1,285,000 Shares of Common Stock1 ENDRA LIFE SCIENCES INC. UNDERWRITING AGREEMENT
Exhibit
1.1
1,285,000
Shares of Common Stock1
October
11, 2018
National
Securities Corporation
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▇▇▇▇▇ ▇▇▇▇▇▇ – ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
ENDRA
Life Sciences Inc., a Delaware corporation (the “Company”),
proposes to sell to National Securities Corporation, a Washington
corporation (the “Underwriter”
or “you”), an
aggregate of 1,285,000 authorized but unissued shares of common
stock, par value $0.0001 per share (the “Common
Stock”), of the Company (the “Firm Shares”)
pursuant to this Underwriting Agreement (the “Agreement”).
The Company also has granted to the Underwriter an option to
purchase up to 192,750 additional shares of Common Stock (the
“Option
Shares”, and together with the Firm Shares, the
“Securities”).
1. Registration
Statement and Prospectus. A registration statement on Form
S-3 (File No. 333-226917) with respect to the Securities, including
a base prospectus, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended
(the “Act”), and the
rules and regulations (“Rules and
Regulations”) of the Securities and Exchange
Commission (the “Commission”)
thereunder and has been filed with the Commission. Such
registration statement, including the amendments, exhibits and
schedules thereto, as of the time it became effective, is referred
to herein as the “Registration
Statement.” The base prospectus filed as part of the
Registration Statement, in the form in which it has most recently
been filed with the Commission on or prior to the date of this
Agreement relating to the Securities, is referred to herein as the
“Base
Prospectus.” The preliminary prospectus supplement
dated October 10, 2018 describing the Securities and the offering
thereof, together with the Base Prospectus, is referred to herein
as the “Preliminary Prospectus
Supplement.” The Preliminary Prospectus Supplement and
any other preliminary prospectus supplement to the Base Prospectus
that describes the Securities and the offering thereof and is used
prior to the filing of the Prospectus (as defined below), together
with the Base Prospectus, is referred to herein as the
“Preliminary
Prospectus.” The Company will prepare and file a
prospectus supplement pursuant to Rule 424(b) of the Rules and
Regulations that discloses the information previously omitted from
the Preliminary Prospectus in reliance upon Rule 430B of the Rules
and Regulations, which information will be deemed retroactively to
be a part of the Registration Statement in accordance with Rule
430B of the Rules and Regulations (“Rule 430B
Information”). If the Company has elected to rely upon
Rule 462(b) of the Rules and Regulations to increase the size of
the offering registered under the Act, the Company will prepare and
file with the Commission a registration statement with respect to
such increase pursuant to Rule 462(b) of the Rules and Regulations
(such registration statement, including the contents of the
Registration Statement incorporated by reference therein is the
“Rule
462(b) Registration Statement”). References herein to
the “Registration
Statement” will be deemed to include the Rule 462(b)
Registration Statement at and after the time of filing of the Rule
462(b) Registration Statement. “Prospectus”
means the final prospectus supplement to the Base Prospectus that
discloses the public offering price and other final terms of the
Securities and the offering and otherwise satisfies Section 10(a)
of the Act. All references in this Agreement to the Registration
Statement, the Base Prospectus, any Preliminary Prospectus, the
Prospectus or any amendment or supplement to any of the foregoing,
is deemed to include the copy filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System or any
successor system thereto (“▇▇▇▇▇”).
_____________
1
All
references herein to the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or a Prospectus or any
amendment or supplement to any of the foregoing shall be deemed as
of any time to include the documents and information incorporated
therein by reference in accordance with the Rules and Regulations.
All references in this Agreement to financial statements and
schedules and other information which are “contained,”
“included” or “stated” in the Registration
Statement, the Preliminary Prospectus, the Base Prospectus, the
Time of Sale Disclosure Package or the Prospectus (and all other
references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which
is or is deemed to be incorporated by reference in the Registration
Statement, the Preliminary Prospectus, the Base Prospectus, the
Time of Sale Disclosure Package or the Prospectus, as the case may
be; and all references in this Agreement to amendments or
supplements to the Registration Statement, the Preliminary
Prospectus, the Base Prospectus, the Time of Disclosure Package or
the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”), that is or is deemed to be incorporated by
reference in the Registration Statement, the Preliminary
Prospectus, any preliminary prospectus, the Base Prospectus, the
Time of Sale Prospectus or the Prospectus, as the case may
be.
2. Representations and
Warranties of the Company.
(a) Representations
and Warranties of the Company. The Company represents and
warrants to, and agrees with, the Underwriter as
follows:
(i) Registration
Statement and Prospectuses. The Registration Statement and
any post-effective amendment thereto have become effective under
the Act. No stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto has
been issued, and no proceeding for that purpose has been initiated
or, to the Company’s knowledge, threatened by the Commission.
No order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus (or any supplement thereto) has been
issued by the Commission and no proceeding for that purpose has
been initiated or, to the Company’s knowledge, threatened by
the Commission. As of the time each part of the Registration
Statement (or any post-effective amendment thereto) became or
becomes effective, such Registration Statement (or any
post-effective amendment thereto) conformed or will conform in all
material respects to the requirements of the Act and the Rules and
Regulations. Upon the filing or first use within the meaning of the
Rules and Regulations, each Preliminary Prospectus and the
Prospectus (or any supplement to either) conformed or will conform
in all material respects to the requirements of the Act and the
Rules and Regulations.
(ii) Accurate
Disclosure. Each Preliminary Prospectus, at the time of
filing thereof or the time of first use within the meaning of the
Rules and Regulations, did not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. Neither the Registration Statement nor any amendment
thereto, at the effective time of each part thereof, at the First
Closing Date (as defined below) or at the Second Closing Date (as
defined below), contained, contains or will contain an untrue
statement of a material fact or omitted, omits or will omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. As of the Time of Sale
(as defined below), neither (A) the Time of Sale Disclosure Package
(as defined below) nor (B) any issuer free writing prospectus (as
defined below), when considered together with the Time of Sale
Disclosure Package, included an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. Neither the Prospectus nor any
supplement thereto, as of its issue date, at the time of any filing
with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, at the First Closing Date or at the Second Closing
Date, included, includes or will include an untrue statement of a
material fact or omitted, omits or will omit to state a material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
representations and warranties in this Section 2(a)(ii) shall not
apply to statements in or omissions from any Preliminary
Prospectus, the Registration Statement (or any amendment thereto),
the Time of Sale Disclosure Package or the Prospectus (or any
supplement thereto) made in reliance upon, and in conformity with,
written information furnished to the Company by you specifically
for use in the preparation of such document, it being understood
and agreed that the only such information furnished by you consists
of the information described as such in Section 6(f).
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“Time
of Sale Disclosure Package” means the Preliminary
Prospectus, as amended or supplemented immediately prior to the
Time of Sale, and the information on Schedule III, all considered
together.
Each
reference to a “free writing
prospectus” herein means a free writing prospectus as
defined in Rule 405 of the Rules and Regulations.
“Time
of Sale” means 8:00 am (Eastern time) on the date of
this Agreement.
(iii) No
Other Offering Materials. The Company has not distributed
and will not distribute any prospectus or other offering material
in connection with the offering and sale of the Securities other
than any Preliminary Prospectus, the Time of Sale Disclosure
Package or the Prospectus or other materials permitted by the Act
to be distributed by the Company; provided, further, that the
Company has not made any offer relating to the Securities that
would constitute a free writing prospectus and will obtain the
consent of the Underwriter before distributing any free writing
prospectus.
(iv) Financial
Statements. The financial statements of the Company,
together with the related notes, included in the Registration
Statement, the Time of Sale Disclosure Package and Prospectus
comply in all material respects with the requirements of the Act
and the Rules and Regulations and fairly present the financial
condition of the Company as of the dates indicated and the results
of operations, cash flows and changes in stockholders’ equity
for the periods therein specified. The financial statements of the
Company, together with the related notes, included in the
Registration Statement, the Time of Sale Disclosure Package and
Prospectus are in accordance with generally accepted accounting
principles in the United States (“GAAP”)
consistently applied throughout the periods involved, except in the
case of any unaudited interim financial statements, which are
subject to normal year-end adjustments and do not contain certain
footnotes as permitted by the applicable rules of the Commission.
The supporting schedules, if any, of the Company included in the
Registration Statement present fairly the information required to
be stated therein. All non-GAAP financial information included in
the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus complies with the requirements of Regulation G and
Item 10 of Regulation S-K under the Act. Except as disclosed in the
Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, there are no material off-balance sheet arrangements
(as defined in Regulation S-K under the Act, Item 303(a)(4)(ii)) or
any other relationships with unconsolidated entities or other
persons, that may have a material current or, to the
Company’s knowledge, material future effect on the
Company’s financial condition, results of operations,
liquidity, capital expenditures, capital resources or significant
components of revenue or expenses. No other financial statements or
schedules, if any, are required to be included in the Registration
Statement, the Time of Sale Disclosure Package or the Prospectus.
RBSM LLP, which has expressed its opinion with respect to the
financial statements of the Company and related schedules filed as
a part of the Registration Statement and included in the
Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, is (x) an independent registered public accounting firm
within the meaning of the Act and the Rules and Regulations, (y) a
registered public accounting firm (as defined in Section 2(a)(12)
of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”)) and (z) not in violation of the auditor
independence requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
(v) Organization and
Good Standing. The Company has been duly organized and is
validly existing as a corporation in good standing under the laws
of its jurisdiction of incorporation. The Company has full
corporate power and authority to own its properties and conduct its
business as currently being carried on and as described in the
Registration Statement, the Time of Sale Disclosure Package and
Prospectus, and is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction in which the
ownership or lease of real property or the conduct of its business
requires such qualification and in which the failure to so qualify
would have a material adverse effect upon the business, prospects,
management, properties, operations, condition (financial or
otherwise) or results of operations of the Company, taken as a
whole (“Material Adverse
Effect”).
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(vi) Absence
of Certain Events. Except as contemplated in the
Registration Statement, the Time of Sale Disclosure Package and in
the Prospectus, subsequent to the date of the most recent financial
statements of the Company included in the Time of Sale Disclosure
Package, the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any
distribution of any kind with respect to its capital stock; and
there has not been any change in the capital stock (other than a
change in the number of outstanding shares of Common Stock due to
the issuance of shares upon the exercise of outstanding options or
warrants or conversion of convertible securities), or any material
change in the short-term or long-term debt (other than as a result
of the conversion of convertible securities), or any issuance of
options, warrants, convertible securities or other rights to
purchase the capital stock, of the Company, or any material adverse
change in the business, prospects, management, properties,
operations, condition (financial or otherwise) or results of
operations of the Company, taken as a whole (“Material Adverse
Change”), or any development which would reasonably be
expected to result in any Material Adverse Change.
(vii) Absence
of Proceedings. Except as set forth in the Time of Sale
Disclosure Package and in the Prospectus, there is not pending or,
to the knowledge of the Company, threatened or contemplated, any
action, suit or proceeding (a) to which the Company is a party or
(b) which has as the subject thereof any officer or director
of the Company, any employee benefit plan sponsored by the Company
or any property or assets owned or leased by the Company before or
by any court or Governmental Authority (as defined below), or any
arbitrator, which, individually or in the aggregate, would
reasonably be expected to result in any Material Adverse Change, or
would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement or the
Underwriter’s Warrants (as defined below) or which are
otherwise material in the context of the sale of the Securities.
There are no current or, to the knowledge of the Company, pending,
legal, governmental or regulatory actions, suits or proceedings (x)
to which the Company is subject or (y) which has as the subject
thereof any officer or director of the Company, any employee plan
sponsored by the Company or any property or assets owned or leased
by the Company, that are required to be described in the
Registration Statement, Time of Sale Disclosure Package and
Prospectus by the Act or by the Rules and Regulations and that have
not been so described.
(viii) Authorization;
No Conflicts; Authority. This Agreement has been duly
authorized, executed and delivered by the Company. The
Underwriter’s Warrants have been duly authorized and, at the
First Closing Date and, if applicable, the Second Closing Date,
will be duly executed and delivered by the Company. This Agreement
constitutes, and the Underwriter’s Warrants will constitute
at the First Closing Date and, if applicable, the Second Closing
Date, a valid, legal and binding obligation of the Company,
enforceable in accordance with its terms, except as rights to
indemnity hereunder may be limited by federal or state securities
laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
the rights of creditors generally and subject to general principles
of equity. The execution, delivery and performance of this
Agreement and the Underwriter’s Warrants and the consummation
of the transactions herein contemplated will not (A) conflict with
or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company
is subject, (B) result in any violation of the provisions of the
Company’s charter or by-laws or (C) result in the violation
of any law or statute or any judgment, order, rule, regulation or
decree of any court or arbitrator or federal, state, local or
foreign governmental agency or regulatory authority having
jurisdiction over the Company or any of its properties or assets
(each, a “Governmental
Authority”), except in the case of clauses (A) and (C)
as would not, individually or in the aggregate, reasonably be
likely to result in a Material Adverse Effect. No consent,
approval, authorization or order of, or registration or filing with
any Governmental Authority is required for the execution, delivery
and performance of this Agreement or the Underwriter’s
Warrants or for the consummation of the transactions contemplated
hereby, including the issuance or sale of the Securities by the
Company or the issuance of shares of Common Stock upon the exercise
of the Underwriter’s Warrants, except such as may be required
under the Act, the Exchange Act, the rules of FINRA, The NASDAQ
Stock Market Rules or state securities or blue sky laws; and the
Company has full corporate power and authority to enter into this
Agreement and the Underwriter’s Warrants and to consummate
the transactions contemplated hereby, including the authorization,
issuance and sale of the Securities as contemplated by this
Agreement and the issuance of shares of Common Stock upon the
exercise of the Underwriter’s Warrants.
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(ix) Capitalization;
the Securities; Registration Rights. All of the issued and
outstanding shares of capital stock of the Company, including the
outstanding shares of Common Stock, are duly authorized and validly
issued, fully paid and non-assessable, have been issued in
compliance with all federal and state securities laws, and were not
issued in violation of or subject to any preemptive rights or other
similar rights to subscribe for or purchase securities that have
not been waived in writing (a copy of which has been delivered to
counsel to the Underwriter), and the holders thereof are not
subject to personal liability by reason of being such holders. The
Securities which may be sold hereunder by the Company (other than
the shares of Common Stock which may be sold pursuant to the
Underwriter’s Warrants) have been duly authorized and, when
issued, delivered and paid for in accordance with the terms of this
Agreement, will have been validly issued and will be fully paid and
non-assessable, and the holders thereof will not be subject to
personal liability by reason of being such holders. The shares of
Common Stock which may be sold pursuant to the Underwriter’s
Warrants by the Company, when issued in accordance with the terms
of this Agreement and the Underwriter’s Warrants (including,
without limitation, payment of the exercise price therefor), will
have been validly issued and will be fully paid and non-assessable,
and the holders thereof will not be subject to personal liability
by reason of being such holders. The capital stock of the Company,
including the Common Stock, will conform to the description thereof
in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus. Except as otherwise stated in the
Registration Statement, in the Time of Sale Disclosure Package and
in the Prospectus, (A) there are no preemptive rights or other
rights to subscribe for or to purchase, or any restriction upon the
voting or transfer of, any shares of Common Stock pursuant to the
Company’s charter, by-laws or any agreement or other
instrument to which the Company is a party or by which the Company
is bound, (B) none of the filing of the Registration Statement, the
offering, the sale of the Securities or the Underwriter’s
Warrants as contemplated by this Agreement, or the issuance of
shares of Common Stock upon exercise of the Underwriter’s
Warrants, give rise to any rights (other than rights in favor of
the holders of the Underwriter’s Warrants) for or relating to
the registration of any shares of Common Stock or other securities
of the Company (collectively “Registration
Rights”) and (C) any person to whom the Company has
granted Registration Rights has agreed not to exercise such rights
until after expiration of the Lock-Up Period (as defined below).
The Company has an authorized and outstanding capitalization as set
forth in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus under the caption “Description
of Capital Stock.” The Securities conform in all material
respects to the descriptions thereof contained in the Time of Sale
Disclosure Package and the Prospectus.
(x) Stock
Options. Except as described in the Registration Statement,
in the Time of Sale Disclosure Package and in the Prospectus, there
are no options, warrants, agreements, contracts or other rights in
existence to purchase or acquire from the Company any shares of the
capital stock of the Company. The description of the
Company’s stock option, stock bonus and other stock plans or
arrangements (the “Company Stock
Plans”), and the options (the “Options”) or
other rights granted thereunder, set forth in the Time of Sale
Disclosure Package and the Prospectus, accurately and fairly
presents in all material respects the information required to be
shown with respect to such plans, arrangements, options and rights.
Each grant of an Option (A) was duly authorized by all necessary
corporate action, including, as applicable, approval by the board
of directors of the Company (or a duly constituted and authorized
committee thereof) and any required stockholder approval by the
necessary number of votes or written consents, and the award
agreement governing such grant (if any) was duly executed and
delivered by each party thereto and (B) was made in accordance with
the terms of the applicable Company Stock Plan, and all applicable
laws and regulatory rules or requirements, including all applicable
federal securities laws.
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(xi) Compliance
with Laws. Except as would not, individually or in the
aggregate, reasonably be likely to have a Material Adverse Effect,
the Company holds, and is operating in compliance with, all
franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders of any Governmental Authority or
self-regulatory body required for the conduct of its business and
all such franchises, grants, authorizations, licenses, permits,
easements, consents, certifications and orders are valid and in
full force and effect; and except as would, individually or in the
aggregate, reasonably be likely to have a Material Adverse Effect,
the Company has not received notice of any revocation or
modification of any such franchise, grant, authorization, license,
permit, easement, consent, certification or order or has reason to
believe that any such franchise, grant, authorization, license,
permit, easement, consent, certification or order will not be
renewed in the ordinary course; and except as would not,
individually or in the aggregate, reasonably be likely to have a
Material Adverse Effect, the Company is in compliance with all
applicable federal, state, local and foreign laws, regulations,
orders and decrees.
(xii) Ownership
of Assets. The Company has good and marketable title to all
property (whether real or personal) described in the Registration
Statement, in the Time of Sale Disclosure Package and in the
Prospectus as being owned by it, in each case free and clear of all
liens, claims, security interests, other encumbrances or defects
except such as are described in the Registration Statement, in the
Time of Sale Disclosure Package and in the Prospectus. The property
held under lease by the Company is held by it under valid,
subsisting and enforceable leases with only such exceptions with
respect to any particular lease as do not interfere in any material
respect with the conduct of the business of the
Company.
(xiii) Intellectual
Property. The Company owns, possesses, or to the knowledge
of the Company can acquire on reasonable terms, all material
Intellectual Property necessary for the conduct of the
Company’s business as now conducted or as described in the
Registration Statement, the Time of Sale Disclosure Package and the
Prospectus. Furthermore, (A) to the knowledge of the Company, there
is no infringement, misappropriation or violation by third parties
of any such Intellectual Property owned or licensed by the Company;
(B) there is no pending or, to the knowledge of the Company,
threatened, action, suit, proceeding or claim by others challenging
the Company’s rights in or to any such Intellectual Property
owned or licensed by the Company, and to the knowledge of the
Company, there are no facts that would form a reasonable basis for
any such claim; (C) the Intellectual Property owned by the Company,
and to the knowledge of the Company, the Intellectual Property
licensed to the Company, has not been judged invalid or
unenforceable, in whole or in part, and there is no pending or, to
the knowledge of the Company, threatened action, suit, proceeding
or claim by others challenging the validity or scope of any such
Intellectual Property, and to the knowledge of the Company, there
are no material facts that would form a reasonable basis for any
such claim; (D) there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or claim by others
that the Company infringes, misappropriates or otherwise violates
any Intellectual Property or other proprietary rights of others,
the Company has not received any written notice of such claim and
to the knowledge of the Company, there are no material facts that
would form a reasonable basis for any such claim; and (E) to the
Company’s knowledge, no employee of the Company is in or has
ever been in violation of any term of any employment contract,
patent disclosure agreement, invention assignment agreement,
non-competition agreement, non-solicitation agreement,
nondisclosure agreement or any restrictive covenant to or with a
former employer where the basis of such violation relates to such
employee’s employment with the Company or actions undertaken
by the employee while employed with the Company, except as such
violation would not result in a Material Adverse Effect.
“Intellectual
Property” shall mean all patents, patent applications,
trade and service marks, trade and service ▇▇▇▇ registrations,
trade names, copyrights, licenses, inventions, trade secrets,
domain names, technology and other intellectual
property.
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(xiv) No
Violations or Defaults. The Company is not in violation of
its charter, by-laws or other organizational documents or in breach
of or otherwise in default under any bond, debt, note, indenture,
loan agreement or any other contract, lease or other instrument to
which it is subject or by which it may be bound, or to which any of
the property or assets of the Company is subject, except for any
such violation, breach or default that has been waived by the other
party. No event has occurred which, with notice or lapse of time or
both, would constitute such a default in the performance of any
obligation, agreement or condition contained in any bond,
debenture, note, indenture, loan agreement or any other contract,
lease or other instrument to which it is subject or by which any of
them may be bound, or to which any of the property or assets of the
Company is subject, except for such breach or default as is not,
individually or in the aggregate, reasonably likely to have a
Material Adverse Effect.
(xv) Taxes.
The Company has timely filed all federal, state, local and foreign
income and franchise tax returns required to be filed (taking into
account valid extensions of time to file) and is not in default in
the payment of any taxes which were payable pursuant to said
returns or any assessments with respect thereto, other than any
which the Company is contesting in good faith. There is no pending
dispute with any taxing authority relating to any of such returns,
and the Company has no knowledge of any proposed liability for any
tax to be imposed upon the properties or assets of the Company for
which there is not an adequate reserve reflected in the
Company’s financial statements included in the Registration
Statement, the Time of Sale Disclosure Package and the
Prospectus.
(xvi) Exchange
Listing and Exchange Act Registration. The Securities have
been approved for listing on The NASDAQ Capital Market upon
official notice of issuance. Except as previously disclosed to
counsel for the Underwriter or as set forth in the Time of Sale
Disclosure Package and the Prospectus, there are no affiliations
with members of FINRA among the Company’s officers or
directors or, to the knowledge of the Company, any five percent or
greater stockholders of the Company or any beneficial owner of the
Company’s unregistered equity securities that were acquired
during the 180-day period immediately preceding the initial filing
date of the Registration Statement. The Company’s board of
directors has, subject to the exceptions, cure periods and the
phase-in periods specified in the applicable stock exchange rules
(the “Exchange
Rules”), validly appointed an audit committee to
oversee internal accounting controls whose composition satisfies
the applicable requirements of the Exchange Rules and the
Company’s board of directors and/or the audit committee has
adopted a charter that satisfies the requirements of the Exchange
Rules.
(xvii) Ownership
of Other Entities. The Company, directly or indirectly, owns
no capital stock or other equity or ownership or proprietary
interest in any corporation, partnership, association, trust or
other entity, other than any subsidiary listed in Exhibit 21.1 to
the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2017.
(xviii) Internal
Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with
management’s general or specific 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. Except
as disclosed in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus, the Company’s
internal control over financial reporting is effective and none of
the Company, its board of directors and audit committee is aware of
any “significant deficiencies” or “material
weaknesses” (each as defined by the Public Company Accounting
Oversight Board) in its internal control over financial reporting,
or any fraud, whether or not material, that involves management or
other employees of the Company who have a significant role in the
Company’s internal controls; and since the end of the latest
audited fiscal year, there has been no change in the
Company’s internal control over financial reporting (whether
or not remediated) that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control
over financial reporting.
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(xix) No
Brokers or Finders. Other than as contemplated by this
Agreement, the Company has not incurred and will not incur any
liability for any finder’s or broker’s fee or
agent’s commission in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xx) Insurance.
The Company carries, or is covered by, insurance from reputable
insurers in such amounts and covering such risks as is adequate for
the conduct of its business and the value of its properties and as
is customary for companies engaged in similar businesses in similar
industries; all policies of insurance and any fidelity or surety
bonds insuring the Company or its business, assets, employees,
officers and directors are in full force and effect; the Company is
in compliance with the terms of such policies and instruments in
all material respects; there are no claims by the Company under any
such policy or instrument as to which any insurance company is
denying liability or defending under a reservation of rights
clause; the Company has not been refused any insurance coverage
sought or applied for; and the Company has no reason to believe
that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business
at a cost that would not, individually or in the aggregate, have a
Material Adverse Effect.
(xxi) Investment
Company Act. The Company is not and, after giving effect to
the offering and sale of the Securities, will not be an
“investment company,” as such term is defined in the
Investment Company Act of 1940, as amended.
(xxii) ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act. The Company is in compliance with all applicable
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules and regulations
of the Commission thereunder.
(xxiii) Disclosure
Controls. The Company has established and maintains
disclosure controls and procedures (as defined in Rules 13a-14 and
15d-14 under the Exchange Act and, except as disclosed in the
Registration Statement, in the Time of Sale Disclosure Package and
in the Prospectus, such controls and procedures are effective in
ensuring that material information relating to the Company is made
known to the principal executive officer and the principal
financial officer. The Company has utilized such controls and
procedures in preparing and evaluating the disclosures in the
Registration Statement, in the Time of Sale Disclosure Package and
in the Prospectus.
(xxiv) Anti-Bribery
and Anti-Money Laundering Laws. Each of the Company, its
officers, directors, supervisors, managers and employees, and to
the knowledge of the Company, its affiliates or agents and any of
their respective officers, directors, supervisors, managers, agents
and employees, has not violated, its participation in the offering
will not violate, and the Company has instituted and maintains
policies and procedures to the extent reasonably necessary to
ensure continued compliance with, each of the following laws: (A)
anti-bribery laws, including but not limited to, any applicable
law, rule, or regulation of any locality, including but not limited
to any law, rule, or regulation promulgated to implement the OECD
Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions, signed December 17, 1997,
including the U.S. Foreign Corrupt Practices Act of 1977, as
amended, the U.K. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, or any other law, rule or
regulation of similar purposes and scope or (B) anti-money
laundering laws, including but not limited to, applicable federal,
state, international, foreign or other laws, regulations or
government guidance regarding anti-money laundering, including,
without limitation, Title 18 US. Code section 1956 and 1957, the
Patriot Act, the Bank Secrecy Act, and international anti-money
laundering principles or procedures by an intergovernmental group
or organization, such as the Financial Action Task Force on Money
Laundering, of which the United States is a member, all as amended,
and any executive order, directive, or regulation pursuant to the
authority of any of the foregoing, or any orders or licenses issued
thereunder. The Company has instituted, maintains and enforces
policies and procedures designed to ensure compliance with
anti-bribery laws.
8
(xxv) OFAC.
(A) Neither the Company
nor any of its directors or officers, nor, to the Company’s
knowledge, any employee, agent or affiliate of the Company, is an
individual or entity that is, or is owned or controlled by an
individual or entity that is:
(1) the subject of any
sanctions administered or enforced by the U.S. Department of
Treasury’s Office of Foreign Assets Control, the United
Nations Security Council, the European Union, Her Majesty’s
Treasury, or other relevant sanctions authority (collectively,
“Sanctions”),
nor
(2) located, organized
or resident in a country or territory that is the subject of
Sanctions (including, without limitation, the Crimea Region of the
Ukraine, Cuba, Iran, North Korea, Sudan and Syria).
(B) The Company will
not, directly or indirectly, use the proceeds of the offering, or
lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other individual or
entity:
(1) to fund or
facilitate any activities or business of or with any individual or
entity or in any country or territory that, at the time of such
funding or facilitation, is the subject of Sanctions;
or
(2) in any other manner
that will result in a violation of Sanctions by any individual or
entity (including any individual or entity participating in the
offering, whether as Underwriter, advisor, investor or
otherwise).
(C) For the past five
years, neither the Company nor any of its subsidiaries, whether or
not currently existing, has knowingly engaged in, and is not now
knowingly engaged in, any dealings or transactions with any
individual or entity, or in any country or territory, that at the
time of the dealing or transaction is or was the subject of
Sanctions.
(xxvi) Compliance
with Environmental Laws. Except as disclosed in the
Registration Statement, the Time of Disclosure Package and the
Prospectus, the Company is not in violation of any statute, any
rule, regulation, decision or order of any Governmental Authority
or any court, domestic or foreign, relating to the use, 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 any
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 would reasonably be
expected to lead to such a claim. The Company does not anticipate
incurring any material capital expenditures relating to compliance
with Environmental Laws.
9
(xxvii) Compliance
with Occupational Laws. The Company (A) is in compliance
with any and all applicable foreign, federal, state and local laws,
rules, regulations, treaties, statutes and codes promulgated by any
and all Governmental Authorities (including pursuant to the
Occupational Health and Safety Act) relating to the protection of
human health and safety in the workplace (“Occupational
Laws”); (B) has received all permits, licenses or
other approvals required of it under applicable Occupational Laws
to conduct its business as currently conducted; and (C) is in
compliance with all terms and conditions of such permits, licenses
or approvals, except in the case of each of clauses (A), (B) and
(C) above where such noncompliance with Occupational Laws, failure
to receive required permits, licenses or other approvals or failure
to comply with the terms and conditions of such permits, licenses
or other approvals would not have a Material Adverse Effect. No
action, proceeding, revocation proceeding, writ, injunction or
claim is pending or, to the Company’s knowledge, threatened
against the Company relating to Occupational Laws, and the Company
does not have knowledge of any facts, circumstances or developments
relating to its operations or cost accounting practices that would
reasonably be expected to form the basis for or give rise to such
actions, suits, investigations or proceedings.
(xxviii) ERISA
and Employee Benefits Matters. (A) To the knowledge of the
Company, no “prohibited transaction” as defined under
Section 406 of ERISA or Section 4975 of the Code and not exempt
under ERISA Section 408 or the regulations or published
interpretations thereunder has occurred with respect to any
Employee Benefit Plan. At no time has the Company or any ERISA
Affiliate maintained, sponsored, participated in, contributed to or
has or had any liability or obligation in respect of any Employee
Benefit Plan subject to Part 3 of Subtitle B of Title I of ERISA,
Title IV of ERISA, or Section 412 of the Code or any
“multiemployer plan” as defined in Section 3(37) of
ERISA or any multiple employer plan for which the Company or any
ERISA Affiliate has incurred or could incur liability under Section
4063 or 4064 of ERISA. No Employee Benefit Plan provides or
promises, or at any time provided or promised, retiree health,
retiree life insurance, or other retiree welfare benefits except as
may be required by the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, or similar state law. Each Employee
Benefit Plan is and has been operated in material compliance with
its terms and all applicable laws, including but not limited to
ERISA and the Code and, to the knowledge of the Company, no event
has occurred (including a “reportable event” as such
term is defined in Section 4043 of ERISA) and no condition exists
that would subject the Company or any ERISA Affiliate to any
material tax, fine, lien, penalty or liability imposed by ERISA,
the Code or other applicable law. Each Employee Benefit Plan
intended to be qualified under Code Section 401(a) is so qualified
and has a favorable determination or opinion letter from the IRS
upon which it can rely, and any such determination or opinion
letter remains in effect and has not been revoked; to the knowledge
of the Company, nothing has occurred since the date of any such
determination or opinion letter that is reasonably likely to
adversely affect such qualification; (B) with respect to each
Foreign Benefit Plan (if any), such Foreign Benefit Plan (1) if
intended to qualify for special tax treatment, meets, in all
material respects, the requirements for such treatment, and (2) if
required to be funded, is funded to the extent required by
applicable law, and with respect to all other Foreign Benefit
Plans, adequate reserves therefor have been established on the
accounting statements of the Company; and (C) the Company does not
have any obligations under any collective bargaining agreement with
any union and, to the knowledge of the Company, no organization
efforts are underway with respect to Company employees. As used in
this Agreement, “Code” means
the Internal Revenue Code of 1986, as amended; “Employee Benefit
Plan” means any “employee benefit plan”
within the meaning of Section 3(3) of ERISA, including, without
limitation, all stock purchase, stock option, stock-based
severance, employment, change-in-control, medical, disability,
fringe benefit, bonus, incentive, deferred compensation, employee
loan and all other employee benefit plans, agreements, programs,
policies or other arrangements, whether or not subject to ERISA,
under which (x) any current or former employee, director or
independent contractor of the Company has any present or future
right to benefits and which are contributed to, sponsored by or
maintained by the Company and (y) the Company has had or has any
present or future obligation or liability; “ERISA” means
the Employee Retirement Income Security Act of 1974, as amended;
“ERISA
Affiliate” means any member of the company’s
controlled group as defined in Code Section 414(b), (c), (m) or
(o); and “Foreign Benefit
Plan” means any Employee Benefit Plan established,
maintained or contributed to outside of, and subject to applicable
laws other than those of, the United States of America or any state
thereof, or which covers any employee working or residing outside
of the United States who is subject to applicable laws other than
those of the United States or any state thereof with respect to
such Employee Benefit Plan.
10
(xxix) Business
Arrangements. Except as disclosed in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus,
the Company has not granted any rights to develop, manufacture,
produce, assemble, distribute, license, market or sell its products
to any other person and is not bound by any agreement that affects
the exclusive right of the Company to develop, manufacture,
produce, assemble, distribute, license, market or sell its
products.
(xxx) Labor
Matters. No labor problem or dispute with the employees of
the Company exists or is threatened or imminent, and the Company is
not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, contractors or
customers, that would, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect.
(xxxi) Disclosure
of Legal Matters. There are no statutes, regulations, legal
or governmental proceedings or contracts or other documents
required to be described in the Time of Sale Disclosure Package or
in the Prospectus or included as exhibits to the Registration
Statement that are not described or included as
required.
(xxxii) Statistical
Information. Any third-party statistical and market-related
data included in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus are based on or derived from
sources that the Company believes to be reliable and accurate in
all material respects.
(xxxiii) Forward-looking
Statements. No forward-looking statement (within the meaning
of Section 27A of the Act and Section 21E of the Exchange Act)
contained in the Registration Statement, the Time of Sale
Disclosure Package or the Prospectus has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good
faith.
(xxxiv) Emerging
Growth Company. From the time of the initial confidential
submission to the Commission of the registration statement relating
to the initial public offering of the Company’s securities,
the Company has been and is an “emerging growth
company,” as such term is defined in Section 2(a) of the Act
(an “Emerging Growth
Company”).
(xxxv) Related
Party Transactions. To the Company’s knowledge, no
transaction has occurred between or among the Company, on the one
hand, and any of the Company’s officers, directors or five
percent or greater stockholders or any affiliate or affiliates of
any such officer, director or five percent or greater stockholders
that is required to be described that is not so described in the
Registration Statement, the Time of Sale Disclosure Package and the
Prospectus. The Company has not, directly or indirectly, extended
or maintained credit, or arranged for the extension of credit, or
renewed an extension of credit, in the form of a personal loan to
or for any of its directors or executive officers in violation of
applicable laws, including Section 402 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act.
(xxxvi) Qualified
Small Business Stock. As of and immediately following the
First Closing Date and the Second Closing Date, as applicable: (i)
the Company will be an eligible corporation as defined in Section
1202(e)(4) of the Code, (ii) the Company will not have made
purchases of its own stock described in Code Section 1202(c)(3)(B)
during the one year period preceding the First Closing Date and the
Second Closing Date, as applicable, except for purchases that are
disregarded for such purposes under Treasury Regulation Section
1.1202-2, and (iii) the Company’s aggregate gross assets, as
defined by Code Section 1202(d)(2), at no time between its
incorporation and through the First Closing Date and the Second
Closing Date, as applicable, have exceeded $50 million, taking into
account the assets of any corporations required to be aggregated
with the Company in accordance with Code Section
1202(d)(3).
11
(b) Effect of
Certificates. Any certificate signed by any officer of the
Company and delivered to you or to your counsel shall be deemed a
representation and warranty by the Company to the Underwriter as to
the matters covered thereby.
3. Purchase, Sale and Delivery
of Securities.
(a) Firm
Shares. On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to issue and sell
the Firm Shares to the Underwriter, and the Underwriter agrees to
purchase from the Company the Firm Shares. The purchase price for
each Firm Share shall be $1.953 per share.
(b) Option
Shares. On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and
conditions herein set forth, the Company hereby grants to the
Underwriter an option to purchase all or any portion of the Option
Shares at the same purchase price as the Firm Shares, for use
solely in covering any over-allotments made by the Underwriter in
the sale and distribution of the Firm Shares. The option granted
hereunder may be exercised in whole or in part at any time within
45 days after the effective date of this Agreement upon notice
(confirmed in writing) by the Underwriter to the Company setting
forth the aggregate number of Option Shares as to which the
Underwriter is exercising the option and the date and time, as
determined by the Underwriter, when the Option Shares are to be
delivered, but in no event earlier than the First Closing Date (as
defined below) nor earlier than the second business day or later
than the tenth business day after the date on which the option
shall have been exercised. No Option Shares shall be sold and
delivered unless the Firm Shares previously have been, or
simultaneously are, sold and delivered.
(c) Payment and
Delivery.
(i) The Securities to
be purchased by the Underwriter hereunder, in book-entry form in
such authorized denominations and registered in such names as you
may request upon at least forty-eight hours’ prior notice to
the Company, shall be delivered by or on behalf of the Company to
you, through the facilities of the Depository Trust Company
(“DTC”), for the account of the Underwriter, with any
transfer taxes payable in connection with the transfer of the
Securities to the Underwriter duly paid, against payment by or on
behalf of the Underwriter of the purchase price therefor by wire
transfer of Federal (same-day) funds to the account specified by
the Company to you at least forty-eight hours in advance. The time
and date of such delivery and payment shall be, with respect to the
Firm Shares, 9:30 a.m., New York City time, on October 15, 2018, or
such other time and date as you and the Company may agree upon in
writing, and, with respect to the Option Shares, 9:30 a.m., New
York City time, on the date specified by you in each written notice
given by you of the election to purchase such Option Shares, or
such other time and date as you and the Company may agree upon in
writing. Such time and date for delivery of the Firm Shares is
herein called the “First Closing
Date,” each such time and date for delivery of the
Option Shares, if not the First Closing Date, is herein called a
“Second
Closing Date,” and each such time and date for
delivery is herein called a “Closing.”
(ii) The
documents to be delivered at each Closing by or on behalf of the
parties hereto pursuant to Section 5 hereof, including the cross
receipt for the Securities and any additional documents requested
by the Underwriter pursuant to Section 5(l) hereof, will be
delivered at the offices of the Company, and the Securities will be
delivered to you, through the facilities of the DTC, for the
account of such Underwriter, all at such Closing.
12
4. Covenants. The
Company covenants and agrees with the Underwriter as
follows:
(a) Required
Filings. The Company will prepare and file a Prospectus with
the Commission containing the Rule 430B Information omitted from
the Preliminary Prospectus within the time period required by, and
otherwise in accordance with the provisions of, Rules 424(b) and
430B of the Rules and Regulations. If the Company has elected to
rely upon Rule 462(b) of the Rules and Regulations to increase the
size of the offering registered under the Act and the Rule 462(b)
Registration Statement has not yet been filed and become effective,
the Company will prepare and file the Rule 462(b) Registration
Statement with the Commission within the time period required by,
and otherwise in accordance with the provisions of, Rule 462(b) of
the Rules and Regulations and the Act. The Company will prepare and
file with the Commission, promptly upon your request, any
amendments or supplements to the Registration Statement or
Prospectus that, in your opinion, may be necessary or advisable in
connection with the distribution of the Securities by the
Underwriter; and the Company will furnish you and counsel for the
Underwriter a copy of any proposed amendment or supplement to the
Registration Statement or Prospectus and will not file any
amendment or supplement to the Registration Statement or Prospectus
to which you shall reasonably object by notice to the Company after
having been furnished a copy a reasonable time prior to the
filing.
(b) Notification of
Certain Commission Actions. The Company will advise you,
promptly after it shall receive notice or obtain knowledge thereof,
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or any post-effective
amendment thereto or preventing or suspending the use of any
Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus or any issuer free writing prospectus, of the suspension
of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding
for any such purpose; and the Company will promptly use its best
efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such a stop order should be issued.
(c) Continued
Compliance with Securities Laws. Within the time during
which a prospectus (assuming the absence of Rule 172) relating to
the Securities is required to be delivered under the Act by the
Underwriter or any dealer, the Company will comply with all
requirements imposed upon it by the Act, as now and hereafter
amended, and by the Rules and Regulations, as from time to time in
force, so far as necessary to permit the continuance of sales of or
dealings in the Securities as contemplated by the provisions
hereof, the Time of Sale Disclosure Package and the Prospectus. The
Company shall use its commercially reasonable efforts to keep the
Registration Statement continuously effective under the Act, and to
file on a timely basis with the Commission such periodic and
special reports as required by the Rules and Regulations, until the
later of (i) the First Closing Date; and (ii) the exercise in full
or expiration of the Underwriter’s option to purchase Option
Shares pursuant to Section 3(b) hereof. If during such period any
event occurs as a result of which the Registration Statement or the
Prospectus (or if the Prospectus is not yet available to
prospective purchasers, the Time of Sale Disclosure Package) would
include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances then existing, not misleading, or if
during such period it is necessary to amend the Registration
Statement or supplement the Prospectus (or if the Prospectus is not
yet available to prospective investors, the Time of Sale Disclosure
Package) to comply with the Act, the Company promptly will (x)
notify you of such untrue statement or omission, (y) amend the
Registration Statement or supplement the Prospectus (or, if the
Prospectus is not yet available to prospective purchasers, the Time
of Sale Disclosure Package) (at the expense of the Company) so as
to correct such statement or omission or effect such compliance and
(z) notify you when any amendment to the Registration Statement is
filed or becomes effective or when any supplement to the Prospectus
(or, if the Prospectus is not yet available to prospective
purchasers, the Time of Sale Disclosure Package) is
filed.
13
(d) Blue Sky
Qualifications. The Company shall take or cause to be taken
all necessary action to qualify the Securities for sale under the
securities laws of such domestic United States or foreign
jurisdictions as you reasonably designate and to continue such
qualifications in effect so long as required for the distribution
of the Securities, except that the Company shall not be required in
connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in any
state.
(e) Provision of
Documents. The Company will furnish, at its own expense, to
the Underwriter and counsel for the Underwriter copies of the
Registration Statement, and to the Underwriter and any dealer each
Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, and all amendments and supplements to such documents,
in each case as soon as practicable once available and in such
quantities as you may from time to time reasonably
request.
(f) Rule 158.
The Company will make generally available to its security holders
as soon as practicable, but in no event later than 15 months after
the end of the Company’s current fiscal quarter, an
“earnings statement” that shall satisfy the provisions
of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations.
(g) Payment and
Reimbursement of Expenses. The Company, whether or not the
transactions contemplated hereunder are consummated or this
Agreement is terminated, will pay or cause to be paid (A) all
expenses (including transfer taxes allocated to the respective
transferees) incurred in connection with the delivery to the
Underwriter of the Securities, (B) all expenses and fees
(including, without limitation, fees and expenses of the
Company’s accountants and counsel) in connection with the
preparation, printing, filing, delivery, and shipping of the
Registration Statement (including the financial statements therein
and all amendments, schedules, and exhibits thereto), the
Securities, each Preliminary Prospectus, the Time of Sale
Disclosure Package, the Prospectus, and any amendment thereof or
supplement thereto, and the printing, delivery, and shipping of
this Agreement and other underwriting documents, including any blue
sky memoranda (covering the states and other applicable
jurisdictions), (C) all filing fees and fees incurred in connection
with the qualification of the Securities for offering and sale by
the Underwriter or by dealers under the securities or blue sky laws
of the states and other jurisdictions which you shall designate,
including the reasonably incurred fees and disbursements of counsel
for the Underwriter in connection with such qualification, (D) all
filing fees and the reasonably incurred fees and disbursements of
counsel to the Underwriter in connection with the review and
qualification of the offering of the Securities by FINRA, (E) all
fees and expenses incident to listing the Securities on The NASDAQ
Capital Market, (F) all fees and expenses of any transfer agent,
warrant agent or registrar, (G) the reasonable out-of-pocket
accountable fees and disbursements incurred by the Underwriter in
connection with the offer, sale or marketing of the Securities and
performance of the Underwriter’s obligations hereunder,
including all reasonable out-of-pocket accountable fees and
disbursements of Underwriter’s counsel, and for the avoidance
of doubt, excluding any general overhead, salaries, supplies, or
similar expenses of the Underwriter incurred in the normal conduct
of business, (H) all fees, expenses and disbursements relating to
background checks of the Company’s officers and directors (I)
the cost and expenses of the Company relating to investor
presentations or any “road show” undertaken in
connection with marketing of the Securities, including, without
limitation, expenses associated with the preparation or
dissemination of any electronic road show, expenses associated with
the production of road show slides and graphics, fees and expenses
of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, and
reasonable travel and lodging expenses of the Underwriter and
officers of the Company and any such consultants, and (J) all other
costs and expenses of the Company incident to the performance of
its obligations hereunder that are not otherwise specifically
provided for herein. The fees and expenses, which includes the fees
and expenses of the Underwriter’s counsel, to be paid by the
Company and reimbursed to the Underwriter under this Section 4(g)
shall not exceed $50,000, which amount shall include any amounts
paid to the Underwriter pursuant to any of the clauses of this
Section 4(g), it being understood that that in addition to this
reimbursement, the Company shall also pay the Underwriter a
non-accountable expense allowance equal to 1.0% of the public
offering price of the Securities (excluding any amounts from the
sale of the Option Shares). If this Agreement is terminated by you
pursuant to Section 8(a)(i), 8(a)(ii) or 8(a)(v) hereof or if the
sale of the Securities provided for herein is not consummated by
reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed, or
because any other condition of the Underwriter’s obligations
hereunder required to be fulfilled by the Company is not fulfilled,
the Company will reimburse the Underwriter for all reasonable
out-of-pocket accountable disbursements (including but not limited
to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges) incurred by the
Underwriter in connection with their investigation, preparing to
market and marketing the Securities or in contemplation of
performing their obligations hereunder.
14
(h) Use of
Proceeds. The Company will apply the net proceeds from the
sale of the Securities to be sold by it hereunder for the purposes
set forth in the Time of Sale Disclosure Package and in the
Prospectus and will file such reports with the Commission with
respect to the sale of the Securities and the application of the
proceeds therefrom as may be required in accordance with Rule 463
of the Rules and Regulations.
(i) Company Lock
Up. The Company will not, without the prior written consent
of the Underwriter, from the date of execution of this Agreement
and continuing to and including the date 180 days after the date of
the Prospectus (the “Lock-Up
Period”), (A) offer, pledge, announce the intention to
sell, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for
Common Stock or (B) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction
described in clause (A) or (B) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise,
except to the Underwriter pursuant to this Agreement and (x) grants
of options, shares of Common Stock and other awards to purchase or
receive shares of Common Stock under the Company Stock Plans that
are in effect as of or prior to the date hereof, (y) issuances of
shares of Common Stock upon the exercise of options or other awards
granted under such Company Stock Plans or the Company’s
warrants outstanding as of the date hereof pursuant to the terms
thereof as of such date or (z) issuance of shares of Common Stock
upon the conversion of convertible securities outstanding as of the
date hereof. The Company agrees not to accelerate the vesting of
any option or warrant or the lapse of any repurchase right prior to
the expiration of the Lock-Up Period.
(j) Stockholder
Lock-Ups. The Company has caused to be delivered to the
Underwriter prior to the date of this Agreement a letter, in the
form of Exhibit A hereto (the “Lock-Up
Agreement”), from each individual or entity listed on
Schedule II. The Company will enforce the terms of each Lock-Up
Agreement and issue stop-transfer instructions to its transfer
agent and registrar for the Common Stock with respect to any
transaction or contemplated transaction that would constitute a
breach of or default under the applicable Lock-Up Agreement and
will not release the stop transfer instructions without the written
approval of the Underwriter.
(k) No Market
Stabilization or Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or
which might reasonably be expected to cause or result in, or which
has constituted, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Securities, and has not effected any sales of Common Stock which
are required to be disclosed in response to Item 701 of Regulation
S-K under the Act which have not been so disclosed in the
Registration Statement.
(l) SEC
Reports. The Company will file on a timely basis with the
Commission such periodic and special reports as required by the
Rules and Regulations.
(m) Free Writing
Prospectuses. The Company represents and agrees that, unless
it obtains the prior written consent of the Underwriter, and the
Underwriter represents and agrees that, unless it obtains the prior
written consent of the Company, it has not made and will 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.
15
(n) Emerging Growth
Company. The Company will promptly notify the Underwriter if
the Company ceases to be an Emerging Growth Company at any time
prior to the later of (A) completion of the distribution of the
Securities within the meaning of the Act and (B) completion of the
Lock-Up Period referenced in Section 4(i) hereof.
(o) Underwriter’s
Warrants. On each Closing Date, the Company shall sell to
the Underwriter a warrant in the form attached as Exhibit B hereto (each, an
“Underwriter’s Warrant” and, together, the
“Underwriter’s
Warrants”) to purchase the number of shares of the
Company’s common stock equal to 3.0% of the shares issued on
such Closing Date (rounded up to the nearest whole
share).
5. Conditions of
Underwriter’s Obligations. The obligations of the
Underwriter hereunder are subject to the accuracy, as of the date
hereof and at each of the First Closing Date and the Second Closing
Date (as if made at such Closing Date), of and compliance with all
representations, warranties and agreements of the Company contained
herein, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) Required
Filings; Absence of Certain
Commission Actions. The Registration Statement shall have
become effective not later than 5:30 p.m., Eastern time, on the
date of this Agreement, or such later time and date as you, as
Underwriter, shall approve and all filings required by Rules 424,
430B and 433 of the Rules and Regulations shall have been timely
made (without reliance on Rule 424(b)(8) or Rule 164(b)); no stop
order suspending the effectiveness of the Registration Statement or
any part thereof or any amendment thereof, nor suspending or
preventing the use of the Time of Sale Disclosure Package or the
Prospectus shall have been issued; no proceedings for the issuance
of such an order shall have been initiated or threatened; and any
request of the Commission for additional information (to be
included in the Registration Statement, the Time of Sale Disclosure
Package, the Prospectus or otherwise) shall have been complied with
to your satisfaction.
(b) Continued
Compliance with Securities Laws. The Registration Statement,
and any amendment thereof or supplement thereto, shall not contain
any untrue statement of a material fact or omit to state a material
fact which is required to be stated therein, or necessary to make
the statements therein, in light of the circumstances under which
they are made, not misleading. The Time of Sale Disclosure Package
and the Prospectus, and any amendment thereof or supplement
thereto, shall not contain any untrue statement of a material fact
or omit to state a material fact which is required to be stated
therein, or necessary to make the statements therein, in light of
the circumstances under which they are made, not
misleading.
(c) Absence of Certain
Events. Except as contemplated in the Time of Sale
Disclosure Package and in the Prospectus, subsequent to the date of
the most recent financial statements of the Company included the
Time of Sale Disclosure Package and the Prospectus, the Company
shall not have incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions, or
declared or paid any dividends or made any distribution of any kind
with respect to its capital stock; and there shall not have been
any change in the capital stock (other than a change in the number
of outstanding shares of Common Stock due to the issuance of shares
upon the exercise of outstanding options or warrants or conversion
of convertible securities), or any material change in the
short-term or long-term debt of the Company (other than as a result
of the conversion of convertible securities), or any issuance of
options, warrants, convertible securities or other rights to
purchase the capital stock of the Company, or any Material Adverse
Change or any development involving a prospective Material Adverse
Change (whether or not arising in the ordinary course of business),
that, in your judgment, makes it impractical or inadvisable to
offer or deliver the Securities on the terms and in the manner
contemplated in the Time of Sale Disclosure Package and in the
Prospectus.
16
(d) Opinion of Company
Counsel. On each Closing Date, there shall have been
furnished to you, as Underwriter, the opinion and negative
assurance letter of K&L Gates LLP, counsel for the Company,
dated such Closing Date and addressed to you in substantially the
form attached hereto as Exhibit C.
(e) [Intentionally
Omitted].
(f) Opinion of Company
Intellectual Property Counsel. On each Closing Date, there
shall have been furnished to you, as Underwriter, the opinion of
Sim & ▇▇▇▇▇▇▇▇, special intellectual property counsel for the
Company, dated such Closing Date and addressed to you in
substantially the form attached hereto as Exhibit D.
(g) Comfort
Letters. On the date hereof, on the effective date of any
post-effective amendment to the Registration Statement filed after
the date hereof, and on each Closing Date, you, as Underwriter,
shall have received a letter containing statements and information
of the type ordinarily included in accountants’
“comfort letters” from RBSM LLP, each dated such date
and addressed to you, as Underwriter, in form and substance
satisfactory to you, as Underwriter.
(h) Officers’
Certificate. On each Closing Date, there shall have been
furnished to you, as Underwriter, a certificate, dated such Closing
Date and addressed to you, as Underwriter, signed by the chief
executive officer and by the chief financial officer of the
Company, to the effect that:
(i) The representations
and warranties of the Company in this Agreement are true and
correct as if made at and as of such Closing Date, and the Company
has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to
such Closing Date; and
(ii) No
stop order or other order suspending the effectiveness of the
Registration Statement or any part thereof or any amendment thereof
or the qualification of the Securities for offering or sale, nor
suspending or preventing the use of the Time of Sale Disclosure
Package, the Prospectus or any issuer free writing prospectus, has
been issued, and no proceeding for that purpose has been instituted
or, to the best of their knowledge, is contemplated by the
Commission or any state or regulatory body.
(i) Lock-Up
Agreement. The Underwriter shall have received all of the
Lock-Up Agreements referenced in Section 4 and the Lock-Up
Agreements shall remain in full force and effect.
(j) Underwriter’s
Warrants. The Underwriter shall have received the
Underwriter’s Warrants referenced in Section 4(o) with
respect to the Securities to be delivered on such Closing
Date.
(k) CFO
Certificate. On the date hereof and on each Closing Date, as
applicable, the Company shall have furnished to you, as
Underwriter, a certificate, dated as of such date, signed on behalf
of the Company by its chief financial officer, regarding the
accuracy of certain financial information in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus,
in form and substance satisfactory to the Underwriter.
(l) Other
Documents. The Company shall have furnished to you, as
Underwriter, and counsel for the Underwriter such additional
documents, certificates and evidence as you or they may have
reasonably requested.
17
(m) FINRA No
Objections. FINRA shall have raised no objection to the
fairness and reasonableness of the underwriting terms and
arrangements.
(n) Exchange
Listing. The Securities to be delivered on such Closing Date
will have been approved for listing on The NASDAQ Capital
Market.
All
such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory
in form and substance to you, as Underwriter, and counsel for the
Underwriter. The Company will furnish you with such conformed
copies of such opinions, certificates, letters and other documents
as you shall reasonably request.
6. Indemnification and
Contribution.
(a) Indemnification of
the Underwriter by the Company. The Company agrees to
indemnify and hold harmless the Underwriter, its affiliates,
directors and officers and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act (collectively the “Underwriter Indemnified
Parties”), from and against any losses, claims,
damages or liabilities to which any Underwriter Indemnified Party
may become subject, under the Act or otherwise (including in
settlement of any litigation if such settlement is effected with
the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) (i)
arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, including the Rule 430B Information and any other
information deemed to be a part of the Registration Statement at
the time of effectiveness and at any subsequent time pursuant to
the Rules and Regulations, if applicable, any Preliminary
Prospectus, the Time of Sale Disclosure Package, the Prospectus, or
any amendment or supplement thereto, any issuer free writing
prospectus, any issuer information that the Company has filed or is
required to file pursuant to Rule 433(d) of the Rules and
Regulations, or any road show as defined in Rule 433(h) under the
Act (a “road show”),
or (ii) arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
and will reimburse the Underwriter Indemnified Parties for any
legal or other expenses reasonably incurred by it in connection
with investigating or defending against such loss, claim, damage,
liability or action as such expenses are incurred; provided,
however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage, liability or action
arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the
Company by you, or by any other person through you, specifically
for use in the preparation thereof; it being understood and agreed
that the only information furnished by the Underwriter consists of
the information described as such in Section 6(e).
(b) Indemnification by
the Underwriter. The Underwriter will indemnify and hold
harmless the Company, its affiliates, directors and officers and
each person, if any, who controls the Company within the meaning of
Section 15 of the Act and Section 20 of the Exchange Act
(collectively, the “Company Indemnified
Parties”), from and against any losses, claims,
damages or liabilities to which any Company Indemnified Party may
become subject, under the Act or otherwise (including in settlement
of any litigation, if such settlement is effected with the written
consent of the Underwriter), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) (i) arise
out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Time of Sale Disclosure
Package, the Prospectus, or any amendment or supplement thereto,
any issuer free writing prospectus, any issuer information that the
Company has filed or is required to file pursuant to Rule 433(d) of
the Rules and Regulations, or any road show, or (ii) arise out of
or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in
conformity with written information furnished to the Company by
you, or by any other persons through you, specifically for use in
the preparation thereof (it being understood and agreed that the
only information furnished by an Underwriter consists of the
information described as such in Section 6(e)), and will reimburse
the Company Indemnified Parties for any legal or other expenses
reasonably incurred by the Company in connection with investigating
or defending against any such loss, claim, damage, liability or
action as such expenses are incurred.
18
(c) Notice and
Procedures. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of
any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from
any liability that it may have to any indemnified party except to
the extent such indemnifying party has been materially prejudiced
by such failure (through the forfeiture of substantive rights or
defenses). In case any such action 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 in, 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 after notice from the indemnifying party to such
indemnified party of the indemnifying party’s election so to
assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any
legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that if, in your
reasonable judgment, it is advisable for the indemnified parties to
be represented as a group by separate counsel, you shall have the
right to employ a single counsel (in addition to local counsel) to
represent the indemnified parties as may be subject to liability
arising from any claim in respect of which indemnity may be sought
by the indemnified parties under subsection (a) above, in which
event the reasonable fees and expenses of such separate counsel
shall be borne by the indemnifying party or parties and reimbursed
to the indemnified parties as incurred. An indemnifying party shall
not be obligated under any settlement agreement relating to any
action under this Section 6 to which it has not agreed in writing.
In addition, no indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be
unreasonably withheld or delayed) effect any settlement of any
pending or threatened proceeding unless such settlement includes an
unconditional release of such indemnified party for all liability
on claims that are the subject matter of such 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 an indemnified
party. Notwithstanding the foregoing, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel pursuant to this
Section 6(c), such indemnifying party agrees that it shall be
liable for any settlement effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such
settlement.
19
(d) Contribution;
Limitations on Liability; Non-Exclusive Remedy. If the
indemnification provided for in this Section 6 is unavailable or
insufficient to hold harmless an indemnified party under subsection
(a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of
the losses, claims, damages or liabilities referred to in
subsection (a) of (b), (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one
hand and the Underwriter on the other from the offering of the
Securities or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company on
the one hand and the Underwriter on the other in connection with
the statements or omissions that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on
the one hand and the Underwriter 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
Underwriter, 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 or the Underwriter and the parties’ relevant
intent, knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The Company and the
Underwriter agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were to be determined
by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to
in the first sentence of this subsection (d). The amount paid by an
indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection
(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of
this subsection (d), the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total
underwriting discounts and commissions received by the Underwriter
with respect to the Securities exceeds the amount of any damages
that the Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriter’s obligations in this
subsection (d) to contribute is in proportion to its respective
underwriting obligations. The remedies provided for in this Section
6 are not exclusive and shall not limit any rights or remedies that
might otherwise be available to any indemnified party at law or in
equity.
(e) Information
Provided by the Underwriter. The Underwriter confirms and
the Company acknowledges that the statements with respect to the
public offering of the Securities by the Underwriter set forth in
the first paragraph of text under the caption “Discount,
Commissions and Expenses” in the section titled
“Underwriting,” and each of the first five paragraphs
of text under the caption “Price Stabilization, Short
Positions and Penalty Bids,” are correct and constitute the
only information concerning the Underwriter furnished in writing to
the Company by or on behalf of the Underwriter specifically for
inclusion in the Registration Statement, any Preliminary
Prospectus, the Time of Sale Disclosure Package, the Prospectus or
any issuer free writing prospectus.
20
7. Representations and
Agreements to Survive Delivery. All representations,
warranties, and agreements of the Company herein or in certificates
delivered pursuant hereto, and the agreements of the Underwriter
and the Company contained in Section 6 hereof, shall remain
operative and in full force and effect regardless of any
investigation made by or on behalf of the Underwriter or any
controlling person thereof, or the Company or any of its officers,
directors, or controlling persons, and shall survive delivery of,
and payment for, the Securities to and by the Underwriter hereunder
and any termination of this Agreement.
8. Termination.
(a) Right to
Terminate. You shall have the right to terminate this
Agreement by giving notice to the Company as hereinafter specified
at any time at or prior to the First Closing Date, and the option
referred to in Section 3(b), if exercised, may be cancelled at any
time prior to the Second Closing Date, if (i) the Company shall
have failed, refused or been unable, at or prior to such Closing
Date, to perform any agreement on its part to be performed
hereunder, (ii) any condition of the Underwriter’s
obligations hereunder (other than any set forth in Section 5(m)
hereof) is not fulfilled, (iii) trading on The NASDAQ Stock Market
or New York Stock Exchange shall have been wholly suspended, (iv)
trading of Common Stock on The NASDAQ Capital Market shall have
been suspended (but trading on The NASDAQ Capital Market shall not
have been wholly suspended), (v) minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for
securities shall have been required, on The NASDAQ Stock Market or
New York Stock Exchange, by such Exchange or by order of the
Commission or any other Governmental Authority, (vi) a banking
moratorium shall have been declared by federal or state
authorities, or (vii) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse
and makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities in the
manner contemplated in the Time of Sale Disclosure Package or the
Prospectus. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 4(g)
and Section 6 hereof shall at all times be effective.
(b) Notice of
Termination. If you elect to terminate this Agreement as
provided in this Section, the Company shall be notified promptly by
you by telephone, confirmed by letter.
9. Default by the
Company.
(a) Default by the
Company. If the Company shall fail at the First Closing Date
to sell and deliver the Securities which it is obligated to sell
hereunder, then this Agreement shall terminate without any
liability on the part of the Underwriter.
(b) No Relief from
Liability. No action taken pursuant to this Section shall
relieve the Company from liability, if any, in respect of any
default hereunder.
10. Notices. Except as
otherwise provided herein, all communications hereunder shall be in
writing and, (i) if to the Underwriter, shall be mailed via
overnight delivery service or hand delivered via courier, to
National Securities Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, to the attention of Investment Banking; and (ii) if
to the Company, shall be mailed or delivered to it at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇. Any party to this Agreement may change such address for
notices by sending to the parties to this Agreement written notice
of a new address for such purpose.
21
11. Persons Entitled to Benefit
of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and
directors referred to in Section 6. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or
corporation any legal or equitable remedy or claim under or in
respect of this Agreement or any provision herein contained. The
term “successors and assigns” as herein used shall not
include any purchaser, as such purchaser, of any of the Securities
from the Underwriter.
12. Absence of Fiduciary
Relationship. The Company acknowledges and agrees that:
(a) the Underwriter has been retained solely to act as an
Underwriter in connection with the sale of the Securities and that
no fiduciary, advisory or agency relationship between the Company
and the Underwriter has been created in respect of any of the
transactions contemplated by this Agreement, irrespective of
whether the Underwriter has advised or is advising the Company on
other matters; (b) the price and other terms of the Securities set
forth in this Agreement were established by the Company following
discussions and arms-length negotiations with the Underwriter, and
the Company is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the
transactions contemplated by this Agreement; (c) the Company has
been advised that the Underwriter and its affiliates are engaged in
a broad range of transactions which may involve interests that
differ from those of the Company and that the Underwriter has no
obligation to disclose such interest and transactions to the
Company by virtue of any fiduciary, advisory or agency
relationship; (d) the Company has been advised that you, as
Underwriter, are acting in respect of the transactions contemplated
by this Agreement, solely for your benefit, and not on behalf of
the Company; (e) the Company waives to the fullest extent permitted
by law, any claims it may have against the Underwriter for breach
of fiduciary duty or alleged breach of fiduciary duty in respect of
any of the transactions contemplated by this Agreement and agrees
that the Underwriter shall have no liability (whether direct or
indirect) to the Company in respect of such a fiduciary duty claim
on behalf of or in right of the Company, including stockholders,
employees or creditors of the Company.
13. Governing Law; Waiver of
Jury Trial. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
Each of the Company (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates) and
the Underwriter hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in
any legal proceeding arising out of or relating to this Agreement,
the Underwriter’s Warrants or the transactions contemplated
hereby.
14. Counterparts. This
Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts
shall each be deemed to be an original and all such counterparts
shall together constitute one and the same instrument.
15. General Provisions.
This Agreement and the Underwriter’s Warrants constitute the
entire agreement of the parties to this Agreement and supersedes
all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter
hereof, including that certain engagement letter, dated March 15,
2018, by and between the Company and the Underwriter. This
Agreement may not be amended or modified unless in writing by all
of the parties hereto, and no condition herein (express or implied)
may be waived unless waived in writing by each party whom the
condition is meant to benefit. The Section headings herein are for
the convenience of the parties only and shall not affect the
construction or interpretation of this Agreement. The invalidity or
unenforceability of any Section, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any
other Section, paragraph or provision hereof. If any Section,
paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to
be made such minor changes (and only such minor changes) as are
necessary to make it valid and enforceable.
[Signature Page Follows]
22
Please
sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement
between the Company and the Underwriter in accordance with its
terms.
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Very truly yours,
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ENDRA Life Sciences Inc.
By: /s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
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Confirmed as of the date firstabove mentioned.
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National Securities Corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇
Title: Executive Vice
President, Head of Investment
Banking
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