Up to 2,025,000 Shares RUMBLEON, INC. Class B Common Stock UNDERWRITING AGREEMENT
Exhibit 1.1
Execution Version
Up to 2,025,000 Shares
Class B Common Stock
July
18, 2018
National
Securities Corporation
000
Xxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Ladies
and Gentlemen:
The
undersigned, RumbleOn, Inc., a corporation formed under the laws of
the State of Nevada (the “Company”), hereby confirms its
agreement (this “Agreement”) with National
Securities Corporation (hereinafter referred to as
“you” or the
“Underwriter”)
as follows:
1.
Purchase and Sale of
Shares.
1.1 Nature
and Purchase of Shares.
(i) On the basis of the
representations and warranties herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue
and sell to the Underwriter, an aggregate of 2,025,000 shares (the
“Firm Shares”)
of the Company’s Class B Common Stock, par value $0.001 per
share (the “Class B
Common Stock”), and,
at the election of the Underwriter, upon the terms and conditions
stated herein, up to 303,750 additional shares (the
“Additional
Shares”) of Class B Common Stock solely to cover
over-allotments, if any (the Firm Shares and the Additional Shares
that the Underwriter elects to purchase pursuant to Section 1.2(iii) hereof being
collectively called the “Shares”).
(ii) The
Underwriter agrees to purchase from the Company the Shares at a
purchase price of $5.63 per share (93% of the per Share offering
price). The Shares are to be offered initially to the public at the
offering price set forth on the cover page of the Prospectus (as
defined in Section
2.1.1). The offering and sale of the Shares is hereinafter
referred to as the “Offering.”
1.2 Payment
and Delivery of Shares.
(i) Delivery and
payment for the Firm Shares shall be made at 10:00 a.m., New York
City time, on the second (2nd) Business Day
following the date of this Agreement (or the third (3rd) Business Day
following the date of this Agreement if the purchase price set
forth in Schedule
1-A is determined after 4:01 p.m., New York City time) or at
such earlier time as shall be agreed upon by the Underwriter and
the Company, at the offices of McGuireWoods LLP, 1251 Avenue of
the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (“Underwriter’s Counsel”), or
at such other place (or remotely by facsimile or other electronic
transmission) as shall be agreed upon by the Underwriter and the
Company. The hour and date of delivery and payment for the Firm
Shares is called the “Closing
Date.”
(ii) Payment
for the Shares shall be made on the Closing Date by wire transfer
in Federal (same day) funds, payable to the order of the Company
upon delivery of the certificates (in form and substance
satisfactory to the Underwriter) representing the Shares (or
through the facilities of The Depository Trust Company
(“DTC”)) for the
account of the Underwriter. The Shares shall be registered in such
name or names and in such authorized denominations as the
Underwriter may request in writing. The Company shall not be
obligated to sell or deliver the Shares except upon tender of
payment by the Underwriter for all of the Shares. The term
“Business Day”
means any day other than a Saturday, a Sunday or a legal holiday or
a day on which banking institutions are authorized or obligated by
law to close in New York, New York.
(iii) As
referenced in Section
1.1(i) above, the Company hereby grants to the Underwriter
the option to purchase from the Company an aggregate of up to the
total number of Additional Shares, at a purchase price equal to
$5.63 per share. This option may be exercised by the Underwriter at
any time and from time to time on or before the date that is
forty-five (45) days following the date hereof, by written notice
to the Company. Each notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised, and
the date and time when the Additional Shares are to be delivered
(each such date and time being herein referred to as an
“Option Closing
Date”); provided, however, that no Option Closing
Date shall be earlier than the Closing Date nor later than one
business day after the date on which the option shall have been
exercised unless the Company and the Underwriter otherwise agree.
Payment of the purchase price and delivery of the Additional Shares
shall be made on each Option Closing Date in the same manner and at
the same place as payment for and delivery of the Firm Shares
occurs pursuant to Section
1.2(ii) above.
2. Representations and Warranties of the
Company. The Company represents and warrants to the
Underwriter as of the Applicable Time (as defined below), as of the
Closing Date and as of each Option Closing Date as
follows:
2.1 Filing
of Registration Statement. The Company has filed with the U.S.
Securities and Exchange Commission (the “Commission”) a “shelf”
Registration Statement (as hereinafter defined) on Form S-3 (File
No. 333-225217) which became effective on June 6, 2018 (the
“Effective
Date”), including a base prospectus dated June 6, 2018
relating to the securities registered pursuant to such Registration
Statement (the “Base
Prospectus”), for the registration of the Shares under
the Securities Act of 1933, as amended (the “Securities Act”), which
Registration Statement and amendment or amendments have been
prepared by the Company in all material respects in conformity with
the requirements of the Securities Act and the rules and
regulations of the Commission under the Securities Act (the
“Securities Act
Regulations”) and contain all material statements that
are required to be stated therein in accordance with the Securities
Act and the Securities Act Regulations. On the Effective Date, the
Company met the then-applicable requirements for use of Form S-3
under the Securities Act. As of the date hereof, the Company meets,
and as of the Closing Date and each Option Closing Date, the
Company will meet, the requirements for use of Form S-3 under the
Securities Act. Pursuant to General Instruction I.B.6 of Form S-3,
the issuance of the Firm Shares and the Additional Shares is
eligible to be registered pursuant to the Prospectus. The term
“Registration
Statement” as used in this Agreement means the
registration statement (including all exhibits, financial schedules
and all documents and information deemed to be a part of the
Registration Statement pursuant to Rule 430A and 430B of the
Securities Act Regulations), as amended and/or supplemented to the
date of this Agreement, including the Base Prospectus. The
Registration Statement is effective under the Securities Act and no
stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the
Prospectus (as defined below) has been issued by the Commission and
no proceedings for that purpose have been instituted or, to the
knowledge of the Company, are threatened by the
Commission.
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The
Company proposes to file with the Commission pursuant to Rule
424(b) of the Securities Act Regulations a final prospectus
supplement relating to the issuance and sale of the Shares to the
Base Prospectus. Such supplemental form of prospectus, in the form
in which it shall be filed with the Commission pursuant to Rule
424(b) (including the Base Prospectus as so supplemented) is
hereinafter called the “Prospectus.” Any preliminary form
of Prospectus which is filed or used prior to filing of the
Prospectus is hereinafter called a “Preliminary Prospectus.” Any
reference herein to the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed
under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”),
on or before the last to occur of the Effective Date, the date of
the last Preliminary Prospectus, or the date of the Prospectus, and
any reference herein to the terms “amend,”
“amendment,” or “supplement” with respect
to the Registration Statement, the Base Prospectus, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include (i) the filing of any document under the Exchange Act after
the Effective Date, the date of such Preliminary Prospectus or the
date of the Prospectus, as the case may be, which is incorporated
by reference, and (ii) any such document so filed. If the Company
has filed an abbreviated registration statement to register
additional securities pursuant to Rule 462(b) of the Securities Act
Regulations (the “462(b)
Registration Statement”), then any reference herein to
the Registration Statement shall also be deemed to include such
462(b) Registration Statement.
As used
in this Section 2.1
and elsewhere in this Agreement:
“Applicable Time” means 7:45 a.m.,
New York City time, on the date of this Agreement.
“Pricing Disclosure Package” means
the Pricing Prospectus and the information included on Schedule 1-A hereto, considered
together.
“Pricing Prospectus” means the
Preliminary Prospectus, if any, and the Base Prospectus, each as
amended and supplemented immediately prior to the Applicable Time,
including any document incorporated by reference therein and any
prospectus supplement deemed to be a part thereof.
2.2 No Stop Orders, etc. Neither
the Commission nor any state regulatory authority has issued any
order preventing or suspending the use of the Registration
Statement, any Preliminary Prospectus or the Prospectus or has
instituted or, to the Company’s knowledge, threatened to
institute, any proceedings with respect to such an order. The
Company has complied with each request (if any) from the Commission
for additional information.
2.3 Listing and Maintenance
Requirements. 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 Exchange Act, as applicable. The Class B
Common Stock is registered pursuant to Section 12(b) of the
Exchange Act and is listed on the NASDAQ Capital Market (the
“Exchange”), and
the Company has taken no action designed to, or reasonably likely
to have the effect of, terminating the registration of the Class B
Common Stock under the Exchange Act or delisting the Common Stock
from the Exchange, nor has the Company received any notification
that the Commission, FINRA or The NASDAQ Stock Market LLC
(“NASDAQ”) is
contemplating terminating such registration or listing, other than
as described in the Company’s Current Report on Form 8-K
filed with the Commission on June 28, 2018. No consent, approval,
authorization or order of, or filing, notification or registration
with, the Exchange is required for the listing and trading of the
shares of Class B Common Stock on the Exchange, except for (i) a
Notification Form: Listing of Additional Shares; and (ii) a
Notification Form: Change in the Number of Shares
Outstanding.
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2.4 Disclosures in Registration
Statement.
2.4.1. Compliance
with Securities Act and 10b-5 Representation.
(i) Each of the
Registration Statement and any post-effective amendment thereto, at
the time it became effective, at the date of this Agreement and at
the Closing Date and each Option Closing Date, complied and will
comply in all material respects with the requirements of the
Securities Act and the Securities Act Regulations. Each Preliminary
Prospectus, including the prospectus filed as part of the
Registration Statement as originally filed or as part of any
amendment or supplement thereto, and the Prospectus, at the time
each was filed with the Commission, at the date of this Agreement
and at the Closing Date and each Option Closing Date, complied in
all material respects with the requirements of the Securities Act
and the Securities Act Regulations. Each Preliminary Prospectus
delivered to the Underwriter 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.
(ii) Neither
the Registration Statement nor any amendment thereto, at its
effective time, as of the Applicable Time, or at the Closing Date
or any Option Closing Date contained, contains or will contain an
untrue statement of a material fact or omitted, omits or will omit
to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
(iii) The
Pricing Disclosure Package, as of the Applicable Time or at the
Closing Date or any Option Closing Date did not, does not and will
not include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and
warranty shall not apply to statements made or statements omitted
in reliance upon and in conformity with written information
furnished to the Company with respect to the Underwriter by the
Underwriter expressly for use in the Registration Statement, the
Pricing Prospectus or the Prospectus or any amendment thereof or
supplement thereto. The parties acknowledge and agree that such
information provided by or on behalf of any Underwriter consists
solely of the following disclosure contained in the
“Underwriting” section of the Prospectus: the fourth
paragraph under the caption “Underwriting,” the second
sentence of the first paragraph and the first sentence of the
second paragraph under the caption “Underwriting –
Stabilization,” and the information in the caption
“Underwriting – Electronic Distribution”
(collectively, the “Underwriter’s Information”);
and
(iv) Neither
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) or at the
Closing Date or any Option Closing Date, included, includes or will
include an untrue statement of a material fact or omitted, omits or
will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this representation and
warranty shall not apply to the Underwriter’s
Information.
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2.4.2. Disclosure
of Agreements. The agreements and documents incorporated by
reference in the Registration Statement, the Pricing Disclosure
Package and the Prospectus conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as
applicable, and there are no agreements or other documents required
by the Securities Act, the Securities Act Regulations or the
Exchange Act to be described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus or to be filed with
the Commission as exhibits to the Registration Statement, that have
not been so filed. Each agreement or other instrument (however
characterized or described) to which the Company is a party or by
which it is or may be bound or affected and (i) that is
referred to or incorporated by reference in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, or
(ii) is material to the Company’s business, has been
duly authorized and validly executed by the Company, is in full
force and effect in all material respects and is enforceable
against the Company and, to the Company’s knowledge, the
other parties thereto, in accordance with its terms, except
(x) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting
creditors’ rights generally, (y) as enforceability of
any indemnification or contribution provision may be limited under
the federal and state securities laws, and (z) that the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought. None of such agreements or instruments has been assigned
by the Company, and neither the Company nor, to the Company’s
knowledge, any other party is in default thereunder and, to the
Company’s knowledge, no event has occurred that, with the
lapse of time or the giving of notice, or both, would constitute a
default thereunder. Performance by the Company of the material
provisions of such agreements or instruments will not result in a
material violation of any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or
court, domestic or foreign, having jurisdiction over the Company or
any of its assets or businesses (each, a “Governmental Entity”), including,
without limitation, those relating to environmental laws and
regulations.
2.4.3. Prior
Securities Transactions. No securities of the Company have
been sold by the Company or by or on behalf of, or for the benefit
of, any person or persons controlling, controlled by or under
common control with the Company, except as disclosed in the
Registration Statement, the Pricing Disclosure Package and the
Preliminary Prospectus.
2.4.4. Regulations.
The disclosures in the Registration Statement, the Pricing
Disclosure Package and the Prospectus concerning the effects of
federal, state, local and all foreign regulation on the Offering
and the Company’s business as currently contemplated are
correct in all material respects and no other such regulations are
required to be disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus which are not so
disclosed.
2.5 Changes After Dates in Registration
Statement.
2.5.1. No
Material Adverse Change. Since the respective dates as of
which information is given in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, except as otherwise
specifically stated therein: (i) there has been no material
adverse change in the financial position or results of operations
of the Company, nor any change or development that, singularly or
in the aggregate, would involve a material adverse change or a
prospective material adverse change, in or affecting the condition
(financial or otherwise), results of operations, business, assets
or prospects of the Company (a “Material Adverse Change”);
(ii) there have been no material transactions entered into by
the Company, other than as contemplated pursuant to this Agreement;
and (iii) no officer or director of the Company has resigned
from any position with the Company.
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2.5.2. Recent
Securities Transactions, etc. Subsequent to the respective
dates as of which information is given in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, and
except as may otherwise be indicated or contemplated herein or
disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, the Company has not: (i) issued
any securities or incurred any liability or obligation, direct or
contingent, for borrowed money; or (ii) declared or paid any
dividend or made any other distribution on or in respect to its
capital stock.
2.6 Independent Accountants. Xxxxxx
Pera & Co., PLCC (the “Auditor”), whose report is filed
with the Commission as part of the Registration Statement, the
Pricing Disclosure Package and the Prospectus, is an independent
registered public accounting firm as required by the Securities Act
and the Securities Act Regulations and the Public Company
Accounting Oversight Board. The Auditor has not, during the periods
covered by the financial statements included or incorporated by
reference in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, provided to the Company any non-audit
services, as such term is used in Section 10A(g) of the Exchange
Act.
2.7 Financial Statements, etc. The
financial statements, including the notes thereto and supporting
schedules, included or incorporated by reference in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, fairly present the financial position and the results
of operations of the Company at the dates and for the periods to
which they apply; and such financial statements have been prepared
in conformity with U.S. generally accepted accounting principles
(“GAAP”),
consistently applied throughout the periods involved (provided that
unaudited interim financial statements are subject to year-end
audit adjustments that are not expected to be material in the
aggregate and do not contain all footnotes required by GAAP); and
the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein.
Except as included therein, no historical or pro forma financial
statements are required to be included or incorporated by reference
in the Registration Statement, the Pricing Disclosure Package or
the Prospectus under the Securities Act or the Securities Act
Regulations. All disclosures contained in the Registration
Statement, the Pricing Disclosure Package or the Prospectus
regarding “non-GAAP financial measures” (as such term
is defined by the rules and regulations of the Commission), if any,
comply with Regulation G of the Exchange Act and Item 10 of
Regulation S-K of the Securities Act, to the extent applicable.
Each of the Registration Statement, the Pricing Disclosure Package
and the Prospectus discloses all material off-balance sheet
transactions, arrangements, obligations (including contingent
obligations), and other relationships of the Company with
unconsolidated entities or other persons that may have a material
current or future effect on the Company’s financial
condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources, or significant
components of revenues or expenses. Except as disclosed or incorporated by reference
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus, (a) the Company has not incurred any material
liabilities or obligations, direct or contingent, or entered into
any material transactions other than in the ordinary course of
business, (b) the Company has not declared or paid any dividends or
made any distribution of any kind with respect to its capital
stock, (c) there has not been any change in the capital stock of
the Company, or, other than in
the course of business, any grants under any stock compensation
plan, and (d) there has not
been any material adverse change in the Company’s long-term
or short-term debt.
2.8 Authorized Capital, etc. The
Company had, at the date or dates indicated in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
duly authorized, issued and outstanding capitalization as set forth
therein. Based on the assumptions stated in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
Company will have on the Closing Date the adjusted stock
capitalization set forth therein. Except as set forth in, or
contemplated by, the Registration Statement, the Pricing Disclosure
Package and the Prospectus, on the Effective Date, as of the
Applicable Time and on the Closing Date and each Option Closing
Date, there will be no stock options, warrants, or other rights to
purchase or otherwise acquire any authorized, but unissued shares
of the Company’s Class A Common Stock, $0.001 per share (the
“Class A Common
Stock”) or the Class B Common Stock or any security
convertible or exercisable into shares of Class A Common Stock or
Class B Common Stock, or any contracts or commitments to issue or
sell shares of Class A Common Stock, Class B Common Stock or any
such options, warrants, rights or convertible
securities.
-6-
2.9 Valid
Issuance of Securities, etc.
2.9.1. Outstanding
Securities. All issued and outstanding securities of the
Company issued prior to the transactions contemplated by this
Agreement have been duly authorized and validly issued and are
fully paid and non-assessable; the holders thereof have no rights
of rescission with respect thereto, and are not subject to personal
liability by reason of being such holders; and none of such
securities were issued in violation of the preemptive rights of any
holders of any security of the Company or similar contractual
rights granted by the Company. The authorized shares of Class B
Common Stock conform in all material respects to all statements
relating thereto contained in the Registration Statement, the
Pricing Disclosure Package and the Prospectus. The offers and sales
of the outstanding shares of Class A Common Stock and Class B
Common Stock were at all relevant times either registered under the
Securities Act and the applicable state securities or “blue
sky” laws or, based in part on the representations and
warranties of the purchasers of such shares of Class A Common Stock
and Class B Common Stock, exempt from such registration
requirements.
2.9.2. Shares
Sold Pursuant to this Agreement. The Shares have been duly
authorized for issuance and sale and, when issued and paid for,
will be validly issued, fully paid and non-assessable; the holders
thereof are not and will not be subject to personal liability by
reason of being such holders; the Shares are not and will not be
subject to the preemptive rights of any holders of any security of
the Company or similar contractual rights granted by the Company;
and all corporate action required to be taken for the
authorization, issuance and sale of the Shares has been duly and
validly taken. The Shares conform in all material respects to all
statements with respect thereto contained in the Registration
Statement, the Pricing Disclosure Package and the
Prospectus.
2.10 Registration
Rights of Third Parties. Except as set forth in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, no holders of any securities of the Company or any
rights exercisable for or convertible or exchangeable into
securities of the Company have the right to require the Company to
register the sale or resale of any such securities of the Company
under the Securities Act, other than Hercules Capital, Inc.
pursuant to the Loan and Security Agreement entered into with that
company, solely to the extent disclosed by the Company in its
Current Report on Form 8-K filed with the Commission on May 1,
2018, or to include any such securities in a registration statement
to be filed by the Company. Hercules Capital, Inc. does not have
the right to require the Company to register the resale of any
securities of the Company held by it, or that it may acquire upon
the exercise or conversion of any other securities of the Company,
pursuant to the Prospectus as part of the Offering.
2.11 Validity
and Binding Effect of Agreement. This Agreement has been
duly and validly authorized by the Company, and, when executed and
delivered, will constitute, the valid and binding agreement of the
Company, enforceable against the Company in accordance with its
terms, except: (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (ii) as enforceability of
any indemnification or contribution provision may be limited under
the federal and state securities laws; and (iii) that the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to
the discretion of the court before which any proceeding therefor
may be brought.
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2.12 No
Conflicts, etc. The execution, delivery and performance by
the Company of this Agreement and all ancillary documents, the
consummation by the Company of the transactions herein and therein
contemplated and the compliance by the Company with the terms
hereof and thereof do not and will not, with or without the giving
of notice or the lapse of time or both: (i) result in a
material breach of, or conflict with any of the terms and
provisions of, or constitute a material default under, or result in
the creation, modification, termination or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
pursuant to the terms of any agreement or instrument to which the
Company is a party; (ii) result in any violation of the
provisions of the Company’s Articles of Incorporation (as the
same may be amended or restated from time to time, the
“Charter”) or
the Company’s bylaws (the “Bylaws”); or (iii) violate
any existing applicable law, rule, regulation, judgment, order or
decree of any Governmental Entity as of the date
hereof.
2.13 No
Defaults; Violations. No material default exists in the due
performance and observance of any term, covenant or condition of
any material license, contract, indenture, mortgage, deed of trust,
note, loan or credit agreement, or any other agreement or
instrument evidencing an obligation for borrowed money, or any
other material agreement or instrument to which the Company is a
party or by which the Company may be bound or to which any of the
properties or assets of the Company is subject. The Company is not
in violation of any term or provision of its Charter or Bylaws, or
in violation of any franchise, license, permit, applicable law,
rule, regulation, judgment or decree of any Governmental
Entity.
2.14 Corporate
Power; Licenses; Consents.
2.14.1. Conduct
of Business. The Company has all requisite corporate power
and authority, and has all necessary authorizations, approvals,
orders, licenses, certificates and permits of and from all
governmental regulatory officials and bodies that it needs as of
the date hereof to conduct its business purpose as described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus.
2.14.2. Transactions
Contemplated Herein. The Company has all corporate power and
authority to enter into this Agreement and to carry out the
provisions and conditions hereof, and all consents, authorizations,
approvals and orders required in connection therewith have been
obtained. No consent, authorization or order of, and no filing
with, any court, Governmental Entity or other body is required for
the valid issuance, sale and delivery of the Shares and the
consummation of the transactions and agreements contemplated by
this Agreement and as contemplated by the Registration Statement,
the Pricing Disclosure Package and the Prospectus, except with
respect to applicable federal and state securities laws and the
rules and regulations of the Financial Industry Regulatory
Authority, Inc. (“FINRA”).
2.15 Independence
Questionnaires. To the Company’s knowledge, all
information concerning the Company’s directors, officers and
principal shareholders as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, as well as in
the Lock-Up Agreement (as defined in Section 2.24), is true and
correct in all material respects and the Company has not become
aware of any information which would cause such information to
become materially inaccurate and incorrect.
2.16 Litigation;
Governmental Proceedings. There is no action, suit,
proceeding, inquiry, arbitration, investigation, litigation or
governmental proceeding pending or, to the Company’s
knowledge, threatened against, or involving the Company which has
not been disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus or in connection with the
Company’s listing application for the listing of the Shares
on the Exchange, which if resolved adversely to the Company is
reasonably likely to result in a Material Adverse
Change.
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2.17 Good
Standing. The Company has been duly organized and is validly
existing as a corporation and is in good standing under the laws of
the State of Nevada as of the date hereof, and is duly qualified to
do business and is in good standing in each other jurisdiction in
which its ownership or lease of property or the conduct of business
requires such qualification, except where the failure to qualify,
singularly or in the aggregate, would not have or reasonably be
expected to result in a Material Adverse Change.
2.18 Insurance.
The Company carries or is entitled to the benefits of insurance,
with reputable insurers, in such amounts and covering such risks
which the Company believes are adequate, including, but not limited
to, directors and officers insurance coverage at least equal to
$5,000,000 and the Company has included each Underwriter as an
additional insured party to the directors and officers insurance
coverage and all such insurance is in full force and effect. The
Company has no reason to believe that it will not be able (i) to
renew its existing insurance coverage as and when such policies
expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a
Material Adverse Change.
2.19 Transactions
Affecting Disclosure to FINRA.
2.19.1. Finder’s
Fees. There are no claims, payments, arrangements,
agreements or understandings relating to the payment of a
finder’s, consulting or origination fee by the Company or any
of the Company’s officers, directors or beneficial owners of
5% or more of any class of the Company’s securities of with
respect to the sale of the Shares hereunder or any other
arrangements, agreements or understandings of the Company or, to
the Company’s knowledge, any of its shareholders that may
affect the Underwriter’s compensation, as determined by
FINRA.
2.19.2. Payments
Within Twelve (12) Months. Except as described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, the Company has not made any direct or indirect
payments (in cash, securities or otherwise) to: (i) any
person, as a finder’s fee, consulting fee or otherwise, in
consideration of such person raising capital for the Company or
introducing to the Company persons who raised or provided capital
to the Company; (ii) any FINRA member; or (iii) any person or
entity that has any direct or indirect affiliation or association
with any FINRA member, within the twelve (12) months prior to the
Effective Date, other than the payment to the Underwriter as
provided hereunder in connection with the Offering.
2.19.3. Use
of Proceeds. None of the net proceeds of the Offering will
be paid by the Company to any participating FINRA member or its
affiliates, except as specifically authorized herein.
2.19.4. FINRA
Affiliation. There is no (i) officer or director of the
Company, (ii) beneficial owner of 5% or more of any class of the
Company’s securities or (iii) beneficial owner of the
Company’s unregistered equity securities which were acquired
during the 180-day period immediately preceding the filing of the
Registration Statement that is an affiliate or associated person of
a FINRA member participating in the Offering (as determined in
accordance with the rules and regulations of FINRA).
2.19.5. Information.
All information provided by the Company in its FINRA questionnaire
to Underwriter’s Counsel specifically for use by
Underwriter’s Counsel in connection with its Public Offering
System filings (and related disclosure) with FINRA is true, correct
and complete in all material respects.
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2.20 Foreign
Corrupt Practices Act. The Company or, to the
Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company or any other person acting on behalf of
the Company, has not, directly or indirectly, given or agreed to
give any money, gift or similar benefit (other than legal price
concessions to customers in the ordinary course of business) to any
customer, supplier, employee or agent of a customer or supplier, or
official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was,
is, or may be in a position to help or hinder the business of the
Company (or assist it in connection with any actual or proposed
transaction) that (i) might subject the Company to any damage
or penalty in any civil, criminal or governmental litigation or
proceeding, (ii) if not given in the past, might have had a
Material Adverse Change, or (iii) if not continued in the
future, might adversely affect the assets, business, operations or
prospects of the Company. The Company has taken reasonable steps to
ensure that its accounting controls and procedures are sufficient
to cause the Company to comply in all material respects with the
Foreign Corrupt Practices Act of 1977, as amended.
2.21 Compliance
with OFAC. Neither the Company nor, to the Company’s
knowledge, any director, officer, agent, employee or affiliate of
the Company or any other person acting on behalf of the Company, is
currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Department of the Treasury
(“OFAC”), and
the Company will not, directly or indirectly, use the proceeds of
the Offering hereunder, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered
by OFAC.
2.22 Money
Laundering Laws. The operations of the Company 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 with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Company,
threatened.
2.23 Officers’
Certificate. Any certificate signed by any duly authorized
officer of the Company and delivered to you or to
Underwriter’s Counsel shall be deemed a representation and
warranty by the Company to the Underwriter as to the matters
covered thereby.
2.24 Lock-Up
Agreements. Schedule 2 hereto contains a
complete and accurate list of the Company’s executive
officers and directors as well as any stockholders deemed to be
affiliates through their ownership of the Company’s Class B
Common Stock or Class A Common Stock (collectively,
the “Lock-Up
Parties”). The Company has caused each of the Lock-Up
Parties to deliver to the Underwriter an executed Lock-Up
Agreement, in the form attached hereto as Exhibit A (the
“Lock-Up
Agreement”), prior to the execution of this
Agreement.
2.25 Subsidiaries.
Except as set forth in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, the Company has no direct or
indirect subsidiaries.
2.26 Related
Party Transactions. There are no business relationships or
related party transactions involving the Company or any other
person required to be described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus that have not been
described as required.
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2.27 Board
of Directors. The Board of Directors of the Company is
comprised of the persons set forth in the Company’s Current
Report on Form 8-K filed with the Commission on June 28, 2018 and
incorporated by reference into each Preliminary Prospectus and the
Prospectus. The qualifications of the persons serving as board
members and the overall composition of the board comply with the
Exchange Act, the rules and regulations of the Commission under the
Exchange Act (the “Exchange
Act Regulations”), the Xxxxxxxx-Xxxxx Act of 2002 and
the rules promulgated thereunder (the “Xxxxxxxx-Xxxxx Act”) applicable to
the Company and the listing rules of the Exchange, except that the
Company does not have a majority of independent directors on the
Board of Directors as is required by Nasdaq Listing Rule 5605. At
least one member of the Audit Committee of the Board of Directors
of the Company qualifies as an “audit committee financial
expert,” as such term is defined under Regulation S-K and the
listing rules of the Exchange.
2.28 Xxxxxxxx-Xxxxx
Compliance.
2.28.1. Disclosure
Controls. The Company has developed and currently maintains
disclosure controls and procedures that comply with Rule 13a-15 or
15d-15 under the Exchange Act Regulations, and such controls and
procedures are effective to ensure that all material information
concerning the Company are made known on a timely basis to the
individuals responsible for the preparation of the Company’s
Exchange Act filings and other public disclosure
documents.
2.28.2. Compliance.
The Company is, or at the Applicable Time and on the Closing Date
and each Option Closing Date will be, in material compliance with
the provisions of the Xxxxxxxx-Xxxxx Act applicable to it, and has
implemented or will implement such programs and taken reasonable
steps to ensure the Company’s future compliance (not later
than the relevant statutory and regulatory deadlines therefor) with
all of the material provisions of the Xxxxxxxx-Xxxxx
Act.
2.29 Accounting
Controls. The Company maintains systems of “internal
control over financial reporting” (as defined under Rules
13a-15 and 15d-15 under the Exchange Act Regulations) that comply
with the requirements of the Exchange Act and have been designed
by, or under the supervision of, their respective principal
executive and principal financial officers, or persons performing
similar functions, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP,
including, but not limited to, internal accounting controls
sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. Except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
Company is not aware of any material weaknesses in its internal
controls. The Company’s auditors and the Audit Committee of
the Board of Directors of the Company have been advised of: (i) all
significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are
known to the Company’s management and that have adversely
affected or are reasonably likely to adversely affect the
Company’ ability to record, process, summarize and report
financial information; and (ii) any fraud known to the
Company’s management, whether or not material, that involves
management or other employees who have a significant role in the
Company’s internal controls over financial
reporting.
2.30 No
Investment Company Status. The Company is not and, after
giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, will not be, required to
register as an “investment company,” as defined in the
Investment Company Act of 1940, as amended.
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2.31 No
Labor Disputes. No labor dispute with the employees of the Company
exists or, to the knowledge of the Company, is
imminent.
2.32 Intellectual
Property Rights. The Company owns or possesses or has valid
rights to use all patents, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights,
licenses, trade secrets and similar rights (“Intellectual Property Rights”), if
any, necessary for the conduct of the business of the Company as
currently carried on and as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus. To
the knowledge of the Company, no action or use by the Company
necessary for the conduct of its business as currently carried on
and as described in the Registration Statement and the Prospectus
will involve or give rise to any infringement of, or license or
similar fees for, any Intellectual Property Rights of others.
Except as would not reasonably be expected to result, individually
or in the aggregate, in a Material Adverse Change, the Company has
not received any notice alleging any such infringement, fee or
conflict with asserted Intellectual Property Rights of others.
Except as would not reasonably be expected to result, individually
or in the aggregate, in a Material Adverse Change (A) to the
knowledge of the Company, there is no infringement,
misappropriation or violation by third parties of any of the
Intellectual Property Rights owned by the Company; (B) 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 in or to any such Intellectual Property Rights, and the
Company is unaware of any facts which would form a reasonable basis
for any such claim, that would, individually or in the aggregate,
together with any other claims in this Section 2.32, reasonably be
expected to result in a Material Adverse Change; (C) the
Intellectual Property Rights owned by the Company and, to the
knowledge of the Company, the Intellectual Property Rights licensed
to the Company have not been adjudged by a court of competent
jurisdiction invalid or unenforceable, in whole or in part, and
there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property Rights, and
the Company is unaware of any facts which would form a reasonable
basis for any such claim that would, individually or in the
aggregate, together with any other claims in this Section 2.32, reasonably be
expected to result in a Material Adverse Change; (D) there is no
pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others that the Company infringes,
misappropriates or otherwise violates any Intellectual Property
Rights or other proprietary rights of others, the Company has not
received any written notice of such claim and the Company is
unaware of any other facts which would form a reasonable basis for
any such claim that would, individually or in the aggregate,
together with any other claims in this Section 2.32, reasonably be
expected to result in a Material Adverse Change; and (E) to the
Company’s knowledge, no employee of the Company is in
violation in any material respect of any term of any employment
contract, patent disclosure agreement, invention assignment
agreement, non-competition agreement, non-solicitation agreement,
nondisclosure agreement or any restrictive covenant to or with a
former employer where the basis of such violation relates to such
employee’s employment with the Company, or actions undertaken
by the employee while employed with the Company and could
reasonably be expected to result, individually or in the aggregate,
in a Material Adverse Change. To the Company’s knowledge, all
material trade secrets developed by and belonging to the Company
which have not been patented have been kept confidential. The
Company is not a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property Rights of any
other person or entity that are required to be set forth in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus and are not described therein. The Registration
Statement, the Pricing Disclosure Package and the Prospectus
contain in all material respects the same description of the
matters set forth in the preceding sentence. None of the technology
employed by the Company has been obtained or is being used by the
Company in violation of any contractual obligation binding on the
Company or, to the Company’s knowledge, any of its officers,
directors or employees, or otherwise in violation of the rights of
any persons.
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2.33 Taxes.
The Company has filed all returns (as hereinafter defined) required
to be filed with taxing authorities prior to the date hereof or has
duly obtained extensions of time for the filing thereof. The
Company has paid all taxes (as hereinafter defined) shown as due on
such returns that were filed and has paid all taxes imposed on or
assessed against the Company. The provisions for taxes payable, if
any, shown on the financial statements filed with or as part of the
Registration Statement are sufficient for all accrued and unpaid
taxes, whether or not disputed, and for all periods to and
including the dates of such financial statements. Except as
disclosed in writing to the Underwriter, (i) no issues have been
raised (and are currently pending) by any taxing authority in
connection with any of the returns or taxes asserted as due from
the Company, and (ii) no waivers of statutes of limitation with
respect to the returns or collection of taxes have been given by or
requested from the Company. The term “taxes” means all federal, state,
local, foreign and other net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license,
lease, service, service use, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, windfall
profits, customs, duties or other taxes, fees, assessments or
charges of any kind whatever, together with any interest and any
penalties, additions to tax or additional amounts with respect
thereto. The term “returns” means all returns,
declarations, reports, statements and other documents required to
be filed in respect to taxes.
2.34 ERISA
Compliance. The Company and any “employee benefit
plan” (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, “ERISA”)) established or maintained
by the Company or its “ERISA Affiliates” (as defined
below) are in compliance in all material respects with ERISA.
“ERISA
Affiliate” means, with respect to the Company, any
member of any group of organizations described in Sections
414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations
thereunder (the “Code”) of which the Company is a
member. No “reportable event” (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any
“employee benefit plan” established or maintained by
the Company or any of its ERISA Affiliates. No “employee
benefit plan” established or maintained by the Company or any
of its ERISA Affiliates, if such “employee benefit
plan” were terminated, would have any “amount of
unfunded benefit liabilities” (as defined under ERISA).
Neither the Company nor any of its ERISA Affiliates has incurred or
reasonably expects to incur any material liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any
“employee benefit plan” or (ii) Sections 412, 4971,
4975 or 4980B of the Code. Each “employee benefit plan”
established or maintained by the Company or any of its ERISA
Affiliates that is intended to be qualified under Section 401(a) of
the Code is so qualified and, to the knowledge of the Company,
nothing has occurred, whether by action or failure to act, which
would cause the loss of such qualification.
2.35 Compliance
with Laws. The Company: (A) is and at all times has been in
compliance with all statutes, rules, or regulations applicable to
the conduct of the Company’s business (collectively, the
“Applicable
Laws”), except as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Change; (B) has not received any warning letter, untitled letter or
other correspondence or notice from any other Governmental Entity
alleging or asserting noncompliance with any Applicable Laws or any
licenses, certificates, approvals, clearances, authorizations,
permits and supplements or amendments thereto required by any such
Applicable Laws (collectively, the “Authorizations”); (C) possesses
all material Authorizations and such Authorizations are valid and
in full force and effect and the Company is not in material
violation of any term of any such Authorizations; (D) has not
received notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from any
Governmental Entity or third party alleging that any of the
Company’s activities is in violation of any Applicable Laws
or Authorizations and has no knowledge that any such Governmental
Entity or third party is considering any such claim, litigation,
arbitration, action, suit, investigation or proceeding; (E) has not
received notice that any Governmental Entity has taken, is taking
or intends to take action to limit, suspend, modify or revoke any
Authorizations and has no knowledge that any such governmental
authority is considering such action; and (F) has filed, obtained,
maintained or submitted all material reports, documents, forms,
notices, applications, records, claims, submissions and supplements
or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments were
complete and correct on the date filed (or were corrected or
supplemented by a subsequent submission).
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2.36 Reserved.
2.37 Real
Property. Except as described in the Registration Statement,
the Pricing Disclosure Package, the Prospectus and Schedule 2.37,
the Company has good and marketable title in fee simple to, or has
valid rights to lease or otherwise use, all items of real or
personal property which are material to the business of the
Company, in each case free and clear of all liens, encumbrances,
security interests, claims and defects that could not, singly or in
the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such
property by the Company; and all of the leases and subleases
material to the business of the Company, and under which the
Company holds properties described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, are in full
force and effect, and the Company has not received any notice of
any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company under any of the leases or
subleases mentioned above, or affecting or questioning the rights
of the Company to the continued possession of the leased or
subleased premises under any such lease or sublease.
2.38 Contracts
Affecting Capital. There are no transactions, arrangements
or other relationships between and/or among the Company, any of its
affiliates (as such term is defined in Rule 405 of the Securities
Act Regulations) and any unconsolidated entity, including, but not
limited to, any structured finance, special purpose or limited
purpose entity, that could reasonably be expected to materially
affect the Company’s liquidity or the availability of or
requirements for its capital resources required to be described or
incorporated by reference in the Registration Statement, the
Pricing Disclosure Package and the Prospectus which have not been
described or incorporated by reference as required.
2.39 Loans
to Directors or Officers. There are no outstanding loans,
advances (except normal advances for business expenses in the
ordinary course of business) or guarantees or indebtedness by the
Company to or for the benefit of any of the officers or directors
of the Company or any of their respective family members, except as
disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
2.40 Smaller
Reporting Company. As of the time of filing of the
Registration Statement, the Company was a “smaller reporting
company,” as defined in Rule 12b-2 of the Exchange Act
Regulations.
2.41 Industry
Data. The statistical and market-related data included
in each of the Registration Statement, the Pricing Disclosure
Package and the Prospectus are based on or derived from sources
that the Company reasonably and in good faith believes are reliable
and accurate or represent the Company’s good faith estimates
that are made on the basis of data derived from such
sources.
2.42 Emerging
Growth Company. From the time of the initial filing of the
Registration Statement to the Commission (or, if earlier, the first
date on which the Company engaged directly in or through any Person
authorized to act on its behalf in any Testing-the Waters
Communication) through the date hereof, the Company has been and is
an “emerging growth company,” as defined in Section
2(a) of the Securities Act (an “Emerging Growth Company”). For
purposes of this Agreement, the term “Testing-the-Waters Communication”
means any oral or written communication with potential investors
undertaken in reliance on Section 5(d) of the Securities
Act.
2.43 Testing-the-Waters
Communications. The Company has not (i) alone engaged in any
Testing-the-Waters Communications, other than Testing-the-Waters
Communications with the written consent of the Underwriter and with
entities that are qualified institutional buyers within the meaning
of Rule 144A under the Securities Act or institutions that are
accredited investors within the meaning of Rule 501 under the
Securities Act and (ii) authorized anyone other than the
Underwriter to engage in Testing-the-Waters Communications. The
Company has not distributed any Written Testing-the-Waters
Communications other than those listed on Schedule 1-B hereto.
“Written Testing-the-Waters Communication” means any
Testing-the-Waters Communication that is a written communication
within the meaning of Rule 405 under the Securities
Act.
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2.44 Margin
Securities. The Company owns no “margin
securities” as that term is defined in Regulation U of the
Board of Governors of the Federal Reserve System (the
“Federal Reserve
Board”), and none of the proceeds of Offering will be
used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might
cause any of the shares of Class B Common Stock to be considered a
“purpose credit” within the meanings of Regulation T, U
or X of the Federal Reserve Board.
2.45 NASDAQ
Marketplace Rules. Except
as described in the Company’s Current Report on Form 8-K
filed with the Commission on June 28, 2018, the Company is, and
after giving effect to the Offering will be, in compliance in all
material respects with all applicable corporate governance
requirements set forth in the NASDAQ Marketplace
Rules.
2.46 NASDAQ
Stockholder Approval Rules. No approval of the stockholders
of the Company under the rules and regulations of NASDAQ (including
Rule 5635 of the NASDAQ Marketplace Rules) is required to issue and
deliver the Shares to the Underwriter.
3.
Covenants of the Company. The
Company covenants and agrees as follows:
3.1 Amendments to Registration
Statement. The Company shall deliver to the Underwriter,
prior to filing, any amendment or supplement to the Registration
Statement or Prospectus proposed to be filed after the Effective
Date and not file any such amendment or supplement to which the
Underwriter shall reasonably object in writing.
3.2 Federal Securities
Laws.
3.2.1. Compliance.
The Company, subject to Section 3.2.2, shall comply
with the requirements of Rule 430A of the Securities Act
Regulations, and will notify the Underwriter 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 or for additional information; (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment or of
any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, or of the suspension of the
qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes or of any examination pursuant
to Section 8(d) or 8(e) of the Securities Act concerning the
Registration Statement; and (v) if the Company becomes the
subject of a proceeding under Section 8A of the Securities Act in
connection with the Offering of the Shares. The Company shall
effect all filings required under Rule 424(b) of the Securities Act
Regulations, in the manner and within the time period required by
Rule 424(b) (without reliance on Rule 424(b)(8)), and shall take
such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company shall use
its best efforts to prevent the issuance of any stop order,
prevention or suspension and, if any such order is issued, to
obtain the lifting thereof at the earliest possible
moment.
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3.2.2. Continued
Compliance. The Company shall comply with the Securities
Act, the Securities Act Regulations, the Exchange Act and the
Exchange Act Regulations so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and in
the Registration Statement, the Pricing Disclosure Package and the
Prospectus. If at any time when a prospectus relating to the Shares
is (or, but for the exception afforded by Rule 172 of the
Securities Act Regulations (“Rule 172”), would be) required by
the Securities Act to be delivered in connection with sales of the
Shares, any event shall occur or condition shall exist as a result
of which it is necessary, in the opinion of Underwriter’s
Counsel or Company Counsel (as defined below), 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 Pricing Disclosure Package or the Prospectus in
order that the Pricing 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 Pricing Disclosure Package or the Prospectus, as the
case may be, in order to comply with the requirements of the
Securities Act or the Securities Act Regulations, the Company will
promptly (A) give the Underwriter 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 Pricing Disclosure Package or the Prospectus comply
with such requirements and, a reasonable amount of time prior to
any proposed filing or use, furnish the Underwriter with copies of
any such amendment or supplement; and (C) file with the
Commission any such amendment or supplement; provided, however, that the Company
shall not file or use any such amendment or supplement to which the
Underwriter or Underwriter’s Counsel shall reasonably object.
The Company will furnish to the Underwriter such number of copies
of such amendment or supplement as the Underwriter may reasonably
request. The Company has given the Underwriter notice of any
filings made pursuant to the Exchange Act or the Exchange Act
Regulations within forty-eight (48) hours prior to the Applicable
Time. The Company shall give the Underwriter notice of its
intention to make any such filing from the Applicable Time until
the last Option Closing Date and will furnish the Underwriter with
copies of the related document(s) 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 Underwriter or
Underwriter’s Counsel shall reasonably object.
3.2.3. Exchange
Act Registration. For a period of three (3) years after the
date of this Agreement, the Company shall use its best efforts to
maintain the registration of the shares of Class B Common Stock
under the Exchange Act. The Company shall not deregister the shares
of Class B Common Stock under the Exchange Act without the prior
written consent of the Underwriter.
3.2.4. Emerging
Growth Company Rules. If after the undertaking of any
Written Testing-the-Waters Communication there occurred or occurs
an event or development as a result of which such Written
Testing-the-Waters Communication 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 shall promptly notify
the Underwriter and shall promptly amend or supplement, at its own
expense, such Written Testing-the-Waters Communication to eliminate
or correct such untrue statement or omission.
3.3 Delivery to the Underwriter of
Registration Statements. The Company has delivered or made
available or shall deliver or make available to the Underwriter and
Underwriter’s Counsel, without charge, signed copies of the
Registration Statement as originally filed and each amendment
thereto (including exhibits filed therewith) and signed copies of
all consents and certificates of experts, and will also deliver to
the Underwriter, without charge, a conformed copy of the
Registration Statement as originally filed and each amendment
thereto (without exhibits) for the Underwriter. The copies of the
Registration Statement and each amendment thereto furnished to the
Underwriter 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.
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3.4 Delivery to the Underwriter of
Prospectuses. The Company has delivered or made available or
will deliver or make available to the Underwriter, without charge,
as many copies of each Preliminary Prospectus as the Underwriter
reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the Securities Act. The
Company will furnish to the Underwriter, without charge, during the
period when a prospectus relating to the Shares is (or, but for the
exception afforded by Rule 172, would be) required to be delivered
under the Securities Act, such number of copies of the Prospectus
(as amended or supplemented) as the Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriter 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.
3.5 Events Requiring Notice to the
Underwriter. The Company shall notify the Underwriter
immediately and confirm the notice in writing: (i) of the
effectiveness of the Registration Statement and any amendment
thereto; (ii) of the issuance by the Commission of any stop
order or of the initiation, or the threatening, of any proceeding
for that purpose; (iii) of the issuance by any state
securities commission of any proceedings for the suspension of the
qualification of the Shares for offering or sale in any
jurisdiction or of the initiation, or the threatening, of any
proceeding for that purpose; (iv) of the mailing and delivery
to the Commission for filing of any amendment or supplement to the
Registration Statement or Prospectus; (v) of the receipt of
any comments or request for any additional information from the
Commission; and (vi) of the happening of any event during the
period described in this Section 3.5 that, in the
judgment of the Company, makes any statement of a material fact
made in the Registration Statement, the Pricing Disclosure Package
or the Prospectus untrue or that requires the making of any changes
in (a) the Registration Statement in order to make the statements
therein not misleading, or (b) in the Pricing Disclosure Package or
the Prospectus in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. If
the Commission or any state securities commission shall enter a
stop order or suspend such qualification at any time, the Company
shall make every reasonable effort to obtain promptly the lifting
of such order.
3.6 Review of Financial Statements.
For a period of five (5) years after the date of this Agreement,
the Company, at its expense, shall cause its regularly engaged
independent registered public accounting firm to review (but not
audit) the Company’s financial statements for each of the
three fiscal quarters immediately preceding the announcement of any
quarterly financial information.
3.7 Listing. The Company shall use
its best efforts to maintain the listing of the shares of Class B
Common Stock (including the Shares) on the Exchange for at least
three (3) years from the date of this Agreement.
3.8 Financial Public Relations
Firm. As of the Effective Date, the Company shall have
retained a financial public relations firm reasonably acceptable to
the Underwriter and the Company, which shall initially be ICR Inc.,
which firm shall be experienced in assisting issuers in initial
public offerings of securities and in their relations with their
security holders, and shall retain such firm or another firm
reasonably acceptable to the Underwriter for a period of not less
than two (2) years after the Effective Date.
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3.9 Reports to the
Underwriter.
3.9.1. Periodic
Reports, etc. For a period of three (3) years after the date
of this Agreement, the Company shall furnish or make available to
the Underwriter copies of such financial statements and other
periodic and special reports as the Company from time to time
furnishes generally to holders of any class of its securities and
also promptly furnish to the Underwriter: (i) a copy of each
periodic report the Company shall be required to file with the
Commission under the Exchange Act and the Exchange Act Regulations;
(ii) a copy of every press release and every news item and article
with respect to the Company or its affairs which was released by
the Company; (iii) a copy of each Form 8-K prepared and filed by
the Company; (iv) five copies of each registration statement filed
by the Company under the Securities Act; and (v) such additional
documents and information with respect to the Company and the
affairs of any future subsidiaries of the Company as the
Underwriter may from time to time reasonably request; provided the
Underwriter shall sign, if requested by the Company, a Regulation
FD compliant confidentiality agreement which is reasonably
acceptable to the Underwriter and Underwriter’s Counsel in
connection with the Underwriter’s receipt of such
information. Documents filed with the Commission pursuant to its
XXXXX system shall be deemed to have been delivered to the
Underwriter pursuant to this Section 3.9.1.
3.9.2. Transfer
Agent; Transfer Sheets. For a period of three (3) years
after the date of this Agreement, the Company shall retain a
transfer agent and registrar acceptable to the Underwriter
(the “Transfer
Agent”) and shall furnish to the Underwriter at the
Company’s sole cost and expense such transfer sheets of the
Company’s securities as the Underwriter may reasonably
request, including the daily and monthly consolidated transfer
sheets of the Transfer Agent and DTC. West Coast Stock Transfer,
Inc. is acceptable to the Underwriter to act as Transfer Agent for
the shares of Class B Common Stock.
3.9.3. Trading
Reports. During such time as the Shares are listed on the
Exchange, the Company shall provide to the Underwriter, at the
Company’s expense, such reports published by Exchange
relating to price trading of the Shares, as the Underwriter shall
reasonably request.
3.9.4. Payment
of Expenses and Advisory Fee. The Company hereby agrees to
pay on the Closing Date and each Option Closing Date all expenses
incident to the performance of the obligations of the Company under
this Agreement, including, but not limited to: (a) all filing fees
and communication expenses relating to the registration of the
Shares to be sold in the Offering (including the Option Shares)
with the Commission, (b) all filing fees and other expenses
(including the reasonable fees and disbursements of counsel to the
Underwriter) incurred in connection with qualification of the
Shares for sale under the laws of such jurisdictions as the
Underwriter designates, (c) costs and expenses related to the
review of the Offering by FINRA, including all filing fees and the
reasonable fees and disbursements of counsel to the Underwriter
relating to such review, (d) costs and reasonable expenses relating
to investor presentations or any “road show” in
connection with the Offering, including, without limitation, the
costs of recording and hosting on the Internet of the
Company’s road show presentation and any reasonable travel
expenses of the Company’s officers and employees and any
other expenses of the Company, (e) fees and expenses incident to
listing or continued listing of the Shares on the Exchange and on
such other stock exchanges as the Company and the Underwriter
together determine, (f) the fees, disbursements and expenses of the
Company’s counsel, accountants and other advisors in
connection with the Offering, (g) expenses incurred in preparing,
printing and distributing each Preliminary Prospectus and the
Prospectus (including any amendments and supplements thereto) to
the Underwriter and for expenses incurred for preparing, printing
and distributing any issuer free writing prospectuses to investors
or prospective investors, (h) reasonable fees, disbursements and
expenses of the Underwriter’s counsel, (i) the costs and
expenses of a public relations firm selected by the Company in its
sole discretion, if any, (i) the costs of preparing, printing and
delivering certificates representing the Shares, (k) fees and
expenses of the transfer agent for the delivery of the shares of
Shares, (1) stock transfer and/or stamp taxes, if any, payable upon
the transfer of securities from the Company to the Underwriter, (m)
to the extent approved by the Company in writing, the costs
associated with post-closing advertising of the Offering in the
national editions of the Wall Street Journal and New York Times,
(n) fees, expenses and disbursements relating to background checks
of the Company’s officers and directors in connection with
the Offering; provided, however, that the maximum
amount of fees, costs and expenses incurred by the Underwriter with
respect to subparagraphs (a) through (n) above, including, without
limitation, the fees, disbursements and expenses of counsel to the
Underwriter, that the Company shall be required to pay under this
Section 3.9.4 shall
be $60,000. The Underwriter may deduct from the net proceeds of the
Offering payable to the Company on the Closing Date or any Option
Closing Date, the expenses set forth herein to be paid by the
Company to the Underwriter.
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3.10 Application
of Net Proceeds. The Company shall apply the net proceeds
from the Offering received by it in a manner consistent with the
application thereof described under the caption “Use of
Proceeds” in the Registration Statement, the Pricing
Disclosure Package and the Prospectus.
3.11 Delivery
of Earnings Statements to Security Holders. The Company
shall make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth
(15th)
full calendar month following the date of this Agreement, an
earnings statement (which need not be certified by independent
registered public accounting firm unless required by the Securities
Act or the Securities Act Regulations, but which shall satisfy the
provisions of Rule 158(a) under Section 11(a) of the Securities
Act) covering a period of at least twelve (12) consecutive months
ending after the date of this Agreement.
3.12 Stabilization.
Neither the Company nor, to its knowledge, any of its employees,
directors or shareholders (without the consent of the Underwriter)
has taken or shall take, directly or indirectly, any action
designed to or that has constituted or that might reasonably be
expected to cause or result in, under Regulation M of the Exchange
Act, or otherwise, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Shares.
3.13 Internal
Controls. The Company shall maintain a system of internal
accounting controls sufficient to provide reasonable assurances
that: (i) transactions are executed in accordance with
management’s general or specific authorization;
(ii) transactions are recorded as necessary in order to permit
preparation of financial statements in accordance with GAAP and to
maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any
differences.
3.14 Accountants.
The Company shall retain an independent registered public
accounting firm reasonably acceptable to the Underwriter, and the
Company shall continue to retain a nationally recognized
independent registered public accounting firm for a period of at
least three (3) years after the date of this Agreement. The
Underwriter acknowledges that the Auditor is acceptable to the
Underwriter.
3.15 FINRA.
The Company shall advise the Underwriter (who shall make an
appropriate filing with FINRA) if it is or becomes aware that (i)
any officer or director of the Company, (ii) any beneficial owner
of 5% or more of any class of the Company’s securities, or
(iii) any beneficial owner of the Company’s unregistered
equity securities which were acquired during the 180-day period
immediately preceding the filing of the Registration Statement is
or becomes an affiliate or associated person of a FINRA member
participating in the Offering (as determined in accordance with the
rules and regulations of FINRA).
3.16 No
Fiduciary Duties. The Company acknowledges and agrees that
the Underwriter’s responsibility to the Company is solely
contractual in nature and that none of the Underwriter or its
affiliates or any selling agent shall be deemed to be acting in a
fiduciary capacity, or otherwise owes any fiduciary duty to the
Company or any of its affiliates in connection with the Offering
and the other transactions contemplated by this
Agreement.
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3.17 Company
Lock-Up Agreements.
3.17.1. Restriction
on Sales of Capital Stock. The Company, on behalf of itself
and any successor entity, agrees that, without the prior written
consent of the Underwriter, it will not, for a period of ninety
(90) days after the date of this Agreement (the “Lock-Up Period”), (a) offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of capital stock
of the Company or any securities convertible into or exercisable or
exchangeable for shares of capital stock of the Company, (b) file
or cause to be filed any registration statement with the Commission
relating to the offering of any shares of capital stock of the
Company or any securities convertible into or exercisable or
exchangeable for shares of capital stock of the Company (except for
registration statements on Form S-4 or Form S-8 and a resale
registration statement on Form S-3 for the shares of capital stock
of the Company underlying warrants issued by the Company on April
30, 2018) or (c) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of capital stock of the Company, whether
any such transaction described in clause (a), (b) or (c) above is
to be settled by delivery of shares of capital stock of the Company
or such other securities, in cash or otherwise. The restrictions
contained in this Section
3.18.1 shall not apply to (A) sales of shares of
capital stock of the Company under any trading plan pursuant to
Rule 10b5-1 under the Securities Exchange Act of 1934, as amended,
existing as of the date of the Underwriting Agreement or
(B) dispositions or transfers of shares of capital stock of
the Company customarily excluded from lock-up restrictions of this
type. The restrictions contained in this Section 3.18.1 shall not apply
(i) the Shares to be sold hereunder, (ii) the issuance by the
Company of shares of capital stock of the Company upon the exercise
of a stock option or warrant or the conversion or vesting of a
security outstanding on the date hereof, (iii) the issuance by the
Company of equity awards of the Company under any equity
compensation plan of the Company, (iv) the issuance by the Company
of shares of capital stock of the Company or securities convertible
into, exchangeable for or that represent the right to receive
shares of capital stock of the Company in connection with the
acquisition by the Company of the securities, business, technology,
property or other assets of another person or entity, (v) the sale
of shares of capital stock of the Company to cover the payment of
exercise prices or the payment of taxes associated with the
exercise or vesting of equity awards under any equity compensation
plan of the Company, or (vi) the filing of a post-effective
amendment to the Company’s registration statements on Form
S-3 (Reg. Nos. 333-223425 and 333-225217) and Form S-8 (Reg. No.
333-219203 and 333-223428) with the Commission to maintain
effectiveness of such registration statements, provided that in
each of (ii) and (iii) above, the underlying shares of capital
stock of the Company shall be restricted from sale during the
entire Lock-Up Period.
3.17.2. Restriction
on Continuous Offerings. Notwithstanding the restrictions
contained in Section
3.18.1, the Company, on behalf of itself and any successor
entity, agrees that, without the prior written consent of the
Underwriter, it will not, for a period of twelve (12) months after
the date of this Agreement, directly or indirectly in any
“at-the-market” or continuous equity transaction, offer
to sell, sell, contract to sell, grant any option to sell or
otherwise dispose of shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for
shares of capital stock of the Company.
3.18 Release
of Lock-up Period. If the Underwriter, in its sole
discretion, agrees to release or waive the restrictions set forth
in the Lock-Up Agreements described in Section 2.24 for an officer or
director of the Company and provide the Company with notice of the
impending release or waiver at least three (3) Business Days before
the effective date of the release or waiver, the Company agrees to
announce the impending release or waiver by a press release
substantially in the form of Exhibit B hereto through a
major news service at least two (2) Business Days before the
effective date of the release or waiver.
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3.19 Blue
Sky Qualifications. The Company shall use its best efforts,
in cooperation with the Underwriter, if necessary, to qualify the
Shares for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the
Underwriter may designate and to maintain such qualifications in
effect so long as required to complete the distribution of the
Shares; provided, however,
that the Company shall not be obligated to file any general consent
to service of process or to qualify as a foreign corporation or as
a dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so
subject.
3.20 Reporting
Requirements. The Company, during the period when a
prospectus relating to the Shares is (or, but for the exception
afforded by Rule 172, would be) required to be delivered under the
Securities Act, will file all documents required to be filed with
the Commission pursuant to the Exchange Act within the time periods
required by the Exchange Act and Exchange Act Regulations.
Additionally, the Company shall report the use of proceeds from the
issuance of the Shares as may be required under Rule 463 under the
Securities Act Regulations.
3.21 Emerging
Growth Company Status. The Company shall promptly notify the
Underwriter if the Company ceases to be an Emerging Growth Company
at any time prior to the later of (i) completion of the
distribution of the Shares within the meaning of the Securities Act
and (ii) fifteen (15) days following the completion of the Lock-Up
Period.
4. Conditions of Underwriter’s
Obligations. The obligations of the Underwriter to purchase
and pay for the Shares, as provided herein, shall be subject to (i)
the continuing accuracy of the representations and warranties of
the Company as of the date hereof, as of the Closing Date and each
Option Closing Date, as applicable; (ii) the accuracy of the
statements of officers of the Company made pursuant to the
provisions hereof; (iii) the performance by the Company of its
obligations hereunder; and (iv) the following
conditions:
4.1 Regulatory
Matters.
4.1.1. Effectiveness of Registration
Statement; Rule 430A Information. The Registration Statement
is effective under the Securities Act, no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto has been issued under the Securities Act, no
order preventing or suspending the use of the Base Prospectus,
any Preliminary Prospectus, the Prospectus or any part thereof
shall have been issued and no proceedings for that purpose or
pursuant to Section 8A under the Securities Act shall have been
initiated or threatened by the Commission, and all requests for
additional information on the part of the Commission (to be
included or incorporated by reference in the Registration Statement
or the Prospectus or otherwise) shall have been complied with to
the reasonable satisfaction of the Underwriter; and the Rule 462(b)
Registration Statement, if any, and the Prospectus shall have been
filed with the Commission within the applicable time period
prescribed for such filing by, and in compliance with, the Rules
and Regulations and in accordance with Section 3.2 and the Rule 462(b)
Registration Statement, if any, shall have become effective
immediately upon its filing with the Commission. The Prospectus
containing the Rule 430A Information shall have been filed with the
Commission in the manner and within the time frame required by Rule
424(b) (without reliance on Rule 424(b)(8)) or a post-effective
amendment providing such information shall have been filed with,
and declared effective by, the Commission in accordance with the
requirements of Rule 430A.
4.1.2. FINRA
Clearance. On or before the date of this Agreement, the
Underwriter shall have received clearance from FINRA as to the
amount of compensation allowable or payable to the Underwriter as
described in the Registration Statement.
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4.1.3. Exchange
Stock Market Clearance. On the Closing Date and each Option
Closing Date, the Company’s shares of Class B Common Stock,
including the Shares, shall have been approved for listing on the
Exchange, subject only to official notice of issuance.
4.2 Company Counsel
Matters.
4.2.1. Closing
Date Opinion of Company Counsel. On the Closing Date and
each Option Closing Date, the Underwriter shall have received (i)
the favorable opinion and negative assurance letter of Akerman LLP,
counsel to the Company (“Company Counsel”), and (ii) the
favorable opinion of Xxxxx & Xxxxxx L.L.P., Nevada counsel to
the Company (“Nevada
Counsel”), in each case, dated the Closing Date and
each Option Closing Date, as applicable, and addressed to the
Underwriter in form and substance reasonably satisfactory to the
Underwriter.
4.2.2. Reliance.
In rendering its opinion, Company Counsel and Nevada Counsel may
rely: (i) as to matters involving the application of laws
other than the laws of the United States and jurisdictions in which
it is admitted, to the extent Company Counsel or Nevada Counsel
deems proper and to the extent specified in such opinion, if at
all, upon an opinion or opinions (in form and substance reasonably
satisfactory to the Underwriter) of other counsel reasonably
acceptable to the Underwriter, familiar with the applicable laws;
and (ii) as to matters of fact, to the extent they deem
proper, on certificates or other written statements of officers of
the Company and officers of departments of various jurisdictions
having custody of documents respecting the corporate existence or
good standing of the Company, provided that copies of any such
statements or certificates shall be delivered to
Underwriter’s Counsel if requested. The opinion of Company
Counsel and any opinion relied upon by Company Counsel shall
include a statement to the effect that it may be relied upon by
Underwriter’s Counsel in its opinion delivered to the
Underwriter.
4.3 Comfort Letters.
4.3.1. Cold
Comfort Letter. At the time this Agreement is executed you
shall have received a cold comfort letter containing statements and
information of the type customarily included in accountants’
comfort letters with respect to the financial statements and
certain financial information contained in the Registration
Statement, the Pricing Disclosure Package and the Prospectus,
addressed to the Underwriter and in form and substance satisfactory
in all respects to you and to the Auditor, dated as of the date of
this Agreement.
4.3.2. Bring-down
Comfort Letter. At the Closing Date and each Option Closing
Date, the Underwriter shall have received from the Auditor a
letter, dated as of the Closing Date or such Option Closing Date,
as applicable, to the effect that the Auditor reaffirms the
statements made in the letter furnished pursuant to Section 4.3.1, except that the
specified date referred to shall be a date not more than three (3)
Business Days prior to the Closing Date or Option Closing Date, as
applicable.
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4.4 Officers’
Certificates.
4.4.1. Officers’
Certificate. The Company shall have furnished to the
Underwriter a certificate, dated the Closing Date and each Option
Closing Date, as applicable, of its Chief Executive Officer and
Chairman and its Chief Financial Officer stating that (i) such
officers have carefully examined the Registration Statement, the
Pricing Disclosure Package and the Prospectus and, in their
opinion, the Registration Statement and each amendment thereto, as
of the Applicable Time and as of the Closing Date or such Option
Closing Date, as applicable, did not include any untrue statement
of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and the Pricing Disclosure Package, as of
the Applicable Time and as of the Closing Date and such Option
Closing Date, as applicable, the Prospectus and each amendment or
supplement thereto, as of the respective date thereof and as of the
Closing Date or Option Closing Date, as applicable, did not include
any untrue statement of a material fact and did not omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances in which they were made, not
misleading, (ii) since the effective date of the Registration
Statement, no event has occurred which should have been set forth
in a supplement or amendment to the Registration Statement, the
Pricing Disclosure Package or the Prospectus, (iii) as of the
Closing Date or such Option Closing Date, as applicable, the
representations and warranties of the Company in this Agreement are
true and correct in all material respects and the Company has
complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the
Closing Date or such Option Closing Date, as applicable, and (iv)
there has not been, subsequent to the date of the most recent
audited financial statements included or incorporated by reference
in the Pricing Disclosure Package, any material adverse change in
the financial position or results of operations of the Company, or
any change or development that, singularly or in the aggregate,
would involve a material adverse change or a prospective material
adverse change, in or affecting the condition (financial or
otherwise), results of operations, business, assets or prospects of
the Company, except as set forth in the Prospectus.
4.4.2. Secretary’s
Certificate. At the Closing Date and each Option Closing
Date, the Underwriter shall have received a certificate of the
Company signed by the Secretary of the Company, dated the Closing
Date or such Option Closing Date, as applicable, certifying:
(i) that each of the Charter and the Bylaws is true and
complete, has not been modified and is in full force and effect;
(ii) that the resolutions of the Company’s Board of
Directors relating to the Offering are in full force and effect and
have not been modified; (iii) as to the accuracy and completeness
of all correspondence between the Company or Company Counsel and
the Commission; and (iv) as to the incumbency of the officers
of the Company. The documents referred to in such certificate shall
be attached to such certificate.
4.5 No Material Changes. Prior to
and on the Closing Date and each Option Closing Date:
(i) there shall have been no Material Adverse Change or
development involving a prospective material adverse change in the
condition or prospects or the business activities, financial or
otherwise, of the Company from the latest dates as of which such
condition is set forth in the Registration Statement, the Pricing
Disclosure Package and the Prospectus; (ii) no action, suit or
proceeding, at law or in equity, shall have been pending or
threatened against the Company or any officer, director or
beneficial owner of 10% or more of any class of the Company’s
securities before or by any court or federal or state commission,
board or other administrative agency wherein an unfavorable
decision, ruling or finding may materially adversely affect the
business, operations, prospects or financial condition or income of
the Company, except as set forth in the Registration Statement, the
Pricing Disclosure Package and the Prospectus; (iii) no stop
order shall have been issued under the Securities Act and no
proceedings therefor shall have been initiated or threatened by the
Commission; and (iv) the Registration Statement, the Pricing
Disclosure Package and the Prospectus and any amendments or
supplements thereto shall contain all material statements which are
required to be stated therein in accordance with the Securities Act
and the Securities Act Regulations and shall conform in all
material respects to the requirements of the Securities Act and the
Securities Act Regulations, and neither the Registration Statement,
the Pricing Disclosure Package nor the Prospectus nor any amendment
or supplement thereto shall contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
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4.6 Delivery of
Agreements. On
or before the date of this Agreement, the Company shall have
delivered to the Underwriter executed copies of the Lock-Up
Agreements from each of the persons listed in Schedule 2 hereto.
4.7 Additional Documents. At the
Closing Date and each Option Closing Date, Underwriter’s
Counsel shall have been furnished with such documents and opinions
as they may require for the purpose of enabling Underwriter’s
Counsel to deliver an opinion to the Underwriter, 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 Shares as herein contemplated shall be
satisfactory in form and substance to the Underwriter and
Underwriter’s Counsel.
5.
Indemnification.
5.1 Indemnification of the
Underwriter.
5.1.1. General.
Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Underwriter, its affiliates and
each of its and their respective directors, officers, members,
employees, representatives, partners, shareholders, affiliates,
counsel, and agents and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act (collectively the
“Underwriter Indemnified
Parties,” and each an “Underwriter Indemnified Party”),
against any and all loss, liability, claim, damage and expense
whatsoever (including but not limited to any and all legal or other
expenses reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any
claim whatsoever, whether arising out of any action between any of
the Underwriter Indemnified Parties and the Company or between any
of the Underwriter Indemnified Parties and any third party, or
otherwise) to which they or any of them may become subject under
the Securities Act, the Exchange Act or any other statute or at
common law or otherwise or under the laws of foreign countries (a
“Claim”), (i)
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in (A) the Registration
Statement, the Pricing Disclosure Package, any Preliminary
Prospectus, the Prospectus, or in any Written Testing-the-Waters
Communication (as from time to time each may be amended and
supplemented); (B) any materials or information provided to
investors by, or with the approval of, the Company in connection
with the marketing of the Offering, including any “road
show” or investor presentations made to investors by the
Company; or (C) any application or other document or written
communication (in this Section 5, collectively called
“application”)
executed by the Company or based upon written information furnished
by the Company in any jurisdiction in order to qualify the Shares
under the securities laws thereof or filed with the Commission, any
state securities commission or agency, the Exchange or any other
national securities exchange; or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, unless
such statement or omission was made in reliance upon, and in
conformity with, the Underwriter’s Information, or (ii)
otherwise arising in connection with or allegedly in connection
with the Offering. The Company also agrees that it will reimburse
each Underwriter Indemnified Party for all fees and expenses
(including but not limited to any and all legal or other expenses
reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim
whatsoever, whether arising out of any action between any of the
Underwriter Indemnified Parties and the Company or between any of
the Underwriter Indemnified Parties and any third party, or
otherwise) (collectively, the “Expenses”), and further agrees
wherever and whenever possible to advance payment of Expenses as
they are incurred by an Underwriter Indemnified Party in
investigating, preparing, pursuing or defending any
Claim.
-24-
5.1.2. Procedure. If
any action is brought against an Underwriter Indemnified Party in
respect of which indemnity may be sought against the Company
pursuant to Section
5.1.1, such Underwriter Indemnified Party shall promptly
notify the Company in writing of the institution of such action and
the Company shall assume the defense of such action, including the
employment and fees of counsel (subject to the approval of such
Underwriter Indemnified Party) and payment of actual expenses if an
Underwriter Indemnified Party requests that the Company do so. Such
Underwriter Indemnified Party shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Company, and shall be
advanced by the Company. The Company shall not be liable for any
settlement of any action effected without its consent (which shall
not be unreasonably withheld). In addition, the Company shall not,
without the prior written consent of the Underwriter, settle,
compromise or consent to the entry of any judgment in or otherwise
seek to terminate any pending or threatened action in respect of
which advancement, reimbursement, indemnification or contribution
may be sought hereunder (whether or not such Underwriter
Indemnified Party is a party thereto) unless such settlement,
compromise, consent or termination (i) includes an unconditional
release of each Underwriter Indemnified Party, acceptable to such
Underwriter Indemnified Party, from all liabilities, expenses and
claims arising out of such action for which indemnification or
contribution may be sought 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 Underwriter Indemnified Party.
5.2 Indemnification of the Company.
The Underwriter agrees to indemnify and hold harmless the Company,
its directors, its officers who signed the Registration Statement
and persons who control the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act against
any and all loss, liability, claim, damage and expense described in
the foregoing indemnity from the Company to the Underwriter, as
incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions made in the Registration
Statement, any Preliminary Prospectus, the Pricing Disclosure
Package or Prospectus or any amendment or supplement thereto or in
any application, in reliance upon, and in strict conformity with,
the Underwriter’s Information. In case any action shall be
brought against the Company or any other person so indemnified
based on any Preliminary Prospectus, the Registration Statement,
the Pricing Disclosure Package or Prospectus or any amendment or
supplement thereto or any application, and in respect of which
indemnity may be sought against the Underwriter, the Underwriter
shall have the rights and duties given to the Company, and the
Company and each other person so indemnified shall have the rights
and duties given to the Underwriter by the provisions of
Section 5.1.2. The
Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against the Company
or any of its officers, directors or any person, if any, who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, in connection
with the issuance and sale of the Shares or in connection with the
Registration Statement, the Pricing Disclosure Package, the
Prospectus, or any Written Testing-the-Waters
Communication.
-25-
5.3 Contribution.
5.3.1. Contribution
Rights. If the indemnification provided for in this
Section 5 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 5.1 or 5.2 in respect of any loss,
claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid
or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative
benefits received by the Company, on the one hand, and the
Underwriter, on the other, from the Offering of the Shares, or (ii)
if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, on the one hand, and the
Underwriter, on the other, with respect to the statements or
omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the
Company, on the one hand, and the Underwriter, on the other, with
respect to such Offering shall be deemed to be in the same
proportion as the total net proceeds from the Offering of the
Shares purchased under this Agreement (before deducting expenses)
received by the Company, as set forth in the table on the cover
page of the Prospectus, on the one hand, and the total underwriting
discounts and commissions received by the Underwriter with respect
to the shares of the Class B Common Stock purchased under this
Agreement, as set forth in the table on the cover page of the
Prospectus, on the other hand. The relative fault shall be
determined by reference to whether the 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 the Underwriter, the intent of the parties and their
relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Underwriter agree that it would not be just and equitable if
contributions pursuant to this Section 5.3.1 were to be
determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Section 5.3.1 shall
be deemed to include, for purposes of this Section 5.3.1, any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 5.3.1 in no event shall
the Underwriter be required to contribute any amount in excess of
the amount by which the total underwriting discounts and
commissions received by the Underwriter with respect to the
Offering of the Shares exceeds the amount of any damages that the
Underwriter has otherwise been required to pay by reason of 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 Securities Act) shall be entitled
to contribution from any person who was not guilty of such
fraudulent misrepresentation.
5.3.2. Contribution
Procedure. Within fifteen (15) days after receipt by any
party to this Agreement (or its representative) of notice of the
commencement of any action, suit or proceeding, such party will, if
a claim for contribution in respect thereof is to be made against
another party (“contributing
party”), notify the contributing party of the
commencement thereof, but the failure to so notify the contributing
party will not relieve it from any liability which it may have to
any other party other than for contribution hereunder. In case any
such action, suit or proceeding is brought against any party, and
such party notifies a contributing party or its representative of
the commencement thereof within the aforesaid fifteen (15) days,
the contributing party will be entitled to participate therein with
the notifying party and any other contributing party similarly
notified. Any such contributing party shall not be liable to any
party seeking contribution on account of any settlement of any
claim, action or proceeding affected by such party seeking
contribution on account of any settlement of any claim, action or
proceeding affected by such party seeking contribution without the
written consent of such contributing party. The contribution
provisions contained in this Section 5.3.2 are intended to
supersede, to the extent permitted by law, any right to
contribution under the Securities Act, the Exchange Act or
otherwise available. Each Underwriter’s obligations to
contribute pursuant to this Section 5.3 are several and not
joint.
-26-
6.
Reserved.
7.
Additional
Covenants.
7.1 Board Composition and Board
Designations. The Company shall ensure that: (i) the
qualifications of the persons serving as members of the Board of
Directors and the overall composition of the Board of Directors
comply with the Xxxxxxxx-Xxxxx Act, with the Exchange Act and with
the listing rules of the Exchange or any other national securities
exchange, as the case may be, in the event the Company seeks to
have its Shares listed on another exchange or quoted on an
automated quotation system, subject to any applicable cure period,
and (ii) if applicable, at least one member of the Audit
Committee of the Board of Directors qualifies as an “audit
committee financial expert,” as such term is defined under
Regulation S-K and the listing rules of the Exchange.
7.2 Prohibition on Press Releases and
Public Announcements. Prior to the last Option Closing Date,
the Company shall not issue any press release or other
communication directly or indirectly or hold any press conference
with respect to the Company, its condition, financial or otherwise,
or earnings, business affairs or business prospects (except for
routine oral marketing communications in the ordinary course of
business and consistent with the past practices of the Company and
of which the 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 or applicable
Exchange rules.
8.
Effective Date of this Agreement and
Termination Thereof.
8.1 Effective Date. This Agreement
shall become effective when both the Company and the Underwriter
have executed the same and delivered counterparts of such
signatures to the other party.
8.2 Termination. The Underwriter
shall have the right to terminate this Agreement at any time prior
to the Closing Date, (i) if any domestic or international
event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, general
securities markets in the United States; or (ii) if trading on
the New York Stock Exchange or NASDAQ shall have been suspended or
materially limited, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall
have been required by FINRA or by order of the Commission or any
other government authority having jurisdiction; or (iii) if
the United States shall have become involved in a new war or an
increase in major hostilities; or (iv) if a banking moratorium
has been declared by a New York State or federal authority; or
(v) if a moratorium on foreign exchange trading has been
declared which materially adversely impacts the United States
securities markets; or (vi) if the Company shall have
sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act
which, whether or not such loss shall have been insured, will, in
your opinion, make it inadvisable to proceed with the delivery of
the Shares; or (vii) if the Company is in material breach of
any of its representations, warranties or covenants hereunder; or
(viii) if the Underwriter shall have become aware after the
date hereof of such a material adverse change in the conditions or
prospects of the Company, or such adverse material change in
general market conditions as in the Underwriter’s judgment
would make it impracticable to proceed with the offering, sale
and/or delivery of the Shares or to enforce contracts made by the
Underwriter for the sale of the Shares.
-27-
8.3 Expenses. Notwithstanding
anything to the contrary in this Agreement, in the event that this
Agreement shall not be carried out for any reason whatsoever,
within the time specified herein or any extensions thereof pursuant
to the terms herein, the Company shall be obligated to pay to the
Underwriter its reasonable accountable out-of-pocket expenses
related to the transactions contemplated herein then due and
payable (including the fees and disbursements of
Underwriter’s Counsel) up to $60,000 and upon demand the
Company shall pay the full amount thereof to the Underwriter on
behalf of the Underwriter; provided, however, that such expense
cap in no way limits or impairs the indemnification and
contribution provisions of this Agreement. Notwithstanding the
foregoing, any advance received by the Underwriter will be
reimbursed to the Company to the extent not actually incurred in
compliance with FINRA Rule 5110(f)(2)(C).
8.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement,
any election hereunder or any termination of this Agreement, and
whether or not this Agreement is otherwise carried out, the
provisions of Section
5 shall remain in full force and effect and shall not be in
any way affected by, such election or termination or failure to
carry out the terms of this Agreement or any part
hereof.
8.5 Representations, Warranties,
Agreements to Survive. All representations, warranties and
agreements contained in this Agreement or in certificates of
officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or its
Affiliates or selling agents, any person controlling any
Underwriter, its officers or directors or any person controlling
the Company or (ii) delivery of and payment for the
Shares.
9.
Miscellaneous.
9.1 Notices. All communications
hereunder, except as herein otherwise specifically provided, shall
be in writing and shall be mailed (registered or certified mail,
return receipt requested), personally delivered or sent by
facsimile transmission and confirmed and shall be deemed given when
so delivered or faxed and confirmed or if mailed, two (2) days
after such mailing.
If to
the Underwriter:
National Securities
Corporation
000
Xxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Xxxxxxxx X. Xxxx
Email:
xxxxx@xxxxxxxxxxxxxxxxxxxx.xxx
Fax No:
(000) 000-0000
with a
copy (which shall not constitute notice) to:
McGuireWoods
LLP
0000
Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
Attention: Xxxxxxx
Older, Esq.
Email:
xxxxxx@xxxxxxxxxxxx.xxx
Fax No:
(000) 000-0000
-28-
If to
the Company:
RumbelOn,
Inc.
0000
Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000
Attention: Xxxxxxxx
Xxxxxxxx, Chairman and Chief Executive Officer
Xxxxxx X. Xxxxxxx, Chief Financial Officer
Fax No:
(000) 000-0000
with a
copy (which shall not constitute notice) to:
Akerman
LLP
000
Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx
Xxxxxxx, Esq.
Email:
xxxxxxx.xxxxxxx@xxxxxxx.xxx
Fax No:
(000) 000-0000
9.2 Headings. The headings
contained herein are for the sole purpose of convenience of
reference, and shall not in any way limit or affect the meaning or
interpretation of any of the terms or provisions of this
Agreement.
9.3 Amendment. This Agreement may
only be amended by a written instrument executed by each of the
parties hereto.
9.4 Entire Agreement. This
Agreement (together with the other agreements and documents being
delivered pursuant to or in connection with this Agreement)
constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof and thereof, and supersedes all prior
agreements and understandings of the parties, oral and written,
with respect to the subject matter hereof. Notwithstanding anything
to the contrary set forth herein, it is understood and agreed by
the parties hereto that all other terms and conditions of that
certain engagement letter between the Company and National
Securities Corporation dated July 2, 2018, shall remain in full
force and effect.
9.5 Binding Effect. This Agreement
shall inure solely to the benefit of and shall be binding upon the
Underwriter, the Company and the controlling persons, directors and
officers referred to in Section 5, and their respective
successors, legal representative, heirs and assigns, and no other
person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this
Agreement or any provisions herein contained. The term
“successors and assigns” shall not include a purchaser,
in its capacity as such, of securities from the
Underwriter.
9.6 Governing Law; Consent to
Jurisdiction; Trial by Jury. This Agreement shall be
governed by and construed and enforced in accordance with the laws
of the State of New York, without giving effect to conflict of laws
principles thereof. The Company hereby agrees that any action,
proceeding or claim against it arising out of, or relating in any
way to this Agreement shall be brought and enforced in state and
federal courts located in the Borough of Manhattan in the City of
New York, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive. The Company hereby waives any
objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum. Any such process or summons to be
served upon the Company may be served by transmitting a copy
thereof by registered or certified mail, return receipt requested,
postage prepaid, addressed to it at the address set forth in
Section 9.1. Such
mailing shall be deemed personal service and shall be legal and
binding upon the Company in any action, proceeding or claim. The
Company agrees that the prevailing party(ies) in any such action
shall be entitled to recover from the other party(ies) all of its
reasonable attorneys’ fees and expenses relating to such
action or proceeding and/or incurred in connection with the
preparation therefor. The Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and
affiliates) and the Underwriter 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.
-29-
9.7 Execution in Counterparts. This
Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which
shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of
the parties hereto and delivered to each of the other parties
hereto. Delivery of a signed counterpart of this Agreement by
facsimile or email/pdf transmission shall constitute valid and
sufficient delivery thereof.
9.8 Waiver, etc. The failure of any
of the parties hereto to at any time enforce any of the provisions
of this Agreement shall not be deemed or construed to be a waiver
of any such provision, nor to in any way effect the validity of
this Agreement or any provision hereof or the right of any of the
parties hereto to thereafter enforce each and every provision of
this Agreement. No waiver of any breach, non-compliance or
non-fulfillment of any of the provisions of this Agreement shall be
effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver
is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any
other or subsequent breach, non-compliance or
non-fulfillment.
[Signature
Page Follows]
-30-
If the
foregoing correctly sets forth the understanding between the
Underwriter and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall
constitute a binding agreement between us.
|
|
Very
truly yours,
By: /s/ Xxxxxxxx
Xxxxxxxx
Name:
Xxxxxxxx Xxxxxxxx
Title:
Chairman and CEO
|
Confirmed as of the
date first written above mentioned:
NATIONAL SECURITIES CORPORATION
By: /s/
Xxxxxxxx X. Xxxx
Name:
Xxxxxxxx X. Xxxx
Title:
Executive Vice President
Head
of Investment Banking
SCHEDULE 1-A
Pricing Information
Number
of Shares: 2,025,000
Public
Offering Price per Share: $6.05
Underwriting
Discount per Share: $0.42
Proceeds
to Company per Share (before expenses): $5.63
Sch.
1-A-1
SCHEDULE 1-B
Written Testing-the-Waters Communications
None.
Sch.
1-B-1
SCHEDULE 2
List of Lock-Up Parties
Xxxxxxxx
Xxxxxxxx
Xxxxxx
X. Xxxxxxx
Xxxxxx
Xxxxx
Xxxxxx
Xxxxxxxx
Xxxxx
Xxxxxxxx
Xxxxxxx
X. Xxxx
Halcyon
Consulting, LLC
Berrard
Holdings Limited Partnership
Blue
Flame Capital, LLC
Sch.
2-1
SCHEDULE 2.37
Lease
Agreement between Columbia Texas Lakeshore II Industrial, LLC and
Good Smoke, LLC, dated December 10, 2014, and Landlord’s
Consent to Sublease Agreement among Columbia Texas Lakeshore II
Industrial, LLC, Good Smoke LLC and RumbleOn, Inc. dated April 24,
2018.
Schedule
2.37
EXHIBIT A
Form of Lock-Up Agreement
July
__, 2018
National
Securities Corporation
000
Xxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Ladies
and Gentlemen:
The
undersigned understands that National Securities Corporation (the
“Underwriter”)
proposes to enter into an Underwriting Agreement (the
“Underwriting
Agreement”) with RumbleOn, Inc., a Nevada corporation
(the “Company”),
providing for the public offering (the “Public Offering”) of shares of
Class B Common Stock, par value $0.001 per share, of the Company
(the “Shares”).
To
induce the Underwriter to continue their efforts in connection with
the Public Offering, the undersigned hereby agrees that, without
the prior written consent of the Underwriter, the undersigned will
not, during the period commencing on the date hereof and ending
ninety (90) days after the date of the final prospectus (the
“Prospectus”)
relating to the Public Offering (the “Lock-Up Period”), (1) offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of capital stock
of the Company or any securities convertible into or exercisable or
exchangeable for shares of capital stock of the Company, whether
now owned or hereafter acquired by the undersigned or with respect
to which the undersigned has or hereafter acquires the power of
disposition (collectively, the “Lock-Up Securities”); (2) enter
into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of
Lock-Up Securities, whether any such transaction is to be settled
by delivery of shares of Lock-Up Securities, in cash or otherwise;
(3) make any demand for or exercise any right with respect to the
registration of any Lock-Up Securities; or (4) publicly disclose
the intention to make any offer, sale, pledge or disposition, or to
enter into any transaction, swap, hedge or other arrangement
relating to any Lock-Up Securities. Notwithstanding the foregoing,
and subject to the conditions below, the undersigned may transfer
Lock-Up Securities without the prior written consent of the
Underwriter in connection with (a) transactions relating to Lock-Up
Securities acquired in open market transactions after the
completion of the Public Offering; provided that no filing under
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), shall be required or shall be voluntarily made
in connection with subsequent sales of Lock-Up Securities acquired
in such open market transactions; (b) transfers of Lock-Up
Securities as a bona fide
gift, by will or intestacy or to a family member or trust for the
benefit of a family member (for purposes of this lock-up agreement,
“family member” means any relationship by blood,
marriage or adoption, not more remote than first cousin); (c)
transfers of Lock-Up Securities to a charity or educational
institution; (d) if the undersigned, directly or indirectly,
controls a corporation, partnership, limited liability company or
other business entity, any transfers of Lock-Up Securities to any
shareholder, partner or member of, or owner of similar equity
interests in, the undersigned, as the case may be, or (e) the sales
of Shares to cover the payment of the exercise prices or the
payment of taxes associated with the exercise or vesting of equity
awards under any equity compensation plan of the Company;
provided that in the case
of any transfer pursuant to the foregoing clauses (b), (c) or
(d), (i) any such transfer shall not involve a disposition for
value, (ii) each transferee shall sign and deliver to the
Underwriter a lock-up agreement substantially in the form of this
lock-up agreement and (iii) no filing under Section 16(a) of
the Exchange Act shall be required or shall be voluntarily made,
except for a Form 5. The undersigned also agrees and consents to
the entry of stop transfer instructions with the Company’s
transfer agent and registrar against the transfer of the
undersigned’s Lock-Up Securities except in compliance with
this lock-up agreement.
Ex.
A-1
If the
undersigned is an officer or director of the Company, (i) the
undersigned agrees that the foregoing restrictions shall be equally
applicable to any issuer-directed or “friends and
family” Shares that the undersigned may purchase in the
Public Offering; (ii) the Underwriter agrees that, at least three
(3) Business Days (as that term is defined in the Underwriting
Agreement) before the effective date of any release or waiver of
the foregoing restrictions in connection with a transfer of Lock-Up
Securities, the Underwriter will notify the Company of the
impending release or waiver; and (iii) the Company has agreed in
the Underwriting Agreement to announce the impending release or
waiver by press release through a major news service at least two
(2) Business Days before the effective date of the release or
waiver. Any release or waiver granted by the Underwriter hereunder
to any such officer or director shall only be effective two (2)
Business Days after the publication date of such press release. The
provisions of this paragraph will not apply if (a) the release or
waiver is effected solely to permit a transfer of Lock-Up
Securities not for consideration and (b) the transferee has agreed
in writing to be bound by the same terms described in this lock-up
agreement to the extent and for the duration that such terms remain
in effect at the time of such transfer.
No
provision in this agreement shall be deemed to restrict or prohibit
the exercise, exchange or conversion by the undersigned of any
securities exercisable or exchangeable for or convertible into
Shares, as applicable; provided that the undersigned does not
transfer the Shares acquired on such exercise, exchange or
conversion during the Lock-Up Period, unless otherwise permitted
pursuant to the terms of this lock-up agreement. In addition, no
provision herein shall be deemed to restrict or prohibit the entry
into or modification of a so-called “10b5-1” plan at
any time (other than the entry into or modification of such a plan
in such a manner as to cause the sale of any Lock-Up Securities
within the Lock-Up Period).
The
undersigned understands that the Company and the Underwriter are
relying upon this lock-up agreement in proceeding toward
consummation of the Public Offering. The undersigned further
understands that this lock-up agreement is irrevocable and shall be
binding upon the undersigned’s heirs, legal representative,
successors and assigns.
The
undersigned understands that, if the Underwriting Agreement is not
executed by August 31, 2018, or if the Underwriting Agreement
(other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the
Shares to be sold thereunder, then this lock-up agreement shall be
void and of no further force or effect.
Whether
or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which
are subject to negotiation between the Company and the
Underwriter.
|
|
Very
truly yours,
__________________________________________________
(Name -
Please Print)
__________________________________________________
(Signature)
__________________________________________________
(Name
of Signatory, in the case of entities - Please Print)
__________________________________________________
(Title
of Signatory, in the case of entities - Please Print)
Address:___________________________________________
___________________________________________
___________________________________________
|
Ex.
A-2
EXHIBIT B
Form of Press Release
[Date]
RumbleOn,
Inc. (the “Company”) announced today that National
Securities Corporation acting as Underwriter for the
Company’s recent public offering of 2,025,000 shares of
the Company’s Class B Common Stock, is [waiving] [releasing]
a lock-up restriction with respect to _________ shares of the
Company’s Class B Common Stock [and _________ shares of
the Company’s Class A Common Stock] held by [certain officers
or directors] [an officer or director] of the Company. The
[waiver] [release] will take effect on _________, 20___, and
the shares may be sold on or after such
date.
This press release is not an offer or sale of the securities in the
United States or in any other jurisdiction where such offer or sale
is prohibited, and such securities may not be offered or sold in
the United States absent registration or an exemption from
registration under the Securities Act of 1933, as
amended.
Ex.
B-1
