16,190,697 Shares of Common Stock ($0.001 Par Value) and Warrants to Purchase up to 24,286,044 Shares of Common Stock CorMedix Inc. Common Stock UNDERWRITING AGREEMENT
Exhibit 1.1
Execution Version
16,190,697
Shares of Common Stock ($0.001 Par Value)
and
Warrants
to Purchase up to 24,286,044 Shares of Common Stock
Common
Stock
April
28, 2017
▇.▇.
▇▇▇▇▇▇▇▇▇▇ & Co., LLC
As
Representative of the several Underwriters
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
CorMedix
Inc., a Delaware corporation (the “Company”), proposes to sell to the
several underwriters (the “Underwriters”) named in Schedule I
hereto for whom you are acting as the representative (the
“Representative”) (i) an aggregate
of 16,190,697 shares (the “Firm Shares”) of the
Company’s common stock, $0.001 par value (the
“Common Stock”)
and (ii) warrants of the Company to purchase an aggregate of
24,286,044 shares of Common Stock (the “Firm Warrants” and, together with
the Firm Shares, the “Firm
Securities”). The respective amounts of the Firm
Securities to be so purchased by the several Underwriters are set
forth opposite their names in Schedule I hereto. The Company also
proposes to sell at the Underwriters’ option (i) an
aggregate of up to 2,428,604 additional shares of the
Company’s Common Stock (the “Option Shares” and, together with
the Firm Shares, the “Shares”) and/or (ii) warrants
of the Company to purchase up to an additional 3,642,906 shares of
Common Stock (the “Option
Warrants” and, together with the Firm Warrants, the
“Warrants”) as
set forth below. Each Share is being sold together with (i) a
Tranche 1 Warrant (the “Tranche 1 Warrant”) to purchase
0.75 of a share of Common Stock at an exercise price of $1.05 per
share and (ii) a Tranche 2 Warrant (the “Tranche 2
Warrant”) to purchase 0.75 of a share of Common Stock at an
exercise price of $0.75 per share. As used herein,
“Warrant Shares”
means the shares of Common Stock issuable upon exercise of the
Warrants. The Option Shares and the Option Warrants are referred to
herein as the “Option
Securities.”
As the
Representative, you have advised the Company (a) that you are
authorized to enter into this Agreement on behalf of the several
Underwriters, and (b) that the several Underwriters are
willing, acting severally and not jointly, to purchase the numbers
of Firm Securities set forth opposite their respective names in
Schedule I, plus their pro rata portion of the Option Securities
set forth opposite their respective names in Schedule II if you
elect to exercise the option in whole or in part for the accounts
of the several Underwriters. The Firm Securities and the Option
Securities (to the extent the aforementioned option is exercised)
are herein collectively called the “Securities.”
Execution Version
In
consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby,
the parties hereto agree as follows:
1.
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY.
The
Company represents and warrants to each of the Underwriters as
follows:
(a) The
Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the “Securities Act”), and has prepared
and filed with the Securities and Exchange Commission (the
“Commission”) a
registration statement on Form S-3 (File No. 333-203300),
including a related Base Prospectus (as defined below), for
registration under the Securities Act of the offering and sale of
the Securities. Such Registration Statement (as defined below),
including any amendments thereto filed prior to the Applicable Time
(as defined below), has become effective. The offering and sale of
the Securities as contemplated by this Agreement may be made
pursuant to General Instruction I.B.1 of Form S-3 under the
Securities Act. The Company may have filed with the Commission, as
part of an amendment to the Registration Statement or pursuant to
Rule 424(b), one or more preliminary prospectus supplements
relating to the Securities, each of which has previously been
furnished to you. The Company will file with the Commission a final
prospectus supplement relating to the Securities in accordance with
Rule 424(b). As filed, such final prospectus supplement shall
contain all information required by the Securities Act and the
rules thereunder, and, except to the extent the Representative
shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the
Applicable Time or, to the extent not completed at the Applicable
Time, shall contain only such specific additional information and
other changes (beyond that contained in the Base Prospectus and any
preliminary prospectus supplement) as the Company has advised you,
prior to the Applicable Time, will be included or made therein. The
Registration Statement, at the Applicable Time, meets the
requirements set forth in Rule 415(a)(1)(x). The initial
Effective Date (as defined below) of the Registration Statement was
not earlier than the date three years before the Applicable
Time.
(b) On
each Effective Date, the Registration Statement did, and when the
Prospectus (as defined below) is first filed in accordance with
Rule 424(b) and on the applicable Closing Date (as defined
herein), the Prospectus (and any supplement thereto) will, comply
in all material respects with the applicable requirements of the
Securities Act and the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”), and the respective rules thereunder; on each
Effective Date and at the Applicable Time, the Registration
Statement did not and 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; and on the date of any filing pursuant to
Rule 424(b) and on the applicable Closing Date, the Prospectus
(together with any supplement thereto) will not include any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided,
however, that the
Company makes no representations or warranties as to the
information contained in or omitted from the Preliminary Prospectus
(as defined below) or the Prospectus (or any supplement thereto) in
reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of any Underwriter through
the Representative, specifically for use therein, it being
understood and agreed that the only such information is that
described in Section 13 hereof.
(c) As
of the Applicable Time and as of the applicable Closing Date,
neither (i) the General Use Free Writing Prospectus(es) (as
defined below) issued at or prior to the Applicable Time, the Base
Prospectus, the Preliminary Prospectus used most recently prior to
the Applicable Time and the information included on Schedule III
hereto, all considered together (collectively, the
“General Disclosure
Package”), nor (ii) any individual Limited Use
Free Writing Prospectus (as defined below), when considered
together with the General Disclosure Package, included or will
include any untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes
no representations or warranties as to information contained in or
omitted from any Issuer Free Writing Prospectus (as defined below)
or the General Disclosure Package, in reliance upon, and in
conformity with, written information furnished to the Company by or
on behalf of any Underwriter through the Representative,
specifically for use therein, it being understood and agreed that
the only such information is that described in Section 13
hereof. As used in this Agreement:
Execution Version
“Applicable
Time” means 6:05 a.m. (New York time) on the date of
this Agreement or such other time as agreed to by the Company and
the Representative.
“Base
Prospectus” shall mean the base prospectus referred to
in Section 1(a) above contained in the Registration Statement at
the Applicable Time.
“Effective
Date” shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement (as defined
below) became or becomes effective.
“General
Use Free Writing Prospectus” means any Issuer Free
Writing Prospectus that is identified on Schedule IV to this
Agreement.
“Issuer
Free Writing Prospectus” means any “issuer free
writing prospectus,” as defined in Rule 433 under the
Securities Act, relating to the Securities in the form filed or
required to be filed with the Commission or, if not required to be
filed, in the form retained in the Company’s records pursuant
to Rule 433(g) under the Securities Act.
“Limited
Use Free Writing Prospectus” means any Issuer Free
Writing Prospectus that is not a General Use Free Writing
Prospectus.
“Preliminary
Prospectus” shall mean any preliminary prospectus
supplement to the Base Prospectus referred to in Section 1(a) above
which is used prior to the filing of the Prospectus, together with
the Base Prospectus.
“Prospectus”
shall mean the final prospectus supplement relating to the
Securities that was first filed pursuant to Rule 424(b) after
the Applicable Time, together with the Base
Prospectus.
“Registration
Statement” shall mean the registration statement
referred to in Section 1(a) above, including exhibits and
financial statements and any prospectus supplement relating to the
Securities that is filed with the Commission pursuant to Rule
424(b) and deemed part of such registration statement pursuant to
Rule 430B, as amended on each Effective Date and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the applicable Closing Date,
shall also mean such registration statement as so amended or such
Rule 462(b) Registration Statement, as the case may
be.
“Rule 462(b)
Registration Statement” shall mean a registration
statement and any amendments thereto filed pursuant to
Rule 462(b) relating to the offering covered by the
registration statement referred to in Section 1(a)
hereof.
“Stockholder
Approval” shall mean the requisite approval from the
Company’s stockholders to amend the Company’s Amended
and Restated Certificate of Incorporation, as amended, to increase
the shares of authorized capital stock from 82,000,000 shares to
202,000,000 shares and to increase the number of authorized shares
of common stock from 80,000,000 to 200,000,000 shares.
Execution Version
(d) The
Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its
properties and conduct its business as described in the
Registration Statement, the General Disclosure Package and the
Prospectus. CorMedix Europe GmbH (the “Subsidiary”) has been duly
organized and, to the knowledge of the Company, is validly existing
as a corporation in good standing under the laws of Germany, with
requisite power and authority to own or lease its properties and
conduct its business as described in the Registration Statement,
the General Disclosure Package and the Prospectus. The Subsidiary
is the only subsidiary, direct or indirect, of the Company. The
Company and the Subsidiary are duly qualified to transact business
in all jurisdictions in which the conduct of their business
requires such qualification, except for such jurisdictions where
the failure to so qualify would not (i) have a material
adverse effect on the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or
prospects of the Company and of the Subsidiary taken as a whole or
(ii) prevent the consummation of the transactions contemplated
hereby (the occurrence of any such effect or any such prevention
described in the foregoing clauses (i) and (ii) being referred
to as a “Material Adverse
Effect”). The outstanding shares of capital stock of
each Subsidiary have been duly authorized and validly issued, are
fully paid and non-assessable and are owned by the Company free and
clear of all liens, encumbrances and equities and claims; and no
options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations
into shares of capital stock or ownership interests in the
Subsidiary are outstanding.
(e) The
outstanding shares of Common Stock of the Company have been duly
authorized and validly issued and are fully paid and
non-assessable, have been issued in compliance with all federal and
state securities laws, were not issued in violation of or subject
to any preemptive rights or other rights to subscribe for or
purchase or acquire any securities of the Company that have not
been waived in writing. The Shares have been duly authorized and
when issued and paid for as contemplated herein will be validly
issued, fully paid and non-assessable; and no preemptive rights of
stockholders exist with respect to any of the Shares or the issue
and sale thereof. Neither the filing of the Registration Statement
nor the offering or sale of the Securities as contemplated by this
Agreement gives rise to any rights, other than those which have
been waived or satisfied, for or relating to the registration of
any shares of Common Stock. Except as described in the Registration
Statement, the General Disclosure Package and the Prospectus, there
are no contracts, agreements or understandings between the Company
and any person granting such person the right to require the
Company to file a registration statement under the Securities Act
with respect to any securities of the Company owned or to be owned
by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities
Act. The Warrants have been duly authorized by the Company and,
when executed and delivered by the Company, will be valid and
binding agreements of the Company, enforceable against the Company
in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable
principles. Subject to receipt of Stockholder Approval, the Warrant
Shares have been duly authorized and validly reserved for issuance
upon exercise of the Warrants. The Warrant Shares, when issued and
delivered upon exercise of the Warrants in accordance therewith,
will be validly issued, fully paid and nonassessable, and the
issuance of the Warrant Shares is not subject to any preemptive
rights, rights of first refusal or other similar rights to
subscribe for or purchase the Warrant Shares.
(f) The
information set forth under the caption “Description of our
Capital Stock” in the Registration Statement and under the
captions “Description of our Capital Stock” and
“Description of Securities We Are Offering” in the
Prospectus (and any similar section or information contained in the
General Disclosure Package) is true and correct. All of the Shares
(including the Warrant Shares) and the Warrants conform to the
description thereof contained in the Registration Statement, the
General Disclosure Package and the Prospectus. The form of
certificates for the Securities conforms to the corporate law of
the jurisdiction of the Company’s incorporation and to any
requirements of the Company’s organizational documents.
Subsequent to the respective dates as of which information is given
in the Registration Statement, the General Disclosure Package and
the Prospectus, except as otherwise specifically stated therein or
in this Agreement, the Company has not: (i) issued any debt
securities or incurred any liability or obligation, direct or
contingent, for borrowed money; or (ii) declared or paid any
dividend or made any other distribution on or in respect to its
capital stock.
Execution Version
(g) The
Commission has not issued an order preventing or suspending the use
of any Preliminary Prospectus, any Issuer Free Writing Prospectus
or the Prospectus relating to the proposed offering of the
Securities, and no proceeding for that purpose or pursuant to
Section 8A of the Securities Act has been instituted or, to the
Company’s knowledge, threatened by the Commission. The
Registration Statement, as of its effective date, contained and as
of the date hereof, contains, and the Prospectus, as of its date,
contained and any amendments or supplements thereto will contain,
all statements which are required to be stated therein by, and will
conform to, the requirements of the Securities Act and the rules
and regulations of the Commission (the “Rules and Regulations”). The
documents incorporated, or to be incorporated, by reference in the
Prospectus, at the time filed with the Commission conformed or will
conform, in all material respects to the requirements of the
Exchange Act or the Act, as applicable, and the Rules and
Regulations.
(h) 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 Securities or until any earlier date that the Company
notified or notifies the Representative pursuant to Section 4(c)
hereof, did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information
contained in the Registration Statement, the General Disclosure
Package or the Prospectus, including any document incorporated by
reference therein that has not been superseded or modified. 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 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 light of the circumstances, not misleading, the Company
has notified or will notify promptly the Underwriters so that any
use of such Issuer Free Writing Prospectus may cease until it is
amended or supplemented. The foregoing does not apply to statements
or omissions from any Issuer Free Writing Prospectus in reliance
upon, and in conformity with, written information furnished to the
Company by or on behalf of any Underwriter through the
Representative, specifically for use therein.
(i) The
Company has not, directly or indirectly, distributed and will not
distribute any offering material in connection with the offering
and sale of the Securities other than any Preliminary Prospectus,
the Prospectus, any Permitted Free Writing Prospectus (as defined
below) and other materials, if any, permitted under the Securities
Act and consistent with Section 4(b) hereof. The Company will file
with the Commission all Issuer Free Writing Prospectuses in the
time required under Rule 433(d) under the Securities Act. The
Company has satisfied or will satisfy the conditions in Rule 433
under the Securities Act to avoid a requirement to file with the
Commission any electronic road show.
(j) (i)
At the time of filing the Registration Statement and (ii) as
of the date hereof (with such date being used as the determination
date for purposes of this clause (ii)), the Company was not and is
not an “ineligible issuer” (as defined in Rule 405
under the Securities Act, without taking into account any
determination by the Commission pursuant to Rule 405 under the
Securities Act that it is not necessary that the Company be
considered an ineligible issuer), including, without limitation,
for purposes of Rules 164 and 433 under the Securities Act with
respect to the offering of the Securities as contemplated by the
Registration Statement.
Execution Version
(k) The
financial statements of the Company, together with related notes
and schedules as set forth or incorporated by reference in the
Registration Statement, the General Disclosure Package and the
Prospectus, present fairly the financial position and the results
of operations and cash flows of the Company and the Subsidiary, at
the indicated dates and for the indicated periods. Such financial
statements and related schedules have been prepared in accordance
with generally accepted principles of accounting
(“GAAP”),
consistently applied throughout the periods involved, except as
disclosed therein, and all adjustments necessary for a fair
presentation of results for such periods have been made. The
summary and selected financial and statistical data included or
incorporated by reference in the Registration Statement, the
General Disclosure Package and the Prospectus presents fairly in
all material respects the information shown therein and such data
has been compiled on a basis consistent with the financial
statements presented therein and the books and records of the
Company. All disclosures, if any, contained in the Registration
Statement, the General Disclosure Package and the Prospectus
regarding “non-GAAP financial measures” (as such term
is defined by the Rules and Regulations) comply with Regulation G
of the Exchange Act, and Item 10 of Regulation S-K under the
Securities Act, to the extent applicable. The Company and the
Subsidiary do not have any material liabilities or obligations,
direct or contingent (including any off-balance sheet obligations
or any “variable interest entities” within the meaning
of Financial Accounting Standards Board Interpretation No. 46R),
not disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus. There are no financial statements
(historical or pro forma) that are required to be included in the
Registration Statement, the General Disclosure Package or the
Prospectus that are not included as required.
(l) ▇▇▇▇▇▇▇▇
LLP, who have audited certain of the financial statements filed
with the Commission as part of, or incorporated by reference in,
the Registration Statement, the General Disclosure Package and the
Prospectus, is an independent registered public accounting firm
with respect to the Company and the Subsidiary within the meaning
of the Securities Act and the applicable Rules and Regulations and
the Public Company Accounting Oversight Board (United States) (the
“PCAOB”).
(m) Except
as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus, neither the Company nor the Subsidiary
is aware of (i) any material weakness in the Company’s
internal control over financial reporting or (ii) change in
internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the
Company’s internal control over financial
reporting.
(n) There
is and has been no failure on the part of the Company and any of
the Company’s directors or officers, in their capacities as
such, to comply in all material respects with any provision of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended, including Section 402
relating to loans and Sections 302 and 906 relating to
certifications.
(o) There
is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company or the
Subsidiary before any court or administrative agency or otherwise,
domestic or foreign, which if determined adversely to the Company
or the Subsidiary would have, individually or in the aggregate, a
Material Adverse Effect, except as set forth in the Registration
Statement, the General Disclosure Package and the
Prospectus.
(p) The
Company and the Subsidiary have good and marketable title to all of
the properties and assets reflected in the financial statements
hereinabove described or described in the Registration Statement,
the General Disclosure Package and the Prospectus, subject to no
lien, mortgage, pledge, charge or encumbrance of any kind except
those reflected in such financial statements or described in the
Registration Statement, the General Disclosure Package and the
Prospectus or which are not material in amount. The Company and the
Subsidiary occupy their leased properties under valid and binding
leases conforming in all material respects to the description
thereof set forth in the Registration Statement, the General
Disclosure Package and the Prospectus.
(q) The
Company and the Subsidiary have filed all Federal, State, local and
foreign tax returns which have been required to be filed and have
paid all taxes indicated by such returns and all assessments
received by them or any of them to the extent that such taxes have
become due and are not being contested in good faith and for which
an adequate reserve for accrual has been established in accordance
with GAAP, except as would not have a Material Adverse Effect. All
material tax liabilities have been adequately provided for in the
financial statements of the Company, and the Company does not know
of any actual or proposed additional material tax
assessments.
Execution Version
(r) Since
the respective dates as of which information is given in the
Registration Statement, the General Disclosure Package and the
Prospectus, as each may be amended or supplemented, (i) there
has not been a Material Adverse Effect, whether or not occurring in
the ordinary course of business, and (ii) there has not been
any material transaction entered into or any material transaction
that is probable of being entered into by the Company or the
Subsidiary, other than transactions in the ordinary course of
business and changes and transactions described in the Registration
Statement, the General Disclosure Package and the Prospectus, as
each may be amended or supplemented. The Company and the Subsidiary
have no material contingent obligations which are required to be
disclosed in the Company’s financial statements but are not
so disclosed. Since the date of the latest audited financial
statements included in the Registration Statement, the General
Disclosure Package and the Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or the
Subsidiary other than as set forth or contemplated in the
Registration Statement, the General Disclosure Package and the
Prospectus.
(s) Neither
the Company nor the Subsidiary is or with the giving of notice or
lapse of time or both, will be, (i) in violation of its
certificate or articles of incorporation, by-laws or other
organizational documents, (ii) in violation of or in default
under any agreement, lease, contract, indenture or other instrument
or obligation to which it is a party or by which it, or any of its
properties, is bound, or (iii) in violation in the performance or
observance of any statute, law, rule, regulation, ordinance,
judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its
properties, as applicable, and, solely with respect to this clause
(ii), which violation or default would have a Material Adverse
Effect. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not conflict with or result in
a breach of (i) any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust
or other agreement or instrument to which the Company or the
Subsidiary is a party or by which the Company or the Subsidiary or
any of their respective properties is bound, except for such
conflicts, breaches or defaults that would not, individually or in
the aggregate, have a Material Adverse Effect, (ii) the
certificate or articles of incorporation or by-laws of the Company
or (iii) any law, order, rule or regulation judgment, order,
writ or decree applicable to the Company or the Subsidiary of any
court or of any government, regulatory body or administrative
agency or other governmental body having jurisdiction, except for
such conflicts or breaches that would not, individually or in the
aggregate, have a Material Adverse Effect.
(t) There
is no document, contract or other agreement required to be
described in the Registration Statement, the General Disclosure
Package 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 the Rules and Regulations. Each
description of a contract, document or other agreement in the
Registration Statement and the Prospectus accurately reflects in
all material respects the terms of the underlying contract,
document or other agreement. Neither the Company nor its Subsidiary
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 or any other
agreement or instrument to which the Company or its Subsidiary is a
party or by which the Company or its Subsidiary or their respective
properties or businesses may be bound, and no event has occurred
which with notice or lapse of time or both would constitute such a
default, in any such case in which the default or event,
individually or in the aggregate, would have a Material Adverse
Effect.
(u) The
execution and delivery of, and the performance by the Company of
its obligations under, this Agreement and the Warrants, subject to
receipt of Stockholder Approval, have been duly and validly
authorized by all necessary corporate action on the part of the
Company, and this Agreement has been duly executed and delivered by
the Company.
Execution Version
(v) Each
approval, consent, order, authorization, designation, declaration
or filing 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 Warrants and the
consummation of the transactions contemplated hereby and thereby
(except such additional steps as may be required by the Commission,
the Financial Industry Regulatory Authority, Inc.
(“FINRA”) or
such additional steps as may be necessary to qualify the Securities
for public offering by the Underwriters under state securities or
Blue Sky laws), other than the Stockholder Approval, has been
obtained or made and is in full force and effect.
(w) The
Company and the Subsidiary each own or possess the right to use all
patents, patent rights, trademarks, trade names, service marks,
service names, copyrights, license rights, know-how (including
trade secrets and other unpatented and unpatentable proprietary or
confidential information, systems or procedures) and other
intellectual property rights (“Intellectual Property”) necessary
to carry on their business in all material respects; neither the
Company nor the Subsidiary has infringed, and neither the Company
nor the Subsidiary has received notice of conflict with, any
Intellectual Property of any other person or entity. The Company
has taken all reasonable steps necessary to secure interests in
such Intellectual Property from its contractors. There are no
outstanding options, licenses or agreements of any kind relating to
the Intellectual Property of the Company that are required to be
described in the Registration Statement, the General Disclosure
Package and the Prospectus and are not described in all material
respects. The Company is not a party to or bound by any options,
licenses or agreements with respect to the Intellectual Property of
any other person or entity that are required to be set forth in the
Prospectus and are not described in all material respects. None of
the technology employed by the Company has been obtained or is
being used by the Company in violation of any contractual
obligation binding on the Company or any of its officers, directors
or employees or otherwise in violation of the rights of any
persons; the Company has not received any written or oral
communications alleging that the Company has violated, infringed or
conflicted with, or, by conducting its business as set forth in the
Registration Statement, the General Disclosure Package and the
Prospectus, would violate, infringe or conflict with, any of the
Intellectual Property of any other person or entity, except to the
extent such violation, infringement or conflict would not,
individually or in the aggregate, have a Material Adverse
Effect.
(x) Neither
the Company, nor to the Company’s knowledge, any of its
affiliates, has taken or may take, directly or indirectly, any
action designed 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 shares of Common Stock to
facilitate the sale or resale of the Securities. The Company
acknowledges that the Underwriters may engage in passive market
making transactions in the Securities on The NYSE MKT LLC
(“NYSE MKT”) in
accordance with Regulation M under the Exchange Act.
(y) Neither
the Company nor the Subsidiary is or, after giving effect to the
offering and sale of the Securities contemplated hereunder and the
application of the net proceeds from such sale as described in the
Registration Statement, General Disclosure Package and the
Prospectus, will be an “investment company” within the
meaning of such term under the Investment Company Act of 1940 as
amended (the “1940
Act”), and the rules and regulations of the Commission
thereunder.
(z) The
Company and the Subsidiary maintain a system of internal accounting
controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with
management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (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 existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
The Company’s certifying officers have evaluated the
effectiveness of the Company’s disclosure controls and
procedures as of the end of the period covered by the
Company’s most recently filed periodic report under the
Exchange Act (such date, the “Evaluation Date”). The Company
presented in its most recently filed periodic report under the
Exchange Act the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on
their evaluations as of the Evaluation Date. Since the Evaluation
Date, there have been no changes in the Company’s internal
control over financial reporting (as such term is defined in the
Exchange Act) that has materially affected, or is reasonably likely
to materially affect, the Company’s internal control over
financial reporting.
Execution Version
(aa) The
Company maintains “disclosure controls and procedures”
(as defined in Rules 13a-14(c) and 15d-14(c) under the Exchange
Act); the Company’s “disclosure controls and
procedures” are reasonably designed to ensure that all
information (both financial and non-financial) required to be
disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and
regulations of the Exchange Act, and that all such information is
accumulated and communicated to the Company’s management as
appropriate to allow timely decisions regarding required disclosure
and to make the certifications of the Chief Executive Officer and
Chief Financial Officer of the Company required under the Exchange
Act with respect to such reports.
(bb) The
statistical, industry-related and market-related data included in
the Registration Statement, the General Disclosure Package and the
Prospectus are based on or derived from sources which the Company
reasonably and in good faith believes are reliable and accurate,
and such data agree with the sources from which they are
derived.
(cc) The
operations of the Company and its Subsidiary are and have been
conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements, including those of the
Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all applicable
jurisdictions, the rules and regulations thereunder and any related
or similar applicable 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 the Subsidiary with respect to
the Money Laundering Laws is pending or, to the best knowledge of
the Company, threatened.
(dd) Neither
the Company nor the Subsidiary nor any director, officer or
employee of the Company nor, to the knowledge of the Company, after
due inquiry, any agent, affiliate or other person associated with
or acting on behalf of the Company is currently subject to or the
target of any U.S. sanctions administered by the U.S. Government
(including, without limitation, the Office of Foreign Assets
Control of the U.S. Department of the Treasury or the U.S.
Department of State or the Bureau of Industry and security of the
U.S. Department of Commerce and including, without limitation, the
designation as a “specially
designated national” or “blocked person”), the United
Nations Security Council, the European Union, the United Kingdom
(including sanctions administered or enforced by Her
Majesty’s Treasury) or other relevant sanctions authority
(collectively, “Sanctions”), nor is the Company
located, organized or resident in a country or territory that is
subject to or the target of Sanctions, including, without
limitation, Crimea, Cuba, Iran, North Korea, Sudan and Syria (each,
a “Sanctioned
Country”); and the Company and the Subsidiary will not
directly or indirectly use the proceeds of this offering, or lend,
contribute or otherwise make available such proceeds to any joint
venture partner or other person or entity, for the purpose of
(i) financing or facilitating the activities of or business
with any person that currently is subject to or the target of any
Sanctions, (ii) financing or facilitating any activities of or
business in any Sanctioned Country or (iii) or in any other
manner that will result in a violation by any person (including any
person participating in the transaction whether as underwriter,
advisor, investor or otherwise) of Sanctions.
(ee) Except
as has been disclosed to the Underwriters or is not material to the
analysis under any Sanctions, neither the Company nor the
Subsidiary has engaged in any dealings or transactions with or for
the benefit of a Sanctioned Person, or with or in a Sanctioned
Country, in the preceding 3 years, nor does the Company or the
Subsidiary have any plans to increase its dealings or transactions
with or for the benefit of Sanctioned Persons, or with or in
Sanctioned Countries.
(ff) The
Company and the Subsidiary carry, or are covered by, insurance in
such amounts and covering such risks as the Company reasonably
deems adequate for the conduct of their respective businesses and
the value of their respective properties and as is customary for
companies engaged in similar businesses and in similar
industries.
(gg) Except
as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus, the Company and the Subsidiary are in
compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974,
as amended, including the regulations and published interpretations
thereunder (“ERISA”); no “reportable
event” (as defined in ERISA) has occurred with respect to any
“pension plan” (as defined in ERISA) for which the
Company and the Subsidiary would have any liability; the Company
and the Subsidiary have not incurred and do not expect to incur
liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan”
or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published
interpretations thereunder (the “Code”); and each “pension
plan” for which the Company or the Subsidiary would have any
liability that is intended to be qualified under Section 401(a) of
the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(hh) To
the Company’s knowledge, there are no affiliations or
associations between any member of FINRA and any of the
Company’s officers, directors or 5%-or-greater
securityholders, except as set forth in the Registration Statement,
the General Disclosure Package and the Prospectus.
Execution Version
(ii) Neither
the Company nor the Subsidiary is in violation of any statute,
rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the
manufacture, processing, distribution, use, treatment, storage,
transport, handling, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances
(collectively, “Environmental
Laws”), owns or operates any real property
contaminated with any substance that is subject to Environmental
Laws, is liable for any off-site disposal or contamination pursuant
to any Environmental Laws, or is subject to any claim relating to
any Environmental Laws, which violation, contamination, liability
or claim would, individually or in the aggregate, have a Material
Adverse Effect; and the Company is not aware of any pending
investigation which could reasonably be expected to lead to such a
claim.
(jj)
An application to list the Shares and the Warrant Shares has been
made to The NYSE MKT.
(kk)
There are no relationships or related-party transactions involving
the Company or the Subsidiary or any other person required to be
described in the Registration Statement, the General Disclosure
Package and the Prospectus which have not been described as
required.
(ll)
Neither the Company nor the Subsidiary has made any
contribution or other payment to any official of, or candidate for,
any federal, state or foreign office in violation of any law which
violation is required to be disclosed in the Registration
Statement, the General Disclosure Package and the
Prospectus.
(mm)
As of the date of the initial filing of the Registration
Statement referred to in Section 1(a) above, there were no
outstanding personal loans made, directly or indirectly, by the
Company to any director or executive officer of the
Company.
(nn)
The Subsidiary is not currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other
distribution on such Subsidiary’s capital stock, from
repaying to the Company any loans or advances to such Subsidiary
from the Company or from transferring any of such
Subsidiary’s property or assets to the Company, except as set
forth in the Registration Statement, the General Disclosure Package
and the Prospectus.
(oo)
Neither the Company nor the Subsidiary nor any director, officer or
employee of the Company nor, to the knowledge of the Company, any
agent, affiliate or other person associated with or acting on
behalf of the Company or the Subsidiary has, in the course of its
actions for, or on behalf of, the Company (i) used any
corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity;
(ii) made or taken any act in furtherance of an offer, promise
or authorization of any direct or indirect unlawful payment to any
domestic government or regulatory official, “foreign
official” (as defined in the U.S. Foreign Corrupt Practices
Act of 1977, as amended, and the rules and regulations thereunder
(collectively, the “FCPA”) or employee, including of
any government-owned or controlled entity (such as a
state-affiliated hospital, research lab, or university) or of a
public international organization, or any person acting in an
official capacity for or on behalf of any of the foregoing, or any
political party or party official or candidate for political
office; (iii) violated or is in violation of any provision of
the FCPA, or any applicable law or regulation implementing the OECD
Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions, or committed an offence under
the ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ of the United Kingdom, or any other applicable
non-U.S. anti-bribery or anti-corruption statute or regulation; or
(iv) made, offered, agreed, requested or taken an act in
furtherance of any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment or benefit to any
domestic government official, such foreign official or employee;
and the Company, the Subsidiary and their respective affiliates
have conducted their respective businesses in compliance in all
material respects with the FCPA and have instituted, maintain and
enforce, and will continue to maintain and enforce, policies and
procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith.
(pp) Except
as described in the Registration Statement, the General Disclosure
Package and the Prospectus, and except for this Agreement, there
are no contracts, agreements or understandings between the Company
and any person that would give rise to a valid claim against the
Company or any Underwriter for a brokerage commission,
finder’s fee or other like payment in connection with the
public offer and sale of the Securities.
(qq) No
material labor dispute with the employees of the Company or the
Subsidiary exists, or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing, threatened
or imminent labor disturbance by the employees of any of its
principal suppliers, manufacturers or contractors that would be
reasonably likely to have a Material Adverse Effect.
(rr) The
Company has not sold or issued and will not sell or issue any
securities that would be integrated with the offering of the
Securities pursuant to the Securities Act, the Rules and
Regulations or the interpretations thereof by the
Commission.
Execution Version
(ss) The
Company and the Subsidiary possesses such permits, certificates,
licenses, approvals, consents and other authorizations
(collectively, “Governmental
Licenses”) issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct
the business of the Company as described in the Registration
Statement, the General Disclosure Package and the Prospectus,
including without limitation, all such registrations, approvals,
certificates, authorizations and permits required by the United
States Food and Drug Administration (the “FDA”) and/or other federal, state,
local or foreign agencies or bodies engaged in the regulation of
clinical trials, pharmaceuticals, or biohazardous substances or
materials, except where the failure so to possess would not, singly
or in the aggregate, have a Material Adverse Effect; the Company is
in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and
effect would not, singly or in the aggregate, have a Material
Adverse Effect; and the Company has not received any written notice
of proceedings relating to the revocation or modification of any
such Governmental Licenses which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect. Where required by applicable laws
and regulations of the FDA, the Company has submitted to the FDA an
Investigational New Drug Application or amendment or supplement
thereto for a clinical trial it has conducted or sponsored or is
conducting or sponsoring, except where such failure would not,
singly or in the aggregate, have a Material Adverse Effect; all
such submissions were in material compliance with applicable laws
and rules and regulations when submitted and no material
deficiencies have been asserted by the FDA with respect to any such
submissions, except any deficiencies which could not, singly or in
the aggregate, have a Material Adverse Effect.
(tt) The
Company has operated and currently is in compliance with the United
States Federal Food, Drug, and Cosmetic Act, all applicable rules
and regulations of the FDA and other federal, state, local and
foreign governmental bodies exercising comparable authority, except
where the failure to so operate or be in compliance would not,
individually or in the aggregate, have a Material Adverse Effect.
The preclinical and clinical studies conducted by or, to the
Company’s knowledge, on behalf of the Company that are
described in the Registration Statement, the General Disclosure
Package and the Prospectus were, and, if still pending, are being,
conducted in all material respects in accordance with the protocols
submitted to the FDA, and all applicable laws and regulations; the
descriptions of the preclinical and clinical studies, and results
thereof, conducted by or, to the Company’s knowledge, on
behalf of the Company contained in the Registration Statement, the
General Disclosure Package and the Prospectus are accurate and
complete in all material respects; the Company is not aware of any
other trials or studies, the results of which reasonably call into
question the results described or referred to in the Registration
Statement, the General Disclosure Package and the Prospectus; the
Company is not in receipt of any written communications from the
FDA or any foreign, state or local governmental body exercising
comparable authority that reasonably call into question the results
of the studies described or referred to in the Registration
Statement, the General Disclosure Package and the Prospectus; and
the Company has not received any written notice or correspondence
from the FDA or any foreign, state or local governmental body
exercising comparable authority requiring the termination,
suspension, or clinical hold of any tests or preclinical or
clinical studies, or such written notice or correspondence from any
Institutional Review Board or comparable authority requiring the
termination or suspension of a clinical study, conducted by or on
behalf of the Company, which termination, suspension, or clinical
hold would reasonably be expected to have a Material Adverse
Effect.
(uu) Neither
the Company nor the Subsidiary nor, to the knowledge of the
Company, any director, officer, agent, employee, affiliate or other
person acting on behalf of the Company or the Subsidiary is aware
of or has taken any action, directly or indirectly, that could
result in a violation or a sanction for violation by such persons
of the Foreign Corrupt Practices Act of 1977 or the U.K. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, each as may be amended, or similar law of any other
relevant jurisdiction, or the rules or regulations thereunder; and
the Company and the Subsidiary have instituted and maintain
policies and procedures to ensure compliance therewith. No part of
the proceeds of the offering will be used, directly or indirectly,
in violation of the Foreign Corrupt Practices Act of 1977 or the
U.K. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, each as may be amended, or similar law of
any other relevant jurisdiction, or the rules or regulations
thereunder.
2.
PURCHASE, SALE AND
DELIVERY OF THE SECURITIES.
(a) On
the basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the
Company agrees to sell to the Underwriters and each Underwriter
agrees, severally and not jointly, to purchase, at a price of
$0.6909 per share, a price of $0.00705 per Tranche 1 Warrant and a
price of $0.00705 per Tranche 2 Warrant, for a combined purchase
price per share and accompanying warrants of $0.705, the number of
Firm Shares and Firm Warrants set forth opposite the name of each
Underwriter in Schedule I hereof, subject to adjustments in
accordance with Section 9 hereof.
Execution Version
(b) Payment
for the Firm Securities to be sold hereunder is to be made in
Federal (same day) funds to an account designated by the Company
against delivery of book-entry positions for the Firm Shares and
certificates for the Firm Warrants to the Representative for the
several accounts of the Underwriters. Such payment and delivery are
to be made through the facilities of The Depository Trust Company,
New York, New York at 10:00 a.m., New York time, on the third
business day after the date of this Agreement or at such other time
and date not later than five business days thereafter as you and
the Company shall agree upon, such time and date being herein
referred to as the “First
Closing Date.” (As used herein, “business day” means a day on which
The NYSE MKT is open for trading and on which banks in New York are
open for business and are not permitted by law or executive order
to be closed.)
(c) In
addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth,
the Company hereby grants an option to the several Underwriters to
(i) purchase the Option Shares at the price per share as set
forth in Section 2(a) and/or (ii) purchase the Option Warrants at
the price per warrant as set forth in Section 2(a). The option
granted hereby may be exercised in whole or in part by giving
written notice (i) at any time before the First Closing Date
and (ii) at any time, and from time to time, thereafter within
30 days after the date of this Agreement, by you, as Representative
of the several Underwriters, to the Company setting forth the
number of Option Shares and/or Option Warrants as to which the
several Underwriters are exercising the option and the time and
date at which such book-entry positions and certificates are to be
delivered. The time and date at which book-entry positions for the
Option Shares and/or certificates for Option Warrants are to be
delivered shall be determined by the Representative but shall not
be earlier than three nor later than 10 full business days after
the exercise of such option, nor in any event prior to the First
Closing Date (any such time and date being herein referred to as an
“Option Closing
Date,” which may be the First Closing Date). The First
Closing Date and any Option Closing Date, if any, are sometimes
herein referred to as a “Closing Date.” If the date of
exercise of the option is three or more days before the First
Closing Date, the notice of exercise shall set the First Closing
Date as an Option Closing Date. The number of Option Shares and/or
Option Warrants to be purchased by each Underwriter shall be in the
same proportion to the total number of Option Shares and/or Option
Warrants being purchased as the number of Firm Shares and Firm
Warrants being purchased by such Underwriter bears to the total
number of Firm Shares and Firm Warrants, adjusted by you in such
manner as to avoid fractional shares. You, as Representative of the
several Underwriters, may cancel such option at any time prior to
its expiration by giving written notice of such cancellation to the
Company. To the extent, if any, that the option is exercised,
payment for the Option Shares and/or Option Warrants shall be made
on an Option Closing Date in Federal (same day funds) through the
facilities of The Depository Trust Company in New York, New York
drawn to the order of the Company.
3.
OFFERING BY THE
UNDERWRITERS.
It is
understood that the several Underwriters are to make a public
offering of the Firm Securities as soon as the Representative deems
it advisable to do so. The Firm Securities are to be initially
offered to the public at the initial public offering price set
forth in the Prospectus. The Representative may from time to time
thereafter change the public offering price and other selling
terms.
It is
further understood that you will act as the Representative for the
Underwriters in the offering and sale of the Securities in
accordance with a Master Agreement Among Underwriters entered into
by you and the several other Underwriters.
Execution Version
4.
COVENANTS OF THE
COMPANY.
The
Company covenants and agrees with the several Underwriters
that:
(a) The
Company will (A) prepare and timely file with the Commission
under Rule 424(b) under the Securities Act a Prospectus in a form
approved by the Representative containing information previously
omitted at the time of effectiveness of the Registration Statement
in reliance on Rule 430B under the Securities Act and (B) not
file any amendment to the Registration Statement or any Rule 462(b)
Registration Statement or distribute an amendment or supplement to
the General Disclosure Package or the Prospectus of which the
Representative shall not previously have been advised and furnished
with a copy or to which the Representative shall have reasonably
objected in writing or which is not in compliance with the Rules
and Regulations.
(b) The
Company will (i) not make any offer relating to the Securities
that would constitute an Issuer Free Writing Prospectus or that
would otherwise constitute a “free writing prospectus”
(as defined in Rule 405 under the Securities Act) required to be
filed by the Company with the Commission under Rule 433 under the
Securities Act unless the Representative approves its use in
writing prior to first use (each, a “Permitted Free Writing
Prospectus”); provided that the prior written consent
of the Representative hereto shall be deemed to have been given in
respect of the Issuer Free Writing Prospectus(es) included in
Schedule IV hereto, (ii) treat each Permitted Free Writing
Prospectus as an Issuer Free Writing Prospectus, (iii) comply
with the requirements of Rules 164 and 433 under the Securities Act
applicable to any Issuer Free Writing Prospectus, including the
requirements relating to timely filing with the Commission,
legending and record keeping and (iv) not take any action that
would result in an Underwriter or the Company being required to
file with the Commission pursuant to Rule 433(d) under the
Securities Act a free writing prospectus prepared by or on behalf
of such Underwriter that such Underwriter otherwise would not have
been required to file thereunder. The Company will satisfy the
conditions in Rule 433 under the Securities Act to avoid a
requirement to file with the Commission any electronic road
show.
(c) The
Company will advise the Representative promptly of (A) any
proposal to amend or supplement the Registration Statement, any
Preliminary Prospectus, the General Disclosure Package or the
Prospectus, and will not effect or distribute such amendment or
supplement without the Representative’s consent, which shall
not be unreasonably withheld or delayed, (B) when any
Rule 462(b) Registration Statement shall have been filed with
the Commission, (C) when any post-effective amendment to the
Registration Statement shall have become effective, (D) any
request of the Commission for amendment of the Registration
Statement, any Rule 462(b) Registration Statement or for supplement
to the General Disclosure Package or the Prospectus or for any
additional information, (E) the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the
Prospectus, or of the institution of any proceedings for that
purpose or pursuant to Section 8A of the Securities Act and
(F) the receipt of any notice with respect to any suspension
of qualification of the Securities for offer or sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such order and to obtain as soon as possible the
lifting thereof, if issued.
(d) The
Company will cooperate with the Representative in endeavoring to
qualify the Securities for sale under the securities laws of such
jurisdictions as the Representative may reasonably have designated
in writing and will make such applications, file such documents,
and furnish such information as may be reasonably required for that
purpose, provided the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or
required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports, and other
documents, as are or may be required to continue such
qualifications in effect for so long a period as the Representative
may reasonably request for distribution of the
Securities.
Execution Version
(e) The
Company will deliver to, or upon the order of, the Representative,
from time to time, as many copies of any Preliminary Prospectus as
the Representative may reasonably request. The Company will deliver
to, or upon the order of, the Representative, from time to time, as
many copies of any Issuer Free Writing Prospectus as the
Representative may reasonably request. The Company will deliver to,
or upon the order of, the Representative during the period when
delivery of a Prospectus (or, in lieu thereof, the notice referred
to under Rule 173(a) under the Securities Act) is required under
the Securities Act, as many copies of the Prospectus in final form,
or as thereafter amended or supplemented, as the Representative may
reasonably request.
(f) The
Company will comply with the Securities Act and the Rules and
Regulations, and the Exchange Act and the rules and regulations of
the Commission thereunder, so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement
and the Prospectus. If during the period in which a prospectus (or,
in lieu thereof, the notice referred to under Rule 173(a) under the
Securities Act) is required by law to be delivered by an
Underwriter or dealer, any event shall occur as a result of which,
in the judgment of the Company or in the reasonable opinion of the
Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of
the circumstances existing at the time the Prospectus is delivered
to a purchaser, not misleading, or, if it is necessary at any time
to amend or supplement the Prospectus to comply with any law, the
Company promptly will prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement
to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply
with the applicable law.
(g) If
the General Disclosure Package is being used to solicit offers to
buy the Securities at a time when the Prospectus is not yet
available to prospective purchasers and any event shall occur as a
result of which, in the judgment of the Company or in the
reasonable opinion of the Underwriters, it becomes necessary to
amend or supplement the General Disclosure Package in order to make
the statements therein, in the light of the circumstances, not
misleading, or to make the statements therein not conflict with the
information contained in the Registration Statement then on file,
or if it is necessary at any time to amend or supplement the
General Disclosure Package to comply with any law, the Company
promptly will prepare, file with the Commission (if required) and
furnish to the Underwriters and any dealers an appropriate
amendment or supplement to the General Disclosure Package so that
the General Disclosure Package as so amended or supplemented will
not, in the light of the circumstances, be misleading or conflict
with the Registration Statement then on file, or so that the
General Disclosure Package will comply with law.
(h) The
Company will make generally available to its security holders, as
soon as it is practicable to do so, an earnings statement (which
need not be audited) in reasonable detail, covering a period of at
least 12 consecutive months beginning after the effective date of
the Registration Statement, which earnings statement shall satisfy
the requirements of Section 11(a) of the Securities Act and Rule
158 under the Securities Act.
(i) Prior
to the First Closing Date, the Company will furnish to the
Underwriters, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim financial
statements of the Company for any period subsequent to the period
covered by the most recent financial statements appearing in the
Registration Statement, the General Disclosure Package and the
Prospectus.
(j) No
offering, sale, short sale or other disposition of any shares of
Common Stock of the Company or other securities convertible into or
exchangeable or exercisable for shares of Common Stock or
derivative of Common Stock (or agreement for such) will be made for
a period of the later of (i) 90 days after the date of the
Prospectus and (ii) the date of the Stockholder Approval, directly
or indirectly, by the Company otherwise than hereunder or with the
prior written consent of the Representative, except for the
(i) Securities to be sold hereunder, (ii) shares of
Common Stock issued by the Company upon the exercise of an option,
warrant or similar security or the conversion of a security
outstanding on the date hereof and referred to in the Prospectus
and (iii) shares of Common Stock issued or options to purchase
Common Stock granted to the Company’s employees pursuant to
existing employee benefit plans of the Company referred to in the
Prospectus.
Execution Version
(k) The
Company will use its best efforts to list the Shares and the
Warrant Shares for quotation on The NYSE MKT.
(l) The
Company has caused each officer and director of the Company set
forth on Schedule V to furnish to you, on or prior to the date of
this Agreement, a letter or letters, substantially in the form
attached hereto as Exhibit A
(the “Lockup
Agreement”).
(m) The
Company shall apply the net proceeds of its sale of the Securities
as set forth in the Registration Statement, General Disclosure
Package and the Prospectus.
(n) The
Company shall not invest, or otherwise use the proceeds received by
the Company from its sale of the Securities in such a manner as
would require the Company or the Subsidiary to register as an
investment company under the ▇▇▇▇ ▇▇▇.
(o) The
Company will not take, directly or indirectly, any action designed
to cause or result in, or that has constituted or might reasonably
be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.
(p) The
Company shall, at all times while any Warrants are outstanding, use
its best efforts to maintain a registration statement covering the
issue and sale of the Warrant Shares upon exercise of the Warrants
such that the Warrant Shares, when issued, will not be subject to
resale restrictions under the Securities Act except to the extent
that the Warrant Shares are owned by affiliates.
(q) Upon
and following the Stockholder Approval, the Company shall, at all
times while any Warrants are outstanding, reserve and keep
available out of the aggregate of its authorized but unissued and
otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of such Warrants,
the number of Warrant Shares that are initially issuable and
deliverable upon the exercise of the then-outstanding
Warrants.
(r) The
Company shall use its reasonable best efforts to obtain Stockholder
Approval.
5.
COSTS AND
EXPENSES.
The
Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Company under this Agreement,
including, without limiting the generality of the foregoing, the
following: accounting fees of the Company; the fees and
disbursements of counsel for the Company; any roadshow expenses;
the cost of printing and delivering to, or as requested by, the
Underwriters copies of the Registration Statement, Preliminary
Prospectuses, the Issuer Free Writing Prospectuses, the Prospectus,
this Agreement, the Blue Sky Survey and any supplements or
amendments thereto; the filing fees of the Commission; the filing
fees and reasonable expenses (including reasonable legal fees and
disbursements) incident to securing any required review by FINRA of
the terms of the sale of the Securities; costs and expenses
incident to listing the Securities on The NYSE MKT; the costs and
expenses (including without limitation any damages or other amounts
payable in connection with legal or contractual liability)
associated with the reforming of any contracts for sale of the
Securities made by the Underwriters caused by a breach of the
representation in Section 1(c) hereof; the reasonable expenses,
including the reasonable fees and disbursements of counsel for the
Underwriters, incurred in connection with the qualification of the
Securities under State securities or Blue Sky laws; and all other
reasonable costs and out-of-pocket expenses of the Underwriters
(including reasonable fees and disbursements of counsel not to
exceed $100,000) incident to the performance of its obligations
hereunder not otherwise specifically provided for here. The Company
shall not, however, be required to pay for any of the
Underwriters’ expenses (other than those related to
qualification under FINRA regulation and State securities or Blue
Sky laws) except that, if this Agreement shall not be consummated
because the conditions in Section 6 hereof are not satisfied
(unless such failure is due primarily to the default or omission of
any Underwriter), or because this Agreement is terminated by the
Representative pursuant to Section 11 hereof, or by reason of
any failure, refusal or inability on the part of the Company to
perform any undertaking or satisfy any condition of this Agreement
or to comply with any of the terms hereof on its part to be
performed, unless such failure, refusal or inability is due
primarily to the default or omission of any Underwriter, the
Company shall reimburse the several Underwriters for reasonable and
documented out-of-pocket expenses, including reasonable fees and
disbursements of counsel, reasonably incurred in connection with
investigating, marketing and proposing to market the Securities or
in contemplation of performing their obligations hereunder; but the
Company shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits
from the sale by them of the Securities.
Execution Version
6.
CONDITIONS OF OBLIGATIONS
OF THE UNDERWRITERS.
The
several obligations of the Underwriters to purchase the Firm
Securities on the First Closing Date and the Option Securities, if
any, on any Option Closing Date are subject to the accuracy, as of
the Applicable Time and the applicable Closing Date, as the case
may be, of the representations and warranties of the Company
contained herein, and to the performance by the Company of its
covenants and obligations hereunder and to the following additional
conditions:
(a) The
Prospectus, and any supplement thereto, and each Issuer Free
Writing Prospectus required shall have been filed as required by
Rules 424, 430B or 433 under the Securities Act, as applicable,
within the time period prescribed by, and in compliance with, the
Rules and Regulations, and any request of the Commission for
additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the
Representative and complied with to its reasonable satisfaction. No
stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and
no proceedings for that purpose or pursuant to Section 8A under the
Securities Act shall have been taken or, to the knowledge of the
Company, shall be contemplated or threatened by the Commission and
no injunction, restraining order or order of any nature by a
Federal or state court of competent jurisdiction shall have been
issued as of the applicable Closing Date which would prevent the
issuance of the Securities.
(b) The
Representative shall have received on the applicable Closing Date
the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel for
the Company, dated such Closing Date, addressed to the Underwriters
in form and substance satisfactory to counsel for the Underwriters
to the effect substantially set forth in Exhibit B
attached hereto.
(c) The
Representative shall have received on the applicable Closing Date
the opinion of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C., special counsel for
the Company with respect to intellectual property matters, dated
such Closing Date, addressed to the Underwriters in form and
substance satisfactory to counsel for the Underwriters to the
effect substantially set forth in Exhibit C
attached hereto.
(d) The
Representative shall have received from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
counsel for the Underwriters, an opinion dated as of the applicable
Closing Date with respect to such matters as you may require, and
the Company shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass
upon such matters.
(e) The
Representative shall have received, on each of the date hereof, the
First Closing Date and, if applicable, any Option Closing Date, a
letter dated the date hereof and such Closing Date, as the case may
be, in form and substance satisfactory to you, of ▇▇▇▇▇▇▇▇ LLP
confirming that they are an independent registered public
accounting firm with respect to the Company and the Subsidiary
within the meaning of the Securities Act and the applicable Rules
and Regulations and the PCAOB and stating that in their opinion the
financial statements and schedules examined by them and included in
the Registration Statement, the General Disclosure Package and the
Prospectus comply in form in all material respects with the
applicable accounting requirements of the Securities Act and the
related Rules and Regulations, and containing such other statements
and information as is ordinarily included in accountants’
“comfort letters” to Underwriters with respect to the
financial statements and certain financial and statistical
information contained in the Registration Statement, the General
Disclosure Package and the Prospectus.
(f) The
Representative shall have received on the applicable Closing Date,
a certificate of the Chief Executive Officer and the Chief
Financial Officer of the Company to the effect that, as of such
Closing Date each of them severally represents as
follows:
(i)
The Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness of
the Registration Statement or no order preventing or suspending the
use of any Preliminary Prospectus, any Issuer Free Writing
Prospectus or the Prospectus has been issued, and no proceedings
for such purpose or pursuant to Section 8A of the Securities Act
have been taken or are, to his or her knowledge, contemplated or
threatened by the Commission;
(ii) The
representations and warranties of the Company contained in
Section 1 hereof are true and correct as of the applicable
Closing Date;
(iii)
All filings required to have been made pursuant to Rules 424 and
430B under the Securities Act have been made as and when required
by such rules;
(iv) He
or she has carefully examined the General Disclosure Package and
any individual Limited Use Free Writing Prospectus and, in his
opinion, as of the Applicable Time, the statements contained in the
General Disclosure Package and any individual Limited Use Free
Writing Prospectus did not contain any untrue statement of a
material fact, and such General Disclosure Package and any
individual Limited Use Free Writing Prospectus, when considered
together with the General Disclosure Package, did not omit to state
a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading;
Execution Version
(v) He
or she has carefully examined the Registration Statement and, in
his opinion, as of the Effective Date, the Registration Statement
and any amendments thereto did not contain any untrue statement of
a material fact and did not omit to state a material fact necessary
in order to make the statements therein not misleading, and since
the Effective Date, no event has occurred which should have been
set forth in a supplement to or an amendment of the Prospectus
which has not been so set forth in such supplement or
amendment;
(vi) He
or she has carefully examined the Prospectus and, in his opinion,
as of its date and the applicable Closing Date, the Prospectus and
any amendments and supplements thereto did not contain any untrue
statement of a material fact and did not omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and
(vii)
Since the respective dates as of which information is given in the
Registration Statement, the General Disclosure Package and
Prospectus, there has not been any Material Adverse Effect, whether
or not arising in the ordinary course of business.
(g)
The Representative shall have received on the applicable Closing
Date, a certificate of the Secretary of the Company having attached
thereto (A) the Company’s certificate of incorporation
as in effect at the time of such Closing Date, (B) the
Company’s bylaws as in effect at the time of such Closing
Date, (C) resolutions approved by the Company’s Board of
Directors and its Finance Committee authorizing the offer, sale and
issuance of the Securities and the transactions contemplated hereby
and (D) good standing certificates (including tax good
standing) with respect to the Company from the applicable
authorities in Delaware and any other jurisdiction in which the
Company is qualified to do business.
(h)
The Company shall have furnished to the Representative such further
certificates and documents confirming the representations and
warranties, covenants and conditions contained herein and related
matters as he Representative may reasonably have
requested.
(i) The
Shares and the Warrant Shares have been approved for listing on The
NYSE MKT.
(j) The
Lockup Agreements described in Section 4(l) hereof shall have been
delivered to the Representative.
The
opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they
are in all material respects satisfactory to the Representative and
to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters.
If any
of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this
Agreement to be fulfilled, the obligations of the Underwriters
hereunder may be terminated by the Representative by notifying the
Company of such termination in writing or by telegram at or prior
to the applicable Closing Date.
In such
event, the Company and the Underwriters shall not be under any
obligation to each other (except to the extent provided in Sections
5 and 8 hereof).
7.
CONDITIONS OF THE
OBLIGATIONS OF THE COMPANY.
The
obligations of the Company to sell and deliver the portion of the
Securities required to be delivered as and when specified in this
Agreement are subject to the conditions that at the applicable
Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or
proceedings therefor initiated or threatened.
Execution Version
8.
INDEMNIFICATION.
(a) The
Company agrees:
(1) to
indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person,
if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any losses, claims, damages or liabilities to
which such Underwriter or any such controlling person may become
subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary
Prospectus, the General Disclosure Package, any Issuer Free Writing
Prospectus or the Prospectus, or any amendment or supplement
thereto, (ii) with respect to the Registration Statement or
any amendment or supplement thereto, 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,
or (iii) with respect to any Preliminary Prospectus, the
General Disclosure Package, any Issuer Free Writing Prospectus or
the Prospectus, or any amendment or supplement thereto, the
omission or alleged omission to state therein 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; provided, however, that the Company will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged
omission made in the Registration Statement, any Preliminary
Prospectus, the General Disclosure Package, any Issuer Free Writing
Prospectus or the Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written
information furnished to the Company by or through the
Representative specifically for use therein, it being understood
and agreed that the only such information furnished by any
Underwriter consists of the information described as such in
Section 13 hereof; and
(2) to
reimburse each Underwriter, each Underwriter’s directors,
officers, employees and agents, and each such controlling person
upon demand for any legal or other out-of-pocket expenses
reasonably incurred by such Underwriter or such controlling person
in connection with investigating or defending any such loss, claim,
damage or liability, action or proceeding or in responding to a
subpoena or governmental inquiry related to the offering of the
Securities, whether or not such Underwriter or controlling person
is a party to any action or proceeding. In the event that it is
finally judicially determined that the Underwriters were not
entitled to receive payments for legal and other expenses pursuant
to this subparagraph, the Underwriters will promptly return all
sums that had been advanced pursuant hereto.
(b) Each
Underwriter severally and not jointly will indemnify and hold
harmless the Company, each of its directors, each of its officers
who have signed the Registration Statement and each person, if any,
who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any losses, claims, damages or liabilities to
which the Company or any such director, officer or controlling
person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any
Preliminary Prospectus, the General Disclosure Package, any Issuer
Free Writing Prospectus or the Prospectus, or any amendment or
supplement thereto, (ii) with respect to the Registration
Statement, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order
to make the statements therein not misleading or (iii) with
respect to any Preliminary Prospectus, the General Disclosure
Package, any Issuer Free Writing Prospectus or the Prospectus, or
any amendment or supplement thereto, the omission or alleged
omission to state therein 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 will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending
any such loss, claim, damage, liability, action or proceeding;
provided,
however, that each
Underwriter will be liable in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission has been made in the Registration
Statement, any Preliminary Prospectus, the General Disclosure
Package, any Issuer Free Writing Prospectus or the Prospectus, or
any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by or
through the Representative specifically for use therein, it being
understood and agreed that the only such information furnished by
any Underwriter consists of the information described as such in
Section 13 hereof.
Execution Version
(c) In
case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such
person (the “indemnified
party”) shall promptly notify the person against whom
such indemnity may be sought (the “indemnifying party”) in writing.
No indemnification provided for in Section 8(a) or (b) shall
be available to any party who shall fail to give notice as provided
in this Section 8(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related
and was materially prejudiced by the failure to give such notice,
but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise
than on account of the provisions of Section 8(a) or (b). In case
any such proceeding shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party and
shall pay as incurred the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel at its own
expense. Notwithstanding the foregoing, the indemnifying party
shall pay as incurred (or within 30 days of presentation) the
reasonable fees and expenses of the counsel retained by the
indemnified party in the event (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention
of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or
potential differing interests between them or (iii) the
indemnifying party shall have failed to assume the defense and
employ counsel acceptable to the indemnified party within a
reasonable period of time after notice of commencement of the
action. It is understood that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of
more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by you in the case of parties
indemnified pursuant to Section 8(a) and by the Company in the case
of parties indemnified pursuant to Section 8(b). The indemnifying
party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment. In addition, the indemnifying party will not, without the
prior written consent of the indemnified party, settle or
compromise or consent to the entry of any judgment in any pending
or threatened claim, action or proceeding of which indemnification
may be sought hereunder (whether or not any indemnified party is an
actual or potential party to such claim, action or proceeding)
unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability
arising out of such claim, action or proceeding, and does not
include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified
party.
(d) To
the extent the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or (b) above in respect of any
losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) 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 from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not
permitted by applicable law then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the
one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions or proceedings in respect
thereof), as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and
the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the Company on the one hand or the Underwriters on the other and
the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
Execution Version
The
Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) 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 in this Section 8(d). The amount
paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to above in this Section 8(d) shall be
deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions
of this subsection (d), (i) no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and
commissions applicable to the Securities purchased by such
Underwriter and (ii) 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. The
Underwriters’ obligations in this Section 8(d) to contribute
are several in proportion to their respective underwriting
obligations and not joint.
(e) In
any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the General Disclosure Package, any Issuer
Free Writing Prospectus or the Prospectus, or any supplement or
amendment thereto, each party against whom contribution may be
sought under this Section 8 hereby consents to the
jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may
be served upon it by any other contributing party and consents to
the service of such process and agrees that any other contributing
party may join it as an additional defendant in any such proceeding
in which such other contributing party is a party.
(f) Any
losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution
under this Section 8 shall be paid by the indemnifying party
to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred. The indemnity and
contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of
any Underwriter, its directors, officers, employees and agents or
any person controlling any Underwriter, the Company, its directors
or officers or any persons controlling the Company,
(ii) delivery and acceptance of any Securities and payment
therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter, its directors or
officers or any person controlling any Underwriter, or to the
Company, its directors or officers, or any person controlling the
Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this
Section 8.
(g)
The obligations of the Company under this Section 8 shall be
in addition to any liability which the Company may otherwise have
and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of
the Securities Act or the Exchange Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriter may otherwise have and
shall extend, upon the same terms and conditions, to each person,
if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the
Exchange Act.
Execution Version
9.
DEFAULT BY
UNDERWRITERS.
If on
the applicable Closing Date, any Underwriter shall fail to purchase
and pay for the portion of the Securities which such Underwriter
has agreed to purchase and pay for on such date (otherwise than by
reason of any default on the part of the Company), you, as
Representative of the Underwriters, shall use your reasonable
efforts to procure within 36 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company
such amounts as may be agreed upon and upon the terms set forth
herein, the Securities which the defaulting Underwriter or
Underwriters failed to purchase. If during such 36 hours you, as
such Representative, shall not have procured such other
Underwriters, or any others, to purchase the Securities agreed to
be purchased by the defaulting Underwriter or Underwriters, then
(a) if the aggregate number of Securities with respect to
which such default shall occur does not exceed 10% of the
Securities to be purchased on the applicable Closing Date, the
other Underwriters shall be obligated, severally, in proportion to
the respective numbers of Shares and Warrants which they are
obligated to purchase hereunder, to purchase the Shares and
Warrants which such defaulting Underwriter or Underwriters failed
to purchase, or (b) if the aggregate number of Securities with
respect to which such default shall occur exceeds 10% of the
Securities to be purchased on the applicable Closing Date, the
Company or you, as the Representative of the Underwriters, will
have the right, by written notice given within the next 36-hour
period to the parties to this Agreement, to terminate this
Agreement without liability on the part of the non-defaulting
Underwriters or of the Company except to the extent provided in
Sections 5 and 8 hereof. In the event of a default by any
Underwriter or Underwriters, as set forth in this Section 9,
the applicable Closing Date may be postponed for such period, not
exceeding seven days, as you, as Representatives, may determine in
order that the required changes in the Registration Statement, the
General Disclosure Package or in the Prospectus or in any other
documents or arrangements may be effected. The term
“Underwriter” includes any person substituted for a
defaulting Underwriter. Any action taken under this Section 9
shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this
Agreement.
10.
NOTICES.
All
communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: if to the Underwriters, to
c/o ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: General Counsel; if to the Company, to ▇.▇.
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇,
with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Esq.
11.
TERMINATION.
This
Agreement may be terminated by you, as Representative, by notice to
the Company (a) at any time prior to the First Closing Date
or, if applicable, any Option Closing Date (if different from the
First Closing Date and then only as to Option Securities), if any
of the following has occurred: (i) since the respective dates
as of which information is given in the Registration Statement, the
General Disclosure Package and the Prospectus, any Material Adverse
Effect (in the judgment of the Representative), whether or not
arising in the ordinary course of business, (ii) any outbreak
or escalation of hostilities or declaration of war or national
emergency or other national or international calamity or crisis
(including, without limitation, an act of terrorism) or change in
economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on
the financial markets of the United States would, in your judgment,
make it impractical or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities,
(iii) suspension of trading in securities generally on the New
York Stock Exchange, the NYSE MKT, The Nasdaq Global Market or
limitation on prices (other than limitations on hours or numbers of
days of trading) for securities on such trading market,
(iv) the enactment, publication, decree or other promulgation
of any statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and
adversely affects or may materially and adversely affect the
business or operations of the Company, (v) the declaration of
a banking moratorium by United States or New York State
authorities, (vi) any downgrading, or placement on any watch
list for possible downgrading, in the rating of any of the
Company’s debt securities by any “nationally recognized
statistical rating organization” (as defined for purposes of
Rule 436(g) under the Exchange Act); (vii) the suspension of
trading of the Company’s common stock by The NYSE MKT, the
Commission, or any other governmental authority, or (viii) the
taking of any action by any governmental body or agency in respect
of its monetary or fiscal affairs which in your opinion has a
Material Adverse Effect on the securities markets in the United
States; or (b) as provided in Sections 6 and 9 of this
Agreement.
Execution Version
12.
SUCCESSORS.
This
Agreement has been and is made solely for the benefit of the
Underwriters and the Company and their respective successors,
executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. No purchaser of
any of the Securities from any Underwriter shall be deemed a
successor or assign merely because of such purchase.
13.
INFORMATION PROVIDED BY
UNDERWRITERS.
The
Company and the Underwriters acknowledge and agree that the only
information furnished or to be furnished by any Underwriter to the
Company for inclusion in the Registration Statement, any
Preliminary Prospectus, the General Disclosure Package, any Issuer
Free Writing Prospectus or the Prospectus consists of the
information set forth in the third, sixth and fifteenth paragraphs
under the caption “Underwriting” in the
Prospectus.
14.
ENTIRE
AGREEMENT.
This
Agreement, together with the other agreements and documents being
delivered pursuant to or in connection with this Agreement,
constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof and thereof, and supersedes all prior
agreements and understandings of the parties, oral and written,
with respect to the subject matter hereof. Notwithstanding anything
herein to the contrary, the engagement letter agreement, dated
April 3, 2017 (the “Engagement Agreement”), between
the Company and ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., LLC, shall continue to
be effective and the terms therein 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.
15.
MISCELLANEOUS.
The
reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement,
(b) any investigation made by or on behalf of any Underwriter
or controlling person thereof, or by or on behalf of the Company or
its directors or officers and (c) delivery of and payment for
the Securities under this Agreement. The Company hereby
acknowledges that (a) the purchase and sale of the Securities
pursuant to this Agreement is an arm’s-length commercial
transaction between the Company, on the one hand, and the
Underwriters and any affiliate through which it may be acting, on
the other, (b) the Underwriters are acting as principal and
not as an agent or fiduciary of the Company and (c) the
Company’s engagement of the Underwriters in connection with
the offering and the process leading up to the offering is as
independent contractors and not in any other capacity. Furthermore,
the Company agrees that it is solely responsible for making its own
judgments in connection with the offering (irrespective of whether
any of the Underwriters has advised or is currently advising the
Company on related or other matters). The Company agrees that it
will not claim that the Underwriters have rendered advisory
services of any nature or respect, or owe an agency, fiduciary or
similar duty to the Company, in connection with such transaction or
the process leading thereto.
This
Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This
Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, including, without limitation,
Section 5-1401 of the New York General Obligations
Law.
The
Underwriters, on the one hand, and the Company (on its own behalf
and, to the extent permitted by law, on behalf of its
stockholders), on the other hand, waive any right to trial by jury
in any action, claim, suit or proceeding with respect to your
engagement as underwriter or your role in connection
herewith.
[signature page follows]
Execution Version
If the
foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates
hereof, whereupon it will become a binding agreement among the
Company and the several Underwriters in accordance with its
terms.
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Very
truly yours,
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By:
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/s/
Khoso Baluch
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Name:
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Khoso
Baluch
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Title:
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Chief
Executive Officer
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The
foregoing Underwriting Agreement
is
hereby confirmed and accepted as
of the
date first above written.
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▇.▇.
▇▇▇▇▇▇▇▇▇▇ & CO., LLC
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Acting
individually and as Representative
of the
several Underwriters named in
the
attached Schedule I.
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▇.▇.
▇▇▇▇▇▇▇▇▇▇ & CO., LLC
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By:
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/s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
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Name:
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▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
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Title:
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COO
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Execution Version
SCHEDULE
I
SCHEDULE
OF UNDERWRITERS
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Underwriter
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Number
of
Firm
Shares
to be Purchased
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Number of
Firm
Warrants
to be
Purchased
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▇.▇.
▇▇▇▇▇▇▇▇▇▇ & Co., LLC
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16,190,697
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24,286,044
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Total
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16,190,697
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24,286,044
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Execution Version
SCHEDULE
II
SCHEDULE
OF OPTION SECURITIES
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Underwriter
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Maximum
Number
of
Option Shares
to be Purchased
|
Maximum
Number of
Option
Warrants
to be
Purchased
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▇.▇.
▇▇▇▇▇▇▇▇▇▇ & Co., LLC
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2,428,604
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3,642,906
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Total
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2,428,604
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3,642,906
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Execution Version
SCHEDULE
III
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Number
of Firm Securities:
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16,190,697
Shares and Warrants to purchase up to 24,286,044
Shares
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Number
of Option Securities:
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2,428,604
additional Shares and/or Warrants to purchase up to 3,642,906
Shares
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Public
price per Share and Related Warrants:
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$0.75
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Initial
Warrant exercise price:
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$1.05
for Tranche 1 Warrant and $0.75 for Tranche 2 Warrant, subject to
adjustment as described in the Prospectus
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Exercisability
Date:
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Each
Tranche 1 Warrant and Tranche 2 Warrant will become exercisable on
any day on or after the effectiveness date of an amendment to the
Company’s Amended and Restated Certificate of Incorporation,
as amended, to increase the shares of authorized capital stock from
82,000,000 shares to 202,000,000 shares and to increase the number
of authorized shares of common stock from 80,000,000 to 200,000,000
shares (the “Exercisable Date”).
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Expiration:
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Each
Tranche 1 Warrant will expire 5 years following the Exercisable
Date. Each Tranche 2 Warrant will expire thirteen months following
the Exercisable Date.
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Execution Version
SCHEDULE
IV
Issuer
Free Writing Prospectus, dated as of April 27, 2017.
Issuer
Free Writing Prospectus, dated as of April 28, 2017.
Execution Version
SCHEDULE
V
Khoso
Baluch
▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇, M.D.
▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇.
▇▇▇▇▇▇
EXHIBIT
A
LOCK-UP AGREEMENT
April
__, 2017
▇.▇.
▇▇▇▇▇▇▇▇▇▇ & Co., LLC,
acting
as representative to the several underwriters:
Re:
Ladies
and Gentlemen:
The
undersigned irrevocably agrees that, from the date hereof until 90
days following the date of the Underwriting Agreement (the
“Underwriting
Agreement”) proposed to be entered into by and between
CorMedix Inc. (the “Company”) and ▇.▇.
▇▇▇▇▇▇▇▇▇▇ & Co., LLC (the “Representative”), acting
as representative to the several underwriters (such period, the
“Restriction
Period” and the underwriters collectively, the
“Underwriters”), the
undersigned will not (i) offer, sell, contract to sell,
hypothecate, pledge or otherwise dispose of or enter into any
transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise)
by the undersigned or any Affiliate (as defined in Rule 405 under
the Securities Act of 1933, as amended) of the undersigned, or any
person in privity with the undersigned or any Affiliate of the
undersigned, directly or indirectly, (ii) establish or increase a
put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”), with
respect to, any shares of common stock of the Company
(“Common
Stock”) or securities convertible, exchangeable or
exercisable into, shares of Common Stock beneficially owned, held
or hereafter acquired by the undersigned (the “Securities”), or (iii)
publicly announce the intention to effect any of the transactions
covered in clauses (i) and (ii) above. Beneficial ownership shall
be calculated in accordance with Section 13(d) of the Exchange Act.
The undersigned also agrees and consents to the entry of
stop-transfer instructions by the Company preventing the transfer
agent of the Company from effecting any actions in violation of
this letter agreement. The Representative may consent to an early
release from the Restriction Period in its sole and absolute
discretion. The restrictions contained in this letter agreement
shall not apply to the Securities to be sold pursuant to the
Underwriting Agreement on behalf of the undersigned, if
any.
Notwithstanding the
foregoing, the restrictions set forth in the prior paragraph shall
not apply to transfers (a) as a bona fide gift, or by will or
intestacy, (b) to any trust, partnership, limited liability company
or other entity for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, and (c) to
the Company pursuant to the Company’s right of repurchase
upon termination of the undersigned’s service with the
Company; provided that it shall be a condition to the transfer
pursuant to clauses (a) or (b) above that the transferee execute an
agreement stating that the transferee is receiving and holding the
Securities subject to the provisions of this letter agreement;
provided, further, that in the case of a transfer pursuant to
clauses (a) or (b) above, no filing under Section 16(a) of the
Exchange Act, or other public announcement shall be required or
shall be voluntarily
made in connection with such transactions.
Execution Version
Furthermore,
notwithstanding anything herein to the contrary, nothing herein
shall prevent the undersigned from establishing a 10b5-1 trading
plan that complies with Rule 10b5-1 under the Exchange Act
(“10b5-1 Trading
Plan”) so long as there are no sales of Lock-Up
Securities under any such 10b5-1 Trading Plan during the Lock-Up
Period; and provided, further, that the establishment of a 10b5-1
Trading Plan shall only be permitted if (i) such 10b5-1 Trading
Plan covers the same number of shares of Common Stock or other
Securities as currently covered by a 10b5-1 Trading Plan that has
been entered into by the undersigned prior to the date hereof, (ii)
the establishment of such plan is not required to be reported in
any public report or filing with the Securities and Exchange
Commission, or otherwise and (iii) the undersigned does not
otherwise voluntarily effect any public filing or report regarding
the establishment of such plan. Additionally, the foregoing
restrictions shall not apply to the transfer of shares of Common
Stock or other Securities pursuant to a 10b5-1 Trading Plan that
has been entered into by the undersigned (or a member of the
undersigned’s immediate family) prior to the date hereof,
provided that if the undersigned reports any such transfer on a
Form 4 filed with the Securities and Exchange Commission pursuant
to Section 16 of the Exchange Act, the undersigned shall cause such
Form 4 to include a statement that such transfer was effected
pursuant to a trading plan meeting the requirements of Rule 10b5-1
under the Exchange Act.
The
undersigned acknowledges that the execution, delivery and
performance of this letter agreement is a material inducement to
each Underwriter to perform under the Underwriting Agreement and
that each Underwriter (which shall be a third party beneficiary of
this letter agreement) shall be entitled to specific performance of
the undersigned’s obligations hereunder. The undersigned
hereby represents that the undersigned has the power and authority
to execute, deliver and perform this letter agreement, that the
undersigned has received adequate consideration therefor and that
the undersigned will indirectly benefit from the closing of the
transactions contemplated by the Underwriting
Agreement.
In
addition, the undersigned hereby agrees that, during the
Restriction Period, the undersigned will not, without the prior
written consent of the Representative, make any demand for, or
exercise any right with respect to, the registration of Common
Stock or any other Securities.
The
undersigned hereby confirms that the undersigned has not, directly
or indirectly, taken, and hereby covenants that the undersigned
will not, directly or indirectly, take, any action designed, or
which has constituted or will constitute or might reasonably be
expected to cause or result in the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of shares of Common Stock.
This
letter agreement may not be amended or otherwise modified in any
respect without the written consent of the Representative and the
undersigned. This letter agreement shall be construed and enforced
in accordance with the laws of the State of New York without regard
to the principles of conflict of laws. The undersigned hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court sitting in the
Southern District of New York and the courts of the State of New
York located in Manhattan, for the purposes of any suit, action or
proceeding arising out of or relating to this letter agreement, and
hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that (i) it is not personally subject to the
jurisdiction of such court, (ii) the suit, action or proceeding is
brought in an inconvenient forum, or (iii) the venue of the suit,
action or proceeding is improper. The undersigned hereby
waives any right to a trial by jury. The undersigned agrees and
understands that this letter agreement does not intend to create
any relationship between the undersigned and each Underwriter and
that no issuance or sale of the Securities is created or intended
by virtue of this letter agreement.
This
letter agreement shall terminate upon the earliest of the following
events: (i) the Company notifies the Representative in writing
prior to the execution of the Underwriting Agreement that it does
not intend to proceed with the public offering contemplated by the
proposed Underwriting Agreement, (ii) the Underwriting Agreement
shall not be entered into on or before June 30, 2017, or (iii) if
the Underwriting Agreement (other than the provisions thereof which
survive termination) shall terminate or be terminated for any
reason prior to the closing of the public offering.
This
letter agreement shall be binding on successors and assigns of the
undersigned with respect to the Securities and any such successor
or assign shall enter into a similar agreement for the benefit of
the Underwriters.
***
SIGNATURE PAGE FOLLOWS***
2
Execution Version
Sincerely,
_________________________
Signature
__________________________
Print
Name
__________________________
Position
in the Company, if any
Address
for Notice:
__________________________
__________________________
__________________________
3
Execution Version
EXHIBIT
B
OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP PURSUANT
TO
SECTION 6(B) OF THE UNDERWRITING AGREEMENT
[Attached]
4
Execution Version
EXHIBIT
C
OPINION OF ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C., PURSUANT
TO
SECTION 6(C) OF THE UNDERWRITING AGREEMENT
[Attached]
5