cvm_ex1
EXHIBIT 1.1
UNDERWRITING AGREEMENT
between
CEL-SCI Corporation
and
KINGSWOOD CAPITAL MARKETS, division of Benchmark Investments,
Inc.,
as Representative of the Several Underwriters
CEL-SCI CORPORATION
UNDERWRITING AGREEMENT
New York, New York
December 8, 2020
Kingswood Capital Markets, division of Benchmark Investments,
Inc.
As Representative of the several Underwriters named on
Schedule
1 attached
hereto
17 Battery Place, Suite 625
New York, New York 10004
Ladies and Gentlemen:
The
undersigned, CEL-SCI Corporation, a corporation formed under the
laws of the State of Colorado (collectively with its subsidiaries
and affiliates, including, without limitation, all entities
disclosed or described in the Registration Statement (as
hereinafter defined) as being subsidiaries or affiliates of CEL-SCI
Corporation the “Company”), hereby confirms its
agreement (this “Agreement”) with Kingswood Capital
Markets, division of Benchmark Investments, Inc. (hereinafter
referred to as “you” (including its correlatives) or
the “Representative”) and with the other underwriters
named on Schedule 1 hereto for which the Representative is acting
as representative (the Representative and such other underwriters
being collectively called the “Underwriters” or,
individually, an “Underwriter”) on the terms and
conditions set forth herein.
1. Purchase
and Sale of Securities.
1.1. Firm
Shares.
1.1.1. Nature
and Purchase of Firm Shares.
(i) On the basis of the
representations and warranties herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue
and sell to the several Underwriters, an aggregate of 1,000,000,
(the “Firm Shares”) of the Company's common stock, par
value $0.01 per share (the “Common Stock).
(ii) The
Underwriters, severally and not jointly, agree to purchase from the
Company the number of Firm Shares set forth opposite their
respective names on Schedule 1 attached hereto and made a part
hereof at the purchase price of $ 13.62 per Firm Share (93% of the
per Firm Share offering price) with respect to each Firm Share. The
Firm Shares are to be offered to the public at the offering price
set forth on the cover page of the Prospectus (as defined in
Section 2.1 hereof).
1.1.2. Firm
Shares Payment and Delivery.
(i) Delivery and
payment for the Firm Shares shall be made at 10:00 a.m., Eastern
time, on the second (2nd) Business Day following the date of this
Agreement or at such earlier time as shall be agreed upon by the
Representative and the Company, at the offices of Nelson Mullins
Riley & Scarborough LLP, 101 Constitution Avenue, NW,
Washington, DC 20001 (“Representative Counsel”), or at
such other place (or remotely by facsimile or other electronic
transmission) as shall be agreed upon by the Representative and the
Company. The hour and date of delivery and payment for the Firm
Shares is called the “Closing Date.”
(ii)
Payment for the Firm Shares shall be made on the Closing Date by
wire transfer in Federal (same day) funds, payable to the order of
the Company upon delivery of the certificates (in form and
substance satisfactory to the Underwriters) representing the Firm
Shares (or through the facilities of the Depository Trust Company
(“DTC”)) for the account of the Underwriters. The Firm
Shares shall be registered in such name or names and in such
authorized denominations as the Representative may request in
writing at least two (2) full Business Days prior to the Closing
Date. The Company shall not be obligated to sell or deliver the
Firm Shares except upon tender of payment by the Representative for
all of the Firm Shares. The term “Business Day” means
any day other than a Saturday, a Sunday or a legal holiday or a day
on which banking institutions are authorized or obligated by law to
close in New York, New York.
1.2. Over-allotment
Option.
1.2.1. Additional
Shares. The Company hereby
grants to the Representative an option (the “Over-allotment
Option”) to purchase up to an additional 150,000 shares of
Common Stock, representing up to 15% of the Firm Shares sold in the
Offering (the “Additional Shares”) for the purpose of
covering over-allotments of such securities, if any. The Firm
Shares and the Additional Shares are collectively referred to as
the “Securities.” The Securities shall be issued
directly by the Company and shall have the rights and privileges
described in the Registration Statement, the Disclosure Package and
the Prospectus referred to below. The offering and sale of the
Securities is herein referred to as the “Offering.”
1.2.2. Exercise
of Option. The Over-allotment
Option granted pursuant to Section 1.2.1 hereof may be exercised by
the Representative as to all (at any time) or any part (from time
to time) of the Additional Shares within 30 days after the date
hereof. The purchase price to be paid per Additional Share shall be
equal to the price per Firm Share set forth in Section 1.1.1(ii)
hereof. The Representative shall not be under any obligation to
purchase any Additional Shares prior to the exercise of the
Over-allotment Option. The Over-allotment Option granted hereby may
be exercised by the giving of oral notice to the Company from the
Representative, which shall be confirmed in writing by overnight
mail or facsimile or other electronic transmission, setting forth
the number of Additional Shares to be purchased and the date and
time for delivery of and payment for the Additional Shares (the
“Option Closing
Date”), which shall not be later than two (2) full
Business Days after the date of the notice or such other time as
shall be agreed upon by the Company and the Representative, at the
offices of Representative Counsel or at such other place (including
remotely by facsimile or other electronic transmission) as shall be
agreed upon by the Company and the Representative. If such delivery
and payment for the Additional Shares does not occur on the Closing
Date, the Option Closing Date will be as set forth in the notice.
Upon exercise of the Over-allotment Option with respect to all or
any portion of the Additional Shares, subject to the terms and
conditions set forth herein, the Company shall become obligated to
sell to the Representative, and the Representative shall purchase,
the number of Additional Shares specified in such
notice.
1.2.3. Payment
and Delivery. Payment for the
Additional Shares shall be made on the Option Closing Date by wire
transfer in Federal (same day) funds, payable to the order of the
Company upon delivery to the Representative of certificates (in
form and substance satisfactory to the Representative) representing
the Additional Shares (or through the facilities of DTC) for the
account of the Representative. The Additional Shares shall be
registered in such name or names and in such authorized
denominations as the Representative may request in writing at least
one (1) full Business Day prior to the Option Closing Date. The
Company shall not be obligated to sell or deliver the Additional
Shares except upon tender of payment by the Representative for
applicable Additional Shares. The Option Closing Date may be
simultaneous with, but not earlier than, the Closing Date; and in
the event that such time and date are simultaneous with the Closing
Date, the term “Closing
Date” shall refer to the time and date of delivery of
the Firm Shares and Additional Shares.
2. Representations and
Warranties of the Company. The Company represents and warrants to
the Underwriters as of the Applicable Time (as defined below), as
of the Closing Date and as of the Option Closing Date, if any, as
follows::
2.1. Filing
of Registration Statement. The Company has
filed with the U.S. Securities and Exchange Commission (the
“Commission”) a
registration statement on Form S-3 (File No. 333-226558), including
any related prospectus or prospectuses, for the registration of the
Securities under the Securities Act of 1933, as amended (the
“Securities
Act”), which registration statement was prepared by
the Company in all material respects in conformity with the
requirements of the Securities Act and the rules and regulations of
the Commission under the Securities Act (the “Securities Act Regulations”) and
contains and will contain all material statements that are required
to be stated therein in accordance with the Securities Act and the
Securities Act Regulations. Except as the context may otherwise
require, such registration statement on file with the Commission at
any given time, including any amendments, exhibits and schedules
thereto at such time, documents filed as a part thereof or
incorporated pursuant to Item 12 of Form S-3 under the Securities
Act at such time and the documents and information otherwise deemed
to be a part thereof or included therein pursuant to Rule 430B of
the Securities Act Regulations (the “Rule 430B Information”) or
otherwise pursuant to the Securities Act Regulations at such time,
is referred to herein as the “Registration Statement.” The
Registration Statement at the time it originally became effective
is referred to herein as the “Initial Registration Statement.”
If the Company files any registration statement pursuant to Rule
462(b) of the Securities Act Regulations, then after such filing,
the term “Registration
Statement” shall include such registration statement
filed pursuant to Rule 462(b). The Registration Statement was
declared effective by the Commission on August 24,
2018.
The
prospectus in the form in which it was filed with the Commission in
connection with the Initial Registration Statement is herein called
the “Base
Prospectus.” Each preliminary prospectus supplement to
the Base Prospectus (including the Base Prospectus as so
supplemented) that described the Securities and the Offering and
omitted the Rule 430B Information and that was used prior to the
filing of the final prospectus supplement referred to in the
following paragraph is herein called a “Preliminary
Prospectus.”
Promptly after the
execution and delivery of this Agreement, the Company will prepare
and file with the Commission a final prospectus supplement to the
Base Prospectus relating to the Securities and the Offering in
accordance with the provisions of Rule 430B and Rule 424(b) of the
Securities Act Regulations. Such final prospectus supplement
(including the Base Prospectus as so supplemented), in the form
filed with the Commission pursuant to Rule 424(b) under the
Securities Act is herein called the “Prospectus.” Any reference
herein to the Base Prospectus, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act as of the date of such
prospectus.
“Applicable Time” means 9:00 a.m., Eastern time, on
the date of this Agreement.
“Disclosure Package” means any Issuer General Use Free
Writing Prospectus issued at or prior to the Applicable Time, the
Preliminary Prospectus dated December 8, 2020 and the information
included on Schedule 2-A hereto, all considered
together.
“Issuer Free Writing
Prospectus” means any “issuer free
writing prospectus,” as defined in Rule 433 of the Securities
Act Regulations (“Rule
433”), including without limitation any
“free writing prospectus” (as defined in Rule 405 of
the Securities Act Regulations) relating to the Securities that is
(i) required to be filed with the Commission by the Company, (ii) a
“road show that is a written communication” within the
meaning of Rule 433(d)(8)(i), whether or not required to be filed
with the Commission, or (iii) exempt from filing with the
Commission pursuant to Rule 433(d)(5)(i) because it contains a
description of the Securities or of the Offering that does not
reflect the final terms, in each case in the form filed or required
to be filed with the Commission or, if not required to be filed, in
the form retained in the Company's records pursuant to Rule
433(g).
“Issuer General Use Free Writing
Prospectus” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective
investors (other than a “bona fide electronic road
show,” as defined in Rule 433 (the “Bona Fide Electronic Road
Show”)), as evidenced by its being
specified in Schedule
2-B hereto.
“Issuer Limited Use Free Writing
Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Use Free Writing
Prospectus.
2.2. Pursuant
to the Exchange Act. The Common Stock is
registered pursuant to Section 12(b) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). The Company
has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange
Act, nor has the Company received any notification that the
Commission is contemplating terminating either such
registration.
2.3. Stock
Exchange Listing. The Common Stock is
listed on the NYSE American LLC (the “NYSE
American”), and
the Company has taken no action designed to, or likely to have the
effect of delisting the Common Stock from the NYSE American, nor
has the Company received any notification that the NYSE American is
contemplating terminating such listing, except as described in the
Registration Statement, the Disclosure Package and the
Prospectus.
2.4. No
Stop Orders, etc. Neither the
Commission nor, to the Company's knowledge, any state regulatory
authority has issued any order preventing or suspending the use of
the Registration Statement, any Preliminary Prospectus or the
Prospectus or has instituted or, to the Company's knowledge,
threatened to institute, any proceedings with respect to such an
order. The Company has complied with each request (if any) from the
Commission for additional information.
2.5. Disclosures
in Registration Statement.
2.5.1. Compliance
with Securities Act and 10b-5 Representation.
(i) Each
of the Registration Statement and any post-effective amendment
thereto, at the time it became effective (including each deemed
effective date with respect to the Underwriters pursuant to Rule
430B or otherwise under the Securities Act) complied and will
comply in all material respects with the requirements of the
Securities Act and the Securities Act Regulations. The Company was
at the time of the filing of the Registration Statement eligible to
use Form S-3. The Company is currently eligible to use Form S-3
under the Securities Act and it meets the transaction requirements
for use of Form S-3 (including if applicable General Instruction
I.B.6 of Form S-3). Each Preliminary Prospectus and the Prospectus,
at the time each was or will be filed with the Commission, complied
and will comply in all material respects with the requirements of
the Securities Act and the Securities Act Regulations. Each
Preliminary Prospectus delivered to the Underwriters for use in
connection with this Offering and the Prospectus was or will be
identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(ii) Neither
the Registration Statement nor any amendment thereto, at its
effective time, as of the Applicable Time, at the Closing Date or
at any Option Closing Date (if any), 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, in the light of the
circumstances under which they were made not
misleading.
(iii) The
Disclosure Package, as of the Applicable Time, at the Closing Date
or at any Option Closing Date (if any), did not, does not and will
not include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and each Issuer Limited Use Free Writing Prospectus
hereto does not conflict with the information contained in the
Registration Statement, the Preliminary Prospectus or the
Prospectus, and each such Issuer Limited Use Free Writing
Prospectus, as supplemented by and taken together with the
Preliminary Prospectus as of the Applicable Time, did not include
an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, however, that this representation and
warranty shall not apply to statements made or statements omitted
in reliance upon and in conformity with written information
furnished to the Company with respect to the Underwriters by the
Representative expressly for use in the Registration Statement, the
Disclosure Package or the Prospectus or any amendment thereof or
supplement thereto. The parties acknowledge and agree that such
information provided by or on behalf of any Underwriter consists
solely of the following disclosure contained in the
“Underwriting” section of the Prospectus: ((a) the
fourth and fifth paragraphs, (b) the information set forth under
the sub-captions “Discretionary Accounts,”
“Electronic Offer, Sale and Distribution of Shares”,
“Other Relationships”, “Stabilization,” and
“Passive Market Making” and (c) the table showing the
number of Securities to be purchased by each Underwriter, (the
“Underwriters'
Information”); and
(iv) Neither
the Prospectus nor any amendment or supplement thereto, as of its
issue date, at the time of any filing with the Commission pursuant
to Rule 424(b), at the Closing Date or at any Option 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 the
light of the circumstances under which they were made, not
misleading; provided, however, that this representation and
warranty shall not apply to the Underwriters'
Information.
2.5.2. Disclosure
of Agreements. The agreements and
documents described in the Registration Statement, the Disclosure
Package and the Prospectus conform in all material respects to the
descriptions thereof contained therein and there are no agreements
or other documents required by the Securities Act and the
Securities Act Regulations to be described in the Registration
Statement, the Disclosure Package and the Prospectus or to be filed
with the Commission as exhibits to the Registration Statement, that
have not been so described or filed. Each agreement or other
instrument (however characterized or described) to which the
Company or any of its direct and indirect subsidiaries, including
each entity disclosed or described in the Registration Statement,
the Disclosure Package and the Prospectus as being a subsidiary of
the Company (each, a “Subsidiary” and,
collectively, the “Subsidiaries”) is a party
or by which it is or may be bound or affected and (i) that is
referred to in the Registration Statement, the Disclosure Package
and the Prospectus, or (ii) is material to the business of the
Company or any Subsidiary, has been duly authorized and validly
executed by the Company or any Subsidiary, is in full force and
effect in all material respects and is enforceable against the
Company or any Subsidiary, and, to the Company's knowledge, the
other parties thereto, in accordance with its terms, except (x) as
such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights
generally, (y) as enforceability of any indemnification or
contribution provision may be limited under the federal and state
securities laws, and (z) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject
to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought. None of such
agreements or instruments has been assigned by the Company or any
Subsidiary, and neither the Company, any Subsidiary nor, to the
Company's knowledge, any other party is in default thereunder and,
to the Company's knowledge, no event has occurred that, with the
lapse of time or the giving of notice, or both, would constitute a
default thereunder. To the best of the Company's knowledge,
performance by the Company or any Subsidiary of the material
provisions of such agreements or instruments will not result in a
violation of any existing applicable law, rule, regulation,
judgment, order or decree of any governmental or regulatory agency,
body or court, domestic or foreign, having jurisdiction over the
Company, any Subsidiary or any of their respective assets or
businesses (each, a “Governmental
Entity”), including, without limitation,
those relating to environmental laws and regulations.
2.5.3. Prior
Securities Transactions. Since August 1,
2020, no securities of the Company have been sold by the Company or
by or on behalf of, or for the benefit of, any person or persons
controlling, controlled by or under common control with the
Company, except as disclosed in the Registration Statement, the
Disclosure Package and the Prospectus.
2.5.4. Regulations.
The
disclosures in the Registration Statement, the Disclosure Package
and the Prospectus concerning the effects of federal, state, local
and all foreign laws, rules and regulations relating to the
respective businesses of the Company and its Subsidiaries as
currently conducted or contemplated are correct and complete in all
material respects and, to the Company's knowledge, no other such
laws, rules or regulations are required to be disclosed in the
Registration Statement, the Disclosure Package and the Prospectus
which are not so disclosed.
2.5.5. No
Other Distribution of Offering Materials. The Company has
not, directly or indirectly, distributed and will not distribute
any offering material in connection with the Offering other than
any Preliminary Prospectus, the Disclosure Package, the Prospectus
and other materials, if any, permitted under the Securities Act and
consistent with Section 3.2 below.
2.6. Changes
After Dates in Registration Statement.
2.6.1. No
Material Adverse Change. Since the
respective dates as of which information is given in the
Registration Statement, the Disclosure Package and the Prospectus,
except as otherwise specifically stated or incorporated by
reference therein: (i) there has been no material adverse change in
the financial position or results of operations of the Company or
any Subsidiary, nor any change or development that, singularly or
in the aggregate, would involve a material adverse change or a
prospective material adverse change, in or affecting the condition
(financial or otherwise), results of operations, business, assets
or prospects of the Company or any Subsidiary (a “Material Adverse Change”);
(ii) there have been no material transactions entered into by the
Company or any Subsidiary, other than as contemplated pursuant to
this Agreement; and (iii) no officer or director of the Company has
resigned from any position with the Company.
2.6.2. Recent
Securities Transactions, etc. Subsequent to the
respective dates as of which information is given in the
Registration Statement, the Disclosure Package and the Prospectus,
and except as may otherwise be indicated or contemplated herein or
disclosed in the Registration Statement, the Disclosure Package and
the Prospectus, the Company has not: (i) issued any securities,
other than securities issued pursuant to the Company's existing
equity incentive or stock option plans or shares of Common Stock
issuable upon the exercise of then outstanding options, warrants
and convertible securities, or incurred any liability or
obligation, direct or contingent, for borrowed money; or (ii)
declared or paid any dividend or made any other distribution on or
in respect to its capital stock.
2.7. Disclosures
in Commission Filings. Since October 1,
2018, (i) none of the Company's filings with the Commission
contained any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and (ii) the Company has made all filings
with the Commission required under the Exchange Act and the rules
and regulations of the Commission promulgated thereunder (the
“Exchange Act
Regulations”).
2.8. Independent
Accountants. To the knowledge of
the Company, BDO USA, LLP (the “Auditor”), whose report is filed with the
Commission and incorporated in the Registration Statement, the
Disclosure Package and the Prospectus, is an independent registered
public accounting firm as required by the Securities Act and the
Securities Act Regulations and the Public Company Accounting
Oversight Board. The Auditor has not, during the periods covered by
the financial statements included in the Registration Statement,
the Disclosure Package and the Prospectus, provided to the Company
any non-audit services, as such term is used in Section 10A(g) of
the Exchange Act.
2.9. Financial
Statements, etc. The financial
statements, including the notes thereto and supporting schedules
included or incorporated by reference in the Registration
Statement, the Disclosure Package and the Prospectus, fairly
present the financial position and the results of operations of the
Company at the dates and for the periods to which they apply; and
such financial statements have been prepared in conformity with
U.S. generally accepted accounting principles (“GAAP”), consistently applied throughout
the periods involved (provided that unaudited interim financial
statements are subject to year-end audit adjustments that are not
expected to be material in the aggregate and do not contain all
footnotes required by GAAP); and the supporting schedules included
or incorporated by reference in the Registration Statement, the
Disclosure Package and the Prospectus present fairly the
information required to be stated therein. Except as included or
incorporated by reference therein, no historical or pro forma
financial statements are required to be included or incorporated by
reference in the Registration Statement, the Disclosure Package or
the Prospectus under the Securities Act or the Securities Act
Regulations. The pro forma and pro forma as adjusted financial
information and the related notes, if any, included or incorporated
by reference in the Registration Statement, the Disclosure Package
and the Prospectus have been properly compiled and prepared in
accordance with the applicable requirements of the Securities Act
and the Securities Act Regulations and present fairly the
information shown therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and
circumstances referred to therein. All disclosures contained or
incorporated by reference in the Registration Statement, the
Disclosure Package or the Prospectus regarding “non-GAAP
financial measures” (as such term is defined by the rules and
regulations of the Commission), if any, comply with Regulation G of
the Exchange Act and Item 10 of Regulation S-K of the Securities
Act, to the extent applicable. Each of the Registration Statement,
the Disclosure Package and the Prospectus discloses all material
off-balance sheet transactions, arrangements, obligations
(including contingent obligations), and other relationships of the
Company with unconsolidated entities or other persons that may have
a material current or future effect on the Company's financial
condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources, or significant
components of revenues or expenses. Except as disclosed in the
Registration Statement, the Disclosure Package and the Prospectus,
(a) neither the Company nor any of its Subsidiaries, including each
entity disclosed or described in the Registration Statement, the
Disclosure Package and the Prospectus as being a Subsidiary of the
Company, has incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions
other than in the ordinary course of business, (b) neither the
Company nor any of its Subsidiaries has declared or paid any
dividends or made any distribution of any kind with respect to its
capital stock, (c) there has not been any change in the capital
stock of the Company or any of its Subsidiaries, (d) other than in
the ordinary course of business and consistent with the Company's
prior policies, the Company has not made any grants under any stock
compensation plan, and (e) there has not been any material adverse
change in the long-term or short-term debt of the Company or any of
its Subsidiaries.
2.10. Authorized
Capital; Options, etc. The Company had, at
the date or dates indicated in the Registration Statement, the
Disclosure Package and the Prospectus, the duly authorized, issued
and outstanding capitalization as set forth therein. Based on the
assumptions stated in the Registration Statement, the Disclosure
Package and the Prospectus, the Company will have on the Closing
Date the adjusted stock capitalization set forth therein. Except as
set forth in, or contemplated by, the Registration Statement, the
Disclosure Package and the Prospectus, as of the Applicable Time
and on the Closing Date and any Option Closing Date, there will be
no stock options, warrants, or other rights to purchase or
otherwise acquire any authorized but unissued shares of Common
Stock of the Company or equity securities of any Subsidiary or any
security convertible or exercisable into shares of Common Stock of
the Company or equity securities of any Subsidiary, or any
contracts or commitments to issue or sell shares of Common Stock of
the Company or equity securities of any Subsidiary or any such
options, warrants, rights or convertible securities.
2.11. Valid
Issuance of Securities, etc.
2.11.1. Outstanding
Securities. All issued and
outstanding securities of the Company issued prior to the
transactions contemplated by this Agreement have been duly
authorized and validly issued and are fully paid and
non-assessable; except as set forth in the Registration Statement,
the Disclosure Package and the Prospectus, the holders thereof have
no contractual rights of rescission or the ability to force the
Company to repurchase such securities with respect thereto, and are
not subject to personal liability by reason of being such holders;
and none of such securities were issued in violation of the
preemptive rights, rights of first refusal or rights of
participation of any holders of any security of the Company or
similar contractual rights granted by the Company. The authorized
shares of Common Stock conform in all material respects to all
statements relating thereto contained in the Registration
Statement, the Disclosure Package and the Prospectus. The offers
and sales of the outstanding shares of Common Stock, options,
warrants and other rights to purchase or exchange such securities
for shares of the Common Stock were at all relevant times either
registered under the Securities Act and the applicable state
securities or “blue sky” laws or, based in part on the
representations and warranties of the purchasers of such shares of
Common Stock, exempt from such registration requirements. The
description of the Company's stock option, stock bonus and other
stock plans or arrangements, and the options or other rights
granted thereunder, as described in the Registration Statement,
Disclosure Package and the Prospectus, accurately and fairly
present, in all material respects, the information required to be
shown with respect to such plans, arrangements, options and
rights.
2.11.2. Securities
Sold Pursuant to this Agreement. The Securities have
been duly authorized for issuance and sale and, when issued and
paid for, will be validly issued, fully paid and non-assessable;
the holders thereof are not and will not be subject to personal
liability by reason of being such holders; the Securities are not
and will not be subject to the preemptive rights of any holders of
any security of the Company or similar contractual rights granted
by the Company; and all corporate action required to be taken for
the authorization, issuance and sale of the Securities has been
duly and validly taken. The Securities conform in all material
respects to all statements with respect thereto contained in the
Registration Statement, the Disclosure Package and the
Prospectus.
2.12. Registration
Rights of Third Parties. Except as set forth
in the Registration Statement, the Disclosure Package and the
Prospectus, no holders of any securities of the Company or any
options, warrants, rights or other securities exercisable for or
convertible or exchangeable into securities of the Company have the
right to require the Company to register any such securities of the
Company under the Securities Act or to include any such securities
in the Registration Statement or any other registration statement
to be filed by the Company.
2.13. Validity
and Binding Effect of Agreements. The execution,
delivery and performance of this Agreement has been duly and
validly authorized by the Company, and this Agreement, when
executed and delivered, will constitute, the valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except: (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally; (ii) as enforceability
of any indemnification or contribution provision may be limited
under the federal and state securities laws; and (iii) that the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to
the discretion of the court before which any proceeding therefor
may be brought.
2.14. No
Conflicts, etc. The execution,
delivery and performance by the Company of this Agreement and all
ancillary documents, the consummation by the Company of the
transactions herein contemplated and the compliance by the Company
with the terms hereof and thereof do not and will not, with or
without the giving of notice or the lapse of time or both: (i)
result in a material breach of, or conflict with any of the terms
and provisions of, or constitute a material default under, or
result in the creation, modification, termination or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement or any other
agreement or instrument to which the Company or any of its
Subsidiaries is a party or as to which any property of the Company
or any of its Subsidiaries is a party; (ii) result in any violation
of the provisions of the Company's Articles of Incorporation (as
the same have been amended or restated from time to time, the
“Charter”), the by-laws of the Company, the
certificate of incorporation of any Subsidiary or the bylaws of any
Subsidiary (as applicable); or (iii) violate any existing
applicable law, rule, regulation, judgment, order or decree of any
Governmental Entity as of the date hereof, except in the cases of
clauses (i) and (iii) for such breaches, conflicts or violations
which would not reasonably be expected to have a Material Adverse
Change.
2.15. No
Defaults; Violations. No material default
exists in the due performance and observance of any term, covenant
or condition of any material license, contract, indenture,
mortgage, deed of trust, note, loan or credit agreement, or any
other agreement or instrument evidencing an obligation for borrowed
money, or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries may be bound or to which any of
the properties or assets of the Company or any of its Subsidiaries
is subject. Neither the Company nor any of its Subsidiaries is (i)
in violation of any term or provision of its Charter or by-laws, or
(ii) in violation of any franchise, license, permit, applicable
law, rule, regulation, judgment or decree of any Governmental
Entity, except in the cases of clause (ii) for such violations
which would not reasonably be expected to result in a Material
Adverse Change.
2.16. Corporate
Power; Licenses; Consents.
2.16.1. Conduct
of Business. Except as described
in the Registration Statement, the Disclosure Package and the
Prospectus, each of the Company and its Subsidiaries has all
requisite corporate power and authority, and has all necessary
consents, authorizations, approvals, orders, licenses,
certificates, qualifications, registrations and permits
(collectively, the “Authorizations”) of and
from all Governmental Entities that it needs as of the date hereof
to conduct its respective business as described in the Registration
Statement, the Disclosure Package and the Prospectus.
2.16.2. Transactions
Contemplated Herein. The Company has all
corporate power and authority to enter into this Agreement and to
carry out the provisions and conditions hereof, and all
Authorizations required in connection therewith have been obtained.
Except for the filing of an Additional Listing Application with the
NYSE American with respect to the sale of the Securities, no
Authorization of, and no filing with, any Governmental Entity is
required for the valid issuance, sale and delivery of the
Securities and the consummation of the transactions and agreements
contemplated by this Agreement and as contemplated by the
Registration Statement, the Disclosure Package and the Prospectus,
except with respect to applicable federal and state securities laws
and the rules and regulations of the Financial Industry Regulatory
Authority, Inc. (“FINRA”).
2.17. D&O
Questionnaires. To the Company's
knowledge, all information concerning each of the Company's
directors, officers and beneficial holders of 5% or more of the
Company's Common Stock immediately prior to the Offering (the
“Insiders”) as
described in the Registration Statement, the Disclosure Package and
the Prospectus, as well as in the Lock-Up Agreements (as defined in
Section 2.27 below), provided to the Underwriters is true and
correct in all material respects and the Company has not become
aware of any information which would cause the information
disclosed in the Questionnaires to become inaccurate and incorrect
in any material respect.
2.18. Litigation;
Governmental Proceedings. There is no
material action, suit, proceeding, inquiry, arbitration,
investigation, litigation or governmental proceeding pending or, to
the Company's knowledge, threatened against, or involving the
Company, any of its Subsidiaries or, to the Company's knowledge,
any executive officer or director which has not been disclosed in
the Registration Statement, the Disclosure Package and the
Prospectus which is required to be disclosed.
2.19. Good
Standing. The Company has
been duly organized and is validly existing as a corporation and is
in good standing under the laws of its jurisdiction of
incorporation, and is duly qualified to do business and is in good
standing in each other jurisdiction in which its ownership or lease
of property or the conduct of business requires such qualification,
except where the failure to qualify, singularly or in the
aggregate, would not have or reasonably be expected to result in a
Material Adverse Change.
2.20. Insurance.
The
Company and each of its Subsidiaries carries or is entitled to the
benefits of insurance (including, without limitation, as to
directors and officers insurance coverage), with reputable
insurers, in such amounts and covering such risks which the Company
believes are adequate, and all such insurance is in full force and
effect. The Company has no reason to believe that it or any of its
Subsidiaries will not be able (i) to renew its existing insurance
coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary
or appropriate to conduct its business as now conducted and at a
cost that would not result in a Material Adverse Change.
2.21. Transactions
Affecting Disclosure to FINRA.
2.21.1. Finder's
Fees. Except as described
in the Registration Statement, the Disclosure Package and the
Prospectus, there are no claims, payments, arrangements, agreements
or understandings relating to the payment of a finder's, consulting
or origination fee by the Company or any Insider with respect to
the sale of the Securities hereunder or any other arrangements,
agreements or understandings of the Company or, to the Company's
knowledge, any of its shareholders that may affect the
Underwriters' compensation, as determined by FINRA.
2.21.2. Payments
Within Six (6) Months. Except as described
in the Registration Statement, the Disclosure Package and the
Prospectus, the Company has not made any direct or indirect
payments (in cash, securities or otherwise) to: (i) any person, as
a finder's fee, consulting fee or otherwise, in consideration of
such person raising capital for the Company or introducing to the
Company persons who raised or provided capital to the Company; (ii)
any FINRA member; or (iii) any person or entity that has any direct
or indirect affiliation or association with any FINRA member,
within the six (6) months prior to the initial filing of the
Registration Statement, other than payments to the underwriters for
offerings under the Registration Statement.
2.21.3. Use
of Proceeds. None of the net
proceeds of the Offering will be paid by the Company to any
participating FINRA member or its affiliates, except as
specifically authorized herein.
2.21.4. FINRA
Affiliation. There is no (i)
officer or director of the Company, (ii) to the Company's
knowledge, any beneficial owner of 5% or more of any class of the
Company's securities or (iii) to the Company's knowledge, any
beneficial owner of the Company's unregistered equity securities
which were acquired during the 180-day period immediately preceding
the filing of the Registration Statement that is an affiliate or
associated person of a FINRA member participating in the Offering
(as determined in accordance with the rules and regulations of
FINRA).
2.21.5. Information.
All
information provided by the Company in its FINRA questionnaire to
Representative Counsel specifically for use by Representative
Counsel in connection with its Public Offering System filings (and
related disclosure) with FINRA is true, correct and complete in all
material respects.
2.22. Foreign
Corrupt Practices Act. Neither the
Company, nor any of its Subsidiaries, nor, to the Company's
knowledge, any director, officer, agent, employee or affiliate of
the Company or any of its Subsidiaries nor, to the Company's
knowledge, any other person acting on behalf of the Company or any
of its Subsidiaries, has, directly or indirectly, given or agreed
to give any money, gift or similar benefit (other than legal price
concessions to customers in the ordinary course of business) to any
customer, supplier, employee or agent of a customer or supplier, or
official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was,
is, or may be in a position to help or hinder the business of the
Company or its Subsidiaries (or assist it in connection with any
actual or proposed transaction) that (i) might subject the Company
or any of its Subsidiaries to any material damage or penalty in any
civil, criminal or governmental litigation or proceeding, (ii) if
not given in the past, might have had a Material Adverse Change or
(iii) if not continued in the future, might adversely affect the
assets, business, operations or prospects of the Company or any of
its Subsidiaries. The Company and each of its Subsidiaries has
taken reasonable steps to ensure that its accounting controls and
procedures are sufficient to cause the Company to comply in all
material respects with the Foreign Corrupt Practices Act of 1977,
as amended.
2.23. Compliance
with OFAC. Neither the
Company, nor any of its Subsidiaries nor, to the Company's
knowledge, any director, officer, agent, employee or affiliate of
the Company or any of its Subsidiaries nor, to the Company's
knowledge, any other person acting on behalf of the Company or any
of its Subsidiaries, is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury (“OFAC”), and the Company
will not, directly or indirectly, use the proceeds of the Offering
hereunder, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
2.24. Money
Laundering Laws. The operations of
the Company and each of its Subsidiaries are and have been
conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any Governmental
Entity (collectively, the “Money Laundering Laws”);
and no action, suit or proceeding by or before any Governmental
Entity involving the Company or any of its Subsidiaries with
respect to the Money Laundering Laws is pending or, to the best
knowledge of the Company, threatened.
2.25. Forward-Looking
Statements. No forward-looking
statement (within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act) contained in either the
Registration Statement, Disclosure Package or the Prospectus has
been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
2.26. Officers'
Certificate. Any certificate
signed by any duly authorized officer of the Company and delivered
to you or to Representative Counsel shall be deemed a
representation and warranty by the Company to the Underwriters as
to the matters covered thereby.
2.27. Lock-Up
Agreements. Schedule 3 hereto contains a
complete and accurate list of the Company's officers, directors
and, to the Company's knowledge, holders of 5% or more of the
Company's Common Stock (collectively, the “Lock-Up Parties”). The
Company has caused each of the Lock-Up Parties to deliver to the
Representative an executed Lock-Up Agreement, in the form attached
hereto as Exhibit A (the “Lock-Up
Agreement”), prior to the execution of this
Agreement.
2.28. Subsidiaries.
The
Company has no subsidiaries.
2.29. Related
Party Transactions.
2.29.1. Business
Relationships. There are no
business relationships or related party transactions involving the
Company or any other person required to be described in the
Registration Statement, the Disclosure Package and the Prospectus
that have not been described as required.
2.29.2. No
Relationships with Customers and Suppliers. No relationship,
direct or indirect, exists between or among the Company on the one
hand, and the directors, officers, 5% or greater stockholders,
customers or suppliers of the Company or any of the Company's
affiliates on the other hand, which is required to be described in
the Disclosure Package and the Prospectus or a document
incorporated by reference therein and which is not so
described.
2.29.3. No
Unconsolidated Entities. There are no
transactions, arrangements or other relationships between and/or
among the Company, any of its affiliates (as such term is defined
in Rule 405 of the Securities Act) and any unconsolidated entity,
including, but not limited to, any structure finance, special
purpose or limited purpose entity that could reasonably be expected
to materially affect the Company's liquidity or the availability of
or requirements for its capital resources required to be described
in the Disclosure Package and the Prospectus or a document
incorporated by reference therein which have not been described as
required.
2.29.4. No
Loans or Advances to Affiliates. There are no
outstanding loans, advances (except normal advances for business
expenses in the ordinary course of business) or guarantees or
indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any of their respective
family members, except as disclosed in the Registration Statement,
the Disclosure Package and the Prospectus.
2.30. Board
of Directors. The qualifications
of the persons serving as members of the Company's Board of
Directors and the overall composition of the Board comply with the
Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act
of 2002 and the rules promulgated thereunder (the “Sarbanes-Oxley Act”)
applicable to the Company and the listing rules of the NYSE
American. At least one member of the Audit Committee of the Board
of Directors of the Company qualifies as an “audit committee
financial expert,” as such term is defined under Regulation
S-K and the listing rules of the NYSE American. In addition, 50% of
the persons serving on the Board of Directors qualify as
“independent,” as defined under the listing rules of
the NYSE American.
2.31. Sarbanes-Oxley
Compliance.
2.31.1. Disclosure
Controls. Except as disclosed
in the Registration Statement, the Disclosure Package and the
Prospectus, the Company has developed and currently maintains
disclosure controls and procedures that comply with Rule 13a-15 or
15d-15 under the Exchange Act Regulations, and such controls and
procedures are effective to the extent or except as otherwise
disclosed in the Registration Statement, the Disclosure Package and
the Prospectus to ensure that all material information concerning
the Company will be made known on a timely basis to the individuals
responsible for the preparation of the Company's Exchange Act
filings and other public disclosure documents.
2.31.2. Compliance.
The
Company is, or at the Applicable Time and on the Closing Date will
be, in material compliance with the provisions of the
Sarbanes-Oxley Act applicable to it, and has implemented or will
implement such programs and taken reasonable steps to ensure the
Company's future compliance (not later than the relevant statutory
and regulatory deadlines therefor) with all of the material
provisions of the Sarbanes-Oxley Act.
2.32. Accounting
Controls. Except as disclosed
in the Registration Statement, the Disclosure Package and the
Prospectus, the Company and each of its Subsidiaries maintains
systems of “internal control over financial reporting”
(as defined under Rules 13a-15 and 15d-15 under the Exchange Act
Regulations ) that comply in all material respects with the
requirements of the Exchange Act and have been designed by, or
under the supervision of, their respective principal executive and
principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP,
including, but not limited to, internal accounting controls
sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP
and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except
as disclosed in the Registration Statement, the Disclosure Package
and the Prospectus, the Company is not aware of any material
weaknesses in its internal controls. The Auditor and the Audit
Committee of the Board of Directors of the Company have been
advised of: (i) all significant deficiencies and material
weaknesses in the design or operation of internal controls over
financial reporting which are known to the Company's management and
that have adversely affected or are reasonably likely to adversely
affect the Company' ability to record, process, summarize and
report financial information; and (ii) any fraud known to the
Company's management, whether or not material, that involves
management or other employees who have a significant role in the
Company's internal controls over financial reporting.
2.33. No
Investment Company Status. The Company is not
and, after giving effect to the Offering and the application of the
proceeds thereof as described in the Registration Statement, the
Disclosure Package and the Prospectus, will not be, required to
register as an “investment company,” as defined in the
Investment Company Act of 1940, as amended.
2.34. No
Labor Disputes. No labor dispute
with the employees of the Company or any of its Subsidiaries exists
or, to the knowledge of the Company, is imminent. The Company is
not aware that any key employee or significant group of employees
of the Company or any Subsidiary plans to terminate employment with
the Company or such Subsidiary.
2.35. Intellectual
Property Rights. The Company and
each of its Subsidiaries owns or possesses or has valid rights to
use all patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service mark registrations,
copyrights, licenses, inventions, trade secrets software,
databases, know-how, internet domain names, other unpatented and/or
un-patentable proprietary confidential information systems,
processes or procedures and similar rights (“Intellectual Property
Rights”) necessary for the conduct of the business of
the Company or such Subsidiary as currently carried on and as
described in the Registration Statement, the Disclosure Package and
the Prospectus. The Intellectual Property licenses described in the
Registration Statement, Disclosure Package and the Prospectus are
validly executed by, binding upon and enforceable against the
Company in accordance with their respective terms. To the knowledge
of the Company, no action or use by the Company or any of its
Subsidiaries necessary for the conduct of their respective
businesses as currently carried on and as described in the
Registration Statement and the Prospectus will involve or give rise
to any infringement of, or license or similar fees for, any
Intellectual Property Rights of others. The Company has not
received any notice alleging any such infringement, fee or conflict
with asserted Intellectual Property Rights of others. Except as
would not reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Change or as otherwise as
disclosed in the Registration Statement, the Disclosure Package and
the Prospectus (A) there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or claim by others
challenging the rights of the Company or any of its Subsidiaries in
or to any such Intellectual Property Rights, and the Company is
unaware of any facts which would form a reasonable basis for any
such claim, that would, individually or in the aggregate, together
with any other claims in this Section 2.35, reasonably be expected
to result in a Material Adverse Change; (B) the Intellectual
Property Rights owned by the Company and, to the knowledge of the
Company, the Intellectual Property Rights licensed to the Company
have not been adjudged by a court of competent jurisdiction invalid
or unenforceable, in whole or in part, and there is no pending or,
to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the validity or scope of any such
Intellectual Property Rights, and the Company is unaware of any
facts which would form a reasonable basis for any such claim that
would, individually or in the aggregate, together with any other
claims in this Section 2.35, reasonably be expected to result in a
Material Adverse Change; (C) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim
by others that the Company infringes, misappropriates or otherwise
violates any Intellectual Property Rights or other proprietary
rights of others, the Company has not received any written notice
of such claim and the Company is unaware of any other facts which
would form a reasonable basis for any such claim that would,
individually or in the aggregate, together with any other claims in
this Section 2.35, reasonably be expected to result in a Material
Adverse Change; and (D) to the Company's knowledge, no employee of
the Company is in or has ever been in violation in any material
respect 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 and could reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Change. To
the Company's knowledge, all material technical information
developed by and belonging to the Company which has not been
patented has been kept confidential. The Company is not a party to
or bound by any options, licenses or agreements with respect to the
Intellectual Property Rights of any other person or entity that are
required to be set forth in the Registration Statement, the
Disclosure Package and the Prospectus and are not described
therein. The Registration Statement, the Disclosure Package and the
Prospectus contain in all material respects the same description of
the matters set forth in the preceding sentence. None of the
technology employed by the Company has been obtained or is being
used by the Company in violation of any contractual obligation
binding on the Company or, to the Company's knowledge, any of its
officers, directors or employees, or otherwise in violation of the
rights of any persons.
2.36. Taxes.
Each of
the Company and its Subsidiaries has filed all returns (as
hereinafter defined) required to be filed with taxing authorities
prior to the date hereof or has duly obtained extensions of time
for the filing thereof. Each of the Company and its Subsidiaries
has paid all taxes (as hereinafter defined) shown as due on such
returns that were filed and has paid all taxes imposed on or
assessed against the Company or such respective Subsidiary. The
provisions for taxes payable, if any, shown on the financial
statements filed with or as part of the Registration Statement are
sufficient for all accrued and unpaid taxes, whether or not
disputed, and for all periods to and including the dates of such
consolidated financial statements. Except as disclosed in writing
to the Underwriters, (i) no issues have been raised (and are
currently pending) by any taxing authority in connection with any
of the returns or taxes asserted as due from the Company or its
Subsidiaries, and (ii) no waivers of statutes of limitation with
respect to the returns or collection of taxes have been given by or
requested from the Company or its Subsidiaries. The term
“taxes” mean all
federal, state, local, foreign and other net income, gross income,
gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, lease, service, service use, withholding,
payroll, employment, excise, severance, stamp, occupation, premium,
property, windfall profits, customs, duties or other taxes, fees,
assessments or charges of any kind whatever, together with any
interest and any penalties, additions to tax or additional amounts
with respect thereto. The term “returns” means all returns,
declarations, reports, statements and other documents required to
be filed in respect to taxes.
2.37. Compliance
with Environmental Laws. Except as described
in the Registration Statement, the Disclosure Package and the
Prospectus, (i) neither the Company nor any of its Subsidiaries is
in material violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent,
decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively,
“Hazardous
Materials”) or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, “Environmental Laws ), (ii) the Company and each of its
Subsidiaries has all material permits, authorizations and approvals
required under any applicable Environmental Laws and is in
compliance with their requirements, (iii) there are no pending or,
to the Company's knowledge, threatened administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
Subsidiaries and (iv) to the Company's knowledge, there are no
events or circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body or
agency, against or affecting the Company or any of its Subsidiaries
relating to Hazardous Materials or any Environmental
Laws.
2.38. ERISA
Compliance. The Company and any
“employee benefit plan” (as defined under the Employee
Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively,
“ERISA”))
established or maintained by the Company or its “ERISA
Affiliates” (as defined below) are in compliance in all
material respects with ERISA. “ERISA Affiliate” means,
with respect to the Company, any member of any group of
organizations described in Sections 414(b), (c),(m) or (o) of the
Internal Revenue Code of 1986, as amended, and the regulations and
published interpretations thereunder (the “Code”) of which the Company
is a member. No “reportable event” (as defined under
ERISA) has occurred or is reasonably expected to occur with respect
to any “employee benefit plan” established or
maintained by the Company or any of its ERISA Affiliates. No
“employee benefit plan” established or maintained by
the Company or any of its ERISA Affiliates, if such “employee
benefit plan” were terminated, would have any “amount
of unfunded benefit liabilities” (as defined under ERISA).
Neither the Company nor any of its ERISA Affiliates has incurred or
reasonably expects to incur any material liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any
“employee benefit plan” or (ii) Sections 412, 4971,
4975 or 4980B of the Code. Each “employee benefit plan”
established or maintained by the Company or any of its ERISA
Affiliates that is intended to be qualified under Section 401(a) of
the Code is so qualified and, to the knowledge of the Company,
nothing has occurred, whether by action or failure to act, which
would cause the loss of such qualification. The execution of this
Agreement, or consummation of the Offering does not constitute a
triggering event under any employee benefit plan or any other
employment contract, whether or not legally enforceable, which
(either alone or upon the occurrence of any additional or
subsequent event) will or may result in any payment (of severance
pay or otherwise), acceleration, increase in vesting, or increase
in benefits to any current or former participant, employee or
director of the Company other than an event that is not material to
the financial condition or business of the Company.
2.39. Compliance
with Laws. The Company and
each of its Subsidiaries: (A) is and at all times has been in
compliance with all statutes, rules, or regulations applicable to
the ownership, testing, development, manufacture, packaging,
processing, use, distribution, marketing, labeling, promotion,
sale, offer for sale, storage, import, export or disposal of any
product manufactured or distributed by the Company (“Applicable
Laws”), except as could not, individually
or in the aggregate, reasonably be expected to have a Material
Adverse Change; (B) possesses all material Authorizations and such
Authorizations are valid and in full force and effect and are not
in material violation of any term of any such Authorizations; (C)
has not received notice of any claim, action, suit, proceeding,
hearing, enforcement, investigation, arbitration or other action
from any Governmental Entity or third party alleging that any
product operation or activity is in violation of any Applicable
Laws or Authorizations and has no knowledge that any such
governmental authority or third party is considering any such
claim, litigation, arbitration, action, suit, investigation or
proceeding; (D) has not received notice that any Governmental
Entity has taken, is taking or intends to take action to limit,
suspend, modify or revoke any Authorizations and has no knowledge
that any such governmental authority is considering such action;
and (E) has filed, obtained, maintained or submitted all material
reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments as required by any
Applicable Laws or Authorizations and that all such reports,
documents, forms, notices, applications, records, claims,
submissions and supplements or amendments were complete and correct
on the date filed (or were corrected or supplemented by a
subsequent submission).
2.40. Smaller
Reporting Company. As of the effective
date, or deemed effective date, of the Registration Statement, the
Company was a “smaller reporting company,” as defined
in Rule 12b-2 of the Exchange Act Regulations.
2.41. Industry
Data. The statistical and
market-related data included in each of the Registration Statement,
the Disclosure Package and the Prospectus are based on or derived
from sources that the Company reasonably and in good faith believes
are reliable and accurate or represent the Company's good faith
estimates that are made on the basis of data derived from such
sources.
2.42. Margin
Securities. The Company does
not own any “margin securities” as that term is defined
in Regulation U of the Board of Governors of the Federal Reserve
System (the “Federal Reserve
Board”), and none of the proceeds of
Offering will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin security, for the purpose of
reducing or retiring any indebtedness which was originally incurred
to purchase or carry any margin security or for any other purpose
which might cause any of the shares of Common Stock to be
considered a “purpose credit” within the meanings of
Regulation T, U or X of the Federal Reserve Board.
2.43. Integration.
Neither
the Company, nor any of its affiliates, nor any person acting on
its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security,
under circumstances that would cause the Offering to be integrated
with prior offerings by the Company for purposes of the Securities
Act that would require the registration of any such securities
under the Securities Act.
2.44. Title.
Except
as described in the Registration Statement, the Disclosure Package
and the Prospectus, the Company and each of its Subsidiaries has
good and marketable title in fee simple to, or has valid rights to
lease or otherwise use, all items of real or personal property that
are material to its respective business, free and clear of all
liens, encumbrances, security interests, claims and defects that do
not, singularly or in the aggregate, materially affect the business
of the Company or its Subsidiaries and do not interfere with the
use made of such property by the Company or its Subsidiaries; and
all of the leases and subleases material to the business of the
Company and each of its Subsidiaries, and under which the Company
or any of its Subsidiaries holds properties described in the
Registration Statement, the Disclosure Package and the Prospectus,
are, to the Company's knowledge in full force and effect, and
neither the Company nor any of its Subsidiaries has received any
notice of any material claim of any sort that have been asserted by
anyone adverse to the rights of the Company or such Subsidiaries
under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company or such Subsidiaries to
the continued possession of the leased or subleased premises under
any such lease or sublease, which would result in a Material
Adverse Change.
2.45. Confidentiality
and Non-Competitions. To the Company's
knowledge, no director, officer, key employee or consultant of the
Company is subject to any confidentiality, non-disclosure,
non-competition agreement or non-solicitation agreement with any
employer or prior employer that could materially affect his ability
to be and act in his respective capacity of the Company or be
expected to result in a Material Adverse Change.
2.46. Potential
Products; FDA; EMEA.
Except as described
in the Registration Statement, the Disclosure Package and the
Prospectus, the Company possesses all certificates, authorizations
and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct its business as
currently conducted, including without limitation all such
certificates, authorizations and permits required by the United
States Food and Drug Administration (the “FDA”) or any other federal,
state or foreign agencies or bodies engaged in the regulation of
pharmaceuticals or biohazardous materials, except where the failure
to so possess such certificates, authorizations and permits,
individually or in the aggregate, would not reasonably be expected
to result in a Material Adverse Effect. Except as described in the
Registration Statement, the Disclosure Package and the Prospectus,
the Company has not received any written notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, individually or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
reasonably be expected to have a Material Adverse
Effect.
Except to the
extent disclosed in the Registration Statement, the Disclosure
Package and the Prospectus, the Company has not received any
written notices or statements from the FDA, the European Medicines
Agency (the “EMEA”) or any other
governmental agency that (i) any drug candidate of the Company
described in the Registration Statement, the Disclosure Package and
the Prospectus (each a “Potential Product”) may or
will be rejected or determined to be non-approvable; (ii) a delay
in time for review and/or approval of a marketing authorization
application or marketing approval application in any jurisdiction
for any Potential Product is or may be required, requested or being
implemented; (iii) one or more clinical studies for any Potential
Product shall or may be requested or required in addition to the
clinical studies submitted to the FDA prior to the date hereof as a
precondition to or condition of issuance or maintenance of a
marketing approval for any Potential Product; (iv) any license,
approval, permit or authorization to conduct any clinical trial of
or market any product or Potential Product of the Company has been,
will be or may be suspended, revoked, modified or limited, except
in the cases of clauses (i), (ii), (iii) and (iv) where such
rejections, determinations, delays, requests, suspensions,
revocations, modifications or limitations would not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect.
Except to the
extent disclosed in the Registration Statement, the Disclosure
Package and the Prospectus, to the Company's knowledge, the
preclinical and clinical testing, application for marketing
approval of, manufacture, distribution, promotion and sale of the
products and Potential Products of the Company is in compliance, in
all material respects, with all laws, rules and regulations
applicable to such activities, including without limitation
applicable good laboratory practices, good clinical practices and
good manufacturing practices, except for such non-compliance as
would not reasonably be expected to have, individually or in the
aggregate, have a Material Adverse Effect. The descriptions of the
results of such tests and trials contained in the Registration
Statement, the Disclosure Package and the Prospectus are complete
and accurate in all material respects such that there would be no
untrue statement of a material fact or omission of a material fact
necessary to make the statements in the Registration Statement, the
Disclosure Package and the Prospectus, in light of the
circumstances under which they are made, not misleading. The
Company is not aware of any studies, tests or trial the results of
which reasonably call into question the results of the tests and
trials conducted by or on behalf of the Company that are described
or referred to in the Registration Statement, the Disclosure
Package and the Prospectus. Except to the extent disclosed in the
Registration Statement, the Disclosure Package and the Prospectus,
the Company has not received written notice of adverse finding,
warning letter or clinical hold notice from the FDA or any non-U.S.
counterpart of any of the foregoing, or any untitled letter or
other correspondence or notice from the FDA or any other
governmental authority or agency or any institutional or ethical
review board alleging or asserting noncompliance with any law, rule
or regulation applicable in any jurisdiction, except notices,
letters, and correspondences and non-U.S. counterparts thereof
alleging or asserting such noncompliance as would not reasonably be
expected to have, individually or in the aggregate, have a Material
Adverse Effect. Except to the extent disclosed in the Registration
Statement, the Disclosure Package and the Prospectus, the Company
has not, either voluntarily or involuntarily, initiated, conducted
or issued, or caused to be initiated, conducted or issued, any
recall, field correction, market withdrawal or replacement, safety
alert, warning, “dear doctor” letter, investigator
notice, or other notice or action relating to an alleged or
potential lack of safety or efficacy of any product or Potential
Product of the Company, any alleged product defect of any product
or Potential Product of the Company, or any violation of any
material applicable law, rule, regulation or any clinical trial or
marketing license, approval, permit or authorization for any
product or potential product of the Company, and the Company is not
aware of any facts or information that would cause it to initiate
any such notice or action and has no knowledge or reason to believe
that the FDA, the EMEA or any other governmental agency or
authority or any institutional or ethical review board or other
non-governmental authority intends to impose, require, request or
suggest such notice or action.
3. Covenants
of the Company. The Company
covenants and agrees as follows:
3.1. Amendments
to Registration Statement. The Company shall
deliver to the Representative, prior to filing, any amendment or
supplement to the Registration Statement, any Preliminary
Prospectus, Disclosure Package or Prospectus proposed to be filed
and shall not file any such document to which the Representative
shall reasonably object in writing.
3.2. Federal
Securities Laws.
3.2.1. Compliance.
The
Company, subject to Section 3.2.2, shall comply with the
requirements of Rule 424(b) and Rule 430B of the Securities Act
Regulations, and will notify the Representative promptly, and
confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement or any amendment or
supplement to any Preliminary Prospectus, the Disclosure Package or
the Prospectus shall have been filed and when any post-effective
amendment to the Registration Statement shall become effective;
(ii) of the receipt of any comments from the Commission; (iii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to any Preliminary
Prospectus, the Disclosure Package or the Prospectus or for
additional information; (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment or of any order
preventing or suspending the use of any Preliminary Prospectus, the
Disclosure Package or the Prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes or of any examination pursuant
to Section 8(d) or 8(e) of the Securities Act concerning the
Registration Statement; and (v) if the Company becomes the subject
of a proceeding under Section 8A of the Securities Act in
connection with the Offering of the Securities. The Company shall
effect all filings required under Rule 424(b) of the Securities Act
Regulations, in the manner and within the time period required by
Rule 424(b) (without reliance on Rule 424(b)(8)), and shall take
such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company shall use
its best efforts to prevent the issuance of any stop order,
prevention or suspension and, if any such order is issued, to
obtain the lifting thereof at the earliest possible
moment.
3.2.2. Continued
Compliance. The Company shall
comply with the Securities Act, the Securities Act Regulations, the
Exchange Act and the Exchange Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in
this Agreement and in the Registration Statement, the Disclosure
Package and the Prospectus. If at any time when a prospectus
relating to the Securities is (or, but for the exception afforded
by Rule 172 of the Securities Act Regulations (“Rule 172”), would be) required by the
Securities Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Company, to (i) amend the Registration
Statement in order that the Registration Statement will not include
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 not misleading; (ii) amend or supplement the
Disclosure Package or the Prospectus in order that the Disclosure
Package or the Prospectus, as the case may be, will not include any
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time
it is delivered to a purchaser or (iii) amend the Registration
Statement or amend or supplement the Disclosure Package or the
Prospectus, as the case may be, in order to comply with the
requirements of the Securities Act or the Securities Act
Regulations, the Company will promptly (A) give the Representative
notice of such event; (B) prepare any amendment or supplement as
may be necessary to correct such statement or omission or to make
the Registration Statement, the Disclosure Package or the
Prospectus comply with such requirements and, a reasonable amount
of time prior to any proposed filing or use, furnish the
Representative with copies of any such amendment or supplement and
(C) file with the Commission any such amendment or supplement;
provided that the Company shall not file or use any such amendment
or supplement to which the Representative or counsel for the
Underwriters shall reasonably object. The Company will furnish to
the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request. The Company
has given the Representative notice of any filings made pursuant to
the Exchange Act or the Exchange Act Regulations within 48 hours
prior to the Applicable Time; the Company will give the
Representative notice of its intention to make any such filing from
the Applicable Time to the Closing Date and will furnish the
Representative with copies of any such documents a reasonable
amount of time prior to such proposed filing, as the case may be,
and will not file or use any such document to which the
Representative or counsel for the Underwriters shall reasonably
object.
3.2.3. Exchange
Act Registration. For a period of
three (3) years after the date of this Agreement, the Company shall
use its reasonable best efforts to maintain the registration of the
Common Stock under the Exchange Act, provided that such provision
shall not prevent a sale, merger or similar transaction involving
the Company. The Company shall not, for a period of three (3) years
after the date of this Agreement, deregister the Common Stock under
the Exchange Act without the prior written consent of the
Representative, which consent shall not be unreasonably
withheld.
3.2.4. Free
Writing Prospectuses. The Company agrees
that, unless it obtains the prior written consent of the
Representative, it shall 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,” or a portion thereof, required to be filed by
the Company with the Commission or retained by the Company under
Rule 433; provided that the Representative shall be deemed to have
consented to each Issuer General Use Free Writing Prospectus hereto
and any “road show that is a written communication”
within the meaning of Rule 433(d)(8)(i) that has been reviewed by
the Representative. The Company represents that it has treated or
agrees that it will treat each such free writing prospectus
consented to, or deemed consented to, by the Underwriters as an
“issuer free writing prospectus,” as defined in Rule
433, and that it has complied and will comply with the applicable
requirements of Rule 433 with respect thereto, including timely
filing with the Commission where required, legending and record
keeping. If at any time following issuance of an Issuer Free
Writing Prospectus there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus conflicted
or would conflict with the information contained in the
Registration Statement or included or would include an untrue
statement of a material fact or omitted or would omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances existing at that subsequent time,
not misleading, the Company will promptly notify the Underwriters
and will promptly amend or supplement, at its own expense, such
Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.
3.3. Delivery
to the Underwriters of Registration Statements. The Company has
delivered or made available or shall deliver or make available to
the Representative and counsel for the Representative, if
requested, without charge, signed copies of the Registration
Statement as originally filed and each amendment thereto (including
exhibits filed therewith) and signed copies of all consents and
certificates of experts, and will also deliver to the Underwriters,
without charge, a conformed copy of the Registration Statement as
originally filed and each amendment thereto (without exhibits) for
each of the Underwriters. The copies of the Registration Statement
and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
3.4. Delivery
to the Underwriters of Prospectuses. The Company has
delivered or made available or will deliver or make available to
each Underwriter, without charge, as many copies of each
Preliminary Prospectus, Disclosure Package and the Prospectus as
such Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the
Securities Act. The Company will furnish to each Underwriter,
without charge, during the period when a prospectus relating to the
Securities is (or, but for the exception afforded by Rule 172 of
the Securities Act Regulations, would be) required to be delivered
under the Securities Act, such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably
request. The Preliminary Prospectus, the Disclosure Package, the
Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation
S-T.
3.5. Listing.
The
Company shall use its reasonable best efforts to maintain the
listing of the Common Stock on the NYSE American for at least three
years from the date of this Agreement; provided that such provision
shall not prevent a sale, merger or similar transaction involving
the Company.
3.6. Payment
of Expenses. The Company hereby
agrees to pay on each of the Closing Date and the Option Closing
Date, if any, to the extent not paid at the Closing Date, all
expenses incident to the performance of the obligations of the
Company under this Agreement, including, but not limited to: (a)
all filing fees and communication expenses relating to the
registration of Securities to be issued and sold in the Offering
with the Commission; (b) all Public Offering System filing fees
associated with the review of the Offering by FINRA; (c) all fees
and expenses relating to the listing of the Securities on the NYSE
American, including any fees charged by DTC; (d) all fees, expenses
and disbursements relating to the registration or qualification of
the Securities under the “blue sky” securities laws of
such states and other jurisdictions as the Representative may
reasonably designate (including, without limitation, all required
filing and registration fees, and the reasonable fees and
disbursements of “blue sky” counsel which will be
Representative Counsel); (e) all fees, expenses and disbursements
relating to the registration, qualification or exemption of the
Securities under the securities laws of such foreign jurisdictions
as the Representative may reasonably designate; (f) the costs of
all mailing and printing of the underwriting documents (including,
without limitation, the Underwriting Agreement, any Blue Sky
Surveys and, if appropriate, any Agreement Among Underwriters,
Selected Dealers' Agreement, Underwriters' Questionnaire and Power
of Attorney), Registration Statements, Preliminary Prospectuses,
Disclosure Packages and Prospectuses and all amendments,
supplements and exhibits thereto and as many Preliminary
Prospectuses and Prospectuses as the Representative may reasonably
deem necessary; (g) the costs of preparing, printing and delivering
certificates representing the Securities; (h) fees and expenses of
the Company's transfer agent; (j) stock transfer and/or stamp
taxes, if any, payable upon the transfer of securities from the
Company to the Underwriters; (k) the fees and expenses of the
Company's accountants; (l) the fees and expenses of the Company's
legal counsel and other agents and representatives; and (m) $65,000
for the actual fees and expenses incurred by the Representative,
including for legal fees of the Representative Counsel or $25,000
if the Offering is not consummated. The Representative may deduct
from the net proceeds of the Offering payable to the Company on the
Closing Date, or the Option Closing Date, if any, the expenses set
forth herein to be paid by the Company to the
Underwriters.
3.7. [Reserved]
3.8. Application
of Net Proceeds. The Company shall
apply the net proceeds from the Offering received by it in a manner
consistent with the application thereof described under the caption
“Use of Proceeds” in the Registration Statement, the
Disclosure Package and the Prospectus.
3.9. Stabilization.
Neither
the Company nor, to its knowledge, any of its employees, directors
or shareholders (without the consent of the Representative) has
taken or shall take, directly or indirectly, any action designed to
or that has constituted or that might reasonably be expected to
cause or result in, under Regulation M of the Exchange Act, or
otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
3.10. Internal
Controls. The Company shall
maintain and shall cause each of its Subsidiaries to maintain a
system of internal accounting controls sufficient to provide
reasonable assurances that: (i) transactions are executed in
accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary in order to permit
preparation of financial statements in accordance 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.
3.11. Accountants.
As of
the date of this Agreement, the Company shall retain an independent
registered public accounting firm, as required by the Securities
Act and the Regulations and the Public Company Accounting Oversight
Board, reasonably acceptable to the Representative. The
Representative acknowledges that the Auditor is acceptable to the
Representative.
3.12. FINRA.
For a
period of 90 days from the later of the Closing Date or the Option
Closing Date (if any), the Company shall advise the Representative
(who shall make an appropriate filing with FINRA) if it is or
becomes aware that (i) any officer or director of the Company, (ii)
any beneficial owner of 5% or more of any class of the Company's
securities or (iii) any beneficial owner of the Company's
unregistered equity securities which were acquired during the 180
days immediately preceding the filing of the Registration Statement
is or becomes an affiliate or associated person of a FINRA member
participating in the Offering (as determined in accordance with the
rules and regulations of FINRA).
3.13. No
Fiduciary Duties. The Company
acknowledges and agrees that the Underwriters' responsibility to
the Company is solely contractual in nature and that none of the
Underwriters or their affiliates or any selling agent shall be
deemed to be acting in a fiduciary capacity, or otherwise owes any
fiduciary duty to the Company or any of its affiliates in
connection with the Offering and the other transactions
contemplated by this Agreement.
3.14. Company
Lock-Up Agreement. The Company, on
behalf of itself and any successor entity, agrees that, without the
prior written consent of the Representative, it will not, during
the period of thirty (30) days from the date of this Agreement (the
“Lock-Up
Period”), (i) offer, pledge, 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, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for
shares of capital stock of the Company; or (ii) file or cause to be
filed any registration statement with the Commission relating to
the offering of any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for
shares of capital stock of the Company.
The
restrictions contained in this Section 3.14 shall not apply to (i)
the Securities to be sold hereunder, (ii) the issuance by the
Company of shares of Common Stock upon the exercise of a stock
option or warrant or the conversion of a security outstanding on
the date hereof, which is disclosed in the Registration Statement,
Disclosure Package and Prospectus,(iii) the issuance by the Company
of stock options under any equity compensation plan of the Company,
and (iv) the sale or issuance by the Company to a non-U.S. person,
as such term is defined in Regulation S promulgated under the
Securities Act, at a price per share that is equal to or more than
the per Firm Share public offering price.
3.15. Release
of D&O Lock-up Period. If the
Representative, in its sole discretion, agrees to release or waive
the restrictions set forth in the Lock-Up Agreements described in
Section 2.27 hereof for an officer, director or shareholder of the
Company, the Representative shall provide the Company with notice
of the impending release or waiver at least three (3) Business Days
before the effective date of the release or waiver, the Company
agrees if required by applicable law to announce the impending
release or waiver by a press release substantially in the form of
Exhibit B hereto
through a major news service at least two (2) Business Days before
the effective date of the release or waiver.
3.16. Blue
Sky Qualifications. The Company shall
use its best efforts, in cooperation with the Underwriters, if
necessary, to qualify the Securities for offering and sale under
the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representative may
designate and to maintain such qualifications in effect so long as
required to complete the distribution of the Securities; provided,
however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not
otherwise so subject.
3.17. Reporting
Requirements. The Company, during
the period when a prospectus relating to the Securities is (or, but
for the exception afforded by Rule 172, would be) required to be
delivered under the Securities Act, will file all documents
required to be filed with the Commission pursuant to the Exchange
Act within the time periods required by the Exchange Act and
Exchange Act Regulations.
3.18. Press
Releases. Prior to the
Closing Date and any Option Closing Date, the Company shall not
issue any press release or other communication directly or
indirectly or hold any press conference with respect to the
Company, its condition, financial or otherwise, or earnings,
business affairs or business prospects (except for routine oral
marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the
Representative is notified), without the prior written consent of
the Representative, which consent shall not be unreasonably
withheld, unless in the judgment of the Company and its counsel,
and after notification to the Representative, such press release or
communication is required by law.
3.19. Sarbanes-Oxley.
The
Company shall at all times comply with all applicable provisions of
the Sarbanes-Oxley Act in effect from time to time.
4. Conditions
of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Securities, as
provided herein, shall be subject to (i) the continuing accuracy of
the representations and warranties of the Company as of the date
hereof and as of each of the Closing Date and the Option Closing
Date, if any; (ii) the accuracy of the statements of officers of
the Company made pursuant to the provisions hereof; (iii) the
performance by the Company of its obligations hereunder; and (iv)
the following conditions:
4.1. Regulatory
Matters.
4.1.1. Absence
of Certain Commission Actions; Required Filings.
At each
of the Closing Date and any Option Closing Date, no stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto shall have been issued under the
Securities Act, no order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus shall have been issued and
no proceedings for any of those purposes shall have been instituted
or are pending or, to the Company's knowledge, contemplated by the
Commission. The Company has complied with each request (if any)
from the Commission for additional information. A prospectus
containing the Rule 430B Information shall have been filed with the
Commission in the manner and within the time frame required by Rule
424(b) under the Securities Act Regulations (without reliance on
Rule 424(b)(8)) or a post-effective amendment providing such
information shall have been filed with, and declared effective by,
the Commission in accordance with the requirements of Rule 430B
under the Securities Act Regulations.
4.1.2. FINRA
Clearance. On or before the
date of this Agreement, the Representative shall have received
clearance from FINRA as to the amount of compensation allowable or
payable to the Underwriters as described in the Registration
Statement.
4.1.3. NYSE
American Stock Market Clearance. On or before the
Closing Date, the Firm Shares, and on or before the Option Closing
Date, the Additional Shares, shall have been approved for listing
on the NYSE American.
4.2. Company
Counsel Matters.
4.2.1. Closing
Date Opinion of Counsel to the Company. On the Closing
Date, the Representative shall have received the favorable opinion
of Hart & Hart, LLC and a written statement providing certain
“10b-5” negative assurances, dated the Closing Date and
addressed to the Representative, substantially in the form attached
hereto as Exhibit
C.
4.2.2. Option
Closing Date Opinion of Counsel. On the Option
Closing Date, if any, the Representative shall have received the
favorable opinion of counsel listed in Section 4.2.1, dated the
Option Closing Date, addressed to the Representative and in form
and substance reasonably satisfactory to the Representative,
confirming as of the Option Closing Date, the statements made by
such counsel in its opinion delivered on the Closing
Date.
4.2.3. Reliance.
In
rendering such opinions, such counsel may rely: (i) as to matters
involving the application of laws other than the laws of the United
States and jurisdictions in which they are admitted, to the extent
such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and
substance reasonably satisfactory to the Representative) of other
counsel reasonably acceptable to the Representative, familiar with
the applicable laws; and (ii) as to matters of fact, to the extent
they deem proper, on certificates or other written statements of
officers of the Company and officers of departments of various
jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company, provided that copies of
any such statements or certificates shall be delivered to
Representative Counsel if requested. The opinion referred to in
Sections 4.2.1 above and any related Option Closing Date opinion
shall include a statement to the effect that it may be relied upon
by Representative Counsel in its written statement providing
certain “10b-5” negative assurances delivered to the
Underwriters.
4.3. Comfort
Letters.
4.3.1. Cold
Comfort Letter. Within 12 hours
after the time this Agreement is executed the Representative shall
have received a cold comfort letter containing statements and
information of the type customarily included in accountants'
comfort letters with respect to the financial statements and
certain financial information contained in the Registration
Statement, the Disclosure Package and the Prospectus, addressed to
the Representative and in form and substance satisfactory in all
respects to you and to Representative Counsel from the Auditor,
dated such date.
4.3.2. Bring-down
Comfort Letter. At each of the
Closing Date and the Option Closing Date, if any, the
Representative shall have received from the Auditor a letter, dated
as of the Closing Date or the Option Closing Date, as applicable,
to the effect that the Auditor reaffirms the statements made in the
letter furnished pursuant to Section 4.3.1, except that the
specified date referred to shall be a date not more than one (1)
business day prior to the Closing Date or the Option Closing Date,
as applicable.
4.4. Officers'
Certificates.
4.4.1. Officers'
Certificate. The Company shall
have furnished to the Representative a certificate, dated the
Closing Date and any Option Closing Date (if such date is other
than the Closing Date), of its Chief Executive Officer and its
Chief Financial Officer or Chief Operating Officer stating that (i)
such officers have carefully examined the Registration Statement,
the Disclosure Package, any Issuer Free Writing Prospectus and the
Prospectus and, in their opinion, the Registration Statement and
each amendment thereto, as of the Applicable Time and as of the
date of this Agreement and as of the Closing Date (or any Option
Closing Date if such date is other than the Closing Date) did not
include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Disclosure
Package, as of the Applicable Time and as of the Closing Date (or
any Option Closing Date if such date is other than the Closing
Date), any Issuer Free Writing Prospectus as of its date and as of
the Closing Date (or any Option Closing Date if such date is other
than the Closing Date), the Prospectus and each amendment or
supplement thereto, as of the respective date thereof and as of the
Closing Date, did not include any untrue statement of a material
fact and did not omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
in which they were made, not misleading, (ii) since the date of
this Agreement, no event has occurred which should have been set
forth in a supplement or amendment to the Registration Statement,
the Disclosure Package or the Prospectus, (iii) to the best of
their knowledge after reasonable investigation, as of the Closing
Date (or any Option Closing Date if such date is other than the
Closing Date), the representations and warranties of the Company in
this Agreement are true and correct in all material respects and
the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date (or any Option Closing Date if such date
is other than the Closing Date), and (iv) there has not been,
subsequent to the date of the most recent audited financial
statements included or incorporated by reference in the Disclosure
Package, any material adverse change in the financial position or
results of operations of the Company, or any change or development
that, singularly or in the aggregate, would involve a material
adverse change or a prospective material adverse change, in or
affecting the condition (financial or otherwise), results of
operations, business, assets or prospects of the Company, except as
set forth in the Prospectus.
4.4.2. Secretary's
Certificate. At
each of the Closing Date and the Option Closing Date, if any, the
Representative shall have received a certificate of the Company
signed by the Secretary or the Assistant Secretary of the Company,
dated the Closing Date or the Option Date, as the case may be,
respectively, certifying: (i) that each of the Charter and Bylaws
is true and complete, has not been modified and is in full force
and effect; (ii) that the resolutions of the Company's Board of
Directors and the Pricing Committee of the Board of Directors
relating to the Offering are in full force and effect and have not
been modified; (iii) as to the accuracy and completeness of all
correspondence between the Company or its counsel and the
Commission; and (iv) as to the incumbency of the officers of the
Company. The documents referred to in such certificate shall be
attached to such certificate.
4.5. No
Material Changes. Prior to and on
each of the Closing Date and each Option Closing Date, if any: (i)
there shall have been no material adverse change or development
involving a prospective material adverse change in the condition or
prospects or the business activities, financial or otherwise, of
the Company from the latest dates as of which such condition is set
forth in the Registration Statement and no material change in the
capital stock or debt of the Company, the Disclosure Package and
the Prospectus; (ii) no action, suit or proceeding, at law or in
equity, shall have been pending or threatened against the Company
or, to the Company's knowledge, any Insider before or by any court
or federal or state commission, board or other administrative
agency wherein an unfavorable decision, ruling or finding may
materially adversely affect the business, operations, prospects or
financial condition or income of the Company, except as set forth
in the Registration Statement, the Disclosure Package and the
Prospectus; (iii) no stop order shall have been issued under the
Securities Act and no proceedings therefor shall have been
initiated or threatened by the Commission; (iv) no action shall
have been taken and no law, statute, rule, regulation or order
shall have been enacted, adopted or issued by any Governmental
Entity which would prevent the issuance or sale of the Securities
or materially and adversely affect or potentially materially and
adversely affect the business or operations of the Company; (v) no
injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been
issued which would prevent the issuance or sale of the Securities
or materially and adversely affect or potentially materially and
adversely affect the business or operations of the Company and (vi)
the Registration Statement, the Disclosure Package and the
Prospectus and any amendments or supplements thereto shall contain
all material statements which are required to be stated therein in
accordance with the Securities Act and the Securities Act
Regulations and shall conform in all material respects to the
requirements of the Securities Act and the Securities Act
Regulations, and neither the Registration Statement, the Disclosure
Package, the Prospectus nor any Issuer Free Writing Prospectus nor
any amendment or supplement thereto shall contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
4.6. No
Material Misstatement or Omission.
The
Underwriters shall not have discovered and disclosed to the Company
on or prior to the Closing Date and any Option Closing Date that
the Registration Statement or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of
counsel for the Underwriters, is material or omits to state any
fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the
statements therein not misleading, or that the Registration
Statement, Disclosure Package, any Issuer Free Writing Prospectus
or the Prospectus or any amendment or supplement thereto contains
an untrue statement of fact which, in the opinion of such counsel,
is material or omits to state any fact which, in the opinion of
such counsel, is material and is necessary in order to make the
statements, in the light of the circumstances under which they were
made, not misleading.
4.7. Corporate
Proceedings. All corporate
proceedings and other legal matters incident to the authorization,
form and validity of each of this Agreement, the Securities, the
Registration Statement, the Disclosure Package, each Issuer Free
Writing Prospectus, if any, and the Prospectus and all other legal
matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company
shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such
matters.
4.8. Delivery
of Lock-Up Agreements. On or before the
date of this Agreement, the Company shall have delivered to the
Representative executed copies of the Lock-Up Agreements from each
of the persons listed in Schedule 3 hereto.
4.9. Good
Standing Certificates. On the Closing Date
and the Option Closing Date, if any, the Company shall have
delivered to the Representative a certificate of good standing from
the State of Colorado for the Company.
4.10. Additional
Documents.At the Closing Date
and at each Option Closing Date (if any), Representative Counsel
shall have been furnished with such documents and opinions as they
may require for the purpose of enabling Representative Counsel to
deliver an opinion to the Underwriters, or in order to evidence the
accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance
and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Representative and
Representative Counsel.
5. Indemnification.
5.1. General.
The
Company shall indemnify and hold harmless each Underwriter, its
affiliates and each of its and their respective directors,
officers, members, employees, representatives, partners,
shareholders, affiliates, counsel and agents and each person, if
any, who controls any such Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
(collectively the “Underwriter Indemnified Parties,”
and each an “Underwriter
Indemnified Party”), against any and all loss,
liability, claim, damage and expense whatsoever (including but not
limited to any and all legal or other expenses reasonably incurred
in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, whether arising
out of any action between any of the Underwriter Indemnified
Parties and the Company or between any of the Underwriter
Indemnified Parties and any third party, or otherwise) to which
they or any of them may become subject under the Securities Act,
the Exchange Act or any other statute or at common law or otherwise
or under the laws of foreign countries, arising out of or based
upon any untrue statement or alleged untrue statement of a material
fact contained in (i) the Registration Statement, the Disclosure
Package, the Preliminary Prospectus, the Prospectus or any Issuer
Free Writing Prospectus (as from time to time each may be amended
and supplemented); (ii) any materials or information provided to
investors by, or with the approval of, the Company in connection
with the marketing of the Offering, including any “road
show” or investor presentations made to investors by the
Company (whether in person or electronically); or (iii) any
application or other document or written communication (in this
Section 5, collectively called “application”) executed by the
Company or based upon written information furnished by the Company
in any jurisdiction in order to qualify the Common Stock under the
securities laws thereof or filed with the Commission, any state
securities commission or agency, the Exchange or any other national
securities exchange; or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, unless such statement
or omission was made in reliance upon, and in conformity with, the
Underwriters’ Information. With respect to any untrue
statement or omission or alleged untrue statement or omission made
in the Disclosure Package, the indemnity agreement contained in
this Section 5.1.1 shall not inure to the benefit of any
Underwriter Indemnified Party to the extent that any loss,
liability, claim, damage or expense of such Underwriter Indemnified
Party results from the fact that a copy of the Prospectus was not
given or sent to the person asserting any such loss, liability,
claim or damage at or prior to the written confirmation of sale of
the Common Stock to such person as required by the Securities Act
and the Securities Act Regulations, and if the untrue statement or
omission has been corrected in the Prospectus, unless such failure
to deliver the Prospectus was a result of non-compliance by the
Company with its obligations under Section 3.3 hereof.
5.2. Procedure.
If any
action is brought against an Underwriter Indemnified Party in
respect of which indemnity may be sought against the Company
pursuant to Section 5.1.1, such Underwriter Indemnified Party shall
promptly notify the Company in writing of the institution of such
action and the Company shall be entitled to participate therein
and, to the extent that it wishes, jointly with any other similarly
notified indemnifying party, to assume the defense of such action,
including the employment and fees of counsel (subject to the
reasonable approval of such Underwriter Indemnified Party) and
payment of actual expenses. Such Underwriter Indemnified Party
shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the
expense of such Underwriter Indemnified Party unless (i) the
employment of such counsel at the expense of the Company shall have
been authorized in writing by the Company in connection with the
defense of such action, or (ii) the Company shall not have employed
counsel to have charge of the defense of such action, or (iii) such
indemnified party or parties shall have been advised by its counsel
that there may be defenses available to it or them which are
different from or additional to those available to the Company (in
which case the Company shall not have the right to direct the
defense of such action on behalf of the indemnified party or
parties), in any of which events the reasonable fees and expenses
of not more than one additional firm of attorneys selected by the
Underwriter Indemnified Parties who are party to such action (in
addition to local counsel) shall be borne by the Company.
Notwithstanding anything to the contrary contained herein, if any
Underwriter Indemnified Party shall assume the defense of such
action as provided above, the Company shall have the right to
approve the terms of any settlement of such action, which approval
shall not be unreasonably withheld.
5.3. Indemnification
of the Company. Each Underwriter,
severally and not jointly, shall indemnify and hold harmless the
Company, its directors, its officers who signed the Registration
Statement and persons who control the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all loss, liability, claim, damage and expense
described in the foregoing indemnity from the Company to the
several Underwriters, as incurred, but only with respect to such
losses, liabilities, claims, damages and expenses (or actions in
respect thereof) which arise out of or are based upon untrue
statements or omissions made in the Registration Statement, any
Preliminary Prospectus, the Disclosure Package or Prospectus or any
amendment or supplement thereto or in any application, in reliance
upon, and in strict conformity with, the Underwriters’
Information. In case any action shall be brought against the
Company or any other person so indemnified based on any Preliminary
Prospectus, the Registration Statement, the Disclosure Package or
Prospectus or any amendment or supplement thereto or any
application, and in respect of which indemnity may be sought
against any Underwriter, such Underwriter shall have the rights and
duties given to the Company, and the Company and each other person
so indemnified shall have the rights and duties given to the
several Underwriters by the provisions of Section 5.1.2. The
Company agrees promptly to notify the Representative of the
commencement of any litigation or proceedings against the Company
or any of its officers, directors or any person, if any, who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, in connection
with the issuance and sale of the Common Stock or in connection
with the Registration Statement, the Disclosure Package, the
Prospectus or any Issuer Free Writing Prospectus.
5.4. Contribution.
5.4.1. Contribution
Rights. If the
indemnification provided for in this Section 5 shall for any reason
be unavailable to or insufficient to hold harmless an indemnified
party under Section 5.1 or 5.2 in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid
or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative
benefits received by the Company, on the one hand, and each of the
Underwriters, on the other hand, from the Offering, 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
Underwriters, on the other, with respect to the statements or
omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the
Company, on the one hand, and the Underwriters, on the other, with
respect to such Offering shall be deemed to be in the same
proportion as the total proceeds from the Offering (before
deducting expenses) received by the Company bear to the total
underwriting discount and commissions received by the Underwriters
in connection with the Offering, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of
the Company, on the one hand, and the Underwriters, on the other,
shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or the
Underwriters, on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to
correct or prevent such untrue statement, omission, act or failure
to act; provided that the parties hereto agree that the written
information furnished to the Company through the Representative by
or on behalf of any Underwriter for use in any Preliminary
Prospectus, any Registration Statement or the Prospectus, or in any
amendment or supplement thereto, consists solely of the
Underwriters’ Information. The Company and the Underwriters
agree that it would not be just and equitable if contributions
pursuant to this Section 5.3.1 were to be determined by pro rata
allocation or by any other method of allocation that does not take
into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the
loss, claim, damage, expense, liability, action, investigation or
proceeding referred to above in this Section 5.3.1 shall be deemed
to include, for purposes of this Section 5.3.1, any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating, preparing to defend or defending
against or appearing as a third party witness in respect of, or
otherwise incurred in connection with, any such loss, claim,
damage, expense, liability, action, investigation or proceeding.
Notwithstanding the provisions of this Section 5.3.1 no Underwriter
shall be required to contribute any amount in excess of the total
discount and commission received by such Underwriter in connection
with the Offering less the amount of any damages which such
Underwriter has otherwise paid or becomes liable to pay by reason
of any untrue or alleged untrue statement, omission or alleged
omission, act or alleged act or failure to act or alleged failure
to act. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
5.4.2. Contribution
Procedure. Within fifteen (15)
days after receipt by any party to this Agreement (or its
representative) of notice of the commencement of any action, suit
or proceeding, such party will, if a claim for contribution in
respect thereof is to be made against another party
(“contributing party”), notify the contributing party
of the commencement thereof, but the failure to so notify the
contributing party will not relieve it from any liability which it
may have to any other party other than for contribution hereunder.
In case any such action, suit or proceeding is brought against any
party, and such party notifies a contributing party or its
representative of the commencement thereof within the aforesaid 15
days, the contributing party will be entitled to participate
therein in the defense of any action, suit or proceeding with the
notifying party and any other contributing party similarly
notified. Any such contributing party shall not be liable to any
party seeking contribution on account of any settlement of any
claim, action or proceeding affected by such party seeking
contribution without the written consent of such contributing
party. The contribution provisions contained in this Section 5.3.2
are intended to supersede, to the extent permitted by law, any
right to contribution under the Securities Act, the Exchange Act or
otherwise available. The Underwriters’ obligations to
contribute as provided in this Section 5.3 are several and in
proportion to their respective underwriting obligation, and not
joint.
6. Default
by an Underwriter.
6.1. Default
Not Exceeding 10% of Firm Shares or Additional Shares.
If any
Underwriter or Underwriters shall default in its or their
obligations to purchase the Firm Shares or the Additional Shares,
if the Over-allotment Option is exercised hereunder, and if the
number of the Firm Shares or Additional Shares with respect to
which such default relates does not exceed in the aggregate 10% of
the number of Firm Shares or Additional Shares that all
Underwriters have agreed to purchase hereunder, then such Finn
Shares or Additional Shares to which the default relates shall be
purchased by the non-defaulting Underwriters in proportion to their
respective commitments hereunder.
6.2. Default
Exceeding 10% of Firm Shares or Additional Shares.
In the
event that the default addressed in Section 6.1 relates to more
than 10% of the Firm Shares or Additional Shares, the Underwriters
may in their discretion arrange for the Underwriters or for another
party or parties to purchase such Firm Shares or Additional Shares
to which such default relates on the terms contained herein. If,
within one (1) Business Day after such default relating to more
than 10% of the Firm Shares or Additional Shares, the Underwriters
do not arrange for the purchase of such Firm Shares or Additional
Shares, then the Company shall be entitled to a further period of
one (1) Business Day within which to procure another party or
parties satisfactory to the Underwriters to purchase said Firm
Shares or Additional Shares on such terms. In the event that
neither the Underwriters nor the Company arrange for the purchase
of the Firm Shares or Additional Shares to which a default relates
as provided in this Section 6, this Agreement will automatically be
terminated by the Underwriters or the Company without liability on
the part of the Company (except as provided in Sections 3.10 and 5
hereof) or the several Underwriters (except as provided in Section
5 hereof); provided, however, that if such default occurs with
respect to the Additional Shares, this Agreement will not terminate
as to the Firm Shares; and provided, further, that nothing herein
shall relieve a defaulting Underwriter of its liability, if any, to
the other Underwriters and to the Company for damages occasioned by
its default hereunder.
6.3. Postponement
of Closing Date. In the event that
the Firm Shares or Additional Shares to which the default relates
are to be purchased by the non-defaulting Underwriters, or are to
be purchased by another party or parties as aforesaid, the
Underwriters or the Company shall have the right to postpone the
Closing Date or Option Closing Date for a reasonable period, but
not in any event exceeding five (5) Business Days, in order to
effect whatever changes may thereby be made necessary in the
Registration Statement, the Disclosure Package or the Prospectus or
in any other documents and arrangements, and the Company agrees to
file promptly any amendment to the Registration Statement, the
Disclosure Package or the Prospectus that in the opinion of counsel
for the Underwriter may thereby be made necessary. The term
“Underwriter” as used in this Agreement shall
include any party substituted under this Section 6 with like effect
as if it had originally been a party to this Agreement with respect
to such Securities.
7. Reserved
8. Effectiveness
of this Agreement and Termination Thereof.
8.1. Effectiveness
of the Agreement. This Agreement
shall become effective when both the Company and the Representative
have executed the same and delivered counterparts of such
signatures to the other party.
8.2. Termination.
The
Representative shall have the right to terminate this Agreement at
any time prior to any Closing Date, (i) if any domestic or
international event or act or occurrence has materially disrupted,
or in the Representative’s opinion will in the immediate
future materially disrupt, general securities markets in the United
States; or (ii) if trading on the New York Stock Exchange or the
Nasdaq Stock Market LLC shall have been suspended or materially
limited, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been
required by FINRA or by order of the Commission or any other
government authority having jurisdiction; or (iii) if the United
States shall have become involved in a new war or an increase in
major hostilities; or (iv) if a banking moratorium has been
declared by a New York State or federal authority; or (v) if a
moratorium on foreign exchange trading has been declared which
materially adversely impacts the United States securities markets;
or (vi) if the Company shall have sustained a material loss by
fire, flood, accident, hurricane, earthquake, theft, sabotage or
other calamity or malicious act which, whether or not such loss
shall have been insured, will, in the Representative’s
opinion, make it inadvisable to proceed with the delivery of the
Firm Shares or Additional Shares; or (vii) if the Company is in
material breach of any of its representations, warranties or
covenants hereunder; or (viii) if the Representative shall have
become aware after the date hereof of such a material adverse
change in the conditions or prospects of the Company, or such
adverse material change in general market conditions as in the
Representative's judgment would make it impracticable to proceed
with the offering, sale and/or delivery of the Securities or to
enforce contracts made by the Underwriters for the sale of the
Securities.
8.3. Expenses
Upon Termination. Notwithstanding
anything to the contrary in this Agreement, except in the case of a
default by the Underwriters, pursuant to Section 6.2 above, in the
event that this Agreement shall not be carried out for any reason
whatsoever, within the time specified herein or any extensions
thereof pursuant to the terms herein, the Company shall be
obligated to pay to the Representative its actual and accountable
out-of-pocket expenses related to the transactions contemplated
herein then due and payable (including the fees and disbursements
of Representative Counsel) up to $25,000, and upon demand the
Company shall pay the full amount thereof to the Representative;
provided, however, that such expense cap in no way limits or
impairs the indemnification and contribution provisions of this
Agreement.
8.4. Survival
of Indemnification. Notwithstanding any
contrary provision contained in this Agreement, any election
hereunder or any termination of this Agreement, and whether or not
this Agreement is otherwise carried out, the provisions of Section
5 shall remain in full force and effect and shall not be in any way
affected by, such election or termination or failure to carry out
the terms of this Agreement or any part hereof.
8.5. Representations,
Warranties, Agreements to Survive.
All
representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and
effect regardless of (i) any investigation made by or on behalf of
any Underwriter or its Affiliates or selling agents, any person
controlling any Underwriter, its officers or directors or any
person controlling the Company or (ii) delivery of and payment for
the Securities.
9. Miscellaneous.
9.1. Notices.
All
communications hereunder, except as herein otherwise specifically
provided, shall be in writing and shall be mailed (registered or
certified mail, return receipt requested), personally delivered or
sent by facsimile transmission and confirmed and shall be deemed
given when so delivered or faxed and confirmed or if mailed, two
(2) days after such mailing.
If
to the Representative:
Kingswood
Capital Markets, division of Benchmark Investments,
Inc.
17
Battery Place, Suite 625
New
York, New York 10004
Attn:
Joseph T. Rallo
with
a copy (which shall not constitute notice) to:
Nelson
Mullins Riley & Scarborough LLP
101
Constitution Avenue NW, Suite 900
Washington, DC
20001
Attn:
Andrew M. Tucker, Esq.
Fax
No.: (202) 689-2860
If
to the Company:
CEL-SCI
Corporation
8229
Boone Blvd. #802
Vienna,
VA 22182
Attn:
Geert R. Kersten
Fax
No.: (703) 506-9471
with
a copy (which shall not constitute notice) to:
Hart
& Hart, LLC
1624
Washington Street
Denver,
CO 80203
Attn:
William T. Hart. Esq.
Fax
No.: (303) 839-5414
9.2. Headings.
The
headings contained herein are for the sole purpose of convenience
of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this
Agreement.
9.3. Absence
of Fiduciary Relationship. The Company
acknowledges and agrees that:
(i) each
Underwriter's responsibility to the Company is solely contractual
in nature, each Underwriter has been retained solely to act as an
underwriter in connection with the Offering and no fiduciary,
advisory or agency relationship between the Company and the
Underwriters has been created in respect of any of the transactions
contemplated by this Agreement, irrespective of whether the
Representative has advised or is advising the Company on other
matters;
(ii) the
price of the Securities set forth in this Agreement was established
by the Company following discussions and arms-length negotiations
with the Representative, 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;
and
(iii) it
has been advised that the Underwriters and their respective
affiliates are engaged in a broad range of transactions which may
involve interests that differ from those of the Company and that
the Underwriters have no obligation to disclose such interests and
transactions to the Company by virtue of any fiduciary, advisory or
agency relationship.
9.4. Research
Analyst Independence. The Company
acknowledges that each Underwriter's research analysts and research
departments are required to be independent from its investment
banking division and are subject to certain regulations and
internal policies, and that such Underwriter's research analysts
may hold views and make statements or investment recommendations
and/or publish research reports with respect to the Company and/or
the offering that differ from the views of their investment banking
division. The Company acknowledges that each Underwriter is a full
service securities firm and as such from time to time, subject to
applicable securities laws, rules and regulations, may effect
transactions for its own account or the account of its customers
and hold long or short positions in debt or equity securities of
the Company; provided, however, that nothing in this Section 9.4
shall relieve the Underwriter of any responsibility or liability it
may otherwise bear in connection with activities in violation of
applicable securities laws, rules or regulations.
9.5. Amendment.
This
Agreement may only be amended by a written instrument executed by
each of the parties hereto.
9.6. Entire
Agreement. This Agreement
(together with the other agreements and documents being delivered
pursuant to or in connection with this Agreement) constitutes the
entire agreement of the parties hereto with respect to the subject
matter hereof and thereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to
the subject matter hereof.
9.7. Binding
Effect. This Agreement
shall inure solely to the benefit of and shall be binding upon the
Representative, the Underwriters, the Company and the controlling
persons, directors and officers referred to in Section 5 hereof,
and their respective successors, legal representatives, heirs and
assigns, and no other person shall have or be construed to have any
legal or equitable right, remedy or claim under or in respect of or
by virtue of this Agreement or any provisions herein contained. The
term “successors and assigns” shall not include a
purchaser, in its capacity as such, of securities from any of the
Underwriters.
9.8. Governing
Law; Consent to Jurisdiction; Trial by Jury. This Agreement
shall be governed by and construed and enforced in accordance with
the laws of the State of New York, without giving effect to
conflict of laws principles thereof. The Company hereby agrees that
any action, proceeding or claim against it arising out of, or
relating in any way to this Agreement shall be brought and enforced
in the New York Supreme Court, County of New York, or in the United
States District Court for the Southern District of New York, and
irrevocably submits to such jurisdiction, which jurisdiction shall
be exclusive. The Company hereby waives any objection to such
exclusive jurisdiction and that such courts represent an
inconvenient forum. Any such process or summons to be served upon
the Company may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 9.1
hereof. Such mailing shall be deemed personal service and shall be
legal and binding upon the Company in any action, proceeding or
claim. The Company agrees that the prevailing party(ies) in any
such action shall be entitled to recover from the other party(ies)
all of its reasonable attorneys' fees and expenses relating to such
action or proceeding and/or incurred in connection with the
preparation therefor. The Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and
affiliates) and each of the Underwriters 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 or the transactions contemplated
hereby.
9.9. Execution
in Counterparts. This Agreement may
be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall
constitute one and the same agreement, and shall become effective
when one or more counterparts has been signed by each of the
parties hereto and delivered to each of the other parties hereto.
Delivery of a signed counterpart of this Agreement by facsimile or
email/pdf transmission shall constitute valid and sufficient
delivery thereof.
9.10. Waiver,
etc. The failure of any
of the parties hereto to at any time enforce any of the provisions
of this Agreement shall not be deemed or construed to be a waiver
of any such provision, nor to in any way effect the validity of
this Agreement or any provision hereof or the right of any of the
parties hereto to thereafter enforce each and every provision of
this Agreement. No waiver of any breach, non-compliance or
non-fulfillment of any of the provisions of this Agreement shall be
effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver
is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any
other or subsequent breach, noncompliance or
non-fulfillment.
[Signature Page Follows]
If
the foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall
constitute a binding agreement between us.
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Very
truly yours,
CEL-SCI
Corporation
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By:
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/s/ Geert
R. Kersten
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Name:
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Geert
R. Kersten
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Title:
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Chief
Executive Officer
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Confirmed as of the date first written above, on
behalf of itself and as Representative of the several Underwriters
named on Schedule 1
hereto:
KINGSWOOD
CAPITAL MARKETS,
division
of Benchmark Investments, Inc.
By:
/s/ Sam
Fleischman
Name: Sam
Fleischman
Title: Supervisory
Principal
[Signature Page]
Cel-Sci Corporation – Underwriting Agreement
SCHEDULE 1
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Underwriter
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Total
Number of
Firm
Shares to bePurchased
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Number
of Additional Option Shares to be Purchased if the Over-Allotment
Option is Fully Exercised
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Kingswood Capital
Markets, division of Benchmark Investments, Inc.
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500,000
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75,000
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Aegis Capital
Corp.
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500,000
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75,000
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TOTAL
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1,000,000
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150,000
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SCHEDULE 2
Pricing Information
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Number
of Firm Shares:
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1,000,000
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Number
of Additional Shares:
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150,000
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Public
Offering Price per Share:
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$14.65
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Underwriting
Discount per Share:
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$1.03
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Proceeds
to Company per Share (before expenses):
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$13.62
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SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
1.
Free Writing
Prospectus filed by the Company with the Commission on December 8,
2020.
Issuer General Use Free Writing Prospectuses
Filed pursuant to Rule 433
Registration Statement No.: 333-226558
Issuer Free Writing Prospectus dated December 8, 2020
Relating to Preliminary Prospectus Supplement dated December 8,
2020
TERM SHEET
CEL-SCI CORPORATION
Public Offering of Common Stock
This document does not provide full disclosure of all material
facts relating to the securities offered. Investors should read the
accompanying prospectus, any amendment and any applicable
prospectus supplement for disclosure of those facts, especially
risk factors relating to the securities offered, before making an
investment decision.
A preliminary prospectus supplement to the accompanying prospectus
dated December 8, 2020 has been filed with the Securities and
Exchange Commission (SEC) in the United States and contains
important information relating to the securities described in this
term sheet. The issuer has filed a registration statement
(including the accompanying prospectus) with the SEC for the
offering to which this communication relates. Before you invest,
you should read the prospectus, as supplemented by the preliminary
prospectus supplement filed with the SEC, in that registration
statement and other documents the issuer has and will file with the
SEC for more complete information about the issuer and this
offering. You may get these documents for free by visiting EDGAR on
the SEC website at www.sec.gov. Alternatively, the issuer, any
underwriter or any dealer participating in the offering will
arrange to send you the prospectus, as supplemented, if you request
it, from Kingswood Capital Markets, Attention: Syndicate Desk, 17
Battery Place, Suite 625, New York, NY 10004, by email at
syndicate@kingswoodcm.com, or by telephone at (212)
404-7002.
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Issuer:
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CEL-SCI
Corporation (the “Company”)
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Number of Firm Shares:
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1,000,000
shares of common stock of the Company (each, a “Share”).
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Public price per Share:
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$14.65
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Option to purchase additional Shares:
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The
Underwriter (as defined below) will have an option, exercisable, in
whole or in part, in the sole discretion of the Underwriter, at any
time prior to the day that is the 30th day following the date of
the Underwriting Agreement, to purchase up to an additional 150,000
Shares on the same terms and conditions as set forth
herein.
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Form of Underwriting:
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Firm
commitment underwriting public offering by way of a prospectus
supplement to the Company’s effective “shelf”
registration statement (File No. 333-226558) (the
“Offering”),
subject to a mutually acceptable underwriting agreement containing
the customary material adverse effect clauses.
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Underwriter:
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Kingswood
Capital Markets, division of Benchmark Investments, Inc. and Aegis
Capital Corp. is acting as the joint book-running managers for the
Offering (the “Underwriter”).
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Jurisdictions:
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No
action is being taken in any jurisdiction outside the United States
to permit a public offering of the Shares. None of the Shares in
this Offering will be offered or sold, directly or indirectly, nor
will any offering material or advertisements in connection with the
offer and sales of any of the Shares be distributed or published in
any jurisdiction, except under circumstances that will result in
compliance with the applicable rules and regulations of that
jurisdiction.
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Underwriter’s Fees:
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The
Company will pay the Underwriter a commission equal to 7.0% of the
gross proceeds of the Offering. The Company will reimburse the
Underwriter for certain expenses including $65,000 for actual fees
and expenses including legal fees, or $25,000 if the offering is
not consummated.
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Use of Proceeds:
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The net
proceeds of the Offering will be used to fund the continued
development of Multikine and LEAPS, for the expansion of the
Company's manufacturing facility and for other general corporate
purposes.
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Listing:
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Our
common stock is listed on the NYSE American under the symbol
“CVM.”
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Closing Date:
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On or
about December 11, 2020 or such other date as the Company and the
Underwriter mutually agree.
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SCHEDULE 3
List of Lock-Up Parties
Geert
R. Kersten
Patricia
B. Prichep
Dr.
Eyal Talor
Dr.
Daniel H. Zimmerman
John
Cipriano
Dr.
Peter R. Young
Bruno
Baillavione
Robert
Watson
EXHIBIT A
Form of Lock-Up Agreement
December 8, 2020
Kingswood
Capital Markets, division of Benchmark Investments,
Inc.
17
Battery Place, Suite 625
New
York, New York 10004
Ladies
and Gentlemen:
The
undersigned understands that Kingswood Capital Markets, division of
Benchmark Investments, Inc. (the “Representative”) proposes to enter into an
Underwriting Agreement (the “Underwriting Agreement
“) with CEL-SCI
Corporation, a Colorado corporation (the “Company”), providing for the public offering
(the “Public
Offering”) of shares of common stock, par
value $0.01 per share, of the Company (the “Shares”).
To
induce the Representative to continue its efforts in connection
with the Public Offering, the undersigned hereby agrees that,
without the prior written consent of the Representative, the
undersigned will not, during the period commencing on the date
hereof and ending 30 days after the date of the final prospectus
(the “Prospectus”) relating to the
Public Offering (the “Lock-Up
Period”), (1) offer, pledge, sell, contract to sell,
grant, lend, or otherwise transfer or dispose of, directly or
indirectly, any Shares or any securities convertible into or
exercisable or exchangeable for Shares, whether now owned or
hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition
(collectively, the “Lock-Up
Securities”); (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Lock-Up Securities,
whether any such transaction described in clause (1) above or this
clause (2) is to be settled by delivery of Lock-Up Securities, in
cash or otherwise; (3) make any demand for or exercise any right
with respect to the registration of any Lock-Up Securities; or (4)
publicly disclose the intention to make any offer, sale, pledge or
disposition, or to enter into any transaction, swap, hedge or other
arrangement relating to any Lock-Up Securities. Notwithstanding the
foregoing, and subject to the conditions below, the undersigned may
transfer Lock-Up Securities without the prior written consent of
the Representative in connection with (a) transactions relating to
Lock-Up Securities acquired in open market transactions after the
completion of the Public Offering; provided that no filing under
Section 13 or Section 16(a) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), or other public
announcement shall be required or shall be voluntarily made during
the Lock-Up Period in connection with subsequent sales of Lock-Up
Securities acquired in such open market transactions pursuant to
this agreement; (b) transfers of Lock-Up Securities as a
bona fide gift, by will or
intestacy or to a family member or trust for the benefit of a
family member (for purposes of this lock-up agreement,
“family member” means any relationship by blood,
marriage or adoption, not more remote than first cousin); (c)
transfers of Lock-Up Securities to a charity or educational
institution; or (d) if the undersigned, directly or indirectly,
controls a corporation, partnership, limited liability company or
other business entity, any transfers of Lock-Up Securities to any
shareholder, partner or member of, or owner of similar equity
interests in, such corporation, partnership, limited liability
company or other business entity, as the case may be; provided that in the case of
any transfer pursuant to the foregoing clauses (b), (c) or (d), (i)
it shall be a condition to any such transfer that (i) the
transferee/donee agrees to be bound by the terms of this lock-up
agreement (including, without limitation, the restrictions set
forth in the preceding sentence) to the same extent as if the
transferee/donee were a party hereto; (ii) each party (donor,
donee, transferor or transferee) shall not be required by law
(including without limitation the disclosure requirements of the
Securities Act of 1933, as amended (the “Securities Act”), and the Exchange
Act) to make, and shall agree to not voluntarily make, any filing
or public announcement of the transfer or disposition prior to the
expiration of the Lock-Up Period; and (iii) the undersigned
notifies the Representative at least two (2) business days prior to
the proposed transfer or disposition.
In
addition, the foregoing restrictions shall not apply to (i) the
exercise of stock options granted pursuant to the Company’s
equity incentive plans, (ii) exercise of warrants, or (iii)
pursuant to an existing contract, instruction or plan (a
“Plan”) that
satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) under
the Exchange Act, (iv) the establishment of any new Plan (as such
may have been extended pursuant to the provisions
thereof).
The
undersigned also agrees and consents to the entry of stop transfer
instructions with the Company’s transfer agent and registrar
against the transfer of the undersigned’s securities subject
to this this lock-up agreement except in compliance with this this
lock-up agreement.
If the
undersigned is an officer or director of the Company, (i) the
undersigned agrees that the foregoing restrictions shall be equally
applicable to any Shares that the undersigned may purchase in the
Public Offering; (ii) the Representative agrees that, at least
three (3) business days before the effective date of any release or
waiver of the foregoing restrictions in connection with a transfer
of Lock-Up Securities, the Representative will notify the Company
of the impending release or waiver; and (iii) the Company has
agreed in the Underwriting Agreement to announce the impending
release or waiver by press release through a major news service at
least two (2) business days before the effective date of the
release or waiver. Any release or waiver granted by the
Representative hereunder to any such officer or director shall only
be effective two (2) business days after the publication date of
such press release. The provisions of this paragraph will not apply
if (a) the release or waiver is effected solely to permit a
transfer of Lock-Up Securities not for consideration and (b) the
transferee has agreed in writing to be bound by the same terms
described in this lock-up agreement to the extent and for the
duration that such terms remain in effect at the time of such
transfer.
The
undersigned understands that the Company and the Representative are
relying upon this lock-up agreement in proceeding toward
consummation of the Public Offering. The undersigned further
understands that this lock-up agreement is irrevocable and shall be
binding upon the undersigned’s heirs, legal representatives,
successors and assigns.
The
undersigned understands that, if the Underwriting Agreement does
not become effective, or if the Underwriting Agreement (other than
the provisions thereof which survive termination) shall terminate
or be terminated prior to payment for and delivery of the Shares to
be sold thereunder, the undersigned shall be released from all
obligations under this lock-up agreement.
This
lock-up agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.
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Very
truly yours,
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(Name -
Please Print)
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(Signature)
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(Name
of Signatory, in the case of entities - Please Print)
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(Title
of Signatory, in the case of entities - Please Print)
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Address:
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EXHIBIT B
Form of Press Release
CEL-SCI
Corporation,
[Date]
CEL-SCI Corporation, (the
“Company”) announced today that Kingswood Capital Markets,
Inc., division of Benchmark Investments, Inc., acting as
representative for the underwriters in the Company's recent public
offering of the Company's common stock, is [waiving] [releasing] a
lock-up restriction with respect to __________ shares of the
Company's common stock held by [certain officers or directors] [an
officer or director] of the Company. The _______________ [waiver]
[release] will take effect on ___________________, 20__and the
shares may be sold on or after such date.
This
press release is not an offer or sale of the securities in the
United States or in any other jurisdiction where such offer or sale
is prohibited, and such securities may not be offered or sold in
the United States absent registration or an exemption from
registration under the Securities Act of 1933, as
amended.
EXHIBIT C
Form of Opinion of Company Counsel
(i)
The
Company has been duly organized and is validly existing as a
corporation and is in good standing under the laws of the State of
Colorado with the requisite corporate power and authority to own or
lease, as the case may be, and operate its properties, and to
conduct its business, as described in the Registration Statement,
the Disclosure Package and the Prospectus and to enter into and
perform its obligations under the Underwriting
Agreement.
()
The
authorized and outstanding shares of capital stock of the Company
is as set forth in the Prospectus.
(i)
The
Firm/Additional Shares have been duly authorized for issuance and
sale to the Underwriters pursuant to the Underwriting Agreement
and, when issued and paid for pursuant to the terms of the
Underwriting Agreement, will be validly issued and fully paid and
non-assessable; the holders thereof are not and will not be subject
to personal liability solely by reason of being such holders. The
issuance of the Firm/Additional Shares is not and will not be
subject to the preemptive or similar rights of any holders of any
security of the Company arising by operation of law or under the
Company's Certificate of Incorporation, as amended (the
“Charter”), bylaws, as amended (the
“Bylaws”) or the Material Contracts ( as defined
below).
(ii)
The
Underwriting Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes the valid and
legally binding obligation of the Company, enforceable against the
Company in accordance with its terms, except (a) as such
enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights
generally, (b) as enforceability of any indemnification or
contribution provisions may be limited under the Federal and state
securities laws, and (c) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject
to the equitable defenses and to the discretion of the court before
which any proceeding therefore may be brought..
(iii)
The
execution, delivery and performance of the Underwriting Agreement
and compliance by the Company with the terms and provisions thereof
and the consummation of the transactions contemplated thereby, and
the issuance and sale of the Securities, do not and will not,
whether with or without the giving of notice or the lapse of time
or both, (a) violate, conflict with, or result in a breach of, any
of the terms or provisions of, or constitute a default under, or
result in the creation or modification of any lien, security
interest, charge or encumbrance upon any of the properties or
assets of the Company pursuant to the terms of, any mortgage, deed
of trust, note, indenture, loan, contract, commitment or other
agreement or instrument filed or incorporated by reference as an
exhibit to the Registration Statement (collectively, the
“Material Contracts”), (b) result in any violation of
the provisions of the Charter, the By-laws or any other governing
documents of the Company, or (c) violate any law, statute or any
judgment, order or decree, rule or regulation applicable to the
Company of any Governmental Entity.
(vi)
The
shares of Common Stock offered pursuant to the Prospectus conform
in all material respects to the description thereof contained in
the Registration Statement, the Disclosure Package and the
Prospectus. No United States or state statute or regulation
required to be described in the Prospectus is not described as
required (except as to the “blue sky” laws of the
various states, as to which such counsel expresses no opinions),
nor to such counsel's knowledge are any contracts or documents of a
character required to be described in the Registration Statement,
Disclosure Package or the Prospectus or to be filed or incorporated
by reference as exhibits to the Registration Statement not so
described or filed as required.
(vii)
The
statements in the Registration Statement, Disclosure Package and
the Prospectus under the heading “Description of
Securities,” insofar as such statements purport to summarize
legal matters, legal conclusions, the Charter, the Bylaws, or other
agreements or documents discussed therein, are correct in all
material respects.
(viii)
The
Registration Statement has been declared effective by the
Commission under the Securities Act and the Securities Act
Regulations. No stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act or
any order preventing or suspending the use of any Preliminary
Prospectus, any Issuer Free Writing Prospectus or the Prospectus
has been issued, and no proceedings for any such purpose have been
instituted or, to such counsel's knowledge, are pending by the
Commission or any other Governmental Entity. Any required filing of
the Prospectus, and any required supplement thereto, pursuant to
Rule 424(b) under the Securities Act Regulations, has been made in
the manner and within the time period required by Rule 424(b)
(without reference to Rule 424(b)(8)).
(ix)
The
Company is not required and, after giving effect to the Offering
and sale of the Firm/Additional Shares and the application of the
proceeds thereof as described in the Registration Statement, the
Disclosure Package and the Prospectus, will not be required, to
register as an “investment company,” under the
Investment Company Act of 1940, as amended.
(x)
No
filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any Governmental Entity
(other than under the Securities Act and the Securities Act
Regulations or with NYSE American, which have been obtained, or as
may be required under the securities or blue sky laws of the
various states, as to which we need express no opinion) is
necessary or required for the performance by the Company of its
obligations under the Underwriting Agreement, in connection with
the offering, issuance or sale of the Firm/Additional Shares
thereunder or the consummation of the transactions contemplated
thereby, except such as have been already made or obtained or as
may be required under the rules of the Exchange, state securities
laws or the rules of FINRA.
(xi)
The
Securities have been approved for listing on the Exchange upon
official notice of issuance.
(xii)
To
such counsel's knowledge, there are no persons with registration
rights or other similar rights to have any securities registered
pursuant to the Registrant Statement or otherwise registered for
sale by the Company under the Securities Act, except as disclosed
in the Registration Statement, the Disclosure Package and the
Prospectus.
(xiii)
To
such counsel's knowledge, there are not any pending legal
proceedings to which the Company or any of its Subsidiaries is a
party or of which the property of the Company or any of its
Subsidiaries is the subject which are required to be disclosed in
the Registration Statement, Disclosure Package and the Prospectus
and are not so disclosed.
(xiv)
Each
of (1) the Registration Statement, as of the time it became
effective, (2) the Disclosure Package, as of the Applicable Time,
and (3) the Prospectus, as of its date (in each case other than the
financial statements and supporting schedules included therein, as
to which no opinion need be rendered), complied as to form in all
material respects with the requirements of the Securities Act and
Securities Act Regulations.
The
opinion shall further include the following:
Nothing
has come to such counsel's attention that caused such counsel to
believe that (1) the Registration Statement, as of the time it
became effective, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; (2) the
Disclosure Package, as of the Applicable Time, contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; or
(3) the Prospectus, as of its date and as of the Closing Date or
Option Closing Date, as applicable, contained or contains an untrue
statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading (except that, in each case, such counsel need express no
view, and make no statement, with respect to the financial
statements and schedules and notes thereto and other financial data
derived therefrom that are contained in or omitted from the
Registration Statement, the Disclosure Package or the
Prospectus).
