EX-1.1
EXHIBIT 1.1
CLEAN DIESEL TECHNOLOGIES, INC.
1,600,000 Shares of Common Stock, $0.01
par value.
and
Warrants to Purchase 800,000 Shares of Common Stock, $0.01 par value
Underwriting
Agreement
June 28, 2013
Roth Capital Partners, LLC
As Representative of the underwriters named in Schedule I
hereto
c/o Roth Capital Partners, LLC
888 San Clemente Drive
Newport Beach, CA 92660
Ladies and Gentlemen:
Clean Diesel
Technologies, Inc. a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to the Underwriters listed in Schedule I hereto (the “Underwriters”) an aggregate of
1,600,000 authorized but unissued shares (the “Underwritten Shares”) of common stock, par value $0.01 per share (the “Common Stock”), of the Company and warrants (“Warrants”) to purchase an aggregate of 800,000 shares
of Common Stock (the “Underwritten Warrants” and together with the Underwritten Shares, the “Underwritten Securities”). The Company has granted the Underwriters the option to purchase an aggregate of up to 240,000 additional
shares of Common Stock (the “Additional Shares”) and/or up to an additional 120,000 Warrants (the “Additional Warrants”, and together with the Additional Shares, the “Additional Securities”) as may be necessary to cover
any over-allotments made in connection with the offering. The Underwritten Shares and the Additional Shares are collectively referred to as the “Shares.” The Underwritten Warrants and the Additional Warrants are collectively referred to as
the “Warrants”. The Underwritten Securities and the Additional Securities are collectively referred to as the “Securities”. Roth Capital Partners, LLC has agreed to act as the representative of the Underwriters (in such capacity,
the “Representative”) in connection with the offering and sale of the Securities.
The Company and the Underwriters hereby confirm
their agreement as follows:
1. Registration Statement and Prospectus. The Company has prepared and filed with
the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3, as amended (File No. 333-181443) under the Securities Act of 1933, as amended (the “Securities Act”), and the rules and
regulations (the “Rules and Regulations”) of the Commission thereunder, such amendments to such registration statement (including post effective amendments) as may have been required to the date of this Agreement and a preliminary
prospectus supplement or “red herring” pursuant to Rule 424(b) under the Securities Act. Such
registration statement, as amended (including any post effective amendments), has been declared effective by the Commission. Such registration statement, as amended (including post effective
amendments thereto), the exhibits and any schedules thereto, the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act and the documents and information otherwise deemed to be a part thereof or
included therein by the Securities Act or otherwise pursuant to the Rules and Regulations, is herein called the “Registration Statement.”
The Company is filing with the Commission pursuant to Rule 424 under the Securities Act a final prospectus supplement relating to the Shares to a form of prospectus included in the Registration Statement.
Such prospectus in the form in which it appears in the Registration Statement is hereinafter called the “Base Prospectus,” and such final prospectus supplement as filed, together with the Base Prospectus, is hereinafter called the
“Final Prospectus.” Each of such Final Prospectus and any preliminary prospectus supplement or “red herring,” in the form in which they shall be filed with the Commission pursuant to Rule 424(b) under the Securities Act
(including the Base Prospectus as so supplemented), is hereinafter called a “Prospectus.” Any reference herein to the Base Prospectus, the Final Prospectus or a Prospectus shall be deemed to 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.
For
purposes of this Agreement, all references to the Registration Statement, the Base Prospectus, the Final Prospectus, a Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”). All references in this Agreement to financial statements and schedules and other information which is “described,” “contained,”
“included” or “stated” in the Registration Statement, the Base Prospectus, the Final Prospectus or a Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements, pro forma
financial information and schedules and other information which is incorporated by reference in or otherwise deemed by the Rules and Regulations to be a part of or included in the Registration Statement, the Base Prospectus, the Final Prospectus or
a Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, the Base Prospectus, the Final Prospectus or a Prospectus shall be deemed to mean and include the subsequent filing of
any document under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that is deemed to be incorporated therein by reference therein or otherwise deemed by the Rules and Regulations to be a part thereof
2. Representations and Warranties of the Company Regarding the Offering.
(a) The Company represents and warrants to, and agrees with, the several Underwriters, as of the date hereof, as of the Closing Date (as
defined in Section 5(b) below) and as of any Additional Closing Date (as defined in Section5(b) below), except as otherwise indicated, as follows:
(i) At each time of effectiveness, at the date hereof, at the Closing Date and at each Additional Closing Date, the Registration Statement and any post-effective amendment thereto complied or will comply
in all material respects with the requirements of the Securities Act and the Rules and Regulations and did not and will not
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contain any 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. The Time of Sale
Disclosure Package (as defined in Section 2(a)(iv)(A)(1) below) as of the date hereof, at the Closing Date and at each Additional Closing Date, and the Final Prospectus, as amended or supplemented, as of its date, at the time of filing pursuant
to Rule 424(b) under the Securities Act and at the Closing Date and each Additional Closing Date, did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in the two immediately preceding sentences shall not apply to statements in or omissions from the
Registration Statement or any Prospectus in reliance upon, and in conformity with, written information furnished to the Company through the Representative by or on behalf of any Underwriter specifically for use in the preparation thereof, which
written information is described in Section 8(g). The Registration Statement (including each document incorporated by reference therein) contains all exhibits and schedules required to be filed by the Securities Act or the Rules and
Regulations. No order preventing or suspending the effectiveness or use of the Registration Statement or any Prospectus is in effect and no proceedings for such purpose have been instituted or are pending, or, to the knowledge of the Company, are
contemplated or threatened by the Commission.
(ii) The documents incorporated by reference in the Registration
Statement, the Time of Sale Disclosure Package and any Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and, to the extent then applicable, the Sarbanes-Oxley Act, including, in each case, the rules and regulations thereunder, were filed on a timely basis with the Commission and none of such documents, when they were filed (or, if
amendments to such documents were filed, when such amendments were filed), contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading. During the Prospectus Delivery Period (as defined in Section 6(a)(i) hereof), any further documents so filed and incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package or the
Final Prospectus, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company certifications required by Rules 13a-14 and 15d-14 under the Exchange Act and Sections 302 and 906 of the
Sarbanes-Oxley Act that are contained in the documents incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and any Prospectus complied with such laws and the rules and regulations thereunder.
(iii) The Company has not distributed any prospectus or other offering material in connection with the offering and sale
of the Securities other than the Time of Sale Disclosure Package and the Marketing Materials.
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(iv) The Company has provided a copy to the Representative of any Issuer
Free Writing Prospectus (as defined below) used in the sale of Securities. The Company has filed any Issuer Free Writing Prospectuses (as defined below) required to be so filed with the Commission, and no order preventing or suspending the
effectiveness or use of any Issuer Free Writing Prospectus is in effect and no proceedings for such purpose have been instituted or are pending, or, to the knowledge of the Company, are contemplated or threatened by the Commission. The
representations and warranties set forth in the immediately preceding sentence shall not apply to statements in or omissions from the Registration Statement, Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus
in reliance upon, and in conformity with, written information furnished to the Company through the Representative by or on behalf of any Underwriter specifically for use therein or in the preparation thereof. As used in this paragraph and
elsewhere in this Agreement:
(1) “Time of Sale Disclosure Package” means the Base
Prospectus, the Prospectus most recently filed with the Commission before the time of this Agreement, including any preliminary prospectus supplement deemed to be a part thereof, any Issuer Free Writing Prospectus, including the Free Writing
Prospectus included as Schedule IV hereto and any written or oral description of the transaction provided by the Representative containing the information set forth on Schedule III hereto.
(2) “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433 under the Securities Act, relating to the Shares that (A) is required to be filed with the Commission by the Company, or (B) is exempt from filing pursuant to Rule 433(d)(5)(i) or (d)(8) under the Securities Act, 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) under the Securities Act.
(B) At the time of filing of the Registration Statement and at the date hereof, the Company was not and is not an
“ineligible issuer,” as defined in Rule 405 under the Securities Act or an “excluded issuer” as defined in Rule 164 under the Securities Act.
(C) Any Issuer Free Writing Prospectus satisfied, as of its issue date and at all subsequent times through the Prospectus
Delivery Period, all other conditions as may be applicable to its use as set forth in Rules 164 and 433 under the Securities Act, including any legend, record-keeping or other requirements.
(v) The financial statements of the Company, together with the related notes, included or incorporated by reference in the
Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act and fairly present the financial condition of the
Company as of the dates indicated and the results of operations and changes in cash flows for the periods therein specified in conformity with generally accepted accounting principles consistently applied throughout the periods involved; and
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the supporting schedules included in the Registration Statement present fairly the information required to be stated therein. No other financial statements, pro forma financial information or
schedules are required under the Securities Act to be included or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus. To the Company’s knowledge, each of KPMG LLP and BDO USA
LLP, each of which has expressed its opinion with respect to the financial statements and schedules filed as a part of the Registration Statement and included in the Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus is an independent public accounting firm with respect to the Company within the meaning of the Securities Act and the Rules and Regulations.
(vi) The Company had a reasonable basis for, and made in good faith, each “forward-looking statement” (within the meaning of Section 27A of the Act or Section 21E of the Exchange Act)
contained or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus.
(vii) All statistical or market-related data included or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus are based on or derived from
sources that the Company reasonably believes to be reliable and accurate, and the Company has obtained the written consent to the use of such data from such sources, to the extent required.
(viii) The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is included or approved for
inclusion on the Nasdaq Capital Market. There is no action pending by the Company or, to the Company’s knowledge, the Nasdaq Capital Market to delist the Common Stock from the Nasdaq Capital Market, nor has the Company received any notification
that the Nasdaq Capital Market is contemplating terminating such listing. When issued, the Shares, the shares of Common Stock issuable upon exercise of the Representative Warrant (as defined in Section 6(a)(vii)(B) hereof) and the shares of
Common Stock exercisable upon exercise of the Warrants will be listed on the Nasdaq Capital Market.
(ix) The
Company has not taken, directly or indirectly, any action that is designed to or that has constituted or that would reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(x) The Company is not and during the past three years
neither the Company nor any predecessor was: (A) a blank check company as defined in Rule 419(a)(2) under the Securities Act, (B) a shell company, other than a business combination shell company, each as defined in Rule 405 under the
Securities Act, or (C) an issuer for an offering of penny stock as defined in Rule 3a51-1 under the Exchange Act.
(xi) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the net proceeds therefrom, will not be an
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“investment company,” as such term is defined in the Investment Company Act of 1940, as amended.
(xii) The Company was at the time of filing the Registration Statement, and at the date hereof, remains eligible to use Form S-3 under the Securities Act. The conditions for use of Form S-3 set
forth in the General Instructions thereto have been satisfied.
(b) Any certificate signed by any officer of the Company and
delivered to the Representative or to the Representative’s counsel shall be deemed a representation and warranty by the Company to the Representative as to the matters covered thereby.
3. Representations and Warranties Regarding the Company.
(a) The Company represents and warrants to and agrees with, the Underwriters, except as set forth in the Registration Statement, the Time
of Sale Disclosure Package and the Final Prospectus, as follows:
(i) Each of the Company and its subsidiaries
(which term, for purposes of this Agreement, shall include Eco Emission Enterprises SrL, an Italian corporation) has been duly organized and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation.
Each of the Company and its subsidiaries has the corporate power and authority to own its properties and conduct its business as currently being carried on and as described in the Registration Statement, the Time of Sale Disclosure Package and the
Final Prospectus, and is duly qualified to do business as a foreign corporation in good standing in each jurisdiction in which it owns or leases real property or in which the conduct of its business makes such qualification necessary and in which
the failure to so qualify would have or is reasonably likely to result in a material adverse effect upon the business, prospects, properties, operations, condition (financial or otherwise) or results of operations of the Company and its
subsidiaries, taken as a whole, or in its ability to perform its obligations under this Agreement (“Material Adverse Effect”).
(ii) The Company has the power and authority to enter into this Agreement, to execute and deliver the Warrants and the Representative Warrant and to authorize, issue and sell the Securities as
contemplated by this Agreement. This Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid, legal and binding obligation of the Company, enforceable against the Company in accordance with its terms,
except as rights to indemnity hereunder may be limited by federal or state securities laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity. The Warrants and the Representative Warrant have been duly authorized by the Company and, on or prior to the Closing Date, or any Additional Closing Date, as applicable, shall be fully executed and delivered
by the Company, and shall constitute a valid, legal and binding obligation of the Company, enforceable against the Company in accordance with their terms, except as rights to indemnity hereunder may be limited by federal or state securities laws and
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except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles of equity.
(iii) The execution, delivery and performance of this Agreement, the Warrants and the Representative Warrant
and the consummation of the transactions herein contemplated hereby and thereby (including the exercise of the Warrants and the Representative Warrant) will not (A) result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any law, rule or regulation to which the Company or any subsidiary is subject, or by which any property or asset of the Company or any subsidiary is bound or affected, (B) conflict with, result in any violation or
breach of, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or
both) of, any agreement, lease, credit facility, debt, note, bond, mortgage, indenture or other instrument (the “Contracts”) or obligation or other understanding to which the Company or any subsidiary is a party of by which any property or
asset of the Company or any subsidiary is bound or affected, except to the extent that such conflict, default, termination, amendment, acceleration or cancellation right is not reasonably likely to result in a Material Adverse Effect, or
(C) result in a breach or violation of any of the terms and provisions of, or constitute a default under, the Company’s charter or by-laws.
(iv) Neither the Company nor any of its subsidiaries is in violation, breach or default under its certificate of incorporation, by-laws or other equivalent organizational or governing documents, except
where the violation, breach or default in the case of a subsidiary of the Company is not reasonably likely to result in a Material Adverse Effect.
(v) All consents, approvals, orders, authorizations and filings required on the part of the Company and its subsidiaries in connection with the execution, delivery or performance of this Agreement have
been obtained or made, other than such consents, approvals, orders and authorizations the failure of which to make or obtain is not reasonably likely to result in a Material Adverse Effect.
(vi) All of the issued and outstanding shares of capital stock of the Company are duly authorized and validly issued,
fully paid and nonassessable, and have been issued in compliance with all applicable securities laws, and conform to the description thereof in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. Except for the
issuances of options or restricted stock or restricted stock units in the ordinary course of business and the issuance of securities to Kanis S.A. and Derek Gray (including shares of Common Stock issuable upon exercise or conversion of such
securities, if applicable, the “Regulation S Sales”) as disclosed in the Registration Statement, Time of Sale Disclosure Package, or Final Prospectus, since the respective dates as of which information is provided in the Registration
Statement, the Time of Sale Disclosure Package or the Final Prospectus, the Company has not entered into or granted any convertible or exchangeable securities, options, warrants, agreements, contracts or other rights in existence to purchase or
acquire from the Company any shares
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of the capital stock of the Company. The Shares, the shares of Common Stock issuable upon exercise of the Representative Warrant and the shares of Common Stock issuable upon exercise of the
Warrants, when issued, will be duly authorized and validly issued, fully paid and nonassessable, will be issued in compliance with all applicable securities laws, and will be free of preemptive, registration or similar rights.
(vii) 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 consolidated 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 the Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus, (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.
(viii) Since the respective dates as of which information
is given in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, except for the Regulation S Sales, (a) neither the Company nor any of its subsidiaries 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) the Company has not 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 (other than a change in the number of outstanding shares of Common Stock due to the issuance of shares upon the exercise of outstanding convertible
notes, options or warrants or the issuance of restricted stock awards or restricted stock units under the Company’s existing stock awards plan, or any new grants thereof in the ordinary course of business), (d) other than the possible sale
of additional accounts receivable pursuant to its $7.5 million demand credit facility there has not been any material change in the Company’s long-term or short-term debt, and (e) there has not been the occurrence of any Material Adverse
Effect.
(ix) The Company makes and keeps accurate books and records and maintains a system of internal
accounting controls sufficient to provide reasonable
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assurance that (a) transactions are executed in accordance with management’s general or specific authorization, (b) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles, consistently applied and to maintain accountability for assets, (c) access to assets is permitted only in accordance with management’s general or specific
authorization and (d) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Time of Sale Disclosure Package,
there has not been a material weakness in the Company’s internal control over financial reporting (whether or not remediated) and since January 1, 2013, and there has been no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
(x) The Company has established and maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), which (a) are designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being prepared and (b) are effective in all material respects to perform the functions for which they were established. The Company is not aware of any fraud, whether or not material, that
involves management or other employees who have a significant role in the Company’s internal control over financial reporting with respect to the Company’s internal control over financial reporting.
(xi) There is no pending or, to the knowledge of the Company, any threatened, action, suit or proceeding to which the
Company or any of its subsidiaries is a party or of which any property or assets of the Company or its subsidiaries is the subject of before or by any court or governmental agency, authority or body, or any arbitrator or mediator, which is
reasonably likely to result in a Material Adverse Effect.
(xii) The Company and each of its subsidiaries
holds, and is in compliance with, all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders (“Permits”) of any governmental or self-regulatory agency, authority or body required for the conduct
of its business, and all such Permits are in full force and effect, in each case except where the failure to hold, or comply with, any of them is not reasonably likely to result in a Material Adverse Effect.
(xiii) The Company and each of its subsidiaries is in material compliance with all Environmental Laws. As used herein,
“Environmental Law(s)” means any and all applicable international, federal, state, or local laws, statutes, ordinances, regulations, policies, guidance, rules, judgments, orders, court decisions or rule of common law, permits, restrictions
and licenses, that (i) regulate or relate to the protection or clean-up of the environment; the use, treatment, storage, transportation, handling, disposal or release of Hazardous Substances, the preservation or protection of waterways,
groundwater, drinking water, air, wildlife, plants or other natural resources; or the health and safety of persons or property, including without limitation protection of
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the health and safety of employees; or (ii) impose liability or responsibility with respect to any of the foregoing, including without limitation the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. § 9601 et seq.), or any other law of similar effect. As used herein, “Hazardous Substances” means any pollutant, chemical, substance and any toxic, infectious, carcinogenic, reactive,
corrosive, ignitable or flammable chemical, or chemical compound, or hazardous substance, material or waste, whether solid, liquid or gas, that is subject to regulation, control or remediation under any Environmental Laws, including without
limitation, any quantity of asbestos in any form, urea formaldehyde, PCBs, radon gas, crude oil or any fraction thereof, all forms of natural gas, petroleum products or by-products or derivatives.
(xiv) There has not been any Hazardous Substances used, generated, treated, stored, disposed of, released, handled or
otherwise existing on any property that has been owned, leased or operated by the Company or its subsidiaries except in compliance with all Environmental Laws, other than such noncompliance that is not reasonably likely to result in a Material
Adverse Effect.
(xv) Neither the Company nor any of its subsidiaries has received any communication, whether
from a governmental authority, citizens group, employee or otherwise, that alleges that the Company or any of its subsidiaries is not in material compliance with any Environmental Laws, and, to the Company’s knowledge, there are no
circumstances that could reasonably be expected to prevent or interfere with such compliance in the future. There are no material environmental claims pending or threatened against the Company or any of its subsidiaries, nor is the Company aware of
any information which might form the basis of any such claims.
(xvi) The Company has made available all
material environmental assessments, reports, data, results of investigations, audits and other material documents in the possession or control of the Company or any of its subsidiaries regarding environmental matters pertaining to the environmental
condition of any real properties owned or operated by the Company or any of its subsidiaries, any environmental claims respecting the Company or any of its subsidiaries, or any noncompliance by the Company or any of its subsidiaries with any
Environmental Laws.
(xvii) The Company and its subsidiaries have good and marketable title to all property
(whether real or personal) described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus as being owned by them that are material to the business of the Company, in each case free and clear of all liens,
claims, security interests, other encumbrances or defects, except those that are not reasonably likely to result in a Material Adverse Effect. The property held under lease by the Company and its Subsidiaries is held by them under valid, subsisting
and enforceable leases with only such exceptions with respect to any particular lease as are not material or do not interfere in any material respect with the conduct of the business of the Company and its subsidiaries.
(xviii) The Company and each of its subsidiaries owns or possesses or has valid right to use all patents, patent
applications, trademarks, service marks, trade names,
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trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights (“Intellectual Property”) necessary for the conduct of the
business of the Company and its subsidiaries as currently carried on and as described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. To the knowledge of the Company, no action or use by the Company or
any of its subsidiaries involves or gives rise to any infringement of, or license or similar fees for, any Intellectual Property of others, except where such action, use, license or fee is not reasonably likely to result in a Material Adverse
Effect. Neither the Company nor any of its subsidiaries has received any notice alleging any such infringement or fee.
(xix) The Company and each of its subsidiaries has complied with, is not in violation of, and has not received any notice of violation relating to any law, rule or regulation relating to the conduct of
its business, or the ownership or operation of its property and assets, including, without limitation, (A) the Currency and Foreign Transactions Reporting Act of 1970, as amended, or any money laundering laws, rules or regulations, (B) the
Sarbanes-Oxley Act and the rules and regulations of the Commission thereunder, (C) the Foreign Corrupt Practices Act of 1977 and the rules and regulations thereunder, and (D) the Employment Retirement Income Security Act of 1974 and the
rules and regulations thereunder, in each case except where the failure to be in compliance is not reasonably likely to result in a Material Adverse Effect.
(xx) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, employee, representative, agent or affiliate of the Company or any of its subsidiaries is
currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering of the Securities
contemplated hereby, or lend, contribute or otherwise make available such proceeds to any person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(xxi) The Company and each of its subsidiaries carries, or is covered by, insurance in such amounts and covering such
risks as the Company reasonably believes is adequate for the conduct of its business and the value of its properties.
(xxii) No labor dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is imminent that is reasonably likely to result in a Material Adverse
Effect.
(xxiii) No supplier or customer of the Company or any of its subsidiaries has notified the Company or
any of its Subsidiaries that it intends to discontinue or decrease the rate of business done with the Company or such subsidiary in such a way that such discontinuation or decrease is reasonably likely to result in a Material Adverse Effect. In
addition, neither the Company nor its subsidiaries have experienced and, to the Company’s knowledge, there does not exist, any material quality control or similar problems with any of the products and/or services currently being supplied to the
Company or any of its Subsidiaries by any of its suppliers such that such material quality control or similar problem is reasonably likely to result in a Material Adverse Effect.
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(xxiv) There are no claims, payments, issuances, arrangements or
understandings for services in the nature of a finder’s, consulting or origination fee with respect to the introduction of the Company to the Underwriters or the sale of the Securities hereunder or any other arrangements, agreements,
understandings, payments or issuances with respect to the Company that may affect the Underwriters’ compensation, as determined by FINRA.
(xxv) Except as disclosed to the Representative in writing, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to (i) any person, as a finder’s fee,
investing fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who 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 12-month period prior to the date on which the Registration Statement was filed with the Commission (“Filing Date”) or thereafter.
(xxvi) None of the net proceeds of the offering will be paid by the Company to any participating FINRA member or any
affiliate or associate of any participating FINRA member, except as specifically authorized herein.
(xxvii) No
person has the right to require the Company or any of its subsidiaries to register any securities for sale under the Securities Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Securities,
except as otherwise have been waived in connection with the issuance and sale of the Securities contemplated hereby.
(xxviii) To the Company’s knowledge, no (i) officer or director of the Company or its subsidiaries, (ii) owner of 5% or more of the Company’s unregistered securities or that of its
subsidiaries or (iii) owner of any amount of the Company’s unregistered securities acquired within the 180-day period prior to the Filing Date, has any direct or indirect affiliation or association with any FINRA member. The Company will
advise the Representative and its counsel if it becomes aware that any officer, director or stockholder of the Company or its subsidiaries is or becomes an affiliate or associated person of a FINRA member participating in the offering.
(xxix) Other than the Underwriters, no person has the right to act as an underwriter or as a financial advisor to the
Company in connection with the transactions contemplated hereby.
4. Intentionally Omitted
5. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell the Underwritten
Securities to the Underwriters, and the Underwriters agree, severally and not jointly, to purchase the number of Underwritten Shares and Underwritten Warrants set forth opposite such Underwriter’s name on Schedule I hereto at a price per
Underwritten Share
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equal to $1.15785 (the “Per Share Price”) and a price per Underwritten Warrant equal to $0.00465 (the “Per Warrant Price”). The Per Share Price represents a 7% discount from
the public offering price. The Per Warrant Price represents a 7% discount from the public offering price.
(b) The Company
hereby grants to the Underwriters severally and not jointly the option to purchase some or all of the Additional Securities and, upon the basis of the warranties and representations and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase all or any portion of the Additional Shares at the Per Share Price and all or any portion of the Additional Warrants at the Per Warrant Price, in each case, as may be necessary to cover any
over-allotments made in connection with the transactions contemplated hereby. If any Additional Securities in the form of Additional Shares and/or Additional Warrants are to be purchased, the number of Additional Securities in the form of Additional
Shares and/or Additional Warrants to be purchased by each Underwriter shall be the number of Additional Securities in the form of Additional Shares and/or Additional Warrants which bears the same ratio to the aggregate number of Additional
Securities in the form of Additional Shares and/or Additional Warrants being purchased as the number of Underwritten Securities set forth opposite the name of such Underwriter in Schedule I hereto bears to the aggregate number of Underwritten
Securities being purchased from the Company by the Underwriters or as the Underwriters may otherwise agree, subject, however, in each instance to such adjustments to eliminate any fractional Securities as the Representative in its sole discretion
shall make.
The Underwriters may exercise the option to purchase Additional Securities in the form of Additional Warrants at
any time in whole, or from time to time in part, on or before the thirtieth day following the date of the Underwriting Agreement, by written notice from the Representative to the Company. Such notice shall set forth the aggregate number of
Additional Securities in the form of Additional Warrants as to which the option is being exercised and the date and time when the Additional Securities in the form of Additional Warrants are to be delivered and paid for, which may be the same date
and time as the Closing Date (as hereinafter defined) but shall not be earlier than the Closing Date or later than the tenth full business day (as hereinafter defined) after the date of such notice. Any such notice shall be given at least one
business day prior to the date and time of delivery specified therein.
The Underwriters may exercise the option to purchase Additional
Securities in the form of Additional Shares at any time in whole, or from time to time in part, on or before the thirtieth day following the date of the Underwriting Agreement, by written notice from the Representative to the Company. Such notice
shall set forth the aggregate number of Additional Securities in the form of Additional Shares as to which the option is being exercised and the date and time when the Additional Securities in the form of Additional Shares are to be delivered and
paid for, which may be the same date and time as the Closing Date but shall not be earlier than the Closing Date or later than the tenth full business day after the date of such notice. Any such notice shall be given at least one business day prior
to the date and time of delivery specified therein.
The date on which any Additional Securities are to be delivered and paid for pursuant to
this paragraph (b) shall be referred to herein as the “Additional Closing Date”. Payment of the purchase price for and delivery of any Additional Securities shall be made on the applicable
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Additional Closing Date in the same manner and at the same office as the payment for the Underwritten Securities as set forth in subparagraph (c) below.
(c) The Underwritten Securities will be delivered by the Company to the Representative for the account of the Underwriters against
payment of the purchase price therefor by wire transfer of same day funds payable to the order of the Company at the offices of Roth Capital Partners, LLC, 888 San Clemente Drive, Newport Beach, CA 92660, or such other location as may be mutually
acceptable, at 6:00 a.m. PST, on the third (or if the Underwritten Securities are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business day following the date hereof, or at such
other time and date as the Representative and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act, or, in the case of the Additional Securities, at such date and time set forth in the applicable option notice. The time and date
of delivery of the Underwritten Securities is referred to herein as the “Closing Date.” If the Representative so elects, delivery of the Underwritten Shares and Additional Shares may be made by credit through full fast transfer to the
account at The Depository Trust Company designated by the Representative. The certificates for the Shares and the Warrants will be made available for inspection and packaging by the Representative at the office of DTC or its designated custodian not
later than 1:00 P.M., New York City time, on the business day prior to the Closing Date or an Additional Closing Date, as the case may be. The Warrants shall be in substantially the form attached hereto as Schedule VI and have an initial exercise
price of $1.25 per share. In the event the delivery of the Warrants is unavailable through DTC, the Warrants shall be delivered in physical or other appropriate form and a specimen Warrant shall be made available for inspection by the Representative
not later than 1:00 P.M., New York City time, on the business day prior to the Closing Date or an Additional Closing Date, as the case may be.
6. Covenants.
(a) The Company covenants and agrees with the
Underwriters as follows:
(i) During the period beginning on the date hereof and ending on the later of the
Closing Date, any Additional Closing Date or such date as determined by the Representative the Prospectus is no longer required by law to be delivered in connection with sales by an underwriter or dealer (the “Prospectus Delivery Period”),
prior to amending or supplementing the Registration Statement, including any Rule 462 Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, the Company shall furnish to the Representative for review and comment a copy
of each such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the Representative reasonably objects.
(ii) From the date of this Agreement until the end of the Prospectus Delivery Period, the Company shall promptly advise
the Representative in writing (A) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission, (B) of the time and date of any filing of any post-effective amendment to the Registration
Statement or any amendment to the Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus, (C) of the time and date that any post-effective amendment to the Registration Statement
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becomes effective and (D) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending its use or
the use of the Time of Sale Disclosure Package or any Issuer Free Writing Prospectus, or of any proceedings to remove, suspend or terminate from listing the Common Stock from any securities exchange upon which it is listed for trading, or of the
threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at any time during the Prospectus Delivery Period, the Company will use its reasonable efforts to obtain the lifting of such
order as promptly as reasonably possible. Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b), 430A and 430B, as applicable, under the Securities Act and will use its reasonable efforts to confirm that any
filings made by the Company under Rule 424(b) or Rule 433 were received in a timely manner by the Commission (without reliance on Rule 424(b)(8) or 164(b) of the Securities Act).
(iii) (A) During the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by the
Securities Act, as now and hereafter amended, and by the Rules and Regulations, as from time to time in force, and by the Exchange Act, as now and hereafter amended, so far as necessary to permit the continuance of sales of or dealings in the
Securities as contemplated by the provisions hereof, the Time of Sale Disclosure Package, the Registration Statement and the Final Prospectus. If during such period any event occurs the result of which the Prospectus (or if the Final Prospectus is
not yet available to prospective purchasers, the Time of Sale Disclosure Package ) would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary or appropriate in the opinion of the Company or its counsel or the Representative or its counsel to amend the Registration Statement or supplement the Final Prospectus (or if the
Final Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package ) to comply with the Securities Act, the Company will promptly notify the Representative, allow the Representative the opportunity to provide
reasonable comments on such amendment, Prospectus supplement or document, and will amend the Registration Statement or supplement the Final Prospectus (or if the Final Prospectus is not yet available to prospective purchasers, the Time of Sale
Disclosure Package) so as to correct such statement or omission or effect such compliance.
(B) If at any time
following the issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development the result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration
Statement or any Prospectus 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 prevailing at that
subsequent time, not misleading, the Company has promptly notified or promptly will notify the Representative and has promptly amended or will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or
correct such conflict, untrue statement or omission.
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(iv) The Company shall take or cause to be taken all necessary action to
qualify the Securities for sale under the securities laws of such jurisdictions as the Representative reasonably designates and to continue such qualifications in effect so long as required for the distribution of the Securities, except that the
Company shall not be required in connection therewith to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified, to execute a general consent to service of process in any state or to subject
itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject.
(v)
The Company will furnish to the Representative and counsel for the Representative copies of the Registration Statement, each Prospectus, any Issuer Free Writing Prospectus, and all amendments and supplements to such documents, in each case as soon
as available and in such quantities as the Underwriters may from time to time reasonably request.
(vi) The
Company will make generally available to its security holders as soon as practicable, but in any event not later than 15 months after the end of the Company’s current fiscal quarter, an earnings statement (which need not be audited) covering a
12-month period that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
(vii) (A) The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay or cause to be paid (1) all expenses (including transfer taxes
allocated to the respective transferees) incurred in connection with the delivery to the Underwriters of the Securities, (2) all expenses and fees (including, without limitation, fees and expenses of the Company’s counsel, but excluding
fees and expenses of the Underwriters’ counsel) in connection with the preparation, printing, filing, delivery, and shipping of the Registration Statement (including the financial statements therein and all amendments, schedules, and exhibits
thereto), the Securities, the Time of Sale Disclosure Package, the Final Prospectus, any Issuer Free Writing Prospectus and any amendment thereof or supplement thereto, (3) all reasonable filing fees and reasonable fees and disbursements of the
Company’s counsel incurred in connection with the qualification of the Securities for offering and sale by the Underwriters or by dealers under the securities or blue sky laws of the states and other jurisdictions that the Representative shall
designate and any associated work performed by Underwriters’ counsel, (4) the fees and expenses of any transfer agent or registrar, (5) the reasonable filing fees and reasonable fees and disbursements of Underwriters’ counsel
incident to any required review and approval by FINRA, of the terms of the sale of the Securities, (6) listing fees, if any, and (7) all other costs and expenses incident to the performance of the Company’s obligations hereunder that
are not otherwise specifically provided for herein (all of the foregoing, the “Company Expenses”). The Company will also reimburse the Underwriters for all out-of-pocket accountable expenses (including, but not limited to, reasonable fees
and disbursements of counsel, travel expenses, postage, facsimile and telephone charges) incurred by the Underwriters in connection with their investigation, preparing to market and marketing the Securities or in contemplation of performing their
obligations hereunder. Notwithstanding anything contained herein, the maximum amount payable by the Company for the Underwriters’
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counsel fees, disbursements and other out of pocket expenses pursuant to this Section 6(a)(vii)(A), exclusive of the Company Expenses, shall be $75,000.
(B) Contingent upon the consummation of the offering, on the Closing Date, the Company will grant the Representative
warrants, in the form attached hereto as Schedule V, to purchase an amount of Common Stock equal to two percent (2.0%) of the aggregate number of Shares sold pursuant to this Agreement (the “Representative Warrant”).
(viii) The Company intends to apply the net proceeds from the sale of the Securities to be sold by it hereunder for the
purposes set forth in the Time of Sale Disclosure Package and in the Final Prospectus.
(ix) The Company has
not taken and will not take, directly or indirectly, during the Prospectus Delivery Period, any action designed to or that might reasonably be expected to cause or result in, or that has constituted, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Securities.
(x) The Company represents and
agrees that, unless it obtains the prior written consent of the Representative, and the Representative represents and agrees that, unless it obtains the prior written consent of the Company, it has not made and will not make any offer relating to
the Securities that would constitute an Issuer Free Writing Prospectus; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of any free writing prospectus containing only the description of the
transaction included in Schedule IV hereto. Any such free writing prospectus consented to by the Company and the Representative is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it has treated
or agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied or will comply with the requirements of Rule 433 applicable to any Permitted Free Writing
Prospectus, including timely Commission filing where required, legending and record-keeping.
(xi) The Company
hereby agrees that, without the prior written consent of the Representative, it will not, during the period ending 60 days after the date hereof (“Lock-Up Period”), (i) offer, pledge, issue, sell, contract to sell, purchase, contract
to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock; or (ii) 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 Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise; or (iii) file any registration statement with the Commission relating to the offering of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock. The
restrictions contained in the preceding sentence shall not apply to (1) the Securities to be sold hereunder, (2) the issuance of Common Stock upon the exercise of options or warrants or other convertible securities disclosed as outstanding
in
17
the Registration Statement (excluding exhibits thereto) or the Prospectus or upon the exercise of any of the Warrants or the Representative Warrant, (3) the issuance of employee stock
options not exercisable during the Lock-Up Period and the grant of restricted stock awards or restricted stock units (or the delivery of shares of Common Stock upon settlement thereof) pursuant to equity incentive plans described in the Registration
Statement (excluding exhibits thereto) and the Prospectus, or (4) the Regulation S Sales. Notwithstanding the foregoing, if (x) the Company issues an earnings release or material news, or a material event relating to the Company occurs,
during the last 17 days of the Lock-Up Period, or (y) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the Lock-Up Period, the
restrictions imposed by this clause shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, unless the Representative waives such
extension in writing.
(xii) The Company hereby agrees that, without the prior written consent of the
Representative, it will not, during the Lock-up period, sell any shares of Common Stock to Lincoln Park Capital Fund LLC (“Lincoln Park”) pursuant to the Purchase Agreement dated as of October 7, 2011 by and between the Company and
Lincoln Park.
7. Conditions of the Underwriters’ Obligations. The obligations of the Underwriters
hereunder to purchase the Securities are subject to the accuracy, as of the date hereof, at the Closing Date and at each Additional Closing Date (as if made at the Closing Date or such Additional Closing Date), of and compliance with all
representations, warranties and agreements of the Company contained herein, the performance by the Company of its obligations hereunder and the following additional conditions:
(a) If filing of the Final Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, is required under
the Securities Act or the Rules and Regulations, the Company shall have filed the Prospectus (or such amendment or supplement) or such Issuer Free Writing Prospectus with the Commission in the manner and within the time period so required (without
reliance on Rule 424(b)(8) or 164(b) under the Securities Act); the Registration Statement shall remain effective; no stop order suspending the effectiveness of the Registration Statement or any part thereof, any Rule 462 Registration Statement, or
any amendment thereof, nor suspending or preventing the use of the Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus shall have been issued; no proceedings for the issuance of such an order shall have been
initiated or threatened; any request of the Commission or the Representative for additional information (to be included in the Registration Statement, the Time of Sale Disclosure Package, the Final Prospectus, any Issuer Free Writing Prospectus or
otherwise) shall have been complied with to the Representative’s satisfaction.
(b) The Shares, the shares of Common
Stock issuable upon exercise of the Representative Warrant and the shares of Common Stock issuable upon exercise of the Warrants shall be qualified for listing on The NASDAQ Capital Market.
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(c) FINRA shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(d) The Representative shall not have reasonably determined, and advised the Company,
that the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free Writing Prospectus, contains an untrue statement of fact that, in the
Representative’s reasonable opinion, is material, or omits to state a fact that, in the Representative’s reasonable opinion, is material and is required to be stated therein or necessary to make the statements therein not misleading.
(e) On the Closing Date, there shall have been furnished to the Representative the opinion and negative assurance letters of
DLA Piper LLP, dated the Closing Date and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representative, to the effect set forth in Schedule VII, and the opinion of Reicker, Pfau, Pyle & McRoy LLP, dated
the Closing Date and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representative, to the effect set forth in Schedule VIII.
(f) On the Closing Date, there shall have been furnished to the Representative the opinion letter of Steward McKelvey, counsel to Engine Control Systems Limited, dated the Closing Date and addressed to
the Underwriters in form and substance reasonably satisfactory to the Representative to the effect set forth in Schedule IX.
(g) The Representative shall have received letters from each of BDO USA LLP and KPMG LLP, on the date hereof, on the Closing Date and on
each Additional Closing Date addressed to the Underwriters, confirming, in each case that they are independent public accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the
qualifications of accountants under Rule 2-01 of Regulation S-X of the Commission, and confirming, as of the date of each such letter (or, with respect to matters involving changes or developments since the respective dates as of which specified
financial information is given in the Time of Sale Disclosure Package, as of a date not prior to the date hereof or more than five days prior to the date of such letter), the conclusions and findings of said firm with respect to the financial
information and other matters required by the Representative.
(h) On the Closing Date and on each Additional Closing Date,
there shall have been furnished to the Representative a certificate, dated the Closing Date or such Additional Closing Date, as applicable and addressed to the Underwriters, signed by the chief executive officer and the chief financial officer of
the Company, in their capacity as officers of the Company, to the effect that:
(i) The representations and
warranties of the Company in this Agreement that are qualified by materiality or by reference to any Material Adverse Effect are true and correct in all respects, and all other representations and warranties of the Company in this Agreement are true
and correct, in all material respects, as if made at and as of the Closing Date or any Additional Closing Date, as applicable, and the Company has complied with all the agreements and satisfied all the conditions on its part
19
to be performed or satisfied at or prior to the Closing Date or such Additional Closing Date, as applicable;
(ii) No stop order or other order (A) suspending the effectiveness of the Registration Statement or any part thereof
or any amendment thereof, (B) suspending the qualification of the Securities for offering or sale, or (C) suspending or preventing the use of the Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus,
has been issued, and no proceeding for that purpose has been instituted or, to their knowledge, is contemplated by the Commission or any state or regulatory body; and
(iii) There has been no occurrence of any event resulting or reasonably likely to result in a Material Adverse Effect
during the period from and after the date of this Agreement and prior to the Closing Date or any Additional Closing Date, as applicable.
(i) On the Closing Date and on each Additional Closing Date, there shall have been furnished to the Representative a certificate, in form and substance reasonably satisfactory to the Representative, dated
the Closing Date or such Additional Closing Date, as applicable, and addressed to the Underwriters, signed by the chief financial officer of the Company, to the effect that certain financial information attached to the certificate is accurate in all
material respects as of the date thereof and as of the date of the Time of Sale Disclosure Package.
(j) On the Closing Date
and on each Additional Closing Date, there shall have been furnished to the Representative, satisfactory evidence of the good standing of the Company and each of its subsidiaries in the respective jurisdictions of organization, in each case, in
writing or any standard form of telecommunication from the appropriate governmental authorities of such jurisdictions.
(k) On
or before the date hereof, the Representative shall have received duly executed “lock-up” agreements from each of the persons set forth on Schedule II hereof, in the form set forth on Schedule X hereof.
(l) The Company shall have furnished to the Representative and its counsel such additional documents, certificates and evidence as the
Representative or its counsel may have reasonably requested.
If any condition specified in this Section 7 shall not have
been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representative by notice to the Company at any time at or prior to the Closing Date and such termination shall be without liability of any party to any
other party, except that Section 6(a)(vii), Section 8 and Section 9 shall survive any such termination and remain in full force and effect.
8. Indemnification and Contribution.
(a) The Company agrees to
indemnify, defend and hold harmless each Underwriter, its affiliates, directors, officers and employees, and each person, if any, who
20
controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any losses, claims, damages or liabilities to which
such Underwriter or such person may become subject, under the Securities Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of the Company), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including the information deemed to be a part of the
Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Rules and Regulations, or arise out of or are based upon the omission from the Registration Statement, or alleged omission to state
therein, a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) an untrue statement or alleged untrue statement of a material fact contained in the Time of Sale Disclosure Package, the
Final Prospectus, or any amendment or supplement thereto (including any documents filed under the Exchange Act and deemed to be incorporated by reference into the Registration Statement or the Final Prospectus), any Issuer Free Writing Prospectus,
or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not
misleading, or (iii) in whole or in part, any failure of the Company to perform its obligations hereunder or under law, and will reimburse the Underwriters for any legal or other expenses reasonably incurred by them in connection with
investigating or defending against such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Time of Sale Disclosure Package, the Final Prospectus, or any amendment or supplement thereto or any Issuer Free Writing
Prospectus, in reliance upon and in conformity with written information furnished to the Company by the Representative specifically for use in the preparation thereof, which written information is described in Section 8(g).
(b) Each Underwriter will, severally and not jointly, indemnify, defend and hold harmless the Company, its affiliates, directors,
officers and employees, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any losses, claims, damages or liabilities to which the
Company may become subject, under the Securities Act or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Underwriter), insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or arise out of or are based upon any omission from the Registration
Statement, or alleged omission to state therein, a material fact required to be stated therein or necessary in order to make the statements therein not misleading or (ii) an untrue statement or alleged untrue statement of a material fact
contained in the Final Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus or the Time of Sale Disclosure Package, or arise out of or are based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the Registration
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Statement, the Time of Sale Disclosure Package, the Final Prospectus, or any amendment or supplement, or any Issuer Free Writing Prospectus in reliance upon and in conformity with written
information furnished to the Company by the Representative specifically for use in the preparation thereof, and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or
defending against any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have to any indemnified party except to the extent such indemnifying party has been
materially prejudiced by such failure. In case any such action shall be brought against any indemnified party, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and,
to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified
party of the indemnifying party’s election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof; provided, however, that if (i) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (ii) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which
case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party), or (iii) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified party to
assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, the indemnified party shall have the right to employ a single counsel to represent it in any claim in respect of which indemnity may
be sought under subsection (a) or (b) of this Section 8, in which event the reasonable fees and expenses of such separate counsel shall be borne by the indemnifying party or parties and reimbursed to the indemnified party as incurred.
The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is a party or could be named and indemnity was or would be sought hereunder by such
indemnified party, unless such settlement, compromise or consent (a) includes an unconditional release of such indemnified party from all liability for claims that are the subject matter of such action, suit or proceeding and (b) does not
include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
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(d) If the indemnification provided for in this Section 8 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering and sale of
the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Final Prospectus. The relative fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters and the parties’ relevant intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (e) were to be determined by pro
rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the first sentence of this subsection (e). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (e) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending against any
action or claim that is the subject of this subsection (e). Notwithstanding the provisions of this subsection (e), the Underwriters shall not be required to contribute any amount in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that the Underwriters have otherwise been required to pay by reason of such untrue statement or omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute
pursuant to this Section 8 are several and not joint, in proportion to their respective underwriting commitments as set forth opposite their respective names on Schedule I. For purposes of this Section 8, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who controls the Company with the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the Company.
(e) The obligations of the Company under this Section 8 shall be in addition to any liability that the Company may otherwise have
and the benefits of such obligations shall extend, upon the same terms and conditions, to each person, if any, who controls the Underwriters within the meaning of Section 15 of the Securities Act or Section 20 of the
23
Exchange Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability that the Underwriters may otherwise have and the benefits of such obligations
shall extend, upon the same terms and conditions, to the Company and its officers, directors and each person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.
(f) For purposes of this Agreement, the Representative confirms, and the Company acknowledges, that there is no information concerning
the Underwriters furnished in writing to the Company by the Representative specifically for preparation of or inclusion in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus or any Issuer Free Writing Prospectus,
other than the statements set forth in the last paragraph on the cover page of the Final Prospectus and the statements set forth in the “Underwriting” section of the Final Prospectus and Time of Sale Disclosure Package, only insofar as
such statements relate to the amount of selling concession and re-allowance or to over-allotment and related activities that may be undertaken by the Underwriters.
9. Representations and Agreements to Survive Delivery. All representations, warranties, and agreements of the Company herein or in certificates delivered pursuant hereto,
including, but not limited to, the agreements of the Underwriters and the Company contained in Section 6(a)(vii) and Section 8 hereof, shall remain operative and in full force and effect regardless of any investigation made by or on behalf
of the Underwriters or any controlling person thereof, or the Company or any of their respective officers, directors, or controlling persons, and shall survive delivery of, and payment for, the Securities to and by the Underwriters hereunder.
10. Termination of this Agreement.
(a) The Representative shall have the right to terminate this Agreement by giving notice to the Company as hereinafter specified at any
time at or prior to the Closing Date, if in the discretion of the Representative, (i) there has occurred any event, act or occurrence that has materially disrupted, or in the opinion of the Representative, will in the future materially disrupt,
the securities markets or there shall be such a material adverse change in general financial, political or economic conditions or the effect of international conditions on the financial markets in the United States is such as to make it, in the
judgment of the Representative, inadvisable or impracticable to market the Securities or enforce contracts for the sale of the Securities (ii) trading in the Company’s Common Stock shall have been suspended by the Commission or The NASDAQ
Capital Market or trading in securities generally on the Nasdaq Global Market, New York Stock Exchange or NYSE Amex shall have been suspended, (iii) minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for
securities shall have been required, on the Nasdaq Global Market, New York Stock Exchange or NYSE Amex, by such exchange or by order of the Commission or any other governmental authority having jurisdiction, (iv) a banking moratorium shall have
been declared by federal or state authorities, (v) there shall have occurred any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration by the United States of a national emergency or
war, any substantial change or development involving a prospective substantial change in United States or international political, financial or economic conditions or any other calamity or crisis, (vi) the Company suffers any loss by strike,
fire, flood, earthquake,
24
accident or other calamity, whether or not covered by insurance, or (vii) in the judgment of the Representative, there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Final Prospectus, any material adverse change in the assets, properties, condition, financial or otherwise, or in the results of operations, business affairs or business prospects of the
Company and its subsidiaries considered as a whole, whether or not arising in the ordinary course of business. Any such termination shall be without liability of any party to any other party except that the provisions of Section 6(a)(vii) and
Section 8 hereof shall at all times be effective and shall survive such termination.
(b) If the Representative elects to
terminate this Agreement as provided in this Section, the Company shall be notified promptly by the Representative by telephone, confirmed by letter.
11. Notices. Except as otherwise provided herein, all communications hereunder shall be in writing and, if to the Representative, shall be mailed, delivered or telecopied to
Roth Capital Partners, LLC, 888 San Clemente Drive, Newport Beach, CA 92660, telecopy number: (949) 720-7227, Attention: Managing Director; if to the Company, shall be mailed, delivered or telecopied to it at Clean Diesel Technologies, Inc.,
4567 Telephone Road, Suite 100, Ventura, CA 93003, telecopy number: (805) 639-9466, Attention: Chief Financial Officer; or in each case to such other address as the person to be notified may have requested in writing. Any party to this
Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns
and the controlling persons, officers and directors referred to in Section 8. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable remedy or claim under or in
respect of this Agreement or any provision herein contained. The term “successors and assigns” as herein used shall not include any purchaser, as such purchaser, of any of the Securities from the Underwriters.
13. Absence of Fiduciary Relationship. The Company acknowledges and agrees that: (a) the Underwriters
have been retained solely to act as underwriters in connection with the sale of the Securities and that no fiduciary, advisory or agency relationship between the Company and the Underwriters have been created in respect of any of the transactions
contemplated by this Agreement, irrespective of whether the Underwriters have advised or are advising the Company on other matters; (b) the price and other terms of the Securities set forth in this Agreement, were established by the Company
following discussions and arms-length negotiations with the Underwriters and the Company are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by this Agreement;
(c) they have been advised that the Underwriters and their respective affiliates are engaged in a broad range of transactions that may involve interests that differ from those of the Company and that the Underwriters have no obligation to
disclose such interest and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; (d) they have been advised that the Underwriters are acting, in respect of the transactions contemplated by this Agreement,
solely for the benefit of the Underwriters, and not on behalf of the Company.
25
14. Amendments and Waivers. No supplement, modification or
waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. The failure of a party to exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in the future. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver be deemed or constitute a continuing waiver unless otherwise expressly
provided.
15. Partial Unenforceability. The invalidity or unenforceability of any section, paragraph, clause or
provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph, clause or provision.
16. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
17. Submission to Jurisdiction. The Company irrevocably (a) submits to the jurisdiction of any court of the State of
New York for the purpose of any suit, action, or other proceeding arising out of this Agreement, or any of the agreements or transactions contemplated by this Agreement, the Registration Statement and the Final Prospectus (each a
“Proceeding”), (b) agree that all claims in respect of any Proceeding may be heard and determined in any such court, (c) waive, to the fullest extent permitted by law, any immunity from jurisdiction of any such court or from any
legal process therein, (d) agree not to commence any Proceeding other than in such courts, and (e) waive, to the fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum. THE COMPANY (ON BEHALF OF
ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT, AND THE PROSPECTUS.
18.
Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original and all such counterparts shall together
constitute one and the same instrument.
Please sign and return to the Company the enclosed duplicates of this letter
whereupon this letter will become a binding agreement between the Company and the Underwriters in accordance with its terms.
|
|
|
|
|
| Very truly yours, |
|
| CLEAN DIESEL TECHNOLOGIES, INC. |
|
|
| By: |
|
/s/ Nikhil A. Mehta |
|
|
Name: |
|
Nikhil A. Mehta |
|
|
Title: |
|
Chief Financial Officer |
26
Accepted for itself and as Representative on behalf of the
Underwriters listed
in Schedule 1 hereto:
, 2013
Roth Capital Partners, LLC
|
|
|
| By: |
|
/s/ Aaron M. Gurewitz |
| Name: |
|
Aaron M. Gurewitz |
| Title: |
|
Head of Equity Capital Market |
[Signature page to Underwriting Agreement]
27
SCHEDULE I
|
|
|
|
|
|
|
|
|
| Underwriter |
|
No. of
Underwritten
Shares |
|
|
No. of
Underwritten
Warrants |
|
|
|
|
| Roth Capital Partners, LLC |
|
|
1,600,000 |
|
|
|
800,000 |
|
28
SCHEDULE II
Persons to Execute Lock-Up Agreements
Lon E. Bell
R.Craig Breese
Stephen Golden
Nikhil Mehta
David Shea
Alexander Ellis III
Bernard Cherry
Charles Engles
Derek Gray
Mungo Park
Terri Schnexnaydre
29
SCHEDULE III
Pricing Term Sheet Provided by Underwriters
|
|
|
| Securities Offered: |
|
1,600,000 shares of common stock, and warrants to purchase up to 800,000 shares of common stock (the “Warrants”). The Warrants will have an initial exercise price of $1.25
per share. |
|
|
| Price to the Public: |
|
$1.245 per share of common stock and $0.005 per Warrant. |
|
|
| Over-Allotment Option: |
|
The underwriters have a 30-day option to purchase up to an additional 240,000 shares of common stock and/or 120,000 Warrants solely to cover over-allotments. If the over-allotment
securities are purchased, the price per share shall be equal to $1.15786 and the price per Warrant shall be equal to $0.00465. |
30
SCHEDULE IV
Clean Diesel Technologies, Inc.
Free Writing Prospectus–June 28,
2013
1,600,000 Shares of Common Stock
Warrants to Purchase up to 800,000 Shares of Common Stock
This free
writing prospectus relates only to the securities described below and should be read together with the preliminary prospectus supplement dated June 27, 2013 (the “Prospectus Supplement”) and the accompanying base prospectus dated
May 15, 2012, included in the Registration Statement on Form S-3 (No. 333-181443) of Clean Diesel Technologies, Inc. (the “Company”).
|
|
|
| Issuer: |
|
Clean Diesel Technologies, Inc. |
|
|
| Issuer Symbol: |
|
CDTI |
|
|
| Exchange: |
|
NASDAQ Capital Market |
|
|
| Securities Offered By the Issuer: |
|
1,600,000 shares of common stock, and Warrants to purchase up to 800,000 shares of common stock. The Warrants will have an initial exercise price of $1.25 per
share. |
|
|
| Price to the Public: |
|
$1.245 per share of common stock and $0.005 per Warrant. |
|
|
| Over-Allotment Option: |
|
The underwriters have a 30-day option beginning June 28, 2013 to purchase up to an additional 240,000 shares of common stock and/or up to an additional 120,000 Warrants solely to
cover over-allotments. |
|
|
| Underwriting Discounts and Commission: |
|
$0.08715 per share of common stock and $0.00035 Warrant. |
|
|
| Proceeds before expenses (excluding the over-allotment): |
|
$1,860,000 (after deducting the underwriters’ discounts and commissions) |
|
|
| Form of Offering: |
|
Firm commitment underwritten public offering pursuant to a registration statement on Form S-3 that was initially filed on May 15. 2012 and declared effective on May 21,
2012 |
|
|
| Trade Date: |
|
June 28, 2013 |
|
|
| Settlement Date: |
|
July 3, 2013 |
|
|
| CUSIP: |
|
18449C401 for the shares and for the Warrants |
|
|
| Underwriter: |
|
Roth Capital Partners, LLC |
Clean Diesel Technologies, Inc. filed a registration statement (including a base prospectus and a
preliminary prospectus supplement thereto) with the Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates. Before you invest you should read the base prospectus and the preliminary prospectus
supplement thereto in that
31
registration statement (including the documents incorporated by reference therein) and other documents Clean Diesel Technologies, Inc. has filed with the SEC for more complete information about
Clean Diesel Technologies, Inc. and this offering. You may obtain these documents for free by visiting EDGAR or the SEC website at www.sec.gov. Alternatively, a written prospectus and accompanying preliminary prospectus supplement related to the
offering may be obtained from Roth Capital Partners, LLC, at 888 San Clemente Drive, Newport Beach, CA 92660, Attention: Robert Stephenson, or by telephone at 949-720-5750.
ANY DISCLAIMER OR OTHER NOTICES THAT MAY APPEAR AFTER THIS MESSAGE ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A
RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
32
SCHEDULE V
Form of Representative Warrant
[Intentionally Omitted]
33
SCHEDULE VI
Form of Investor Warrant
[Intentionally Omitted]
34
SCHEDULE VII
Forms of Opinion of DLA Piper LLP (US)
35
SCHEDULE VIII
Forms of Opinion of Reicker, Pfau, Pyle & McRoy LLP
36
SCHEDULE IX
Form of Opinions of Canadian Counsel
37
SCHEDULE X
FORM OF LOCK-UP AGREEMENT
, 2013
Roth Capital Partners, LLC
As Representative of the Underwriters named in Schedule I to the
Underwriting Agreement
| |
Re: |
Clean Diesel Technologies, Inc.—Public Offering |
Ladies and Gentlemen:
The undersigned understands that you, as Representative of
the Underwriters, propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Clean Diesel Technologies, Inc., a Delaware corporation (the “Company”), providing for the public offering (the “Public
Offering”) by the Underwriters named in Schedule I to the Underwriting Agreement (the “Underwriters”), of shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”), and warrants to purchase
Common Stock (together with the Common Stock, the “Securities”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters’ agreement to purchase and make the Public Offering of the Securities, and for other good and
valuable consideration receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of the Representative on behalf of the Underwriters, the undersigned will not, during the period ending 90 days
after the date of the prospectus relating to the Public Offering (the “Prospectus”), (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (including without
limitation, Common Stock or such other securities which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and securities which may be issued upon exercise
of a stock option or warrant) or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock or such other securities, whether any such transaction described
in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise or (3) make any demand for or exercise any right with respect to the registration of any shares of Common Stock or
any security convertible into or exercisable or exchangeable for Common Stock, in each case other than (a) transfers of Common Stock upon the settlement of restricted stock units solely to cover tax obligations, or (b) transfers of shares
of Common Stock as a bona fide gift or gifts; by will or intestacy or to a family member or trust for the benefit of such family member; provided that in the case of any transfer or distribution pursuant to (c) each donee or distributee shall
execute and deliver to the Representative a lock-up letter in the form of this paragraph; and provided, further,
38
that in the case of any transfer or distribution pursuant to (d) no filing by any party (donor, donee, transferor or transferee) under the Securities Exchange Act of 1934, as amended, or
other public announcement shall be required or shall be made voluntarily in connection with such transfer or distribution (other than a filing on a Form 5 made after the expiration of the 90-day period referred to above).
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities
described herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement. All authority herein conferred or agreed to be conferred and any
obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.
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 Common Stock to be sold thereunder, the undersigned shall be released from all obligations under this Letter Agreement. The undersigned understands that the Underwriters are entering into the
Underwriting Agreement and proceeding with the Public Offering in reliance upon this Letter Agreement.
This Letter Agreement
shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.
[Signature Page Follows]
39
|
|
|
| Very truly yours, |
|
| [NAME OF STOCKHOLDER] |
|
|
| By: |
|
|
|
|
Name: |
|
|
Title: |
40
