UNDERWRITING AGREEMENT
Exhibit 1.1
The
Benchmark Company, LLC
As
Representative of the Underwriters named in Schedule A
hereto
The
Benchmark Company, LLC
000
Xxxx 00xx Xxxxxx,
00xx Xxxxx
Xxx
Xxxx, XX 00000
September
19, 2019
Ladies
and Gentlemen:
Youngevity
International, Inc., a Delaware corporation (the
“Company”), confirms its agreement with the underwriters named
in Schedule
A hereto (the
“Underwriters,”
or each, an “Underwriter”,
which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Benchmark
is acting as representatives (in such capacity, the
“Representative”), with respect to (i) the sale by
the Company and the purchase by the Underwriters, acting severally
and not jointly, of the respective numbers of shares of 9.75%
Series D Cumulative Redeemable Perpetual Preferred Stock, par value
$0.001 per share, of the Company (“Preferred Stock” or
“Series D Preferred Stock”) set forth in Schedule A
hereto and (ii) the grant by the Company to the Underwriters,
acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of additional
shares of Preferred Stock representing 15% of the Series D
Preferred Stock set forth in Schedule A
hereto. The aforesaid shares of Preferred Stock (the “Initial
Securities”) to be purchased by the Underwriters and all or
any part of the shares of Preferred Stock subject to the option
described in Section 2(b) hereof (the “Option
Securities”) are herein called, collectively, the
“Securities.”
The
Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems
advisable after this Agreement has been executed and
delivered.
The
Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3
(No. 333-225053) under the Securities Act of 1933, as amended (the
“1933 Act”), and the rules and regulations promulgated
thereunder (the “1933 Act Regulations”) and such amendments to such registration statement
(including post-effective amendments) as may have been required to
the date of this Agreement. Such registration statement, as amended (including
post-effective amendments), has been declared effective by the
Commission. The registration statement, together with any
amendments thereto filed prior to the date of this Agreement,
including the information deemed to be a part of, or incorporated
by reference into, the registration statement at the time of
effectiveness pursuant to Rule 430B under the 1933 Act, or at such
time as the case may be, is hereinafter referred to as the
“Registration Statement”. The prospectus, dated May 29,
2018, included in the Registration Statement at the time the
Registration Statement first became effective is hereinafter
referred to as the “Base Prospectus”. If the Company
files one or more registration statements pursuant to Rule 462(b)
under the 1933 Act (the “Rule 462 Registration
Statement”) that relates to the Registration Statement, then
any reference herein to the term Registration Statement shall
include such Rule 462 Registration Statement. Promptly after
execution and delivery of this Agreement, the Company will prepare
and file a final prospectus supplement relating to the Securities
in accordance with the provisions of Rule 424(b) under the 1933 Act
Regulations (“Rule 424(b)”). The final prospectus supplement as filed with the
Commission, together with the Base Prospectus, is hereinafter
called the “Final Prospectus.” The term
“Preliminary Prospectus” means the Base Prospectus,
together with the Preliminary Prospectus supplement used or filed
with the Commission on September 5, 2019 and September 19, 2019
pursuant to Rule 424 of the 1933 Act Regulations, in the form
provided to the Underwriters by the Company for use in connection
with the offering of the Shares. The Final Prospectus and the
Preliminary Prospectus in the form in which they shall be filed
with the Commission pursuant to Rule 424(b) under the 1933 Act
(including the Base Prospectus as so supplemented) is hereinafter
called a “Prospectus.”
The term
“Effective Date” shall mean each date that the
Registration Statement (and any post-effective amendment) became or
becomes effective pursuant to Rule 430B(f)(2) of the 1933
Act. For purposes of this Agreement, all references to the
Registration Statement, the Base Prospectus, the Preliminary
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 Electronic Data Gathering, Analysis and
Retrieval system (or any successor system)
(“XXXXX”).
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As
used in this Agreement:
“Applicable
Time” means 4:15 p.m., New York City time, on September 19,
2019, or such other time as agreed by the Company and the
Representative.
“General
Disclosure Package” means the Preliminary Prospectus
(including any documents incorporated therein by reference) that is
distributed to investors prior to the Applicable Time together with
the documents and pricing information referred to in Schedule A
hereto, all considered together.
“Issuer Free
Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 of the 1933 Act
Regulations (“Rule 433”), including, without
limitation, any “free writing prospectus” (as defined
in Rule 405 of the 1933 Act Regulations (“Rule 405”))
relating to the Securities that is (i) required to be filed
with the Commission by the Company, (ii) a “road show
that is a written communication” within the meaning of Rule
433(d)(8)(i), whether or not required to be filed with the
Commission, or (iii) exempt from filing with the Commission
pursuant to Rule 433(d)(5)(i) because it contains a description of
the Securities or of the offering that does not reflect the final
terms, in each case in the form filed or required to be filed with
the Commission or, if not required to be filed, in the form
retained in the Company’s records pursuant to Rule
433(g).
“Issuer
General Use Free Writing Prospectus” means any Issuer Free
Writing Prospectus that is intended for general distribution to
prospective investors, as evidenced by its being specified in
Schedule B
hereto.
“Testing-the-Waters
Communication” means any oral or written communication with
potential investors undertaken in reliance on Section 5(d) of
the 1933 Act.
All
references in this Agreement to financial statements and schedules
and other information which is “described,”
“contained,” “included” or
“stated” in the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which
is incorporated by reference in or otherwise deemed by the Rules
and Regulations to be a part of or included in the Registration
Statement, the Base Prospectus, any Preliminary Prospectus or the
Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration
Statement, the Base Prospectus, any Preliminary 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 “1934 Act”), which is incorporated by
reference in or otherwise deemed by 1933 Act Regulations to be a
part of or included in the Registration Statement, the Preliminary
Prospectus or the Prospectus, as the case may be, at or after the
execution and delivery of this Agreement.
SECTION
1. Representations
and Warranties.
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(a) Representations
and Warranties by the Company. The Company represents and
warrants to each Underwriter as of the date hereof, and agrees with
each Underwriter, as follows:
(i) Registration
Statement and Prospectuses. The Company was at the time of
filing the Registration Statement, and at the time of filing any
post-effective amendment thereto, eligible to use Form S-3 under
the 1933Act. Each of the Registration Statement and any
post-effective amendment thereto has become effective under the
1933 Act. No stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto has
been issued under the 1933 Act, no order preventing or suspending
the use of the Preliminary Prospectus or the Prospectus has been
issued and no proceedings for any of those purposes or pursuant to
Section 8A of the 1933 Act have been instituted or are pending
or, to the Company’s knowledge, contemplated. The Company has
complied with each request (if any) from the Commission for
additional information.
Each of
the Registration Statement and any post-effective amendment
thereto, at the time of its effectiveness, complied in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations. Each preliminary prospectus, the Prospectus and any
amendment or supplement thereto, at the time each was filed with
the Commission, complied in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations. The
Preliminary Prospectus delivered to the Underwriters for use in
connection with this offering and the Prospectus was or will be
identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
The
documents incorporated or deemed to be incorporated by reference in
the Registration Statement, the Preliminary Prospectus and the
Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply
in all material respects with the requirements of the 1934 Act and
the rules and regulations of the Commission under the 1934 Act (the
“1934 Act Regulations”).
(ii) Accurate
Disclosure. Neither the Registration Statement nor any
amendment thereto, at its effective time, at the Closing Time or at
any Date of Delivery, contained, contains or will contain any
untrue statement of a material fact or omitted, omits or will omit
to state a material fact required to be stated therein or necessary
to make the statements therein not misleading. As of the Applicable
Time, none of (A) the General Disclosure Package or
(B) any Issuer Free Writing Prospectus, when considered
together with the General Disclosure Package, included, includes or
will include any untrue statement of a material fact or omitted,
omits or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading. Neither the Preliminary
Prospectus, as of its issue date or at the time of its filing with
the Commission, nor the Prospectus, nor any amendment or supplement
thereto (including any prospectus wrapper), as of its issue date,
at the time of any filing with the Commission pursuant to Rule
424(b), at the Closing Time or at any Date of Delivery, included,
includes or will include any untrue statement of a material fact or
omitted, omits or will omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
documents incorporated or deemed to be incorporated by reference in
the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus and the Prospectus, when read together with
the other information in the Registration Statement, the General
Disclosure Package, the Preliminary Prospectus or the Prospectus,
as the case may be, did not and will not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Any further documents so filed and
incorporated by reference in the Prospectus, when such documents
are filed with Commission will conform in all material respects to
the requirements of the 1933 Act or the 1934 Act, as applicable,
and the rules and regulations of the Commission thereunder 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, in light of the circumstances under
which they were made, not misleading.
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The
representations and warranties in this subsection shall not apply
to statements in or omissions from the General Disclosure Package
or the Prospectus (or any amendment or supplement thereto,
including any prospectus wrapper) made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through the Representative expressly for use therein.
For purposes of this Agreement, the only information so furnished
shall be the information under the heading
“Underwriting” contained in the Prospectus
(collectively, the “Underwriter
Information”).
(iii) Issuer
Free Writing Prospectuses. No Issuer Free Writing Prospectus
conflicts or will conflict with the information contained in the
Registration Statement or the Prospectus, including any document
incorporated by reference therein, and any preliminary or other
prospectus deemed to be a part thereof that has not been superseded
or modified.
(iv) Testing-the-Waters
Materials. The Company (A) has not engaged in any
Testing-the-Waters Communication and (B) has not authorized
anyone to engage in Testing-the-Waters Communications.
(v) Company
Ineligible Issuer. As of the
date of this Agreement the Company is an ineligible issuer as
defined in Rule 405 under the 1933 Act at the times specified in
Rules 164 and 433 under the 1933 Act in connection with the
offering of the Shares.
(vi) Emerging
Growth Company Status. From the time of the initial filing
of the Registration Statement with the Commission through December
31, 2018, the Company was an “emerging growth company,”
as defined in Section 2(a) of the 1933 Act (an “Emerging
Growth Company”).
(vii) Independent
Accountants. Xxxxx Xxxxxxx
XxXxxx P.C., who has certified the financial statements
included in the Registration Statement, the General Disclosure
Package and the Prospectus, is an independent public accountant as
required by the 1933 Act, the 1933 Act Regulations, the 1934 Act,
the 1934 Act Regulations and the Public Company Accounting
Oversight Board.
(viii) Financial
Statements; Non-GAAP Financial Measures. The historical
financial statements (including the related notes and supporting
schedules) included or incorporated by reference in the
Registration Statement, the General Disclosure Package and the
Prospectus comply as to form in all material respects with the
requirements of Regulation S-X under the 1933 Act, are accurate in
all material respects and present fairly the financial position of
the Company on a consolidated basis at the dates indicated; said
financial statements have been prepared in conformity with
accounting principles generally accepted in the United States
(“GAAP”) applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, present fairly in accordance with GAAP the
information required to be stated therein. The selected financial
data and the summary financial information included or incorporated
by reference in the Registration Statement, the General Disclosure
Package and the Prospectus present fairly the information shown
therein in all material respects and have been compiled on a basis
consistent with that of the audited financial statements included
therein. The pro forma financial statements and the related notes
thereto included or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus, if
any, present fairly in all material respects the information shown
therein, have been prepared in accordance with the
Commission’s rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances
referred to therein. The pro forma financial statements
incorporated by reference in the Registration Statement comply as
to form with the applicable requirements of Regulation S-X of the
1933 Act in all material respects. No other financial statements or
supporting schedules of the Company or any of its subsidiaries are
required to be included or incorporated by reference in the
Registration Statement, the General Disclosure Package or the
Prospectus under the 1933 Act and the 1933 Act Regulations. All
disclosures contained or incorporated by reference in the
Registration Statement, the General Disclosure Package or the
Prospectus regarding “non-GAAP financial measures” (as
such term is defined by the rules and regulations of the
Commission) comply in all material respects with Regulation G of
the 1934 Act and Item 10 of Regulation S-K of the 1933 Act, to the
extent applicable. The
interactive data in eXtensible Business Reporting Language
incorporated by reference in the Registration Statement, the
General Disclosure Package and the Prospectus fairly presents the
information called for in all material respects and has been
prepared in accordance with the Commission's rules and guidelines
applicable thereto.
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(ix) No
Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration
Statement, the General Disclosure Package or the Prospectus, except
as otherwise stated therein, (A) there has been no material adverse
change in or affecting the business affairs, business, earnings,
condition (financial or otherwise), results of operations,
stockholders’ equity, properties, management or prospects of
the Company and its subsidiaries considered as one enterprise
(including all of the properties of the Company and its
subsidiaries), whether or not arising in the ordinary course of
business (a “Material Adverse
Effect”), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to such entities considered as one enterprise or incurred
any liability or obligation, direct or contingent, that is material
to such entities considered as one enterprise, and (C) there
has been no dividend or distribution of any kind declared, paid or
made by the Company or any of its subsidiaries on any class of the
capital stock or other equity interest of such
entities.
(x)
Good Standing of the
Company. The Company has been duly organized, is validly
existing and in good standing as a corporation under the laws of
the State of Delaware with full corporate power and authority to
own, lease and operate its properties and to conduct its business
as described in the Registration Statement, the General Disclosure
Package and the Prospectus and to enter into and perform its
obligations under this Agreement. The Company is duly qualified as
a foreign corporation to transact business and in good standing in
each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
its businesses, except where the failure to be so qualified or in
good standing would not, singly or in the aggregate, result in a
Material Adverse Effect.
(xi) Good
Standing of Subsidiaries. Each of CLR Roasters, LLC and
Khrysos Industries, Inc., each a subsidiary that is material to the
business and operations of the Company has been duly organized, is
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, has corporate or
similar power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement, the General Disclosure Package and the
Prospectus, and is duly qualified to transact business and in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property
or the conduct of its business, except where the failure to be so
qualified or in good standing would not, singly or in the
aggregate, result in a Material Adverse Effect. All of the issued
and outstanding capital stock or other ownership interests of each
such subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company, directly
or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity. None of the
outstanding shares of capital stock or other ownership interests of
any subsidiary was issued in violation of the preemptive or similar
rights of any securityholder of such subsidiary. The Company does
not own or control, directly or indirectly, any corporation,
association or other entity that is or will be a “significant
subsidiary” (within the meaning of Rule 1-02(w) of Regulation
S-X). For the purposes of this Agreement, “subsidiary”
means each direct and indirect subsidiary of the
Company.
(xii) Capitalization.
The authorized, issued and outstanding shares of capital stock of
the Company are as set forth in the Registration Statement, the
General Disclosure Package and the Prospectus under the caption
“Capitalization” (except for subsequent issuances, if
any, pursuant to this Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the
Registration Statement, the General Disclosure Package and the
Prospectus or pursuant to the exercise, redemption, or exchange of
convertible or exchangeable securities, options or warrants
referred to in the Registration Statement, the General Disclosure
Package and the Prospectus). The issued and outstanding shares of
capital stock of the Company have been duly authorized and validly
issued, are fully paid and non-assessable, conform to the
description thereof contained in the Registration Statement,
General Disclosure Package and Prospectus and were issued in
compliance with federal and state securities laws and not in
violation of any preemptive right, resale right, right of first
refusal or similar right. The issuance of such shares of capital
stock of the Company was exempt from registration or qualification
under the 1933 Act and applicable state securities laws. The
Company’s stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder
conform in all material respects to the descriptions thereof
contained in the Registration Statement, the General Disclosure
Package and the Prospectus. Except as disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, no
options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or
exchange any securities or interests for shares of the
Company’s or its subsidiaries’ capital stock, or
exchange any securities for shares of the Company’s capital
stock are outstanding.
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(xiii) Authorization
of 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 or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The Company
has full corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby, including
the authorization, issuance and sale of the Securities as
contemplated by this Agreement.
(xiv) Authorization
and Description of Securities. The Securities have been duly
authorized for issuance and sale to the Underwriters pursuant to
this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued, fully paid and
non-assessable, will conform to the description thereof contained
in the Registration Statement, General Disclosure Package and
Prospectus, will be issued in compliance with federal and state
securities laws and will not be issued in violation of any
preemptive right, resale right, right of first refusal or similar
right. The Preferred Stock conforms in all material respects to all
statements relating thereto contained in the Registration
Statement, the General Disclosure Package and the Prospectus and
such description conforms in all material respects to the rights
set forth in the instruments defining the same. No holder of
Securities will be subject to personal liability solely by reason
of being such a holder. The Certificate of Designations, Rights and
Preferences of the Preferred Stock that forms a part of the
Company’s charter and sets forth the terms of the Securities
(the “Certificate of
Designations”) will be, prior to the Closing Time,
duly authorized, executed and filed by the Company with the
Secretary of State of the State of Delaware (the
“DSOS”).
(xv) Registration
Rights. Except as set forth in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to
file a registration statement under the 1933 Act with respect to
any securities of the Company owned or to be owned by such person
or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in
any securities being registered pursuant to any other registration
statement filed by the Company under the 1933 Act.
(xvi) Absence
of Violations and Defaults. Neither the Company nor any of
its subsidiaries is (A) in violation of its charter, bylaws or
similar organizational documents, (B) in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease, license or other agreement or
instrument to which the Company or any such subsidiary is a party
or by which it is bound or to which any of the properties or assets
of the Company or any subsidiary is subject (collectively,
“Agreements and
Instruments”), except for such violations that would
not, singly or in the aggregate, result in a Material Adverse
Effect, or (C) except as disclosed in the Registration Statement,
the General Disclosure Package and the Prospectus, in violation of
any federal, state, local or foreign statute or rule, or any order,
rule or regulation of any arbitrator, court or governmental,
regulatory or administrative agency or body or any self-regulatory
organization or other non-governmental regulatory authority having
jurisdiction over the Company or any of its subsidiaries or any of
their respective properties, assets or operations (each, a
“Governmental
Entity”), except for such violations that would not,
singly or in the aggregate, be reasonably likely to have a Material
Adverse Effect.
(xvii) Absence
of Conflicts. The execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement, the General
Disclosure Package and the Prospectus (including the issuance and
sale of the Securities and the use of the proceeds from the sale of
the Securities as described therein under the caption “Use of
Proceeds”) and the compliance by the Company with its
obligations hereunder have been duly authorized by all necessary
corporate or other action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any properties or assets of
the Company or any subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches, defaults or
Repayment Events or liens, charges or encumbrances that would not,
singly or in the aggregate, result in a Material Adverse Effect),
nor will such action result in any violation of the provisions of
the charter (including the Certificate of Designations), bylaws or
similar organizational documents of the Company or any of its
subsidiaries, or, except as disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any Governmental Entity. As used herein, a
“Repayment
Event” means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any of its
subsidiaries.
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(xviii) Absence
of Labor Dispute. No labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of
its or any subsidiary’s principal suppliers, manufacturers,
customers or contractors, which, in either case, would result in a
Material Adverse Effect.
(xix) Employee
Benefits. (A) The Company and each of its subsidiaries or
their “ERISA Affiliates” (as defined below) are in
compliance in all respects with all applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
(“ERISA”); (B) no
“reportable event” (as defined in ERISA) has occurred
with respect to any “employee benefit plan” (as defined
in ERISA) for which the Company or any of its subsidiaries or ERISA
Affiliates would have any liability; (C) the Company and each
of its subsidiaries or their ERISA Affiliates have not incurred and
do not reasonably expect to incur liability under Title IV of ERISA
with respect to termination of, or withdrawal from, any
“employee benefit plan”; and (D) each
“employee benefit plan” for which the Company and each
of its subsidiaries or any of their ERISA Affiliates would have any
liability that is intended to be qualified under
Section 401(a) of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations
thereunder (collectively, the “Code”), is so qualified
in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification; except, in the cases of (A), (B), and (C), as would
not reasonably be expected to have a Material Adverse Effect.
“ERISA
Affiliate” means, with respect to the Company or any
of its subsidiaries, any member of any group of organizations
described in Sections 414(b), (c) or (m) of the Code or
Section 4001(b)(1) of ERISA of which the Company or such subsidiary
is a member.
(xx) Absence
of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any Governmental
Entity now pending or, to the knowledge of the Company, threatened
against the Company or any subsidiary, which is required to be
disclosed in the Registration Statement, or which would reasonably
be expected to result in a Material Adverse Effect, or would
reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated in this Agreement or
the performance by the Company of its obligations hereunder; and
the aggregate of all pending legal or governmental proceedings to
which the Company or any subsidiary is a party or of which any of
their respective properties or assets is the subject which are not
described in the Registration Statement, the General Disclosure
Package and the Prospectus, including ordinary routine litigation
incidental to the business, would not result in a Material Adverse
Effect.
(xxi) Accuracy
of Descriptions. The statements made in the Registration
Statement, the General Disclosure Package and the Prospectus under
the caption “Description of the Series D Preferred
Stock,” insofar as it purports to constitute a summary of the
terms of the Series D Preferred Stock, and under the captions
“Prospectus Supplement Summary”, “The
Offering,” “Risk Factors,” “Description of
Capital Stock,” “Certain U.S. Federal Income Tax
Considerations,” and “Underwriting,” insofar as
such statements constitute summaries of the terms of statutes,
rules or regulations, legal matters or governmental proceedings or
agreements, contracts and other documents, are accurate and fair
summaries of the terms of such statutes, rules or regulations,
legal matters or governmental proceedings or agreements, contracts
and other documents in all material respects. All agreements
between the Company or any of its subsidiaries and any other party
expressly referenced in the Registration Statement, the General
Disclosure Package and the Prospectus are legal, valid and binding
obligations of the Company or such subsidiary, as applicable,
enforceable against the Company or such subsidiary, as applicable,
as appropriate, in accordance with their respective terms, except
to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or
similar laws affecting creditors’ rights generally and by
general equitable principles and, with respect to equitable relief,
the discretion of the court before which any proceeding therefor
may be brought (regardless of whether enforcement is sought in a
proceeding at law or in equity) and, with respect to any
indemnification provisions contained therein, except as rights
under those provisions may be limited by applicable law or policies
underlying such law. The General Disclosure Package and Prospectus
accurately reflect, in all material respects, the current
intentions of the Company with respect to the operation of its
business, and no material deviation from such guidelines or
policies is currently contemplated. There are no statutes or
regulations that are required to be described in the Registration
Statement, in the General Disclosure Package and in the Prospectus
or required to be filed as exhibits to the Registration Statement
by the 1933 Act or by the 1933 Act Regulations that have not been
so described or filed.
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(xxii) Accuracy
of Exhibits. There are no legal or governmental proceedings
or contracts or other documents of a character required to be
described in the Registration Statement, the General Disclosure
Package and the Prospectus or, in the case of documents to be filed
as exhibits to the Registration Statement, which are not described
and filed as required. All
descriptions of any such agreements, contracts or documents
contained or incorporated by reference in the Registration
Statement, the General Disclosure Package or in the Prospectus are
accurate and complete descriptions of such documents in all
material respects.
(xxiii) Absence
of Further Requirements. No consent, approval,
authorization, license or order of, or filing or registration of or
with, any Governmental Entity is necessary or required for the
execution, delivery and performance by the Company or any
subsidiary of its obligations hereunder, in connection with the
offering, issuance and sale of the Securities hereunder, or its
consummation of the transactions contemplated by this Agreement or
the Registration Statement, the General Disclosure Package and the
Prospectus, or the application of the proceeds from the sale of the
Securities as described under “Use of Proceeds” in the
Registration Statement, General Disclosure Package and Prospectus,
except such as have been obtained or made and except for such as
have been obtained or as may be required under the 1933 Act, the
1933 Act Regulations, the rules of The Nasdaq Capital Market (the
“Nasdaq Capital
Market”), applicable state or foreign securities laws
or the by-laws and rules of the Financial Industry Regulatory
Authority, Inc. (“FINRA”).
(xxiv) Possession
of Licenses and Permits. Except as described in the
Registration Statement, the General Disclosure Package and the
Prospectus, the Company and its subsidiaries possess such permits,
licenses, approvals, consents and other authorizations
(collectively, “Governmental Licenses”)
issued by the appropriate Governmental Entities necessary to
conduct the business now operated by them, except where the failure
so to possess would not, singly or in the aggregate, result in a
Material Adverse Effect. The Company and its subsidiaries are in
compliance with the terms and conditions of all Governmental
Licenses, except where the failure so to comply would not, singly
or in the aggregate, result in a Material Adverse Effect. All of
the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and
effect would not, singly or in the aggregate, result in a Material
Adverse Effect. Neither the Company nor any subsidiary has received
any notice of proceedings relating to the revocation or
modification of any Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect. The Company
believes that the sales of its hemp-derived products are in
compliance with all applicable regulations since all of its
products that contain hemp, contain less than 0.3% THC content and
are sold only in states in the United States that have not
prohibited the sale of hemp products. No regulatory authority,
including the Nasdaq Capital Market, has indicated that it will
prohibit the listing of the Company’s securities based upon
its sale of CBD products nor will the Underwriters or any broker or
other FINRA member participating in this Offering be prohibited
from depositing, clearing or settling the Securities, including
through the Depository Trust
Company (the “DTC”) or otherwise, on
account of the Company’s sale of CBD products; provided,
however, that no representation is made regarding depositing, clearing or settling any
securities including the Securities at or through Cowen, Pershing
or Xxxxx Fargo.
(xxv) Title
to Personal Property. Each of the Company and its
subsidiaries have good and marketable title to all of their assets
and personal property owned by them that is material to the business of the
Company, free and clear of all liens, encumbrances and
defects, except such as are described in the Registration
Statement, the General Disclosure Package and the Prospectus or
such as do not materially affect the value of such property and do
not materially interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries; and all
assets and personal property held under lease by the Company and
its subsidiaries are held by it under valid, subsisting and
enforceable leases, with such exceptions as do not materially
interfere with the use made and proposed to be made of such assets
by the Company and its subsidiaries and the Company does not have
notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company and its direct and
indirect subsidiaries under any such leases or affecting or
questioning the rights of the Company and its subsidiaries to be in
the continued possession of the leased premises under such
leases.
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(xxvi) Real
Property. The Company and its
subsidiaries have good and marketable title in fee simple to all
real property owned by them that is material to the business of the
Company and the subsidiaries and good and marketable title in all
personal property owned by them that is material to the business of
the Company and the subsidiaries, in each case free and clear of
all Liens (as defined herein), except for Liens as disclosed in the
Company’s reports filed with the Commission or Liens that do
not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries and Liens for the
payment of federal, state or other taxes, the payment of which is
neither delinquent nor subject to penalties. Any real property and
facilities held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases of
which the Company and its subsidiaries are in compliance, except
where such non-compliance would not reasonably be expected to have
a Material Adverse Effect. “Liens”
shall mean a lien, charge, security interest, encumbrance, right
of first refusal, preemptive right or other
restriction.
(xxvii) No
Acquisitions or Dispositions. (A) There are no contracts,
letters of intent, term sheets, agreements, arrangements or
understandings with respect to the direct or indirect acquisition
or disposition by any of the Company or its subsidiaries of
interests in assets or real property that are required to be
described in the Registration Statement, the General Disclosure
Package and the Prospectus that are not so described; and (B)
neither the Company nor any of its subsidiaries has sold any real
property to a third party during the immediately preceding twelve
(12) calendar months.
(xxviii) Title
Insurance. Title insurance in favor of the Company and its
subsidiaries has been obtained with respect to each property owned
by any such entity, except where the failure to maintain such title
insurance would not have a Material Adverse Effect.
(xxix) Indebtedness.
Except as disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus, the Company has not issued
any debt and has no debt outstanding.
(xxx) Environmental
Laws. Except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor
any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation,
laws and regulations relating to the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products,
asbestos-containing materials, mold or any hazardous materials as
defined by or regulated under any Environmental Laws, as defined
below (collectively, “Hazardous Materials”) or
to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials
(collectively, “Environmental Laws”), (B)
the Company and its subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental Laws and
are each in compliance with their requirements, and (C) there are
no pending or known threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries.
(xxxi) Accounting
Controls and Disclosure Controls. Except as disclosed in the
Registration Statement, the General Disclosure Package and the
Prospectus, the Company and each of its subsidiaries (A) make and
keep accurate books and records and (B) maintain effective internal
control over financial reporting (as defined under Rule 13-a15 and
15d-15 under the rules and regulations of the Commission under the
1934 Act Regulations) and a system of internal accounting controls
sufficient to provide reasonable assurances that
(1) transactions are executed in accordance with
management’s general or specific authorization, (2)
transactions are recorded as necessary to permit preparation of the
Company’s financial statements in conformity with GAAP and to
maintain accountability for its assets, (3) access to the
Company’s assets is permitted only in accordance with
management’s general or specific authorization, and (4) the
recorded accountability for the Company’s assets is compared
with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Since the Company’s
incorporation, except as disclosed in the Registration Statement,
the General Disclosure Package and the Prospectus, there has been
(A) no material weakness in the Company’s internal control
over financial reporting (whether or not remediated) and (B) no
change in the Company’s internal control over financial
reporting that has materially affected or is reasonably likely to
materially affect the Company’s internal control over
financial reporting. Since the date of the most recent audited
financial statements of the Company, except as disclosed in the
Registration Statement, the General Disclosure Package and the
Prospectus, the Company has not been advised of (A) any
significant deficiencies in the design or operation of internal
controls that could adversely affect the ability of the Company to
record, process, summarize and report financial data, and (B) any
fraud, whether or not material, that involves management or other
employees who have a significant role in the internal controls of
the Company.
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-9-
(xxxii) Compliance
with the Xxxxxxxx-Xxxxx Act. There is and has been no
failure on the part of the Company or any of the Company’s
directors or officers, in their respective capacities as such, to
comply with all provisions of the Xxxxxxxx-Xxxxx Act of 2002 and
the rules and regulations promulgated thereunder or implementing
provisions thereof (the “Xxxxxxxx-Xxxxx Act”) that
are then in effect and with which the Company is required to comply
as of the effectiveness of the Registration Statement, and is
actively taking steps to ensure that it will be in compliance with
other provisions of the Sarbanes Oxley Act not currently in effect,
upon the effectiveness of such provisions, or which will become
applicable to the Company at all times after the effectiveness of
the Registration Statement.
(xxxiii) Critical
Accounting Policies. The description of the Company’s
accounting policies included or incorporated by reference in the
Registration Statement, the General Disclosure Package and the
Prospectus accurately and fully describes, in all material
respects, (A) the accounting policies that the Company believes are
the most important in the portrayal of the Company’s
financial condition and results of operations and that require
management’s most difficult, subjective or complex judgments
(“Critical
Accounting Policies”); (B) the judgments and
uncertainties affecting the application of Critical Accounting
Policies; and (C) the likelihood that materially different amounts
would be reported under different conditions or using different
assumptions and an explanation thereof.
(xxxiv) Payment
of Taxes. The Company and its current (and with respect to
(A) and (B), former) subsidiaries (A) have paid all material
federal, state, local and foreign taxes (whether imposed directly,
through withholding or otherwise and including any interest,
additions to tax or penalties applicable thereto) required to be
paid through the date hereof, other than those being contested in
good faith by appropriate proceedings and for which adequate
reserves have been provided on the books of the applicable entity,
(B) have timely filed all material tax returns or extensions
thereof required to be filed through the date hereof, and all such
tax returns are correct and complete in all material respects, and
(C) have established adequate reserves for all taxes that have
accrued but are not yet due and payable. The charges, accruals and
reserves on the books of the Company and its subsidiaries in
respect of any income and corporation tax liability for any years
not finally determined are adequate to meet any assessments or
re-assessments for additional income tax for any years not finally
determined, except to the extent of any inadequacy that would not
result in a Material Adverse Effect. No tax deficiency has been
asserted against the Company or any of its current or former
subsidiaries, nor does any such entity know of any tax deficiency
that is likely to be asserted and, if determined adversely to any
such entity, would reasonably be expected to have a Material
Adverse Effect.
(xxxv) Possession
of Intellectual Property. The Company and its subsidiaries
own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights, licenses,
know-how, software, systems and technology (including trade secrets
and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the
conduct of its business as described in the Registration Statement,
the General Disclosure Package and the Prospectus, and has no
reason to believe that the conduct of its business will conflict
with, and has not received any notice of any claim of conflict
with, any such rights of others. There is no pending or, to the
knowledge of the Company, threatened action, suit, proceeding, or
claim by others challenging the rights of the Company or any
subsidiary in or to such rights. There is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding, or
claim by others that the Company or any subsidiary infringes,
misappropriates, or otherwise violates any such rights of
others.
(xxxvii) Insurance.
The Company and its subsidiaries carry or are entitled to the
benefits of insurance, with financially sound and reputable
insurers, in such amounts and covering such risks as the Company
believes is generally maintained by companies of established repute
engaged in the same or similar business and in such amounts as is
commercially reasonable for the value of the properties, in the
aggregate, by the Company and its subsidiaries, and all such
insurance is in full force and effect. Neither the Company nor any
of its subsidiaries has been denied any insurance coverage which it
has sought or for which it has applied.
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-10-
(xxxviii) Investment
Company Act. Neither the Company nor any of its subsidiaries
is required, or upon the issuance and sale of the Securities as
herein contemplated and the application of the net proceeds
therefrom as described under “Use of Proceeds” in the
Registration Statement, the General Disclosure Package and the
Prospectus will be required, to register as an “investment
company” or an entity “controlled” by an
“investment company” within the meaning of such terms
under the Investment Company Act of 1940, as amended, and the rules
and regulations of the Commission thereunder.
(xxxix) Absence
of Manipulation. Neither the Company nor any affiliate of
the Company has taken, nor will the Company or any affiliate take,
directly or indirectly, any action designed to or that has
constituted or that could reasonably be expected to cause or result
in the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities,
and has taken no action which would directly or indirectly violate
Regulation M or which would constitute a special selling effort as
such term is defined under Regulation M.
(xl) Foreign
Corrupt Practices Act. None of the Company, nor any of its
subsidiaries, nor, to the knowledge of the Company, any director,
officer, agent, employee, affiliate or other person acting on
behalf of such entity is aware of or has taken any action, directly
or indirectly, that would result in a violation by such persons of
the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder (the “FCPA”), including,
without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of
an offer, payment, promise to pay or authorization of the payment
of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the
FCPA and the Company and, to the knowledge of the Company, its
affiliates have conducted their businesses in compliance with the
FCPA, and the Company has instituted and maintains policies and
procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance by the Company and its
subsidiaries therewith.
(xli) Money
Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the
rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced
by any Governmental Entity (collectively, the “Money Laundering Laws”);
and no action, suit or proceeding by or before any Governmental
Entity involving the Company or any subsidiary with respect to the
Money Laundering Laws is pending or, to the best knowledge of the
Company, threatened.
(xlii) No
Conflicts with OFAC Laws. None of the Company, any of its
subsidiaries or, to the knowledge of the Company, any director,
officer, agent, employee, affiliate or representative of the
Company or any of its subsidiaries is an individual or entity
(“Person”) currently the
subject or target of any sanctions administered or enforced by the
United States Government, including, without limitation, the U.S.
Department of the Treasury’s Office of Foreign Assets
Control, the United Nations Security Council, the European Union,
Her Majesty’s Treasury, or other relevant sanctions authority
(collectively, “Sanctions”), nor is the
Company located, organized or resident in a country or territory
that is the subject of Sanctions; and the Company will not directly
or indirectly use the net proceeds of the sale of the Securities,
or lend, contribute or otherwise make available such net proceeds
to any subsidiaries, joint venture partners or other Person, to
fund any activities of or business with any Person, or in any
country or territory, that, at the time of such funding, is the
subject of Sanctions or in any other manner that will result in a
violation by any Person (including any Person participating in the
transaction, whether as underwriter, advisor, investor or
otherwise) of Sanctions.
(xliii) Distribution
of Offering Material. The Company and its subsidiaries have
not distributed and, prior to the later to occur of the Closing
Time and the completion of the distribution of the Securities, will
not distribute any offering material in connection with the
offering and sale of the Securities other than the Preliminary
Prospectus, the Prospectus, any issuer free writing prospectus, or
any other materials, if any, permitted by the 1933
Act.
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-11-
(xliv) Restrictions
on Distributions. Except as set forth in agreements with
Crestmark Bank, no subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any distributions
to the Company, from making any other distribution on such
subsidiary’s equity interests, from repaying to the Company
any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary’s property or assets to
the Company or any other subsidiary of the Company, except as
described in or contemplated by the Registration Statement, the
General Disclosure Package and the Prospectus.
(xlv) Prior
Sales of Preferred Stock. Except as disclosed in the
Registration Statement, the General Disclosure Package and the
Prospectus, the Company has not sold, issued or distributed any
shares of preferred stock.
(xlvi)
Compliance. The
Company is subject to and in compliance in all material respects
with the reporting requirements of Section 13 or
Section 15(d) of the 1934 Act. The Common Stock is registered
pursuant to Section 12(b) of the 1934 Act and is listed on The
Nasdaq Capital Market, and the Company has taken no action designed
to, or reasonably likely to have the effect of, terminating the
registration of the Common Stock under the 1934 Act or delisting
the Common Stock from The Nasdaq Capital Market nor has the Company
received any notification that the Commission or FINRA is
contemplating terminating such registration or listing, except as
described in the General Disclosure Package.
(xlvii) No
Finder’s Fee. Except for the Underwriters’
discounts and commissions payable by the Company to the
Underwriters in connection with the offering of the Securities
contemplated herein or as otherwise disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, the
Company has not incurred any liability for any brokerage
commission, finder’s fees or similar payments in connection
with the offering of the Securities contemplated
hereby.
(xlviii) Nasdaq
Capital Market Listing. The Company is in compliance with
the rules and regulations of The Nasdaq Capital Market, including
without limitation, the requirements for listing of the Preferred
Stock on The Nasdaq Capital Market, and there are no actions, suits
or proceedings pending, threatened or, to the Company's knowledge,
contemplated, and the Company has not received any notice from The
Nasdaq Capital Market, regarding the revocation of such or
otherwise regarding the delisting of the Preferred Stock from The
Nasdaq Capital Market. The Company has filed a notification of the
listing of the Securities on The Nasdaq Capital
Market.
(xlix) Absence
of Certain Relationships. No relationship, direct or
indirect, exists between or among the Company or its subsidiaries,
on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company, on the other hand, that is
required to be described in the Registration Statement, the General
Disclosure Package and the Prospectus which is not so described.
The Company has not, directly or indirectly, including through any
subsidiary, extended credit, arranged to extend credit, or renewed
any extension of credit, in the form of a personal loan, to or for
any executive officer of the Company, or to or for any family
member or affiliate of any director or executive officer of the
Company.
(l) No
Integration. The Company has not sold or issued any
securities that would be integrated with the offering of the
Securities contemplated by this Agreement pursuant to the 1933 Act,
the 1933 Act Regulations or the interpretations thereof by the
Commission.
(li) Lending
Relationship. Except as disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, the
Company (A) does not have any material lending or other
relationship with any bank or lending affiliate of any Underwriter
and (B) does not intend to use any of the net proceeds from the
sale of the Securities to repay any outstanding debt owed to any
affiliate of any Underwriter.
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(lii) Ratings.
The Company has no debt securities or preferred stock that is rated
by any “nationally recognized statistical rating
agency” (as such term is defined by the Commission for
purposes of Rule 436(g)(2) of the 1933 Act).
(liii) No
FINRA Affiliations.
There are no affiliations or associations between any member of
FINRA and any of the Company's officers, directors or, to the
knowledge of the Company, 5% or greater
securityholders.
(liv) Statistical
and Market-Related Data. All statistical and market-related
data included in the Registration Statement, the General Disclosure
Package and the Prospectus are based on or derived from sources
that the Company believes, after reasonable inquiry, to be reliable
and accurate, and such data agree with the sources from which they
are derived, and, to the extent required, the Company has obtained
the written consent to the use of such data from such
sources.
(lv) FINRA.
Except as previously disclosed to counsel for the Underwriter or as
set forth in the General Disclosure Package and the Prospectus, to
the knowledge of the Company, no beneficial owners of the
Company’s capital stock or debt who, together with their
associated persons and affiliates, hold in the aggregate 10% or
more of such capital stock or subordinated debt, have any direct or
indirect association or affiliate with a FINRA member
(lvi) Cyber
Security; Data Protection. The Company and its
subsidiaries’ information technology assets and equipment,
computers, systems, networks, hardware, software, websites,
applications, and databases (collectively, “IT
Systems”) are adequate for, and operate and perform in all
material respects as required in connection with the operation of
the business of the Company and the subsidiaries as currently
conducted, free and clear of all material bugs, errors, defects,
Trojan horses, time bombs, malware and other corruptants, except in
each case as would not, singly or in the aggregate, result in a
Material Adverse Effect. The Company and its subsidiaries have
implemented and maintained commercially reasonable controls,
policies, procedures, and safeguards to maintain and protect their
material confidential information and the integrity, continuous
operation, redundancy and security of all IT Systems and data
(including all personal, personally identifiable, sensitive,
confidential or regulated data) used in connection with their
businesses, and there have been no breaches, violations, outages or
unauthorized uses of or accesses to same, except in each case as
would not, singly or in the aggregate, result in a Material Adverse
Effect.
(lvii)
Forward Looking
Statements. The Company had a
reasonable basis for, and made in good faith, each
“forward-looking statement” (within the meaning of
Section 27A of the 1933 Act or Section 21E of the 0000 Xxx)
contained or incorporated by reference in the Registration
Statement, the General Disclosure Package, or the
Prospectus.
(b) Officer’s
Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representative
or to counsel for the Underwriters shall be deemed a representation
and warranty by the Company to each Underwriter as to the matters
covered thereby.
SECTION
2. Sale and Delivery
to Underwriters; Closing.
(a) Initial
Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions
herein set forth, the Company agrees to sell to each Underwriter,
severally and not jointly, and each Underwriter, severally and not
jointly, agrees to purchase from the Company, at the price per
share set forth in Schedule A,
that number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter, plus any additional number
of Initial Securities that such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof,
subject, in each case, to such adjustments among the Underwriters
as the Representative in their sole discretion shall make to
eliminate any sales or purchases of fractional
shares.
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(b) Option
Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to
the Underwriters, severally and not jointly, to purchase up to an
additional 43,500 shares of Preferred Stock, at the price per share
set forth in Schedule A,.
The option hereby granted may be exercised for 45 days after
the date hereof and may be exercised in whole or in part at any
time from time to time upon notice by the Representative to the
Company setting forth the number of Option Securities as to which
the several Underwriters are then exercising the option and the
time and date of payment and delivery for such Option Securities.
Any such time and date of delivery (a “Date of
Delivery”) shall be determined by the Representative, but any
Date of Delivery occurring after the Closing Time shall not be
later than seven (7) full business days nor earlier than two (2)
full business days after the exercise of said option, nor in any
event prior to the Closing Time. If the option is exercised as to
all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being
purchased which the number of Initial Securities set forth in
Schedule A
opposite the name of such Underwriter bears to the total number of
Initial Securities, subject, in each case, to such adjustments as
the Representative in their sole discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment.
Payment of the purchase price for, and delivery of certificates for
or security entitlements in respect of, the Initial Securities
shall be made at the offices of Xxxxxxxx Xxxxxx Xxxxxxx &
Xxxxxxx LLP, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000 or at such
other place as shall be agreed upon by the Representative and the
Company, at 9:00 A.M. (New York City time) on the second
(third, if the pricing occurs after 4:30 P.M. (New York City time)
on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or
such other time as shall be agreed upon by the Representative and
the Company pursuant to Rule 15c6-1(a)
under the 1934 Act (such time and date of payment and
delivery being herein called “Closing Time”). Delivery
of the Initial Securities at the Closing Time shall be made through
the facilities of DTC unless the Representative shall otherwise
instruct.
In
addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for,
and delivery of certificates for or security entitlements in
respect of, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed
upon by the Representative and the Company, on each Date of
Delivery as specified in the notice from the Representative to the
Company. Delivery of the Option Securities on the Date of Delivery
shall be made through the facilities of DTC unless the
Representative shall otherwise instruct.
Payment
shall be made to the Company by wire transfer of immediately
available funds to bank accounts designated by the Company, against
delivery to Benchmark for the respective accounts of the
Underwriters of certificates for or security entitlements in
respect of the Securities to be purchased by them. Benchmark may
(but shall not be obligated to) make payment of the purchase price
for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by
the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve an Underwriter from its
obligations hereunder.
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-14-
SECTION
3. Covenants of the
Company. The Company covenants with each Underwriter as
follows:
(a) Compliance
with Securities Regulations and Commission Requests.
Promptly following execution of this Agreement, the Company will
prepare and file the Prospectus containing the information required
by Rule 430B under the 1933 Act and other selling terms of the
Securities, the plan of distribution thereof and such other
information as may be required by the 1933 Act or the 1933 Act
Regulations and will file the Prospectus within the time period
required by, and otherwise in accordance with the provisions of,
Rule 424(b) of the 1933 Act Regulations; if the Company has elected
to file a Rule 462 Registration Statement to increase the size of
the offering registered under the 1933 Act and the Rule 462
Registration Statement has not yet been filed and become effective,
the Company will prepare and file the Rule 462 Registration
Statement with the Commission within the time period required by,
and otherwise in accordance with the provisions of,
Rule 462(b) and the 1933 Act; the Company will prepare and
file with the Commission, promptly upon the Underwriter’s
request, any amendments or supplements to the Registration
Statement or Prospectus that, based on the advice of counsel, may
be necessary or advisable in connection with the distribution of
the Securities by the Underwriter; and the Company will furnish the
Underwriter and counsel for the Underwriter a copy of any proposed
amendment or supplement to the Registration Statement or Prospectus
and will not file any amendment or supplement to the Registration
Statement or Prospectus to which the Underwriter shall reasonably
object by notice to the Company after having been furnished a copy
a reasonable time prior to the filing The Company, subject to
Section 3(b), will notify the Representative promptly, and
confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective or
any amendment or supplement to the Prospectus shall have been
filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or
supplement to the Prospectus, including any document incorporated
by reference therein, or for additional information, (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment or of any order preventing or suspending the use of the
Preliminary Prospectus or the Prospectus, or of the suspension of
the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes or of any examination pursuant
to Section 8(d) or 8(e) of the 1933 Act concerning the
Registration Statement and (v) if the Company becomes the
subject of a proceeding under Section 8A of the 1933 Act in
connection with the offering of the Securities. The Company will
effect all filings required under Rule 424(b), in the manner and
within the time period required by Rule 424(b) (without reliance on
Rule 424(b)(8)), and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission
and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to
prevent the issuance of any stop order, prevention or suspension
and, if any such order is issued, to obtain the lifting thereof at
the earliest possible moment.
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-15-
(b) Continued
Compliance with Securities Laws. The Company will comply
with the 1933 Act, the 1933 Act Regulations, the 1934 Act and the
1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement
and in the Registration Statement, the General Disclosure Package
and the Prospectus. If at any time when a prospectus relating to
the Securities is (or, but for the exception afforded by Rule 172
of the 1933 Act Regulations (“Rule 172”), would be)
required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist
as a result of which it is necessary, in the reasonable opinion of
counsel for the Underwriters or for the Company, to (i) amend
the Registration Statement in order that the Registration Statement
will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) amend or
supplement the General Disclosure Package or the Prospectus in
order that the General Disclosure Package or the Prospectus, as the
case may be, will not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser
or (iii) amend the Registration Statement or amend or
supplement the General Disclosure Package or the Prospectus, as the
case may be, in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly
(A) give the Representative notice of such event,
(B) prepare any amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration
Statement, the General Disclosure Package or the Prospectus comply
with such requirements and, a reasonable amount of time prior to
any proposed filing or use, furnish the Representative with copies
of any such amendment or supplement and (C) file with the
Commission any such amendment or supplement; provided that the
Company shall not file or use any such amendment or supplement to
which the Representative or counsel for the Underwriters shall
reasonably object. The Company will furnish to the Underwriters
such number of copies of such amendment or supplement as the
Underwriters may reasonably request. The Company has given the
Representative notice of any filings to be made pursuant to the
1934 Act or the 1934 Act Regulations within 48 hours prior to the
Applicable Time; the Company will give the Representative notice of
its intention to make any such filing from the Applicable Time to
the Closing Time and will furnish the Representative with copies of
any such documents a reasonable amount of time prior to such
proposed filing, as the case may be, and will not file or use any
such document to which the Representative or counsel for the
Underwriters shall reasonably object.
(c) Delivery
of Registration Statements. The Company has furnished or
will deliver to the Representative and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representative, without
charge, a conformed copy of the Registration Statement as
originally filed and each amendment thereto (without exhibits) for
each of the Underwriters. The copies of the Registration Statement
and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(d) Delivery
of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of the Preliminary
Prospectus as such Underwriter reasonably requested, and the
Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each
Underwriter, without charge, during the period when a prospectus
relating to the Securities is (or, but for the exception afforded
by Rule 172, would be) required to be delivered under the 1933 Act,
such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation
S-T.
(e) Blue
Sky Qualifications. The Company will use its best efforts,
in cooperation with the Underwriters, to qualify the Securities
sold by it for offering and sale under the applicable securities
laws of such states and other jurisdictions (domestic or foreign)
as the Representative may reasonably designate and to maintain such
qualifications in effect so long as required to complete the
distribution of such Securities; provided, however, that the
Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so
subject.
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-16-
(f) Rule
158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement
for the purposes of, and to provide to the Underwriters the
benefits contemplated by, the last paragraph of Section 11(a)
of the 1933 Act.
(g) Use
of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities sold by it in all material
respects in the manner specified in the Registration Statement, the
General Disclosure Package and the Prospectus under “Use of
Proceeds.”
(h) Listing.
For a period of three (3) years after the date of this Agreement,
the Company will use its best efforts to effect and its reasonable
best efforts to maintain the listing of the Securities on The
Nasdaq Capital Market.
(i) Restriction
on Sale of Securities. During a period of
ninety (90) days from the date of the Prospectus, the Company will
not, without the prior written consent of the Representative, (i)
directly or indirectly, offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any shares of Series D Preferred
Stock or any securities similar to or ranking on par with or senior
to the Series D Preferred Stock or any securities convertible into
or exercisable or exchangeable for Series D Preferred Stock or
similar, parity or senior securities, or file any registration
statement under the 1933 Act with respect to any of the foregoing,
or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Series D
Preferred Stock or such similar, parity or senior securities,
whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Series D Preferred Stock
or such similar, parity or senior securities or such other
securities, in cash or otherwise. The foregoing sentence shall not
apply to the Securities to be sold hereunder.
(j) Reporting
Requirements. The Company, during the period when a
Prospectus relating to the Securities is (or, but for the exception
afforded by Rule 172, would be) required to be delivered under the
1933 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods
required by the 1934 Act and 1934 Act Regulations. Additionally,
the Company shall report the use of proceeds from the issuance of
the Securities sold by it as may be required under Rule 463 under
the 1933 Act.
(k) Issuer
Free Writing Prospectuses. The Company agrees that, unless
it obtains the prior written consent of the Representative, it will
not make any offer relating to the Securities that would constitute
an Issuer Free Writing Prospectus or that would otherwise
constitute a “free writing prospectus,” or a portion
thereof, required to be filed by the Company with the Commission or
retained by the Company under Rule 433; provided that the
Representative will be deemed to have consented to the Issuer Free
Writing Prospectuses listed on Schedule B
hereto and any “road show that is a written
communication” within the meaning of Rule 433(d)(8)(i) that
has been reviewed by the Representative. The Company represents
that it has treated or agrees that it will treat each such free
writing prospectus consented to, or deemed consented to, by the
Representative as an “issuer free writing prospectus,”
as defined in Rule 433, and that it has complied and will comply
with the applicable requirements under Rule 433 with respect
thereto, including timely filing with the Commission where
required, legending and record keeping. If at any time following
issuance of an Issuer Free Writing Prospectus there occurred or
occurs an event or development as a result of which such Issuer
Free Writing Prospectus conflicted or would conflict with the
information contained in the Registration Statement, the
Preliminary Prospectus or the 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 existing at
that subsequent time, not misleading, the Company will promptly
notify the Representative and will promptly amend or supplement, at
its own expense, such Issuer Free Writing Prospectus to eliminate
or correct such conflict, untrue statement or
omission.
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-17-
(l)
Stabilization. The Company
has not taken and will not take, directly or indirectly, any action
designed to or which would reasonably be expected to cause or
result in, or which has constituted, the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities, and has not
effected any sales of Common Stock which are required to be
disclosed in response to Item 701 of Regulation S-K under
the 1933 Act which have not been so disclosed in the Registration
Statement.
(m)
Controls and Procedures.
The Company and its subsidiaries will use its reasonable best
efforts to maintain such controls and other procedures, including
without limitation those required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act and the applicable regulations thereunder, that
are designed to ensure that information required to be disclosed by
the Company in the reports that it files or submits under the 1934
Act is recorded, processed, summarized and reported within the time
periods specified in the Commission’s rules and forms,
including without limitation, controls and procedures designed to
ensure that information required to be disclosed by the Company in
the reports that it files or submits under the 1934 Act is
accumulated and communicated to the Company’s management,
including its principal executive officer and its principal
financial officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required
disclosure, to ensure that material information relating to
Company, including its subsidiaries, is made known to them by
others within those entities.
(n)
Press Releases. Prior to
the latest of the Closing Dates, not to issue any press release or
other communication directly or indirectly or hold any press
conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects
(except for routine oral marketing communications in the ordinary
course of business and consistent with the past practices of the
Company and of which the Underwriter is notified), without the
prior written consent of the Underwriter, unless in the judgment of
the Company and its counsel, and after notification to the
Underwriter, such press release or communication is required by
law.
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-18-
SECTION
4. Payment of
Expenses.
(a) Expenses.
The Company will pay or cause to be paid all expenses incident to
the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Prospectus
(including financial statements and exhibits), (ii) the
preparation, issuance and delivery of the certificates for the
Securities to the Underwriters, including any stock, transfer or
other taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters,
(iii) the fees and disbursements of the Company’s
counsel, accountants and other advisors, (iv) the preparation,
printing and delivery to the Underwriters of copies of each
preliminary prospectus, each Issuer Free Writing Prospectus and the
Prospectus and any amendments or supplements thereto and any costs
associated with electronic delivery of any of the foregoing by the
Underwriters to investors, (v) the fees and expenses of any
transfer agent or registrar for the Securities, (vi) the costs and
expenses of the Company relating to investor presentations on any
“road show” undertaken in connection with the marketing
of the Securities, including, without limitation, expenses
associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the
road show presentations, travel and lodging expenses of the
officers of the Company and any such consultants, and the cost of
aircraft and other transportation chartered or owned by the Company
or its affiliates and used in connection with the road show, (vii)
the filing fees incident to the review by FINRA of the terms of the
sale of the Securities, (viii) the fees and expenses incurred in
connection with the listing of the Securities on The Nasdaq Capital
Market (ix) costs associated with commemorative mementos and lucite
and (x) the Underwriters’ use of Ipreo’s book-building,
prospectus tracking and compliance software for the offering. The
Company agrees to promptly reimburse any Underwriter for any of the
above expenses which the Underwriter pays on behalf of the Company,
provided that any fees of counsel, shall not exceed $75,000 in the
aggregate and the aggregate expenses of the Underwriters (including
fees of counsel) shall not exceed $90,000. The Company agrees to
pay $25,000 upon the execution of this Agreement which shall be
applied against the Underwriters’ out of pocket expenses as
set forth in this Section 4(a).
(b) Underwriter Discount. At the
Closing Time and each subsequent Date of Delivery, if any, the
Company shall pay the Underwriters an underwriting discount equal
to 8% of the proceeds raised from the sale of the Securities. Such
underwriting discount shall be reduced to 1% on all proceeds raised
from the sale of Securities to the senior lenders listed on
Schedule C
hereto.
(c) Termination
of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions
of Section 5(n) or Section 9(a)(i) or (iii) hereof,
the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters, up to $50,000 in the
aggregate, less any amounts previously paid.
SECTION
5. Conditions of
Underwriters’ Obligations. The respective obligations
of the several Underwriters hereunder are subject to the accuracy
of the representations and warranties of the Company contained
herein or in certificates of any officer of the Company or any of
its subsidiaries delivered pursuant to the provisions hereof, to
the performance by the Company of its covenants and other
obligations hereunder, and to each of the following additional
terms and conditions:
(a) Effectiveness
of Registration Statement; Rule 430B Information.
No
stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment to the Registration
Statement shall be in effect, and no proceedings for such purpose
shall have been instituted or threatened by the Commission.
The Company
shall have filed the Prospectus with the Commission (including the
information previously omitted from the Registration Statement
pursuant to Rule 430B under the 0000 Xxx) in the manner and within
the time period required by Rule 424(b) under the 1933 Act; or the
Company shall have filed a post-effective amendment to the
Registration Statement containing the information previously
omitted from the Registration Statement pursuant to such Rule 430B,
and such post-effective amendment shall have become
effective
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-19-
(b) No
Amendments or Supplements. No prospectus or amendment or
supplement to the Registration Statement, the Prospectus, the
Preliminary Prospectus or any Issuer Free Writing Prospectus shall
be filed to which the Underwriters shall have reasonably objected
in writing. The Underwriter shall not have advised the Company that
(i) the Registration Statement or any amendment thereof or
supplement thereto contains an untrue statement of a material fact
which, based on the advice of counsel to the Underwriter, is
material or omits to state a material fact which, based on the
advice of counsel to the Underwriter, is required to be stated
therein or necessary to make the statements therein not misleading,
or (ii) the General 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, based on the
advice of counsel to the Underwriter, is material, or omits to
state a fact which, based on the advice of counsel to the
Underwriter, is material and is required to be stated therein, or
necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. Except as
contemplated in the General Disclosure Package and in the
Prospectus, subsequent to the respective dates as of which
information is given in the General Disclosure Package and the
Prospectus, the Company shall have not incurred any material
liabilities or obligations, direct or contingent, or entered into
any material transactions, or declared or paid any dividends or
made any distribution of any kind with respect to its capital
stock; and there shall not have been any change in the capital
stock (other than a change in the number of outstanding shares of
Common Stock due to the issuance of shares upon the exercise or
conversion of outstanding options, warrants, rights or convertible
securities), or any material change in the short-term or long-term
debt of the Company, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital
stock of the Company except pursuant to equity compensation plans
or arrangements described in the General Disclosure Package and in
the Prospectus, or any Material Adverse Effect or any development
that would result in a Material Adverse Effect (whether or not
arising in the ordinary course of business), that, in the
Underwriter’s judgment, makes it impractical or inadvisable
to offer or deliver the Securities on the terms and in the manner
contemplated in the General Disclosure Package and in the
Prospectus.
(c) Opinion
of Counsel for the Company. At the Closing Time, the
Representative shall have received the favorable opinion and 10b-5
statement, dated as of the Closing Time, of Gracin & Xxxxxx,
LLP, counsel for the Company, in form and substance reasonably
satisfactory to counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the other
Underwriters, to the effect set forth in hereto and to such
further effect as counsel to the Underwriters may reasonably
request.
(d) Opinion
of Counsel for Underwriters. At Closing Time, the
Representative shall have received the 10b-5 statement, dated as of
the Closing Time, of Xxxxxxxx Xxxxxx Xxxxxxx & Xxxxxxx, LLP,
counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters, with
respect to such matters as the Underwriters may reasonably
request.
(e)
Comfort
Letter. On the date hereof, the
Representatives shall have received from Xxxxx Xxxxxxx XxXxxx P.C.,
independent registered public accountants for the Company, a letter
dated the date hereof addressed to the Underwriters, in form and
substance satisfactory to the Representatives, containing
statements and information of the type ordinarily included in
accountant’s “comfort letters” to underwriters,
delivered according to Statement of Auditing Standards No. 72
(or any successor bulletin), with respect to the audited and
unaudited financial statements and certain financial information
contained in the Registration Statement, the Time of Sale
Prospectus, and each free writing prospectus, if
any.
(f)
Bring-down Comfort
Letter. On the Closing Date,
the Representatives shall have received from Xxxxx Xxxxxxx XxXxxx
P.C., independent registered public accountants for the Company, a
letter dated such date, in form and substance satisfactory to the
Representatives, which letter shall: (i) reaffirm the
statements made in the letter furnished by them pursuant to
Section 5(e), except that the specified date referred to
therein for the carrying out of procedures shall be no more than
three business days prior to the Closing Date; and (ii) cover
certain financial information contained in the
Prospectus.
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-20-
(g) Officers’
Certificate. At the Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which
information is given in the Registration Statement, the General
Disclosure Package or the Prospectus, any material adverse change
in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise, whether or not arising
in the ordinary course of business, and the Representative shall
have received a certificate of the Chief Executive Officer and the
Chief Financial Officer of the Company, dated the Closing Time, to
such effect.
(h) Certificate
of the Principal Financial and Accounting Officer. At the
time of execution of this Agreement, the Representative shall have
received a certificate of the Principal Financial and Accounting
Officer of the Company, dated as of such date, in form and
substance reasonably satisfactory to counsel for the Underwriters
as to the financial information set forth in the Prospectus. At the
Closing Time, the Representative shall have received a certificate,
dated as of the Closing Time, of the Principal Financial and
Accounting Officer of the Company confirming that the certificate
delivered by the Company at the time of execution of this Agreement
pursuant to the prior sentence of this Section 5(h) hereof remains
true and correct as of the Closing Time.
(i) Certificate
of Designations. At the Closing Time, the Certificate of
Designations shall have been accepted for record by the DSOS and
shall be effective under the Delaware General Corporation
Law.
(j) Approval
of Listing. At the Closing Time, the Securities shall have
been approved for listing on The Nasdaq Capital Market, subject
only to official notice of issuance.
(k) No
Objection. FINRA shall have confirmed that it has not raised
any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements relating to the offering of
the Securities.
(l)
No Material
Adverse Change.
For the
period from and after the date of this Agreement and through and
including the Closing Date, in the judgment of the Representatives
there shall not have occurred any Material Adverse
Effect.
(m) Rule 462(b) Registration
Statement. In the event that a
Rule 462(b) Registration Statement is filed in connection with the
offering contemplated by this Agreement, such Rule 462(b)
Registration Statement shall have been filed with the Commission on
the date of this Agreement and shall have become effective
automatically upon such filing.
(n) Nasdaq.
On each Closing Date, the Securities to be delivered on such
closing Date will have been approved for listing on the Nasdaq
Capital Market, subject to official notice of
issuance.
(n) Conditions
to the Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof
to purchase all or any portion of the Option Securities subsequent
to the closing on the Initial Securities, the representations and
warranties of the Company contained herein and the statements in
any certificates furnished by the Company and any of its
subsidiaries hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the Representative
shall have received:
(i) Officers’
Certificate. A certificate, dated such Date of Delivery, of
the Chief Executive Officer and the Chief Financial Officer of the
Company confirming that the certificate delivered at the Closing
Time pursuant to Section 5(g) hereof
remains true and correct as of such Date of Delivery.
(ii) Opinion
of Counsel for Company. The favorable opinion and 10b-5
statement of Gracin & Xxxxxx, LLP, counsel for the Company, in
form and substance reasonably satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise
to the same effect as the opinion required by Section 5(c) hereof.
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-21-
(iii) Opinion
of Counsel for Underwriters. The favorable 10b-5 statement
of Xxxxxxxx Xxxxxx Xxxxxxx & Hampton, LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise
to the same effect as the opinion required by Section 5(e) hereof.
(iv)
Bring-down
Comfort Letter. On the Closing Date,
the Representatives shall have received from Xxxxx Xxxxxxx XxXxxx
P.C., independent registered public accountants for the Company, a
letter dated such date, in form and substance satisfactory to the
Representatives, which letter shall: (i) reaffirm the
statements made in the letter furnished by them pursuant to
Section 5(e), except that the specified date referred to
therein for the carrying out of procedures shall be no more than
three business days prior to the Closing Date; and (ii) cover
certain financial information contained in the
Prospectus
(v) Certificate
of the Principal Financial and Accounting Officer. A
certificate of the Principal Financial and Accounting Officer of
the Company, dated such Date of Delivery, substantially in the same
form and substance as the letter furnished to the Representative
pursuant to Section 5(h) hereof.
(o) Additional
Documents. At the Closing Time and at each Date of Delivery
(if any) counsel for the Underwriters shall have been furnished
with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance
and sale of the Securities as herein contemplated shall be
reasonably satisfactory in form and substance to the Representative
and counsel for the Underwriters.
(p) Termination
of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of
Option Securities on a Date of Delivery which is after the Closing
Time, the obligations of the several Underwriters to purchase the
relevant Option Securities, may be terminated by the Representative
by notice to the Company at any time at or prior to Closing Time or
such Date of Delivery, as the case may be, and such termination
shall be without liability of any party to any other party except
as provided in Section 4 and except that Sections 1, 6, 7, 8, 11,
12, 13, 14, 15, 16, 17, 18, 19, 20 and 21 shall survive any such
termination and remain in full force and effect.
SECTION
6. Indemnification.
(a) Indemnification
of Underwriters. The Company agrees to indemnify and hold
harmless each Underwriter, its affiliates (as such term is defined
in Rule 501(b) under the 1933 Act (each, an “Affiliate”)), its selling
agents and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act as follows:
(i) against
any and all loss, liability, claim, damage and expense whatsoever,
as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430B
Information, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included
in (A) the Preliminary Prospectus, any Issuer Free Writing
Prospectus, any Written Testing-the-Waters Communication, the
General Disclosure Package or the Prospectus (or any amendment or
supplement thereto), or (B) in any materials or information
provided to investors by, or with the approval of, the Company in
connection with the marketing of the offing of the Securities
(“Marketing
Materials”),
including any road show or investor presentation made to investors
by the Company (whether in person or electronically), or the
omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not
misleading;
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-22-
(ii) against
any and all loss, liability, claim, damage and expense whatsoever,
as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission; provided that
(subject to Section
6(d) below) any such settlement is effected with the
written consent of the Company;
(iii) against
any and all reasonable expense whatsoever, as incurred (including
the fees and disbursements of one counsel chosen by the
Representative), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i)
or (ii) above; provided,
however, that this indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising
out of any untrue statement or omission or alleged untrue statement
or omission made in the Preliminary Prospectus, any Issuer Free
Writing Prospectus, any Issuer Free Writing Prospectus, the General
Disclosure Package or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with the
Underwriter Information. The indemnity agreement set forth in
this Section
6(a) shall be in addition to any liabilities that the
Company may otherwise have.
(b) Indemnification
of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Preliminary Prospectus, any Issuer Free Writing Prospectus, the
General Disclosure Package or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with the
Underwriter Information. The indemnity agreement set forth in
this Section
6(b) shall be in additional to any other liabilities
that each Underwriter may otherwise have.
(c) Actions
against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each
indemnifying party of any action (including any governmental
investigation) commenced against it in respect of which indemnity
may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity
agreement. The indemnifying party shall be entitled, to the extent
that it shall elect, jointly with any other indemnifying party
similarly notified, to assume the defense of such action, with
counsel reasonably satisfactory to the indemnified party, to
represent the indemnified party and any others the indemnifying
party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any
such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel, (ii) the indemnifying
party has failed within a reasonable time to retain counsel
reasonably satisfactory to the indemnified party, (iii) the
indemnified party shall have reasonably concluded that there may be
legal defenses available to it that are different from or in
addition to those available to the indemnifying party, or (iv) the
named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests
between them, and in any such event the reasonable fees and
expenses of one separate counsel (and any additional local
counsels) shall be paid by the indemnifying party. If the
indemnifying party does not elect to assume the defense, then such
firm shall be designated in writing by the Representative, in the
case of parties indemnified pursuant to Section 6(a), and by the
Company in the case of parties indemnified pursuant to Section
6(b). No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent
to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim
and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any
indemnified party.
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-23-
(d) Settlement
without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel,
such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected
without its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such
settlement.
SECTION
7. Contribution. If the
indemnification provided for in Section 6 hereof is for
any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriters, on the other hand,
from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, on the one hand, and of the
Underwriters, on the other hand, in connection with the statements
or omissions, that resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable
considerations.
The
relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of
the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the
offering of the Securities pursuant to this Agreement (before
deducting expenses) received by the Company, on the one hand, and
the total underwriting discount received by the Underwriters, on
the other hand, in each case as set forth on the cover of the
Prospectus, bear to the aggregate initial public offering price of
the Securities as set forth on the cover of the
Prospectus.
The
relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference
to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the
Company or by the Underwriters and the parties’ relative
intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The
Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations
referred to above in this Section 7. The aggregate amount
of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue or alleged untrue statement
or omission or alleged omission.
Notwithstanding the
provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it
and distributed to the public were offered to the public exceeds
the amount of any damages which such Underwriter has otherwise been
required to pay by reason of any such untrue or alleged untrue
statement or omission or alleged omission.
No
person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
For
purposes of this Section 7, each person, if any,
who controls an Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act and each Underwriter’s
Affiliates and selling agents shall have the same rights to
contribution as such Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company, subject
in each case to the preceding two paragraphs. The
Underwriters’ respective obligations to contribute pursuant
to this Section 7 are several in proportion to the number of
Initial Securities set forth opposite their respective names
in Schedule
A hereto and not joint.
The
provisions of this Section shall not affect any agreement among the
Company with respect to contribution.
SECTION
8. Representations,
Warranties and Agreements to Survive. All representations,
warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its direct or indirect
subsidiaries submitted pursuant hereto, shall remain
operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or its
Affiliates or selling agents, any person controlling any
Underwriter, its officers or directors, any person controlling the
Company and (ii) delivery of and payment for the
Securities.
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-24-
SECTION
9. Termination of
Agreement.
(a) Termination.
The Representative may terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Time (i) if there
has been, in the judgment of the Representative, since the time of
execution of this Agreement or since the respective dates as of
which information is given in the Registration Statement, the
General Disclosure Package or the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the
properties, earnings, business affairs or business prospects of the
Company and its subsidiaries of the Company considered as one
enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or
international political, financial or economic conditions, in each
case the effect of which is such as to make it, in the judgment of
the Representative, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities,
or (iii) if trading in any equity securities of the Company
has been suspended or materially limited by the Commission or The
Nasdaq Capital Market, or (iv) if trading generally on the NYSE
American LLC, the NYSE or The Nasdaq Capital Market has been
suspended or materially limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by order of the Commission,
FINRA or any other governmental authority, or (v) a material
disruption has occurred in commercial banking or securities
settlement or clearance services in the United States, or (vi) if a
banking moratorium has been declared by either federal or state
authorities.
(b) Liabilities.
If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further
that Sections 1, 6, 7, 8, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20
and 21 shall survive such termination and remain in full force and
effect.
SECTION
10. Default by One or
More of the Underwriters. If one or more of the Underwriters
shall fail at Closing Time or a Date of Delivery to purchase the
Securities which it or they are obligated to purchase under this
Agreement (the “Defaulted Securities”),
the Representative shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth;
if, however, the Representative shall not have completed such
arrangements within such 24-hour period, then:
(i) if
the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Underwriters,
or
(ii) if
the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the Underwriters to purchase, and the
Company to sell, the Option Securities to be purchased and sold on
such Date of Delivery shall terminate without liability on the part
of any non-defaulting Underwriter.
No
action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the
event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after
the Closing Time, which does not result in a termination of the
obligation of the Underwriters to purchase and the Company to sell
the relevant Option Securities, as the case may be, either the
(i) Representative or (ii) the Company shall have the right to
postpone Closing Time or the relevant Date of Delivery, as the case
may be, for a period not exceeding seven (7) days in order to
effect any required changes in the Registration Statement, the
General Disclosure Package or the Prospectus or in any other
documents or arrangements. As used herein, the term
“Underwriter” includes any person substituted for an
Underwriter under this Section 10.
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-25-
SECTION
11. Notices.
All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be directed to the Representative at
000 Xxxx 00xx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 Attention: Xxxxxxx
Xxxxxxx, Email: xxxxxxxx@xxxxxxxxxxxxxxxx.xxx with a copy to
Xxxxxxxx Xxxxxx Xxxxxxx & Hampton LLP, Attention: Xxxxxxx
Xxxxxxxx, Esq. Email: xxxxxxxxxx@xxxxxxxxxxxxxx.xxx; notices to the
Company shall be directed to them Youngevity International, Inc.,
0000 Xxxxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxxxxx, 00000, Attention:
Xxxxx Xxxxxxx; and with a copy to Gracin & Xxxxxx, LLP,
The Chrysler Building,
000 Xxxxxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxx
Xxxxxx, Esq. (Fax: (000)
000-0000).
SECTION
12. Research Analyst
Independence. The Company acknowledges that
the Underwriters’ research analysts and research departments
are required to be independent from their respective investment
banking divisions and are subject to certain regulations and
internal policies, and that such Underwriters’ research
analysts may hold views and make statements or investment
recommendations and/or publish research reports with respect to the
Company and/or the offering that differ from the views of their
respective investment banking divisions. The Company hereby waives
and releases, to the fullest extent permitted by law, any claims
that the Company may have against the Underwriters with respect to
any conflict of interest that may arise from the fact that the
views expressed by their independent research analysts and research
departments may be different from or inconsistent with the views or
advice communicated to the Company by such Underwriters’
investment banking divisions. The Company acknowledges that each of
the Underwriters is a full-service securities firm and as such from
time to time, subject to applicable securities laws, may effect
transactions for its own account or the account of its customers
and hold long or short positions in debt or equity securities of
the companies that may be the subject of the transactions
contemplated by this Agreement.
SECTION
13. No Advisory or
Fiduciary Relationship. The Company and its subsidiaries
acknowledge and agree that (a) the purchase and sale of the
Securities pursuant to this Agreement, including the determination
of the public offering price of the Securities and any related
discounts and commissions, is an arm’s-length commercial
transaction between the Company and its subsidiaries, on the one
hand, and the several Underwriters, on the other hand, (b) in
connection with the offering of the Securities and the process
leading thereto, each Underwriter is and has been acting solely as
a principal and is not the agent or fiduciary of the Company, any
of its subsidiaries, or their respective stockholders, equity
interest holders, creditors, employees or any other party, (c) no
Underwriter has assumed or will assume an advisory or fiduciary
responsibility in favor of the Company or its subsidiaries with
respect to the offering of the Securities or the process leading
thereto (irrespective of whether such Underwriter has advised or is
currently advising the Company or any of its subsidiaries on other
matters) and no Underwriter has any obligation to the Company or
any of its subsidiaries with respect to the offering of the
Securities except the obligations expressly set forth in this
Agreement, (d) the Underwriters and their respective affiliates may
be engaged in a broad range of transactions that involve interests
that differ from those of each of the Company and its subsidiaries,
and (e) none of the Underwriters or legal counsel for the
Underwriters has provided any legal, accounting, regulatory or tax
advice to the Company or its subsidiaries with respect to the
offering of the Securities and the Company and its subsidiaries
have consulted their own respective legal, accounting, regulatory
and tax advisors to the extent they deemed
appropriate.
SECTION
14. Parties.
This Agreement shall each inure to the benefit of and be binding
upon the Underwriters, the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and their respective successors
and the controlling persons and officers and directors referred to
in Sections 6 and 7 and their heirs and legal Representative,
any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters, the Company and
their respective successors, and said controlling persons and
officers and directors and their heirs and legal Representative,
and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be
a successor by reason merely of such purchase.
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-26-
SECTION
15. Trial by
Jury. The Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and
affiliates) and each of the Underwriters hereby irrevocably waives,
to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated
hereby.
SECTION
16. Consent to
Jurisdiction; Waiver of Immunity. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions
contemplated hereby (“Related
Proceedings”)
shall be instituted in (i) the federal courts of the United States
of America located in the City and County of New York, Borough of
Manhattan or (ii) the courts of the State of New York located in
the City and County of New York, Borough of Manhattan
(collectively, the “Specified
Courts”), and
each party irrevocably submits to the exclusive jurisdiction
(except for proceedings instituted in regard to the enforcement of
a judgment of any such court (a “Related
Judgment”), as
to which such jurisdiction is non-exclusive) of such courts in any
such suit, action or proceeding. Service of any process, summons,
notice or document by mail to such party’s address set forth
above shall be effective service of process for any suit, action or
other proceeding brought in any such court. The parties irrevocably
and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and
irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such suit, action or other
proceeding brought in any such court has been brought in an
inconvenient forum.
SECTION
17. GOVERNING
LAW. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE
ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF, THE STATE OF NEW
YORK, WITHOUT REGARD TO ITS CHOICE OF LAW PROVISIONS.
SECTION
18. TIME. TIME
SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET
FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION
19. Partial
Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect
the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes
(and only such minor changes) as are necessary to make it valid and
enforceable.
SECTION
20. Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall
be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.
SECTION
21. Effect of
Headings. The Section headings herein are for convenience
only and shall not affect the construction
hereof.
If the
foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart
hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the Underwriters and the
Company in accordance with its terms.
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Very
truly yours,
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By:
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/s/
Xxxxx Xxxxxxx
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Name:
Xxxxx Xxxxxxx
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Title:
President and Chief Financial Officer
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Accepted:
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The
Benchmark Company, LLC
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By:
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/s/
Xxxx Xxxxx
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Authorized Representative of The Benchmark Company,
LLC
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Xxxx
Xxxxx
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Print
Name:
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Senior
Managing Director
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Print
Title:
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[Signature
Page to Underwriting Agreement]
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-27-
SCHEDULE
A
The
dollar amount of Securities to be issued shall be
$7,250,000.
The
public offering price per share for the Securities shall be
$25.00.
The
purchase price per share for the Securities to be paid by the
several Underwriters shall be $23.00, being an amount equal to the
public offering price set forth above less $2.00 per
share.
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Name
of Underwriter
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Number of
Initial Securities
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The Benchmark
Company, LLC
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290,000
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Total
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290,000
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A-1
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SCHEDULE
B
Free Writing Prospectuses
None.
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B-1
SCHEDULE
C
Senior
Lenders
None.
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C-1
