Shares Zoo Entertainment, Inc. Common Stock UNDERWRITING AGREEMENT
_________
Shares
Common
Stock
________,
2010
Xxxx
Capital Partners, LLC
As
Representative of the Several Underwriters
Named In
Schedule
I hereto
00
Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxxx, XX 00000
Ladies
and Gentlemen:
Subject
to the terms and conditions stated herein, Zoo Entertainment, Inc., a Delaware
corporation (the “Company”),
proposes to issue and sell to the several underwriters named in Schedule
I hereto (the “Underwriters”)
an aggregate of [__________] authorized but unissued shares (the “Underwritten
Shares”) of Common Stock, par value $0.001 per share, of the
Company (the “Common
Stock”), and Focus Capital Partners, LLC (the “Selling
Stockholder”) agrees to sell to the Underwriters an aggregate of
[__________] shares of Common Stock (the “Secondary
Shares” and, together with the Underwritten Shares, the “Firm
Shares”). The Company has granted the Underwriters the option
to purchase an aggregate of up to [___________] additional shares of Common
Stock (the “Additional
Shares”) as may be necessary to cover over-allotments made in connection
with the offering. The Firm Shares and Additional Shares are
collectively referred to as the “Shares.” Xxxx
Capital Partners, LLC (the “Representative”)
shall act as the representative of the several Underwriters.
The
Company, the Selling Stockholder and the Underwriters hereby confirm their
agreement as follows:
1.
Registration
Statement and Prospectus. The
Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”)
a registration statement on Form S-1 (File No. 333-167294) under the
Securities Act of 1933, as amended (the “Securities
Act”) and the rules and regulations (the “Rules
and Regulations”) of the Commission thereunder, and such amendments to
such registration statement (including post effective amendments) as may have
been required to the date of this Underwriting Agreement (the “Agreement”). Such
registration statement, as amended (including any post effective amendments) has
been declared effective by the Commission. Such registration
statement, including amendments thereto (including post effective amendments
thereto) at such time, the exhibits and any schedules thereto at such time and
the documents and information otherwise deemed to be a part thereof or included
therein by the Securities Act or otherwise pursuant to the Rules and Regulations
at such time, is herein called the “Registration
Statement.” If the Company has filed or files an abbreviated
registration statement pursuant to Rule 462(b) under the Securities Act
(the “Rule 462
Registration Statement”), then any reference herein to the term
Registration Statement shall include such Rule 462 Registration
Statement.
1
The
form of prospectus included in the Registration Statement is hereinafter called
the “Base
Prospectus.” Such Base Prospectus, along with any final
prospectus supplement relating to the Shares filed with the Commission pursuant
to Rule 424 under the Securities Act, or the prospectus that discloses all
the information that was omitted from the Base Prospectus pursuant to Rule 430A
under the Securities Act, and in either case together with any changes contained
in any prospectus filed with the Commission by the Company with the consent of
the Representative after the effective date of the Registration Statement, is
hereinafter called the “Final
Prospectus.” Such Final Prospectus and any preliminary
prospectus supplement or “red xxxxxxx,” in the form in which they shall be filed
with the Commission pursuant to Rule 424(b) under the Securities Act
(including the Base Prospectus as so supplemented) is hereinafter called a
“Prospectus.”
For
purposes of this Agreement, all references to the Registration Statement, the
Rule 462 Registration Statement, the Base Prospectus, the Final Prospectus,
the Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Interactive
Data Electronic Applications system or predecessor system. All
references in this Agreement to amendments or supplements to the Registration
Statement, the Rule 462 Registration Statement, the Base Prospectus, the
Final Prospectus or the Prospectus shall be deemed to mean and include the
subsequent filing of any document under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), that is deemed to be incorporated therein by reference therein or
otherwise deemed by the Rules and Regulations to be a part thereof.
2.
Representations
and Warranties of the Company Regarding the Offering.
(a)
The
Company represents and warrants to, and agrees with, the Underwriters, as of the
date hereof and as of the Closing Date (as defined in Section 5(c)
below), except as otherwise specified, as follows:
(i)
At
each time of effectiveness, at the date hereof and at the Closing Date, the
Registration Statement and any post-effective amendment thereto complied or will
comply in all material respects with the requirements of the Securities Act and
the Rules and Regulations and did not and will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading. The Time of Sale Disclosure Package (as defined in Section 2(a)(ii)(A)(1)
below) as of the date hereof and at the Closing Date, and the Final Prospectus,
as amended or supplemented, at the time of filing pursuant to Rule 424(b)
under the Securities Act and at the Closing Date, did not and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. The representations and warranties set forth in the two
immediately preceding sentences shall not apply to statements in or omissions
from the Registration Statement or any Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by the
Representative, or by any Underwriter through the Representative, specifically
for use in the preparation thereof. The Registration Statement
contains all exhibits and schedules required to be filed by the Securities Act
or the Rules and Regulations. No order preventing or suspending the
effectiveness or use of the Registration Statement or any Prospectus is in
effect and no proceedings for such purpose have been instituted or are pending,
or, to the knowledge of the Company, are contemplated or threatened by the
Commission.
2
(ii)
(A) The
Company has provided a copy to the Underwriters of each Issuer Free Writing
Prospectus (as defined below) used in the sale of Shares. The Company
has filed all Issuer Free Writing Prospectuses required to be so filed with the
Commission, and no order preventing or suspending the effectiveness or use of
any Issuer Free Writing Prospectus is in effect and no proceedings for such
purpose have been instituted or are pending, or, to the knowledge of the
Company, are contemplated or threatened by the Commission. When taken
together with the rest of the Time of Sale Disclosure Package or the Final
Prospectus, since its first use and at all relevant times since then, no Issuer
Free Writing Prospectus has, does or will include (1) any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (2) information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the
Final Prospectus. The representations and warranties set forth in the
immediately preceding sentence shall not apply to statements in or omissions
from the Time of Sale Disclosure Package, the Final Prospectus or any Issuer
Free Writing Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by the Representative, or by any
Underwriter through the Representative, specifically for use in the preparation
thereof. As used in this paragraph and elsewhere in this
Agreement:
(1)
“Time
of Sale Disclosure Package” means the Base Prospectus, the Prospectus
most recently filed with the Commission before the time of this Agreement,
including any preliminary prospectus supplement deemed to be a part thereof,
each Issuer Free Writing Prospectus, and any description of the transaction
provided by the Underwriters included on Schedule
II.
(2)
“Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433 under the Securities Act, relating to the Shares that
(A) is required to be filed with the Commission by the Company, or (B) is exempt
from filing pursuant to Rule 433(d)(5)(i) or (d)(8) under the Securities
Act, in each case in the form filed or required to be filed with the Commission
or, if not required to be filed, in the form retained in the Company’s records
pursuant to Rule 433(g) under the Securities Act.
(B)
At
the time of filing of the Registration Statement and at the date hereof, the
Company was not and is not an “ineligible issuer,” as defined in Rule 405
under the Securities Act or an “excluded issuer” as defined in Rule 164
under the Securities Act.
3
(C)
Each
Issuer Free Writing Prospectus satisfied, as of its issue date and at all
subsequent times through the Prospectus Delivery Period, all other conditions as
may be applicable to its use as set forth in Rules 164 and 433 under the
Securities Act, including any legend, record-keeping or other
requirements.
(iii)
The
financial statements of the Company, together with the related notes, included
or incorporated by reference in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectus comply in all material respects with
the applicable requirements of the Securities Act and the Exchange Act and
fairly present the financial condition of the Company as of the dates indicated
and the results of operations and changes in cash flows for the periods therein
specified in conformity with generally accepted accounting principles
consistently applied throughout the periods involved; and the supporting
schedules included in the Registration Statement present fairly the information
required to be stated therein. No other financial statements, pro
forma financial information or schedules are required under the Securities Act
to be included or incorporated by reference in the Registration Statement, the
Time of Sale Disclosure Package or the Final Prospectus. To the
Company’s knowledge, Amper, Politziner & Xxxxxx, LLP, which has expressed
its opinion with respect to the financial statements and schedules filed as a
part of the Registration Statement and included in the Registration Statement,
the Time of Sale Disclosure Package and the Final Prospectus is an independent
public accounting firm with respect to the Company within the meaning of the
Securities Act and the Rules and Regulations.
(iv)
The
Company had a reasonable basis for, and made in good faith, each
“forward-looking statement” (within the meaning of Section 27A of the Act
or Section 21E of the Exchange Act) contained or incorporated by reference
in the Registration Statement, the Time of Sale Disclosure Package or the Final
Prospectus.
(v)
All
statistical or market-related data included or incorporated by reference in the
Registration Statement, the Time of Sale Disclosure Package or the Final
Prospectus are based on or derived from sources that the Company reasonably
believes to be reliable and accurate, and the Company has obtained the written
consent to the use of such data from such sources, to the extent
required.
(vi)
The
Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is
included or approved for inclusion on The NASDAQ Global Market. There
is no action pending to delist the Common Stock from The NASDAQ Global Market,
nor has the Company received any notification that The NASDAQ Global Market is
contemplating terminating such listing. When issued, the Shares will
be listed on The NASDAQ Global Market.
(vii)
The
Company has not taken, directly or indirectly, any action that is designed to or
that has constituted or that would reasonably be expected to cause or result in
the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
4
(viii)
The
Company is not and, after giving effect to the offering and sale of the Shares,
will not be an “investment company,” as such term is defined in the Investment
Company Act of 1940, as amended.
(b)
Any
certificate signed by any officer of the Company and delivered to the
Representative or to the Underwriters’ counsel shall be deemed a representation
and warranty by the Company to the Underwriters as to the matters covered
thereby.
3.
Representations
and Warranties Regarding the Company.
(a)
The
Company represents and warrants to and agrees with, the Underwriters, except as
set forth in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus, as follows:
(i)
Each
of the Company and its subsidiaries has been duly organized and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and its subsidiaries has the corporate power
and authority to own its properties and conduct its business as currently being
carried on and as described in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus, and is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction in which it owns or
leases real property or in which the conduct of its business makes such
qualification necessary and in which the failure to so qualify would have or is
reasonably likely to result in a material adverse effect upon the business,
prospects, properties, operations, condition (financial or otherwise) or results
of operations of the Company and its subsidiaries, taken as a whole, or in its
ability to perform its obligations under this Agreement (“Material
Adverse Effect”).
(ii)
The
Company has the power and authority to enter into this Agreement and to
authorize, issue and sell the Shares as contemplated by this
Agreement. This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding obligation
of the Company, enforceable in accordance with its terms, except as rights to
indemnity hereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws affecting the
rights of creditors generally and subject to general principles of
equity.
(iii)
The
execution, delivery and performance of this Agreement and the consummation of
the transactions herein contemplated will not (A) result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any law, rule or regulation to which the Company or any subsidiary is subject,
or by which any property or asset of the Company or any subsidiary is bound or
affected, (B) conflict with, result in any violation or breach of, or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any right of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, lease, credit facility, debt, note, bond, mortgage, indenture or
other instrument (the “Contracts”)
or obligation or other understanding to which the Company or any subsidiary is a
party of by which any property or asset of the Company or any subsidiary is
bound or affected, except to the extent that such conflict, default,
termination, amendment, acceleration or cancellation right is not reasonably
likely to result in a Material Adverse Effect, or (C) result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
the Company’s charter or by laws.
5
(iv)
Neither
the Company nor any of its subsidiaries is in violation, breach or default under
its certificate of incorporation, by-laws or other equivalent organizational or
governing documents.
(v)
All
consents, approvals, orders, authorizations and filings required on the part of
the Company and its subsidiaries in connection with the execution, delivery or
performance of this Agreement have been obtained or made, other than such
consents, approvals, orders and authorizations the failure of which to make or
obtain is not reasonably likely, individually or in the aggregate, to result in
a Material Adverse Effect.
(vi)
All
of the issued and outstanding shares of capital stock of the Company are duly
authorized and validly issued, fully paid and nonassessable, and have been
issued in compliance with all applicable securities laws, and conform to the
description thereof in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus. Except for the issuances of options or
restricted stock to directors, employees and consultants in the ordinary course
of business pursuant to equity incentive plans described in the Registration
Statement (excluding exhibits thereto) and the Prospectus, and except as
contemplated by this Agreement, since the respective dates as of which
information is provided in the Registration Statement, the Time of Sale
Disclosure Package or the Prospectus, the Company has not entered into or
granted any convertible or exchangeable securities, options, warrants,
agreements, contracts or other rights in existence to purchase or acquire from
the Company any shares of the capital stock of the Company. The
Shares have been duly authorized and, when issued, will be validly issued, fully
paid and nonassessable, will be issued in compliance with all applicable
securities laws, and will be free of preemptive, registration or similar
rights.
(vii)
Each
of the Company and its subsidiaries has filed all returns (as hereinafter
defined) required to be filed with taxing authorities prior to the date hereof
or has duly obtained extensions of time for the filing thereof. Each
of the Company and its subsidiaries has paid all taxes (as hereinafter defined)
shown as due on such returns that were filed and has paid all taxes imposed on
or assessed against the Company or such respective subsidiary. The
provisions for taxes payable, if any, shown on the financial statements filed
with or as part of the Registration Statement are sufficient for all accrued and
unpaid taxes, whether or not disputed, and for all periods to and including the
dates of such consolidated financial statements. Except as disclosed
in writing to the Underwriters, (A) no issues have been raised (and are
currently pending) by any taxing authority in connection with any of the returns
or taxes asserted as due from the Company or its subsidiaries, and (B) no
waivers of statutes of limitation with respect to the returns or collection of
taxes have been given by or requested from the Company or its
subsidiaries. The term “taxes” mean all federal, state, local,
foreign, and other net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, lease, service, service use,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property, windfall profits, customs, duties or other taxes, fees, assessments,
or charges of any kind whatever, together with any interest and any penalties,
additions to tax, or additional amounts with respect thereto. The
term “returns” means all returns, declarations, reports, statements, and other
documents required to be filed in respect to taxes.
6
(viii)
Since
the respective dates as of which information is given in the Registration
Statement, the Time of Sale Disclosure Package or the Prospectus, (a) neither
the Company nor any of its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions
other than in the ordinary course of business, (b) the Company has not declared
or paid any dividends or made any distribution of any kind with respect to its
capital stock; (c) there has not been any change in the capital stock of the
Company or any of its subsidiaries (other than a change in the number of
outstanding shares of Common Stock due to the issuance of shares upon the
exercise of outstanding options or warrants or the issuance of restricted stock
awards or restricted stock units under the Company’s existing stock awards plan,
or any new grants thereof in the ordinary course of business), (d) there has not
been any material change in the Company’s long-term or short-term debt, and (e)
there has not been the occurrence of any Material Adverse
Effect.
(ix)
There
is not pending or, to the knowledge of the Company, threatened, any action, suit
or proceeding to which the Company or any of its subsidiaries is a party or of
which any property or assets of the Company is the subject before or by any
court or governmental agency, authority or body, or any arbitrator or mediator,
which, individually or in the aggregate, is reasonably likely to result in a
Material Adverse Effect.
(x)
The
Company and each of its subsidiaries holds, and is in compliance with, all
franchises, grants, authorizations, licenses, permits, easements, consents,
certificates and orders (“Permits”)
of any governmental or self regulatory agency, authority or body required for
the conduct of its business, and all such Permits are in full force and effect,
in each case except where the failure to hold, or comply with, any of them is
not reasonably likely to result in a Material Adverse
Effect.
(xi)
The
Company and its subsidiaries have good and marketable title to all property
(whether real or personal) described in the Registration Statement, the Time of
Sale Disclosure Package and the Prospectus as being owned by them, in each case
free and clear of all liens, claims, security interests, other encumbrances or
defects, except those that are not reasonably likely to result in a Material
Adverse Effect. The property held under lease by the Company and its
subsidiaries is held by them under valid, subsisting and enforceable leases with
only such exceptions with respect to any particular lease as do not interfere in
any material respect with the conduct of the business of the Company and its
subsidiaries.
(xii)
The
Company and each of its subsidiaries owns or possesses or has valid right to use
all patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets and similar rights (“Intellectual
Property”) necessary for the conduct of the business of the Company and
its subsidiaries as currently carried on and as described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus. To
the knowledge of the Company, no action or use by the Company or any of its
subsidiaries will involve or give rise to any infringement of, or license or
similar fees for, any Intellectual Property of others. Neither the
Company nor any of its subsidiaries has received any notice alleging any such
infringement or fee.
7
(xiii)
The
Company and each of its subsidiaries has complied with, is not in violation of,
and has not received any notice of violation relating to any law, rule or
regulation relating to the conduct of its business, or the ownership or
operation of its property and assets, including, without limitation, (A) the
Currency and Foreign Transactions Reporting Act of 1970, as amended, or any
money laundering laws, rules or regulations, (B) any laws, rules or regulations
related to health, safety or the environment, including those relating to the
regulation of hazardous substances, (C) the Xxxxxxxx-Xxxxx Act and the rules and
regulations of the Commission thereunder, (D) the Foreign Corrupt Practices Act
of 1977 and the rules and regulations thereunder, and (E) the Employment
Retirement Income Security Act of 1974 and the rules and regulations thereunder,
in each case except where the failure to be in compliance is not reasonably
likely to result in a Material Adverse Effect.
(xiv)
Neither
the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, employee, representative, agent or affiliate of the
Company or any of its subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”);
and the Company will not directly or indirectly use the proceeds of the offering
of the Shares contemplated hereby, or lend, contribute or otherwise make
available such proceeds to any person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(xv)
The
Company and each of its subsidiaries carries, or is covered by, insurance in
such amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties and as is customary for companies
engaged in similar businesses in similar industries.
(xvi)
No
labor dispute with the employees of the Company or any of its subsidiaries
exists or, to the knowledge of the Company, is imminent that is reasonably
likely to result in a Material Adverse Effect.
(xvii)
Neither
the Company, its subsidiaries nor, to its knowledge, any other party is in
violation, breach or default of any Contract that is reasonably likely to result
in a Material Adverse Effect.
(xviii)
No
supplier, customer, distributor or sales agent of the Company has notified the
Company that it intends to discontinue or decrease the rate of business done
with the Company, except where such decrease is not reasonably likely to result
in a Material Adverse Effect.
8
(xix)
There
are no claims, payments, issuances, arrangements or understandings for services
in the nature of a finder’s, consulting or origination fee with respect to the
introduction of the Company to the Underwriters or the sale of the Shares
hereunder or any other arrangements, agreements, understandings, payments or
issuances with respect to the Company that may affect the Underwriters’
compensation, as determined by the Financial Industry Reguatory Authority
(“FINRA”).
(xx)
Except
as disclosed to the Underwriters in writing, the Company has not made any direct
or indirect payments (in cash, securities or otherwise) to (i) any person, as a
finder’s fee, investing fee or otherwise, in consideration of such person
raising capital for the Company or introducing to the Company persons who
provided capital to the Company, (ii) any FINRA member, or (iii) any person or
entity that has any direct or indirect affiliation or association with any FINRA
member within the 12-month period prior to the date on which the Registration
Statement was filed with the Commission (“Filing Date”) or
thereafter.
(xxi)
None
of the net proceeds of the offering will be paid by the Company to any
participating FINRA member or any affiliate or associate of any participating
FINRA member, except as specifically authorized herein.
(xxii)
To
the Company’s knowledge, no (i) officer or director of the Company or its
subsidiaries, (ii) owner of 5% or more of any class of the Company’s securities
(with beneficial ownership determined pursuant to Rule 13d-3 under the Exchange
Act) or that of its subsidiaries or (iii) owner of any amount of the Company’s
unregistered securities acquired within the 180-day period prior to the Filing
Date, has any direct or indirect affiliation or association with any FINRA
member. The Company will advise the Representative and the
Underwriters’ counsel if it becomes aware that any officer, director or
stockholder of the Company or its subsidiaries is or becomes an affiliate or
associated person of a FINRA member participating in the
offering.
(xxiii)
Other
than the Underwriters, no person has the right to act as an underwriter or as a
financial advisor to the Company in connection with the transactions
contemplated hereby.
4.
Representations
and Warranties of the Selling Stockholder.
(a)
The
Selling Stockholder represents and warrants and to, and agrees with, the
Underwriters as follows:
(i)
This
Agreement has been duly authorized, executed and delivered by such Selling
Stockholder, and constitutes a valid, legal and binding obligation of such
Selling Stockholder, enforceable in accordance with its terms, except as rights
to indemnity hereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity. The execution, delivery and
performance of this Agreement and the consummation of the transactions herein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, agreement or
instrument to which the Selling Stockholder is a party or by which it is bound
or to which any of its property is subject, or any order, rule, regulation or
decree of any court or governmental agency or body having jurisdiction over the
Selling Stockholder or any of its properties, except for violations and defaults
that individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect. The execution, delivery and performance of
this Agreement and the consummation of the transactions herein contemplated will
not result in a breach or violation of any of the terms and provisions of, or
constitute a default under, the Selling Stockholder’s charter or by
laws. No consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the execution,
delivery and performance of this Agreement or for the consummation of the
transactions contemplated hereby, including the sale of the Shares by the
Selling Stockholder, except as may be required under the Securities Act or state
securities or blue sky laws; and the Selling Stockholder has the power and
authority to enter into this Agreement and to sell the Shares as contemplated by
this Agreement.
9
(ii)
Such
Selling Stockholder is, on the date hereof, the record and beneficial owner of
all of the Shares to be sold by the Selling Stockholder hereunder free and clear
of all liens, encumbrances, equities and claims and has duly indorsed such
Shares in blank or has duly signed a stock power assigning all right, title and
interest to the Shares to be sold by such Selling Stockholder, with all
signatures appropriately guaranteed by an eligible guarantor institution with
membership in an approved medallion guaranty program pursuant to
Rule 17Ad-15 under the Exchange Act.
(iii)
On
the applicable Closing Date, all stock transfer or other taxes (other than
income taxes) that are required to be paid in connection with the sale and
transfer by such Selling Stockholder of the Shares will be fully paid or
provided for by such Selling Stockholder and all laws imposing such taxes will
be fully complied with.
(iv)
All
information with respect to such Selling Stockholder contained in the
Registration Statement, the Time of Sale Disclosure Package and any Prospectus,
or any amendment or supplement thereto, complied or will comply in all material
respects with all applicable requirements of the Securities Act and the Rules
and Regulations promulgated thereunder and does not and will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(v)
Such
Selling Stockholder, directly or indirectly, has not entered into any
commitment, transaction or other arrangement, including any prepaid forward
contract, 10b5-1 plan or similar agreement, which transfers or may transfer any
of the legal or beneficial ownership or any of the economic consequences of
ownership of the Shares, except as has been previously disclosed in writing to
the Underwriters.
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(vi)
Such
Selling Stockholder represents and warrants that it has not prepared or had
prepared on its behalf or used or referred to any “free writing prospectus” (as
defined in Rule 405 of the Act) and further represents that it has not
distributed and will not distribute any written materials in connection with the
offer or sale of the Shares that could otherwise constitute a “free writing
prospectus” (as defined in Rule 405 of the Act) required to be filed with
the Commission or retained under Rule 433 of the Act.
(vii)
All
information relating to such Selling Stockholder furnished by or on behalf of
such Selling Stockholder in writing expressly for use in the Registration
Statement, the Time of Sale Disclosure Package or any Prospectus, as the case
may be, is as of the applicable Closing Date, true, correct, and complete in all
material respects, and does not, and will not, contain any untrue statement of a
material fact or omit to state any material fact necessary to make such
information not misleading. In addition, such Selling Stockholder
confirms as accurate the number of shares of Common Stock set forth opposite
such Selling Stockholder’s name in the Time of Sale Disclosure Package and any
Prospectus under the caption “Selling Stockholder” (both prior to and after
giving effect to the sale of the Shares).
(viii)
Such
Selling Stockholder does not have any registration or other similar rights to
have any equity or debt securities registered for sale by the Company under the
Registration Statement or included in an offering contemplated by this
Agreement, except for such rights that have been waived.
(ix)
Such
Selling Stockholder has not taken and will not take, directly or indirectly, any
action designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(x)
Nothing
has come to the attention of such Selling Stockholder that has caused such
Selling Stockholder to believe that the representations and warranties of the
Company contained in this Section are not true and correct; such Selling
Stockholder has reviewed the Registration Statement, the Time of Sale Disclosure
Package and each Prospectus and has no knowledge of any material fact, condition
or information not disclosed in the Registration Statement, the Time of Sale
Disclosure Package or such Prospectus which has had or which could reasonably be
expected to result in a Material Adverse Effect, and such Selling Stockholder is
not prompted to sell shares of Common Stock by any information concerning the
Company that is not set forth in the Registration Statement, the Time of Sale
Disclosure Package or a Prospectus.
(b)
Any
certificate signed by any officer of the Selling Stockholder and delivered to
the Representative or to the Underwriters’ counsel shall be deemed a
representation and warranty by such Selling Stockholder to the Underwriters as
to the matters covered thereby.
5.
Purchase,
Sale and Delivery of Shares.
(a)
On
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, the Company agrees to
issue and sell the Underwritten Shares and the Selling Stockholder agrees to
sell the Secondary Shares to the Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase the number of Firm Shares set
forth opposite such Underwriter’s name on Schedule
I hereto. The purchase price for each Firm Share shall be
$_______ per share (the “Per
Share Price”).
11
(b)
The
Company hereby grants to the Underwriters the option to purchase some or all of
the Additional Shares and, upon the basis of the warranties and representations
and subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase all or any portion of the Additional Shares at the
Per Share Price as may be necessary to cover over-allotments made in connection
with the transactions contemplated hereby. This option may be
exercised by the Underwriters at any time (but not more than once) on or before
the thirtieth (30th) day
following the date hereof, by delivery of a written notice to the Company by the
Representative (the “Option
Notice”). The Option Notice shall set forth the aggregate
number of Additional Shares as to which the option is being exercised, and the
date and time when the Additional Shares are to be delivered (such date and time
being herein referred to as the “Option
Closing Date”); provided,
however,
that the Option Closing Date shall not be earlier than the Closing Date (as
defined below) nor earlier than the first (1st)
business day after the date on which the option shall have been exercised nor
later than the fifth (5th)
business day after the date on which the option shall have been exercised unless
the Company and the Representative otherwise agree. Such Additional
Shares shall be purchased from the Company, severally and not jointly, for the
accounts of the several Underwriters in proportion to the number of Firm Shares
set forth opposite each such Underwriter’s name in Schedule
I hereto, except that the respective purchase obligations of each
Underwriter shall be adjusted by the Representative so that no Underwriter shall
be obligated to purchase fractional shares.
Payment of
the purchase price for and delivery of the Additional Shares shall be made at
the Option Closing Date in the same manner and at the same office as the payment
for the Firm Shares as set forth in Section
5(c) below. For
the purpose of expediting the checking of the certificate for the Additional
Shares by the Underwriters, the Company agrees to make a form of such
certificate available to the Representative for such purpose at least one full
business day preceding the Option Closing Date.
(c)
The
Firm Shares will be delivered by the Company and the Selling Stockholder to the
Underwriters against payment of the purchase price therefor by wire transfer of
same day funds payable to the order of the Company or the Selling Stockholder,
as appropriate, at the offices of Xxxx Capital Partners, LLC, 00 Xxxxxxxxx
Xxxxx, Xxxxxxx Xxxxx, XX 00000, or such other location as may be mutually
acceptable, at 6:00 a.m. Pacific Time, on the third (or if the Firm Shares are
priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after
4:30 p.m. Eastern Time, the fourth) full business day following the date hereof,
or at such other time and date as the Representative and the Company determine
pursuant to Rule 15c6-1(a) under the Exchange Act, or, in the case of the
Additional Shares, at such date and time set forth in the Option
Notice. The time and date of delivery of the Firm Shares or the
Additional Shares, as applicable, is referred to herein as the “Closing
Date.” If the Representative so elects, delivery of the Firm
Shares and Additional Shares may be made by credit through full fast transfer to
the account at The Depository Trust Company designated by the
Representative. Certificates representing the Shares, in definitive
form and in such denominations and registered in such names as the
Representative may request upon at least two business days’ prior notice to the
Company, will be made available for checking and packaging not later than 10:30
a.m. Pacific Time on the business day next preceding the Closing Date at the
above addresses, or such other location as may be mutually
acceptable.
12
6.
Covenants.
(a)
The
Company covenants and agrees with the Underwriters as
follows:
(i)
During
the period beginning on the date hereof and ending on the later of the Closing
Date or such date as determined by the Underwriters the Prospectus is no longer
required by law to be delivered in connection with sales by an underwriter or
dealer (the “Prospectus
Delivery Period”), prior to amending or supplementing the Registration
Statement, including any Rule 462 Registration Statement, the Time of Sale
Disclosure Package or the Prospectus, the Company shall furnish to the
Representative for review and comment a copy of each such proposed amendment or
supplement, and the Company shall not file any such proposed amendment or
supplement to which the Representative reasonably objects.
(ii)
From
the date of this Agreement until the end of the Prospectus Delivery Period, the
Company shall promptly advise the Representative in writing (A) of the receipt
of any comments of, or requests for additional or supplemental information from,
the Commission, (B) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to the
Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing
Prospectus, (C) of the time and date that any post-effective amendment to the
Registration Statement becomes effective and (D) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending its use or the use of the
Time of Sale Disclosure Package or any Issuer Free Writing Prospectus, or of any
proceedings to remove, suspend or terminate from listing or quotation the Common
Stock from any securities exchange upon which it is listed for trading or
included or designated for quotation, or of the threatening or initiation of any
proceedings for any of such purposes. If the Commission shall enter
any such stop order at any time during the Prospectus Delivery Period, the
Company will use its reasonable efforts to obtain the lifting of such order at
the earliest possible moment. Additionally, the Company agrees that
it shall comply with the provisions of Rules 424(b), 430A and 430B, as
applicable, under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under Rule 424(b) or
Rule 433 were received in a timely manner by the Commission (without
reliance on Rule 424(b)(8) or 164(b) of the Securities
Act).
(iii)
(A) During
the Prospectus Delivery Period, the Company will comply with all requirements
imposed upon it by the Securities Act, as now and hereafter amended, and by the
Rules and Regulations, as from time to time in force, and by the Exchange Act,
as now and hereafter amended, so far as necessary to permit the continuance of
sales of or dealings in the Shares as contemplated by the provisions hereof, the
Time of Sale Disclosure Package, the Registration Statement and the
Prospectus. If during such period any event occurs the result of
which the Prospectus (or if the Prospectus is not yet available to prospective
purchasers, the Time of Sale Disclosure Package ) would include an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary or appropriate in the
opinion of the Company or its counsel or the Representative or Underwriters’
counsel to amend the Registration Statement or supplement the Prospectus (or if
the Prospectus is not yet available to prospective purchasers, the Time of Sale
Disclosure Package ) to comply with the Securities Act, the Company will
promptly notify the Underwriters and will amend the Registration Statement or
supplement the Prospectus (or if the Prospectus is not yet available to
prospective purchasers, the Time of Sale Disclosure Package) so as to correct
such statement or omission or effect such compliance.
13
(B)
If
at any time following the issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development the result of which such Issuer Free
Writing Prospectus conflicted or would conflict with the information contained
in the Registration Statement or any Prospectus or included or would include an
untrue statement of a material fact or omitted or would omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading, the Company
has promptly notified or promptly will notify the Underwriters and has promptly
amended or will promptly amend or supplement, at its own expense, such Issuer
Free Writing Prospectus to eliminate or correct such conflict, untrue statement
or omission.
(iv)
The
Company shall take or cause to be taken all necessary action to qualify the
Shares for sale under the securities laws of such jurisdictions as the
Representative reasonably designates and to continue such qualifications in
effect so long as required for the distribution of the Shares, except that the
Company shall not be required in connection therewith to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified, to execute a general consent to service of process in any state or
to subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise subject.
(v)
The
Company will furnish to the Underwriters and counsel for the Underwriters copies
of the Registration Statement, each Prospectus, any Issuer Free Writing
Prospectus, and all amendments and supplements to such documents, in each case
as soon as available and in such quantities as the Underwriters may from time to
time reasonably request.
(vi)
The
Company will make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the end of the
Company’s current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period that shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Rules and
Regulations.
(vii)
The
Company, whether or not the transactions contemplated hereunder are consummated
or this Agreement is terminated, will pay or cause to be paid (A) all
expenses (including transfer taxes allocated to the respective transferees)
incurred in connection with the delivery to the Underwriters of the Shares, (B)
all expenses and fees (including, without limitation, fees and expenses of the
Company’s counsel) in connection with the preparation, printing, filing,
delivery, and shipping of the Registration Statement (including the financial
statements therein and all amendments, schedules, and exhibits thereto), the
Shares, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free
Writing Prospectus and any amendment thereof or supplement thereto, (C) all
reasonable filing fees and reasonable fees and disbursements of the
Underwriters’ counsel incurred in connection with the qualification of the
Shares for offering and sale by the Underwriters or by dealers under the
securities or blue sky laws of the states and other jurisdictions that the
Underwriters shall designate, (D) the fees and expenses of any transfer agent or
registrar, (E) the reasonable filing fees and reasonable fees and disbursements
of Underwriters’ counsel incident to any required review and approval by FINRA,
of the terms of the sale of the Shares, (F) listing fees, if any, and (G) all
other costs and expenses incident to the performance of its obligations
hereunder that are not otherwise specifically provided for herein. In
addition to the foregoing, the Company will (x) reimburse the Underwriters for
up to $200,000 for its expenses (including fees, disbursements and other
out-of-pocket expenses of Underwriters’ counsel) incurred in connection with the
purchase and sale of the Shares contemplated hereby and (y) pay the
Underwriters, on the Closing Date, an amount equal to two percent (2%) of the
gross proceeds received by the Company from the sale of the Firm Shares and the
Additional Shares, as applicable, as a non-accountable reimbursement of the
Underwriters’ other expenses. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 7
or Section 10,
the Company will reimburse the Underwriters for up to $40,000 for its expenses
(including, but not limited to, reasonable fees and disbursements of counsel,
travel expenses, postage, facsimile and telephone charges) incurred by the
Underwriters in connection with their investigation, preparing to market and
marketing the Shares or in contemplation of performing their obligations
hereunder.
14
(viii)
The
Company intends to apply the net proceeds from the sale of the Shares to be sold
by it hereunder for the purposes set forth in the Time of Sale Disclosure
Package and in the Final Prospectus.
(ix)
The
Company has not taken and will not take, directly or indirectly, during the
Prospectus Delivery Period, any action designed to or which might reasonably be
expected to cause or result in, or that has constituted, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
(x)
The
Company represents and agrees that, unless it obtains the prior written consent
of the Representative, and each of the Underwriters represents and agrees that,
unless it obtains the prior written consent of the Company, it has not made and
will not make any offer relating to the Shares that would constitute an Issuer
Free Writing Prospectus; provided that the prior written consent of the parties
hereto shall be deemed to have been given in respect of the free writing
prospectuses included in Schedule
II. Any such free writing prospectus consented to by the
Company and the Underwriters is hereinafter referred to as a “Permitted
Free Writing Prospectus.” The Company represents that it has
treated or agrees that it will treat each Permitted Free Writing Prospectus as
an “issuer free writing prospectus,” as defined in Rule 433, and has
complied or will comply with the requirements of Rule 433 applicable to any
Permitted Free Writing Prospectus, including timely Commission filing where
required, legending and record-keeping.
15
(xi)
The
Company hereby agrees that, without the prior written consent of the
Representative, it will not, during the period ending 180 days after the date
hereof (“Lock-Up
Period”), (i) offer, pledge, issue, sell, contract to sell, purchase,
contract to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock; or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise; or (iii) file
any registration statement with the Commission relating to the offering of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock. The restrictions contained in the
preceding sentence shall not apply to (1) the Shares to be sold hereunder, (2)
the issuance of Common Stock upon the exercise of options, warrants, or other
rights to acquire securities of the Company (or pursuant to any antidilution or
price protection provisions granted with respect thereto) disclosed as
outstanding in the Registration Statement (excluding exhibits thereto) or the
Prospectus, or (3) the issuance of stock options not exercisable during the
Lock-Up Period to employees, directors and consultants and the grant of
restricted stock awards or restricted stock units pursuant to equity incentive
plans described in the Registration Statement (excluding exhibits thereto) and
the Prospectus. Notwithstanding the foregoing, if (x) the Company
issues an earnings release or material news, or a material event relating to the
Company occurs, during the last 17 days of the Lock-Up Period, or (y) prior to
the expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, the restrictions imposed by this clause shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event,
unless the Representative waives such extension in writing.
(b)
The
Selling Stockholder covenants and agrees with the Underwriters as
follows:
(i)
Such
Selling Stockholder, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, will pay or cause to be paid all
expenses (including transfer taxes allocated to the respective transferees)
incurred in connection with the delivery to the Underwriters of the Secondary
Shares to be sold by such Selling Stockholder hereunder.
(ii)
Such
Selling Stockholder hereby agrees that, without the prior written consent of the
Representative, it will not, during the Lock-Up Period, (i) offer, pledge, sell,
contract to sell, purchase, contract to purchase, lend, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock; or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or
otherwise. The restrictions contained in the preceding sentence shall
not apply to (1) the Shares to be sold hereunder, (2) the issuance of Common
Stock upon the exercise of options or warrants disclosed as outstanding in the
Registration Statement (excluding exhibits thereto) or the Prospectus, (3) the
issuance of employee stock options not exercisable during the Lock-Up Period and
the grant of restricted stock pursuant to equity incentive plans described in
the Registration Statement (excluding exhibits thereto) and the
Prospectus. Notwithstanding the foregoing, if (x) the Company issues
an earnings release or material news, or a material event relating to the
Company occurs, during the last 17 days of the Lock-Up Period, or (ii) prior to
the expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, the restrictions imposed by this clause shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event,
unless the Representative waives such extension in writing.
16
(iii)
Such
Selling Stockholder will deliver to the Representative prior to the applicable
Closing Date a properly completed and executed United States Treasury Department
Form W-9.
(iv)
During
the Prospectus Delivery Period, such Selling Stockholder will advise the
Underwriters promptly, and if requested by the Underwriters, will confirm such
advice in writing, of any change in information relating to such Selling
Stockholder in the Registration Statement, the Time of Sale Disclosure Package
or any Prospectus.
(v)
Such
Selling Stockholder agrees that it will not prepare or have prepared on its
behalf or use or refer to any “free writing prospectus” (as such term is defined
in Rule 405 under the Act), and agrees that it will not distribute any
written materials in connection with the offer or sale of the
Shares.
7.
Conditions
of the Underwriters’ Obligations. The
obligations of the Underwriters hereunder to purchase the Shares are subject to
the accuracy, as of the date hereof and at the Closing Date (as if made at the
Closing Date), of and compliance with all representations, warranties and
agreements of the Company and the Selling Stockholder contained herein, the
performance by the Company and the Selling Stockholder of its obligations
hereunder and the following additional conditions:
(a)
If
filing of the Prospectus, or any amendment or supplement thereto, or any Issuer
Free Writing Prospectus, is required under the Securities Act or the Rules and
Regulations, the Company shall have filed the Prospectus (or such amendment or
supplement) or such Issuer Free Writing Prospectus with the Commission in the
manner and within the time period so required (without reliance on
Rule 424(b)(8) or 164(b) under the Securities Act); the Registration
Statement shall remain effective; no stop order suspending the effectiveness of
the Registration Statement or any part thereof, any Rule 462 Registration
Statement, or any amendment thereof, nor suspending or preventing the use of the
Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing
Prospectus shall have been issued; no proceedings for the issuance of such an
order shall have been initiated or threatened; any request of the Commission or
the Underwriters for additional information (to be included in the Registration
Statement, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free
Writing Prospectus or otherwise) shall have been complied with to the
Underwriters’ satisfaction.
17
(b)
FINRA
shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(c) The
Representative shall not have reasonably determined, and advised the Company,
that the Registration Statement, the Time of Sale Disclosure Package or the
Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free
Writing Prospectus, contains an untrue statement of fact which, in the
Representative’s reasonable opinion, is material, or omits to state a fact
which, in the Representative’s reasonable opinion, is material and is required
to be stated therein or necessary to make the statements therein not
misleading.
(d)
On
the Closing Date, there shall have been furnished to the Underwriters the
opinion and negative assurance letters of Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo P.C., dated the Closing Date and addressed to the Underwriters, in
form and substance reasonably satisfactory to the Underwriters, to the effect
set forth in Schedule
III.
(e)
On
the Closing Date, there shall have been furnished to the Underwriters the
opinion of legal counsel to the Selling Stockholder, dated the Closing Date and
addressed to the Underwriters, in form and substance reasonably satisfactory to
the Underwriters, to the effect set forth in Schedule IV.
(f)
The
Underwriters shall have received a letter of Amper, Politziner & Xxxxxx,
LLP, on the date hereof and on the Closing Date addressed to the Underwriters,
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualifications of accountants under Rule 2 01 of Regulation
S X of the Commission, and confirming, as of the date of each such letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Time of Sale
Disclosure Package, as of a date not prior to the date hereof or more than five
days prior to the date of such letter), the conclusions and findings of said
firm with respect to the financial information and other matters required by the
Underwriters.
(g)
On
the Closing Date, there shall have been furnished to the Underwriters a
certificate, dated the Closing Date and addressed to the Underwriters, signed by
the chief executive officer and the chief financial officer of the Company, in
their capacity as officers of the Company, to the effect
that:
18
(i)
The
representations and warranties of the Company in this Agreement are true and
correct, in all material respects, as if made at and as of the Closing Date, and
the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the Closing
Date;
(ii)
No
stop order or other order (A) suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof, (B) suspending the
qualification of the Shares for offering or sale, or (C) suspending or
preventing the use of the Time of Sale Disclosure Package, the Prospectus or any
Issuer Free Writing Prospectus, has been issued, and no proceeding for that
purpose has been instituted or, to their knowledge, is contemplated by the
Commission or any state or regulatory body; and
(iii)
There
has been no occurrence of any event resulting or reasonably likely to result in
a Material Adverse Effect during the period from and after the date of this
Agreement and prior to the Closing Date.
(h)
On
the Closing Date, there shall have been furnished to the Underwriters
certificates, dated the Closing Date and addressed to the Underwriters, signed
by the Selling Stockholder, to the effect that the representations and
warranties of such Selling Stockholder in this Agreement are true and correct,
in all material respects, as if made at and as of the Closing Date, and such
Selling Stockholder has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the Closing
Date.
(i)
On
or before the date hereof, the Underwriters shall have received “lock-up”
agreements, in a form acceptable to the Underwriters, duly executed by each
director, officer and owner of 5% or more of the Company’s securities (with
beneficial ownership determined pursuant to Rule 13d-3 under the Exchange
Act).
(j)
The
Company and the Selling Stockholder shall have furnished to the Underwriters and
their counsel such additional documents, certificates and evidence as the
Underwriters or their counsel may have reasonably requested.
If any
condition specified in this Section 7 shall
not have been fulfilled when and as required to be fulfilled, this Agreement may
be terminated by the Representative by notice to the Company and the Selling
Stockholder at any time at or prior to the Closing Date and such termination
shall be without liability of any party to any other party, except that Section 6(a)(vii), Section 8 and
Section 9 shall
survive any such termination and remain in full force and
effect.
8.
Indemnification
and Contribution.
(a) T
he Company agrees to indemnify, defend and hold harmless each Underwriter, its
respective affiliates, directors and officers and employees, and each person, if
any, who controls the Underwriters within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any
losses, claims, damages or liabilities to which the Underwriters or such person
may become subject, under the Securities Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a part of the
Registration Statement at the time of effectiveness and at any subsequent time
pursuant to Rules 430A and 430B of the Rules and Regulations, the Time of
Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto
(including any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Registration Statement or the Prospectus), or
any Issuer Free Writing Prospectus, or in any materials or information provided
to investors by, or with the approval of, the Company in connection with the
marketing of the offering of the Common Stock, including any roadshow or
investor presentations made to investors by the Company (whether in person or
electronically), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, (ii) in whole or in part, any inaccuracy
in the representations and warranties of the Company contained herein, or (iii)
in whole or in part, any failure of the Company to perform its obligations
hereunder or under law, and will reimburse the Underwriters for any legal or
other expenses reasonably incurred by them in connection with evaluating,
investigating or defending against such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or action arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, the Time of Sale
Disclosure Package, the Prospectus, or any amendment or supplement thereto or
any Issuer Free Writing Prospectus, in reliance upon and in conformity with
written information furnished to the Company by the Representative, or any
Underwriter through the Representative, specifically for use in the preparation
thereof.
19
(b)
The
Selling Stockholder agrees to indemnify, defend and hold harmless each
Underwriter, its respective affiliates, directors and officers and employees,
and each person, if any, who controls the Underwriters within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any losses, claims, damages or liabilities, joint or several, to which
the Underwriters or such person may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) an untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) in
whole or in part, any inaccuracy in the representations and warranties of the
Selling Stockholder contained herein, or (iii) in whole or in part, any failure
of the Selling Stockholder to perform its obligations hereunder or under law,
and will reimburse the Underwriters for any legal or other expenses reasonably
incurred by it in connection with evaluating, investigating or defending against
such loss, claim, damage, liability or action; provided, however, that the
Selling Stockholder shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, the Time of Sale Disclosure Package, the
Prospectus, or any amendment or supplement thereto or any Issuer Free Writing
Prospectus, in reliance upon and in conformity with written information
furnished to the Company by the Representative, or by any Underwriter through
the Representative, specifically for use in the preparation
thereof.
20
(c)
Each
Underwriter will, severally and not jointly, indemnify, defend and hold harmless
the Company and the Selling Stockholder, their respective affiliates, directors,
officers and employees, and each person, if any, who controls the Company or the
Selling Stockholder within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any losses, claims,
damages or liabilities to which the Company or the Selling Stockholder may
become subject, under the Securities Act or otherwise (including in settlement
of any litigation, if such settlement is effected with the written consent of
the Representative), insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, the Time of Sale Disclosure Package, the Prospectus, or any amendment
or supplement thereto or any Issuer Free Writing Prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, the Time of Sale Disclosure Package, the
Prospectus, or any amendment or supplement thereto or any Issuer Free Writing
Prospectus in reliance upon and in conformity with written information furnished
to the Company by the Representative, or by any Underwriter through the
Representative, specifically for use in the preparation thereof, and will
reimburse the Company or the Selling Stockholder for any legal or other expenses
reasonably incurred by the Company or the Selling Stockholder in connection with
defending against any such loss, claim, damage, liability or
action.
(d)
Promptly
after receipt by an indemnified party under subsection
(a),
(b)
or (c)
above of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof; but the failure to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have to any indemnified party
except to the extent such indemnifying party has been materially prejudiced by
such failure. In case any such action shall be brought against any
indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party’s election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof; provided,
however,
that if (i) the indemnified party has reasonably concluded (based on advice of
counsel) that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to the
indemnifying party, (ii) a conflict or potential conflict exists (based on
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party),
or (iii) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, the indemnified party shall have the right to employ a single counsel to
represent it in any claim in respect of which indemnity may be sought under
subsection
(a),
(b)
or (c)
of this Section 8,
in which event the reasonable fees and expenses of such separate counsel shall
be borne by the indemnifying party or parties and reimbursed to the indemnified
party as incurred.
21
The
indemnifying party under this Section 8 shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is a party
or could be named and indemnity was or would be sought hereunder by such
indemnified party, unless such settlement, compromise or consent (a) includes an
unconditional release of such indemnified party from all liability for claims
that are the subject matter of such action, suit or proceeding and (b) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(e)
If
the indemnification provided for in this Section 8
is unavailable or insufficient to hold harmless an indemnified party under subsection
(a),
(b)
or (c)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection
(a),
(b)
or (c)
above, (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholder on the one hand and the
Underwriters on the other from the offering and sale of the Shares or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholder on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Selling Stockholder on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling Stockholder
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Final Prospectus. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling Stockholder or the
Underwriters and the parties’ relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or
omission. The Company, the Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection
(e)
were to be determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in the first sentence of this subsection
(e). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection
(e)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending against any
action or claim that is the subject of this subsection
(e). Notwithstanding
the provisions of this subsection
(e),
no Underwriter shall be required to contribute any amount in excess of the
amount of the Underwriters’ commissions referenced in Section 5(a)
actually received by such Underwriter pursuant to this Agreement. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations in this subsection
(e)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
22
(f)
The
obligations of the Company and the Selling Stockholder under this Section 8
shall be in addition to any liability that the Company and the Selling
Stockholder may otherwise have and the benefits of such obligations shall
extend, upon the same terms and conditions, to each person, if any, who controls
an Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act; and the obligations of the Underwriters
under this Section 8
shall be in addition to any liability that the Underwriters may otherwise have
and the benefits of such obligations shall extend, upon the same terms and
conditions, to the Company, the Selling Stockholder and their respective
officers, directors and each person who controls the Company or the Selling
Stockholder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act.
(g)
For
purposes of this Agreement, the Underwriters confirm, and the Company and the
Selling Stockholder acknowledges, that there is no information concerning the
Underwriters furnished in writing to the Company and/or the Selling Stockholder
by the Representative, or by any Underwriter through the Representative,
specifically for preparation of or inclusion in the Registration Statement, the
Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing
Prospectus, other than the statements set forth in the last paragraph on the
cover page of the Prospectus and the statements set forth in the “Underwriting”
section of the Prospectus and Time of Sale Disclosure Package, and only insofar
as such statements relate to the amount of selling concession and re-allowance
or to over-allotment and related activities that may be undertaken by the
Underwriters.
9.
Representations
and Agreements to Survive Delivery. All
representations, warranties, and agreements of the Company and the Selling
Stockholder herein or in certificates delivered pursuant hereto, including, but
not limited to, the agreements of the Underwriters, the Selling Stockholder and
the Company contained in Section 6(a)(vii) and
Section 8 hereof,
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Underwriters or any controlling person
thereof, or the Company and the Selling Stockholder or any of their respective
officers, directors, or controlling persons, and shall survive delivery of, and
payment for, the Shares to and by the Underwriters
hereunder.
10.
Termination
of this Agreement.
(a)
In
addition to the provisions of Section
7,
the Underwriters shall have the right to terminate this Agreement by giving
notice to the Company and the Selling Stockholder as hereinafter specified at
any time at or prior to the Closing Date, if (i) trading in the Common Stock
shall have been suspended by the Commission or The NASDAQ Global Market or
trading in securities generally on The NASDAQ Global Market, the New York Stock
Exchange or NYSE Amex shall have been suspended, (ii) minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities
shall have been required, on The NASDAQ Global Market, the New York Stock
Exchange or NYSE Amex, by such exchange or by order of the Commission or any
other governmental authority having jurisdiction, (iii) a banking moratorium
shall have been declared by federal or state authorities, (iv) there shall have
occurred any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States, any declaration by the United States of a
national emergency or war, any change in financial markets, any substantial
change or development involving a prospective substantial change in United
States or international political, financial or economic conditions or any other
calamity or crisis, or (v) the Company suffers any loss by strike, fire, flood,
earthquake, accident or other calamity, whether or not covered by insurance, the
effect of which, in each case described in this subsection
(a),
in the Representative’s reasonable judgment is material and adverse and makes it
impractical or inadvisable to proceed with the completion of the sale of and
payment for the Shares. Any such termination shall be without
liability of any party to any other party except that the provisions of Section 6(a)(vii)
and Section 8
hereof shall at all times be effective and shall survive such
termination.
23
(b)
If
the Underwriters elect to terminate this Agreement as provided in this Section,
the Company and the Selling Stockholder shall be notified promptly by the
Representative by telephone, confirmed by letter.
11.
Notices. Except
as otherwise provided herein, all communications hereunder shall be in writing
and, if to Xxxx, shall be mailed, delivered or faxed to Xxxx Capital Partners,
LLC, 00 Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000, fax number: (000)
000-0000, Attention: Managing Director; and if to the Company, shall
be mailed, delivered or faxed to it at Zoo Entertainment, Inc., 0000 Xxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000, fax number: _____________,
Attention: President; and if to the Selling Stockholder, shall be
mailed, delivered or faxed to it at c/o ______________________, fax
number: _____________, Attention: ________________; or in
each case to such other address as the person to be notified may have requested
in writing. Any party to this Agreement may change such address for
notices by sending to the parties to this Agreement written notice of a new
address for such purpose.
12.
Persons
Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns and the controlling persons,
officers and directors referred to in Section 8. Nothing
in this Agreement is intended or shall be construed to give to any other person,
firm or corporation any legal or equitable remedy or claim under or in respect
of this Agreement or any provision herein contained. The term
“successors and assigns” as herein used shall not include any purchaser, as such
purchaser, of any of the Shares from the Underwriters.
13.
Absence
of Fiduciary Relationship. The
Company and each of the Selling Stockholder acknowledges and agrees
that: (a) the Underwriters have been retained solely to act as
underwriters in connection with the sale of the Shares and that no fiduciary,
advisory or agency relationship between the Company and the Selling Stockholder
and the Underwriters have been created in respect of any of the transactions
contemplated by this Agreement, irrespective of whether the Underwriters have
advised or is advising the Company or the Selling Stockholder on other matters;
(b) the price and other terms of the Shares set forth in this Agreement were
established by the Company and the Selling Stockholder following discussions and
arms-length negotiations with the Underwriters and the Company and the Selling
Stockholder is capable of evaluating and understanding and understands and
accepts the terms, risks and conditions of the transactions contemplated by this
Agreement; (c) it has been advised that the Underwriters and their affiliates
are engaged in a broad range of transactions that may involve interests that
differ from those of the Company and the Selling Stockholder and that the
Underwriters have no obligation to disclose such interest and transactions to
the Company or the Selling Stockholder by virtue of any fiduciary, advisory or
agency relationship; (d) it has been advised that the Underwriters are acting,
in respect of the transactions contemplated by this Agreement, solely for the
benefit of the Underwriters, and not on behalf of the Company or the Selling
Xxxxxxxxxxx.
00
00.
Amendments
and Waivers. No
supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. The failure of
a party to exercise any right or remedy shall not be deemed or constitute a
waiver of such right or remedy in the future. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (regardless of whether similar), nor shall any such
waiver be deemed or constitute a continuing waiver unless otherwise expressly
provided.
15.
Partial
Unenforceability. The
invalidity or unenforceability of any section, paragraph, clause or provision of
this Agreement shall not affect the validity or enforceability of any other
section, paragraph, clause or provision.
16.
Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of California.
17.
Counterparts. This
Agreement may be executed in one or more counterparts and, if executed in more
than one counterpart, the executed counterparts shall each be deemed to be an
original and all such counterparts shall together constitute one and the same
instrument.
25
Please
sign and return to the Company the enclosed duplicates of this letter whereupon
this letter will become a binding agreement between the Company, the Selling
Stockholder and the Underwriters in accordance with its terms.
Very
truly yours,
By:____________________________________
Name:__________________________________
Title:___________________________________
FOCUS
CAPITAL PARTNERS, LLC
By:_____________________________________
Name:___________________________________
Title:____________________________________
Confirmed
as of the date first above-
mentioned:
Xxxx
Capital Partners, LLC
(As
representative of the several
Underwriters
named in Schedule
I hereto)
By:_____________________________________
Name:___________________________________
Title:____________________________________
SCHEDULE I
|
Underwriter
|
Number
of
Firm
Shares
to
be Purchased
|
|
|
Xxxx
Capital Partners, LLC
|
||
|
ThinkEquity
LLC
|
||
|
Total
|
SCHEDULE
II
SCHEDULE
III
Company
Opinions
1. The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with the requisite
corporate power to own or lease, as the case may be, and operate its properties,
and to conduct its business, as described in the Registration Statement and the
Final Prospectus.
2. The
Company is duly registered or qualified to do business as a foreign corporation
and is in good standing under the laws of the States of [Ohio, New York and
[list
additional states as applicable]].
3. The
issuance of the Shares has been duly authorized and, when issued and paid for by
you pursuant to the Agreement, the Shares will be validly issued, fully paid and
nonassessable.
4. The
holders of outstanding shares of capital stock of the Company Stock are not
entitled to any preemptive right or right of first refusal (i) set forth in or
provided for by the Company’s currently effective Certificate of Incorporation
or By-Laws (collectively, the “Company
Governing Documents”), or (ii) to our knowledge, granted by the Company
in any currently effective written agreement.
5. The
statements in the Base Prospectus, the most recent Prospectus that is part of
the Time of Sale Disclosure Package (the “Time
of Sale Prospectus”) and the Final Prospectus under the headings
“Description of Capital Stock” and in the Registration Statement in Part II,
Item 15, insofar as such statements purport to summarize legal matters,
agreements or documents discussed therein, fairly summarize such legal matters,
agreements or documents, in all material respects.
6. The
Registration Statement has become effective under the Securities
Act. We have been orally advised by the Staff of the Commission that
no stop order suspending the effectiveness of the Registration Statement has
been issued, and to our knowledge, no proceedings for that purpose have been
instituted or overtly threatened by the Commission. Any required
filing of the Prospectus, and any required supplement thereto, pursuant to
Rule 424(b) under the Securities Act, has been made in the manner and
within the time period required by Rule 424(b).
7. The
Agreement has been duly authorized by all necessary corporate action on the part
of the Company and has been duly executed and delivered by the
Company.
8. The
Company is not, and after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in the Time of Sale
Disclosure Package and the Final Prospectus will not be, required to register as
an “investment company” as defined in the Investment Company
Act.
9. No
consent, approval, authorization or filing with or order of any court or
governmental agency or body having jurisdiction over the Company is required,
under the laws, rules and regulations of the United States of America and the
States of Delaware and Ohio, for the consummation by the Company of the
transactions contemplated by the Agreement, except (i) such as have been made or
obtained under the Securities Act and (ii) such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Shares by you in the manner contemplated in the Agreement
and in the Final Prospectus, as to which we express no
opinion.
10. The
issue and sale of the Shares pursuant to the Agreement will not result in a
breach or violation of (or constitute any event that with notice, lapse of time
or both would result in a breach of violation of): (i) the Company
Governing Documents, (ii) any statute, rule, or regulation of the United States
of America or the States of Delaware and Ohio which, in our experience, is
typically applicable to transactions of the nature contemplated by the Agreement
and is applicable to the Company, (iii) any currently effective order, writ,
judgment, injunction, decree, or award that names and has been entered against
the Company and of which we have knowledge, or (iv) any Contract that was filed
as an exhibit to the Company’s most recent annual report on Form 10-K, in
each case (ii) through (iv) the breach or violation of which would materially
and adversely affect the Company.
11. To
our knowledge, except as set forth in the Time of Sale Disclosure Package and
the Final Prospectus, the Company is not a party to any written agreement
granting any holders of securities of the Company rights to require the
registration under the Securities Act of resales of such
securities.
12. To
our knowledge, there is no action, suit or proceeding by or before any court or
other governmental agency, authority or body or any arbitrator pending or
overtly threatened against the Company or its properties by a third party of a
character required to be disclosed in the Registration Statement, the Time of
Sale Disclosure Package or the Final Prospectus that is not disclosed in the
Registration Statement, the Time of Sale Disclosure Package or the Final
Prospectus as required by the Securities Act and the rules
thereunder.
Negative
Assurance Letter
In
addition to rendering legal advice and assistance to the Company in the course
of the preparation of the Registration Statement and the Time of Sale Disclosure
Package and the Final Prospectus, involving, among other things, discussions and
inquiries concerning various legal matters and the review of certain corporate
records, documents and proceedings, we also participated in conferences with
certain officers and other representatives of the Company, its independent
certified public accountants and you and your counsel, at which the contents of
the Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus, the documents incorporated by reference in the Time of Sale
Disclosure Package and the Final Prospectus and related matters were
discussed. We have also reviewed and relied upon certain corporate
records and documents of the Company, letters from counsel and accountants, and
oral and written statements and certificates of officers and other
representatives of the Company and others as to the existence and consequences
of certain factual and other matters.
The
purpose of our professional engagement was not to establish or confirm factual
matters or financial or quantitative information. Therefore, we are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements or information contained or incorporated by reference
in the Registration Statement, the Time of Sale Disclosure Package or the Final
Prospectus (except to the extent expressly set forth in the numbered
paragraph 5 of our separate opinion letter to you as of this date) and have
not made, or undertaken any obligation to make, an independent check or
verification thereof (except as also stated in that opinion
letter). Moreover, many of the determinations required to be made in
the preparation of the Registration Statement, the Time of Sale Disclosure
Package and the Final Prospectus involve matters of a non-legal
nature.
However,
subject to the foregoing and based on our participation, review and reliance
described in the second preceding paragraph, (i) we believe (a) the Registration
Statement (as of its effective date), the Time of Sale Prospectus (as of the
Applicable Time), the Final Prospectus (as of its date), and any further
amendments and supplements thereto (as of their respective dates), as
applicable, made by the Company prior to the Closing Date (other than the
financial statements and schedules and other financial and statistical data
included therein or derived therefrom, as to which we express no belief)
appeared on their face to be appropriately responsive, and complied as to form,
in all material respects to the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder and (b) the
documents incorporated by reference in the Registration Statement and the Time
of Sale Prospectus and the Final Prospectus (other than the financial statements
and schedules and other financial and statistical data included therein or
derived therefrom, as to which we express no belief), at the time they were
filed with the Commission, appeared on their face to be appropriately
responsive, and complied as to form, in all material respects to the
requirements of the Exchange Act and the applicable rules and regulations of the
Commission thereunder, and (ii) we confirm that no facts have come to our
attention that caused us to believe (a) that the Registration Statement or any
amendment thereto filed by the Company prior to the Closing Date (other than the
financial statements and schedules and other financial and statistical data
included therein or derived therefrom, as to which we express no belief), when
the Registration Statement or such amendment became effective, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(b) that the Time of Sale Disclosure Package (other than the financial
statements and schedules and other financial and statistical data included
therein or derived therefrom, as to which we express no belief), as of 6:00 a.m.
Pacific Time on __________, 2010 (the “Applicable
Time,” which, you have informed us, is a time before the time of the
first sale of the Shares by any Underwriter), contained any untrue statement of
a material fact or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; or (c) that, as of its date and as of the Closing Date,
the Final Prospectus or any further amendment or supplement thereto made by the
Company prior to the Closing Date (other than the financial statements and
schedules and other financial and statistical data included therein or derived
therefrom, as to which we express no belief), contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. We do not express any
belief with respect to the assessments of or reports on the effectiveness of
internal control over financial reporting contained in the Registration
Statement, the Time of Sale Disclosure Package or the Final
Prospectus.
SCHEDULE IV
Selling
Stockholder Opinions
1. The
Selling Stockholder is duly organized, validly existing and in good standing
under the laws of the state of its organization with requisite power to own or
lease, as the case may be, and to operate its properties and conduct its
business.
2. The
statements in any Prospectus under the headings “Selling Stockholder,” insofar
as such statements purport to summarize legal matters, agreements or documents
discussed therein, fairly present, to the extent required by the Securities Act
and the rules thereunder, in all material respects, such legal matters,
agreements or documents.
3. This
Agreement has been duly authorized by all necessary action on the part of the
Selling Stockholder and has been duly executed and delivered by the Selling
Stockholder.
4. The
sale of the Shares by the Selling Stockholder pursuant to the Agreement will not
result in a breach or violation of (or constitute any event that with notice,
lapse of time or both would result in a breach of violation of): (i)
the charter or other organizational documents of the Selling Stockholder, (ii)
any statute, law, rule, or regulation which, in our experience is typically
applicable to transactions of the nature contemplated by the Agreement and is
applicable to the Selling Stockholder, or any order, writ, judgment, injunction,
decree, or award that has been entered against the Selling Stockholder and of
which we are aware.
5. No
consent, approval, authorization or filing with or order of any U.S. Federal or
California court or governmental agency or body having jurisdiction over the
Selling Stockholder is required for the consummation by the Selling Stockholder
of the transactions contemplated by the Agreement, except such as have been
obtained under the Securities Act and except such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Shares by the Underwriters in the manner contemplated in the
Agreement and in the Final Prospectus.
