Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering: (i) An underwriting discount applied at each Closing equal to eight percent (8%) of the Public Offering Price; and (ii) warrants, issued to the Representative or to such other parties designated by the Representative, to purchase up to an aggregate of [________] shares of Common Stock (the “Representative’s Warrants”) equal to five percent (5%) of the total number of Shares sold in the Offering, including the Over-Allotment Option. The Representative’s Warrants shall not be redeemable. The Representative’s Warrants shall be exercisable, in whole or in part, commencing 180 days from the Effective Date and expiring on the five-year anniversary of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisions. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the Representative’s Warrants may be exercised as to all or a lesser number of shares of Common Stock, will provide for cashless exercise and will contain provisions for unlimited “piggyback” registration rights for a period of three years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if the Registration Statement or any other registration statement registering the Representative’s Warrant and/or shares underlying such Representative’s Warrant is not effective at the time the Representative elects to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securities.” (b) Whether or not the transactions contemplated by this Agreement are consummated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000, which amount was previously advanced to the Representative) (the “Advance”), including, without limitation: (i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) all fees and expenses in connection with filings with FINRA’s Public Offering System; (iii) all fees, disbursements and expenses of the Company’s counsels and accountants in connection with the preparation and filing of the Registration Statement, the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoing; (iv) all fees, expenses and disbursements relating to the registration or qualification of the Shares and Warrants for offering and sale under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings); (v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determine; (vi) all fees, expenses and disbursements relating to background checks of the Company’s officers and directors; (vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”); (viii) any stock transfer taxes incurred in connection with this Agreement or the Offering; (ix) the cost of preparing, printing and delivering certificates, if any, representing the Securities; (x) the cost and charges of any transfer agent, warrant agent and/or registrar for the Securities; (xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative; (xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement; (xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney); (xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000; (xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and (xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3. (c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto. (d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment. (e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request. (f) It is understood, however, that except as provided in this Section 3, and Sections 7, 8 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 3, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay all out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to the extent it exceeds the Representative’s actual out-of-pocket expenses.
Appears in 2 contracts
Samples: Underwriting Agreement (Oculus Innovative Sciences, Inc.), Underwriting Agreement (Oculus Innovative Sciences, Inc.)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters Underwriter or their respective designees their its designee(s) the following compensation (or pro rata portion (based on the number of Firm Securities purchasedthereof, if applicable) of the following compensation with respect to the Offered Securities which they are offeringpurchased from the Company in this Offering:
(i) An an underwriting discount applied at each Closing equal to eight seven percent (87.0%) of the Public aggregate gross proceeds (inclusive the Over-allotment Option to purchase the Additional Shares) raised in the Offering Pricefor investors that are introduced by the Underwriter and an underwriting discount equal to four percent (4.0%) of the aggregate gross proceeds (inclusive the Over-allotment Option to purchase the Additional Shares) raised in the Offering for investors introduced by the Company;
(ii) a non-accountable expense allowance of one percent (1.0%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to US$165,000, of which US$155,000 has already been paid to the Underwriter as an advance against accountable expenses; and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriter or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “RepresentativeUnderwriter’s Warrants”) covering a number of shares equal to five seven percent (57.0%) of the total number of Firm Shares and Additional Shares sold in this Offering.
(b) In compliance with FINRA Rule 5110(e)(1), the Underwriter’s Warrants and the underlying securities will be locked up for 180 days beginning on the date of commencement of sales of the Offering and will expire five (5) years after the Effective Date, subject to certain exceptions as set forth in FINRA Rule 5110(e)(2). The Underwriter’s Warrants will be exercisable at a price equal to one hundred and twenty percent (120%) of the public offering price of the underlying Ordinary Shares in connection with the Offering, including the Over-Allotment Option. The RepresentativeUnderwriter’s Warrants shall not be redeemable. The RepresentativeCompany will register the Ordinary Shares underlying the Underwriter’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriter’s Warrants and the underlying securities shall not be sold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days beginning on the date of commencement of sales of the Offering, except that they may be transferred to any member participating in the Offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the time period. The Underwriter will have the option to exercise, transfer or assign the Underwriter’s Warrants at any time, provided that the underlying securities shall not be transferred during the lock-up period; i.e., the Shares underlying the Underwriter’s Warrants shall be exercisable, in whole or in part, commencing 180 days from remain subject to the Effective Date and expiring on the five180-year anniversary of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any antiday lock-dilution provisionsup period. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the RepresentativeThe Underwriter’s Warrants may be exercised as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise exercise. The Underwriter’s Warrants shall further provide for adjustment in the number and will contain provisions for unlimited “piggyback” registration rights for a period price of three years commencing six such warrants (6) months after and the Effective Date at the Company’s expense. In addition, if the Registration Statement or any other registration statement registering the Representative’s Warrant and/or shares Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriter reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriter’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters Underwriter and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs all fees and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of “due diligence” meetings incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) all the road show expenses incurred by the Company;
(ix) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ixx) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(xxi) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a public relations background search firm as contemplated in Section 5(s) of this Agreementacceptable to the Underwriter, not to exceed US$15,000;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging bound volumes and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, mementos in such quantities as the Representative Underwriter may reasonably request, not to exceed US$2,500; and
(xiv) fees and expenses of the Underwriter’s legal counsel, not to exceed US$75,000.
(fe) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters Underwriter will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b12(b) hereof, or subsequent to a Material Adverse Change, the Company will pay, less any advances previously paid which as of the date hereof is US$155,000, including US$75,000 paid upon the execution of the certain engagement letter between the Company and the Underwriter, dated July 1, 2022 and US$80,000 paid at the time the Company filed the Registration Statement publicly, as advances to be applied towards the accountable expenses allowance (collectively the “Advances”). On the Closing Date, the Company shall pay all the Underwriter US$10,000 such that as of the Closing Date the Company shall have paid the Underwriter a total of no more than US$165,000 in respect of such accountable expenses pursuant to this Section 6(e). All documented out-of-pocket expenses of the Underwriters Underwriter (including but not limited to fees and disbursements of Underwriters’ Underwriter’s Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000US$165,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriter’ out-of-pocket expensesexpenses are less than the Advances, the Underwriter will return to the Company that portion of the Advances not offset by actual expenses in accordance with FINRA Rule 5110(g)(4)(A).
Appears in 1 contract
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities Shares purchased) of the following compensation with respect to the Offered Securities Shares which they are offering:
(i) An underwriting discount applied at each Closing a commission equal to eight percent (8%) of the Public Offering Priceaggregate gross proceeds received by the Company from the sale of the Shares in the offering;
(ii) a non-accountable expense allowance of 2% at the Closing Date; and
(iiiii) warrantsan accountable expense allowance of up to $150,000, issued of which $65,000 has already been paid to the Underwriters as an advance against accountable expenses. For the avoidance of doubt, such accountable expenses shall include the costs of any “due diligence” meetings; all filing fees (DTC and SEC) and communication expenses relating to the registration of the Shares; all application fees and fees and expenses of counsel for the Representative incurred in connection with any filing with, and clearance of the offering by, FINRA. Notwithstanding the foregoing, any advance received by the Representative will be returned to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(f)(2)(C).
(iv) the Company shall grant to the Representative or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “Representative’s Warrants”) covering a number of shares equal to five eight percent (58%) of the total number of Shares sold Shares, substantially in the form and content attached hereto as Exhibit G. The Representative’s Warrants will be exercisable from the Closing Date of the Offering will expire five (5) years from the date of commencement of sales of the Offering, including the Over-Allotment Option. The Representative’s Warrants shall not will be redeemable. The Representative’s Warrants shall be exercisable, in whole or in part, commencing 180 days from the Effective Date and expiring on the five-year anniversary of the Effective Date exercisable at an initial exercise a price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price public offering price of the Offered Securities, underlying Common Stock in connection with the Offering. The Representative’s Warrants shall not be redeemable. The Company will register the Common Stock underlying the Representative’s Warrants under the Act and will have substantially similar terms as those file all necessary undertakings in connection therewith. The Representative’s Warrants shall not be sold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the offeringeffective economic disposition of the securities by any person for a period of 180 days immediately following the date of effectiveness, including except that they may be transferred to any anti-dilution provisions. If no Warrants are sold member participating in the offeringOffering and the officers or partners thereof, if all securities so transferred remain subject to the Company may determine lock-up restriction for the remainder of the time period. The Representative will have the option to exercise their warrants at any time, provided that such shares are not transferred during the lock-up period; the 180-day lock period will remain on these underlying shares. The Representative shall have the option to register such Representative’s Warrantsexercise, transferred or assign their warrants at any time from issuance but the 180-day lock period shall remain in effect for the underlying shares. In such event, the The Representative’s Warrants may be exercised as to all or a lesser number of shares of the underlying Common Stock, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Representative’s Warrants holder’s expense, and unlimited “piggyback” registration rights for a period of three five (5) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if the Registration Statement or any other registration statement registering the Representative’s Warrant and/or shares underlying such Representative’s Warrant is not effective at the time the Representative elects to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants shall further provide for adjustment in the number and price of such warrants (and the shares of Common Stock issuable upon exercise of the Representative’s Ordinary Share underlying such Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securities.”
(b) Whether or not the transactions contemplated by this Agreement are consummated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000, which amount was previously advanced to the Representative) (the “Advance”), including, without limitation:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels and accountants in connection with the preparation and filing of the Registration Statement, the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoing;
(iv) all fees, expenses and disbursements relating to the registration or qualification of the Shares and Warrants for offering and sale under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings);
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determine;
(vi) all fees, expenses and disbursements relating to background checks of the Company’s officers and directors;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes incurred in connection with this Agreement or the Offering;
(ix) the cost of preparing, printing and delivering certificates, if any, representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) aboverecapitalization, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (merger or other reasonable form) memorabilia structural transaction to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably requestprevent dilution.
(f) It is understood, however, that except as provided in this Section 3, and Sections 7, 8 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 3, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay all out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to the extent it exceeds the Representative’s actual out-of-pocket expenses.
Appears in 1 contract
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters Underwriter or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight seven percent (87%) of the Public Offering Priceaggregate gross proceeds raised in the Offering;
(ii) a non-accountable expense allowance of one and one-half percent (1.5%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $125,000, of which $100,000 has already been paid to the Underwriter as an advance against accountable expenses; and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriter or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “RepresentativeUnderwriter’s Warrants”) covering a number of shares equal to five nine percent (59%) of the total number of Firm Shares.
(b) The Underwriter’s Warrants will be non-exercisable for six (6) months after the closing of the Offering and will expire three (3) years after the Effective Date. The Underwriter’s Warrants will be exercisable at a price equal to one hundred and twenty-five percent (125%) of the public offering price of the underlying Class A Ordinary Shares sold in connection with the Offering, including the Over-Allotment Option. The RepresentativeUnderwriter’s Warrants shall not be redeemable. The RepresentativeCompany will register the Class A Ordinary Shares underlying the Underwriter’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriter’s Warrants shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing the effective economic disposition of the securities by any person for a period of 180 days from immediately following the Effective Date date of effectiveness, except that they may be transferred to any member participating in the Offering and expiring on the fiveofficers or partners thereof, if all securities so transferred remain subject to the lock-year anniversary up restriction for the remainder of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisions. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the Representativetime period.. The Underwriter’s Warrants may be exercised as to all or a lesser number of shares of Common Stockthe underlying Class A Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Class A Ordinary Share at the Company’s expense, an additional demand registration at the Underwriter’s Warrants holder’s expense, and unlimited “piggyback” registration rights for a period of three (3) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if The Underwriter’s Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Class A Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriter reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriter’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters Underwriter and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer any reasonable costs and expenses incurred in conducting background checks of the Securities from the Company Company’s officers and directors by a background search firm acceptable to the Representative;Underwriter, not to exceed $15,000; and
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging bound volumes and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, mementos in such quantities as the Representative Underwriter may reasonably request., not to exceed $2,500;
(fe) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters Underwriter will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid which as of the date hereof is $100,000, including $50,000 as an advance to be applied towards the accountable expenses allowance (the “Advances”) and $50,000 paid upon the filing of the Company’s Registration Statement, all documented out-of-pocket expenses of the Underwriters Underwriter (including but not limited to fees and disbursements of UnderwritersUnderwriter’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriter’ out-of-pocket expenses are less than the Advances, the Underwriter will return to the Company that portion of the Advances not offset by actual expenses.
Appears in 1 contract
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An underwriting discount applied at each Closing equal to eight percent (8%) of the Public Offering Price; and
(ii) warrants, issued to the Representative or to such other parties designated by the Representative, to purchase up to an aggregate of [________] 359,375 shares of Common Stock (the “Representative’s Warrants”) equal to five percent (5%) of the total number of Shares sold in the Offering, including the Over-Allotment Option. The Representative’s Warrants shall not be redeemable. The Representative’s Warrants shall be exercisable, in whole or in part, commencing 180 days from the Effective Date and expiring on the five-year anniversary of the Effective Date at an initial exercise price of $[____] 1.10 per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisions. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the Representative’s Warrants may be exercised as to all or a lesser number of shares of Common Stock, will provide for cashless exercise and will contain provisions for unlimited “piggyback” registration rights for a period of three years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if the Registration Statement or any other registration statement registering the Representative’s Warrant and/or shares underlying such Representative’s Warrant is not effective at the time the Representative elects to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securities.”
(b) Whether or not the transactions contemplated by this Agreement are consummated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000, which amount was previously advanced to the Representative) (the “Advance”), including, without limitation:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels and accountants in connection with the preparation and filing of the Registration Statement, the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoing;
(iv) all fees, expenses and disbursements relating to the registration or qualification of the Shares and Warrants for offering and sale under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings);
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determine;
(vi) all fees, expenses and disbursements relating to background checks of the Company’s officers and directors;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes incurred in connection with this Agreement or the Offering;
(ix) the cost of preparing, printing and delivering certificates, if any, representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.Section
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 3, and Sections 7, 8 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 3, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay all out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to the extent it exceeds the Representative’s actual out-of-pocket expenses.
Appears in 1 contract
Samples: Underwriting Agreement (Oculus Innovative Sciences, Inc.)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight seven percent (87%) of the Public Offering Price; andaggregate gross proceeds raised in the Offering;
(ii) warrantsan accountable expense allowance of up to $150,000, issued including, among other things, all reasonable fees and expenses of the Underwriters’ outside legal counsel; any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Representative Underwriters; and the costs associated with bound volumes and mementos in such quantities as the Underwriters may reasonably request;
(iii) a non-accountable expense allowance of two and half percent (2.5%) of the gross proceeds of the Offering;
(iv) an advisory fee of $100,000;
(v) the Company shall grant to the Underwriter or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “RepresentativeUnderwriter’s Warrants”) covering a number of shares equal to five percent (5%) of the total number of Shares, substantially in the form and content attached hereto as Annex V. The Underwriter’s Warrants will be exercisable after the date of the Closing, but could only be sold for (nine) months after the Closing, and will expire three (3) years after the effective The Underwriter’s Warrants will be exercisable at a price equal to one hundred and twenty five percent (125%) of the public offering price of the underlying Ordinary Shares sold in the Offering, including the Over-Allotment Option. The RepresentativeUnderwriter’s Warrants shall not be redeemable. The RepresentativeCompany will register the Ordinary Shares underlying the Underwriter’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriter’s Warrants shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing the effective economic disposition of the securities by any person for a period of 180 days from immediately following the Effective Date date of effectiveness, except that they may be transferred to any member participating in the Offering and expiring on the fiveofficers or partners thereof, if all securities so transferred remain subject to the lock-year anniversary up restriction for the remainder of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and time period. The Underwriter will have substantially similar terms as those Warrants sold the option to exercise its warrants at any time, provided that such shares are not transferred during the lock-up period; the 180-day lock period will remain on these underlying shares. The Underwriter shall have the option to exercise, transferred or assign its warrants at any time from issuance but the 180-day lock period shall remain in effect for the offering, including any anti-dilution provisionsunderlying shares. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the RepresentativeThe Underwriter’s Warrants may be exercised as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Underwriter’s Warrants holder’s expense, and unlimited “piggyback” registration rights for a period of three (3) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if The Underwriter’s Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time event of recapitalization, merger or other structural transaction to prevent dilution. The Underwriter shall have the Representative elects option to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The RepresentativeUnderwriter’s Warrants and at any time, provided that such shares are not transferred during the shares of Common Stock issuable upon exercise of lock-up period; the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securities180-day lock period will remain on these underlying Ordinary Shares.”
(b) The Underwriters reserve the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(c) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to is not included in the Representative) (maximum accountable expense allowance, including the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or in connection with the Offeringauthorization, issuance, sale, preparation, transfer and delivery of the Securities to the Underwriters;
(ix) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 and 11(d) 9 hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b10(b) hereof, or subsequent to a Material Adverse ChangeEffect, the Company will pay pay, less any advances previously paid, representing an advance to be applied towards the accountable expenses allowance (the “Advances”), all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000150,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriters’ out-of-pocket expensesexpenses are less than the Advances, the Underwriters will return to the Company that portion of the Advances not offset by actual expenses in accordance with FINRA Rule 5110(g)(4)(A).
Appears in 1 contract
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An underwriting discount applied at each Closing equal to an aggregate of nine percent (9%) of the aggregate gross proceeds raised in the Offering by investors introduced to the Offering by the Underwriters (to be split up as 8% gross commission and a 1% corporate finance fee), and an underwriting discount equal to an aggregate of five percent (5%) of the aggregate gross proceeds raised in the Offering by investors introduced by the Company or its affiliates; and
(ii) The Underwriters' Warrants. The Company shall issue to the Representative (and/or their respective designees) on the Closing Date and each Option Closing Date, as the case may be, Warrants to purchase up to an aggregate of eight percent (8%) of the Public Offering Price; and
(ii) warrants, issued to the Representative or to such other parties designated by the Representative, to purchase up to an aggregate of [________] shares of Common Stock sold by the Underwriters to investors introduced to the Offering by the Underwriters at such closing (the “Representative’s "Underwriters' Warrants”) equal to five percent (5%) of the total number of Shares sold "). The Underwriters' Warrants shall be substantially in the Offering, including the Over-Allotment Option. The Representative’s Warrants shall not be redeemable. The Representative’s Warrants form of Annex I hereto and shall be exercisable, in whole or in part, commencing 180 days from after the Effective Date and expiring on the fivethree-year anniversary of the Effective Date Date, at an initial exercise price of $[____●] per share of Common Stockshare, which is equal to one hundred and ten fifteen percent (110115%) of the Public Offering Price initial public offering price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisions. If no Warrants are sold in the offering, the Company may determine not to register Firm Shares issued at such Representative’s Warrants. In such event, the Representative’s Warrants may be exercised as to all or a lesser number of shares of Common Stock, will provide for cashless exercise and will contain provisions for unlimited “piggyback” registration rights for a period of three years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if the Registration Statement or any other registration statement registering the Representative’s Warrant and/or shares underlying such Representative’s Warrant is not effective at the time the Representative elects to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basisclosing. The Representative’s Underwriters' Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, Underwriters' Warrants are hereinafter referred to collectively as the “"Underwriters' Securities."
(b) Upon Closing of the Offering with an aggregate gross proceeds of no less than fifteen million ($15 million), the Company shall grant the Representative the right of first refusal for a period of twelve (12) months from the commencement of sales of Firm Securities to act as lead managing underwriting and book runner or as co-lead manager and co-book runner and/or co-lead placement agent for any and all public and private debt or equity securities ("Subsequent Financing") (excluding (i) sales to employees under any compensation or stock option plan approved by the shareholders of the Company, (ii) shares issued in payment of the consideration for an acquisition or as part of a joint venture or other bona fide strategic relationship (the primary purpose of which is not financing) and (iii) conventional banking arrangements and commercial debt financing) of the Company or any subsidiary or successor of the Company. In the event, however, that during the twelve (12) month period detailed above, the Company retains a bulge bracket firm in connection with the Subsequent Offering, then the Representative’s Securities” and 's percentage of economics in such Subsequent Offering shall be subject to negotiations between the Offered Securities bulge bracket firm and the Representative’s Securities are collectively referred , with the Representative in any instance retaining no less than 35% of the total fixed economics. If the Representative fails to accept in writing any such proposal for such Subsequent Financing within ten (10) days after receipt of a written notice from the Company containing such proposal, then the Representative will have no claim or right with respect to any such sale contained in any such notice. If, thereafter, such proposal is modified in any material respect, the Company will adopt the same procedure as with respect to the “Securitiesoriginal proposed Subsequent Financing and the Representative shall have the right of first refusal with respect to such revised proposal.”
(bc) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters' aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement, the General Disclosure Package and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s 's Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels 's counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Securities Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determineNasdaq Capital Market;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers 's officers, directors and directors;
(vii) the costs employees and expenses any other expense of the Company relating to investor presentations on any “road show” undertaken or the Underwriters incurred in connection with the marketing attending or hosting meetings with prospective purchasers of the offering of the Offered SecuritiesSecurities ("Road Show Expenses"); provide, includinghowever, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, that all travel and lodging expenses of the representatives and officers representative in excess of $5,000 shall be subject to prior written approval by the Company and any such consultants in connection with the road show (“Road Show Expenses”)Company;
(viiivii) any stock transfer taxes incurred in connection with this Agreement or the Offering;
(ixviii) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(xix) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xix) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the any reasonable costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence conducting background checks of the Company's officers and directors by a background search firm acceptable to the Representative (excluding fees payable to Representative’s legal counsel) at a cost not to exceed $25,0001,200 per person); and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 3, and Sections 7, 8 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 3, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay all out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to the extent it exceeds the Representative’s actual out-of-pocket expenses.
Appears in 1 contract
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight six and half percent (86.5%) of the Public Offering Priceaggregate gross proceeds (inclusive the Over-allotment Option to purchase the Option Shares) raised in the Offering;
(ii) a non-accountable expense allowance of one percent (1%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $160,000, including all reasonable fees and expenses of the underwriters’ outside legal counsel; any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Underwriters; and the costs associated with bound volumes and mementos in such quantities as the Underwriters may reasonably request. $91,000 has already been paid to the Underwriters as an advance against accountable expenses, provided however any unused portion of the accountable expense allowance shall be returned to the Company in accordance with FINRA Rule 5110(g)(4)(A); and
(iiiv) warrants, issued the Company shall grant to the Representative or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “Representative’s Warrants”) covering a number of shares equal to five percent (5%) of the total number of Firm Shares sold , substantially in the form and content attached hereto as Annex V.
(b) In compliance with FINRA Rule 5110(e)(1), the Representative’s Warrants and the underlying securities will be locked up for 180 day beginning on the date of commencement of sales of the Offering and will expire five (5) years after the Effective Date. The Representative’s Warrants will be exercisable at a price equal to one hundred and fifteen percent (115%) of the public offering price of the underlying Ordinary Shares in connection with the Offering, including the Over-Allotment Option. The Representative’s Warrants shall not be redeemable. The Company will register the Ordinary Shares underlying the Representative’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Representative’s Warrants and the underlying securities shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing the effective economic disposition of the securities by any person for a period of 180 days from the Effective Date and expiring beginning on the five-year anniversary date of commencement of sales of the Effective Date at an initial exercise price of $[____] per share of Common StockOffering, which is equal except that they (or any portion thereof) may be transferred or assigned to one hundred and ten percent (110%) any successor to the Underwriter, any officer, manager, member or partner of the Public Underwriter, as well as to any member participating in the Offering Price and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisionstime period. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the The Representative’s Warrants may be exercised at any time after the issuance of the Warrants as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Representative’s Warrants holder’s expense, provided such demand registration rights will not be greater than five years from the date of the commencement of sales of this offering in compliance with FINRA Rule 5110(g)(8)(C), and unlimited “piggyback” registration rights for a period of three five (5) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if the Registration Statement or any other registration statement registering the Representative’s Warrant and/or shares underlying such Representative’s Warrant is not effective at the time the Representative elects to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants shall further provide for adjustment in the number and price of such warrants (and the shares Ordinary Share underlying such Warrants) in the event of Common Stock issuable upon exercise of the Representative’s Warrantsrecapitalization, are hereinafter referred merger or other structural transaction to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriters reserve the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) EXXXX and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid which as of the date hereof is $91,000, representing an advance to be applied towards the accountable expenses allowance (the “Advances”), all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000160,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriters’ out-of-pocket expenses are less than the Advances, the Underwriters will return to the Company that portion of the Advances not offset by actual expenses. The Company hereby agrees to issue and sell to the Underwriters the Option Shares, and the Underwriters shall have the option to purchase, severally and not jointly, in whole or in part, the Option Shares from the Company (the “Over-Allotment Option”), in each case, at a price per share equal to the Purchase Price less an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Option Shares (the “Over-Allotment Option Purchase Price”). The parties agree that the Underwriters may only exercise the Over-Allotment Option for the purpose of covering over-allotments made in connection with the offering of the Firm Shares. The Representative may exercise the Over-Allotment Option on behalf of the Underwriters at any time in whole, or from time to time in part, on or before the forty-fifth (45th) day after effective date of the Registration Statement, by giving written notice to the Company (the “Over-Allotment Exercise Notice”). Each exercise date must be at least one (1) business day after the written notice is given and may not be earlier than the Closing Date nor later than ten (10) business days after the date of such notice. On each day, if any, that the Option Shares are to be purchased, each Underwriter agrees, severally and not jointly, to purchase the number of the Option Shares (subject to such adjustments to eliminate fractional shares as the Representative may determine) that bears the same proportion to the total number of the Option Shares to be purchased on such Additional Closing Date as the number of Firm Shares set forth in Schedule A hereto opposite the name of such Underwriter bears to the total number of the Firm Shares. The Representative may cancel any exercise of the Over-Allotment Option at any time prior to the Closing Date or the applicable Additional Closing Date, as the case may be, by giving written notice of such cancellation to the Company. The Over-Allotment Exercise Notice shall set forth: (i) the aggregate number of Option Shares as to which the Over-Allotment Option is being exercised; (ii) the Over-Allotment Option Purchase Price; (iii) the names and denominations in which the Option Shares are to be registered; and (iii) the applicable Additional Closing Date. Payment for the Option Shares (the “Option Shares Payment”) shall be made, against delivery of the Option Shares to be purchased, by wire transfer in immediately available funds to the account(s) specified by the Company to the Representative at least two (2) business day in advance of such payment at the office of VCL Law LLP at [●], Eastern Time, on [●], or at such other place on the same or such other date and time, as shall be designated in writing by the Representative (an “Additional Closing Date”). Delivery of the Firm Shares shall be made through the facilities of The Depository Trust Company (“DTC”), unless the Representative shall otherwise instruct.
Appears in 1 contract
Consideration; Payment of Expenses. (a) 3.9.1 In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters Representative or their respective designees their its designee(s) the following compensation (or pro rata portion (based on the number of Firm Securities purchasedthereof, if applicable) of the following compensation with respect to the Offered Securities which they are offeringpurchased from the Company in this Offering:
(i) An an underwriting discount applied at each Closing equal to eight seven and a half percent (87.5%) of the Public aggregate gross proceeds (inclusive the Over-allotment Option to purchase the Option Shares) raised in the Offering;
(ii) a non-accountable expense allowance of one-half of a percent (0.5%) of the gross proceeds of the Offering Priceto the Representative;
(iii) an accountable expense allowance of up to $175,000, of which $100,000 has already been paid to the Representative as an advance against accountable expenses; and
(iiiv) warrants, issued the Company shall grant to the Representative or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “Representative’s Warrants”) covering a number of shares equal to five eight percent (58.0%) of the total number of Firm Shares and Option Shares sold in this offering.
3.9.2 In compliance with FINRA Rule 5110(e)(1), the OfferingRepresentative’s Warrants and the underlying securities will be locked up for 180 days beginning on the date of commencement of sales of the Offering and will expire five (5) years after the Closing Date, including subject to certain exceptions as set forth in FINRA Rule 5110(e)(2). The Representative’s Warrants will be exercisable at a price equal to one hundred and thirty percent (130%) of the Over-Allotment Optionpublic offering price per Firm Share. The Representative’s Warrants shall not be redeemable. The Company will register the Ordinary Shares underlying the Representative’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Representative’s Warrants and the underlying securities shall not be sold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days beginning on the date of commencement of sales of the Offering, except that they may be transferred to any member participating in the Offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the time period. The Representative will have the option to exercise, transfer or assign the Representative’s Warrants at any time, provided that the underlying securities shall not be transferred during the lock-up period; i.e., the Shares underlying the Representative’s Warrants shall be exercisable, in whole or in part, commencing 180 days from remain subject to the Effective Date and expiring on the five180-year anniversary of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any antiday lock-dilution provisionsup period. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the The Representative’s Warrants may be exercised as to all or a lesser number of shares of Common Stock, will provide for cashless exercise the underlying Ordinary Shares and will contain provisions for unlimited “piggyback” registration rights for a period of three years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if each with a duration of no more than five years from the Registration Statement or any other registration statement registering date of commencement of sales of the Representative’s Warrant and/or shares underlying such Representative’s Warrant is not effective at the time the Representative elects to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basisoffering in compliance with FINRA Rule 5110(g)(8)(D). The Representative’s Warrants shall further provide for adjustment in the number and price of such warrants (and the shares Ordinary Share underlying such Warrants) in the event of Common Stock issuable upon exercise recapitalization, merger or other structural transaction to prevent dilution. In the event that the Company chooses to disengage or terminate A.G.P. as its Representative prior to the effectiveness of the Registration Statement but after the initial filing of the Registration Statement with the SEC, A.G.P. will be due the full amount of the Representative’s Warrants, are hereinafter referred Warrants that would be due to collectively as them at the “Representative’s Securities” and Closing Date of the Offered Securities and the Representative’s Securities are collectively referred to as the “SecuritiesIPO.”
(b) Whether or not the transactions contemplated by this Agreement are consummated, the 3.9.3 The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date, if any, to the extent not paid at the Closing Date, all actual costs and expenses incident to the Offering (less $50,000, which amount was previously advanced to performance of the Representative) (obligations of the “Advance”)Company under this Agreement, including, without limitation:
but not limited to: (ia) all filing fees and communication expenses relating to the registration of the Ordinary Shares to be sold in the Offering (including the Option Shares) with the Commission; (b) all Public Filing System filing fees associated with the review of the Offering by FINRA; (c) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof relating to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s listing of such Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels and accountants in connection with the preparation and filing of the Registration Statement, Securities on the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by such other stock exchanges as the Company and amendments and supplements to any of the foregoing;
Representative together determine; (ivd) all fees, expenses and disbursements relating to the registration or qualification of the Shares and Warrants for offering and sale Public Securities under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the reasonable fees and disbursements of Representative’s counsel with respect to such “blue sky” filings);
counsel; (v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determine;
(vie) all fees, expenses and disbursements relating to background checks the registration, qualification or exemption of the Company’s officers and directors;
Public Securities under the securities laws of such foreign jurisdictions as the Representative may reasonably designate; (vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes incurred in connection with this Agreement or the Offering;
(ix) the cost of preparing, printing and delivering certificates, if any, representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiiif) the costs of all mailing and printing of the underwriting documents (including this including, without limitation, the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
, Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary; (xivg) the legal costs and expenses of a public relations firm; (h) the costs of preparing, printing and delivering certificates representing the Public Securities; (i) fees and expenses of the transfer agent for Representativethe Ordinary Shares; (j) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriters; (k) the fees and expenses of the Company’s accountants; (l) the fees and expenses of the Company’s legal counsel (and other than agents and representatives. The Company hereby agrees to pay on each of the legal fees associated with “blue sky” filingsClosing Date and the Option Closing Date, if any referenced any, to the extent not paid at the Closing Date, to the Representative, from the gross proceeds of the Offering, for accountable legal expenses incurred by the Representative in Section 3(b)(iv) aboveconnection with the transaction in the aggregate amount of $175,000 as well as non-accountable expenses (the “NAE”), including, but not limited to, background check(s), tombstones, marketing related expenses; i.e. roadshow, travel, et al. and any other expenses incurred by the Representative in connection with the transaction, (provided, however, that such reimbursement amount shall in no way limit or impair the indemnification and contribution provisions of this Agreement). The total NAE allowance shall be 0.5% of the gross proceeds raised in the Offering.
3.9.4 It is understood, however, that except as provided in this Section 3, and Sections 5, 8.3 and 8.4 hereof, the Representative will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 6, in the event that this Agreement is terminated pursuant to Section 8 hereof, or subsequent to a Material Adverse Change, the Company will pay, less any advances previously paid which as of the date hereof is $100,000 as an advance to be applied towards the accountable expenses allowance (the “Advance”). On the Closing Date, the Company shall pay the Representative $75,000 such that as of the Closing Date the Company shall have paid the Representative a total of no more than $175,000 in respect of such accountable expenses pursuant to this Section 3.9.4. All documented out-of-pocket expenses of the Representative (including but not limited to fees and disbursements of Representative’s Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses to be reimbursed by the Company shall not exceed $100,000;
(xv) 175,000, including the Advances. To the extent that the Representative’s accountable out-of-pocket expenses including travelare less than the Advance, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced return to the Company that portion of the Advances not offset by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth actual expenses in Sections 3(a) and 3(b) heretoaccordance with FINRA Rule 5110(g)(4)(A).
(d) 3.9.5 The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ Representative’s aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 3, and Sections 7, 8 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 3, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay all out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to the extent it exceeds the Representative’s actual out-of-pocket expenses.
Appears in 1 contract
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight seven and half percent (87.5%) of the Public Offering Priceaggregate gross proceeds raised in the Offering;
(ii) a non-accountable expense allowance of one percent (1%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $170,000, including all reasonable fees and expenses of the underwriters’ outside legal counsel; any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Underwriters; and the costs associated with bound volumes and mementos in such quantities as the Underwriters may reasonably request. $25,000 has already been paid to the Underwriters as an advance against accountable expenses; and
(iiiv) warrants, issued the Company shall grant to the Representative or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “Representative’s Warrants”) covering a number of shares equal to five four percent (54%) of the total number of Shares sold Firm Shares, substantially in the form and content attached hereto as Annex V.
(b) The Representative’s Warrants will be exercisable from the Closing Date of the Offering will expire five (5) years from the date of commencement of sales of the Offering, including . The Representative’s Warrants will be exercisable at a price equal to one hundred and twenty percent (120%) of the Over-Allotment Optionpublic offering price of the underlying Ordinary Shares in connection with the Offering. The Representative’s Warrants shall not be redeemable. The Company will register the Ordinary Shares underlying the Representative’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Representative’s Warrants shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing the effective economic disposition of the securities by any person for a period of 180 days from immediately following the Effective Date date of effectiveness, except that they may be transferred to any member participating in the Offering and expiring on the fiveofficers or partners thereof, if all securities so transferred remain subject to the lock-year anniversary up restriction for the remainder of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and time period. The Underwriter will have substantially similar terms as those Warrants sold the option to exercise their warrants at any time, provided that such shares are not transferred during the lock-up period; the 180-day lock period will remain on these underlying shares. The Underwriter shall have the option to exercise, transferred or assign their warrants at any time from issuance but the 180-day lock period shall remain in effect for the offering, including any anti-dilution provisionsunderlying shares. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the The Representative’s Warrants may be exercised as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Representative’s Warrants holder’s expense, and unlimited “piggyback” registration rights for a period of three five (5) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if the Registration Statement or any other registration statement registering the Representative’s Warrant and/or shares underlying such Representative’s Warrant is not effective at the time the Representative elects to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants shall further provide for adjustment in the number and price of such warrants (and the shares Ordinary Share underlying such Warrants) in the event of Common Stock issuable upon exercise of the Representative’s Warrantsrecapitalization, are hereinafter referred merger or other structural transaction to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriters reserve the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid which as of the date hereof is $25,000, representing an advance to be applied towards the accountable expenses allowance (the “Advances”), all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000170,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriters’ out-of-pocket expenses are less than the Advances, the Underwriters will return to the Company that portion of the Advances not offset by actual expenses.
(f) The Company hereby agrees to issue and sell to the Underwriters the Option Shares, and the Underwriters shall have the option to purchase, severally and not jointly, in whole or in part, the Option Shares from the Company (the “Over-Allotment Option”), in each case, at a price per share equal to the Purchase Price less an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Option Shares (the “Over-Allotment Option Purchase Price”). The parties agree that the Underwriters may only exercise the Over-Allotment Option for the purpose of covering over-allotments made in connection with the offering of the Firm Shares. The Representative may exercise the Over-Allotment Option on behalf of the Underwriters at any time in whole, or from time to time in part, on or before the forty-fifth (45th) day after effective date of the Registration Statement, by giving written notice to the Company (the “Over-Allotment Exercise Notice”). Each exercise date must be at least one (1) business day after the written notice is given and may not be earlier than the Closing Date nor later than ten (10) business days after the date of such notice. On each day, if any, that the Option Shares are to be purchased, each Underwriter agrees, severally and not jointly, to purchase the number of the Option Shares (subject to such adjustments to eliminate fractional shares as the Representative may determine) that bears the same proportion to the total number of the Option Shares to be purchased on such Additional Closing Date as the number of Firm Shares set forth in Schedule A hereto opposite the name of such Underwriter bears to the total number of the Firm Shares. The Representative may cancel any exercise of the Over-Allotment Option at any time prior to the Closing Date or the applicable Additional Closing Date, as the case may be, by giving written notice of such cancellation to the Company. The Over-Allotment Exercise Notice shall set forth: (i) the aggregate number of Option Shares as to which the Over-Allotment Option is being exercised; (ii) the Over-Allotment Option Purchase Price; (iii) the names and denominations in which the Option Shares are to be registered; and (iii) the applicable Additional Closing Date. Payment for the Option Shares (the “Option Shares Payment”) shall be made, against delivery of the Option Shares to be purchased, by wire transfer in immediately available funds to the account(s) specified by the Company to the Representative at least two (2) business day in advance of such payment at the office of VCL Law LLP at [●], Eastern Time, on [●], or at such other place on the same or such other date and time, as shall be designated in writing by the Representative (an “Additional Closing Date”). Delivery of the Firm Shares shall be made through the facilities of The Depository Trust Company (“DTC”), unless the Representative shall otherwise instruct.
Appears in 1 contract
Samples: Underwriting Agreement (Erayak Power Solution Group Inc.)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An the Company shall pay to the Underwriters or their respective designees an underwriting discount applied at each Closing equal to eight seven percent (87.0%) of the Public aggregate gross proceeds raised in the Offering Pricefor investors introduced by the Underwriters and five percent (5.0%) of the aggregate gross proceeds raised in the Offering for investors introduced by the Company;
(ii) the Company shall pay to the Underwriters or their respective designees a non-accountable expense allowance of one percent (1%) of the gross proceeds of the Offering;
(iii) the Company shall pay to the Underwriters or their respective designees an accountable expense allowance of up to $150,000, of which $75,000 has already been paid to the Underwriters as an Advance expense deposit, any portion of which not actually incurred in compliance with FINRA Rule 5110 (g)(4)(A) by the Underwriters will be reimbursed to the Company; and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriters or to such other parties their respective designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “Representative’s Underwriters’ Warrants”) covering a number of shares equal to five percent (5%) of the total number of Firm Shares sold and Additional Shares, substantially in the Offering, including form and content attached hereto as Annex V.
(b) The Underwriters’ Warrants will be non-exercisable for six (6) months after the Over-Allotment Optiondate of the effective date of the Registration Statement and will expire three (3) years after the date of the effective date of the Registration Statement. The Representative’s Underwriters’ Warrants will be exercisable at a price equal to one hundred and twenty-five percent (125%) of the public offering price of the underlying Shares in connection with the Offering. The Underwriters’ Warrants shall not be redeemable. The Representative’s Company will register the Shares underlying the Underwriters’ Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriters’ Warrants shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing 180 days from the Effective Date and expiring on the five-year anniversary effective economic disposition of the Effective Date at an initial exercise price securities by any person for a period of $[____] per share of Common Stock, which is equal to one hundred and ten percent eighty (110%180) days beginning on the date of commencement of sales of the Public Offering, except that they may be transferred to any member participating in the Offering Price and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisionstime period. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the Representative’s The Underwriters’ Warrants may be exercised as to all or a lesser number of shares of Common Stockthe underlying Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Share at the Company’s expense, an additional demand registration at the Underwriters’ Warrants holder’s expense, each such demand registration for a period of three (3) years after the date of commencement of sales of the Offering and unlimited “piggyback” registration rights for a period of three (3) years commencing six (6) months after the Effective Date date of commencement of sales of the Offering at the Company’s expense. In addition, if The Underwriters’ Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriters reserve the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual the following costs and expenses incident to the Offering (less $50,000, which amount was previously advanced to the Representative) (the “Advance”), including, without limitationOffering:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the costs associated with book building, prospectus tracking, and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer any reasonable costs and expenses incurred in conducting background checks of the Securities from the Company Company’s officers and directors by a background search firm acceptable to the Representative;Underwriters, not to exceed $15,000; and
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging bound volumes and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, mementos in such quantities as the Representative Underwriters may reasonably request, not to exceed $2,5000.
(fe) It is understood, however, that except as provided in this Section 36, and Sections 79, 8 10 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid which as of the date hereof is $75,000 as an advance to be applied towards the accountable expenses allowance (the “Advance”), all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Representative’s Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000150,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to . To the extent it exceeds that the Representative’s actual Underwriters’ out-of-pocket expenses are less than the Advance, the Underwriters will return to the Company that portion of the Advance not offset by actual expenses.
Appears in 1 contract
Samples: Underwriting Agreement (Planet Image International LTD)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight seven percent (87%) of the Public Offering Priceaggregate gross proceeds raised in the Offering;
(ii) a non-accountable expense allowance of one and one-half percent (1.5%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $125,000, of which $100,000 has already been paid to the Underwriters as an advance against accountable expenses; and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriters or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “RepresentativeUnderwriter’s Warrants”) covering a number of shares equal to five nine percent (59%) of the total number of Firm Shares.
(b) The Underwriters’s Warrants will be non-exercisable for six (6) months after the closing of the Offering and will expire three (3) years after the Effective Date. The Underwriters’s Warrants will be exercisable at a price equal to one hundred and twenty-five percent (125%) of the public offering price of the underlying Class A Ordinary Shares sold in connection with the Offering, including the Over-Allotment Option. The RepresentativeUnderwriters’s Warrants shall not be redeemable. The RepresentativeCompany will register the Class A Ordinary Shares underlying the Underwriters’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriters’s Warrants shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing the effective economic disposition of the securities by any person for a period of 180 days from immediately following the Effective Date date of effectiveness, except that they may be transferred to any member participating in the Offering and expiring on the fiveofficers or partners thereof, if all securities so transferred remain subject to the lock-year anniversary up restriction for the remainder of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisions. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the Representativetime period.. The Underwriters’s Warrants may be exercised as to all or a lesser number of shares of Common Stockthe underlying Class A Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Class A Ordinary Share at the Company’s expense, an additional demand registration at the Underwriters’s Warrants holder’s expense, and unlimited “piggyback” registration rights for a period of three (3) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if The Underwriters’s Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Class A Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriters reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer any reasonable costs and expenses incurred in conducting background checks of the Securities from the Company Company’s officers and directors by a background search firm acceptable to the Representative;Underwriters, not to exceed $15,000; and
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging bound volumes and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, mementos in such quantities as the Representative Underwriters may reasonably request., not to exceed $2,500;
(fe) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid which as of the date hereof is $100,000, including $50,000 as an advance to be applied towards the accountable expenses allowance (the “Advances”) and $50,000 paid upon the filing of the Company’s Registration Statement, all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of UnderwritersUnderwriter’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriters’ out-of-pocket expenses are less than the Advances, the Underwriters will return to the Company that portion of the Advances not offset by actual expenses.
Appears in 1 contract
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight six and half percent (86.5%) of the Public Offering Priceaggregate gross proceeds (inclusive the Over-allotment Option to purchase the Option Shares) raised in the Offering;
(ii) a non-accountable expense allowance of one percent (1%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $220,000, including all reasonable fees and expenses of the underwriters’ outside legal counsel; any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Underwriters; and the costs associated with bound volumes and mementos in such quantities as the Underwriters may reasonably request. $95,000 has already been paid to the Underwriters as an advance against accountable expenses, provided however any unused portion of the accountable expense allowance shall be returned to the Company in accordance with FINRA Rule 5110(g)(4)(A); and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriters or to such other parties their designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “Representative’s Underwriters’ Warrants”) covering a number of shares equal to five percent (5%) of the total number of Firm Shares sold , substantially in the Offeringform and content attached hereto as Annex V.
(b) In compliance with FINRA Rule 5110(e)(1), including the Over-Allotment OptionUnderwriters’ Warrants and the underlying securities will be locked up for 180 day beginning on the date of commencement of sales of the Offering and will expire five (5) years after the Effective Date. The Representative’s Underwriters’ Warrants will be exercisable at a price equal to one hundred and fifteen percent (115%) of the public offering price of the underlying Ordinary Shares in connection with the Offering. The Underwriters’ Warrants shall not be redeemable. The Representative’s Company will register the Ordinary Shares underlying the Underwriters’ Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriters’ Warrants and the underlying securities shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing the effective economic disposition of the securities by any person for a period of 180 days from the Effective Date and expiring beginning on the five-year anniversary date of commencement of sales of the Effective Date at an initial exercise price of $[____] per share of Common StockOffering, which is equal except that they (or any portion thereof) may be transferred or assigned to one hundred and ten percent (110%) any successor to the Underwriter, any officer, manager, member or partner of the Public Underwriter, as well as to any member participating in the Offering Price and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisionstime period. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the Representative’s The Underwriters’ Warrants may be exercised at any time after the issuance of the Warrants as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Underwriters’ Warrants holder’s expense, provided such demand registration rights will not be greater than five years from the date of the commencement of sales of this offering in compliance with FINRA Rule 5110(g)(8)(C), and unlimited “piggyback” registration rights for a period of three five (5) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if The Underwriters’ Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriters reserve the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) EXXXX and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the cost of preparing, printing and delivering certificates, if any, representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid which as of the date hereof is $95,000, representing an advance to be applied towards the accountable expenses allowance (the “Advances”), all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000220,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriters’ out-of-pocket expenses are less than the Advances, the Underwriters will return to the Company that portion of the Advances not offset by actual expenses. The Company hereby agrees to issue and sell to the Underwriters the Option Shares, and the Underwriters shall have the option to purchase, severally and not jointly, in whole or in part, the Option Shares from the Company (the “Over-Allotment Option”), in each case, at a price per share equal to the Purchase Price less an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Option Shares (the “Over-Allotment Option Purchase Price”). The parties agree that the Underwriters may only exercise the Over-Allotment Option for the purpose of covering over-allotments made in connection with the offering of the Firm Shares. The Underwriters may exercise the Over-Allotment Option at any time in whole, or from time to time in part, on or before the forty-fifth (45th) day after effective date of the Registration Statement, by giving written notice to the Company (the “Over-Allotment Exercise Notice”). Each exercise date must be at least one (1) business day after the written notice is given and may not be earlier than the Closing Date nor later than ten (10) business days after the date of such notice. On each day, if any, that the Option Shares are to be purchased, each Underwriter agrees, severally and not jointly, to purchase the number of the Option Shares (subject to such adjustments to eliminate fractional shares as the Underwriters may determine) that bears the same proportion to the total number of the Option Shares to be purchased on such Additional Closing Date as the number of Firm Shares set forth in Schedule A hereto opposite the name of such Underwriter bears to the total number of the Firm Shares. The Underwriters may cancel any exercise of the Over-Allotment Option at any time prior to the Closing Date or the applicable Additional Closing Date, as the case may be, by giving written notice of such cancellation to the Company. The Over-Allotment Exercise Notice shall set forth: (i) the aggregate number of Option Shares as to which the Over-Allotment Option is being exercised; (ii) the Over-Allotment Option Purchase Price; (iii) the names and denominations in which the Option Shares are to be registered; and (iii) the applicable Additional Closing Date. Payment for the Option Shares (the “Option Shares Payment”) shall be made, against delivery of the Option Shares to be purchased, by wire transfer in immediately available funds to the account(s) specified by the Company to the Underwriters at least two (2) business days in advance of such payment at the office of VCL Law LLP or at such other place on such date and time, as shall be designated in writing by the Underwriters (an “Additional Closing Date”). Delivery of the Firm Shares shall be made through the facilities of The Depository Trust Company (“DTC”), unless the Underwriters shall otherwise instruct.
Appears in 1 contract
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) : An underwriting discount applied at each Closing equal to eight percent (8%) of the Public Offering Price; and
(ii) warrants, issued to the Representative or to such other parties designated by the Representative, to purchase up to an aggregate of [________] shares of Common Stock (the “Representative’s Warrants”) equal to five percent (5%) of the total aggregate gross proceeds raised in the Offering and such number of Common Stock Purchase Warrants (the “Underwriters Warrants”) to the Representatives or their permitted designees at the Closing to purchase, in the aggregate, shares of Common Stock equal to 5% of the aggregate number of Firm Shares sold in the Offering, including the Over-Allotment Option. The Representative’s Underwriters Warrants shall be in customary form reasonably acceptable to Representatives, have a term of 5 years exercisable from 180 days from the date of the Offering, and an exercise price of 100% of the price of Securities sold in the Offering. The Underwriters Warrants shall not be redeemable. The Representative’s Warrants shall be exercisable, in whole or in part, commencing transferable for 180 days from the Effective Date and expiring on the five-year anniversary date of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent Offering except as permitted by FINRA Rule 5110(g)(1).
(110%b) Upon Closing of the Public Offering Price with an aggregate gross proceeds of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisions. If no Warrants are sold in the offeringless than fifteen million ($15 million), the Company may determine not to register such Representative’s Warrants. In such event, shall grant the Representative’s Warrants may be exercised as to all or a lesser number Representative the right of shares of Common Stock, will provide for cashless exercise and will contain provisions for unlimited “piggyback” registration rights first refusal for a period of three years commencing six twelve (612) months after from the Effective Date at commencement of sales of Firm Securities to act as lead managing underwriting and book runner or as co-lead manager and co-book runner and/or co-lead placement agent for any and all public and private debt or equity securities (“Subsequent Financing”) (excluding (i) sales to employees under any compensation or stock option plan approved by the shareholders of the Company’s expense, (ii) shares issued in payment of the consideration for an acquisition or as part of a joint venture or other bona fide strategic relationship (the primary purpose of which is not financing) and (iii) conventional banking arrangements and commercial debt financing) of the Company or any subsidiary or successor of the Company. In additionthe event, if however, that during the Registration Statement or any other registration statement registering twelve (12) month period detailed above, the Company retains a bulge bracket firm in connection with the Subsequent Offering, then the Representative’s Warrant and/or shares underlying percentage of economics in such Subsequent Offering shall be subject to negotiations between the bulge bracket firm and the Representative’s Warrant is not effective at the time , with the Representative elects in any instance retaining no less than 35% of the total fixed economics. If the Representative fails to exercise accept in writing any such proposal for such Subsequent Financing within ten (10) days after receipt of a written notice from the Representative’s WarrantsCompany containing such proposal, then the Representative may exercise will have no claim or right with respect to any such sale contained in any such notice. If, thereafter, such proposal is modified in any material respect, the Representative‘s Warrants on a cashless basis. The Representative’s Warrants Company will adopt the same procedure as with respect to the original proposed Subsequent Financing and the shares Representative shall have the right of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred first refusal with respect to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiessuch revised proposal.”
(bc) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement, the General Disclosure Package and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) EXXXX and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Securities Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determineNasdaq Capital Market;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directors;
(vii) the costs employees and expenses any other expense of the Company relating to investor presentations on any “road show” undertaken or the Underwriters incurred in connection with the marketing attending or hosting meetings with prospective purchasers of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show Securities (“Road Show Expenses”); provide, however, that all travel and lodging expenses of the representative in excess of $5,000 shall be subject to prior written approval by the Company;
(viiivii) any stock transfer taxes incurred in connection with this Agreement or the Offering;
(ixviii) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(xix) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xix) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the any reasonable costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Representative (excluding fees payable to Representative’s legal counsel) at a cost not to exceed $25,0001,200 per person); and
(xvixi) all other costs reasonable, non-accounted costs, fees and expenses up to $250,000 incident to the performance of the Company obligations hereunder which Offering that are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering 6, in addition to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustmentCounsel’s fees up to $75,000 and up to $25,000 for third-party due diligence expenses.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d12(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b12(b) hereof, or subsequent to a Material Adverse Change, the Company will pay all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel Counsel, expenses associated with a due diligence report and reasonable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to the extent it exceeds the Representative’s actual out-of-pocket expenses100,000 (as provided in Section 6(d)).
Appears in 1 contract
Samples: Underwriting Agreement (Yangtze River Development LTD)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight seven and half percent (87.5%) of the Public Offering Priceaggregate gross proceeds raised in the Offering;
(ii) a non-accountable expense allowance of one and half percent (1.5%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $150,000, including all reasonable fees and expenses of the underwriters’ outside legal counsel; any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Underwriter, not to exceed $15,000; and the costs associated with bound volumes and mementos in such quantities as the Underwriter may reasonably request, not to exceed $2,500. $125,000 has already been paid to the Underwriter as an advance against accountable expenses; and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriter or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “RepresentativeUnderwriter’s Warrants”) covering a number of shares equal to five percent (5%) of the total number of Shares sold Firm Shares, substantially in the form and content attached hereto as Annex V.
(b) The Underwriter’s Warrants will be exercisable from the Closing Date of the Offering will expire five (5) years from the date of commencement of sales of the Offering, including the Over-Allotment Option. The RepresentativeUnderwriter’s Warrants will be exercisable at a price equal to one hundred and twenty five percent (125%) of the public offering price of the underlying Ordinary Shares in connection with the Offering. The Underwriter’s Warrants shall not be redeemable. The RepresentativeCompany will register the Ordinary Shares underlying the Underwriter’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriter’s Warrants shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing the effective economic disposition of the securities by any person for a period of 180 days from immediately following the Effective Date date of effectiveness, except that they may be transferred to any member participating in the Offering and expiring on the fiveofficers or partners thereof, if all securities so transferred remain subject to the lock-year anniversary up restriction for the remainder of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisionstime period. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the RepresentativeThe Underwriter’s Warrants may be exercised as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Underwriter’s Warrants holder’s expense, and unlimited “piggyback” registration rights for a period of three five (5) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if The Underwriter’s Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriter reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriter’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) EXXXX and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters Underwriter and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters Underwriter will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid which as of the date hereof is $125,000, representing an advance to be applied towards the accountable expenses allowance (the “Advances”), all documented out-of-pocket expenses of the Underwriters Underwriter (including but not limited to fees and disbursements of UnderwritersUnderwriter’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000150,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriter’ out-of-pocket expenses are less than the Advances, the Underwriter will return to the Company that portion of the Advances not offset by actual expenses.
Appears in 1 contract
Samples: Underwriting Agreement (Intelligent Living Application Group Inc.)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters Underwriter or their respective designees their its designee(s) the following compensation (or pro rata portion (based on the number of Firm Securities purchasedthereof, if applicable) of the following compensation with respect to the Offered Securities which they are offeringpurchased from the Company in this Offering:
(i) An an underwriting discount applied at each Closing equal to eight seven percent (87.0%) of the Public Offering Priceaggregate gross proceeds (inclusive the Over-allotment Option to purchase the Additional Shares) raised in the Offering;
(ii) a non-accountable expense allowance of one percent (1.0%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $150,000, of which $75,000 has already been paid to the Underwriter as an advance against accountable expenses; and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriter or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “RepresentativeUnderwriter’s Warrants”) covering a number of shares equal to five seven percent (57.0%) of the total number of Firm Shares and Additional Shares sold in this offering.
(b) In compliance with FINRA Rule 5110(e)(1), the Underwriter’s Warrants and the underlying securities will be locked up for 180 days beginning on the date of commencement of sales of the Offering and will expire five (5) years after the Effective Date, subject to certain exceptions as set forth in FINRA Rule 5110(e)(2). The Underwriter’s Warrants will be exercisable at a price equal to one hundred and forty percent (140%) of the public offering price of the underlying Ordinary Shares in connection with the Offering, including the Over-Allotment Option. The RepresentativeUnderwriter’s Warrants shall not be redeemable. The RepresentativeCompany will register the Ordinary Shares underlying the Underwriter’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriter’s Warrants and the underlying securities shall not be sold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days beginning on the date of commencement of sales of the Offering, except that they may be transferred to any member participating in the Offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the time period. The Underwriter will have the option to exercise, transfer or assign the Underwriter’s Warrants at any time, provided that the underlying securities shall not be transferred during the lock-up period; i.e., the Shares underlying the Underwriter’s Warrants shall be exercisable, in whole or in part, commencing 180 days from remain subject to the Effective Date and expiring on the five180-year anniversary of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any antiday lock-dilution provisionsup period. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the RepresentativeThe Underwriter’s Warrants may be exercised as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Underwriter’s Warrants holder’s expense, and unlimited “piggyback” registration rights for a period of three years commencing six (6) months after the Effective Date at the Company’s expense, each with a duration of no more than five years from the date of commencement of sales of the offering in compliance with FINRA Rule 5110(g)(8)(D). In addition, if The Underwriter’s Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriter reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriter’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) EXXXX and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters Underwriter and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs all fees and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”)due diligence” meetings;
(viii) all the road show expenses incurred by the Company;
(ix) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ixx) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(xxi) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a public relations background search firm as contemplated in Section 5(s) of this Agreementacceptable to the Underwriter, not to exceed $15,000;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging bound volumes and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, mementos in such quantities as the Representative Underwriter may reasonably request, not to exceed $2,500; and
(xiv) fees and expenses of the Underwriter’s legal counsel, not to exceed $75,000.
(fe) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters Underwriter will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b12(b) hereof, or subsequent to a Material Adverse Change, the Company will pay, less any advances previously paid which as of the date hereof is $125,000, including $75,000 as an advance to be applied towards the accountable expenses allowance (the “Advance”) and $50,000 paid at the time the Company files the Registration Statement publicly. On the Closing Date, the Company shall pay all the Underwriter $25,000 such that as of the Closing Date the Company shall have paid the Underwriter a total of no more than $150,000 in respect of such accountable expenses pursuant to this Section 6(e). All documented out-of-pocket expenses of the Underwriters Underwriter (including but not limited to fees and disbursements of Underwriters’ Underwriter’s Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000150,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriter’ out-of-pocket expensesexpenses are less than the Advance, the Underwriter will return to the Company that portion of the Advances not offset by actual expenses in accordance with FINRA Rule 5110(g)(4)(A).
Appears in 1 contract
Samples: Underwriting Agreement (Starbox Group Holdings Ltd.)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight seven and half percent (87.5%) of the Public Offering Priceaggregate gross proceeds raised in the Offering;
(ii) a non-accountable expense allowance of one percent (1%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of an aggregate amount up to $150,000, including all actual and reasonable fees and expenses of the underwriters’ outside legal counsel; any actual and reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Underwriters; and the costs associated with bound volumes and mementos in such quantities as the Underwriters may reasonably request. $50,000 has already been paid to the Underwriters as an advance against accountable expenses; and
(iiiv) warrants, issued the Company shall grant to the Representative or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “Representative’s Warrants”) covering a number of shares equal to five percent (5%) of the total number of Shares sold Firm Shares, substantially in the form and content attached hereto as Annex V.
(b) The Representative’s Warrants will be exercisable from the Closing Date of the Offering and will expire five (5) years from the date of commencement of sales of the Offering, including . The Representative’s Warrants will be exercisable at a price equal to one hundred and twenty five percent (125%) of the Over-Allotment Optionpublic offering price of the underlying Ordinary Shares in connection with the Offering. The Representative’s Warrants shall not be redeemable. The Company will register the Ordinary Shares underlying the Representative’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Representative’s Warrants shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing 180 days from the Effective Date and expiring on the five-year anniversary effective economic disposition of the Effective Date at an initial exercise price securities by any person for a period of $[____] per share of Common Stock, which is equal to one hundred and ten percent eighty (110%180) days immediately following the date of effectiveness, except that they may be transferred to any member participating in the Offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the Public Offering Price of the Offered Securities, and time period. The Underwriters will have substantially similar terms as those Warrants sold the option to exercise warrants at any time, provided that such shares are not transferred during the lock-up period; the 180-day lock period will remain on these underlying shares. The Underwriters shall have the option to exercise, transfer or assign their warrants at any time from issuance but the 180-day lock period shall remain in effect for the offering, including any anti-dilution provisionsunderlying shares. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the The Representative’s Warrants may be exercised as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, and unlimited “piggyback” registration rights for a period of three five (5) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if expense in accordance with the Registration Statement or any other registration statement registering terms set forth in the Representative’s Warrant and/or shares underlying such Representative’s Warrant is not effective at the time the Representative elects to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basisWarrant. The Representative’s Warrants shall further provide for adjustment in the number and price of such warrants (and the shares Ordinary Share underlying such Warrants) in the event of Common Stock issuable upon exercise of the Representative’s Warrantsrecapitalization, are hereinafter referred merger or other structural transaction to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriters reserve the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid which as of the date hereof is $50,000, representing an advance to be applied towards the accountable expenses allowance (the “Advances”), all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000150,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriters’ out-of-pocket expenses are less than the Advances, the Underwriters will return to the Company that portion of the Advances not offset by actual expenses.
(f) The Company hereby agrees to issue and sell to the Underwriters the Option Shares, and the Underwriters shall have the option to purchase, severally and not jointly, in whole or in part, the Option Shares from the Company (the “Over-Allotment Option”), in each case, at a price per share equal to the Purchase Price less an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Option Shares (the “Over-Allotment Option Purchase Price”). The parties agree that the Underwriters may only exercise the Over-Allotment Option for the purpose of covering over-allotments made in connection with the offering of the Firm Shares. The Representative may exercise the Over-Allotment Option on behalf of the Underwriters at any time in whole, or from time to time in part, on or before the forty-fifth (45th) day after the Closing Date of the Offering, by giving written notice to the Company (the “Over-Allotment Exercise Notice”). Each exercise date must be at least one (1) business day after the written notice is given and may not be earlier than the Closing Date nor later than ten (10) business days after the date of such notice. On each day, if any, that the Option Shares are to be purchased, each Underwriter agrees, severally and not jointly, to purchase the number of the Option Shares (subject to such adjustments to eliminate fractional shares as the Representative may determine) that bears the same proportion to the total number of the Option Shares to be purchased on such Additional Closing Date (as defined below) as the number of Firm Shares set forth in Schedule A hereto opposite the name of such Underwriter bears to the total number of the Firm Shares. The Representative may cancel any exercise of the Over-Allotment Option at any time prior to the Closing Date or the applicable Additional Closing Date, as the case may be, by giving written notice of such cancellation to the Company. The Over-Allotment Exercise Notice shall set forth: (i) the aggregate number of Option Shares as to which the Over-Allotment Option is being exercised; (ii) the Over-Allotment Option Purchase Price; (iii) the names and denominations in which the Option Shares are to be registered; and (iii) the applicable Additional Closing Date. Payment for the Option Shares (the “Option Shares Payment”) shall be made, against delivery of the Option Shares to be purchased, by wire transfer in immediately available funds to the account(s) specified by the Company to the Representative at least two (2) business day in advance of such payment at the office of VCL Law LLP at [•], Eastern Time, on [•], or at such other place on the same or such other date and time, as shall be designated in writing by the Representative (an “Additional Closing Date”). Delivery of the Firm Shares shall be made through the facilities of DTC, unless the Representative shall otherwise instruct.
Appears in 1 contract
Samples: Underwriting Agreement (Creative Global Technology Holdings LTD)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight six and half percent (86.5%) of the Public Offering Priceaggregate gross proceeds (inclusive the Over-allotment Option to purchase the Option Shares) raised in the Offering;
(ii) a non-accountable expense allowance of one percent (1%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $220,000, including all reasonable fees and expenses of the Underwriters’ outside legal counsel; any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Underwriters; and the costs associated with bound volumes and mementos in such quantities as the Underwriters may reasonably request. $95,000 has already been paid to the Underwriters as an advance against accountable expenses, provided however any unused portion of the accountable expense allowance shall be returned to the Company in accordance with FINRA Rule 5110(g)(4)(A); and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriters or to such other parties their designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “Representative’s Underwriters’ Warrants”) covering a number of shares equal to five percent (5%) of the total number of Firm Shares sold , substantially in the Offeringform and content attached hereto as Annex V.
(b) In compliance with FINRA Rule 5110(e)(1), including the Over-Allotment OptionUnderwriters’ Warrants and the underlying securities will be locked up for 180 day beginning on the date of commencement of sales of the Offering and will expire five (5) years after the Effective Date. The Representative’s Underwriters’ Warrants will be exercisable at a price equal to one hundred and fifteen percent (115%) of the public offering price of the underlying Ordinary Shares in connection with the Offering. The Underwriters’ Warrants shall not be redeemable. The Representative’s Company will register the Ordinary Shares underlying the Underwriters’ Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriters’ Warrants and the underlying securities shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing the effective economic disposition of the securities by any person for a period of 180 days from the Effective Date and expiring beginning on the five-year anniversary date of commencement of sales of the Effective Date at an initial exercise price of $[____] per share of Common StockOffering, which is equal except that they (or any portion thereof) may be transferred or assigned to one hundred and ten percent (110%) any successor to the Underwriter, any officer, manager, member or partner of the Public Underwriter, as well as to any member participating in the Offering Price and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisionstime period. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the Representative’s The Underwriters’ Warrants may be exercised at any time after the issuance of the Warrants as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Underwriters’ Warrants holder’s expense, provided such demand registration rights will not be greater than five years from the date of the commencement of sales of this offering in compliance with FINRA Rule 5110(g)(8)(C), and unlimited “piggyback” registration rights for a period of three five (5) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if The Underwriters’ Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriters reserve the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) EXXXX and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the cost of preparing, printing and delivering certificates, if any, representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid which as of the date hereof is $95,000, representing an advance to be applied towards the accountable expenses allowance (the “Advances”), all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000220,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriters’ out-of-pocket expenses are less than the Advances, the Underwriters will return to the Company that portion of the Advances not offset by actual expenses. The Company hereby agrees to issue and sell to the Representative the Option Shares, and the Representative shall have the option to purchase, in whole or in part, the Option Shares from the Company (the “Over-Allotment Option”), in each case, at a price per share equal to the Purchase Price less an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Option Shares (the “Over-Allotment Option Purchase Price”). The parties agree that the Representative may only exercise the Over-Allotment Option for the purpose of covering over-allotments made in connection with the offering of the Firm Shares. The Representative may exercise the Over-Allotment Option at any time in whole, or from time to time in part, on or before the forty-fifth (45th) day after effective date of the Registration Statement, by giving written notice to the Company (the “Over-Allotment Exercise Notice”). Each exercise date must be at least one (1) business day after the written notice is given and may not be earlier than the Closing Date nor later than ten (10) business days after the date of such notice. The Representative may cancel any exercise of the Over-Allotment Option at any time prior to the Closing Date or the applicable Additional Closing Date, as the case may be, by giving written notice of such cancellation to the Company. The Over-Allotment Exercise Notice shall set forth: (i) the aggregate number of Option Shares as to which the Over-Allotment Option is being exercised; (ii) the Over-Allotment Option Purchase Price; (iii) the names and denominations in which the Option Shares are to be registered; and (iii) the applicable Additional Closing Date. Payment for the Option Shares (the “Option Shares Payment”) shall be made, against delivery of the Option Shares to be purchased, by wire transfer in immediately available funds to the account(s) specified by the Company to the Representative at least two (2) business day in advance of such payment at the office of VCL Law LLP at [●], Eastern Time, on [●], or at such other place on the same or such other date and time, as shall be designated in writing by the Representative (an “Additional Closing Date”). Delivery of the Firm Shares shall be made through the facilities of The Depository Trust Company (“DTC”), unless the Representative shall otherwise instruct.
Appears in 1 contract
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters Underwriter or their respective designees their its designee(s) the following compensation (or pro rata portion (based on the number of Firm Securities purchasedthereof, if applicable) of the following compensation with respect to the Offered Securities which they are offeringpurchased from the Company in this Offering:
(i) An an underwriting discount applied at each Closing equal to eight six percent (86.0%) of the Public Offering Priceaggregate gross proceeds (inclusive the Over-allotment Option to purchase the Additional Shares) raised in the Offering;
(ii) a non-accountable expense allowance of one percent (1.0%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $250,000, of which $200,000 has already been paid to the Underwriter as an advance against accountable expenses; and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriter or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “Representative’s Warrants”) covering a number of shares equal to five fifteen percent (515.0%) of the total number of Firm Shares and Additional Shares sold in this Offering.
(b) In compliance with FINRA Rule 5110(e)(1), the Representative’s Warrants and the underlying securities will be locked up for 180 days beginning on the date of commencement of sales of the Offering and will expire three (3) years after the Effective Date, subject to certain exceptions as set forth in FINRA Rule 5110(e)(2). The Representative’s Warrants are non-exercisable for six (6) months after the close of the Offering and will expire three (3) years after the sales of the Offering, including . The Representative’s Warrants will be exercisable at a price equal to one hundred and fifteen percent (115%) of the Over-Allotment Optionpublic offering price of the underlying Ordinary Shares in connection with the Offering. The Representative’s Warrants shall not be redeemable. The Company will register the Ordinary Shares underlying the Representative’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Representative’s Warrants and the underlying securities shall not be sold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days beginning on the date of commencement of sales of the Offering, except that they may be transferred to any member participating in the Offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the time period. The Underwriter will have the option to exercise, transfer or assign the Representative’s Warrants at any time, provided that the underlying securities shall not be transferred during the lock-up period; i.e., the Shares underlying the Representative’s Warrants shall be exercisable, in whole or in part, commencing 180 days from remain subject to the Effective Date and expiring on the five180-year anniversary of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any antiday lock-dilution provisionsup period. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the The Representative’s Warrants may be exercised as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Representative’s Warrants holder’s expense, and unlimited “piggyback” registration rights for a period of three years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if each with a duration of no more than three (3) years from the Registration Statement or any other registration statement registering date of commencement of sales of the Representative’s Warrant and/or shares underlying such Representative’s Warrant is not effective at the time the Representative elects to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basisoffering in compliance with FINRA Rule 5110(g)(8)(D). The Representative’s Warrants shall further provide for adjustment in the number and price of such warrants (and the shares Ordinary Share underlying such Warrants) in the event of Common Stock issuable upon exercise recapitalization, merger or other structural transaction to prevent dilution. In the event that the Company chooses to disengage or terminate Network 1 Financial Securities, Inc. as its Underwriter prior to the effectiveness of the Registration Statement but after the initial filing of the Registration Statement with the SEC, Network 1 Financial Securities, Inc. will be due the full amount of the Representative’s Warrants, are hereinafter referred Warrants that would be due to collectively as them at the “Representative’s Securities” and Closing Date of the Offered Securities and the Representative’s Securities are collectively referred to as the “SecuritiesIPO.”
(bc) The Underwriter reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriter’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters Underwriter and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs all fees and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”)due diligence” meetings;
(viii) all the road show expenses incurred by the Company;
(ix) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ixx) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(xxi) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a public relations background search firm as contemplated in Section 5(s) of this Agreementacceptable to the Underwriter, not to exceed $15,000;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging bound volumes and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, mementos in such quantities as the Representative Underwriter may reasonably request, not to exceed $2,500; and
(xiv) fees and expenses of the Underwriter’s legal counsel, not to exceed $75,000.
(fe) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters Underwriter will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b12(b) hereof, or subsequent to a Material Adverse Change, the Company will pay, less any advances previously paid which as of the date hereof is $200,000, including $75,000 as an advance to be applied towards the accountable expenses allowance (the “Advance”), $50,000 paid upon the first confidential filing of the Registration Statement, and $75,000 paid at the time the Company files the Registration Statement publicly. On the Closing Date, the Company shall pay all the Underwriter $50,000 such that as of the Closing Date the Company shall have paid the Underwriter a total of no more than $250,000 in respect of such accountable expenses pursuant to this Section 6(e). All documented out-of-pocket expenses of the Underwriters Underwriter (including but not limited to fees and disbursements of Underwriters’ Underwriter’s Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000250,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriter’ out-of-pocket expensesexpenses are less than the Advance, the Underwriter will return to the Company that portion of the Advances not offset by actual expenses in accordance with FINRA Rule 5110(g)(4)(A).
Appears in 1 contract
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight seven percent (87%) of the Public Offering Priceaggregate gross proceeds raised in the Offering;
(ii) an accountable expense allowance of up to $250,000 of which $80,000 which has been paid by the Company in advance, including, among other things, all reasonable fees and expenses of the Underwriters’ outside legal counsel; any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Underwriters; and the costs associated with bound volumes and mementos in such quantities as the Underwriters may reasonably request, provided that any expense over $5,000 shall require prior written or email approval of the Company;
(iii) a non-accountable expense allowance of zero point seven five percent (0.75%) of the gross proceeds of the Offering; and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriter or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “RepresentativeUnderwriter’s Warrants”) covering a number of shares equal to five percent (5%) of the total number of Shares sold Shares, substantially in the form and content attached hereto as Exhibit G. The Underwriter’s Warrants will be exercisable six months from the Closing Date of the Offering will expire five (5) years from the date of commencement of sales of the Offering, including the Over-Allotment Option. The RepresentativeUnderwriter’s Warrants will be exercisable at a price equal to one hundred and twenty percent (120%) of the public offering price of the underlying Ordinary Shares in connection with the Offering. The Underwriter’s Warrants shall not be redeemable. The RepresentativeCompany will register the Ordinary Shares underlying the Underwriter’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriter’s Warrants shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing the effective economic disposition of the securities by any person for a period of 180 days from immediately following the Effective Date date of effectiveness, except that they may be transferred to any member participating in the Offering and expiring on the fiveofficers or partners thereof, if all securities so transferred remain subject to the lock-year anniversary up restriction for the remainder of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and time period. The Underwriter will have substantially similar terms as those Warrants sold the option to exercise its warrants at any time, provided that such shares are not transferred during the lock-up period; the 180-day lock period will remain on these underlying shares. The Underwriter shall have the option to exercise, transferred or assign its warrants at any time from issuance but the 180-day lock period shall remain in effect for the offering, including any anti-dilution provisionsunderlying shares. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the RepresentativeThe Underwriter’s Warrants may be exercised as to all or a lesser number of shares of the underlying Common Stock, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Shares at the Company’s expense, an additional demand registration at the Underwriter’s Warrants holder’s expense, and unlimited “piggyback” registration rights for a period of three five (5) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if The Underwriter’s Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(b) The Underwriters reserve the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(c) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to is not included in the Representative) (maximum accountable expense allowance, including the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) EXXXX and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 79, 8 10 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid, representing an advance to be applied towards the accountable expenses allowance (the “Advances”), all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000250,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriters’ out-of-pocket expenses are less than the Advances, the Underwriters will return to the Company that portion of the Advances not offset by actual expenses.
Appears in 1 contract
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Firm Securities which they are offering:
(i) An underwriting discount applied at each Closing equal to eight percent (8%) of the Public Offering Price, it being understood that $35,000 has been paid to the Representative as an advance to be applied towards such underwriting discount; and
(ii) warrants, issued to the Representative or to such other parties designated by the Representative, to purchase up to an aggregate of [________[ ] shares of Common Stock (the “Representative’s Warrants”) equal to five eight percent (58.0%) of the total number of Shares sold in the Offering, including the Over-Allotment Option. The Representative’s Warrants shall not be redeemable. The Representative’s Warrants shall be exercisable, in whole or in part, commencing 180 days from the Effective Date date of the Final Prospectus and expiring on the five-year anniversary of the Effective Date date of the Final Prospectus at an initial exercise price of $[____[ ] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisions. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the The Representative’s Warrants may be exercised as to all or a lesser number of shares of Common Stock, will provide for for, among other things, cashless exercise and will contain provisions for one demand registration of the underlying shares of Common Stock at the Company’s expense, an additional demand registration right at the holder’s expense and unlimited “piggyback” registration rights for a period of three seven years commencing six (6) months after the Effective Date date of the Final Prospectus at the Company’s expense. In addition, if the Registration Statement or any other registration statement registering the Representative’s Warrant and/or shares underlying shall provide for adjustment in the number and price of such Representative’s Warrant is not effective at and the time the Representative elects Warrant Shares to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basisprevent dilution. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securities.”
(b) Whether or not the transactions contemplated by this Agreement are consummated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000, which amount was previously advanced to the Representative) (the “Advance”)Offering, including, without limitation:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees and expenses in connection with filing of the Registration Statement and Prospectus, any amendments, supplements and other required filings with the Commission in connection with or as a result of the Offering;
(iv) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingSecurities Act;
(ivv) all fees, expenses and disbursements relating to the registration or qualification of the Shares and Warrants for offering and sale under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings);
(vvi) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determine;
(vivii) all fees, expenses and disbursements relating to background checks of the Company’s officers and directors;
(viiviii) the costs and all reasonable travel expenses of the Company’s officers and employees and any other expense of the Company relating to investor presentations on any “road show” undertaken incurred in connection with the marketing of the offering attending or hosting meetings with prospective purchasers of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show Securities (“Road Show Expenses”);
(viiiix) any stock transfer taxes incurred in connection with this Agreement or the Offering;
(ixx) the cost of preparing, printing and delivering certificates, if any, representing the Securities;
(xxi) the cost and charges of any transfer agent, warrant agent and/or registrar for the Securities;
(xixii) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xiixiii) the costs and expenses of a public relations firm as contemplated in Section 5(s4(n) of this Agreement;
(xiiixiv) the costs of all mailing and printing of the underwriting documents (including this the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xivxv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed the greater of (a) $100,000100,000 or (b) 1% of the gross proceeds raised in the Offering;
(xvxvi) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,00050,000; and
(xvixvii) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve fifteen (1215) months from the date of commencement of sales of the Offering Closing Date to act at very minimum as lead managing underwriter and book runner, or minimally as co-lead manager and co-book runner and/or co-lead placement agent, with at least 33.350% of the economics or, in the case of a three-handed deal, 33% of the economics, for any and all future public and private equity financings equity, equity-linked or debt offerings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offeringscommercial debt, (ii) funding from a strategic investorequipment financing, or (iii) equity issued to purchase business assets or to acquire a strategic companyseller financing in connection with any acquisition by the Company, and (iv) any financing with existing investors). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 20 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, the Right of First Refusal shall nonetheless become operative and shall remain in full force and effect for a period of twelve months from the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after date of such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000); and (ii) the cost of leather bound volumes of the Offering documents and Offering commemorative lucite (or other reasonable form) memorabilia and bound books to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 3, and Sections 7, 8 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 3, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay all out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000, including 50,000 plus the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed the greater of (i) $100,000, less the $50,000 Advance; and the Representative shall rebate any portion 100,000 or (ii) 1% of the Advance to gross proceeds raised in the extent it exceeds the Representative’s actual out-of-pocket expensesOffering.
Appears in 1 contract
Samples: Underwriting Agreement (U.S. Dry Cleaning Services Corp)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight six percent (86%) of the Public Offering Priceaggregate gross proceeds raised in the Offering;
(ii) a non-accountable expense allowance of one percent (1%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $180,000, including all reasonable fees and expenses of the underwriters’ outside legal counsel; any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Underwriters; and the costs associated with bound volumes and mementos in such quantities as the Underwriters may reasonably request; and
(iiiv) warrants, issued to the Representative or to such other parties designated by the Representative, warrants to purchase up to its Ordinary Shares in an aggregate of [________] shares of Common Stock (the “Representative’s Warrants”) amount equal to five percent (5%) of the total number of Ordinary Shares sold in this offering (the Offering, including the Over-Allotment Option“Representative’s Warrants”). The Representative’s Warrants shall not may be redeemableexercised at a price per share equal to 120% of the initial public offering price of the Ordinary Shares sold in this offering. The Representative’s Warrants shall be exercisable, in whole or in part, commencing 180 days from the Effective Date and expiring on the five-year anniversary of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisions. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, Ordinary Shares underlying the Representative’s Warrants may be exercised as to all or a lesser number of shares of Common Stockshares, will provide for purchased via cashless exercise exercise, and will contain provisions for unlimited one demand registration of the sale of the underlying shares of our Ordinary Shares and immediate “piggyback” registration rights at the Company’s expense for a period of three years commencing six (6) months after from the Effective Date at the Company’s expense. In addition, if the Registration Statement or any other registration statement registering the Representative’s Warrant and/or shares underlying such Representative’s Warrant is not effective at the time the Representative elects to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basisdate of commencement of sales of this offering. The Representative’s Warrants and the underlying shares will be deemed compensation by FINRA, and therefore will be subject to FINRA Rule 5110(e)(1). In accordance with FINRA Rule 5110(e)(1), and except as otherwise permitted by FINRA rules, neither the Representative’s Warrants nor any of Common Stock our shares issued upon exercise of the Representative’s Warrants may be exercised, sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of such securities by any person, for a period of 180 days beginning on the date of commencement of sales of this offering. The issuance of the Representative’s Warrants and the underlying Ordinary Shares that are issuable upon exercise of the Representative’s Warrants, Warrants are hereinafter referred to collectively as being registered in the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesregistration statement.”
(b) The Underwriters reserve the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(c) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid, representing an advance to be applied towards the accountable expenses allowance (the “Advances”), all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000450,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriters’ out-of-pocket expenses are less than the Advances, the Underwriters will return to the Company that portion of the Advances not offset by actual expenses.
Appears in 1 contract
Samples: Underwriting Agreement (ORIENTAL RISE HOLDINGS LTD)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight seven and half percent (87.5%) of the Public Offering Priceaggregate gross proceeds raised in the Offering;
(ii) a non-accountable expense allowance of one and half percent (1.5%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $150,000, including all reasonable fees and expenses of the underwriters’ outside legal counsel; any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Underwriter, not to exceed $15,000; and the costs associated with bound volumes and mementos in such quantities as the Underwriter may reasonably request, not to exceed $2,500. $75,000 has already been paid to the Underwriter as an advance against accountable expenses; and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriter or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “RepresentativeUnderwriter’s Warrants”) covering a number of shares equal to five nine percent (59%) of the total number of Shares sold Firm Shares, substantially in the form and content attached hereto as Annex V.
(b) The Underwriter’s Warrants will be exercisable from the Closing Date of the Offering will expire five (5) years from the date of commencement of sales of the Offering, including the Over-Allotment Option. The RepresentativeUnderwriter’s Warrants will be exercisable at a price equal to one hundred and twenty five percent (125%) of the public offering price of the underlying Ordinary Shares in connection with the Offering. The Underwriter’s Warrants shall not be redeemable. The RepresentativeCompany will register the Ordinary Shares underlying the Underwriter’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriter’s Warrants shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing the effective economic disposition of the securities by any person for a period of 180 days from immediately following the Effective Date date of effectiveness, except that they may be transferred to any member participating in the Offering and expiring on the fiveofficers or partners thereof, if all securities so transferred remain subject to the lock-year anniversary up restriction for the remainder of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisionstime period. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the RepresentativeThe Underwriter’s Warrants may be exercised as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Underwriter’s Warrants holder’s expense, and unlimited “piggyback” registration rights for a period of three five (5) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if The Underwriter’s Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriter reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriter’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters Underwriter and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters Underwriter will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid which as of the date hereof is $75,000, representing an advance to be applied towards the accountable expenses allowance (the “Advances”), all documented out-of-pocket expenses of the Underwriters Underwriter (including but not limited to fees and disbursements of UnderwritersUnderwriter’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000150,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriter’ out-of-pocket expenses are less than the Advances, the Underwriter will return to the Company that portion of the Advances not offset by actual expenses.
Appears in 1 contract
Samples: Underwriting Agreement (Intelligent Living Application Group Inc.)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight seven percent (87%) of the Public Offering Priceaggregate gross proceeds raised in the Offering;
(ii) an accountable expense allowance of up to $250,000 of which $80,000 which has been paid by the Company in advance, including, among other things, all reasonable fees and expenses of the Underwriters’ outside legal counsel; any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Underwriters; and the costs associated with bound volumes and mementos in such quantities as the Underwriters may reasonably request, provided that any expense over $5,000 shall require prior written or email approval of the Company;
(iii) a non-accountable expense allowance of zero point seven five percent (0.75%) of the gross proceeds of the Offering; and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriter or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “RepresentativeUnderwriter’s Warrants”) covering a number of shares equal to five percent (5%) of the total number of Shares sold Shares, substantially in the form and content attached hereto as Exhibit G. The Underwriter’s Warrants will be exercisable six months from the Closing Date of the Offering will expire five (5) years from the date of commencement of sales of the Offering, including the Over-Allotment Option. The RepresentativeUnderwriter’s Warrants will be exercisable at a price equal to one hundred and twenty percent (120%) of the public offering price of the underlying Ordinary Shares in connection with the Offering. The Underwriter’s Warrants shall not be redeemable. The RepresentativeCompany will register the Ordinary Shares underlying the Underwriter’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriter’s Warrants shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing the effective economic disposition of the securities by any person for a period of 180 days from immediately following the Effective Date date of effectiveness, except that they may be transferred to any member participating in the Offering and expiring on the fiveofficers or partners thereof, if all securities so transferred remain subject to the lock-year anniversary up restriction for the remainder of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and time period. The Underwriter will have substantially similar terms as those Warrants sold the option to exercise its warrants at any time, provided that such shares are not transferred during the lock-up period; the 180-day lock period will remain on these underlying shares. The Underwriter shall have the option to exercise, transferred or assign its warrants at any time from issuance but the 180-day lock period shall remain in effect for the offering, including any anti-dilution provisionsunderlying shares. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the RepresentativeThe Underwriter’s Warrants may be exercised as to all or a lesser number of shares of the underlying Common Stock, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Shares at the Company’s expense, an additional demand registration at the Underwriter’s Warrants holder’s expense, and unlimited “piggyback” registration rights for a period of three five (5) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if The Underwriter’s Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(b) The Underwriters reserve the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(c) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to is not included in the Representative) (maximum accountable expense allowance, including the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 79, 8 10 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid, representing an advance to be applied towards the accountable expenses allowance (the “Advances”), all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000250,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriters’ out-of-pocket expenses are less than the Advances, the Underwriters will return to the Company that portion of the Advances not offset by actual expenses.
Appears in 1 contract
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offeringpurchase from the Company in this Offering:
(i) An an underwriting discount applied at each Closing equal to eight seven percent (87%) of the Public Offering Priceaggregate gross proceeds (inclusive the Over-allotment Option to purchase the Additional Shares) raised in the Offering;
(ii) a non-accountable expense allowance of one percent (1%) of the gross proceeds of the Offering, to be split among the Underwriters;
(iii) an accountable expense allowance of up to $80,000, of which $50,000 has already been paid to the Representative as an advance against accountable expenses, provided however any unused portion of the accountable expense allowance shall be returned to the Company in acco9rdance with FINRA Rule 5110(g)(4)(A); and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriters or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “RepresentativeUnderwriter’s Warrants”) covering a number of shares equal to five seven percent (57%) of the total number of Firm Shares and Additional Shares sold in this offering, to be split among the Underwriters.
(b) In compliance with FINRA Rule 5110(e)(1), the Underwriter’s Warrants and the underlying securities will be locked up for 180 beginning on the date of commencement of sales of the Offering and will expire five (5) years after the Effective Date. The Underwriter’s Warrants will be exercisable at a price equal to one hundred and twenty percent (120%) of the public offering price of the underlying Ordinary Shares in connection with the Offering, including the Over-Allotment Option. The RepresentativeUnderwriter’s Warrants shall not be redeemable. The RepresentativeCompany will register the Ordinary Shares underlying the Underwriter’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriter’s Warrants and the underlying securities shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing the effective economic disposition of the securities by any person for a period of 180 days from the Effective Date and expiring beginning on the five-year anniversary date of commencement of sales of the Effective Date at an initial exercise price of $[____] per share of Common StockOffering, which is equal except that they (or any portion thereof) may be transferred or assigned to one hundred and ten percent (110%) any successor to the Underwriter, any officer, manager, member or partner of the Public Underwriter, as well as to any member participating in the Offering Price and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisionstime period. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the RepresentativeThe Underwriter’s Warrants may be exercised at any time after the issuance of the Warrants as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Underwriter’s expense provided such demand registration rights will not be greater than five years from the date of the commencement of sales of this offering in compliance with FINRA Rule 5110(g)(8)(C), and unlimited “piggyback” registration rights for a period of three five (5) years commencing six (6) months after the Effective Date at the Company’s expense. In additionThe Underwriter’s Warrants shall further provide for adjustment in the number and price of such warrants (and the Ordinary Share underlying such Warrants) in the event of recapitalization, if merger or other structural transaction to prevent dilution.
(c) The Representative reserves the Registration Statement right to reduce any item of compensation or any other registration statement registering adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Representative’s Warrant and/or shares underlying such Representative’s Warrant ’ aggregate compensation is not effective at in excess of FINRA Rules or that the time the Representative elects to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesterms thereof require adjustment.”
(bd) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters Representative and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer any reasonable costs and expenses incurred in conducting background checks of the Securities from the Company Company’s officers and directors by a background search firm acceptable to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging bound volumes and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, mementos in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 3, and Sections 7, 8 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 3, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay all out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to the extent it exceeds the Representative’s actual out-of-pocket expenses.and
Appears in 1 contract
Samples: Underwriting Agreement (Millennium Group International Holdings LTD)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters Underwriter or their respective designees their its designee(s) the following compensation (or pro rata portion (based on the number of Firm Securities purchasedthereof, if applicable) of the following compensation with respect to the Offered Securities which they are offeringpurchased from the Company in this Offering:
(i) An an underwriting discount applied at each Closing equal to eight percent (88.0%) of the Public Offering Priceaggregate gross proceeds (inclusive the Over-allotment Option to purchase the Additional Shares) raised in the Offering;
(ii) a non-accountable expense allowance of one and a half percent (1.5%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $180,000, of which $150,000 has already been paid to the Underwriter as an advance against accountable expenses; and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriter or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “RepresentativeUnderwriter’s Warrants”) covering a number of shares equal to five ten percent (510.0%) of the total number of Firm Shares and Additional Shares sold in this offering.
(b) In compliance with FINRA Rule 5110(e)(1), the Underwriter’s Warrants and the underlying securities will be locked up for 180 days beginning on the date of commencement of sales of the Offering and will expire five (5) years thereafter, subject to certain exceptions as set forth in FINRA Rule 5110(e)(2). The Underwriter’s Warrants will be exercisable at a price equal to one hundred and twenty percent (120%) of the public offering price of the underlying Ordinary Shares in connection with the Offering, including the Over-Allotment Option. The RepresentativeUnderwriter’s Warrants shall not be redeemable. The RepresentativeCompany will register the Ordinary Shares underlying the Underwriter’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriter’s Warrants and the underlying securities shall not be sold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days beginning on the date of commencement of sales of the Offering, except that they may be transferred to any member participating in the Offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the time period. The Underwriter will have the option to exercise, transfer or assign the Underwriter’s Warrants at any time, provided that the underlying securities shall not be transferred during the lock-up period; i.e., the Shares underlying the Underwriter’s Warrants shall be exercisable, in whole or in part, commencing 180 days from remain subject to the Effective Date and expiring on the five180-year anniversary of the Effective Date at an initial exercise price of $[____] per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any antiday lock-dilution provisionsup period. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the RepresentativeThe Underwriter’s Warrants may be exercised as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Underwriter’s Warrants holder’s expense, and unlimited “piggyback” registration rights for a period of three years commencing six (6) months after the Effective Date at the Company’s expense, each with a duration of no more than five years from the date of commencement of sales of the offering in compliance with FINRA Rule 5110(g)(8)(D). In addition, if The Underwriter’s Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriter reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriter’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters Underwriter and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs all fees and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”)due diligence” meetings;
(viii) all the road show expenses incurred by the Company;
(ix) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ixx) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(xxi) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a public relations background search firm as contemplated in Section 5(s) of this Agreementacceptable to the Underwriter, not to exceed $15,000;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging bound volumes and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, mementos in such quantities as the Representative Underwriter may reasonably request, not to exceed $2,500; and
(xiv) fees and expenses of the Underwriter’s legal counsel, not to exceed $100,000.
(fe) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters Underwriter will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b12(b) hereof, or subsequent to a Material Adverse Change, the Company will pay, less any advances previously paid which as of the date hereof is $150,000, including $100,000 as an advance to be applied towards the accountable expenses allowance (the “Advance”) and $50,000 paid at the time the Company files the Registration Statement publicly. On the Closing Date, the Company shall pay all the Underwriter $30,000 such that as of the Closing Date the Company shall have paid the Underwriter a total of no more than $180,000 in respect of such accountable expenses pursuant to this Section 6(e). All documented out-of-pocket expenses of the Underwriters Underwriter (including but not limited to fees and disbursements of Underwriters’ Underwriter’s Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000180,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriter’ out-of-pocket expensesexpenses are less than the Advance, the Underwriter will return to the Company that portion of the Advances not offset by actual expenses in accordance with FINRA Rule 5110(g)(4)(A).
Appears in 1 contract
Samples: Underwriting Agreement (BloomZ Inc.)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) : An underwriting discount applied at each Closing equal to eight an aggregate of six and one-half percent (86.5%) of the Public aggregate gross proceeds raised in the Offering Price; and(the “Underwriting Discount”).
(iib) warrants, issued The Company hereby agrees to issue to the Representative or Underwriters (and/or their designees) on the Closing Date warrants to purchase such other parties designated number of ordinary shares of the Company equal to six and half percent (6.5%) of the gross payment amount to be disbursed to the Company on the Closing Date for the Securities divided by the Representativepurchase price of the Firm Shares (“Underwriters’ Warrants”). For illustrative purposes only, if an equity investment of USD$40million is completed and investors purchased eight million (8,000,000) shares at USD$5 per share, the Underwriters shall receive warrants to purchase up to an aggregate of [________] 520,000 shares of Common Stock with a fixed exercise price of USD$5 per share. The Underwriters’ Warrant agreement, in the form attached hereto as Exhibit A (the “Representative’s WarrantsUnderwriters’ Warrant Agreement”) equal to five percent (5%) of the total number of Shares sold in the Offering), including the Over-Allotment Option. The Representative’s Warrants shall not be redeemable. The Representative’s Warrants shall be exercisable, in whole or in part, commencing 180 days from on the effective date of the Registration Statement (the “Effective Date Date”) and expiring on the five-year anniversary of the Effective Date thereof at an initial exercise price per ordinary share of $[____] per share of Common Stock●], which is equal to one hundred and ten percent (110%) 100% of the Public Offering Price purchase price of the Offered Securities, Firm Shares. The Underwriters’ Warrants shall include a “cashless” exercise feature and will have substantially similar terms as those Warrants sold in the offering, including any antishall include a provision for “piggy-dilution provisions. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the Representative’s Warrants may be exercised as to all or a lesser number of shares of Common Stock, will provide for cashless exercise and will contain provisions for unlimited “piggybackback” registration rights until expiration or until the shares underlying the warrant are eligible for resale pursuant to an exemption from registration. The Representative understands and agrees that there are significant restrictions pursuant to FINRA Rule 5110 against transferring the Underwriters’ Warrant Agreement and the underlying ordinary shares during the one hundred eighty (180) days after the Effective Date and by its acceptance thereof shall agree that it will not sell, transfer, assign, pledge or hypothecate the Underwriters’ Warrant Agreement, or any portion thereof, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of such securities for a period of three years commencing six one hundred eighty (6180) months after days following the Effective Date at to anyone other than (i) an Underwriter, or (ii) a bona fide officer or partner of the Company’s expense. In addition, Underwriters; and only if any such transferee agrees to the Registration Statement foregoing lock-up restrictions.
(c) Delivery of the Underwriters’ Warrant Agreement shall be made on the Closing Date and shall be issued in the name or any other registration statement registering the Representative’s Warrant and/or shares underlying names and in such Representative’s Warrant is not effective at the time the Representative elects to exercise the Representative’s Warrants, then authorized denominations as the Representative may exercise request.
(d) The Company has agreed to reimburse the Representative‘s Warrants on a cashless basis. The Representative’s Warrants Representative for all actual fees and expenses incurred by the shares Underwriters in connection with due diligence costs, which shall not exceed $50,000, $50,000 of Common Stock issuable which was paid upon exercise the execution of the Representative’s WarrantsEngagement Letter.
(e) On the Closing Date, are hereinafter referred the Company hereby agrees to collectively as pay the Representative an advisory fee of $50,000 (the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “SecuritiesAdvisory Fee”).”
(bf) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters' aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(g) Whether or not the transactions contemplated by this Agreement, the Registration Statement, the General Disclosure Package and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s 's Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels 's counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Securities Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determineNasdaq Capital Market;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers 's officers, directors and directors;
(vii) the costs employees and expenses any other expense of the Company relating to investor presentations on any “road show” undertaken or the Underwriters incurred in connection with the marketing attending or hosting meetings with prospective purchasers of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show Securities (“Road Show Expenses”); provide, however, that all travel and lodging expenses of the representative in excess of $5,000 shall be subject to prior written approval by the Company;
(viiivii) any stock transfer taxes incurred in connection with this Agreement or the Offering;
(ixviii) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(xix) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xix) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the any reasonable costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence conducting background checks of the Company's officers and directors by a background search firm acceptable to the Representative (excluding fees payable to Representative’s legal counsel) at a cost not to exceed $25,0001,200 per person); and
(xvixi) all other costs costs, fees (including Underwriters' Counsel's fees up to $75,000 and expenses) and expenses incident to the performance of the Company obligations hereunder which Offering that are not otherwise specifically provided for in this Section 35.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(fh) It is understood, however, that except as provided in this Section 35, and Sections 7, 8 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 35, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ ' Counsel and reasonable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to the extent it exceeds the Representative’s actual out-of-pocket expenses5110.
Appears in 1 contract
Samples: Underwriting Agreement (Consumer Capital Group, Inc.)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An underwriting discount applied at each Closing equal to eight percent (8%) of the Public Offering Price; and
(ii) warrants, issued to the Representative or to such other parties designated by the Representative, to purchase up to an aggregate of [________] 330,625 shares of Common Stock (the “Representative’s Warrants”) equal to five percent (5%) of the total number of Shares sold in the Offering, including the Over-Allotment Option. The Representative’s Warrants shall not be redeemable. The Representative’s Warrants shall be exercisable, in whole or in part, commencing 180 days from the Effective Date and expiring on the five-year anniversary of the Effective Date at an initial exercise price of $[____] 1.21 per share of Common Stock, which is equal to one hundred and ten percent (110%) of the Public Offering Price of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisions. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the Representative’s Warrants may be exercised as to all or a lesser number of shares of Common Stock, will provide for cashless exercise and will contain provisions for unlimited “piggyback” registration rights for a period of three years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if the Registration Statement or any other registration statement registering the Representative’s Warrant and/or shares underlying such Representative’s Warrant is not effective at the time the Representative elects to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securities.”
(b) Whether or not the transactions contemplated by this Agreement are consummated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000, which amount was previously advanced to the Representative) (the “Advance”), including, without limitation:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels and accountants in connection with the preparation and filing of the Registration Statement, the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoing;
(iv) all fees, expenses and disbursements relating to the registration or qualification of the Shares and Warrants for offering and sale under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings);
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determine;
(vi) all fees, expenses and disbursements relating to background checks of the Company’s officers and directors;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes incurred in connection with this Agreement or the Offering;
(ix) the cost of preparing, printing and delivering certificates, if any, representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 3, and Sections 7, 8 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 3, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay all out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to the extent it exceeds the Representative’s actual out-of-pocket expenses.
Appears in 1 contract
Samples: Underwriting Agreement (Oculus Innovative Sciences, Inc.)
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters Underwriter or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight seven percent (87%) of the Public Offering Priceaggregate gross proceeds raised in the Offering;
(ii) a non-accountable expense allowance of one and one-half percent (1.5%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $125,000, of which $100,000 has already been paid to the Underwriter as an advance against accountable expenses; and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriter or to such other parties its designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “RepresentativeUnderwriter’s Warrants”) covering a number of shares equal to five nine percent (59%) of the total number of Firm Shares.
(b) The Underwriter’s Warrants will be non-exercisable for six (6) months after the closing of the Offering and will expire three (3) years after the Effective Date. The Underwriter’s Warrants will be exercisable at a price equal to one hundred and twenty-five percent (125%) of the public offering price of the underlying Class A Ordinary Shares sold in connection with the Offering, including the Over-Allotment Option. The RepresentativeUnderwriter’s Warrants shall not be redeemable. The RepresentativeCompany will register the Class A Ordinary Shares underlying the Underwriter’s Warrants shall under the Act and will file all necessary undertakings in connection therewith. The Underwriter’s Warrants may not be exercisabletransferred, assigned or hypothecated for a period of six (6) months following the Closing, except that they may be assigned, in whole or in part, commencing 180 days from the Effective Date and expiring on the five-year anniversary to any successor, office, manager, member, or partner of the Effective Date at an initial exercise price Underwriter (or its officers, managers or members of $[____] per share of Common Stockany such successor, which is equal member or partner), and to one hundred and ten percent (110%) members of the Public Offering Price of the Offered Securitiesunderwriting syndicate or selling group and their respective officers, and will have substantially similar terms as those Warrants sold in the offeringmanagers, including any anti-dilution provisionsmembers or partners. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the RepresentativeThe Underwriter’s Warrants may be exercised as to all or a lesser number of shares of Common Stockthe underlying Class A Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Class A Ordinary Share at the Company’s expense, an additional demand registration at the Underwriter’s Warrants holder’s expense, and unlimited “piggyback” registration rights for a period of three (3) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if The Underwriter’s Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Class A Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriter reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriter’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters Underwriter and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ixviii) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing, printing and delivering certificates, if any, preparing certificates representing the Securities;
(xix) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xix) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the any reasonable costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Underwriter, not to exceed $15,000; and
(xi) the costs associated with due diligence (excluding fees payable to Representative’s legal counsel) bound volumes and mementos in such quantities as the Underwriter may reasonably request, not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.;
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters Underwriter will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid which as of the date hereof is $100,000, including $50,000 as an advance to be applied towards the accountable expenses allowance (the “Advances”) and $50,000 paid upon the filing of the Company’s Registration Statement, all documented out-of-pocket expenses of the Underwriters Underwriter (including but not limited to fees and disbursements of UnderwritersUnderwriter’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriter’ out-of-pocket expenses are less than the Advances, the Underwriter will return to the Company that portion of the Advances not offset by actual expenses.
Appears in 1 contract
Consideration; Payment of Expenses. (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the number of Firm Securities purchased) of the following compensation with respect to the Offered Securities which they are offering:
(i) An an underwriting discount applied at each Closing equal to eight six and half percent (86.5%) of the Public Offering Priceaggregate gross proceeds (inclusive the Over-allotment Option to purchase the Option Shares) raised in the Offering;
(ii) a non-accountable expense allowance of one percent (1%) of the gross proceeds of the Offering;
(iii) an accountable expense allowance of up to $220,000, including all reasonable fees and expenses of the underwriters’ outside legal counsel; any reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Underwriters; and the costs associated with bound volumes and mementos in such quantities as the Underwriters may reasonably request. $95,000 has already been paid to the Underwriters as an advance against accountable expenses, provided however any unused portion of the accountable expense allowance shall be returned to the Company in accordance with FINRA Rule 5110(g)(4)(A); and
(iiiv) warrants, issued the Company shall grant to the Representative Underwriters or to such other parties their designated by the Representative, to affiliates share purchase up to an aggregate of [________] shares of Common Stock warrants (the “Representative’s Underwriters’ Warrants”) covering a number of shares equal to five percent (5%) of the total number of Firm Shares sold , substantially in the Offeringform and content attached hereto as Annex V.
(b) In compliance with FINRA Rule 5110(e)(1), including the Over-Allotment OptionUnderwriters’ Warrants and the underlying securities will be locked up for 180 day beginning on the date of commencement of sales of the Offering and will expire five (5) years after the Effective Date. The Representative’s Underwriters’ Warrants will be exercisable at a price equal to one hundred and fifteen percent (115%) of the public offering price of the underlying Ordinary Shares in connection with the Offering. The Underwriters’ Warrants shall not be redeemable. The Representative’s Company will register the Ordinary Shares underlying the Underwriters’ Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriters’ Warrants and the underlying securities shall not be exercisablesold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in whole or in part, commencing the effective economic disposition of the securities by any person for a period of 180 days from the Effective Date and expiring beginning on the five-year anniversary date of commencement of sales of the Effective Date at an initial exercise price of $[____] per share of Common StockOffering, which is equal except that they (or any portion thereof) may be transferred or assigned to one hundred and ten percent (110%) any successor to the Underwriter, any officer, manager, member or partner of the Public Underwriter, as well as to any member participating in the Offering Price and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the Offered Securities, and will have substantially similar terms as those Warrants sold in the offering, including any anti-dilution provisionstime period. If no Warrants are sold in the offering, the Company may determine not to register such Representative’s Warrants. In such event, the Representative’s The Underwriters’ Warrants may be exercised at any time after the issuance of the Warrants as to all or a lesser number of shares of Common Stockthe underlying Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Underwriters’ Warrants holder’s expense, provided such demand registration rights will not be greater than five years from the date of the commencement of sales of this offering in compliance with FINRA Rule 5110(g)(8)(C), and unlimited “piggyback” registration rights for a period of three five (5) years commencing six (6) months after the Effective Date at the Company’s expense. In addition, if The Underwriters’ Warrants shall further provide for adjustment in the Registration Statement or any other registration statement registering number and price of such warrants (and the Representative’s Warrant and/or shares Ordinary Share underlying such Representative’s Warrant is not effective at Warrants) in the time the Representative elects event of recapitalization, merger or other structural transaction to exercise the Representative’s Warrants, then the Representative may exercise the Representative‘s Warrants on a cashless basis. The Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Representative’s Warrants, are hereinafter referred to collectively as the “Representative’s Securities” and the Offered Securities and the Representative’s Securities are collectively referred to as the “Securitiesprevent dilution.”
(bc) The Underwriters reserve the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement are consummatedis terminated, the Company hereby agrees to pay all actual costs and expenses incident to the Offering (less $50,000Offering, which amount was previously advanced to including the Representative) (the “Advance”), including, without limitationfollowing:
(i) all fees and expenses in connection with the preparation, printing, formatting for XXXXX (including XBRL) EXXXX and filing of the Registration Statement, Exchange Act Registration Statement, any Preliminary Prospectus (as defined below) and the Prospectus and any and all amendments and supplements thereto and other required filings with the Commission in connection with or as a result of the Offering, and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA’s Public Offering System;
(iii) all fees, disbursements and expenses of the Company’s counsels counsel and accountants in connection with the preparation and filing registration of the Registration Statement, Securities under the Exchange Act Registration Statement, the Preliminary Prospectus, the Disclosure Package, and the Final Prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoingOffering;
(iv) all fees, reasonable expenses and disbursements relating to in connection with the registration or qualification qualifications of the Shares and Warrants Securities for offering and sale under the “state or foreign securities or blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of Representative’s counsel with respect to such “blue sky” filings)sky laws;
(v) all fees and expenses in connection with listing the Offered Securities on such stock exchange as the Company and Representative shall determinea national securities exchange;
(vi) all fees, reasonable travel expenses and disbursements relating to background checks of the Company’s officers officers, directors and directorsemployees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with all the road show presentations with the prior approval of expenses incurred by the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants in connection with the road show (“Road Show Expenses”);
(viii) any stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;
(ix) the cost of preparing, printing and delivering certificates, if any, representing the Securities;
(x) the cost and charges of any transfer agent, warrant agent and/or or registrar for the Securities;
(xi) stock transfer taxes, if any, payable upon the transfer of the Securities from the Company to the Representative;
(xii) the costs and expenses of a public relations firm as contemplated in Section 5(s) of this Agreement;
(xiii) the costs of all mailing and printing of the underwriting documents (including this Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(xiv) the legal fees for Representative’s legal counsel (other than the legal fees associated with “blue sky” filings, if any referenced in Section 3(b)(iv) above), which amount shall not exceed $100,000;
(xv) the Representative’s accountable expenses including travel, lodging and other “road show” expenses, mailing, printing and reproduction expenses and expenses incurred in connection with due diligence (excluding fees payable to Representative’s legal counsel) not to exceed $25,000; and
(xvi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 3.
(c) The Company grants the Representative the right of first refusal (“Right of First Refusal”) for a period of twelve (12) months from the date of commencement of sales of the Offering to act at very minimum as co-manager and co-book runner and/or co-placement agent, with at least 33.3% of the economics, for any and all future public and private equity financings of the Company or any successor to or any subsidiary of the Company (excluding (i) at-the-market offerings, (ii) funding from a strategic investor, or (iii) equity issued to purchase business assets or to acquire a strategic company). The Company shall provide written notice to Representative with terms of such offering and if Representative fails to accept in writing any such proposal for such public or private sale within 10 days after receipt of a written notice from the Company containing such proposal, then Representative will have no claim or right with respect to any such sale contained in any such notice. In the event the Company terminates this Agreement even though Maxim was prepared to proceed with the Offering, and the Company subsequently completes any public or private financing with any investor introduced to the Company by the Representative at any time during the nine (9) months after such termination, then the Representative shall be entitled to receive the compensation as set forth in Sections 3(a) and 3(b) hereto.
(d) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination and/or suggestion shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
(e) In addition to the costs and expenses set forth in Section 3(b) above, the Company will be responsible for: (i) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) not to exceed $5,000; and (ii) the cost of Offering commemorative lucite (or other reasonable form) memorabilia to be supplied to the Representative valued up to $1,500, in such quantities as the Representative may reasonably request.
(f) It is understood, however, that except as provided in this Section 36, and Sections 78, 8 9 and 11(d) hereof, the Underwriters will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this Section 36, in the event that this Agreement is terminated pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay pay, less any advances previously paid which as of the date hereof is $95,000, representing an advance to be applied towards the accountable expenses allowance (the “Advances”), all documented out-of-pocket expenses of the Underwriters (including but not limited to fees and disbursements of Underwriters’ Counsel and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses (including Underwriters’ Counsel fees) to be reimbursed by the Company shall not exceed $125,000220,000, including the legal fees for Representative’s legal counsel, which amount of legal fees shall not exceed $100,000, less the $50,000 Advance; and the Representative shall rebate any portion of the Advance to Advances. To the extent it exceeds that the Representative’s actual Underwriters’ out-of-pocket expenses are less than the Advances, the Underwriters will return to the Company that portion of the Advances not offset by actual expenses. The Company hereby agrees to issue and sell to the Underwriters the Option Shares, and the Underwriters shall have the option to purchase, severally and not jointly, in whole or in part, the Option Shares from the Company (the “Over-Allotment Option”), in each case, at a price per share equal to the Purchase Price less an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Option Shares (the “Over-Allotment Option Purchase Price”). The parties agree that the Underwriters may only exercise the Over-Allotment Option for the purpose of covering over-allotments made in connection with the offering of the Firm Shares. The Underwriters may exercise the Over-Allotment Option at any time in whole, or from time to time in part, on or before the forty-fifth (45th) day after effective date of the Registration Statement, by giving written notice to the Company (the “Over-Allotment Exercise Notice”). Each exercise date must be at least one (1) business day after the written notice is given and may not be earlier than the Closing Date nor later than ten (10) business days after the date of such notice. On each day, if any, that the Option Shares are to be purchased, each Underwriter agrees, severally and not jointly, to purchase the number of the Option Shares (subject to such adjustments to eliminate fractional shares as the Underwriters may determine) that bears the same proportion to the total number of the Option Shares to be purchased on such Additional Closing Date as the number of Firm Shares set forth in Schedule A hereto opposite the name of such Underwriter bears to the total number of the Firm Shares. The Underwriters may cancel any exercise of the Over-Allotment Option at any time prior to the Closing Date or the applicable Additional Closing Date, as the case may be, by giving written notice of such cancellation to the Company. The Over-Allotment Exercise Notice shall set forth: (i) the aggregate number of Option Shares as to which the Over-Allotment Option is being exercised; (ii) the Over-Allotment Option Purchase Price; (iii) the names and denominations in which the Option Shares are to be registered; and (iii) the applicable Additional Closing Date. Payment for the Option Shares (the “Option Shares Payment”) shall be made, against delivery of the Option Shares to be purchased, by wire transfer in immediately available funds to the account(s) specified by the Company to the Underwriters at least two (2) business day in advance of such payment at the office of VCL Law LLP at [●], Eastern Time, on [●], or at such other place on the same or such other date and time, as shall be designated in writing by the Underwriters (an “Additional Closing Date”). Delivery of the Firm Shares shall be made through the facilities of The Depository Trust Company (“DTC”), unless the Underwriters shall otherwise instruct.
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