5,000,000 Shares AZURRX BIOPHARMA, INC. Common Stock UNDERWRITING AGREEMENT
Exhibit
1.1
5,000,000 Shares
Common Stock
July
17, 2019
▇.▇.
▇▇▇▇▇▇▇▇▇▇ & Co., LLC
As the
Representative of the
Several
underwriters, if any, named in Schedule I hereto
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
AzurRx
BioPharma, Inc., a Delaware corporation (the "Company"), proposes, subject to
the terms and conditions contained herein, to sell to you and the
other underwriters named on Schedule I to this Agreement
(the "Underwriters"), for whom you
are acting as Representative (the "Representative"), an aggregate
of 5,000,000 shares (the "Firm Shares") of the Company's
common stock, $0.0001 par value per share (the "Common Stock"). The respective
amounts of the Firm Shares to be purchased by each of the several
Underwriters are set forth opposite their names on Schedule I hereto. In addition,
the Company proposes to grant to the Underwriters an option to
purchase up to an additional 750,000 shares (the "Option Shares") of Common Stock for
the purpose of covering over-allotments in connection with the sale
of the Firm Shares. The Firm Shares and the Option Shares are
collectively called the "Shares."
The
Company has prepared and filed in conformity with the requirements
of the Securities Act of 1933, as amended (the "Securities Act"), and the
published rules and regulations thereunder (the "Rules") adopted by the
Securities and Exchange Commission (the "Commission") a registration
statement on Form S-3 (No. 333-231954), including a related
prospectus dated June 4, 2019 (the "Base Prospectus") relating to
common stock, stock purchase units and warrants to purchase common
stock of the Company that may be sold from time to time by the
Company in accordance with Rule 415 of the Securities Act, and
such amendments thereof as may have been required to the date of
this Agreement. Copies of such Registration Statement (including
all amendments thereof and all documents deemed incorporated by
reference therein) and of the related Base Prospectus have
heretofore been delivered by the Company or are otherwise available
to you. The term "Registration Statement" as used in this Agreement
means the registration statement, including all exhibits, financial
schedules and all documents and information deemed to be part of
the Registration Statement by incorporation by reference or
otherwise, as amended from time to time, including the information
(if any) contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and deemed to be
part thereof at the time of effectiveness pursuant to Rule 430A of
the Rules. If the Company has filed an abbreviated registration
statement to register additional Shares pursuant to Rule 462(b)
under the Rules (the "462(b) Registration
Statement"), then any reference herein to the Registration
Statement shall also be deemed to include such 462(b) Registration
Statement. The term "Preliminary Prospectus" means the Base
Prospectus, together with any preliminary prospectus supplement
used or filed with the Commission pursuant to Rule 424 of the
Rules, in the form provided to the Underwriters by the Company for
use in connection with the offering of the Shares. The term "Prospectus" means the Base
Prospectus, any Preliminary Prospectus and any amendments or
further supplements to such prospectus, and including, without
limitation, the final prospectus supplement, filed pursuant to and
within the limits described in Rule 424(b) with the Commission in
connection with the proposed sale of the Shares contemplated by
this Agreement through the date of such Prospectus Supplement. The
term "Effective
Date" shall mean each date that the Registration Statement
and any post-effective amendment or amendments thereto became or
become effective. Unless otherwise stated herein, any reference
herein to the Registration Statement, any Preliminary Prospectus,
the Statutory Prospectus (as hereinafter defined) and the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, including pursuant to
Item 12 of Form S-3 under the Securities Act, which were filed
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") on
or before the date hereof or are so filed hereafter. Any reference
herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, any Preliminary Prospectus,
the Statutory Prospectus or the Prospectus shall be deemed to refer
to and include any such document filed or to be filed under the
Exchange Act after the date of the Registration Statement, any such
Preliminary Prospectus, the Statutory Prospectus or Prospectus, as
the case may be, and deemed to be incorporated therein by
reference.
-1-
The
Company understands that the Underwriters propose to make a public
offering of the Shares, as set forth in and pursuant to the
Statutory Prospectus (as hereinafter defined) and the Prospectus,
as soon after the Effective Date and the date of this Agreement as
the Representative deems advisable. The Company hereby confirms
that the Underwriters and dealers have been authorized to
distribute or cause to be distributed each Preliminary Prospectus,
and each Issuer Free Writing Prospectus (as hereinafter defined),
if any, and are authorized to distribute the Prospectus (as from
time to time amended or supplemented if the Company furnishes
amendments or supplements thereto to the
Underwriters).
1. Sale, Purchase, Delivery and Payment
for the Shares. On the basis of the representations,
warranties and agreements contained in, and subject to the terms
and conditions of, this Agreement:
(a)
The Company agrees to issue and sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $0.93 per share
(the "Initial
Price"), the number of Firm Shares set forth opposite the
name of such Underwriter under the column "Number of Firm Shares to
be Purchased from the Company" on Schedule I to this Agreement,
subject to adjustment in accordance with Section 9
hereof.
(b) The
Company hereby grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option
Shares at the Initial Price. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage
(adjusted by the Representatives to eliminate fractions) of the
total number of Option Shares to be purchased by the Underwriters
as such Underwriter is purchasing of the Firm Shares. Such option
may be exercised in whole or in part at any time on or before 12:00
noon, New York City time, on the business day before the Firm
Shares Closing Date (as defined below), and from time to time
thereafter within 30 days after the date of this Agreement, in each
case upon written, facsimile or telegraphic notice, or verbal or
telephonic notice confirmed by written, facsimile or telegraphic
notice, by the Representatives to the Company no later than 12:00
noon, New York City time, on the business day before the Firm
Shares Closing Date or at least one business day before the Option
Shares Closing Date (as defined below), as the case may be, setting
forth the number of Option Shares to be purchased and the time and
date (if other than the Firm Shares Closing Date) of such
purchase.
(c) Payment
of the purchase price for, and delivery of, the Firm Shares shall
be made at the offices of ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., LLC, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m., New York City
time, on the second (or if the Firm Shares are priced, as
contemplated by Rule 15c6-1(c) under the Exchange Act (as defined
below), after 4:30 p.m. Eastern time, the third) business day
following the date of this Agreement or at such time on such other
date, not later than ten (10) business days after the date of this
Agreement, as shall be agreed upon by the Company and the
Representative (such time and date of delivery and payment are
called the “Firm
Shares Closing Date”). In addition, in the event that
any or all of the Option Shares are purchased by the Underwriters,
payment of the purchase price, and delivery of the certificates,
for such Option Shares shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the
Representatives and the Company, on each date of delivery as
specified in the notice from the Representatives to the Company
(such time and date of delivery and payment are called the
"Option Shares Closing
Date"). The Firm Shares Closing Date and any Option Shares
Closing Date are called, individually, a "Closing Date" and,
together, the "Closing Dates."
-2-
(d) Payment
shall be made to the Company by wire transfer of immediately
available funds or by certified or official bank check or checks
payable in New York Clearing House (same day) funds drawn to the
order of the Company, against delivery of the Firm Shares and
Option Shares, if any, to the account of the Representative for the
respective accounts of the Underwriters for the Firm Shares and
Option Shares, if any, to be purchased by them.
(e)
The Firm Shares shall be registered in such names and shall
be in such denominations as the Representative shall request at
least two full business days before the Firm Shares Closing Date
and shall be delivered by or on behalf of the Company to the
Representative through the facilities of the Depository Trust
Company ("DTC") for
the account of such Underwriter.
(e) On the
Firm Shares Closing Date and on each Option Shares Closing Date, if
any, the Company agrees to issue to ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., LLC
or its designees (for their own account and not as the
Representative of the several Underwriters), warrants (the
"Warrants") to
purchase a number of shares of Common Stock (the "Warrant Shares") equal to 4.0%
of the number of Firm Shares or Option Shares, as applicable, with
an exercise price per Warrant Share equal to $1.25. The Warrants
will be exercisable at any time and from time to time on or after
the the Firm Shares Closing Date or the Option Shares Closing Date,
as applicable, up to the fifth anniversary of the date
hereof.
2. Representations and Warranties of the
Company. The Company represents and warrants to each
Underwriter as of the date hereof, as of the Firm Shares Closing
Date and as of each Option Shares Closing Date (if any), as
follows:
(a) The
Company meets the requirements for use of Form S-3 under the
Securities Act, including the transaction requirements set forth in
General Instruction I.B.6 of such form. The aggregate market value
of all securities sold by or on behalf of the Company pursuant to
Form S-3 during the period of 12 calendar months immediately prior
to, and including, the offering contemplated hereby is no more than
the aggregate market value of the voting and non-voting common
equity held by non-affiliates of the Company. The Company is not,
and has not been for at least 12 calendar months prior to the
filing of the Registration Statement, a shell company. The Company
filed with the Commission the Registration Statement on such Form,
including a Base Prospectus, for registration under the Securities
Act of the offering and sale of the Shares, and the Company has
prepared and used a Preliminary Prospectus in connection with the
offer and sale of the Shares. When the Registration Statement or
any amendment thereof or supplement thereto was or is declared
effective, it (i) complied or will comply, in all material
respects, with the requirements of the Securities Act and the Rules
and the Exchange Act and the rules and regulations of the
Commission thereunder and (ii) did not or will not, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein not misleading. When any Preliminary
Prospectus or
Prospectus was first filed with the Commission (whether filed as
part of the Registration Statement or any amendment thereto or
pursuant to Rule 424 of the Rules) and when any amendment thereof
or supplement thereto was first filed with the Commission, such
Preliminary Prospectus or Prospectus as amended or supplemented
complied in all material respects with the applicable provisions of
the Securities Act and the Rules and did not or will not, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein not misleading. If applicable, each
Preliminary Prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T. Notwithstanding the foregoing, none of the
representations and warranties in this paragraph 2(a) shall apply
to statements in, or omissions from, the Registration Statement,
any Preliminary Prospectus or the Prospectus made in reliance upon,
and in conformity with, information herein or otherwise furnished
in writing by the Representative on behalf of the several
Underwriters specifically for use in the Registration Statement,
any Preliminary Prospectus or the Prospectus. With respect to the
preceding sentence, the Company acknowledges that the only
information furnished in writing by the Representative for use in
the Registration Statement, any Preliminary Prospectus or the
Prospectus is the statements contained in the subsections titled
“Stabilizing transactions,” “Syndicate covering
transactions,” and “Penalty bids” in the section
captioned “Stabilization” under the caption
"Underwriting" in the Prospectus (collectively, the "Underwriting
Information").
-3-
(b) As of the
Applicable Time (as hereinafter defined), neither (i) the price to
the public and the number of shares offered and sold, as indicated
on the cover page of the Prospectus and the
Statutory Prospectus (as hereinafter defined), all considered
together (collectively, the “General Disclosure
Package”), nor (ii) any individual Issuer Free
Writing Prospectus when considered together with the General
Disclosure Package, and (iii) any individual Written Testing-the
Waters Communication (as defined herein), when considered together
with the General Disclosure Package, included, includes or will
include any untrue statement of a material fact or omitted, omits
or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and
warranty shall not apply to statements in or omissions in the
General Disclosure Package made in reliance upon and in conformity
with the Underwriter Information.
Each
Issuer Free Writing Prospectus (as hereinafter defined), including
any electronic road show (including without limitation any
“bona fide electronic road show” as defined in Rule
433(h)(5) under the Securities Act) (each, a “Road Show”) (i) is
identified in Schedule
III hereto and (iii) complied when issued, and complies, in
all material respects with the requirements of the Securities Act
and the Rules and the Exchange Act and the rules and regulations of
the Commission thereunder.
As used
in this Section and elsewhere in this Agreement:
“Applicable Time” means
[11:00 p.m.] (Eastern Daylight Time) on the date of this
Agreement.
“Statutory Prospectus” as
of any time means the Preliminary Prospectus relating to the Shares
that is included in the Registration Statement immediately prior to
the Applicable Time, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part
thereof.
“Issuer Free Writing
Prospectus” means each “free writing
prospectus” (as defined in Rule 405 of the Rules) prepared by
or on behalf of the Company or used or referred to by the Company
in connection with the offering of the Shares, including, without
limitation, each Road Show.
(c) The
Registration Statement is effective under the Securities Act and no
stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of any
Preliminary Prospectus, the Prospectus or any “free writing
prospectus”, as defined in Rule 405 under the Rules, has been
issued by the Commission and no proceedings for that purpose have
been instituted or are threatened under the Securities Act. Any
required filing of any Preliminary Prospectus and/or the Prospectus
and any supplement thereto pursuant to Rule 424(b) of the Rules has
been or will be made in the manner and within the time period
required by such Rule 424(b). Any material required to be filed by
the Company pursuant to Rule 433(d) or Rule 163(b)(2) of the Rules
has been or will be made in the manner and within the time period
required by such Rules.
(d) The
documents incorporated by reference in the Registration Statement,
any Preliminary Prospectus and the Prospectus, at the time they
became effective or were filed with the Commission, as the case may
be, complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and
any further documents so filed and incorporated by reference in the
Registration Statement, any Preliminary Prospectus and the
Prospectus, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they are made, not
misleading.
-4-
(e) Each
Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and
sale of the Shares or until any earlier date that the Company
notified or notifies the Representative as described in the next
sentence, did not, does not and will not include any information
that conflicted, conflicts or will conflict with the information
contained in the Registration Statement, including any
document incorporated by reference therein and any prospectus
supplement deemed to be a part thereof that has not been superseded
or modified, the Statutory Prospectus or the
Prospectus.
If at
any time following issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of
which such Issuer Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration
Statement, the Statutory Prospectus or the Prospectus or included
or would include an untrue statement of a material fact or omitted
or would omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in
the light of the circumstances prevailing at the subsequent time,
not misleading, the Company has promptly notified or will promptly
notify the Representative and has promptly amended or will promptly
amend or supplement, at its own expense, such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement
or omission.
(f)
The financial statements of the Company (including all notes and
schedules thereto) included in the Registration Statement, the
Statutory Prospectus and Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries at the
dates indicated and the statement of operations, stockholders'
equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; and such financial
statements and related schedules and notes thereto, and the
unaudited financial information filed with the Commission as part
of the Registration Statement, have been prepared in conformity
with generally accepted accounting principles, consistently applied
throughout the periods involved. The summary and selected financial
data included in the Statutory Prospectus and Prospectus present
fairly the information shown therein as at the respective dates and
for the respective periods specified and have been presented on a
basis consistent with the consolidated financial statements set
forth in the Prospectus and other financial
information.
(g)
Mazars USA LLP (the “Auditor”)
whose reports are filed with the Commission as a part of the
Registration Statement, are and, during the periods covered by
their reports, were independent public accountants as required by
the Securities Act and the Rules.
(h) The
Company and each of its subsidiaries, including each entity
(corporation, partnership, joint venture, association or other
business organization) controlled directly or indirectly by the
Company (each, a “Subsidiary”), is duly
organized, validly existing and in good standing under the laws of
their respective jurisdictions of incorporation or organization and
each such entity has all requisite power and authority to carry on
its business as is currently being conducted as described in the
Statutory Prospectus and the Prospectus, and to own, lease and
operate its properties. All of the issued shares of capital stock
of, or other ownership interests in, each Subsidiary have been duly
and validly authorized and issued and are fully paid and
non-assessable and are owned, directly or indirectly, by the
Company, free and clear of any lien, charge, mortgage, pledge,
security interest, claim, limitation on voting rights, equity,
trust or other encumbrance, preferential arrangement, defect or
restriction of any kind whatsoever. The Company and each of its
Subsidiaries is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the
nature of the business conducted by it or location of the assets or
properties owned, leased or licensed by it requires such
qualification, except for such jurisdictions where the failure to
so qualify individually or in the aggregate would not have a
material adverse effect on the assets, properties, condition,
financial or otherwise, or in the results of operations, business
affairs or business prospects of the Company and its Subsidiaries
considered as a whole (a "Material Adverse Effect"); and
to the Company's knowledge, no proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing, or seeking
to revoke, limit or curtail, such power and authority or
qualification.
-5-
(i) The
Registration Statement initially became effective within three
years of the date hereof. If, immediately prior to the third
anniversary of the initial effective date of the Registration
Statement, any of the Shares remain unsold by the Underwriters, the
Company will, prior to that third anniversary file, if it has not
already done so, a new shelf registration statement relating to the
Shares, in a form satisfactory to the Representative, will use its
best efforts to cause such registration statement to be declared
effective within 180 days after that third anniversary, and
will take all other action necessary or appropriate to permit the
public offering and sale of the Shares to continue as contemplated
in the expired Registration Statement. References herein to the
registration statement relating to the Shares shall include such
new shelf registration statement.
(j) At
the earliest time after the filing of the Registration Statement
that the Company or another offering participant made a
bona fide
offer (within the meaning of
Rule 164(h)(2) of the Rules) of the Shares and (ii) at the
date hereof,
the Company was not and is not an
“ineligible issuer,” as defined in Rule 405 of the
Rules, including (but not limited to) the Company or any other
Subsidiary in the preceding three years not having been convicted
of a felony or misdemeanor or having been made the subject of a
judicial or administrative decree or order as described in
Rule 405 of the Rules.
(k) The
Company and each of its Subsidiaries has all requisite corporate
power and authority, and all necessary authorizations, approvals,
consents, orders, licenses, certificates and permits of and from
all governmental or regulatory bodies or any other person or entity
(collectively, the "Permits"),
to own, lease and license its assets and properties and conduct its
business, all of which are valid and in full force and effect,
except where the lack of such Permits, individually or in the
aggregate, would not have a Material Adverse Effect. The Company
and each of its Subsidiaries has fulfilled and performed in all
material respects all of its obligations with respect to such
Permits and no event has occurred that allows, or after notice or
lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the
Company thereunder. Except as may be required under the Securities
Act and state and foreign Blue Sky laws, no other Permits are
required to enter into, deliver and perform this Agreement and to
issue and sell the Shares.
(l) The
Company and each of its Subsidiaries owns or possesses legally
enforceable rights to use all patents, patent rights, inventions,
trademarks, trademark applications, trade names, service marks,
copyrights, copyright applications, licenses, know-how and other
similar rights and proprietary knowledge (collectively,
"Intangibles")
necessary for the conduct of its business. Neither the Company nor
any of its Subsidiaries has received any notice of, or is not aware
of, any infringement of or conflict with asserted rights of others
with respect to any Intangibles.
(m) The Company and each of its
Subsidiaries has good and marketable title in fee simple to all
real property, and good and marketable title to all other property
owned by it, in each case free and clear of all liens,
encumbrances, claims, security interests and defects, except such
as do not materially affect the value of such property and do not
materially interfere with the use made or proposed to be made of
such property by the Company and its Subsidiaries. All property
held under lease by the Company and its Subsidiaries is held by
them under valid, existing and enforceable leases, free and clear
of all liens, encumbrances, claims, security interests and defects,
except such as are not material and do not materially interfere
with the use made or proposed to be made of such property by the
Company and its Subsidiaries.
-6-
(n) Subsequent to the respective dates as of which
information is given in the Registration Statement, the Statutory
Prospectus and the Prospectus, (i) there has not been any event
which could have a Material Adverse Effect; (ii) neither the
Company nor any of its Subsidiaries has sustained any loss or
interference with its assets, businesses or properties (whether
owned or leased) from fire, explosion, earthquake, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action,
order or decree which would have a Material Adverse Effect; and
(iii) since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, neither the Company nor
its Subsidiaries has (A) issued any securities or incurred any
liability or obligation, direct or contingent, for borrowed money,
except such liabilities or obligations incurred in the ordinary
course of business, (B) entered into any transaction not in the
ordinary course of business or (C) declared or paid any dividend or
made any distribution on any shares of its stock or redeemed,
purchased or otherwise acquired or agreed to redeem, purchase or
otherwise acquire any shares of its capital
stock.
(n) There is
no document, contract or other agreement required to be described
in the Registration Statement, the Statutory Prospectus or the
Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed as required by the
Securities Act or Rules. Each description of a contract, document
or other agreement in the Registration Statement, the Statutory
Prospectus or the Prospectus accurately reflects in all respects
the terms of the underlying contract, document or other agreement.
Each contract, document or other agreement described in the
Registration Statement, the Statutory Prospectus or the Prospectus
or listed in the Exhibits to the Registration Statement or
incorporated by reference is in full force and effect and is valid
and enforceable by and against the Company or its Subsidiary, as
the case may be, in accordance with its terms. Neither the Company
nor any of its Subsidiaries, if a Subsidiary is a party, nor to the
Company's knowledge, any other party is in default in the
observance or performance of any term or obligation to be performed
by it under any such agreement, and no event has occurred which
with notice or lapse of time or both would constitute such a
default, in any such case which default or event, individually or
in the aggregate, would have a Material Adverse Effect. No default
exists, and no event has occurred which with notice or lapse of
time or both would constitute a default, in the due performance and
observance of any term, covenant or condition, by the Company or
its Subsidiary, if a Subsidiary is a party thereto, of any other
agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which Company or its properties or
business or a Subsidiary or its properties or business may be bound
or affected which default or event, individually or in the
aggregate, would have a Material Adverse Effect.
(o) The
statistical and market related data included in the Registration
Statement, the Statutory Prospectus or the Prospectus are based on
or derived from sources that the Company believes to be reliable
and accurate.
(p) Neither the Company nor any Subsidiary (i) is in
violation of its certificate or articles of incorporation, by-laws,
certificate of formation, limited liability company agreement,
partnership agreement or other organizational documents, (ii) is in
default under, and no event has occurred which, with notice or
lapse of time, or both, would constitute a default under, or result
in the creation or imposition of any lien, charge, mortgage,
pledge, security interest, claim, limitation on voting rights,
equity, trust or other encumbrance, preferential arrangement,
defect or restriction of any kind whatsoever, upon, any property or
assets of the Company or any Subsidiary pursuant to, any bond,
debenture, note, indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which it is a party or by which
it is bound or to which any of its properties or assets is subject
or (iii) is in violation of any statute, law, rule, regulation,
ordinance, directive, judgment, decree or order of any judicial,
regulatory or other legal or governmental agency or body, foreign
or domestic, except (in the case of clauses (ii) and (iii) above)
for violations or defaults that could not (individually or in the
aggregate) reasonably be expected to have a Material Adverse
Effect.
-7-
(q)
This Agreement has been duly authorized, executed and delivered by
the Company;
(r) Neither
the execution, delivery and performance of this Agreement by the
Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance
and sale by the Company of the Shares) will give rise to a right to
terminate or accelerate the due date of any payment due under, or
conflict with or result in the breach of any term or provision of,
or constitute a default (or an event which with notice or lapse of
time or both would constitute a default) under, or require any
consent or waiver under, or result in the execution or imposition
of any lien, charge or encumbrance upon any properties or assets of
the Company or its Subsidiaries pursuant to the terms of, any
indenture, mortgage, deed of trust or other agreement or instrument
to which the Company or any of its Subsidiaries is a party or by
which either the Company or its subsidiaries or any of their
properties or businesses is bound, or any franchise, license,
permit, judgment, decree, order, statute, rule or regulation
applicable to the Company or any of its Subsidiaries or violate any
provision of the charter or by-laws of the Company or any of its
Subsidiaries, except for such consents or waivers which have
already been obtained and are in full force and
effect.
(s) The
Company has authorized and outstanding capital stock as set forth
under the caption "Capitalization" in the Statutory Prospectus and
the Prospectus. The Shares have been duly authorized for issuance
by the Company. All of the issued and outstanding shares of Common
Stock have been duly and validly issued and are fully paid and
nonassessable. There are no statutory preemptive or other similar
rights to subscribe for or to purchase or acquire any shares of
Common Stock of the Company or any of its Subsidiaries or any such
rights pursuant to its Certificate of Incorporation or by-laws or
any agreement or instrument to or by which the Company or any of
its Subsidiaries is a party or bound. The Shares, when issued and
sold pursuant to this Agreement, will be duly and validly issued,
fully paid and nonassessable and none of them will be issued in
violation of any preemptive or other similar right. Except as
disclosed in the Registration Statement, the Statutory Prospectus
and the Prospectus, there is no outstanding option, warrant or
other right calling for the issuance of, and there is no
commitment, plan or arrangement to issue, any share of stock of the
Company or any of its Subsidiaries or any security convertible
into, or exercisable or exchangeable for, such stock. The exercise
price of each option to acquire Common Stock (each, a
“Company Stock
Option”) is no less than the fair market value of a
share of Common Stock as determined on the date of grant of such
Company Stock Option. All grants of Company Stock Options were
validly issued and properly approved by the Board of Directors of
the Company in material compliance with all applicable laws and the
terms of the plans under which such Company Stock Options were
issued and were recorded on the Company Financial Statements, in
accordance with GAAP, and no such grants involved any “back
dating”, “forward dating,” “spring
loading” or similar practices with respect to the effective
date of grant. The Common
Stock and the Shares conform in all material respects to all
statements in relation thereto contained in the Registration
Statement and the Statutory Prospectus and the Prospectus. All
outstanding shares of capital stock of each of the Company's
Subsidiaries have been duly authorized and validly issued, and are
fully paid and nonassessable and are owned directly by the Company
or by another wholly-owned Subsidiary of the Company free and clear
of any security interests, liens, encumbrances, equities or claims,
other than those described in the Statutory Prospectus and the
Prospectus.
(t) No
holder of any security of the Company has any right, which has not
been waived, to have any security owned by such holder included in
the Registration Statement or to demand registration of any
security owned by such holder for a period of 180 days after the
date of this Agreement. Each director and executive officer of the
Company and each stockholder of the Company listed on
Schedule
II hereto has delivered to the
Representative its enforceable written lock-up agreement in the
form attached to this Agreement as Exhibit A
hereto (each, a "Lock-Up
Agreement").
-8-
(u) There are no legal or governmental proceedings
pending to which the Company or any of its Subsidiaries is a party
or of which any property of the Company or any of its Subsidiaries
is the subject which, if determined adversely to the Company or any
of its Subsidiaries could individually or in the aggregate have a
Material Adverse Effect; and, to the knowledge of the Company, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(w) Neither the Company nor any of its Subsidiaries is
not involved in any labor dispute nor, to the knowledge of the
Company, is any such dispute threatened, which dispute would have a
Material Adverse Effect. The Company is not aware of any existing
or imminent labor disturbance by the employees of any of its
principal suppliers or contractors which would have a Material
Adverse Effect. The Company is not aware of any threatened or
pending litigation between the Company or its Subsidiaries and any
of its executive officers which, if adversely determined, could
have a Material Adverse Effect and has no reason to believe that
such officers will not remain in the employment of the
Company.
(x) No
transaction has occurred between or among the Company and any of
its officers or directors or any affiliate or affiliates of any
such officer or director that is required to be described in and is
not described in the Registration Statement, the Statutory
Prospectus and the Prospectus.
(y) The
Company has not taken, nor will it take, directly or indirectly,
any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or
manipulation of the price of the Common Stock or any security of
the Company to facilitate the sale or resale of any of the
Shares.
(z) The
Company and each of its Subsidiaries has filed all Federal, state,
local and foreign tax returns which are required to be filed
through the date hereof, which returns are true and correct in all
material respects or has received timely extensions thereof, and
has paid all taxes shown on such returns and all assessments
received by it to the extent that the same are material and have
become due. There are no tax audits or investigations pending,
which if adversely determined would have a Material Adverse Effect;
nor are there any material proposed additional tax assessments
against the Company or any of its Subsidiaries.
(aa) The
Shares have been approved for quotation on the NASDAQ Capital
Market, subject only to official notice of
issuance.
(bb) The
Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under
the Exchange Act or the quotation of the Common Stock on the NASDAQ
Capital Market, nor has the Company received any notification that
the Commission or the NASDAQ Capital Market is contemplating
terminating such registration or quotation.
(cc) The
books, records and accounts of the Company and its Subsidiaries
accurately and fairly reflect, the transactions in, and
dispositions of, the assets of, and the results of operations of,
the Company and its Subsidiaries. The Company and each of its
Subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in accordance with
generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
-9-
(dd) The
Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 under the
Exchange Act), which: (i) are designed to ensure that material
information relating to the Company is made known to the
Company’s principal executive officer and its principal
financial officer by others within the Company, particularly during
the periods in which the periodic reports required under the
Exchange Act are required to be prepared; (ii) provide for the
periodic evaluation of the effectiveness of such disclosure
controls and procedures at the end of the periods in which the
periodic reports are required to be prepared; and (iii) are
effective in all material respects to perform the functions for
which they were established.
(ee) Based on the evaluation of its disclosure controls
and procedures, the Company is not aware of (i) any material
weakness or significant deficiency in the design or operation of
internal controls which could adversely affect the Company’s
ability to record, process, summarize and report financial data or
any material weaknesses in internal controls; or (ii) any fraud,
whether or not material, that involves management or other
employees who have a role in the Company’s internal
controls.
(ff) Except as described in the Statutory Prospectus
and the Prospectus and as preapproved in accordance with the
requirements set forth in Section 10A of the Exchange Act, the
Auditor has not been engaged by the Company to perform any
“prohibited activities” (as defined in Section 10A of
the Exchange Act).
(gg)
Except as described in the Statutory Prospectus and the Prospectus,
there are no material off-balance sheet arrangements (as defined in
Item 303 of Regulation S-K) that have or are reasonably likely to
have a material current or future effect on the Company’s
financial condition, revenues or expenses, changes in financial
condition, results of operations, liquidity, capital expenditures
or capital resources.
(hh) The
Company’s Board of Directors has validly appointed an audit
committee whose composition satisfies the requirements of Rule 5605
of the NASDAQ Stock Market and the Board of Directors and/or the
audit committee has adopted a charter that satisfies the
requirements of Rule 5605 of the NASDAQ Stock Market. The audit
committee has reviewed the adequacy of its charter within the past
twelve months.
(ii) There is and has been no failure on the part of
the Company or any of its directors or officers, in their
capacities as such, to comply with any provision of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, including, without limitation, Section
402 related to loans and Sections 302 and 906 related to
certifications.
(jj) The Company and its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as are customary in the businesses in
which they are engaged or propose to engage after giving effect to
the transactions described in the Statutory Prospectus and the
Prospectus; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its Subsidiaries or the Company's or
its Subsidiaries' respective businesses, assets, employees,
officers and directors are in full force and effect; the Company
and each of its Subsidiaries are in compliance with the terms of
such policies and instruments in all material respects; and neither
the Company nor any Subsidiary has any reason to believe that it
will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a
cost that is not materially greater than the current cost. Neither
the Company nor any of its Subsidiaries has been denied any
insurance coverage which it has sought or for which it has
applied.
-10-
(kk) Each approval, consent, order, authorization,
designation, declaration or filing of, by or with any regulatory,
administrative or other governmental body necessary in connection
with the execution and delivery by the Company of this Agreement
and the consummation of the transactions herein contemplated
required to be obtained or performed by the Company (except such
additional steps as may be required by the Financial Industry
Regulatory Authority ("FINRA")
or may be necessary to qualify the Shares for public offering by
the Underwriters under the state securities or Blue Sky laws) has
been obtained or made and is in full force and
effect.
(ll) None of the Company's officers, directors or, to
the best of the knowledge of the Company, any five percent or
greater stockholder of the Company, is associated or affiliated
with any broker-dealer that is a member of FINRA, except as set
forth in the Registration Statement or otherwise disclosed in
writing to the Representative.
(mm) The
Company does not expect to be a Passive Foreign Investment Company
(“PFIC”) within the meaning
of Section 1297(a) of the United States Internal Revenue Code
of 1986, as amended, and the regulations and published
interpretations thereunder for the year ended December 31,
2017, and has no plan or intention to conduct its business in a
manner that would be reasonably expected to result in the Company
becoming a PFIC in the future under current laws and
regulations.
(nn) (i)
Each of the Company and each of its Subsidiaries is in compliance
in all material respects with all rules, laws and regulation
relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment
("Environmental
Law") which are applicable to
its business; (ii) neither the Company nor its Subsidiaries has
received any notice from any governmental authority or third party
of an asserted claim under Environmental Laws; (iii) each of the
Company and each of its Subsidiaries has received all permits,
licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and is in compliance
with all terms and conditions of any such permit, license or
approval; (iv) to the Company's knowledge, no facts currently exist
that will require the Company or any of its Subsidiaries to make
future material capital expenditures to comply with Environmental
Laws; and (v) no property which is or has been owned, leased or
occupied by the Company or its Subsidiaries has been designated as
a Superfund site pursuant to the Comprehensive Environmental
Response, Compensation of Liability Act of 1980, as amended (42
U.S.C. Section 9601, et. seq.) or otherwise designated as a
contaminated site under applicable state or local law. Neither the
Company nor any of its Subsidiaries has been named as a
"potentially responsible party" under the CERCLA
1980.
(oo) In
the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries, in
the course of which the Company identifies and evaluates associated
costs and liabilities (including, without limitation, any capital
or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws, or any permit,
license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On the
basis of such review, the Company has reasonably concluded that
such associated costs and liabilities would not, singly or in the
aggregate, have a Material Adverse Effect.
(pp) The
Company is not and, after giving effect to the offering and sale of
the Shares and the application of proceeds thereof as described in
the Statutory Prospectus and the Prospectus, will not be an
"investment company" within the meaning of the Investment Company
Act of 1940, as amended (the "Investment Company
Act").
-11-
(qq) The
Company or any other person associated with or acting on behalf of
the Company including, without limitation, any director, officer,
agent or employee of the Company or its Subsidiaries, has not,
directly or indirectly, while acting on behalf of the Company or
its Subsidiaries (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
relating to political activity; (ii) made any unlawful payment
to foreign or domestic government officials or employees or to
foreign or domestic political parties or campaigns from corporate
funds; (iii) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any other unlawful
payment.
(rr) The
operations of the Company and its Subsidiaries are and have been
conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental
agency (collectively, the “Money Laundering
Laws”) and no action,
suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of
it Subsidiaries with respect to the Money Laundering Laws is
pending, or to the best knowledge of the Company,
threatened.
(ss) Neither
the Company nor any of its Subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of
the Company or any of its Subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department (“OFAC”); and the Company
will not directly or indirectly use the proceeds of the offering,
or lend, contribute or otherwise make available such proceeds to
any Subsidiary, joint venture partner or other person or entity,
for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(tt)
Except as described in the Statutory Prospectus and the
Prospectus, the Company has not sold or issued any shares of Common
Stock during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act, other than shares issued
pursuant to employee benefit plans, qualified stock options plans
or other employee compensation plans or pursuant to outstanding
options, rights or warrants.
(uu) The
Company has fulfilled its obligations, if any, under the minimum
funding standards of Section 302 of the U.S. Employee Retirement
Income Security Act of 1974 ("ERISA") and the regulations and
published interpretations thereunder with respect to each "plan" as
defined in Section 3(3) of ERISA and such regulations and published
interpretations in which its employees are eligible to participate
and each such plan is in compliance in all material respects with
the presently applicable provisions of ERISA and such regulations
and published interpretations. No "Reportable Event" (as defined in
12 ERISA) has occurred with respect to any "Pension Plan" (as
defined in ERISA) for which the Company could have any
liability.
(vv) None of
the Company, its directors or its officers has distributed nor will
distribute prior to the later of (i) the Firm Shares Closing Date
or the Option Shares Closing Date, and (ii) completion of the
distribution of the Shares, any offering material in connection
with the offering and sale of the Shares other than any Preliminary
Prospectus, the Prospectus, the Registration Statement and other
materials, if any, permitted by the Securities Act and consistent
with the terms of this Agreement.
-12-
(ww) Since
that date of the Preliminary Prospectus included in the
Registration Statement filed with the Commission on June 4, 2019
(or, if earlier, the first date on which the Company engaged
directly or through any Person authorized to act on its behalf in
any Testing-the-Waters Communication (as defined herein)) through
the date hereof, the Company has been and is an “emerging
growth company,” as defined in Section 2(a) of the Securities
Act (an “Emerging
Growth Company”). “Testing-the-Waters
Communication” means any oral or written communication with
potential investors undertaken in reliance on Section 5(d) of the
Securities Act.
(xx) The
Company (a) has not alone engaged in any Testing-the-Waters
Communication other than Testing-the-Waters Communications with the
consent of the Representative with entities that are qualified
institutional buyers within the meaning of Rule 144A under the
Securities Act or institutions that are accredited investors within
the meaning of Rule 501 under the Securities Act and (b) has not
authorized anyone other than the Representative to engage in
Testing-the-Waters Communications. The Company reconfirms that the
Representative has been authorized to act on its behalf in
undertaking Testing-the-Waters Communications. The Company has not
distributed any Written Testing-the-Waters Communications (as
defined herein) other than those listed on Schedule III hereto. "Written
Testing-the-Waters Communication" means any Testing-the-Waters
Communication that is a written communication within the meaning of
Rule 405 under the Securities Act.
(yy) There is
no legal or governmental proceeding to which the Company or any
subsidiary is a party or of which any property or assets of the
Company or any subsidiary is the subject, including any proceeding
before the United States Food and Drug Administration of the U.S.
Department of Health and Human Services ("FDA") or comparable federal,
state, local or non-U.S. governmental bodies (it being understood
that the interaction between the Company and the FDA and such
comparable governmental bodies relating to the clinical development
and product approval process shall not be deemed proceedings for
purposes of this representation), which is required to be described
in the Registration Statement, the General Disclosure Package or
the Prospectus or a document incorporated by reference therein and
is not described therein, or which, singularly or in the aggregate,
if determined adversely to the Company or any subsidiary, would
reasonably be expected to have a Material Adverse Effect; and to
the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others. The Company and each subsidiary is in
compliance with all applicable federal, state, local and, to the
Company’s knowledge, non-U.S. laws, regulations, orders and
decrees governing its business as prescribed by the FDA, or any
other federal, state or, to the Company’s knowledge, non-U.S.
agencies or bodies engaged in the regulation of pharmaceuticals,
except where noncompliance would not, singularly or in the
aggregate, have a Material Adverse Effect. All preclinical studies
and clinical trials conducted by or on behalf of the Company and
any subsidiary to support approval for commercialization of the
Company's or any subsidiary's products have been conducted by the
Company or any subsidiary, as applicable, or to the Company's
knowledge by third parties, in compliance with all applicable
federal, state or, to the Company’s knowledge, non-U.S. laws,
rules, orders and regulations, except for such failure or failures
to be in compliance as would not reasonably be expected to have,
singularly or in the aggregate, a Material Adverse
Effect.
-13-
(zz) The
Company and its subsidiaries own, or have obtained licenses for, or
other rights to use, the inventions, patent applications, patents,
trademarks (both registered and unregistered), trade names, service
names, copyrights, trade secrets and other proprietary information
described in the Registration Statement, the General Disclosure
Package and the Prospectus, necessary for the conduct of their
respective businesses as currently conducted (including the
commercialization of products or services described in the
Registration Statement, the General Disclosure Package and the
Prospectus, as currently under development) (collectively,
"Intellectual
Property"), except where the failure to own, license or have
such rights would not, individually or in the aggregate, have a
Material Adverse Effect. Except as otherwise disclosed in the
Registration Statement, the General Disclosure Package and the
Prospectus and except as would not, individually or in the
aggregate, have a Material Adverse Effect, (i) there are no third
parties who have or, to the Company's knowledge, will be able to
establish rights to any Intellectual Property owned by the Company
or any of its subsidiaries ("Company Intellectual
Property"), except for any third parties to whom the Company
or any of its subsidiaries has granted licenses to the Company
Intellectual Property pursuant to written license agreements in the
ordinary course of business; (ii) to the Company's knowledge, there
is no infringement by third parties of any Company Intellectual
Property; (iii) there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or claim by others challenging
the Company's rights in or to any Intellectual Property of the
Company or its subsidiaries, and the Company is unaware of any
facts which could form a reasonable basis for any such action,
suit, proceeding or claim; (iv) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim
by others challenging the validity, enforceability or scope of any
Company Intellectual Property, and the Company is unaware of any
facts which could form a reasonable basis for any such action,
suit, proceeding or claim; (v) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim
by others that the Company or any subsidiary infringes or otherwise
violates, or would, upon the commercialization of any product or
service described in the Registration Statement, the General
Disclosure Package and the Prospectus, as under development,
infringe or violate, any patent, trademark, trade name, service
name, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any facts which could form a
reasonable basis for any such action, suit, proceeding or claim;
(vi) the Company and its subsidiaries have complied with the terms
of each agreement pursuant to which Intellectual Property has been
licensed to the Company or any subsidiary, except where the failure
to comply would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect, and all such
agreements are in full force and effect; (vii) to the Company's
knowledge, there is no patent or patent application, that contains
claims that interfere with the issued or pending claims of any
patent or patent application included in the Company Intellectual
Property or that challenges the validity, enforceability or scope
of any patent included in the Company Intellectual Property; and
(viii) the Company has disclosed to the United States Patent and
Trademark Office all prior art within the possession of the Company
that may render any patent application within the Company
Intellectual Property unpatentable or the failure to disclose of
which may render any patent issued thereon
unenforceable.
3. Reserved.
4.
Conditions of the
Underwriters' Obligations. The obligations of the
Underwriters under this Agreement are several and not joint. The
respective obligations of the Underwriters to purchase the Shares
are subject to each of the following terms and
conditions:
(a) Notification that the Registration Statement has
become effective shall have been received by the Representative and
the Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a) of this Agreement and any material
required to be filed by the Company pursuant to Rule 433(d) of the
Rules shall have been timely filed with the Commission in
accordance with such rule.
-14-
(b) No
order preventing or suspending the use of any Preliminary
Prospectus, the Prospectus or any “free writing
prospectus” (as defined in Rule 405 of the Rules), shall have
been or shall be in effect and no order suspending the
effectiveness of the Registration Statement shall be in effect and
no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have
been complied with to the satisfaction of the Commission and the
Representative. If the Company has elected to rely upon Rule 430A,
Rule 430A information previously omitted from the effective
Registration Statement pursuant to Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b)
within the prescribed time period and the Company shall have
provided evidence satisfactory to the Underwriters of such timely
filing, or a post-effective amendment providing such information
shall have been promptly filed and declared effective in accordance
with the requirements of Rule 430A.
(c) The
representations and warranties of the Company contained in this
Agreement and in the certificates delivered pursuant to Section
4(d) shall be true and correct when made and on and as of each
Closing Date as if made on such date. The Company shall have
performed all covenants and agreements and satisfied all the
conditions contained in this Agreement required to be performed or
satisfied by them at or before such Closing
Date.
(d) The
Representative shall have received on each Closing Date a
certificate, addressed to the Representative and dated such Closing
Date, of the chief executive or chief operating officer and the
chief financial officer or chief accounting officer of the Company
to the effect that: (i) the representations, warranties and
agreements of the Company in this Agreement were true and correct
when made and are true and correct as of such Closing Date; (ii)
the Company has performed all covenants and agreements and
satisfied all conditions contained herein; (iii) they have
carefully examined the Registration Statement, the Prospectus, the
General Disclosure Package, and any individual Issuer Free Writing
Prospectus and, in their opinion (A) as of the Effective Date the
Registration Statement and Prospectus did not include, and as of
the Applicable Time, neither (i) the General Disclosure
Package, nor (ii) any individual Issuer Free Writing
Prospectus, when considered together with the General Disclosure
Package, included, any untrue statement of a material fact and did
not omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (B)
since the Effective Date no event has occurred which should have
been set forth in a supplement or otherwise required an amendment
to the Registration Statement, the Statutory Prospectus or the
Prospectus; (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and, to their knowledge, no
proceedings for that purpose have been instituted or are pending
under the Securities Act and (v) there has not occurred any
material adverse change in the assets, properties, condition,
financial or otherwise, or in the results of operations, business
affairs or business prospects of the Company and its Subsidiaries
considered as a whole.
(e) The
Representative shall have received: (i) simultaneously with the
execution of this Agreement a signed letter from the Auditor
addressed to the Representative and dated the date of this
Agreement, in form and substance reasonably satisfactory to the
Representative, containing statements and information of the type
ordinarily included in accountants’ “comfort
letters” to underwriters with respect to the financial
statements and certain financial information contained in the
Registration Statement and the General Disclosure Package, and (ii)
on each Closing Date, a signed letter from the Auditor addressed to
the Representative and dated the date of such such Closing Date, in
form and substance reasonably satisfactory to the Representative
containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial
information contained in the Registration Statement and the
Prospectus.
-15-
(f) The
Representative shall have received on each Closing Date from
Disclosure Law Group, a Professional Corporation, counsel for the
Company, an opinion and negative assurance statement, addressed to
the Representative and dated such Closing Date, in form and
substance reasonably satisfactory to the
Representative.
(g) The
Representative shall have received on each Closing Date from Loeb
& Loeb LLP, intellectual property counsel for the Company, an
opinion, addressed to the Representative, in form and substance
reasonably satisfactory to the Representative.
(h) The
Representative shall have received on each Closing Date from
Ellenoff ▇▇▇▇▇▇▇▇ & Schole LLP, counsel for the Representative,
an opinion and negative assurance statement, addressed to the
Representative and dated such Closing Date, in form and substance
reasonably satisfactory to the Representative.
(i) All
proceedings taken in connection with the sale of the Firm Shares
and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representative, and its
counsel.
(j The
Representative shall have received copies of the Lock-up Agreements
executed by each entity or person listed on Schedule II
hereto.
(k) The
Shares shall have been approved for quotation on the NASDAQ Capital
Market, subject only to official notice of issuance.
(l) The
Representative shall be reasonably satisfied that since the
respective dates as of which information is given in the
Registration Statement, the Statutory Prospectus, the General
Disclosure Package and the Prospectus, (i) there shall not have
been any material change in the capital stock of the Company or any
material change in the indebtedness (other than in the ordinary
course of business) of the Company, (ii) except as set forth or
contemplated by the Registration Statement, the Statutory
Prospectus, the General Disclosure Package or the Prospectus, no
material oral or written agreement or other transaction shall have
been entered into by the Company that is not in the ordinary course
of business or that could reasonably be expected to result in a
material reduction in the future earnings of the Company, (iii) no
loss or damage (whether or not insured) to the property of the
Company shall have been sustained that had or could reasonably be
expected to have a Material Adverse Effect, (iv) no legal or
governmental action, suit or proceeding affecting the Company or
any of its properties that is material to the Company or that
affects or could reasonably be expected to affect the transactions
contemplated by this Agreement shall have been instituted or
threatened and (v) there shall not have been any material change in
the assets, properties, condition (financial or otherwise), or in
the results of operations, business affairs or business prospects
of the Company or its Subsidiaries considered as a whole that makes
it impractical or inadvisable in the Representative’s
judgment to proceed with the purchase or offering of the Firm
Shares as contemplated hereby.
(m) On
the Firm Shares Closing Date, FINRA shall have confirmed that it
has not raised any objection with respect to the fairness and
reasonableness of the underwriting terms and agreements in
connection with the offering of the Shares.
(n) The
Company shall have furnished or caused to be furnished to the
Representative such further certificates or documents as the
Representative shall have reasonably requested.
-16-
5.
Covenants and other
Agreements of the Company and the Underwriters.
(a)
The Company covenants and agrees as follows:
(i) The
Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto, to become effective as
promptly as possible. The Company shall prepare the Prospectus in a
form approved by the Representative and file such Prospectus
pursuant to Rule 424(b) under the Securities Act not later than the
Commission's close of business on the second business day following
the execution and delivery of this Agreement, or, if applicable,
such earlier time as may be required by the Rules. The Company will
file with the Commission all Issuer Free Writing Prospectuses in
the time and manner required under Rules 433(d) or 163(b)(2), as
the case may be.
(ii) The
Company shall promptly advise the Representative in writing (A)
when any post-effective amendment to the Registration Statement
shall have become effective or any supplement to the Prospectus
shall have been filed, (B) of any request by the Commission for any
amendment of the Registration Statement or the Prospectus or for
any additional information, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus or any “free writing
prospectus”, as defined in Rule 405 of the Rules, or the
institution or threatening of any proceeding for that purpose and
(D) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Shares for sale in
any jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Company shall not file any amendment of the
Registration Statement or supplement to the Prospectus or any
document incorporated by reference in the Registration Statement or
any Issuer Free Writing Prospectus unless the Company has furnished
the Representative a copy for its review prior to filing and shall
not file any such proposed amendment or supplement to which the
Representative reasonably objects. The Company shall use its best
efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal
thereof.
(iii) If,
at any time when a prospectus relating to the Shares (or, in lieu
thereof, the notice referred to in Rule 173(a) of the Rules) is
required to be delivered under the Securities Act and the, any
event occurs as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were
made not misleading, or if it shall be necessary to amend or
supplement the Prospectus to comply with the Securities Act or the
Rules, the Company promptly shall prepare and file with the
Commission, subject to the second sentence of paragraph (ii) of
this Section 5(a), an amendment or supplement which shall correct
such statement or omission or an amendment which shall effect such
compliance.
-17-
(iv) If
at any time following issuance of an Issuer Free Writing Prospectus
there occurs an event or development as a result of which such
Issuer Free Writing Prospectus would conflict with the information
contained in the Registration Statement or would include an untrue
statement of a material fact or would omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances prevailing at
the subsequent time, not misleading, the Company will promptly
notify the Representative and will promptly amend or supplement, at
its own expense, such Issuer Free Writing Prospectus to eliminate
or correct such conflict, untrue statement or
omission.
(v) The
Company shall make generally available to its security holders and
to the Representative as soon as practicable, but not later than 45
days after the end of the 12-month period beginning at the end of
the fiscal quarter of the Company during which the Effective Date
occurs (or 90 days if such 12-month period coincides with the
Company's fiscal year), an earning statement (which need not be
audited) of the Company, covering such 12-month period, which shall
satisfy the provisions of Section 11(a) of the Securities Act or
Rule 158 of the Rules.
(vi) The
Company shall furnish to the Representative and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement (including all exhibits thereto and amendments thereof)
and to each other Underwriter a copy of the Registration Statement
(without exhibits thereto) and all amendments thereof and, so long
as delivery of a prospectus by an Underwriter or dealer may be
required by the Securities Act or the Rules, as many copies of any
Preliminary Prospectus, any Issuer Free Writing Prospectus and the
Prospectus and any amendments thereof and supplements thereto as
the Representative may reasonably request. If applicable, the
copies of the Registration Statement, Preliminary Prospectus, any
Issuer Free Writing Prospectus and Prospectus and each amendment
and supplement thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(vii) The
Company shall cooperate with the Representative and their counsel
in endeavoring to qualify the Shares for offer and sale in
connection with the offering under the laws of such jurisdictions
as the Representative may designate and shall maintain such
qualifications in effect so long as required for the distribution
of the Shares; provided, however, that the Company shall not be
required in connection therewith, as a condition thereof, to
qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction or subject itself to
taxation as doing business in any jurisdiction.
(viii) The
Company, during the period when the Prospectus (or in lieu thereof,
the notice referred to in Rule 173(a) of the Rules) is required to
be delivered under the Securities Act and the Rules or the Exchange
Act, will file all reports and other documents required to be filed
with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange Act
and the regulations promulgated thereunder.
-18-
(ix) Without
the prior written consent of ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., LLC, for a
period of 90 days after the date of this Agreement, the Company and
each of its individual directors and executive officers shall not
issue, sell or register with the Commission (other than on Form S-8
or on any successor form), or otherwise dispose of, directly or
indirectly, any equity securities of the Company (or any securities
convertible into, exercisable for or exchangeable for equity
securities of the Company), except for (i) the issuance of the
Shares pursuant to the Registration Statement, and (ii) the
issuance of shares pursuant to the Company's existing stock option
plan or bonus plan as described in the Registration Statement and
the Prospectus. In the event that during this period, (A) any
shares are issued pursuant to the Company's existing stock option
plan or bonus plan that are exercisable during such 90 day period
or (B) any registration is effected on Form S-8 or on any successor
form relating to shares that are exercisable during such 90 period,
the Company shall obtain the written agreement of such grantee or
purchaser or holder of such registered securities that, for a
period of 90 days after the date of this Agreement, such person
will not, without the prior written consent of ▇.▇. ▇▇▇▇▇▇▇▇▇▇
& Co., LLC, offer for sale, sell, distribute, grant any option
for the sale of, or otherwise dispose of, directly or indirectly,
or exercise any registration rights with respect to, any shares of
Common Stock (or any securities convertible into, exercisable for,
or exchangeable for any shares of Common Stock) owned by such
person. Notwithstanding the foregoing, (i) the Company represents
and warrants that each such grantee or purchaser or holder of such
registered securities shall be subject to similar lockup
restrictions as set forth on Exhibit A
attached hereto and the Company shall
enforce such rights and impose stop-transfer restrictions on any
such sale or other transfer or disposition of such shares until the
end of the applicable period and (ii) if (x) during the last 17
days of the 90 day period described in this Section 5(a)(viii) the
Company issues an earnings release or material news or a material
event relating to the Company occurs; or (y) prior to the
expiration of such 90 day period, the Company announces that it
will release earnings results during the 16 day period beginning on
the last day of the 90 day period; the restrictions imposed during
this Section 5(a)(viii) shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material
event; provided, however, that this sentence shall not apply if the
research published or distributed on the Company is compliant under
Rule 139 of the Securities Act and the Company’s securities
are actively traded as defined in Rule 101(c)(1) of Regulation M of
the Exchange Act.
(x) On
or before completion of this offering, the Company shall make all
filings required under applicable securities laws and by NASDAQ
(including any required registration under the Exchange
Act).
(xi)
Prior
to the Closing Date, the Company will issue no press release or
other communications directly or indirectly and hold no press
conference with respect to the Company, the condition, financial or
otherwise, or the earnings, business affairs or business prospects
of any of them, or the offering of the Shares without the prior
written consent of the Representative unless in the judgment of the
Company and its counsel, and after notification to the
Representative, such press release or communication is required by
law.
-19-
(xii)
The
Company will apply the net proceeds from the offering of the Firm
Shares in the manner set forth under "Use of Proceeds" in the
Prospectus.
(xiii)
The
Company will promptly notify the Representative if the Company
ceases to be an Emerging Growth Company at any time prior to the
later of (a) completion of the distribution of the Firm Shares
within the meaning of the Securities Act and (b) completion of
the 90-day restricted period referred to in Section 5(a)(ix)
hereof.
(xiv)
If
at any time following the distribution of any Written
Testing-the-Waters Communication there occurred or occurs an event
or development as a result of which such Written Testing-the-Waters
Communication included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances existing at that subsequent time, not misleading,
the Company will promptly notify the Representative and will
promptly amend or supplement, at its own expense, such Written
Testing-the-Waters Communication to eliminate or correct such
untrue statement or omission.
(b) The
Company agrees to pay, or reimburse if paid by the Representative,
whether or not the transactions contemplated hereby are consummated
or this Agreement is terminated, all costs and expenses incident to
the public offering of the Shares and the performance of the
obligations of the Company under this Agreement including those
relating to: (i) the preparation, printing, reproduction filing and
distribution of the Registration Statement including all exhibits
thereto, each Preliminary Prospectus, the Prospectus, any Issuer
Free Writing Prospectus, all amendments and supplements thereto and
any document incorporated by reference therein, and the printing,
filing and distribution of this Agreement; (ii) the preparation and
delivery of the Shares to the Underwriters; (iii) the registration
or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the various jurisdictions referred
to in Section 5(a)(vi), including the reasonable fees and
disbursements of counsel for the Underwriters in connection with
such registration and qualification and the preparation, printing,
distribution and shipment of preliminary and supplementary Blue Sky
memoranda; (iv) the furnishing (including costs of shipping and
mailing) to the Representative and to the Underwriters of copies of
each Preliminary Prospectus, the Prospectus and all amendments or
supplements to the Prospectus, any Issuer Free Writing Prospectus,
and of the several documents required by this Section to be so
furnished, as may be reasonably requested for use in connection
with the offering and sale of the Shares by the Underwriters or by
dealers to whom Shares may be sold; (v) the filing fees of FINRA in
connection with its review of the terms of the public offering and
reasonable fees and disbursements of counsel for the Underwriters
in connection with such review; (vi) inclusion of the Shares for
quotation on the NASDAQ Capital Market, (vii) all transfer taxes,
if any, with respect to the sale and delivery of the Shares by the
Company to the Underwriters, (viii) up to $10,000 with respect to
the fees and expenses of the Representative’s clearing firm,
(ix) the Representative’s expenses in the non-accountable sum
of $25,000, and (x) all reasonable out-of-pocket costs and
reasonable expenses incident to the offering and the performance of
the obligations of the Representative under this Agreement, up to
$100,000 in the aggregate, which amount shall include the fees and
expenses of counsel to the Underwriters. Subject to the provisions
of Section 8, the Underwriters agree to pay, whether or not the
transactions contemplated hereby are consummated or this Agreement
is terminated, all costs and expenses incident to the performance
of the obligations of the Underwriters under this Agreement not
payable by the Company pursuant to the preceding sentence,
including, without limitation, the fees and disbursements of
counsel for the Underwriters.
-20-
(c) The
Company acknowledge and agree that each of the Underwriters has
acted and is acting solely in the capacity of a principal in an
arm’s length transaction between the Company, on the one
hand, and the Underwriters, on the other hand, with respect to the
offering of Shares contemplated hereby (including in connection
with determining the terms of the offering) and not as a financial
advisor, agent or fiduciary to the Company or any other person.
Additionally, the Company acknowledges and agrees that the
Underwriters have not and will not advise the Company or any other
person as to any legal, tax, investment, accounting or regulatory
matters in any jurisdiction. The Company has consulted with its own
advisors concerning such matters and shall be responsible for
making its own independent investigation and appraisal of the
transactions contemplated hereby, and the Underwriters shall have
no responsibility or liability to the Company or any other person
with respect thereto, whether arising prior to or after the date
hereof. Any review by the Underwriters of the Company, the
transactions contemplated hereby or other matters relating to such
transactions have been and will be performed solely for the benefit
of the Underwriters and shall not be on behalf of the Company. The
Company agrees that it will not claim that the Underwriters, or any
of them, has rendered advisory services of any nature or respect,
or owes a fiduciary duty to the Company or any other person in
connection with any such transaction or the process leading
thereto.
(d) The
Company acknowledges and agrees that each of the Underwriters has
acted and is acting solely in the capacity of a principal in an
arm’s length transaction between the Company, on the one
hand, and the Underwriters, on the other hand, with respect to the
offering of the Shares contemplated hereby (including in connection
with determining the terms of the offering) and not as a financial
advisor, agent or fiduciary to the Company or any other person.
Additionally, the Company acknowledges and agrees that the
Underwriters have not and will not advise the Company or any other
person as to any legal, tax, investment, accounting or regulatory
matters in any jurisdiction. The Company has consulted with its own
advisors concerning such matters and shall be responsible for
making its own independent investigation and appraisal of the
transactions contemplated hereby, and the Underwriters shall have
no responsibility or liability to the Company or any other person
with respect thereto, whether arising prior to or after the date
hereof. Any review by the Underwriters of the Company, the
transactions contemplated hereby or other matters relating to such
transactions have been and will be performed solely for the benefit
of the Underwriters and shall not be on behalf of the Company. The
Company agrees that it will not claim that the Underwriters, or any
of them, has rendered advisory services of any nature or respect,
or owes a fiduciary duty to the company or any other person in
connection with any such transaction or the process leading
thereto.
(e) The
Company represents and agrees that, unless it obtains the prior
consent of the Representative, and each Underwriter represents and
agrees that, unless it obtains the prior consent of the Company and
the Representative, it has not made and will not make any offer
relating to the Shares that would constitute an “issuer free
writing prospectus,” as defined in Rule 433, or that
would otherwise constitute a “free writing prospectus,”
as defined in Rule 405, required to be filed with the
Commission. The Company has complied and will comply with the
requirements of Rule 433 under the Act applicable to any Issuer
Free Writing Prospectus, including timely filing with the
Commission where required, legending and record keeping. The
Company represents that is has satisfied and agrees that it will
satisfy the conditions set forth in Rule 433 of the Rules to avoid
a requirement to file with the Commission any Road
Show.
-21-
6.
Indemnification.
(a) The
Company agrees to indemnify and hold harmless each Underwriter, its
officers and employees and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act against any and all losses,
claims, damages and liabilities, joint or several (including any
reasonable investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted), to which they, or any of
them, may become subject under the Securities Act, the Exchange Act
or other Federal or state law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Statutory Prospectus,
the Prospectus, any Issuer Free Writing Prospectus or any
“issuer-information” filed or required to be filed
pursuant to Rule 433(d) of the Rules, any amendment thereof or
supplement thereto, any Written Testing-the-Waters Communication,
or in any Blue Sky application or other information or other
documents executed by the Company filed in any state or other
jurisdiction to qualify any or all of the Shares under the
securities laws thereof (any such application, document or
information being hereinafter referred to as a "Blue Sky
Application") or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that such indemnity shall not inure
to the benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages or
liabilities arising from the sale of the Shares to any person by
such Underwriter if such untrue statement or omission or alleged
untrue statement or omission was made in such Preliminary
Prospectus, the Registration Statement, the Prospectus, the
Statutory Prospectus, any Issuer Free Writing Prospectus or such
amendment or supplement thereto, any Written Testing-the-Waters
Communication, or in any Blue Sky Application in reliance upon and
in conformity with the Underwriter Information. This indemnity and
expense reimbursement agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each
Underwriter, severally and not jointly, agrees to indemnify and
hold harmless the Company, and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, each director of the Company,
and each officer of the Company who signs the Registration
Statement, against any losses, claims, damages or liabilities to
which such party may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, the Registration Statement, the
Statutory Prospectus or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with the Underwriter
Information; provided, however, that the obligation of each
Underwriter to indemnify the Company (including any controlling
person, director or officer thereof) shall be limited to the amount
of the underwriting discount and commissions applicable to the
Shares to be purchased by such Underwriter hereunder.
-22-
(c) Any party
that proposes to assert the right to be indemnified under this
Section will, promptly after receipt of notice of a claim or notice
of commencement of any action, suit or proceeding against such
party in respect of which a claim is to be made against an
indemnifying party or parties under this Section, notify each such
indemnifying party of receipt of such claim or the commencement of
such action, suit or proceeding, enclosing a copy of all papers
served. No indemnification provided for in Section 6(a) or 6(b)
shall be available to any party who shall fail to give notice as
provided in this Section 6(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have
related and was prejudiced by the failure to give such notice but
the omission so to notify such indemnifying party of any such
claim, action, suit or proceeding shall not relieve it from any
liability that it may have to any indemnified party for
contribution or otherwise than under this Section. In case any such
claim, action, suit or proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the
receipt or commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof and the approval by the indemnified party of such
counsel, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses, except as
provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with
the defense thereof. The indemnified party shall have the right to
employ its counsel in any such action, but the fees and expenses of
such counsel shall be at the expense of such indemnified party
unless (i) the employment of counsel by such indemnified party has
been authorized in writing by the indemnifying parties, (ii) the
indemnified party shall have been advised by counsel that there may
be one or more legal defenses available to it which are different
from or in addition to those available to the indemnifying party
(in which case the indemnifying parties shall not have the right to
direct the defense of such action on behalf of the indemnified
party), (iii) the indemnifying parties shall not have employed
counsel to assume the defense of such action within a reasonable
time after notice of the commencement thereof or (iv) the
indemnified party has determined that representation by such
counsel would represent a conflict of interest, in each of which
cases the fees and expenses of counsel shall be at the expense of
the indemnifying parties. An indemnifying party shall not be liable
for any settlement of any action, suit, and proceeding or claim
effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. The Company will not
enter into any waiver, release or settlement of any claim or action
(whether or not any indemnified party is a party thereto) in
respect of which indemnification may be sought hereunder without
the prior written consent of the Representative (which consent will
not be unreasonably withheld, delayed or conditioned), unless such
waiver, release or settlement (i) includes an unconditional release
of each indemnified party from all liability arising out of such
claim or action, (ii) does not contain any factual or legal
admission by or with respect to any indemnified party or any
adverse statement with respect to the character, professionalism,
expertise or reputation of any indemnified party or any action or
inaction of any indemnified party and (iii) does not preclude or
purport to preclude the future business activities of any
indemnified person.
In
addition to any rights of indemnification or contribution set forth
above, the Company agrees to reimburse each indemnified party for
all documented out-of-pocket costs and expenses as they are
incurred (including, without limitation, fees and expenses of
outside counsel) in connection with investigating, preparing or
settling any claim or action involving the enforcement of this
Section 6.
-23-
7. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section
6(a) or 6(b) is due in accordance with its terms but for any reason
is unavailable to or insufficient to hold harmless an indemnified
party in respect to any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall
contribute to the aggregate losses, liabilities, claims, damages
and expenses (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims
asserted, but after deducting any contribution received by any
person entitled hereunder to contribution from any person who may
be liable for contribution) incurred by such indemnified party, as
incurred, in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares
pursuant to this Agreement or, if such allocation is not permitted
by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the
relative fault of the Company on the one hand and the Underwriters
on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to above. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission
or alleged omission. Notwithstanding the provisions of this Section
7, no Underwriter (except as may be provided in the Agreement Among
Underwriters) shall be required to contribute any amount in excess
of the underwriting discounts and
commissions applicable to the Shares purchased by such
Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company
including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the
Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within
the meaning of the Section 15 of the Securities Act or Section 20
of the Exchange Act, shall have the same rights to contribution as
the Company, as the case may be. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a
claim for contribution may be made against another party or parties
under this Section 7, notify such party or parties from whom
contribution may be sought, but the omission so to notify such
party or parties from whom contribution may be sought shall not
relieve the party or parties from whom contribution may be sought
from any other obligation it or they may have hereunder or
otherwise than under this Section 7. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim
settled without its written consent. The Underwriter's obligations
to contribute pursuant to this Section 7 are several in proportion
to their respective underwriting commitments and not
joint.
-24-
8. Termination.
(a) This
Agreement may be terminated with respect to the Shares to be
purchased on a Closing Date by the Representative by notifying the
Company at any time at or before a Closing Date in the absolute
discretion of the Representative if: (i) there has occurred any
material adverse change in the securities markets or any event, act
or occurrence that has materially disrupted, or in the opinion of
the Representative, will in the future materially disrupt, the
securities markets or there shall be such a material adverse change
in general financial, political or economic conditions or the
effect of international conditions on the financial markets in the
United States is such as to make it, in the judgment of the
Representative, inadvisable or impracticable to market the Shares
or enforce contracts for the sale of the Shares; (ii) there has
occurred any outbreak or material escalation of hostilities or acts
of terrorism or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in
the judgment of the Representative, inadvisable or impracticable to
market the Shares or enforce contracts for the sale of the Shares;
(iii) trading in the Shares or any securities of the Company has
been suspended or materially limited by the Commission or trading
generally on the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. or the NASDAQ has been suspended or materially
limited, or minimum or maximum ranges for prices for securities
shall have been fixed, or maximum ranges for prices for securities
have been required, by any of said exchanges or by such system or
by order of the Commission, FINRA, or any other governmental or
regulatory authority; or (iv) a banking moratorium has been
declared by any state or Federal authority; or (v) in the judgment
of the Representative, there has been, since the time of execution
of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change
in the assets, properties, condition, financial or otherwise, or in
the results of operations, business affairs or business prospects
of the Company and its Subsidiaries considered as a whole, whether
or not arising in the ordinary course of business.
(b) If
this Agreement is terminated pursuant to any of its provisions, the
Company shall not be under any liability to any Underwriter, and no
Underwriter shall be under any liability to the Company, except
that (y) if this Agreement is terminated by the Representative or
the Underwriters because of any failure, refusal or inability on
the part of the Company to comply with the terms or to fulfill any
of the conditions of this Agreement, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) incurred by
them in connection with the proposed purchase and sale of the
Shares or in contemplation of performing their obligations
hereunder and (z) no Underwriter who shall have failed or refused
to purchase the Shares agreed to be purchased by it under this
Agreement, without some reason sufficient hereunder to justify
cancellation or termination of its obligations under this
Agreement, shall be relieved of liability to the Company or to the
other Underwriters for damages occasioned by its failure or
refusal.
-25-
9. Substitution
of Underwriters. If any Underwriter shall default in its
obligation to purchase on any Closing Date the Shares agreed to be
purchased hereunder on such Closing Date, the Representative shall
have the right, within 36 hours thereafter, to make arrangements
for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase such Shares on the terms contained
herein. If, however, the Representative shall not have completed
such arrangements within such 36-hour period, then the Company
shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to the
Underwriters to purchase such Shares on such terms. If, after
giving effect to any arrangements for the purchase of the Shares of
a defaulting Underwriter or Underwriters by the Representative and
the Company as provided above, the aggregate number of Shares which
remains unpurchased on such Closing Date does not exceed
one-eleventh of the aggregate number of all the Shares that all the
Underwriters are obligated to purchase on such date, then the
Company shall have the right to require each non-defaulting
Underwriter to purchase the number of Shares which such Underwriter
agreed to purchase hereunder at such date and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed
to purchase hereunder) of the Shares of such defaulting Underwriter
or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from
liability for its default. In any such case, either the
Representative or the Company shall have the right to postpone the
applicable Closing Date for a period of not more than seven days in
order to effect any necessary changes and arrangements (including
any necessary amendments or supplements to the Registration
Statement or Prospectus or any other documents), and the Company
agrees to file promptly any amendments to the Registration
Statement or the Prospectus which in the opinion of the Company and
the Underwriters and their counsel may thereby be made
necessary.
If,
after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the
Representative and the Company as provided above, the aggregate
number of such Shares which remains unpurchased exceeds 10% of the
aggregate number of all the Shares to be purchased at such date,
then this Agreement, or, with respect to a Closing Date which
occurs after the first Closing Date, the obligations of the
Underwriters to purchase and of the Company, to sell the Option
Shares to be purchased and sold on such date, shall terminate,
without liability on the part of any non-defaulting Underwriter to
the Company, and without liability on the part of the Company,
except as provided in Sections 5(b), 6, 7 and 8. The provisions of
this Section 9 shall not in any way affect the liability of any
defaulting Underwriter to the Company or the nondefaulting
Underwriters arising out of such default. The term "Underwriter" as
used in this Agreement shall include any person substituted under
this Section 9 with like effect as if such person had originally
been a party to this Agreement with respect to such
Shares.
10.
Miscellaneous. The
respective agreements, representations, warranties, indemnities and
other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them
pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or the Company or
any of their respective officers, directors or controlling persons
referred to in Sections 6 and 7 hereof, and shall survive delivery
of and payment for the Shares. In addition, the provisions of
Sections 5(b), 6, 7 and 8 shall survive the termination or
cancellation of this Agreement.
This
Agreement has been and is made for the benefit of the Underwriters
and the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons
controlling any of the Underwriters, or the Company, and directors
and officers of the Company, and their respective successors and
assigns, and no other person shall acquire or have any right under
or by virtue of this Agreement. The term "successors and assigns"
shall not include any purchaser of Shares from any Underwriter
merely because of such purchase.
-26-
All
notices and communications hereunder shall be in writing and mailed
or delivered or by telephone or telegraph if subsequently confirmed
in writing, (a) if to the Representative, c/o ▇.▇. ▇▇▇▇▇▇▇▇▇▇ &
Co., LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇
▇. Viklund, with a copy to Ellenoff ▇▇▇▇▇▇▇▇ & Schole LLP,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and (b) if to the Company, to its agent for service
as such agent's address appears on the cover page of the
Registration Statement with a copy to Disclosure Law Group, a
Professional Corporation, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York. This Agreement contains the entire agreement of the
parties, and replaces and supersedes all prior discussions,
proposals, negotiations, and agreements in principle, oral or
written, between or among the parties, with respect to the subject
matter hereof. Notwithstanding anything herein to the contrary, the
Engagement Agreement, dated July 1, 2019 (“Engagement Agreement”),
by and between the Company and the Representative, shall continue
to be effective and the terms therein, including, without
limitation, Section A.4. with respect to any future offerings,
shall continue to survive and be enforceable by the Representative
in accordance with its terms, provided that, in the event of a
conflict between the terms of the Engagement Agreement and this
Agreement, the terms of this Agreement shall prevail. This
Agreement may only be amended by a written instrument signed by the
parties hereto.
This
Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same
instrument.
-27-
Please
confirm that the foregoing correctly sets forth the agreement among
us.
Very
truly yours,
By:
/s/ Johan M. (Thijs)
▇▇▇▇▇
Name: Johan M.
(Thijs) ▇▇▇▇▇
Title:
Chief Executive Officer
Confirmed:
▇.▇. ▇▇▇▇▇▇▇▇▇▇ & CO., LLC
___________________________________
Acting
severally on behalf of itself
and as
representative of the several
Underwriters
named in Schedule I
annexed
hereto.
By:
▇.▇. ▇▇▇▇▇▇▇▇▇▇ & CO.,
LLC
By:
/s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Chief Operating Officer
-28-
SCHEDULE
I
|
Underwriter
|
Number of Firm Shares to be Purchased from the Company
|
|
▇.▇.
▇▇▇▇▇▇▇▇▇▇ & Co., LLC
|
4,390,000
|
|
National
Securities Corporation
|
610,000
|
|
Total
|
5,000,000
|
-29-
SCHEDULE
II
Lock-up
Signatories
Johan
M. (Thijs) ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, M.D., Ph.D.
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, Ph.D.
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇
-30-
SCHEDULE
III
Issuer
Free Writing Prospectuses
None.
-31-