UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event
reported): June
29, 2021
RECRUITER.COM GROUP, INC.
(Exact name of registrant as specified in its charter)
Nevada
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001-40563
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90-1505893
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(State
or other jurisdiction ofincorporation or organization)
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(Commission
File Number)
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(IRS
EmployerIdentification No.)
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100 Waugh Drive, Suite 300
Houston, Texas
77007
(Address of principal executive offices)
(855) 931 1500
(Registrant’s telephone number, including area
code)
(Former name or former address, if changed since last
report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐ Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
☐ Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
☐ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the
Act:
Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common
Stock
Common
Stock Purchase Warrants
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RCRT
RCRTW
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The
Nasdaq Stock Market LLC
The
Nasdaq Stock Market LLC
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging growth company ☑
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
Item 1.01 Entry into a Material Definitive
Agreement.
Underwriting Agreement, Warrant Agent Agreement, and Closing of
Underwritten Public Offering
On June 29, 2021, Recruiter.com Group, Inc. (the
“Company”), entered into an underwriting agreement (the
“Underwriting Agreement”), with Joseph Gunnar & Co., LLC (“Joseph Gunnar”) who acted as the
underwriter (the “Underwriter”), pursuant to which the
Company agreed to sell to the Underwriter in a firm commitment
underwritten public offering (the “Offering”) an
aggregate of 2,400,000 units, with each unit consisting of one
share of the Company’s common stock, par value $0.001 per
share (the “Common Stock”) and one warrant
(“Warrants”, and collectively with the Common Stock the
“Units”), each to purchase one share of Common Stock,
at a public offering price of $5 per share. The Warrants included
in the Units are exercisable immediately, have an exercise price of
$5.50 per share, which represents 110% of the price per unit sold
in the Offering, and expire five years from the date of issuance.
The Common Stock and the Warrants have been approved to list on the
Nasdaq Capital Market under the symbols RCRT and RCRTW,
respectively, and began trading there on June 30,
2021.
The Units were offered and sold to the public pursuant to the
Company’s registration statement on Form S-1 (File No.
333-249208), initially filed by
the Company with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the “Securities
Act”) on October 1, 2020, and declared effective on June 29,
2021 (the “Initial Registration Statement”), and a
registration statement relating to the Initial Registration
Statement, as amended, filed on June 29, 2021 pursuant to Rule
462(b) promulgated under the Securities Act, and which became
automatically effective upon filing (File No.
333-257540).
In addition, the Underwriter was granted a 45-day option,
exercisable one or more times in whole or in part, to purchase up
to an additional 360,000 shares of Common Stock and up to an
additional 360,000 Warrants solely to cover over-allotments, at the
public offering price per share of Common Stock and per Warrant,
less, in each case, the underwriting discounts payable by the
Company.
The Underwriting Agreement contains customary representations,
warranties and agreements by the Company, customary conditions to
closing, indemnification obligations of the Company and the
Underwriter, including for liabilities under the Securities Act of
1933, as amended, other obligations of the parties and termination
provisions. In addition, pursuant to the terms of the Underwriting
Agreement and related “lock-up” agreements, the
Company, each director and executive officer of the Company, and
certain stockholders have agreed with the Underwriter not to offer
for sale, issue, sell, contract to sell, pledge or otherwise
dispose of any of our Common Stock or securities convertible into
Common Stock for a period of 225 days for directors and executive
officers of the Company, and 180 days for the Company itself, its
5% shareholders, and our shareholders receiving shares pursuant to
automatic conversions or exchange agreements commencing on the June
29, 2021 date of the final prospectus.
On July 2, 2021, the Company entered into a warrant agent agreement
(the “Warrant Agent Agreement”) with
Philadelphia Stock Transfer, Inc., a
Pennsylvania corporation, (“PST”), to serve as the
Company’s warrant agent for the Warrants. Upon the closing of
the Offering, PST issued the Warrants.
On July 2, 2021, pursuant to the Underwriting Agreement, the
Company issued Representative’s Warrants to purchase up to an
aggregate of 240,000 shares of Common Stock (the
“Representative’s Warrants”). The
Representative’s Warrants are exercisable beginning on
December 26, 2021, until June 29, 2026. The initial exercise price
of Representative's Warrants is $6.25 per share, which equals 125%
of the public offering price per Unit in the Offering.
The Offering closed on July 2, 2021. In addition, on July 2, the
Underwriter partially exercised its over-allotment option by
purchasing additional Warrants to purchase 360,000 shares of Common
Stock.
Placement Agent Warrants
In connection with the Company’s private placement of
$2,953,125 principal amount of convertible debentures (the
“Debentures”) and warrants, Joseph Gunnar and the
Company entered into a placement agency agreement, dated May 20,
2020 (the “May 2020 Agreement”). In addition to cash
compensation received, pursuant to the terms of the May 2020
Agreement, the Placement Agent was issued warrants to purchase
147,657 shares of Common Stock, at an exercise price of $5.00 per
share (the “May 2020 Placement Agent
Warrants”).
In June 2021, the Company and Joseph Gunnar agreed to amend the May
2020 Agreement, pursuant to which effective immediately prior the
effectiveness of the Offering’s registration statement, the
right to receive all May 2020 Placement Agent Warrants as
contemplated in such agreement were amended so that Joseph Gunnar
(or its designees) shall be entitled to receive warrants to
purchase 36,364 shares of Common Stock.
In connection with the Company’s private placement of
$2,799,000 principal amount of Debentures and warrants, Joseph
Gunnar and the Company entered into a placement agency agreement,
dated December 22, 2020 (the “December 2020
Agreement”). In addition to cash compensation received,
pursuant to the terms of the December 2020 Agreement, the Placement
Agent was entitled to receive warrants to purchase 139,951 shares
of Common Stock, at an exercise price of $5.00 per share (the
“January 2021 Placement Agent Warrants”).
In June 2021 the Company and Joseph Gunnar agreed to amend the
December 2020 Agreement, pursuant to which effective immediately
prior the effectiveness of the Offering’s registration
statement, the right to receive all January 2021 Placement Agent
Warrants as contemplated in such agreement was amended so that
Joseph Gunnar (or its designees) shall be entitled to receive
warrants to purchase 36,364 shares of Common Stock.
On July 2, 2021, the Company issued the May 2020 Placement Agent
Warrants and January 2021 Placement Agent Warrants (collectively,
the “Placement Agent Warrants”) exercisable for a total
of 72,728 shares of common stock at an exercise price equal to
$6.25, which equals to 125% of the public offering price per Unit
in the Offering.
The foregoing description of the Underwriting Agreement, Warrant
Agent Agreement, Representative’s Warrants, and Placement
Agent Warrants are not complete and are qualified in their entirety
by references to the full text of the Underwriting Agreement, the
Warrant Agent Agreement, the form of Representative’s
Warrants, and the form of Placement Agent Warrants, which are filed
as exhibits to this report and are incorporated by reference
herein.
Item 8.01 Other Events.
On June 30, 2021, the Company issued a press release announcing the
pricing of the Offering. A copy of the press release is attached as
Exhibit 99.1 hereto and is incorporated herein by reference. On
July 2, 2021, the Company issued a press release announcing the
closing of the Offering, a copy of which is attached hereto as
Exhibit 99.2 and is incorporated herein by reference.
Item 9.01. Exhibits.
(d) Exhibits
Exhibit No.
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Exhibit
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Underwriting
Agreement, by and among Recruiter.com Group, Inc., and Joseph
Gunnar & Co., LLC, dated June 29, 2021
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Form of
Representative’s Warrants.
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Form of Placement
Agent Warrants.
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Warrant Agent
Agreement by and between Recruiter.com Group, Inc., and
Philadelphia Stock Transfer, Inc., dated July 2, 2021.
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Press Release
announcing the pricing of the Offering, dated June 30,
2021.
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Press Release
announcing the closing of the Offering, dated July 2,
2021.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly
authorized.
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RECRUITER.COM GROUP, INC.
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Dated:
July 6, 2021
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By:
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/s/
Evan Sohn
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Evan
Sohn
Chief
Executive Officer
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EXHIBIT 1.1
UNDERWRITING AGREEMENT
between
RECRUITER.COM GROUP, INC.,
and
JOSEPH GUNNAR & CO. LLC
as Representative of the Several Underwriters, if any
RECRUITER.COM GROUP, INC.
UNDERWRITING AGREEMENT
New York, New York
June 29, 2021
Joseph Gunnar & Co. LLC
30 Broad Street, 11th
Floor
New York, New York 10004
As Representative of the several Underwriters, if any, named
on Schedule 1
attached hereto
Ladies and Gentlemen:
The undersigned, Recruiter.com Group, Inc., a corporation formed
under the laws of the State of Nevada (collectively with its
subsidiaries and affiliates, including, without limitation, all
entities disclosed or described in the Registration Statement (as
hereinafter defined) as being subsidiaries or affiliates of
Recruiter.com Group, Inc., the “Company”), hereby confirms its agreement (this
“Agreement”) with Joseph Gunnar & Co. LLC
(hereinafter referred to as “you” (including its correlatives) or the
“Representative”)
and with the other underwriters, if any, named on
Schedule
1 hereto for which the
Representative is acting as representative (the Representative and
such other underwriters being collectively called the
“Underwriters” or, individually, an
“Underwriter”) as follows:
1. Purchase
and Sale of Securities.
1.1 Firm
Securities.
1.1.1 Nature
and Purchase of Firm Securities.
(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 several Underwriters, an aggregate of 2,400,000
shares (each, a “Firm
Share” and collectively, the “Firm Shares”) of the
Company’s common stock, par value $0.0001 per share (the
“Common Stock”).
For every one Firm Share issued and sold by the Company, the
Company shall issue and sell to the several Underwriters one
warrant to purchase one share of Common Stock each at an exercise
price of $5.50 per share (110% of the public offering price per
Firm Unit in the Offering) (each, a “Warrant” and collectively, the
“Warrants”), or
an aggregate of Warrants to purchase an aggregate of
2,400,000 shares of
Common Stock (the “Firm
Warrants” and together with the Firm Shares, the
“Firm
Securities”). The Firm Shares and Firm Warrants shall
be sold as a unit (a “Firm Unit”), consisting of one Firm
Share and one Firm Warrant.
(ii) The
Underwriters, severally and not jointly, agree to purchase from the
Company the number of Firm Units set forth opposite their
respective names on Schedule 1 attached hereto and
made a part hereof at a purchase price of $4.65 per Firm Unit (93% of the Firm Unit Offering
Price), and the purchase price of the Firm Unit shall be allocated
as follows: (i) $4.64 per Firm Share and (ii)
$0.01 per Firm Warrant. The
Firm 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 hereof).
1.1.2 Firm
Securities Payment and Delivery.
(i) Delivery and
payment for the Firm Securities shall be made at 10:00 a.m.,
Eastern time, on the second (or if the
Firm Securities are priced, as contemplated by Rule 15c6-1(c) under
the Exchange Act, after 4:30 p.m. Eastern time, the third) full
business day following the date hereof, or at such other time and
date as the Representative and the Company determine pursuant to
Rule 15c6-1(a) under the Exchange Act, at the offices of
Littman Krooks LLP, 655 Third Avenue, New York, New York 10017
(“Representative’s
Counsel”), or at such other place (or remotely by
facsimile or other electronic transmission) as shall be agreed upon
by the Representative and the Company. The time and date of
delivery of and payment for the Firm Securities is called the
“Closing
Date.”
(ii) Payment
for the Firm Securities 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 Underwriters) representing the Firm Securities
(or through the facilities of the Depository Trust Company
(“DTC”)) for the
account of the Representative. The Firm Securities shall be
registered in such name or names and in such authorized
denominations as the Representative may request in writing at least
two (2) Business Days prior to the Closing Date. The Company shall
not be obligated to sell or deliver the Firm Securities except upon
tender of payment by the Representative for all of the Firm
Securities. 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.
1.2 Over-allotment
Option.
1.2.1 Option
Securities. The Company hereby grants to the Underwriters an
option (the “Over-allotment
Option”) to purchase up to an additional 360,000
shares of Common Stock, representing up to fifteen percent (15%) of
the Firm Shares included in the Firm Units sold in the offering
(the “Option
Shares”), and/or Warrants to purchase an additional
360,000 shares of Common Stock, representing up to 15% of the Firm
Warrants included in the Firm Units sold in the Offering (the
“Option
Warrants”), in each case for the purpose of covering
over-allotments of such securities, if any. The purchase price to
be paid per Option Share shall be equal to the Firm Share purchase
price (i.e., $4.64) and the purchase price to be paid per Option
Warrant shall be $0.01. The Over-allotment Option is, at the
Underwriters’ sole discretion, for Option Shares and Option
Warrants together, solely Option Shares, solely Option Warrants, or
any combination thereof (each, an “Option Security” and collectively,
the “Option
Securities”). The Firm Securities and the Option
Securities are collectively referred to as the “Securities.” The Securities, the
shares of Common Stock underlying the Firm Warrants, and the shares
of Common Stock underlying the Option Warrants are referred to
herein collectively as the “Public Securities.” The Firm
Warrants and the Option Warrants, if any, shall be issued pursuant
to, and shall have the rights and privileges set forth in, a
warrant agreement, dated on or before the Closing Date, between the
Company and Philadelphia Stock Transfer, Inc. as warrant agent (the
“Warrant
Agreement”). The offering and sale of the Public
Securities is herein referred to as the “Offering.”
1.2.2 Exercise
of Option. The Over-allotment Option granted pursuant to
Section 1.2.1 hereof may be exercised by the Representative as to
all (at any time) or any part (from time to time) of the Option
Shares and/or Option Warrants, in any confirmation thereof, within
45 days after the effective date (the “Effective Date”) of the
Registration Statement (as defined in Section 2.1.1 below). The
purchase price to be paid per Option Share shall be equal to the
Firm Share purchase price. The purchase price to be paid per Option
Warrant shall be equal to the Firm Warrant purchase price. The
Underwriters shall not be under any obligation to purchase any
Option Securities prior to the exercise of the Over-allotment
Option. The Over-allotment Option granted hereby may be exercised
by the giving of oral notice to the Company from the
Representative, which shall be confirmed in writing by overnight
mail or facsimile or other electronic transmission, setting forth
the number of Option Shares and/or Option Warrants to be purchased
and the date and time for delivery of and payment for the Option
Securities (the “Option
Closing Date”), which shall not be later than one (1)
Business Day after the date of the notice or such other time as
shall be agreed upon by the Company and the Representative, at the
offices of Representative’s Counsel, or at such other place
(including remotely by facsimile or other electronic transmission)
as shall be agreed upon by the Company and the Representative. If
such delivery and payment for the Option Securities does not occur
on the Closing Date, the Option Closing Date will be as set forth
in the notice. Upon exercise of the Over-allotment Option with
respect to all or any portion of the Option Securities, subject to
the terms and conditions set forth herein, (i) the Company shall
become obligated to sell to the Underwriters the number of Option
Shares and/or Option Warrants specified in such notice, and (ii)
each of the Underwriters, acting severally and not jointly, shall
purchase that portion of the total number of Option Shares and
Option Warrants then being purchased that the number of Firm Shares
and/or Option Warrants as set forth in Schedule 1 opposite the name of
such Underwriter bears to the total number of Firm Shares, subject,
in each case, to such adjustments as the Representative, in its
sole discretion, shall determine.
1.2.3 Payment
and Delivery. Payment for the Option Securities shall be
made on the Option Closing Date by wire transfer in federal (same
day) funds, payable to the order of the Company upon delivery to
you of certificates (in form and substance satisfactory to the
Representative) representing the Option Securities (or through the
facilities of DTC for the account of the Underwriters). The Option
Securities shall be registered in such name or names and in such
authorized denominations as the Representative may request in
writing at least two (2) Business Days prior to the Option Closing
Date. The Company shall not be obligated to sell or deliver the
Option Securities except upon tender of payment by the
Representative for applicable Option Securities. The Option Closing
Date may be simultaneous with, but not earlier than, the Closing
Date; and in the event that such time and date are simultaneous
with the Closing Date, the term “Closing Date” shall refer to the
time and date of delivery of the Firm Securities and Option
Securities.
1.3 Representative’s
Warrants.
1.3.1 Purchase
Warrants. The Company hereby agrees to issue and sell to the
Representative (and/or its designees) on the Closing Date an option
(“Representative’s
Warrant”) for the purchase of an aggregate of
240,000 shares of Common
Stock (which is equal to an aggregate of 5% of the Firm Securities
sold in the Offering), for an aggregate purchase price of $100.00.
The Representative’s Warrant agreement, in the form attached
hereto as Exhibit A (the
“Representative’s
Warrant Agreement”), shall be exercisable, in whole or
in part, commencing on a date which is one (1) year after the
Effective Date and expiring on the five-year anniversary of the
Effective Date at an initial exercise price per share of Common
Stock of $6.25, which is equal to 125% of the public offering price
of each Firm Unit. The Representative’s Warrant Agreement and
the shares of Common Stock issuable upon exercise thereof are
sometimes hereinafter referred to together as the
“Representative’s
Securities.” The Representative understands and agrees
that there are significant restrictions pursuant to FINRA Rule 5110
against transferring the Representative’s Warrant and the
underlying shares of Common Stock during the one hundred eighty
(180) days after the Effective Date and by its acceptance thereof
shall agree that it will not sell, transfer, assign, pledge or
hypothecate the Representative’s Warrant Agreement, or any
portion thereof, or be the subject of any hedging, short sale,
derivative, put or call transaction that would result in the
effective economic disposition of such securities for a period of
one hundred eighty (180) days following the Effective Date to
anyone other than (i) an Underwriter or a selected dealer in
connection with the Offering, or (ii) a bona fide officer or
partner of the Representative or of any such Underwriter or
selected dealer; and only if any such transferee agrees to the
foregoing lock-up restrictions.
1.3.2 Delivery.
Delivery of the Representative’s Warrant Agreement shall be
made on the Closing Date and shall be issued in the name or names
and in such authorized denominations as the Representative may
request.
2. Representations
and Warranties of the Company. The Company, represents and
warrants to the Underwriters as of the Applicable Time (as defined
below), as of the Closing Date and as of the Option Closing Date,
if any, as follows:
2.1 Filing
of Registration Statement.
2.1.1 Pursuant
to the Securities Act.
(i) The Company has
prepared and filed with the Securities and Exchange Commission (the
“Commission”) a
registration statement, including the related preliminary
prospectus or prospectuses, relating to the Public Securities under
the Securities Act of 1933, as amended (the “Securities Act”), on Form S-1 (No.
333-249208) (the “Initial
Registration Statement”); and such Initial
Registration Statement, and any post-effective amendment thereto,
each in the form previously delivered to you, have been declared
effective by the Commission, in such form. Other than a
registration statement, if any, increasing the size of the Offering
(a “Rule 462(b) Registration
Statement”) filed pursuant to Rule 462(b) under the
Securities Act, which will become effective upon filing, no other
document with respect to the Initial Registration Statement has
heretofore been filed with the Commission. The various parts of the
Initial Registration Statement and the 462(b) Registration
Statement, if any, including all exhibits thereto and including the
information contained in the form of final prospectus filed with
the Commission pursuant to Rule 424(b) under the Securities Act and
deemed by virtue of Rule 430A under the Securities Act to be part
of the Initial Registration Statement at the time it became
effective under the Securities Act, each as amended at the time
such part of the Initial Registration Statement or Rule 462(b)
Registration Statement, if any, became or hereafter becomes
effective under the Securities Act, are hereafter collectively
referred to as the “Registration
Statement.”
All references in this agreement (this
“Agreement”) to the Registration Statement, the Rule
462(b) Registration Statement, any Preliminary Prospectus, Issuer
Free Writing Prospectus or the Prospectus, or any amendments or
supplements to any of the foregoing, shall be deemed to include any
copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System
(“EDGAR”). For purposes of this Agreement,
“Applicable
Time” is 5:30 p.m. (New
York City time) on the date of this Agreement.
(ii) The
prospectus relating to the Public Securities and the
Representative’s Securities, in the form first filed with the
Commission pursuant to Rule 424(b) under the Securities Act, is
hereafter referred to as the “Prospectus.” Any preliminary
prospectus included in the Initial Registration Statement or filed
with the Commission pursuant to Rule 424 under the Securities Act
is hereafter referred to as a “Preliminary Prospectus”; and the
Preliminary Prospectus relating to the Public Securities, if any,
as amended or supplemented immediately prior to the Applicable
Time, is hereafter referred to as the “Pricing Prospectus.” Any
“issuer free writing prospectus” (as defined in Rule
433 under the Securities Act) relating to the Public Securities is
hereafter referred to as an “Issuer Free Writing Prospectus”;
and the Pricing Prospectus, as supplemented by the Issuer Free
Writing Prospectuses, if any, listed in Schedule 2-B hereto, and
the information included on Schedule 2A hereto, taken together, are
hereafter referred to collectively as the “Pricing Disclosure Package.” As
used herein “Testing-the-Waters Communication”
means any oral or written communication with potential investors
undertaken in reliance on Section 5(d) of the Securities Act, and
“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.
(iii) Intentionally
Omitted.
(iv) Each
Issuer Free Writing Prospectus conformed or will conform in all
material respects to the requirements of the Securities Act and the
regulations promulgated thereunder on the date of first use, and
the Company has complied with the requirements of Rule 433 under
the Securities Act with respect to each Issuer Free Writing
Prospectus including, without limitation, all prospectus delivery,
filing, record retention and legending requirements applicable to
any such Issuer Free Writing Prospectus. The Company has not (i)
distributed any offering material in connection with the Offering
other than any Preliminary Prospectus, the Prospectus, and any
Issuer Free Writing Prospectus set forth on Schedule II hereto, or
(ii) filed, referred to, approved, used or authorized the use of
any “free writing prospectus” as defined in Rule 405
under the Securities Act with respect to the Offering or the Public
Securities, except for any Issuer Free Writing Prospectus set forth
in Schedule 2-B hereto and any electronic road show previously
approved by the Representative. The Company has retained in
accordance with the Securities Act and the rules and regulations
promulgated thereunder all Issuer Free Writing Prospectuses that
were not required to be filed pursuant to the Securities Act and
the rules and regulations promulgated thereunder. The Company has
taken all actions necessary so that any “road show” (as
defined in Rule 433 under the Securities Act) in connection with
the offering of the Stock will not be required to be filed pursuant
to the Securities Act and the rules and regulations
thereunder.
2.1.2 Pursuant
to the Exchange Act. The Company has filed with the
Commission a Form 8-A (Accession No. 0001654954-21-007364) providing for the
registration pursuant to Section 12(b) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), of the shares of
Common Stock and Warrants; and such Form 8-A has become effective
under the Exchange Act. The Company has taken no action designed
to, or likely to have the effect of, terminating the registration
of the shares of Common Stock and Warrants under the Exchange Act,
nor has the Company received any notification that the Commission
is contemplating terminating such registration.
2.1.3 Testing
the Waters Communications
(i) Each Written
Testing-the-Waters Communications did not, as of the Applicable
Time, and at all times through the completion of the public offer
and sale of the Public Securities will not, include any information
that conflicted, conflicts or will conflict with the information
contained in the Registration Statement, the Pricing Disclosure
Package or the Prospectus. Each Written Testing-the-Waters
Communication did not, as of the Applicable Time, when taken
together with the Pricing Disclosure Package, contain 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 that no
representation or warranty is made as to the Underwriters’
Information (as defined in Section 2.4.1(ii) below).
(ii) The
Company has not (a) engaged in any Testing-the-Waters Communication
other than Testing-the-Waters Communications with the consent of
the Representative 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 (b) authorized any third
party to engage in Testing-the-Waters Communications. The Company
reconfirms that the Representative has been authorized to act on
its behalf in undertaking Testing-the-Waters Communications. The
Company has not distributed any Written Testing-the-Waters
Communications other than those listed on Schedule 2-C
hereto.
(iii) From
the time of the initial confidential submission of the Registration
Statement to the Commission (or, if earlier, the first date on
which the Company engaged directly 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”).
2.1.4 Road
Show. The Company has filed publicly on EDGAR at least 15
calendar days prior to any “road show” (as defined in
Rule 433 under the Securities Act), any confidentially submitted
registration statement and registration statement amendments
relating to the offer and sale of the Public
Securities.
2.2 Stock
Exchange Listing. Each of the
shares of Common Stock and Warrants has been approved for listing
on The Nasdaq Capital Market (the “NasdaqCM”), subject only to official notice of
issuance.
2.3 No
Stop Orders, etc. No stop order
suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding
for that purpose has been initiated or, to the Company’s
knowledge, threatened by the Commission. No order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus
has been issued and no proceeding for that purpose has been
initiated or, to the Company’s knowledge, threatened by the
Commission. The Company has complied in all material respects with
each request (if any) from the Commission for additional
information.
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, complied in all material respects
with the requirements of the Securities Act and the rules and
regulations of the Commission thereunder (the “Securities Act Regulations”). Each
Preliminary Prospectus, the Prospectus and any amendment or
supplement thereto, at the time each was filed with the Commission,
complied in all material respects with the requirements of the
Securities Act and the Securities Act Regulations. Each Preliminary
Prospectus delivered to the Underwriters for use in connection with
this offering and the Prospectus was or will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(ii) The
Registration Statement, when it became effective, did not contain
and, as amended or supplemented, if applicable, will not contain,
as of the date of such amendment or supplement, an untrue statement
of a material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to any information contained in or
omitted from the Registration Statement or any amendment thereto in
reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Underwriter through
the Representative specifically for use therein (collectively, the
“Underwriters’
Information”). 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: (i) the
tables showing the number of securities to be purchased by each
Underwriter, (ii) the first paragraph under the caption
“Discounts and Commissions” and (iii) paragraphs under
the captions “Discretionary Accounts,”
“Stabilization,” “Passive Market Making,”
“Electronic Offer, Sale and Distribution of Shares,”
“Other Relationships” and “Market
Information”
(iii) The
Pricing Disclosure Package, as of the Applicable Time, did not
contain 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. The Prospectus will not, as of its date, as of the
Closing Date or as of any Option Closing Date, contain 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. Each
Issuer Free Writing Prospectus complies in all material respects
with the applicable provisions of the Securities Act and the
Securities Act Regulations, and does not conflict with the
information contained in the Registration Statement, the Pricing
Prospectus or the Prospectus, and each Issuer Free Writing
Prospectus listed in Schedule 2-B hereto, as
supplemented by and taken together with the Pricing Disclosure
Package did not, as of the Applicable Time, contain 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.
Notwithstanding the foregoing, the representations and warranties
set forth in this Section 2.4.1(iii) shall not apply with respect
to the Underwriters’ Information.
2.4.2 Disclosure
of Agreements. The agreements and documents described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus conform in all material respects to the descriptions
thereof contained therein and there are no agreements or other
documents required by the Securities Act and the Securities Act
Regulations 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 described or filed. Each agreement or other instrument
(however characterized or described) to which either the Company is
a party or by which the Company is or may be bound or affected and
(i) that is referred to 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, as the case may be, is in full force and
effect in all material respects and is enforceable against the
Company, or as the case may be, 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 no event
has occurred that, with the lapse of time or the giving of notice,
or both, would constitute a default thereunder. To the best of the
Company’s knowledge, performance by the Company of the
material provisions of such agreements or instruments will not
result in a violation of any existing applicable law, rule,
regulation, judgment, order or decree of any governmental,
judicial, regulatory or administrative agency, body or court,
domestic or foreign, having jurisdiction over the Company or any of
their assets or business (each, a “Governmental Entity”), including,
without limitation, those relating to environmental laws and
regulations.
2.4.3 Prior
Securities Transactions. Since inception, 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 statements set forth in the Pricing Prospectus and Prospectus
under the caption “Description of Securities”, insofar
as it purports to constitute a summary of the terms of the Common
Stock and the Warrants, and under the captions “Shares
Eligible for Future Sale,”, “Certain Relationships and
Related Transactions,” “Prospectus Summary
—Implications of Being an Emerging Growth Company”,
“Business—Legal Proceedings,”
“Business—Intellectual Property,”
“Underwriting,” “Risk Factors”and the
statements in the Registration Statement under Item 14 thereof,
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair in
all material respects.
2.4.5 No
Other Distribution of Offering Materials. The Company has
not, directly or indirectly, distributed and will not distribute
any offering material in connection with the Offering other than
any Preliminary Prospectus, the Prospectus and other materials, if
any, permitted under the Securities Act and consistent with Section
3.2 below.
2.5 Changes
After Dates in Registration Statement. 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
and its Subsidiaries (as defined below) taken as a whole (a
“Material Adverse
Change”); (ii) there
have been no material transactions entered into by the Company,
other than as contemplated pursuant to this Agreement; (iii) there
has not been any material change in the capital stock or long-term
or short-term debt of the Company, (iv) there have been no
transactions entered into by the Company, other than in the
ordinary course of business, which are material with respect to the
Company, individually or taken as a whole, (v) the Company has not
sustained any material loss or interference with its business or
properties from fire, explosion, flood, earthquake, hurricane,
accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding and
(vi) no officer or director of the Company has resigned from any
position with the Company. Since the date of the latest balance
sheet included in the Registration Statement, the Pricing
Disclosure Package or the Prospectus, neither the Company nor any
Subsidiary has incurred or undertaken any liabilities or
obligations, whether direct or indirect, liquidated or contingent,
matured or unmatured, or entered into any transactions, including
any acquisition or disposition of any business or asset, which are
material to the Company and the Subsidiaries, individually or taken
as a whole, except for liabilities, obligations and transactions
which are disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus.
2.6 Independent
Accountants. Salberg &
Company P.A. (the “Auditor”),
who has certified the financial statements and supporting schedules
and information of the Company that are included in the
Registration Statement, the Pricing Disclosure Package, or the
Prospectus are independent public accountants as required by the
Securities Act, the Securities Act Regulations and the rules of the
Public Company Accounting Oversight Board
(“PCAOB”). The Auditor has not, during the periods
covered by the financial statements included 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 the supporting schedules included
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus present fairly in all material respects the
consolidated financial position as of the dates indicated and the
cash flows and results of operations for the periods specified of
the Company; except as otherwise stated in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, said
financial statements have been prepared in conformity with United
States generally accepted accounting principles
(“GAAP”) applied on a consistent basis throughout
the periods involved; and the supporting schedules, if any,
included in the Registration Statement, the Pricing Disclosure
Package and the Prospectus present fairly in all material respects
in accordance with GAAP the information required to be stated
therein. No other historical or pro forma financial statements or
supporting schedules are required to be included in the
Registration Statement, the Pricing Disclosure Package or the
Prospectus by the Securities Act or the Securities Act Regulations.
The other financial and statistical information included in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus present fairly in all material respects the information
included therein and have been prepared on a basis consistent with
that of the financial statements that are included in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus and the books and records of the respective entities
presented therein. The pro forma financial statements included in
the Registration Statement, Pricing Disclosure Package and the
Prospectus have been properly compiled and prepared in accordance
with the applicable requirements of the Securities Act and the
Securities Act Regulations and include all adjustments necessary to
present fairly in all material respects in accordance with GAAP the
pro forma financial position of the respective entity or entities
presented therein at the respective dates indicated and their cash
flows and the results of operations for the respective periods
specified. 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 in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, (a) neither the
Company nor any of its direct and indirect subsidiaries, including
each entity disclosed or described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus as being a
subsidiary of the Company (each, a “Subsidiary” and, collectively, the
“Subsidiaries”), has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions other than in the ordinary course of business, (b) the
Company has not declared or paid any dividends or made any
distribution of any kind with respect to its capital stock, (c)
there has not been any change in the capital stock of the Company
or any of its Subsidiaries, 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; Options, 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 Applicable Time, as of the
Applicable Time and on the Closing Date and any Option Closing
Date, there will be no stock options, warrants, or other rights to
purchase or otherwise acquire any authorized but unissued shares of
Common Stock of the Company or any security convertible or
exercisable into shares of Common Stock of the Company, or any
contracts or commitments to issue or sell shares of Common Stock or
any such options, warrants, rights or convertible
securities.
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
contractual rights of rescission or put rights 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, rights of first refusal or
rights of participation of any holders of any security of the
Company or similar contractual rights granted by the Company,
except for such rights as may have been fully satisfied or waived
prior to the Effective Date. The authorized shares of 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 Common Stock, options, warrants and other rights to
purchase or exchange such securities for shares of the Common Stock
as the case may be, 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
Common Stock, and or holders of membership interests exempt from
such registration requirements.
2.9.2 Securities
Sold Pursuant to this Agreement. The Public Securities and
Representative’s Securities 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 Public Securities and Representative’s
Securities 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 Public Securities and Representative’s Securities has
been duly and validly taken. The Public Securities and
Representative’s Securities conform in all material respects
to all statements with respect thereto contained in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus. All corporate action required to be taken for the
authorization, issuance and sale of the Warrants and
Representative’s Warrant has been duly and validly taken; the
shares of Common Stock issuable upon exercise of the Warrants and
Representative’s Warrant have been duly authorized and
reserved for issuance by all necessary corporate action on the part
of the Company and, when paid for and issued in accordance with the
Warrant Agreement and Warrants or the Representative’s
Warrant and the Representative’s Warrant Agreement, as the
case may be, such underlying shares of Common Stock 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; and such shares of Common Stock 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.
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 options, warrants, rights or other securities
exercisable for or convertible or exchangeable into securities of
the Company have the right to require the Company to register any
such securities of the Company under the Securities Act or to
include any such securities in the Registration Statement or any
other registration statement to be filed by the Company, except for
any such rights so disclosed that have either been fully complied
with by the Company or effectively waived by the holders
thereof.
2.11 Validity
and Binding Effect of Agreements. The execution, delivery and performance of this
Agreement, the Warrants, the Warrant Agreement, the
Representative’s Warrant and the Representative’s
Warrant Agreement have been duly and validly authorized by the
Company, and, this Agreement, constitute, and the
Representative’s Warrant and the Representative’s
Warrant Agreement, when executed and delivered, will constitute,
the valid and binding agreements of the Company, in each case,
enforceable against the Company in accordance with their respective
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.
2.12 No
Conflicts, etc. The execution,
delivery and performance by the Company of this Agreement, the
Warrants, the Warrant Agreement, the Representative’s Warrant
and the Representative’s Warrant 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, as the case may be, 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, mortgage, pledge, security
interest, claim, equity, trust or other encumbrance, preferential
arrangement, defect or restriction of any kind whatsoever (any
“Lien”) upon any property or assets of the
Company pursuant to the terms of any indenture, mortgage, deed of
trust, note, lease, loan agreement or any other agreement or
instrument, franchise, license or permit to which the Company is a
party or as to which any property of the Company is a party;
(ii) result in any violation of the provisions of the
Company’s Articles of Incorporation (as the same have been
amended or restated from time to time, the
“Charter”), the by-laws of the Company (as the same
may be amended or restated from time to time) or (iii) violate
any existing applicable law, rule, regulation, ordinance,
directive, judgment, writ, order or decree of any
Governmental Entity as of the date hereof or by any foreign,
state or local Governmental Entity, except in the cases of clauses
(i) and (iii) for such breaches, conflicts or violations which
could not reasonably be expected to have a Material Adverse
Change.
2.13 No
Defaults; Violations. Except as
set forth in, or contemplated by, the Registration Statement, the
Pricing Disclosure Package and the Prospectus, the Company is not
(i) in violation of its Charter, by-laws, or other organizational
documents, (ii) in default under, and no event has occurred which,
with notice or lapse of time or both, would constitute a default
under or result in the creation or imposition of any Lien upon any
property or assets of the Company pursuant to any indenture,
mortgage, deed of trust, note, lease,
loan agreement or other agreement or instrument to which it is a
party or by which it is bound or to which any of its property or
assets is subject, or (iii) in violation of any statute, law, rule,
regulation, ordinance, directive, judgment, writ, decree or order
of any court or judicial, regulatory or other legal or Governmental
Entity, except (in the case of clauses (ii) and (iii) above) for
violations or defaults that could not (individually or in the
aggregate) reasonably be expected to have a Material Adverse Effect
(as defined in Section 2.17 below).
2.14 Corporate
Power; Licenses; Authorizations.
2.14.1 Conduct
of Business. The Company has all requisite power and
authority, and all necessary consents, approvals, authorizations,
orders, registrations, qualifications, licenses, filings and
permits of, with and from all Governmental Entities and all third
parties, foreign and domestic (collectively, the
“Authorizations”),
to own, lease and operate its properties and conduct its business
as it is now being conducted and as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, and
each such Authorization is valid and in full force and effect,
except in each case as could not reasonably be expected to have a
Material Adverse Effect. The Company has not received notice of any
investigation or proceedings which, if decided adversely to the
Company, could reasonably be expected to result in, the revocation
of, or imposition of a materially burdensome restriction on, any
such Authorization.
2.14.2 Transactions
Contemplated Herein. The Company has or, at the time of
execution, had all corporate power and authority to enter into this
Agreement, the Warrants, the Warrant Agreement, the
Representative’s Warrant and the Representative’s
Warrant Agreement and to carry out the provisions and conditions
hereof, and all Authorizations required in connection therewith
have been obtained. No Authorization of, and no filing with,
Governmental Entity is required for the valid issuance, sale and
delivery of the Public Securities and the consummation of the
transactions and agreements contemplated by this Agreement, the
Warrant Agreement and the Representative’s Warrant Agreement
and as contemplated by the Registration Statement, the Pricing
Disclosure Package and the Prospectus, except as may be required
under state securities or blue sky laws or the by-laws the rules
and regulations of the Financial Industry Regulatory Authority,
Inc. (“FINRA”)
in connection with the purchase and distribution of the Public
Securities by the Underwriters, each of which has been obtained and
is in full force and effect.
2.15 D&O
Questionnaires. To the
Company’s knowledge, all information contained in the
questionnaires (the “Questionnaires”)
completed by each of the Company’s directors, officers and
principal stockholders immediately prior to the Offering (the
“Insiders”) as supplemented by all information
concerning the Company’s directors, officers and principal
stockholders as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, provided to the
Underwriters is true and correct in all material respects and the
Company has not become aware of any information which would cause
the information disclosed in the Questionnaires to become
inaccurate and incorrect in any material
respect.
2.16 Litigation;
Governmental Proceedings.
Except as disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, there is no judicial,
regulatory, arbitral or other legal or governmental proceeding or
other litigation or arbitration, domestic or foreign, pending to
which the Company is a party or of which any property, operations
or assets of the Company is the subject which, individually or in
the aggregate, if determined adversely to the Company, could
reasonably be expected to have a Material Adverse Effect, or which
might materially and adversely affect the consummation of the
transactions contemplated in this Agreement or the performance by
the Company of its respective obligations hereunder; to the
Company’s knowledge, no such proceeding, litigation or
arbitration is threatened or contemplated; and the defense of all
such proceedings, litigation and arbitration against or involving
the Company could not reasonably be expected to have a Material
Adverse Effect.
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 its jurisdiction of incorporation.
The Company is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed)
or the nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in good
standing which (individually and in the aggregate) could not
reasonably be expected to have a material adverse effect on (i) the
business, general affairs, management, condition (financial or
otherwise), results of operations, stockholders’ equity,
properties or prospects of the Company and the Subsidiaries, when
taken as a whole; or (ii) the ability of the Company to consummate
the Offering or any other transaction contemplated by this
Agreement or the Registration Statement, the Pricing Disclosure
Package and the Prospectus (collectively, a
“Material Adverse
Effect”). The Charter,
and by-laws, or other constitutive and organizational documents of
the Company comply with the requirements of applicable law and are
in full force and effect.
2.18 Insurance.
The Company maintains insurance in such amounts and covering such
risks as the Company reasonably considers adequate for the conduct
of its business and the value of its properties and as is customary
for companies engaged in similar businesses in similar industries,
all of which insurance is in full force and effect, except where
the failure to maintain such insurance could not reasonably be
expected to have a Material Adverse Effect. In furtherance of the foregoing, the Company
carries (or will carry at the Closing Date) and is entitled to the
benefits of directors and officers insurance coverage at least
equal to $2,000,000. There are no
material claims by the Company under any such policy or instrument
as to which any insurance company is denying liability or defending
under a reservation of rights clause. The Company reasonably
believes that it will be able to renew its existing insurance as
and when such coverage expires or will be able to obtain
replacement insurance adequate for the conduct of the business and
the value of its properties at a cost that would not have a
Material Adverse Effect.
2.19 Transactions
Affecting Disclosure to FINRA.
2.19.1 Finder’s
Fees. Except as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, there are no claims,
payments, contracts, arrangements, agreements or understandings
between the Company and any person that would give rise to a valid
claim against the Company or any Underwriter for a brokerage
commission, finder’s fee or other like payment in connection
with the transactions contemplated by this Agreement or, to the
Company’s knowledge, any arrangements, agreements,
understandings, payments or issuance with respect to the Company or
any of its officers, directors, stockholders, partners, employees
or affiliates that may affect the Underwriters’ compensation
as determined by FINRA.
2.19.2 Payments
Within Six (6) 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 six (6) months prior to the
initial filing of the Registration Statement, other than the
payment to the Underwriters 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 described in the Registration
Statement.
2.19.4 FINRA
Affiliation. Except as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, 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). Except as disclosed in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, the Company (i) does not have any material lending or
other relationship with any bank or lending affiliate of any
Underwriter and (ii) does not intend to use any of the proceeds
from the sale of the Public Securities to repay any outstanding
debt owed to any affiliate of any Underwriter.
2.19.5 Information.
All information provided by the Company in the FINRA questionnaire
to Representative’s Counsel specifically for use by
Representative’s Counsel in connection with its Public
Offering System filings (and related disclosure) with FINRA is
true, correct and complete in all material respects.
2.20 Foreign
Corrupt Practices Act. None of
the Company, any director or officer of the Company, or, to the
knowledge of the Company, any agent, employee, affiliate or other
person acting on behalf of the Company, has (i) made any unlawful
contribution, gift, entertainment or other unlawful expense
relating to political activity; (ii) made any direct or indirect
unlawful payment to any domestic governmental official,
“foreign official” (as defined in the U.S. Foreign
Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (collectively, the
“FCPA”)
or employee; (iii) violated or is in violation of any provision of
the FCPA or any applicable non-U.S. anti-bribery statute or
regulation; (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment; and (v) received notice of any
investigation, proceeding or inquiry by any Governmental Entity
regarding any of the matters in clauses (i)-(iv) above; and the
Company and, to the knowledge of the Company, the Company’s
affiliates have conducted their respective businesses in compliance
with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance
therewith.
2.21 Compliance
with OFAC. None of the Company,
any director or officer of the Company or, to the knowledge of the
Company, any agent, employee, affiliate or other person acting on
behalf of the Company, is currently the subject or target of any
sanctions administered or enforced by the United States Government,
including, without limitation, the U.S. Department of the
Treasury’s Office of Foreign Assets Control
(“OFAC”), the U.S. Department of State, the United
Nations Security Council, the European Union, Her Majesty’s
Treasury, or other relevant sanctions authority (collectively,
“Sanctions”), nor is the Company located, organized or
resident in a country or territory that is the subject of
Sanctions; and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any joint venture partner or other
person or entity, for the purpose of financing the activities of or
business with any person, or in any country or territory, that
currently is the subject or target of any U.S. sanctions
administered by OFAC or in any other manner that will result in a
violation by any person (including any person participating in the
transaction whether as underwriter, advisor, investor or otherwise)
of Sanctions.
2.22 Money
Laundering Laws. The operations
of the Company are and have been conducted at all times in
compliance with applicable financial record-keeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act
of 1970, as amended, the money laundering statutes of all
applicable 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 or any
arbitrator involving the Company with respect to the Money
Laundering Laws is pending or, to the best knowledge of the
Company, threatened.
2.23 Forward-Looking
Statements. No forward-looking
statement (within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act) contained in either the
Registration Statement, Pricing Disclosure Package or the
Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
2.24 Officers’
Certificate. Any certificate
signed by any duly authorized officer of the Company and delivered
to you or to Representative’s Counsel shall be deemed a
representation and warranty by the Company to the Underwriters as
to the matters covered thereby.
2.25 Lock-Up
Agreements.
Schedule
3 hereto contains a complete
and accurate list of each of the Company’s officers,
directors and each owner of 5% of the Company’s outstanding
shares of Common Stock (or securities convertible into or
exercisable for shares of Common Stock) (collectively, the
“Lock-Up
Parties”). The Company
has caused each of the Lock-Up Parties to deliver to the
Representative an executed Lock-Up Agreement, in the form attached
hereto as Exhibit
B (the “Lock-Up
Agreement”), prior to the
execution of this Agreement.
2.26 Subsidiaries.
All direct and indirect Subsidiaries of the Company are duly
organized and in good standing under the laws of the place of
organization or incorporation, and each Subsidiary is in good
standing in each jurisdiction in which its ownership or lease of
property or the conduct of business requires such qualification,
except where the failure to qualify would not have a Material
Adverse Effect. The Company’s ownership and control of each
Subsidiary is as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus
2.27 Related
Party Transactions.
2.27.1 Business
Relationships. Except as set
forth in, or contemplated by, the Registration Statement, the
Pricing Disclosure Package and the Prospectus, there are no
material business relationships or related party transactions
involving the Company or any other person required to be described
in the Pricing Disclosure Package and the Prospectus that have not
been described. Without limiting the generality of the immediately
preceding sentence, no relationship, direct or indirect, exists
between or among the Company on the one hand, and the directors,
officers, stockholders managers or members of the Company on the
other hand, that is required to be described in the Pricing
Disclosure Package and the Prospectus and that is not so described.
Except as described in the Registration Statement, Pricing
Disclosure Package and the Prospectus, since inception, the Company
has not directly or indirectly, extended or maintained credit,
arranged to extend credit, or renewed any extension of credit, in
the form of a personal loan, to or for any director, executive
officer of the Company, or to or for any family member or affiliate
of any director or executive officer of the Company.
2.27.2 No
Relationships with Customers and Suppliers. No relationship,
direct or indirect, exists between or among the Company or any of
its Subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company, its
Subsidiaries or any of the Company’s affiliates, on the other
hand, which is required to be described in the Pricing Disclosure
Package and the Prospectus or a document incorporated by reference
therein and which is not so described.
2.27.3 No
Unconsolidated Entities. 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) and any unconsolidated entity, including,
but not limited to, any structure 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 in the Pricing Disclosure Package and the Prospectus or a
document incorporated by reference therein which have not been
described as required.
2.27.4 No
Loans or Advances to Affiliates. 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 or any Subsidiary 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.
2.28 Board
of Directors. The Board of
Directors of the Company is, and on the Closing Date, will be
comprised of the persons set forth under the heading of the Pricing
Prospectus and the Prospectus captioned “Management.”
The qualifications of the persons serving as board members and the
overall composition of the board comply with the Exchange Act and
the rules and regulations of the Commission promulgated thereunder
(the “Exchange Act
Regulations”), the
Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder
(the “Sarbanes-Oxley
Act”) applicable to the
Company and the listing rules of the Nasdaq Stock Market LLC. At
least one member of the Audit Committee of the Board of Directors
of the Company qualifies, and at the Closing Date, will qualify as
an “audit committee financial expert,” as such term is
defined under Regulation S-K and the listing rules of the Nasdaq
Stock Market LLC. In addition, at least a majority of the persons
serving on the Board of Directors qualify as
“independent,” as defined under the listing rules of
the Nasdaq Stock Market LLC.
2.29 Sarbanes-Oxley
Compliance.
2.29.1 Disclosure
Controls. Except as set forth in the Registration Statement,
Pricing Disclosure Package and the Prospectus, the Company has
developed and maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) under the Exchange Act
Regulations) that comply with the requirements of the Exchange Act;
such disclosure controls and procedures will be designed to ensure
that material information relating to the Company is made known to
the Company’s principal executive officer and principal
financial officer by others within those entities; and so that such
disclosure controls and procedures are effective.
2.29.2 Compliance.
Except as set forth in the Registration Statement, Pricing
Disclosure Package and the Prospectus, the Company has taken the
necessary actions to ensure that, upon the effectiveness of the
Registration Statement, it will be in compliance with all
provisions of the Sarbanes-Oxley Act with which the Company is
required to comply as of the effectiveness of the Registration
Statement, and is taking all steps necessary to ensure that it will
at all times be in compliance with other provisions of the
Sarbanes-Oxley Act as and when the same become applicable to the
Company after the effectiveness of the Registration
Statement.
2.30 Accounting
Controls. The Company maintains
a system of “internal control over financial reporting”
(as defined under Rules 13a-15(f) under the Exchange Act
Regulations) that complies 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 ability
of the Company 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. Since the date of the
latest audited financial statements included in the Pricing
Disclosure Package, there has been no change in the Company’s
internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the
Company’s internal control over financial
reporting.
2.31 No
Investment Company Status. The
Company is not and, at all times up to and including consummation
of the transactions contemplated by this Agreement, and after
giving effect to application of the net proceeds of the Offering as
described in the Pricing Disclosure Package and the Prospectus,
will not be, required to register as an “investment
company” under the Investment Company Act of 1940, as
amended, and is not and will not be an entity
“controlled” by an “investment company”
within the meaning of such act.
2.32 No
Labor Disputes. No labor
disturbance by the employees of the Company exists or, to the best
of the Company’s knowledge, is imminent and the Company is
not aware of any existing or imminent labor disturbances by the
employees of any of its principal suppliers,
manufacturers’ customers
or contractors, which, in either case (individually or in the
aggregate), could reasonably be expected to have a Material Adverse
Effect.
2.33 Intellectual
Property Rights.
(i) The Company and
each of its Subsidiaries owns or possesses or has valid rights to
use all patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service mark registrations,
copyrights, licenses, inventions, trade secrets and similar rights
(“Intellectual Property
Rights”) described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus and necessary for the
conduct of the business of the Company and its Subsidiaries as
currently carried on and as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus. To
the knowledge of the Company, no action or use by the Company or
any of its Subsidiaries 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. Neither the Company nor any of its
Subsidiaries has 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 2.33,
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 2.33,
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 2.33,
reasonably be expected to result in a Material Adverse Change; and
(E) to the Company’s knowledge, no employee of the Company is
in or has ever been 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 technical information
developed by and belonging to the Company which has not been
patented has 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.
(ii) All
licenses for the use of the Intellectual Property described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus are in full force and effect in all material respects
and are enforceable by the Company and, to the Company’s
knowledge, the other parties thereto, in accordance with their
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 to the Company’s knowledge, no 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.
2.34 Taxes.
Each of the Company and its Subsidiaries has filed all returns (as
hereinafter defined) required to be filed with taxing authorities
prior to the date hereof or has duly obtained extensions of time
for the filing thereof. Each of the Company and its Subsidiaries
has paid all taxes (as hereinafter defined) shown as due and
payable on such returns that were filed and has paid all taxes
imposed on or assessed against the Company or such respective
Subsidiary, except for assessments against which appeals have been
or will be promptly taken and as to which adequate reserves have
been provided. The provisions for taxes payable, if any, shown on
the financial statements filed with or as part of the Registration
Statement are sufficient for all accrued and unpaid taxes, whether
or not disputed, and for all periods to and including the dates of
such consolidated financial statements. Except as disclosed in
writing to the Underwriters, (i) no issues have been raised (and
are currently pending) by any taxing authority in connection with
any of the returns or taxes asserted as due from the Company or its
Subsidiaries, and (ii) no waivers of statutes of limitation with
respect to the returns or collection of taxes have been given by or
requested from the Company or its Subsidiaries. The term
“taxes” 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.
2.35 ERISA
Compliance. (i) Each
“employee benefit plan” (within the meaning of Section
3(3) of the Employee Retirement Security Act of 1974, as amended
(“ERISA”)) for which the Company or any member of
its “Controlled Group” (defined as any organization
which is a member of a controlled group of corporations within the
meaning of Section 414 of the Internal Revenue Code of 1986, as
amended (the “Code”)) would have any liability (each a
“Plan”) has been maintained in compliance in all
material respects with its terms and with the requirements of all
applicable statutes, rules and regulations including ERISA and the
Code; (ii) no prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code, has occurred with respect
to any Plan excluding transactions effected pursuant to a statutory
or administrative exemption; (iii) with respect to each Plan
subject to Title IV of ERISA (A) no “reportable event”
(within the meaning of Section 4043(c) of ERISA) has occurred or is
reasonably expected to occur, (B) no “accumulated funding
deficiency” (within the meaning of Section 302 of ERISA or
Section 412 of the Code), whether or not waived, has occurred or is
reasonably expected to occur, (C) the fair market value of the
assets under each Plan exceeds the present value of all benefits
accrued under such Plan (determined based on those assumptions used
to fund such Plan), and (D) neither the Company or any member of
its Controlled Group has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA (other than contributions to
the Plan or premiums to the Pension Benefit Guaranty Corporation in
the ordinary course and without default) in respect of a Plan
(including a “multiemployer plan,” within the meaning
of Section 4001(c)(3) of ERISA); and (iv) each Plan that is
intended to be qualified under Section 401(a) of the Code is so
qualified and nothing has occurred, whether by action or by failure
to act, which would cause the loss of such
qualification.
2.36 Compliance
with Laws. The Company: (i) is
in compliance with all statutes, rules, or regulations applicable
to the Company’s business and operation, including without
limitation all foreign, federal, state and local laws relating to
taxes, environmental protection, occupational health and safety,
product quality and safety and employment and labor matters
(“Applicable
Laws”), except as could
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Change; (ii) has not received any warning
letter, untitled letter or other correspondence or notice from any
other governmental authority 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
(“Authorizations”);
(iii) possesses all material Authorizations and such Authorizations
are valid and in full force and effect and are not in material
violation of any term of any such Authorizations; (iv) has not
received notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from any
governmental authority or third party alleging that any product
operation or activity is in violation of any Applicable Laws or
Authorizations and has no knowledge that any such governmental
authority or third party is considering any such claim, litigation,
arbitration, action, suit, investigation or proceeding; (v) has not
received notice that any governmental authority 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 (vi) 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).
2.37 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.
2.38 Intentionally
Omitted.
2.39 Industry
Data. The statistical,
industry related 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, and such data agree
with the sources from which they are derived.
2.40 Margin
Securities. The Company does
not own any “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 the Offering will be used, directly or indirectly, for
the purpose of purchasing or carrying
2.41 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 Common Stock to be considered a “purpose
credit” within the meanings of Regulation T, U or X of the
Federal Reserve Board.
2.42 Integration.
Neither the Company nor any of its affiliates, nor any person
acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any
security, under circumstances that would cause the Offering to be
integrated with prior offerings by the Company for purposes of the
Securities Act that would require the registration of any such
securities under the Securities Act.
2.43 Title
to Real and Personal Property.
The Company owns or leases all such properties as are necessary to
the conduct of its business as presently operated and as proposed
to be operated as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus. The Company has good
and marketable title in fee simple to all real property and good
and marketable title to all personal property owned by it, in each
case free and clear of any and all Liens except such as are
described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus or such as do not (individually or in
the aggregate) materially affect the value of such property or
materially interfere with the use made or proposed to be made of
such property by the Company; and any real property and buildings
held under lease or sublease by the Company are held by them under
valid, subsisting and enforceable leases with such exceptions as
are not material to, and do not materially interfere with, the use
made and proposed to be made of such property and buildings by the
Company. The Company has not received any notice of any claim
adverse to its ownership of any real or personal property or of any
claim against the continued possession of any real property,
whether owned or held under lease or sublease by the
Company.
2.44 Confidentiality
and Non-Competitions. To the
Company’s knowledge, no director, officer, key employee or
consultant of the Company is subject to any confidentiality,
non-disclosure, non-competition agreement or non-solicitation
agreement with any employer or prior employer that could
materially affect his ability to be
and act in his respective capacity of the Company or be expected to
result in a Material Adverse Change. Each officer, key employee or
consultant of the Company has entered into a confidentiality
agreement in favor of the Company relating to the protection of the
proprietary information and confidential information of the
Company.
2.45 Corporate
Records. The minute books of
the Company have been made available to the Underwriters and
counsel for the Underwriters, and such books (i) contain minutes of
all material meetings and actions of the board of directors
(including each board committee) and stockholders of the Company,
and (ii) reflect all material transactions referred to in such
minutes.
2.46 No
Stabilization. Neither the
Company nor any of its affiliates (within the meaning of Rule 144
under the Securities Act) has taken, directly or indirectly, any
action which constitutes or is designed to cause or result in, or
which could reasonably be expected to constitute, cause or result
in, the stabilization or manipulation of the price of any security
to facilitate the sale or resale of the Public Securities or to
result in a violation of Regulation M under the Exchange
Act.
3. Covenants of the Company. The
Company covenants and agrees as follows:
3.1 Amendments
to Registration Statement. The
Company shall deliver to the Representative, 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 Representative 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 Representative promptly, and confirm the notice in
writing, (i) when any post-effective amendment to the
Registration Statement shall become effective or any amendment or
supplement to the Prospectus shall have been filed; (ii) of
the receipt of any comments from the Commission; (iii) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus 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
Public Securities and Representative’s Securities for
offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes or of any
examination pursuant to Section 8(d) or 8(e) of the 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 Public
Securities and Representative’s Securities. 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.
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 Public Securities as contemplated in this
Agreement, the Warrant Agreement and in the Registration Statement,
the Pricing Disclosure Package and the Prospectus. If at any time
when a prospectus relating to the Public Securities 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 Public Securities, any
event shall occur or condition shall exist as a result of which it
is necessary, in the opinion of counsel for the Underwriters or for
the Company, to (i) amend the Registration Statement in order
that the Registration Statement will not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; (ii) amend or supplement the 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
Representative notice of such event; (B) prepare any amendment
or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement, the 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 Representative with copies of any such amendment
or supplement and (C) file with the Commission any such
amendment or supplement; provided that the Company shall not file
or use any such amendment or supplement to which the Representative
or counsel for the Underwriters shall reasonably object. The
Company will furnish to the Underwriters such number of copies of
such amendment or supplement as the Underwriters may reasonably
request.
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 Common Stock under the Exchange
Act. The Company shall not deregister any of the Common Stock or
Warrants under the Exchange Act without the prior written consent
of the Representative, which consent shall not be unreasonably
withheld.
3.2.4 Free
Writing Prospectuses. The Company will not, without the
prior consent of the Representative, (i) make any offer relating to
the Public Securities that would constitute a “free writing
prospectus” as defined in Rule 405 under the Securities Act,
except for any Issuer Free Writing Prospectus set forth in
Schedule 2-B hereto
and any electronic road show previously approved by the
Representative, or (ii) file, refer to, approve, use or authorize
the use of any “free writing prospectus” as defined in
Rule 405 under the Securities Act with respect to the Offering or
the Public Securities. If at any time any event shall have occurred
as a result of which any Issuer Free Writing Prospectus as then
amended or supplemented would, in the judgment of the Underwriters
or the Company, conflict with the information in the Registration
Statement, the Pricing Prospectus or the Prospectus as then amended
or supplemented or would, in the judgment of the Underwriters or
the Company, include an untrue statement of a material fact or omit
to state any material necessary in order to make the statements
therein, in the light of the circumstances existing at the time of
delivery to the purchaser, not misleading, or if to comply with the
Securities Act or the Securities Act Regulations it shall be
necessary at any time to amend or supplement any Issuer Free
Writing Prospectus, the Company will notify the Representative
promptly and, if requested by the Representative, prepare and
furnish without charge to each Underwriter an appropriate amendment
or supplement (in form and substance satisfactory to the
Representative) that will correct such statement, omission or
conflict or effect such compliance. The Company has complied and
will comply with the requirements of Rule 433 with respect to each
Issuer Free Writing Prospectus including, without limitation, all
prospectus delivery, filing, record retention and legending
requirements applicable to each such Issuer Free Writing
Prospectus.
3.2.5 Testing-the-Waters
Communications. If at any time following the distribution 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 Representative 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. The Company
will promptly notify the Representative of (i) any distribution by
the Company of Written Testing-the-Waters Communications, and (ii)
any request by the Commission for information concerning the
Written Testing-the-Waters Communications
3.3 Delivery
to the Underwriters of Registration Statements. The Company has delivered or made available or
shall deliver or make available to the Representative and counsel
for the Representative, 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 Underwriters, without charge, a conformed copy of the
Registration Statement as originally filed and each amendment
thereto (without exhibits) for each of the Underwriters. The copies
of the Registration Statement and each amendment thereto furnished
to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation
S-T.
3.4 Delivery
to the Underwriters of Prospectuses. The Company has delivered or made available or
will deliver or make available to each Underwriter, without charge,
as many copies of each Preliminary Prospectus as such 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 each Underwriter, without charge, during
the period when a prospectus relating to the Public Securities is
(or, but for the exception afforded by Rule 172 of the Securities
Act Regulations, would be) required to be delivered under the
Securities Act, such number of copies of the Prospectus (as amended
or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation
S-T.
3.5 Effectiveness
and Events Requiring Notice to the
Representative. The Company
shall use its reasonable best efforts to cause the Registration
Statement to remain effective with a current prospectus for at
least nine (9) months after the Applicable Time, and shall notify
the Representative 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 Public Securities 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, in light of the circumstances under which it was
made, 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 three (3) 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 (3) fiscal quarters immediately preceding the announcement of
any quarterly financial information.
3.7 Listing.
The Company shall use its reasonable best efforts to maintain the
listing of the Common Stock (including the Firm Shares, Option
Shares and shares of Common Stock issuable upon exercising of the
Warrants) and the Warrants on the NasdaqCM 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 Representative
and the Company, which shall initially be Redchip, which firm shall
be experienced in assisting public companies in their relations
with their security holders, and shall retain such firm or another
firm reasonably acceptable to the Representative for a period of
not less than two (2) years after the Effective
Date.
3.9 Reports
to the Representative.
3.9.1 Periodic
Reports, etc. For a period of three (3) years after the
Effective Date, at the Representative’s request, the Company
shall furnish to the Representative 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 Representative: (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; (v) a copy
of each report or other communication furnished to stockholders and
(vi) such additional documents and information with respect to the
Company and the affairs of any future subsidiaries of the Company
as the Representative may from time to time reasonably request;
provided the Representative shall sign, if requested by the
Company, a Regulation FD compliant confidentiality agreement which
is reasonably acceptable to the Representative and
Representative’s Counsel in connection with the
Representative’s receipt of such information. Documents filed
with the Commission pursuant to its EDGAR system or otherwise
publicly filed or made available shall be deemed to have been
delivered to the Representative pursuant to this Section
3.9.1.
3.9.2 Transfer
Agent; Transfer Sheets. For a period of three (3) years
after the Effective Date, the Company shall retain a transfer agent
and registrar acceptable to the Representative (the
“Transfer
Agent”) and shall furnish to the Representative at the
Company’s sole cost and expense such transfer sheets of the
Company’s securities as the Representative may reasonably
request, including the daily and monthly consolidated transfer
sheets of the Transfer Agent and DTC. Philadelphia Stock Transfer
is acceptable to the Representative to act as Transfer Agent for
the shares of Common Stock.
3.9.3 Warrant
Agent. For so long as the Warrants are outstanding, the
Company shall retain a warrant agent for the Warrants reasonably
acceptable to the Representative (the “Warrant Agent”). Philadelphia
Stock Transfer is acceptable to the Representative to act as
Warrant Agent for the Warrants.
3.9.4 Trading
Reports. For a period of two (2) years after the date of
this Agreement, the Company shall provide to the Representative, at
the Company’s expense, such reports published by NasdaqCM
relating to price trading of the Public Securities, as the
Representative shall reasonably request.
3.10 Payment
of Expenses
3.10.1 General
Expenses Related to the Offering. The Company hereby agrees
to pay on each of the Closing Date and the Option Closing Date, if
any, to the extent not paid at the Closing Date, all 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 Public
Securities to be issued and sold in the Offering with the
Commission; (b) all filing fees associated with the review of the
Offering by FINRA; (c) all fees and expenses relating to the
listing of such Common Stock on the NasdaqCM; (d) all fees,
expenses and disbursements relating to the registration or
qualification of the Public Securities under the “blue
sky” securities laws of such states and other jurisdictions
as the Representative may reasonably designate (including, without
limitation, all filing and registration fees, and the reasonable
fees and disbursements of “blue sky” counsel), it being
agreed that such fees and expenses will be limited if the offering
is commenced on the NasdaqCM to make a payment of $5,000 to such
counsel on the Closing Date; (e) all fees, expenses and
disbursements relating to the registration, qualification or
exemption of the Public Securities under the securities laws of
such foreign jurisdictions as the Representative may reasonably
designate; (f) the costs of all mailing and printing of the
underwriting documents (including, without limitation, this
Agreement, any blue sky surveys and, if appropriate, any agreement
among underwriters, selected dealers’ agreement,
underwriters’ questionnaire and power of attorney),
Registration Statements, Prospectuses and all amendments,
supplements and exhibits thereto and as many preliminary and final
Prospectuses as the Representative may reasonably deem necessary;
(g) the costs and expenses of the public relations firm referred to
in Section 3.8 hereof; (h) the costs of preparing, printing and
delivering certificates representing the Public Securities; (i)
fees and expenses of the Transfer Agent for the shares of Common
Stock and Warrants; (j) stock transfer and/or stamp taxes, if any,
payable upon the transfer of securities from the Company to the
Underwriters; (k) 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 The
New York Times; (l) the fees and expenses of the
Company’s accountants; (m) the fees and expenses of the
Company’s legal counsel and other agents and representatives;
(n) the reasonable and documented fees and expenses of
Underwriter’s legal counsel not to exceed $125,000; (o) the
$19,950 cost associated with the Underwriters’ use of
Ipreo’s book building, prospectus tracking and compliance
software for the Offering and (p) up to $25,000 of the
Underwriters’ actual accountable “road show”
expenses for the offering. The Representative may deduct from the
net proceeds of the Offering payable to the Company on the Closing
Date, or the Option Closing Date, if any, the expenses set forth
herein to be paid by the Company to the Underwriters, provided,
however, that in the event that the Offering is terminated, the
Company agrees to reimburse the Underwriters pursuant to Section
8.3 hereof.
3.11 Non-accountable
Expenses. The Company further
agrees that, in addition to the expenses payable pursuant to
Section 3.10.1, on the Closing Date it shall pay to the
Representative, by deduction from the net proceeds of the Offering
contemplated herein, a non-accountable expense allowance equal to
one percent (1%) of the gross proceeds received by the Company from
the sale of the Firm Securities less the Advance (as such term is defined in
Section 8.3 hereof).
3.12 Reservation
of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient
number of shares of Common Stock for the purpose of enabling the
Company to issue the Public Securities.
3.13 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.
3.14 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
Effective Date, an earnings statement (which need not be certified
by an 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 beginning after the Effective
Date.
3.15 Stabilization.
Neither the Company nor, to its knowledge, any of its employees,
directors or stockholders (without the consent of the
Representative) 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
Public Securities.
3.16 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.
3.17 Accountants.
As of the Effective Date, the Company shall have retained an
independent registered public accounting firm, as required by the
Securities Act and the Regulations and the PCAOB, reasonably
acceptable to the Representative and the Company shall retain a
nationally recognized independent public accounting firm for a
period of at least three (3) years after the Effective Date. The
Representative acknowledges that the Auditor is acceptable to the
Representative.
3.18 FINRA.
For a period of 90 days from the later of the Closing Date or the
Option Closing Date, the Company shall advise the Representative
(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 days 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).
3.19 No
Fiduciary Duties. The Company
acknowledges and agrees that the Underwriters’ responsibility
to the Company is solely contractual in nature and that none of the
Underwriters or their 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 their affiliates in
connection with the Offering and the other transactions
contemplated by this Agreement.
3.20 Company
Lock-Up Agreements.
3.20.1 Restrictions
on Sales of Capital Stock. The
Company, on behalf of itself and any successor entity of the
Company, agrees that, without the prior written consent of the
Representative, it will not, during the period commencing on the
date of this Agreement and ending on the nine (9) month anniversary
for officers and directors and six (6) month anniversary for 5% or
greater stock holders (the “Lock-Up
Period”), (i) 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 (other than
the Option Securities and Common Stock issued pursuant to employee
benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or pursuant to
currently outstanding options, warrants or rights) provided that
either (a) such shares shall not vest during the Lock-Up Period or
(b) the grantee of such shares will execute a Lock-Up Agreement;
(ii) 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 other than
a registration statement on Form S-4 or S-8; (iii) complete any
offering of debt securities of the Company, other than entering
into a line of credit with a traditional bank ; or (iv) 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 (i), (ii) or (iv) 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 3.19 shall not apply to (i)
the Public Securities to be sold hereunder, (ii) the issuance by
the Company of shares of Common Stock upon the exercise of a stock
option or warrant or the conversion of a security outstanding on
the date hereof, which is disclosed in the Registration Statement,
Pricing Disclosure Package and Prospectus, (iii) the issuance by
the Company of stock options or shares of capital stock of the
Company under any equity compensation plan of the Company, and (iv)
the issuance by the Company of shares of Common Stock to
consultants in the Company’s ordinary course of business and
not for capital raising transactions.
3.20.2 Restriction
on Continuous Offerings. Notwithstanding the restrictions
contained in Section 3.19.1, the Company, on behalf of itself and
any successor entity, agrees that, without the prior written
consent of the Representative,
it will not, for a period of 12 months after the date of this
Agreement, directly or indirectly in any
“at-the-market”, or continuous equity transaction,
offer to 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.
3.21 Release
of D&O Lock-up Period. If
the Representative, in its sole discretion, agrees to release or
waive the restrictions set forth in the Lock-Up Agreements
described in Section 2.25 hereof 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 if
required by applicable law to announce the impending release or
waiver by a press release substantially in the form of
Exhibit C
hereto through a major news service at
least two (2) Business Days before the effective date of the
release or waiver.
3.22 Blue
Sky Qualifications. The Company
shall use its best efforts, in cooperation with the Underwriters,
if necessary, to qualify the Public Securities for offering and
sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representative may
designate and to maintain such qualifications in effect so long as
required to complete the distribution of the Public Securities;
provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself
to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject.
3.23 Reporting
Requirements. The Company,
during the period when a prospectus relating to the Public
Securities 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
Public Securities as may be required under Rule 463 under the
Securities Act Regulations.
3.24 Emerging
Growth Company Status. The
Company shall promptly notify the Representative 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 Public
Securities within the meaning of the Securities Act, and (ii)
fifteen (15) days following the completion of the Lock-Up
Period.
3.25 Press
Releases. Prior to the Closing
Date and any 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 Representative is notified),
without the prior written consent of the Representative, which
consent shall not be unreasonably withheld, unless in the judgment
of the Company and its counsel, and after notification to the
Representative, such press release or communication is required by
law.
3.26 Sarbanes-Oxley.
The Company shall at all times comply with all applicable
provisions of the Sarbanes-Oxley Act in effect from time to time
and applicable to the Company.
3.27 IRS
Forms. If requested by the
Representative, the Company shall deliver to each Underwriter (or
its agent), prior to or at the Closing Date, a properly completed
and executed Internal Revenue Service Form W-9 or Form W-8, as
appropriate, together with all required attachments to such
form.
4. Conditions of Underwriters’
Obligations. The obligations of the Underwriters to purchase
and pay for the Public Securities, as provided herein, shall be
subject to (i) the continuing accuracy of the representations and
warranties of the Company as of the date hereof and as of each of
the Closing Date and the Option Closing Date, if any; (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 shall have become effective not later than
5:30 p.m., Eastern time, on the date of this Agreement or such
later date and time as shall be consented to in writing by you,
and, at each of the Closing Date and any Option Closing Date, no
stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto shall have been
issued under the Securities Act, no order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus shall have
been issued and no proceedings for any of those purposes shall have
been instituted or are pending or, to the Company’s
knowledge, contemplated by the Commission. The Company has complied
with each request (if any) from the Commission for additional
information. A 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) under the Securities Act
Regulations (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 under the Securities Act
Regulations.
4.1.2 FINRA
Clearance. On or before the Effective Date, the
Representative shall have received clearance from FINRA as to the
amount of compensation allowable or payable to the Underwriters as
described in the Registration Statement.
4.1.3 NasdaqCM
Stock Market Clearance. On the Closing Date, the
Company’s Common Stock (including the shares of Common Stock
underlying the Warrants and Option Securities) and the Warrants
shall have been approved for listing on the NasdaqCM. On the first
Option Closing Date (if any), the Company’s Common Stock
(including the Common Stock underlying the Warrants and Option
Securities) shall have been approved for listing on the NasdaqCM,
subject only to official notice of issuance.
4.2 Company
Counsel Matters.
4.2.1 Closing
Date Opinion of Counsel to the Company. On the Closing Date,
the Representative shall have received the favorable opinions of
Lucosky, Brookman LLP, counsel to the Company, and a written
statement providing certain “10b-5” negative
assurances, dated the Closing Date and addressed to the
Representative, substantially in a form acceptable to the
Representative.
4.2.2 Option
Closing Date Opinions of Counsel. On the Option Closing
Date, if any, the Representative shall have received the favorable
opinions of counsel listed in Section 4.2.1, dated the Option
Closing Date, addressed to the Representative and in form and
substance reasonably satisfactory to the Representative, confirming
as of the Option Closing Date, the statements made by such counsel
in its opinion delivered on the Closing Date.
4.2.3 Reliance.
In rendering such opinions, such counsel may rely: (i) as to
matters involving the application of laws other than the laws of
the United States and jurisdictions in which they are admitted, to
the extent such 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 Representative) of other
counsel reasonably acceptable to the Representative, 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
Representative’s Counsel if requested.
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 Representative and in form and substance
satisfactory in all respects to you and to Representative’s
Counsel from the Auditor, dated as of the date of this
Agreement.
4.3.2 Bring-down
Comfort Letter. At each of the Closing Date and the Option
Closing Date, if any, the Representative shall have received from
the Auditor a letter, dated as of the Closing Date or the 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 the Option Closing Date, as applicable.
4.4 Officers’
Certificates.
4.4.1 Officers’
Certificate. The Company shall have furnished to the
Representative a certificate, dated the Closing Date and any Option
Closing Date (if such date is other than the Closing Date), of its
Chief Executive Officer and its Chief Financial Officer stating
that (i) such officers have carefully examined the Registration
Statement, the Pricing Disclosure Package, any Issuer Free Writing
Prospectus and the Prospectus and, in their opinion, the
Registration Statement and each amendment thereto, as of the
Applicable Time and as of the date of this Agreement and as of the
Closing Date (or any Option Closing Date if such date is other than
the Closing Date) 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 (or any Option Closing
Date if such date is other than the Closing Date), any Issuer Free
Writing Prospectus as of its date and as of the Closing Date (or
any Option Closing Date if such date is other than the Closing
Date), the Prospectus and each amendment or supplement thereto, as
of the respective date thereof and as of the Closing Date, 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) to the best of
their knowledge after reasonable investigation, as of the Closing
Date (or any Option Closing Date if such date is other than the
Closing Date), the representations and warranties of the Company in
this Agreement are true and correct in all material respects
(except for those representations and warranties qualified as to
materiality, which shall be true and correct in all respects and
except for those representations and warranties which refer to
facts existing at a specific date, which shall be true and correct
as of such date) 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 any Option
Closing Date if such date is other than the Closing Date), 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, 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 each of the Closing Date and the Option
Closing Date, if any, the Representative shall have received a
certificate of the Company signed by the Secretary of the Company,
dated the Closing Date or the Option Date, as the case may be,
respectively, certifying: (i) that each of the Charter and
by-laws 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 its 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 each of the Closing Date and each Option Closing Date, if any:
(i) there shall have been no Material Adverse Change and no
material change in the capital stock or debt of the Company from
the latest dates as of which such information is set forth in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, except as set forth in the Registration Statement,
Pricing Disclosure 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 Insider before or by any
court or federal or state commission, board or other administrative
agency wherein an unfavorable decision, ruling or finding may
result in a Material Adverse Change, 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; (iv) no action shall
have been taken and no law, statute, rule, regulation or order
shall have been enacted, adopted or issued by any Governmental
Entity which would prevent the issuance or sale of the Public
Securities or materially and adversely affect or potentially
materially and adversely affect the business or operations of the
Company; (v) no injunction, restraining order or order of any other
nature by any federal or state court of competent jurisdiction
shall have been issued which would prevent the issuance or sale of
the Public Securities or materially and adversely affect or
potentially materially and adversely affect the business or
operations of the Company; and (vi) 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, the
Prospectus nor any Issuer Free Writing 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 the
light of the circumstances under which they were made, not
misleading.
4.6 No
Material Misstatement or Omission. The Underwriters shall not have discovered and
disclosed to the Company on or prior to the Closing Date and any
Option Closing Date that the Registration Statement or any
amendment or supplement thereto contains an untrue statement of a
fact which, in the opinion of counsel for the Underwriters, is
material or omits to state any fact which, in the opinion of such
counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading, or that
the Registration Statement, Pricing Disclosure Package, any Issuer
Free Writing Prospectus or the Prospectus or any amendment or
supplement thereto contains an untrue statement of fact which, in
the opinion of such counsel, is material or omits to state any fact
which, in the opinion of such counsel, is material and is necessary
in order to make the statements, in the light of the circumstances
under which they were made, not misleading.
4.7 Corporate
Proceedings. All corporate
proceedings and other legal matters incident to the authorization,
form and validity of each of this Agreement, the Warrants, the
Warrant Agreement, the Representative’s Warrant, the
Representative’s Warrant Agreement, the Public Securities,
the Registration Statement, the Pricing Disclosure Package, each
Issuer Free Writing Prospectus, if any, and the Prospectus and all
other legal matters relating to this Agreement, the Warrants, the
Warrant Agreement, the Representative’s Warrant, the
Representative’s Warrant Agreement and the transactions
contemplated hereby and thereby shall be reasonably satisfactory in
all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass
upon such matters.
4.8 Delivery
of Agreements.
4.8.1 Effective
Date Deliveries. On or before the Effective Date, the
Company shall have delivered to the Representative executed copies
of the Lock-Up Agreements from each of the persons listed in
Schedule 3
hereto.
4.8.2 Closing
Date Deliveries. On the Closing Date, the Company shall have
delivered to the Representative an executed copy of the Warrant
Agreement and the Representative’s Warrant
Agreement.
4.9 Additional
Documents. At the Closing Date
and at each Option Closing Date (if any), Representative’s
Counsel shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling
Representative’s Counsel to deliver an opinion to the
Underwriters, 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 Public
Securities and the Representative’s Securities as herein
contemplated shall be satisfactory in form and substance to the
Representative and Representative’s
Counsel.
5. Indemnification.
5.1 Indemnification
of the
Underwriters.
5.1.1 General.
Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless each 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 any such
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 Issuer Free Writing 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 (whether in person or electronically); 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 Public Securities and
Representative’s Securities under the securities laws thereof
or filed with the Commission, any state securities commission or
agency, the NasdaqCM 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 Underwriters’
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.
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, and the fees and expenses of such counsel shall be
at the expense of the Company, and shall be advanced by the Company
to the Underwriter Indemnified Party upon request.. 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 Underwriters, 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.
Each Underwriter, severally and not jointly, 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 several Underwriters, 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
Underwriters’ 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 any Underwriter, such 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 several Underwriters by the provisions of
Section 5.1.2. The Company agrees promptly to notify the
Representative 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 Public Securities
or in connection with the Registration Statement, the Pricing
Disclosure Package, the Prospectus, or any Issuer Free Writing
Prospectus or any Written Testing-the-Waters
Communication.
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 Underwriters, on the other, from the Offering of the Public
Securities, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company, on
the one hand, and the Underwriters, on the other, 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 Underwriters, 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 Public Securities 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
Underwriters with respect to the Public Securities 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 Underwriters, 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
Underwriters 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 (even if the Underwriters were treated as
one entity for such purpose) 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 an Underwriter be required to contribute any amount
in excess of the amount by which the total underwriting discounts
and commissions received by such Underwriter with respect to the
Offering of the Public Securities exceeds the amount of any damages
that such 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 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.
6. Default
by an Underwriter.
6.1 Default
Not Exceeding 10% of Firm Securities or Option
Securities. If any Underwriter
or Underwriters shall default in its or their obligations to
purchase the Firm Securities or the Option Securities, if the
Over-allotment Option is exercised hereunder, and if the number of
the Firm Securities or Option Securities with respect to which such
default relates does not exceed in the aggregate 10% of the number
of Firm Securities or Option Securities that all Underwriters have
agreed to purchase hereunder, then such Firm Securities or Option
Securities to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to their respective
commitments hereunder.
6.2 Default
Exceeding 10% of Firm Securities or Option
Securities. In the event that
the default addressed in Section 6.1 relates to more than 10% of
the Firm Securities or Option Securities, the Representative may in
its discretion arrange for it or for another party or parties to
purchase such Firm Securities or Option Securities to which such
default relates on the terms contained herein. If, within one (1)
Business Day after such default relating to more than 10% of the
Firm Securities or Option Securities, the Representative does not
arrange for the purchase of such Firm Securities or Option
Securities, then the Company shall be entitled to a further period
of one (1) Business Day within which to procure another party or
parties satisfactory to the Representative to purchase said Firm
Securities or Option Securities on such terms. In the event that
neither the Representative nor the Company arrange for the purchase
of the Firm Securities or Option Securities to which a default
relates as provided in this Section 6, this Agreement will
automatically be terminated by the Representative or the Company
without liability on the part of the Company (except as provided in
Sections 3.10 and 5 hereof) or the several Underwriters (except as
provided in Section 5 hereof); provided, however, that if such
default occurs with respect to the Option Securities, this
Agreement will not terminate as to the Firm Securities; and
provided, further, that nothing herein shall relieve a defaulting
Underwriter of its liability, if any, to the other Underwriters and
to the Company for damages occasioned by its default
hereunder.
6.3 Postponement
of Closing Date. In the event
that the Firm Securities or Option Securities to which the default
relates are to be purchased by the non-defaulting Underwriters, or
are to be purchased by another party or parties as aforesaid, the
Representative or the Company shall have the right to postpone the
Closing Date or Option Closing Date for a reasonable period, but
not in any event exceeding five (5) Business Days, in order to
effect whatever changes may thereby be made necessary in the
Registration Statement, the Pricing Disclosure Package or the
Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment to the Registration
Statement, the Pricing Disclosure Package or the Prospectus that in
the opinion of counsel for the Underwriter may thereby be made
necessary. The term “Underwriter” as used in this Agreement shall include
any party substituted under this Section 6 with like effect as if
it had originally been a party to this Agreement with respect to
such Firm Securities.
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 comply with the
Sarbanes-Oxley Act, the Exchange Act and the listing rules of the
NasdaqCM or any other national securities exchange, as the case may
be, in the event the Company seeks to have any of its securities
listed on another exchange or quoted on an automated quotation
system, 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
NasdaqCM.
7.2 Prohibition
on Press Releases and Public Announcements. The Company shall not issue press releases or
engage in any other publicity, without the Representative’s
prior written consent, for a period ending at 5:00 p.m., Eastern
time, on the first (1st)
Business Day following the fortieth (40th)
day after the Closing Date, other than normal and customary
releases issued in the ordinary course of the Company’s
business.
7.3 Right
of First Refusal. Provided that
the Firm Securities are sold in accordance with the terms of this
Agreement, for a period of twenty four (24) months from the
Closing, the Company grants the Representative the right of first
refusal (the “Right of First Refusal”) to act as lead
managing underwriter and book-runner and/or placement agents for
any and all future public or private equity, equity-linked or debt
(excluding commercial bank debt) offerings undertaken during such
period by the Company, any Subsidiary, or any successor to the
Company (each, a “Subject Transaction”), at
Representative’s sole and exclusive discretion, on terms and
conditions customary to the Representative for such Subject
Transactions. For the avoidance of any doubt, the Company shall not
retain, engage or solicit any additional investment banker,
book-runner, financial advisor, underwriter and/or placement agent
in a Subject Transaction without the express written consent of
Representative.
The
Company shall notify Representative of its intention to pursue a
Subject Transaction, including the material terms thereof, by
providing written notice thereof by registered mail or overnight
courier service addressed to Representative. If Representative
fails to exercise its Right of First Refusal with respect to any
Subject Transaction within ten (10) Business Days after the mailing
of such written notice, then Representative shall have no further
claim or right with respect to the Subject Transaction. The
Representative may elect, in its sole and absolute discretion, not
to exercise its Right of First Refusal with respect to any Subject
Transaction; provided that any such election shall not adversely
affect its Right of First Refusal with respect to any other Subject
Transaction during the twenty four (24) month period agreed to
above.
In
the event the Company fails to comply with this provision, damages
shall be computed as the maximum allowable amount under applicable
FINRA rules and regulations.
7.4 Post
Offering Investments. Provided
that the Firm Securities are sold in accordance with the terms of
this Agreement, in the event any individual or entity (including
affiliates of such persons) that was introduced to the Company by
any Underwriter subsequently provides the Company capital via any
transaction during the period commencing 91 days following the
Closing Date and ending eighteen months thereafter, .the Company
shall be obligated to pay the applicable Underwriter a cash fee of
7% of the gross proceeds of any such
investments.
8. Effectiveness
of this Agreement and Termination Thereof.
8.1 Effectiveness
of the Agreement. This
Agreement shall become effective when the Company and the
Representative have executed the same and delivered counterparts of
such signatures to the other party.
8.2 Termination.
The Representative shall have the right to terminate this Agreement
at any time prior to any 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 the Nasdaq Stock Market
LLC 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 Governmental Entity 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 Firm Securities or Option Securities; or
(vii) if the Company is in material breach of any of its
representations, warranties or covenants hereunder; or
(viii) if the Representative shall have become aware after the
date hereof of a material adverse change in the conditions or
prospects of the Company, or a material adverse change in general
market conditions as in the Representative’s reasonable
judgment would make it impracticable to proceed with the offering,
sale and/or delivery of the Public Securities or to enforce
contracts made by the Underwriters for the sale of the Public
Securities.
8.3 Expenses.
Notwithstanding anything to the contrary in this Agreement, except
in the case of a default by the Underwriters, pursuant to Section
6.2 above, in the event that this Agreement is terminated prior to
the Closing Date or is not otherwise 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 Underwriters their actual and accountable
out-of-pocket expenses related to the transactions contemplated
herein then due and payable (including the fees and disbursements
of Representative Counsel) up to $100,000, inclusive of the $50,000
advance for accountable expenses (the “Advance”) previously paid by the Company to the
Representative pursuant to that letter entitled Investment Banking
Services and dated May 1, 2020 (the “Engagement
Letter”) and upon demand
the Company shall pay the full amount thereof to the Representative
on behalf of the Underwriters; 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 Representative will be
reimbursed to the Company to the extent not actually incurred in
compliance with FINRA Rule 5110(f)(2)(C).
8.4 Survival
of 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 Public
Securities.
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 or e-mail
and confirmed and shall be deemed given when so delivered, faxed or
e-mailed and confirmed or if mailed, two (2) days after such
mailing.
If to the Representative:
Joseph Gunnar & Co., LLC
30 Broad Street, 11th
Floor
New York, New York 10004
Attn: Stephan Stein, CEO
Fax No.:
e-mail:
with a copy (which shall not constitute notice) to:
Littman Krooks LLP
655 Third Avenue, 20th Floor
New York, NY 10017
Attn: Steven D. Uslaner, Esq.
Fax No.: 212-490-2990
e-mail:
If to the Company:
Recruiter.com Group, Inc.
100
Waugh Dr. Suite 300
Houston,
Texas 77007
Attn: Evan Sohn, Chief Executive Officer
e-mail:
with a copy (which shall not constitute notice), in each case,
to:
Lucosky
Brookman LLP
101
Wood Avenue South, Fifth Floor
Woodbridge,
New Jersey 08830
Attention:
Joseph Lucosky, Esq.
Fax No:
732 395 4401
email:
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 Absence
of Fiduciary Relationship. The
Company acknowledges and agrees that:
(i) each
Underwriter’s responsibility to the Company is solely
contractual in nature, each Underwriter has been retained solely to
act as an underwriter in connection with the Offering and no
fiduciary, advisory or agency relationship between the Company and
the Underwriters has been created in respect of any of the
transactions contemplated by this Agreement, irrespective of
whether either the Representative has advised or is advising the
Company on other matters;
(ii) the
price of the Public Securities set forth in this Agreement was
established by the Company following discussions and
arm’s-length negotiations with the Representative, and the
Company are capable of evaluating and understanding, and
understands and accepts, the terms, risks and conditions of the
transactions contemplated by this Agreement; and
(iii) it
has been advised that the Representative and their respective
affiliates are engaged in a broad range of transactions which may
involve interests that differ from those of the Company and that
the Underwriters have no obligation to disclose such interests and
transactions to the Company by virtue of any fiduciary, advisory or
agency relationship.
9.4 Research
Analyst Independence. The
Company acknowledges that each Underwriter’s research
analysts and research departments are required to be independent
from its investment banking division and are subject to certain
regulations and internal policies, and that such
Underwriter’s research analysts may hold views and make
statements or investment recommendations and/or publish research
reports with respect to the Company and/or the Offering that differ
from the views of their investment banking division. The Company
acknowledges that each Underwriter is a full service securities
firm and as such from time to time, subject to applicable
securities laws, rules and regulations, may effect transactions for
its own account or the account of its customers and hold long or
short positions in debt or equity securities of the Company;
provided, however, that nothing in this Section 9.4 shall relieve
the Underwriter of any responsibility or liability it may otherwise
bear in connection with activities in violation of applicable
securities laws, rules or regulations.
9.5 Amendment.
This Agreement may only be amended by a written instrument executed
by each of the parties hereto.
9.6 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 those certain letter
agreements between JG and the Company dated March 11, 2019, as
amended and September 18, 2019, as amended shall remain in full
force and effect; provided, that, in the event of a conflict
between the terms of the foregoing agreements and this Agreement,
the terms of this Agreement shall prevail.
9.7 Binding
Effect. This Agreement shall
inure solely to the benefit of and shall be binding upon the
Representative, the Underwriters, the Company, and the controlling
persons, directors and officers referred to in Section 5.2 hereof,
and their respective successors, legal representatives, 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 any of the
Underwriters.
9.8 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 the New York Supreme
Court, County of New York, or in the United States District Court
for the Southern District 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 hereof. 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 own behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and
affiliates) and each of the Underwriters hereby irrevocably waives,
to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated
hereby.
9.9 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.
9.10 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]
If
the foregoing correctly sets forth the understanding between the
Underwriters 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,
RECRUITER.COM
GROUP, INC.
By:_________________________
Name:
Evan Sohn
Title:
Chief Executive Officer
Confirmed as of the date first written
above, on behalf of itself and as
Representative of the several Underwriters, if any
named on Schedule 1
hereto:
JOSEPH
GUNNAR & CO. LLC
By:_______________________
Stephan A. Stein
President
SCHEDULE 1
Underwriter
|
Total Number of Firm
Securities to be
Purchased
|
Number of Option Securities to be Purchased if Over-Allotment
Option is Fully Exercised
|
|
Number of Firm Units
|
Number of Option Shares
|
Number of Option Warrants
|
Joseph Gunnar & Co., LLC
|
2,400,000
|
360,000
|
360,000
|
Totals
|
|
|
|
SCHEDULE 2-A
Pricing Information
Number of Firm Units: 2,400,000
Number of Option Shares: 360,000
Number of Option Warrants: 360,000
Public Offering Price per Firm Unit: $5.00
Public Offering Price per Option Share $4.99
Public Offering Price per Option Warrant: $0.01
Underwriting Discount per Firm Unit: $0.35
Underwriting Discount per Option Share: $0.3493
Underwriting Discount per Option Warrant: $0.0007
Proceeds to Company per Firm Unit (before expenses and credit):
$4.65
Proceeds to Company per Option Share (before expenses and credit):
$4.6407
Proceeds to Company per Option Warrant (before expenses and
credit): $0.0093
Underwriting non-accountable expense allowance per Firm Unit:
$0.05
SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
None
SCHEDULE 2-C
Written Testing-the-Waters Communications
None
SCHEDULE 3
List of Lock-Up Parties
Officers:
Miles
Jennings
Judy
Krandel
Evan
Sohn
Ashley
Saddul
Rick
Roberts
|
|
|
|
|
|
Directors:
|
Timothy
O’Rourke
Douglas
Roth
Deborah
Leff
Wallace
D. Ruiz
Steve
Pemberton
Robert
Heath
|
|
|
EXHIBIT A
Form of Representative’s Warrant Agreement
Reference
is made to Exhibit 4.8 to the
Registration Statement on Form S-1 (File Number
333-249208) of the
Company, which is incorporated by reference.
EXHIBIT B
Form of Lock-Up Agreement
[FURNISHED SEPARATELY]
US_ACTIVE--7435-7435-84.-YPHAM
EXHIBIT C
Form of Press Release
Recruiter.com Group, Inc.
[Date]
Recruiter.com Group, Inc. (the
“Company”) announced today that Joseph Gunnar &
Co., LLC, acting as representative for the underwriters in the
Company’s recent public offering of the Company’s
units, consisting of one share of common stock and one warrant to
purchase one share of common stock, is [waiving] [releasing] a
lock-up restriction with respect to _________ shares of the
Company’s common stock held by [certain officers, directors
or other security holders] [an officer, director or security
holder] 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.
THE REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE
HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS
PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED
HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL,
TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A
PERIOD OF 180 DAYS FOLLOWING THE EFFECTIVE DATE OF THE REGISTRATION
STATEMENT (DEFINED BELOW) TO ANYONE OTHER THAN (I) JOSEPH GUNNAR
& CO LLC OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION
WITH THE OFFERING, (II) A BONA FIDE OFFICER OR PARTNER OF JOSEPH
GUNNAR & CO., LLC OR OF ANY SUCH UNDERWRITER OR SELECTED
DEALER OR (III) AS OTHERWISE
PERMITTED BY FINRA RULE 5110(E)(1).
THIS WARRANT IS NOT EXERCISABLE PRIOR TO DECEMBER 26,
2021. VOID AFTER 5:00 P.M., EASTERN
TIME, JUNE 29, 2026.
WARRANT TO PURCHASE COMMON STOCK
RECRUITER.COM GROUP, INC.
Warrant Shares:
Initial Exercise Date: December 26, 2021
THIS WARRANT TO PURCHASE COMMON STOCK (the
“Warrant”)
certifies that, for value received, . or his assigns (the
“Holder”)
is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on
or after December 26, 2021 (the date that is 180 days following the
Effective Date, the “Initial Exercise
Date”) and, in accordance
with FINRA Rule 5110(g)(8)(A), prior to or at 5:00 p.m. (New York
time) on the date that is five (5) years following the Effective
Date (the “Termination
Date”) but not
thereafter, to subscribe for and purchase from RECRUITER.COM GROUP,
INC., a Nevada corporation (the
“Company”),
up to shares of Common Stock, par value $0.0001 per share, of the
Company (the “Warrant
Shares”), as subject to
adjustment hereunder. The purchase price of one share of Common
Stock under this Warrant shall be equal to the Exercise Price, as
defined in Section 2(b).
Section
1. Definitions.
In addition to the terms defined elsewhere in this Warrant, the
following terms have the meanings indicated in this Section
1:
“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed
under Rule 405 under the Securities Act.
“Business
Day” means any day except
any Saturday, any Sunday, any day which is a federal legal holiday
in the United States or any day on which banking institutions in
the State of New York are authorized or required by law or other
governmental action to close.
“Commission”
means the United States Securities and Exchange
Commission.
“Common Stock” means the
common stock of the Company, par value $0.0001 per share, and any
other class of securities into which such securities may hereafter
be reclassified or changed.
“Common Stock Equivalents”
means any securities of the Company or the Subsidiaries which would
entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock
“Exchange
Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Person”
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any
kind.
“Rule
144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“Securities
Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
“Trading
Day” means a day on which
the Nasdaq Capital Market is open for trading.
“Trading
Market” means any of the
following markets or exchanges on which the Common Stock is listed
or quoted for trading on the date in question: the NYSE American
LLC, the Nasdaq Capital Market, the Nasdaq Global Market, the
Nasdaq Global Select Market, or the New York Stock Exchange (or any
successors to any of the foregoing).
“VWAP”
means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time)), (b) if OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of a share of Common
Stock for such date (or the nearest preceding date) on the OTCQB or
OTCQX as applicable, (c) if the Common Stock is not then listed or
quoted for trading on the OTCQB or OTCQX and if prices for the
Common Stock are then reported in the “Pink Sheets”
published by OTC Markets Group, Inc. (or a similar organization or
agency succeeding to its functions of reporting prices), the most
recent bid price per share of the Common Stock so reported, or
(d) in all other cases, the fair market value of a share of
Common Stock as determined by an independent appraiser selected in
good faith by the Holder and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the
Company.
Section
2. Exercise.
a) Exercise of the purchase rights represented by
this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the
Termination Date by delivery to the Company (or such other office
or agency of the Company as it may designate by notice in writing
to the registered Holder at the address of the Holder appearing on
the books of the Company) of a duly executed facsimile copy (or
e-mail attachment) of the Notice of Exercise in the form annexed
hereto. Within three (3) Trading Days following the date of
exercise as aforesaid, the Holder shall deliver the aggregate
Exercise Price for the shares specified in the applicable Notice of
Exercise by wire transfer or cashier’s check drawn on a
United States bank unless the cashless exercise procedure specified
in Section 2(c) below is specified in the applicable Notice of
Exercise. No ink-original Notice of Exercise shall be
required, nor shall any medallion guarantee (or other type of
guarantee or notarization) of any Notice of Exercise form be
required. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date the final Notice of Exercise is
delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise
within three (3) Business Days of receipt of such
notice. The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason
of the provisions of this paragraph, following the purchase of a
portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be
less than the amount stated on the face hereof.
b) Exercise
Price. The exercise price per
share of the Common Stock under this Warrant shall
be $6.25, subject to adjustment hereunder (the
“Exercise
Price”).
c) Cashless
Exercise. If at the time
of exercise hereof after the Initial Exercise Date, there is no effective registration statement
registering, or the prospectus contained therein is not available
for the issuance of the Warrant Shares to the Holder, then this
Warrant may also be exercised, in whole or in part, at such time by
means of a “cashless exercise” in which the Holder
shall be entitled to receive the number of Warrant Shares equal to
the quotient obtained by dividing [(A-B) (X)] by (A),
where:
(A)
= the VWAP on the Trading Day immediately preceding the date on
which Holder elects to exercise this Warrant by means of a
“cashless exercise,” as set forth in the applicable
Notice of Exercise;
(B)
= the Exercise Price of this Warrant, as adjusted hereunder;
and
(X)
= the number of Warrant Shares that would be issuable upon exercise
of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise rather than a
cashless exercise.
If Warrant Shares are
issued in such a “cashless exercise,” the parties
acknowledge and agree that in accordance with Section 3(a)(9) of
the Securities Act, the Warrant Shares shall take on the registered
characteristics of the Warrants being exercised, and the holding
period of the Warrants being exercised may be tacked on to the
holding period of the Warrant Shares. The Company agrees
not to take any position contrary to this Section
2(c).
Notwithstanding
anything herein to the contrary, on the Termination Date, this
Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2(c).
d) Mechanics of
Exercise.
i. Delivery of Warrant
Shares Upon Exercise. The
Company shall cause the Warrant Shares purchased hereunder to be
transmitted by its transfer agent to the Holder by crediting the
account of the Holder’s or its designee’s balance
account with The Depository Trust Company through its Deposit or
Withdrawal at Custodian system (“DWAC”)
if the Company is then a participant in such system and either
(A) there is an effective registration statement permitting
the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder, or (B) the Warrant Shares are eligible for resale
by the Holder without volume or manner-of-sale limitations pursuant
to Rule 144 and, in either case, the Warrant Shares have been sold
by the Holder prior to the Warrant Share Delivery Date (as defined
below), and otherwise by physical delivery of a certificate,
registered in the Company’s share register in the name of the
Holder or its designee, for the number of Warrant Shares to which
the Holder is entitled pursuant to such exercise to the address
specified by the Holder in the Notice of Exercise by the date that
is three (3) Trading Days after the delivery to the Company of
the Notice of Exercise and payment of cash if the exercise is a
cash exercise pursuant to Section 2(a) above (such date, the
“Warrant Share Delivery
Date”). If the Warrant
Shares can be delivered via DWAC, the transfer agent shall have
received from the Company any legal opinions or other documentation
required by it to deliver such Warrant Shares without legend
(subject to receipt by the Company of reasonable back up
documentation from the Holder, including with respect to affiliate
status) and, if applicable and requested by the Company prior to
the Warrant Share Delivery Date, the transfer agent shall have
received from the Holder a confirmation of sale of the Warrant
Shares (provided the requirement of the Holder to provide a
confirmation as to the sale of Warrant Shares shall not be
applicable to the issuance of unlegended Warrant Shares upon a
cashless exercise of this Warrant if the Warrant Shares are then
eligible for resale pursuant to Rule 144(b)(1)). The Warrant Shares
shall be deemed to have been issued, and Holder or any other person
so designated to be named therein shall be deemed to have become a
holder of record of such shares for all purposes, as of the date
the Warrant has been exercised, with payment to the Company of the
Exercise Price (or by cashless exercise, if permitted) and all
taxes required to be paid by the Holder, if any, pursuant to
Section 2(d)(vi) prior to the issuance of such shares, having
been paid. If the Company fails for any reason to deliver to the
Holder the Warrant Shares subject to a Notice of Exercise by the
second Trading Day following the Warrant Share Delivery Date, the
Company shall pay to the Holder, in cash, as liquidated damages and
not as a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the
applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the fifth Trading Day after such liquidated
damages begin to accrue) for each Trading Day after the second
Trading Day following such Warrant Share Delivery Date until such
Warrant Shares are delivered or Holder rescinds such
exercise.
ii. Delivery of New
Warrants Upon Exercise. If this
Warrant shall have been exercised in part, the Company shall, at
the request of a Holder and upon surrender of this Warrant
certificate, at the time of delivery of the Warrant Shares, deliver
to the Holder a new Warrant evidencing the rights of the Holder to
purchase the unpurchased Warrant Shares called for by this Warrant,
which new Warrant shall in all other respects be identical with
this Warrant.
iii. Rescission
Rights. If the Company fails to
cause its transfer agent to deliver to the Holder the Warrant
Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery
Date, then the Holder will have the right to rescind such
exercise; provided, however,
that the Holder shall be required to return any Warrant Shares or
Common Stock subject to any such rescinded exercise notice
concurrently with the return to Holder of the aggregate Exercise
Price paid to the Company for such Warrant Shares and the
restoration of Holder’s right to acquire such Warrant Shares
pursuant to this Warrant (including, issuance of a replacement
warrant certificate evidencing such restored
right).
iv. Compensation for
Buy-In on Failure to Timely Deliver Warrant Shares Upon
Exercise. In addition to any
other rights available to the Holder, if the Company fails to cause
its transfer agent to transmit to the Holder the Warrant
Shares in accordance with the provisions of Section 2(d)(i)
above pursuant to an exercise on or
before the second Trading Day following the Warrant Share Delivery
Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the
Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if
any, by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue
times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored
(in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have
been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms
hereof.
v. No Fractional Shares
or Scrip. No fractional shares
or scrip representing fractional shares shall be issued upon the
exercise of this Warrant. As to any fraction of a share which the
Holder would otherwise be entitled to purchase upon such exercise,
the Company shall, at its election, either pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole
share.
vi. Charges, Taxes and
Expenses. Issuance of Warrant
Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance
of such Warrant Shares, all of which taxes and expenses shall be
paid by the Company, and such Warrant Shares shall be issued in the
name of the Holder or in such name or names as may be directed by
the Holder; provided, however,
that in the event that Warrant Shares are to be issued in a name
other than the name of the Holder, this Warrant when surrendered
for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder and the Company may require, as
a condition thereto, the payment of a sum sufficient to reimburse
it for any transfer tax incidental thereto. The Company shall pay
all transfer agent fees required for same-day processing of any
Notice of Exercise and all fees to the Depository Trust
Company (or another established clearing corporation performing
similar functions) required for same-day electronic delivery of the
Warrant Shares.
vii. Closing of
Books. The Company will not
close its stockholder books or records in any manner which prevents
the timely exercise of this Warrant, pursuant to the terms
hereof.
viii. Signature.
This Section 2 and the Notice of Exercise attached hereto set forth
the totality of the procedures required of the Holder in order to
exercise this Warrant. Without limiting the preceding
sentences, no ink-original exercise form shall be required, nor
shall any medallion guarantee (or other type of guarantee or
notarization) of any exercise form be required in order to exercise
this Warrant. No additional legal opinion, other information
or instructions shall be required of the Holder to exercise this
Warrant. The Company shall honor exercises of this Warrant
and shall deliver Warrant Shares underlying this Warrant in
accordance with the terms, conditions and time periods set forth
herein.
e) Holder’s
Exercise Limitations. The
Company shall not effect any exercise of this Warrant, and a Holder
shall not have the right to exercise any portion of this Warrant,
pursuant to Section 2 or otherwise, to the extent that after giving
effect to such issuance after exercise as set forth on the
applicable Notice of Exercise, the Holder (together with the
Holder’s Affiliates, and any other Persons acting as a group
together with the Holder or any of the Holder’s Affiliates),
would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below). For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates shall include the number of shares
of Common Stock issuable upon exercise of this Warrant with respect
to which such determination is being made, but shall exclude the
number of shares of Common Stock which would be issuable upon (i)
exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates and (ii)
exercise or conversion of the unexercised or nonconverted portion
of any other securities of the Company (including, without
limitation, any other Common Stock Equivalents) subject to a
limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Holder or any of its
Affiliates. Except as set forth in the preceding sentence,
for purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission
of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any
Affiliates) and of which portion of this Warrant is exercisable, in
each case subject to the Beneficial Ownership Limitation, and the
Company shall have no obligation to verify or confirm the accuracy
of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in
determining the number of outstanding shares of Common Stock, a
Holder may rely on the number of outstanding shares of Common Stock
as reflected in (A) the Company’s most recent periodic or
annual report filed with the Commission, as the case may be, (B) a
more recent public announcement by the Company or (C) a more recent
written notice by the Company or the Company’s transfer agent
setting forth the number of shares of Common Stock
outstanding. Upon the written or oral request of a Holder,
the Company shall within two Trading Days confirm orally and in
writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this
Warrant, by the Holder or its Affiliates since the date as of which
such number of outstanding shares of Common Stock was reported. The
“Beneficial Ownership
Limitation” shall be
4.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant. The Holder, upon
notice to the Company, may increase or decrease the Beneficial
Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of
the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of
this Section 2(e) shall continue to apply. Any increase in the
Beneficial Ownership Limitation will not be effective until the
61st day
after such notice is delivered to the Company. The provisions of
this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section
2(e) to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.
Section
3. Certain
Adjustments.
a) Stock Dividends and
Splits. If the Company, at any
time while this Warrant is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt,
shall not include any shares of Common Stock issued by the Company
upon exercise of this Warrant), (ii) subdivides outstanding shares
of Common Stock into a larger number of shares, (iii) combines
(including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (iv) issues by
reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares, if
any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock
outstanding immediately after such event, and the number of shares
issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to this
Section 3(a) shall become effective immediately after the record
date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination
or re-classification. For the purposes of clarification, the
Exercise Price of this Warrant will not be adjusted in the event
that the Company or any Subsidiary thereof, as applicable, sells or
grants any option to purchase, or sell or grant any right to
reprice, or otherwise dispose of or issue (or announce any offer,
sale, grant or any option to purchase or other disposition) any
Common Stock or Common Stock Equivalents, at an effective price per
share less than the Exercise Price then in
effect.
b)
[RESERVED.]
c) Subsequent Rights
Offerings. In addition to any
adjustments pursuant to Section 3(a) above, if at any time the
Company grants, issues or sells any Common Stock Equivalents or
rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common
Stock (the “Purchase
Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in
abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
d) Pro Rata
Distributions. During such time
as this Warrant is outstanding, if the Company shall declare or
make any dividend (other than cash dividends) or other distribution
of its assets (or rights to acquire its assets) to holders of
shares of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of stock or other
securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or
other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such
case, the Holder shall be entitled to participate in such
Distribution to the same extent that the Holder would have
participated therein if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such
Distribution, or, if no such record is taken, the date as of which
the record holders of shares of Common Stock are to be determined
for the participation in such Distribution (provided, however,
to the extent that the Holder’s right to participate in any
such Distribution would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result
of such Distribution to such extent) and the portion of such
Distribution shall be held in abeyance for the benefit of the
Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership
Limitation). To the extent that this Warrant has not been partially
or completely exercised at the time of such Distribution, such
portion of the Distribution shall be held in abeyance for the
benefit of the Holder until the Holder has exercised this
Warrant.
e) Fundamental
Transaction. If, at any time
while this Warrant is outstanding, (i) the Company, directly or
indirectly, in one or more related transactions effects any merger
or consolidation of the Company with or into another Person, (ii)
the Company, directly or indirectly, effects any sale, lease,
license, assignment, transfer, conveyance or other disposition of
all or substantially all of its assets in one or a series of
related transactions, (iii) any, direct or indirect, purchase
offer, tender offer or exchange offer (whether by the Company or
another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for
other securities, cash or property and has been accepted by the
holders of 50% or more of the outstanding Common Stock, (iv) the
Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or
recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property,
or (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or
other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person or group of Persons whereby such
other Person or group acquires more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business
combination) (each a “Fundamental
Transaction”), then, upon
any subsequent exercise of this Warrant, the Holder shall have the
right to receive, for each Warrant Share that would have been
issuable upon such exercise immediately prior to the occurrence of
such Fundamental Transaction, at the option of the Holder (without
regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of shares of Common Stock of the successor or
acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the
“Alternate
Consideration”)
receivable by holders of Common Stock as a result of such
Fundamental Transaction for each share of Common Stock for which
this Warrant is exercisable immediately prior to such Fundamental
Transaction (without regard to any limitation in Section 2(e) on
the exercise of this Warrant). For purposes of any such exercise,
the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share
of Common Stock in such Fundamental Transaction, and the Company
shall apportion the Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If
holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. The Company shall cause any
successor entity in a Fundamental Transaction in which the Company
is not the survivor (the “Successor
Entity”) to assume in
writing all of the obligations of the Company under this Warrant in
accordance with the provisions of this Section 3(e) pursuant to
written agreements prior to such Fundamental Transaction and shall,
at the option of the Holder, deliver to the Holder in exchange for
this Warrant a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to
this Warrant which is exercisable for a corresponding number of
shares of capital stock of such Successor Entity (or its parent
entity) equivalent to the shares of Common Stock acquirable and
receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies
the exercise price hereunder to such shares of capital stock (but
taking into account the relative value of the shares of Common
Stock pursuant to such Fundamental Transaction and the value of
such shares of capital stock, such number of shares of capital
stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction), and which is
reasonably satisfactory in form and substance to the Holder. Upon
the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and
after the date of such Fundamental Transaction, the provisions of
this Warrant referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and
power of the Company and shall assume all of the obligations of the
Company under this Warrant with the same effect as if such
Successor Entity had been named as the Company
herein.
f) Calculations.
All calculations under this Section 3 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock
deemed to be issued and outstanding as of a given date shall be the
sum of the number of shares of Common Stock (excluding treasury
shares, if any) issued and outstanding.
g) Notice to
Holder.
i. Adjustment to Exercise
Price. Whenever the Exercise
Price is adjusted pursuant to any provision of this Section 3, the
Company shall promptly mail to the Holder a notice setting forth
the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a
brief statement of the facts requiring such
adjustment.
ii. Notice to Allow
Exercise by Holder. If (A) the
Company shall declare a dividend (or any other distribution in
whatever form) on the Common Stock, (B) the Company shall declare a
special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders
of the Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Company shall be required in
connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the
Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the
Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in
each case, the Company shall cause to be mailed a notice to the
Holder at its last address as it shall appear upon the Warrant
Register of the Company, at least ten (10) calendar days prior to
the applicable record or effective date hereinafter specified,
stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which
the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected
to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be
entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share
exchange; provided that the failure to provide such notice or any
defect therein shall not affect the validity of the corporate
action required to be specified in such notice. To the extent that
any notice provided hereunder constitutes, or contains, material,
non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K. The
Holder shall remain entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date
of the event triggering such notice except as may otherwise be
expressly set forth herein.
Section
4. Transfer of
Warrant.
a) Transferability.
Pursuant to FINRA Rule 5110(e)(1), neither this Warrant nor any
Warrant Shares issued upon exercise of this Warrant shall be sold,
transferred, assigned, pledged, or hypothecated, or be the subject
of any hedging, short sale, derivative, put, or call transaction
that would result in the effective economic disposition of the
securities by any person for a period of 180 days immediately
following the date of effectiveness or commencement of sales of the
offering pursuant to which this Warrant is being issued, except the
transfer of any security:
i.
by operation of law or by reason of reorganization of the
Company;
ii.
to any FINRA member firm participating in the offering and the
officers or partners thereof, if all securities so transferred
remain subject to the lock-up restriction in this Section 4(a) for
the remainder of the time period;
iii.
if the aggregate amount of securities of the Company held by the
Holder or related person do not exceed 1% of the securities being
offered;
iv.
that is beneficially owned on a pro-rata basis by all equity owners
of an investment fund, provided that no participating member
manages or otherwise directs investments by the fund, and
participating members in the aggregate do not own more than 10% of
the equity in the fund; or
v.
the exercise or conversion of any security, if all securities
received remain subject to the lock-up restriction in this Section
4(a) for the remainder of the time period.
Subject
to the foregoing restriction, any applicable securities laws and
the conditions set forth in Section 4(d), this Warrant and all
rights hereunder (including, without limitation, any registration
rights) are transferable, in whole or in part, upon surrender of
this Warrant at the principal office of the Company or its
designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by
the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee
or assignees, as applicable, and in the denomination or
denominations specified in such instrument of assignment, and shall
issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be
cancelled. The Warrant, if properly assigned in accordance
herewith, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued
b) New
Warrants. This Warrant may be
divided or combined with other Warrants upon presentation hereof at
the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to
be issued, signed by the Holder or its agent or attorney. Subject
to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute
and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided or combined in accordance with such
notice. All Warrants issued on transfers or exchanges shall be
dated the initial issuance date of this Warrant and shall be
identical with this Warrant except as to the number of Warrant
Shares issuable pursuant thereto.
c) Warrant
Register. The Company shall
register this Warrant, upon records to be maintained by the Company
for that purpose (the “Warrant
Register”), in the name
of the record Holder hereof from time to time. The Company may deem
and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent
actual notice to the contrary.
d) Representation by the
Holder. The Holder, by the
acceptance hereof, represents and warrants that it is acquiring
this Warrant and, upon any exercise hereof, will acquire the
Warrant Shares issuable upon such exercise, for its own account and
not with a view to or for distributing or reselling such Warrant
Shares or any part thereof in violation of the Securities Act or
any applicable state securities law, except pursuant to sales
registered or exempted under the Securities
Act.
Section
5. Registration
Rights.
a) Demand
Registration–Grant of Right. The Company, upon written demand (a
“Demand
Notice”) of the Holder(s)
of at least 51% of the Warrants and/or the underlying Shares
(“Majority
Holders”), agrees to
register, on one occasion, all or any portion of the Warrants and
the underlying Shares (the “Registrable
Securities”). On such
occasion, the Company will file a registration statement with the
Commission covering the Registrable Securities within sixty (60)
days after receipt of a Demand Notice and use its commercially
reasonable efforts to have the registration statement declared
effective promptly thereafter, subject to compliance with review by
the Commission; provided, however,
that the Company shall not be required to comply with a Demand
Notice if the Company has filed a registration statement with
respect to which the Holder is entitled to piggyback registration
rights pursuant to Section
5(c) hereof and either:
(i) the Holder has elected to participate in the offering covered
by such registration statement or (ii) if such registration
statement relates to an underwritten primary offering of securities
of the Company, until the offering covered by such registration
statement has been withdrawn or until thirty (30) days after such
offering is consummated. The demand for registration may be made at
any time during a period of four and half (4.5) years beginning six
months after the Effective Date. The Company covenants and agrees
to give written notice of its receipt of any Demand Notice by any
Holder(s) to all other registered Holders of the Warrants and/or
the Registrable Securities within ten (10) days after the date of
the receipt of any such Demand Notice.
b) Demand
Registration–Terms. The
Company shall bear all fees and expenses attendant to the
registration of the Registrable Securities pursuant
to Section
5(a), but the Holders shall pay
any and all underwriting commissions and the expenses of any legal
counsel selected by the Holders to represent them in connection
with the sale of the Registrable Securities. The Company agrees to
use its commercially reasonable efforts to cause the filing
required herein to become effective promptly and to qualify or
register the Registrable Securities in such States as are
reasonably requested by the Holder(s); provided, however,
that in no event shall the Company be required to register the
Registrable Securities in a State in which such registration would
cause: (i) the Company to be obligated to register or license to do
business in such State or submit to general service of process in
such State, or (ii) the principal shareholders of the Company to be
obligated to escrow their shares of capital stock of the Company.
The Company shall cause any registration statement filed pursuant
to the demand right granted under Section
5(a) to remain effective
for a period of at least twelve (12) consecutive months after the
date that the Holders of the Registrable Securities covered by such
registration statement are first given the opportunity to sell all
of such securities. The Holders shall only use the prospectuses
provided by the Company to sell the shares covered by such
registration statement, and will immediately cease to use any
prospectus furnished by the Company if the Company advises the
Holder that such prospectus may no longer be used due to a material
misstatement or omission. Notwithstanding the provisions of
this Section
5(b), the Holder shall be
entitled to a demand registration under
this Section
5(b) on only one (1)
occasion and such demand registration right shall terminate on the
fifth anniversary of the Effective Date in accordance with FINRA
Rule 5110(g)(8)(B) and (C).
c) “Piggy-Back”
Registration–Grant of Right. In addition to the demand right of registration
described in Section
5(a) hereof, the Holder
shall have the right, for a period of five (5) years commencing six
months after the Effective Date, to include the Registrable
Securities as part of any other registration of securities filed by
the Company (other than in connection with a transaction
contemplated by Rule 145 promulgated under the Act or pursuant to
Form S-8 or any equivalent form); provided, however,
that if, solely in connection with any primary underwritten public
offering for the account of the Company, the managing
underwriter(s) thereof shall, in its reasonable discretion, impose
a limitation on the number of shares of common stock which may be
included in the registration statement because, in such
underwriter(s)’ judgment, marketing or other factors dictate
such limitation is necessary to facilitate public distribution,
then the Company shall be obligated to include in such registration
statement only such limited portion of the Registrable Securities
with respect to which the Holder requested inclusion hereunder as
the underwriter shall reasonably permit. Any exclusion of
Registrable Securities shall be made pro rata among the Holders
seeking to include Registrable Securities in proportion to the
number of Registrable Securities sought to be included by such
Holders; provided, however,
that the Company shall not exclude any Registrable Securities
unless the Company has first excluded all outstanding securities,
the holders of which are not entitled to inclusion of such
securities in such Registration Statement or are not entitled to
pro rata inclusion with the Registrable
Securities.
d) “Piggy-Back”
Registration–Terms. The
Company shall bear all fees and expenses attendant to registering
the Registrable Securities pursuant to Section
5(c) hereof, but the
Holders shall pay any and all underwriting commissions and the
expenses of any legal counsel selected by the Holders to represent
them in connection with the sale of the Registrable Securities. In
the event of such a proposed registration, the Company shall
furnish the then Holders of outstanding Registrable Securities with
not less than thirty (30) days written notice prior to the proposed
date of filing of such registration statement. Such notice to the
Holders shall continue to be given for each registration statement
filed by the Company until such time as all of the Registrable
Securities have been sold by the Holder. The holders of the
Registrable Securities shall exercise the “piggy-back”
rights provided for herein by giving written notice, within ten
(10) days of the receipt of the Company’s notice of its
intention to file a registration statement. Except as otherwise
provided in this Warrant, there shall be no limit on the number of
times the Holder may request registration under
this Section
5(d); provided, however, that
such registration rights shall terminate on the fifth anniversary
of the Effective Date in accordance with FINRA Rule
5110(g)(8)(D).
Section 6.
Miscellaneous.
a) No Rights as
Stockholder Until Exercise.
This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to
the exercise hereof as set forth in Section
2(d)(i).
b) Loss, Theft,
Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any certificate
relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it
(which, in the case of the Warrant, shall not include the posting
of any bond), and upon surrender and cancellation of such Warrant
or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock
certificate.
c) Saturdays, Sundays,
Holidays, etc. If the last or
appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a Business Day, then,
such action may be taken or such right may be exercised on the next
succeeding Business Day.
d) Authorized
Shares.
The
Company covenants that, during the period the Warrant is
outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock
certificates to execute and issue the necessary Warrant Shares upon
the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure
that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any
requirements of the Trading Market upon which the Common Stock may
be listed. The Company covenants that all Warrant Shares which may
be issued upon the exercise of the purchase rights represented by
this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges created by
the Company in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such
issue).
Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations
under this Warrant.
Before
taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction
thereof.
e) Jurisdiction.
All questions concerning the construction, validity, enforcement
and interpretation of this Warrant shall be determined in
accordance with the provisions of the underwriting agreement, dated
June 29, 2021 by and between the Company and Joseph Gunnar &
Co. LLC, as representative of the underwriters set forth therein
(the “Underwriting
Agreement”).
f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, and the Holder does
not utilize cashless exercise, will have restrictions upon resale
imposed by state and federal securities laws.
g) Nonwaiver and
Expenses. No course of dealing
or any delay or failure to exercise any right hereunder on the part
of Holder shall operate as a waiver of such right or otherwise
prejudice the Holder’s rights, powers or remedies. Without
limiting any other provision of this Warrant or the Underwriting
Agreement, if the Company willfully and knowingly fails to comply
with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to the Holder such
amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by the Holder in
collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies
hereunder.
h) Notices.
Any notice, request or other document required or permitted to be
given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Underwriting
Agreement.
i) Limitation of
Liability. No provision hereof,
in the absence of any affirmative action by the Holder to exercise
this Warrant to purchase Warrant Shares, and no enumeration herein
of the rights or privileges of the Holder, shall give rise to any
liability of the Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the
Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company
agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of
this Warrant and hereby agrees to waive and not to assert the
defense in any action for specific performance that a remedy at law
would be adequate.
k) Successors and
Assigns. Subject to applicable
securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon
the successors and permitted assigns of the Company and the
successors and permitted assigns of Holder. The provisions of this
Warrant are intended to be for the benefit of any Holder from time
to time of this Warrant and shall be enforceable by the Holder or
holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the
Holder.
m) Severability.
Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be
prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the
remaining provisions of this Warrant.
n) Headings.
The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of
this Warrant.
********************
(Signature Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized as of the date first above
indicated.
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RECRUITER.COM
GROUP, INC.
By: ___________________________________________
Evan
Sohn, Chief Executive Officer
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NOTICE OF EXERCISE
TO:
|
RECRUITER.COM
GROUP, INC.
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(1)
The undersigned hereby elects to purchase ________ Warrant Shares
of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if
any.
(2)
Payment shall take the form of (check applicable box):
☐ in lawful money of the United States;
or
☐ if
permitted the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number
of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).
(3)
Please register and issue said Warrant Shares in the name of the
undersigned or in such other name as is specified
below:
_______________________________
The Warrant Shares shall be delivered to the following DWAC Account
Number or by physical delivery of a certificate to:
_______________________________
_______________________________
_______________________________
(4) Accredited
Investor. If the Warrant is
being exercised via cash exercise, the undersigned is an
“accredited investor” as defined in Regulation D
promulgated under the Securities Act of 1933, as
amended
[SIGNATURE OF HOLDER]
Name of Investing Entity:
________________________________________________________________________
Signature of Authorized Signatory of Investing
Entity:
_________________________________________________
Name of Authorized Signatory:
___________________________________________________________________
Title of Authorized Signatory:
____________________________________________________________________
Date:
________________________________________________________________________________________
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR
VALUE RECEIVED, [____] all of or [_______] shares of the foregoing
Warrant and all rights evidenced thereby are hereby assigned
to
_______________________________________________ whose address
is
_______________________________________________________________.
_______________________________________________________________
Dated:
______________, _______
Holder’s
Signature: ___________________________
Holder’s
Address: ____________________________
_____________________________
NOTE: The signature to this Assignment Form must correspond with
the name as it appears on the face of the Warrant, without
alteration or enlargement or any change whatsoever. Officers of
corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority to
assign the foregoing Warrant.
NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY SUCH SECURITIES.
THIS WARRANT IS NOT EXERCISABLE PRIOR TO DECEMBER 26, 2021. VOID
AFTER 5:00 P.M., EASTERN TIME, JUNE
29, 2026.
COMMON STOCK PURCHASE WARRANT
RECRUITER.COM GROUP, INC.
Warrant
Shares:
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Initial Exercise
Date: December 26, 2021
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BACKGROUND
1. Joseph Gunnar & Co. LLC (“Gunnar”)
acted as placement agent in two convertible note and warrant
financings of the Company (as defined below) which were consummated
between May 2020 and June 2020 with respect to the initial
financing and in January 2021 with respect to the subsequent
financing, respectively, (together, the “Financings”)
and is acting as the sole book-running manager of the
Company’s public offering (the “Public
Offering”) as described
in a registration statement on Form S-1 (No. 333-249208), which was declared effective by
(i) the Securities and Exchange Commission on June 29,
2021(the “Initial
Registration Statement”)
and (ii) the registration statement relating to the Initial
Registration Statement, as amended, filed on June 29, 2021 pursuant
to Rule 462(b) promulgated under the Securities Act, automatically
effective upon filing (File No. 333-257540) (the
“June 29th Registration
Statement”) (the Initial Registration Statement,
including all amendments and exhibits thereto, the documents
incorporated by reference therein pursuant to Item 12 of Form S-1
under the Securities Act, at the time the Initial Registration
Statement became effective, and including the information deemed to
be part of the Initial Registration Statement at the time it became
effective pursuant to Rule 430A under the Securities Act, along
with the June 29th Registration
Statement, is hereinafter collectively referred to as the
“Registration
Statement”).
2. In
connection with the Financings, Gunnar was entitled to receive
certain placement agent warrants to purchase shares of the
Company’s common stock (“Placement Agent
Warrants”) as more particularly described in that
certain placement agency agreements between the Company and Gunnar
dated May 20, 2020 and December 22, 2020 (the “PAAs”).
3.
Pursuant to certain amendment agreements to the PAAs, each dated
June 29, 2021, the Company and Gunnar have agreed to amend the
provisions with respect to the issuance of the Placement Agent
Warrants contained in the PAAs.
4. The
issuance of this Common Stock Purchase Warrant (and other warrants
in identical form and substance, other than number of Warrant
Shares contained in each such warrant, which when aggregated equal
72,728 Warrant Shares) shall serve as the Placement Agent Warrants
issuable in satisfaction of the Company’s obligation to issue
Placement Agent Warrants to Gunnar or its assignees under the PAAs,
as amended.
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”)
certifies that, for value received, or his assigns (the
“Holder”), is
entitled, upon the terms and subject to the limitations on exercise
and the conditions hereinafter set forth, at any time on or after
December 26, 2021 (the “Initial Exercise
Date”) and on or prior to 5:00 p.m. (New York City
time) on June 29, 2026 (the “Termination
Date”) but not thereafter, to subscribe for and
purchase from Recruiter.com Group, Inc., a Nevada corporation (the “Company”), up
to shares of the Company’s common stock, $0.0001 par value
(as subject to adjustment hereunder, the “Warrant
Shares”) as described herein. This Warrant is issued
pursuant to section 5(a) of the PAAs. The purchase price of one
share of Common Stock under this Warrant shall be equal to the
Exercise Price, as defined in Section 2(b).
Section
1. Definitions.
Capitalized terms used and not otherwise defined herein shall have
the meanings set forth in those certain Securities Purchase
Agreements, dated as of May 28, 2020 and January 5, 2021, among the
Company and the investors listed on the Schedule of Investors
attached thereto (the “Purchase
Agreements”).
Section
2. Exercise.
a)
Exercise of Warrant. Exercise
of the purchase rights represented by this Warrant may be made, in
whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to
the Company of a duly executed facsimile copy or PDF copy submitted
by e-mail (or e-mail attachment) of the Notice of Exercise in the
form annexed hereto (the “Notice of Exercise”).
Within the earlier of (i) two (2) Trading Days and (ii) the number
of Trading Days comprising the Standard Settlement Period (as
defined in Section 2(d)(i)) following the date of exercise as
aforesaid, the Holder shall deliver to the Company the aggregate
Exercise Price for the shares specified in the applicable Notice of
Exercise by wire transfer or cashier’s check drawn on a
United States bank unless the cashless exercise procedure specified
in Section 2(c) is specified in the applicable Notice of
Exercise. No
ink-original Notice of Exercise shall be required, nor shall any
medallion guarantee (or other type of guarantee or notarization) of
any Notice of Exercise be required. Notwithstanding anything herein
to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company until the Holder has
purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date on which the final Notice of Exercise
is delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise
within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of
this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares
available for purchase hereunder at any given time may be less than
the amount stated on the face hereof.
b) Exercise Price. The exercise
price per share of Common Stock under this Warrant shall be
$6.25, subject to adjustment
hereunder (the “Exercise
Price”).
c) Cashless Exercise. This Warrant
may also be exercised, in whole or in part, at such time by means
of a “cashless exercise” in which the Holder shall be
entitled to receive a number of Warrant Shares equal to the
quotient obtained by dividing [(A-B) (X)] by (A),
where:
(A) =
as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such
Notice of Exercise is (1) both executed and delivered pursuant to
Section 2(a) hereof on a day that is not a Trading Day or (2) both
executed and delivered pursuant to Section 2(a) on a Trading Day
prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(64) of Regulation NMS promulgated under the
federal securities laws) on such Trading Day, (ii) at the option of
the Holder, either (y) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise or (z) the
Bid Price of the Common Stock on the principal Trading Market as
reported by Bloomberg L.P. as of the time of the Holder’s
execution of the applicable Notice of Exercise if such Notice of
Exercise is executed during “regular trading hours” on
a Trading Day and is delivered within two (2) hours thereafter
(including until two (2) hours after the close of “regular
trading hours” on a Trading Day) pursuant to Section 2(a) or
(iii) the VWAP on the date of the applicable Notice of Exercise if
the date of such Notice of Exercise is a Trading Day and such
Notice of Exercise is both executed and delivered pursuant to
Section 2(a) after the close of “regular trading hours”
on such Trading Day;
(B) =
the Exercise Price of this Warrant, as adjusted hereunder;
and
(X) =
the number of Warrant Shares that would be issuable upon exercise
of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise rather than a
cashless exercise.
If Warrant Shares are issued in such a cashless exercise, the
parties acknowledge and agree that in accordance with Section
3(a)(9) of the Securities Act, the Warrant Shares shall take on the
characteristics of the Warrants being exercised, and the holding
period of the Warrant Shares being issued may be tacked on to the
holding period of this Warrant. The Company agrees not
to take any position contrary to this Section 2(c).
“Bid Price” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the bid price of the Common Stock for the time in
question (or the nearest preceding date) on the Trading Market on
which the Common Stock is then listed or quoted as reported by
Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (b) if OTCQB
or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date)
on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices
for the Common Stock are then reported in the “Pink
Sheets” published by OTC Markets Group, Inc. (or a similar
organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so
reported, or (d) in all other cases, the fair market value of
a share of Common Stock as determined by an independent appraiser
selected in good faith by the Purchasers of a majority in interest
of the Securities then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the
Company.
“VWAP” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted
as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)),
(b) if OTCQB or OTCQX is not a Trading Market, the volume
weighted average price of the Common Stock for such date (or the
nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the
Common Stock is not then listed or quoted for trading on OTCQB or
OTCQX and if prices for the Common Stock are then reported in the
“Pink Sheets” published by OTC Markets Group, Inc. (or
a similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the
Common Stock so reported, or (d) in all other cases, the fair
market value of a share of Common Stock as determined by an
independent appraiser selected in good faith by the Purchasers of a
majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.
Notwithstanding
anything herein to the contrary, on the Termination Date, this
Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2(c).
d)
Mechanics of
Exercise.
i. Delivery of Warrant Shares Upon
Exercise. The Company shall cause the Warrant Shares
purchased hereunder to be transmitted by the Transfer Agent to the
Holder by crediting the account of the Holder’s or its
designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system
(“DWAC”) if the Company is
then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by the Holder or
(B) the Warrant Shares are eligible for resale by the Holder
without volume or manner-of-sale limitations pursuant to Rule 144
(assuming cashless exercise of the Warrants), and otherwise by
physical delivery of a certificate, registered in the
Company’s share register in the name of the Holder or its
designee, for the number of Warrant Shares to which the Holder is
entitled pursuant to such exercise to the address specified by the
Holder in the Notice of Exercise by the date that is the earliest
of (i) two (2) Trading Days after the delivery to the Company of
the Notice of Exercise, (ii) one (1) Trading Day after delivery of
the aggregate Exercise Price to the Company and (iii) the number of
Trading Days comprising the Standard Settlement Period after the
delivery to the Company of the Notice of Exercise (such date, the
“Warrant Share
Delivery Date”). Upon delivery of the Notice of
Exercise, the Holder shall be deemed for all corporate (but not
Rule 144) purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the Warrant
Shares, provided that payment of the aggregate Exercise Price
(other than in the case of a cashless exercise) is received within
the earlier of (i) two (2) Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period following
delivery of the Notice of Exercise. If the Company fails for any
reason to deliver to the Holder the Warrant Shares subject to a
Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as
a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the
applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the fifth (5th) Trading Day after
such liquidated damages begin to accrue) for each Trading Day after
such Warrant Share Delivery Date until such Warrant Shares are
delivered or Holder rescinds such exercise. The Company agrees to
maintain a transfer agent that is a participant in the FAST program
so long as this Warrant remains outstanding and exercisable. As
used herein, “Standard Settlement
Period” means the standard settlement period,
expressed in a number of Trading Days, on the Company’s
primary Trading Market with respect to the Common Stock as in
effect on the date of delivery of the Notice of
Exercise.
ii. Delivery of New Warrants Upon
Exercise. If this Warrant shall have been exercised in part,
the Company shall, at the request of a Holder and upon surrender of
this Warrant certificate, at the time of delivery of the Warrant
Shares, deliver to the Holder a new Warrant evidencing the rights
of the Holder to purchase the unpurchased Warrant Shares called for
by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to
transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will
have the right to rescind such exercise.
iv. Compensation for Buy-In on Failure to
Timely Deliver Warrant Shares Upon Exercise. In addition to
any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder the Warrant
Shares in accordance with the provisions of Section 2(d)(i) above
pursuant to an exercise on or before the Warrant Share Delivery
Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the
Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”), then the
Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the product of (1) the number of Warrant
Shares that the Company was required to deliver to the Holder in
connection with the exercise at issue times (2) the price at which
the sell order giving rise to such purchase obligation was
executed, and (B) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of Warrant Shares for
which such exercise was not honored (in which case such exercise
shall be deemed rescinded) or deliver to the Holder the number of
shares of Common Stock that would have been issued had the Company
timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having
a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted exercise of shares of Common Stock with an aggregate
sale price giving rise to such purchase obligation of $10,000,
under clause (A) of the immediately preceding sentence the Company
shall be required to pay the Holder $1,000. The Holder shall
provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the
Company, evidence of the amount of such loss. Nothing herein shall
limit a Holder’s right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver shares of
Common Stock upon exercise of the Warrant as required pursuant to
the terms hereof.
v. No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. As to any fraction of
a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay
a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up
to the next whole share.
vi. Charges, Taxes and Expenses.
Issuance of Warrant Shares shall be made without charge to the
Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of such Warrant Shares, all of which taxes
and expenses shall be paid by the Company, and such Warrant Shares
shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that in the event that
Warrant Shares are to be issued in a name other than the name of
the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by
the Holder and the Company may require, as a condition thereto, the
payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto. The Company shall pay all Transfer Agent fees
required for same-day processing of any Notice of Exercise and all
fees to the Depository Trust Company (or another established
clearing corporation performing similar functions) required for
same-day electronic delivery of the Warrant Shares.
vii. Closing
of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
e) Holder’s
Exercise Limitations. The Company shall not effect any
exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or
otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise,
the Holder (together with the Holder’s Affiliates, and any
other Persons acting as a group together with the Holder or any of
the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below). For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates and Attribution Parties shall
include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being
made, but shall exclude the number of shares of Common Stock which
would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of
its Affiliates or Attribution Parties and (ii) exercise or
conversion of the unexercised or unconverted portion of any other
securities of the Company (including, without limitation, any other
Common Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for
purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within one Trading Day
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The
“Beneficial
Ownership Limitation” shall be 4.99% of the number of
shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon
exercise of this Warrant. The Holder, upon notice to the Company,
may increase or decrease the Beneficial Ownership Limitation
provisions of this Section 2(e), provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of
shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock upon exercise of
this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial
Ownership Limitation will not be effective until the 61st day after such
notice is delivered to the Company. The provisions of this
paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(e) to
correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.
Section
3. Certain
Adjustments.
a) Stock Dividends and Splits. If
the Company, at any time while this Warrant is outstanding: (i)
pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or
equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any shares of
Common Stock issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of
shares or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case
the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of
this Warrant shall remain unchanged. Any adjustment made pursuant
to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to
receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.
b) Intentionally Left
Blank.
c) Subsequent Rights Offerings.
In addition to any adjustments
pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase
stock, warrants, securities or other property pro rata to the
record holders of any class of shares of Common Stock (the
“Purchase
Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided,
however,
that, to the extent that the Holder’s right to participate in
any such Purchase Right would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Purchase Right to such extent (or
beneficial ownership of such shares of Common Stock as a result of
such Purchase Right to such extent) and such Purchase Right to such
extent shall be held in abeyance for the Holder until such time, if
ever, as its right thereto would not result in the Holder exceeding
the Beneficial Ownership Limitation).
d) Pro
Rata Distributions. During such time as this Warrant is
outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a
dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a
“Distribution”), at any
time after the issuance of this Warrant, then, in each such case,
the Holder shall be entitled to participate in such Distribution to
the same extent that the Holder would have participated therein if
the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the
Beneficial Ownership Limitation) immediately before the date of
which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such
Distribution (provided, however, that, to the extent
that the Holder's right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in
such Distribution to such extent (or in the beneficial ownership of
any shares of Common Stock as a result of such Distribution to such
extent) and the portion of such Distribution shall be held in
abeyance for the benefit of the Holder until such time, if ever, as
its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation).
e) Fundamental Transaction. If, at
any time while this Warrant is outstanding, (i) the Company,
directly or indirectly, in one or more related transactions effects
any merger or consolidation of the Company with or into another
Person, (ii) the Company, directly or indirectly, effects any sale,
lease, license, assignment, transfer, conveyance or other
disposition of all or substantially all of its assets in one or a
series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders
of Common Stock are permitted to sell, tender or exchange their
shares for other securities, cash or property and has been accepted
by the holders of 50% or more of the outstanding Common Stock, (iv)
the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or
recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property,
or (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or
other business combination (including, without limitation, a
reorganization, recapitalization, spin-off, merger or scheme of
arrangement) with another Person or group of Persons whereby such
other Person or group acquires more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business
combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of
this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any
limitation in Section 2(e) on the exercise of this Warrant), the
number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such
Fundamental Transaction. The Company shall cause any successor
entity in a Fundamental Transaction in which the Company is not the
survivor (the “Successor Entity”) to
assume in writing all of the obligations of the Company under this
Warrant and the other Transaction Documents in accordance with the
provisions of this Section 3(e) pursuant to written agreements in
form and substance reasonably satisfactory to the Holder and
approved by the Holder (without unreasonable delay) prior to such
Fundamental Transaction and shall, at the option of the Holder,
deliver to the Holder in exchange for this Warrant a security of
the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which
is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to
the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such
shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such exercise price being for
the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and
substance to the Holder. Upon the occurrence of any such
Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant and the
other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant and the other
Transaction Documents with the same effect as if such Successor
Entity had been named as the Company herein.
f) Intentionally
Omitted.
g) Calculations. All calculations
under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of
this Section 3, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if
any) issued and outstanding.
h) Notice to Holder.
i. Adjustment to Exercise Price.
Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly deliver to the Holder
by facsimile or email a notice setting forth the Exercise Price
after such adjustment and any resulting adjustment to the number of
Warrant Shares and setting forth a brief statement of the facts
requiring such adjustment.
ii. Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any
other distribution in whatever form) on the Common Stock, (B) the
Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock, (C) the Company shall authorize the
granting to all holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital stock of any class
or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially
all of the assets of the Company, or any compulsory share exchange
whereby the Common Stock is converted into other securities, cash
or property, or (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be
delivered by facsimile or email to the Holder at its last facsimile
number or email address as it shall appear upon the Warrant
Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which
the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected
to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be
entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share
exchange; provided that the failure to deliver such notice or any
defect therein or in the delivery thereof shall not affect the
validity of the corporate action required to be specified in such
notice. To the extent that any notice provided in this Warrant
constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K. The Holder shall remain entitled to
exercise this Warrant during the period commencing on the date of
such notice to the effective date of the event triggering such
notice except as may otherwise be expressly set forth
herein.
Section
4. Transfer
of Warrant.
a) Transferability. Subject to
compliance with any applicable securities laws and the conditions
set forth in Section 4(d) hereof, this Warrant and all rights
hereunder are transferable, in whole or in part after the Initial
Exercise Date. upon surrender of this Warrant at the principal
office of the Company or its designated agent, together with a
written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or
attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees, as
applicable, and in the denomination or denominations specified in
such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled. Notwithstanding the
foregoing, Holder (or permitted assignees under Rule 5110(e)(2)(B)(i)) will not sell,
transfer, assign, pledge, or hypothecate these warrants or the
securities underlying these warrants, nor will they engage in any
hedging, short sale, derivative, put, or call transaction that
would result in the effective economic disposition of the warrants
or the underlying securities for a period of 180 days from the
effective date of the Registration Statement. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this
Warrant to the Company unless the Holder has assigned this Warrant
in full, in which case, the Holder shall surrender this Warrant to
the Company within three (3) Trading Days of the date on which the
Holder delivers an assignment form to the Company assigning this
Warrant in full. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant
issued.
b) New Warrants. This Warrant may
be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written
notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which
may be involved in such division or combination, the Company shall
execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with
such notice. All Warrants issued on transfers or exchanges shall be
dated the Initial Exercise Date and shall be identical with this
Warrant except as to the number of Warrant Shares issuable pursuant
thereto.
c) Warrant Register. The Company
shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”), in
the name of the record Holder hereof from time to time. The Company
may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent
actual notice to the contrary.
d) Permitted Transfers and
Assignments. Notwithstanding any provision to the contrary
in this Section 4, the Holder may transfer, with or without
consideration, this Warrant or any of the Warrant Shares (or a
portion thereof) to the Holder’s Affiliates (as such term is
defined under Rule 144 of the Securities Act) or to officers,
directors, employees and other associated persons of the Holder
without obtaining the opinion from, provided, that the Holder
delivers to the Company and its counsel certification,
documentation, and other assurances reasonably required by the
Company’s counsel to ensure that such transfer does not
violate applicable securities laws.
e) Representation by the Holder.
The Holder, by the acceptance hereof, represents and warrants that
it is acquiring this Warrant and, upon any exercise hereof, will
acquire the Warrant Shares issuable upon such exercise, for its own
account and not with a view to or for distributing or reselling
such Warrant Shares or any part thereof in violation of the
Securities Act or any applicable state securities law, except
pursuant to sales registered or exempted under the Securities
Act.
Section
5. Miscellaneous.
a) No Rights as Stockholder Until
Exercise. This Warrant does not entitle the Holder to any
voting rights, dividends or other rights as a stockholder of the
Company prior to the exercise hereof as set forth in Section
2(d)(i), except as expressly set forth in Section 3.
b) Loss, Theft, Destruction or Mutilation
of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not
include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.
c) Saturdays, Sundays, Holidays,
etc. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein
shall not be a Business Day, then, such action may be taken or such
right may be exercised on the next succeeding Business
Day.
d) Authorized Shares.
The
Company covenants that, during the period the Warrant is
outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of issuing the necessary
Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which
the Common Stock may be listed. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of
the purchase rights represented by this Warrant and payment for
such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations
under this Warrant.
Before
taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction
thereof.
e) Jurisdiction. This Warrant will
be governed by and construed under the laws of the State of New
York without regard to conflicts of laws principles that would
require the application of any other law.
f) Restrictions. The Holder
acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant, if not registered and the Holder does not utilize
cashless exercise, will have restrictions upon resale imposed by
state and federal securities laws.
g) Nonwaiver and Expenses. No
course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such
right or otherwise prejudice the Holder’s rights, powers or
remedies. Without limiting any other provision of this Warrant, if
the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to
the Holder, the Company shall pay to the Holder such amounts as
shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys’ fees, including those
of appellate proceedings, incurred by the Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its
rights, powers or remedies hereunder.
h) Notices. Any notice or other
communication required or permitted to be given hereunder shall be
in writing and shall be deemed effectively given: (a) upon personal
delivery to the party notified, (b) when sent by confirmed email or
facsimile if sent during normal business hours of the recipient, if
not, then on the next business day, (c) five days after having been
sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent
to the Company at Recruiter.com Group, Inc., 100 Waugh Drive, Suite
300, Houston, TX 77007, Attn: Evan H,
Sohn; Email: , and to
the Holder at c/o Joseph Gunnar & Co., LLC, 30 Broad Street,
11th
Floor, New York, NY 10004; Attention: Stephan A. Stein; Email:
.
i) Limitation of Liability. No
provision hereof, in the absence of any affirmative action by the
Holder to exercise this Warrant to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of the Holder, shall
give rise to any liability of the Holder for the purchase price of
any Common Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the
Company.
j) Remedies. The Holder, in
addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this
Warrant and hereby agrees to waive and not to assert the defense in
any action for specific performance that a remedy at law would be
adequate.
k) Successors and Assigns. Subject
to applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors and permitted assigns of the Company
and the successors and permitted assigns of Holder. The provisions
of this Warrant are intended to be for the benefit of any Holder
from time to time of this Warrant and shall be enforceable by the
Holder or holder of Warrant Shares.
l) Amendment; Waivers. This
Warrant may be modified or amended or the provisions hereof waived
with the written consent of the Company and the Holder.
m) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in
such manner as to be effective and valid under applicable law, but
if any provision of this Warrant shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this
Warrant.
n) Headings. The headings used in
this Warrant are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this
Warrant.
o) Equal Treatment of Holders. No
consideration (including any modification of this Warrant) shall be
offered or paid to any Person (as such term is defined in the
Purchase Agreements) to amend or consent to a waiver or
modification of any provision hereof unless the same consideration
is also offered to all of the Holders. For clarification purposes,
this provision constitutes a separate right granted to each Holder
by the Company and negotiated separately by each Holder, and is
intended for the Company to treat the Holders as a class and shall
not in any way be construed as the Holders acting in concert or as
a group with respect to the Warrants or the shares of Common Stock
issuable upon exercise of the Warrants.
********************
(Signature Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized as of the date first above
indicated.
RECRUITER.COM GROUP, INC.
|
By:__________________________________________
Name:
Title:
|
NOTICE OF EXERCISE
TO:
[_______________________
(1) The undersigned
hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.
(2) Payment shall take
the form of (check applicable box):
[ ] in
lawful money of the United States; or
[ ] [if
permitted the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number
of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).
(3) Please issue said
Warrant Shares in the name of the undersigned or in such other name
as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following DWAC Account
Number:
_______________________________
_______________________________
_______________________________
(4)
Accredited
Investor. The undersigned is an “accredited
investor” as defined in Regulation D promulgated under the
Securities Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name of
Investing Entity:
________________________________________________________________________
Signature of Authorized Signatory of Investing
Entity:
_________________________________________________
Name of
Authorized Signatory:
___________________________________________________________________
Title
of Authorized Signatory:
____________________________________________________________________
Date:
________________________________________________________________________________________
EXHIBIT B
(To assign the foregoing Warrant, execute this form and
supply required information. Do not use this form to purchase
shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
Name:
|
|
|
(Please Print)
|
Address:
|
|
Phone Number:
Email Address:
|
(Please
Print)
______________________________________
______________________________________
|
Dated: _______________ __, ______
|
|
Holder’s
Signature:
|
|
Holder’s
Address:
|
|
EXHIBIT 10.1
WARRANT AGENT AGREEMENT
WARRANT AGENT
AGREEMENT (this
“Warrant
Agreement”) dated as of
July 2, 2021 (the “Issuance
Date”) between
Recruiter.com Group, Inc., a company incorporated under the laws of
the State of Nevada (the “Company”),
and Philadelphia Stock Transfer, Inc., a Pennsylvania corporation (the
“Warrant
Agent”).
WHEREAS, pursuant to the terms of that certain
Underwriting Agreement (“Underwriting
Agreement”), dated June
29, 2021, by and between the Company and Joseph Gunnar & Co.
LLC as representative of the underwriters set forth therein, the
Company is engaged in a public offering (the
“Offering”)
of up to 2,760,000 units (the “Units”), consisting of
an aggregate of 2,760,000 shares (the “Shares”)
of common stock, par value $0.0001 per share (the
“Common
Stock”) of the Company
and Warrants (the “Warrants”)
to purchase up to an aggregate of 2,760,000 shares of Common Stock
(the “Warrant
Shares”), including
Shares and Warrants issuable pursuant to the underwriters’
over-allotment option;
WHEREAS, the Company has filed with the Securities and
Exchange Commission (the “Commission”),
for the registration under the Securities Act of 1933, as amended
(the “Securities
Act”), of the Units,
Shares, Warrants and Warrant Shares, a (i) Registration Statement
on Form S-1 (File No. 333-249208) (the “Initial Registration
Statement”) and such
Initial Registration Statement was declared effective on June 29,
2021; and (ii) a registration statement relating to the Initial
Registration Statement, filed on June 29, 2021 pursuant to Rule
462(b) promulgated under the Securities Act, automatically
effective upon filing (File No. 333-257540) (the
“June 29th Registration
Statement”) (the Initial
Registration Statement together with the June 29th
Registration Statement the
“Registration
Statement”);
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to so act,
in accordance with the terms set forth in this Warrant Agreement in
connection with the issuance, registration, transfer, exchange and
exercise of the Warrants;
WHEREAS, the Company desires to provide for the
provisions of the Warrants, the terms upon which they shall be
issued and exercised, and the respective rights, limitation of
rights, and immunities of the Company, the Warrant Agent, and the
holders of the Warrants; and
WHEREAS, all acts and things have been done and performed
which are necessary to make the Warrants the valid, binding and
legal obligations of the Company, and to authorize the execution
and delivery of this Warrant Agreement.
NOW,
THEREFORE, in consideration of
the mutual agreements herein contained, the parties hereto agree as
follows:
1. Appointment of Warrant
Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company with
respect to the Warrants, and the Warrant Agent hereby accepts such
appointment and agrees to perform the same in accordance with the
express terms and conditions set forth in this Warrant Agreement
(and no implied terms or conditions).
2. Warrants.
2.1. Form of
Warrants. The Warrants shall be
registered securities and shall be initially evidenced by a global
Warrant certificate (“Global
Certificate”) in the form
of Annex
A to this Warrant
Agreement, which shall be deposited on behalf of the Company with a
custodian for The Depository Trust Company
(“DTC”) and registered in the name of Cede &
Co., a nominee of DTC. If DTC subsequently ceases to make its
settlement system available for the Warrants, the Company may
instruct the Warrant Agent regarding making arrangements for
book-entry settlement. In the event that the Warrants are not
eligible for, or it is no longer necessary to have the Warrants
available in, registration in the name of Cede & Co., a nominee
of DTC, the Company may instruct the Warrant Agent to provide
written instructions to DTC to deliver to the Warrant Agent for
cancellation the Global Certificate, and the Company shall instruct
the Warrant Agent to deliver to each Holder (as defined below)
separate certificates evidencing Warrants
(“Definitive
Certificates” and,
together with the Global Certificate, “Warrant
Certificates”), in the
form of Annex
C to this Warrant
Agreement. The Warrants represented by the Global Certificate are
referred to as “Global Warrants”.
2.2. Issuance and
Registration of Warrants.
2.2.1. Warrant
Register. The Warrant Agent
shall maintain books (“Warrant
Register”) for the
registration of original issuance and the registration of transfer
of the Warrants. Any Person in whose name ownership of a beneficial
interest in the Warrants evidenced by a Global Certificate is
recorded in the records maintained by DTC or its nominee shall be
deemed the “beneficial owner” thereof, provided that
all such beneficial interests shall be held through a Participant
(as defined below), which shall be the registered holder of such
Warrants.
2.2.2. Issuance of
Warrants. Upon the initial
issuance of the Warrants, the Warrant Agent shall issue the Global
Certificate and deliver the Warrants in the DTC settlement system
in accordance with written instructions delivered to the Warrant
Agent by the Company. Ownership of beneficial interests in the
Warrants shall be shown on, and the transfer of such ownership
shall be effected through, records maintained (i) by DTC and (ii)
by institutions that have accounts with DTC (each, a
“Participant”),
subject to a Holder’s right to elect to receive a Warrant in
certificated form in the form of Annex C
to this Warrant Agreement. Any Holder
desiring to elect to receive a Warrant in certificated form shall
make such request in writing delivered to the Warrant Agent
pursuant to Section 2.2.8, and shall surrender to the Warrant Agent
the interest of the Holder on the books of the Participant
evidencing the Warrants which are to be represented by a Definitive
Certificate through the DTC settlement system. Thereupon, the
Warrant Agent shall countersign and deliver to the person entitled
thereto a Warrant Certificate or Warrant Certificates, as the case
may be, as so requested.
2.2.3. Beneficial Owner;
Holder. Prior to due
presentment for registration of transfer of any Warrant, the
Company and the Warrant Agent may deem and treat the person in
whose name that Warrant shall be registered on the Warrant Register
(the “Holder”)
as the absolute owner of such Warrant for purposes of any exercise
thereof, and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary.
Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Warrant Agent or any agent of the Company or the
Warrant Agent from giving effect to any written certification,
proxy or other authorization furnished by DTC governing the
exercise of the rights of a holder of a beneficial interest in any
Warrant. The rights of beneficial owners in a Warrant evidenced by
the Global Certificate shall be exercised by the Holder or a
Participant through the DTC system, except to the extent set forth
herein or in the Global Certificate.
2.2.4. Execution.
The Warrant Certificates shall be executed on behalf of the Company
by any authorized officer of the Company (an
“Authorized
Officer”), which need not
be the same authorized signatory for all of the Warrant
Certificates, either manually or by facsimile signature. The
Warrant Certificates shall be countersigned by an authorized
signatory of the Warrant Agent, which need not be the same
signatory for all of the Warrant Certificates, and no Warrant
Certificate shall be valid for any purpose unless so countersigned.
In case any Authorized Officer of the Company that signed any of
the Warrant Certificates ceases to be an Authorized Officer of the
Company before countersignature by the Warrant Agent and issuance
and delivery by the Company, such Warrant Certificates,
nevertheless, may be countersigned by the Warrant Agent, issued and
delivered with the same force and effect as though the person who
signed such Warrant Certificates had not ceased to be such officer
of the Company; and any Warrant Certificate may be signed on behalf
of the Company by any person who, at the actual date of the
execution of such Warrant Certificate, shall be an Authorized
Officer of the Company authorized to sign such Warrant Certificate,
although at the date of the execution of this Warrant Agreement any
such person was not such an Authorized Officer.
2.2.5. Registration of
Transfer. At any time at or
prior to the Expiration Date (as defined below), a transfer of any
Warrants may be registered and any Warrant Certificate or Warrant
Certificates may be split up, combined or exchanged for another
Warrant Certificate or Warrant Certificates evidencing the same
number of Warrants as the Warrant Certificate or Warrant
Certificates surrendered. Any Holder desiring to register the
transfer of Warrants or to split up, combine or exchange any
Warrant Certificate shall make such request in writing delivered to
the Warrant Agent, and shall surrender to the Warrant Agent the
Warrant Certificate or Warrant Certificates evidencing the Warrants
the transfer of which is to be registered or that is or are to be
split up, combined or exchanged. Thereupon, the Warrant Agent shall
countersign and deliver to the person entitled thereto a Warrant
Certificate or Warrant Certificates, as the case may be, as so
requested. The Warrant Agent may require reasonable and customary
payment, by the Holder requesting a registration of transfer of
Warrants or a split-up, combination or exchange of a Warrant
Certificate (but, for purposes of clarity, not upon the exercise of
the Warrants and issuance of Warrant Shares to the Holder), of a
sum sufficient to cover any tax or governmental charge that may be
imposed in connection with such registration of transfer, split-up,
combination or exchange, together with reimbursement to the Warrant
Agent of all reasonable expenses incidental
thereto.
2.2.6. Loss, Theft and
Mutilation of Warrant Certificates. Upon receipt by the Company and the Warrant
Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security in
customary form and amount, and reimbursement to the Company and the
Warrant Agent of all reasonable expenses incidental thereto, and
upon surrender to the Warrant Agent and cancellation of the Warrant
Certificate if mutilated, the Warrant Agent shall, on behalf of the
Company, countersign and deliver a new Warrant Certificate of like
tenor to the Holder in lieu of the Warrant Certificate so lost,
stolen, destroyed or mutilated. The Warrant Agent may charge the
Holder an administrative fee for processing the replacement of lost
Warrant Certificates, which shall be charged only once in instances
where a single surety bond obtained covers multiple certificates.
The Warrant Agent may receive compensation from the surety
companies or surety bond agents for administrative services
provided to them.
2.2.7. Proxies.
The Holder of a Warrant may grant proxies or otherwise authorize
any person, including the Participants and beneficial holders that
may own interests through the Participants, to take any action that
a Holder is entitled to take under this Agreement or the
Warrants; provided, however,
that at all times that Warrants are evidenced by a Global
Certificate, exercise of those Warrants shall be effected on their
behalf by Participants through DTC in accordance the procedures
administered by DTC.
2.2.8. Warrant Certificate
Request. A Holder has the right
to elect at any time or from time to time a Warrant Exchange (as
defined below) pursuant to a Warrant Certificate Request Notice (as
defined below). Upon written notice by a Holder to the Warrant
Agent for the exchange of some or all of such Holder’s Global
Warrants for a Definitive Certificate evidencing the same number of
Warrants, which request shall be in the form attached hereto
as Annex
E (a
“Warrant Certificate
Request Notice” and the
date of delivery of such Warrant Certificate Request Notice by the
Holder, the “Warrant Certificate
Request Notice Date” and
the deemed surrender upon delivery by the Holder of a number of
Global Warrants for the same number of Warrants evidenced by a
Definitive Certificate, a “Warrant
Exchange”), the Warrant
Agent shall promptly effect the Warrant Exchange and shall promptly
issue and deliver to the Holder a Definitive Certificate for such
number of Warrants in the name set forth in the Warrant Certificate
Request Notice. Such Definitive Certificate shall be dated the
original issue date of the Warrants, shall be manually executed by
an authorized signatory of the Company, shall be in the form
attached hereto as Annex
C, and shall be reasonably
acceptable in all respects to such Holder. In connection with a
Warrant Exchange, the Company agrees to deliver, or to direct the
Warrant Agent to deliver, the Definitive Certificate to the Holder
within three (3) Business Days of the Warrant Certificate Request
Notice pursuant to the delivery instructions in the Warrant
Certificate Request Notice (“Warrant Certificate
Delivery Date”). If the
Company fails for any reason to deliver to the Holder the
Definitive Certificate subject to the Warrant Certificate Request
Notice by the Warrant Certificate Delivery Date, the Company shall
pay to the Holder, in cash, as liquidated damages and not as a
penalty, for each $1,000 of Warrant Shares evidenced by such
Definitive Certificate (based on the VWAP (as defined in the
Warrants) of the Common Stock on the Warrant Certificate Request
Notice Date), $10 per Business Day for each Business Day after such
Warrant Certificate Delivery Date until such Definitive Certificate
is delivered or, prior to delivery of such Warrant Certificate, the
Holder rescinds such Warrant Exchange. The Company covenants and
agrees that, upon the date of delivery of the Warrant Certificate
Request Notice, the Holder shall be deemed to be the holder of the
Definitive Certificate and, notwithstanding anything to the
contrary set forth herein, the Definitive Certificate shall be
deemed for all purposes to contain all of the terms and conditions
of the Warrants evidenced by such Warrant Certificate and the terms
of this Agreement, other than Sections 3(c) and 9 herein, shall not
apply to the Warrants evidenced by the Definitive Certificate. For
purposes of clarity, if there is a conflict between the express
terms of this Warrant Agreement and a Definitive Warrant in for the
form of Annex C
hereto with respect to the terms of
the Warrants, the terms of the Definitive Warrant shall govern and
control.
3. Terms and Exercise of
Warrants.
3.1. Exercise
Price. Each Warrant shall
entitle the Holder, subject to the provisions of the applicable
Warrant Certificate and of this Warrant Agreement, to purchase from
the Company the number of shares of Common Stock stated therein, at
the price of $5.50 per whole share, subject to the subsequent
adjustments provided in Section 4 hereof. The term
“Exercise
Price” as used in this
Warrant Agreement refers to the price per share at which shares of
Common Stock may be purchased at the time a Warrant is
exercised.
3.2. Duration of
Warrants. Warrants may be
exercised only during the period commencing on the Issuance Date
and terminating at 5:00 P.M., New York City time (the
“close of
business”) on July 2,
2026 “Expiration
Date”). Each Warrant not
exercised on or before the Expiration Date shall become void, and
all rights thereunder and all rights in respect thereof under this
Warrant Agreement shall cease at the close of business on the
Expiration Date.
3.3. Exercise of
Warrants.
3.3.1. Exercise and
Payment.
(a) Exercise of the purchase rights
represented by a Warrant may be made, in whole or in part, at any
time or times on or after the Issuance Date and on or before close
of business on the Expiration Date by delivery to the Company or
the Warrant Agent of the Notice of Exercise in the form annexed
as Annex
B hereto (the
“Notice of
Exercise”). Within the
earlier of (i) two (2) Trading Days and (ii) the number of Trading
Days comprising the Standard Settlement Period following the date
of exercise as aforesaid, the Holder shall deliver to the Company
the aggregate Exercise Price for the shares specified in the
applicable Notice of Exercise by wire transfer or cashier’s
check drawn on a United States bank unless the cashless exercise
procedure specified in Section 3.3.7 below is specified in the
applicable Notice of Exercise. No ink-original Notice of Exercise
shall be required, nor shall any medallion guarantee (or other type
of guarantee or notarization) of any Notice of Exercise form be
required. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender a Warrant
Certificate to the Company until the Holder has purchased all of
the Warrant Shares available thereunder and the Warrant has been
exercised in full, in which case, the Holder shall surrender such
Warrant to the Company for cancellation within three (3) Trading
Days of the date the final Notice of Exercise is delivered to the
Company. Partial exercises of a Warrant resulting in purchases of a
portion of the total number of Warrant Shares available thereunder
shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder in an amount equal to the applicable
number of Warrant Shares purchased. The Holder and the Company
shall maintain records showing the number of Warrant Shares
purchased and the date of such purchases. The Company shall deliver
any objection to any Notice of Exercise within one (1) Business Day
of receipt of such notice. The Holder and any assignee, by
acceptance of a Warrant, acknowledge and agree that, by reason of
the provisions of this paragraph, following the purchase of a
portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be
less than the amount stated on the face
thereof.
Notwithstanding
the foregoing in this Section 3.3.1, a holder whose interest in a
Warrant is a beneficial interest in certificate(s) representing
such Warrant held in registered form through DTC (or another
established clearing corporation performing similar functions),
shall effect exercises made pursuant to this Section 3.3.1 by
delivering to DTC (or such other clearing corporation, as
applicable) the appropriate instruction form for exercise,
complying with the procedures to effect exercise that are required
by DTC (or such other clearing corporation, as applicable), subject
to a Holder’s right to elect to receive a Warrant in
certificated form pursuant to the terms of the Warrant Agent
Agreement, in which case this sentence shall not apply. Upon giving
irrevocable instructions to its Participant to exercise Warrants,
solely for purposes for Regulation SHO, the holder whose interest
in the Warrant is a beneficial interest shall be deemed to have
exercised such Warrant, regardless of when the applicable Warrant
Shares are delivered to such
holder.
3.3.2. Issuance of Warrant
Shares. (a) The Warrant Agent
shall, on the Trading Day following the receipt of a Notice of
Exercise, advise the Company, the transfer agent and registrar for
the Company’s Common Stock, in respect of (i) the number of
Warrant Shares indicated on the Notice of Exercise as issuable upon
such exercise with respect to such exercised Warrants, (ii) the
instructions of the Holder or Participant, as the case may be,
provided to the Warrant Agent with respect to the delivery of the
Warrant Shares and the number of Warrants that remain outstanding
after such exercise and (iii) such other information as the Company
or such transfer agent and registrar shall reasonably
request.
The Company shall cause the Warrant Shares
purchased hereunder to be transmitted by the Transfer Agent to the
Holder by crediting the account of the Holder’s or its
designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system
(“DWAC”)
if the Transfer Agent is then a participant in such system and
either (A) there is an effective registration statement permitting
the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) this Warrant is being exercised via
cashless exercise, and otherwise by physical delivery of a
certificate, registered in the Company’s share register in
the name of the Holder or its designee, for the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to
the address specified by the Holder in the Notice of Exercise by
the date that is the earlier of (i) two (2) Trading Days and (ii)
the number of Trading Days comprising the Standard Settlement
Period after the delivery to the Company of the Notice of Exercise
and provided that payment in full of the aggregate Exercise Price
(other than in the case of a cashless exercise) is received by the
Company within one (1) Trading Day thereafter (such date, the
“Warrant Share Delivery
Date”). Upon delivery of
the Notice of Exercise, the Holder shall be deemed for all
corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the Warrant
Shares, provided that payment of the aggregate Exercise Price
(other than in the case of a cashless exercise) is received within
the earlier of (i) one (1) Trading Day and (ii) the number of
Trading Days comprising the Standard Settlement Period following
delivery of the Notice of Exercise. If the Company fails for any
reason to deliver to the Holder the Warrant Shares subject to a
Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as
a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the
applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the fifth Trading Day after such liquidated
damages begin to accrue) for each Trading Day after such Warrant
Share Delivery Date until such Warrant Shares are delivered or
Holder rescinds such exercise. The Company agrees to maintain a
transfer agent that is a participant in the FAST program so long as
this Warrant remains outstanding and exercisable. As used herein,
“Standard Settlement
Period” means the
standard settlement period, expressed in a number of Trading Days,
on the Company’s primary Trading Market with respect to the
Common Stock as in effect on the date of delivery of the Notice of
Exercise.
3.3.3. Valid
Issuance. All Warrant Shares
issued by the Company upon the proper exercise of a Warrant in
conformity with this Warrant Agreement shall be validly issued,
fully paid and non-assessable.
3.3.4. No Fractional
Exercise. No fractional Warrant
Shares will be issued upon the exercise of the Warrant. If, by
reason of any adjustment made pursuant to Section 4, a Holder would
be entitled, upon the exercise of such Warrant, to receive a
fractional interest in a share, the Company shall, upon such
exercise, round up or down, as applicable, to the nearest whole
number the number of Warrant Shares to be issued to such
Holder.
3.3.5. No Transfer
Taxes. Issuance of Warrant
Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance
of such Warrant Shares, all of which taxes and expenses shall be
paid by the Company, and such Warrant Shares shall be issued in the
name of the Holder or in such name or names as may be directed by
the Holder; provided, however,
that in the event Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder and the Company may require, as
a condition thereto, the payment of a sum sufficient to reimburse
it for any transfer tax incidental thereto. The Company shall pay
all Transfer Agent fees required for same-day processing of any
Notice of Exercise and all fees to the Depository Trust Company (or
another established clearing corporation performing similar
functions) required for same-day electronic delivery of the Warrant
Shares.
3.3.6. [RESERVED]
3.3.7. Restrictive Legend
Events; Cashless Exercise Under Certain
Circumstances.
(i) The Company shall use its reasonable best
efforts to maintain the effectiveness of the Registration Statement
and the current status of the prospectus included therein or to
file and maintain the effectiveness of another registration
statement and another current prospectus covering the Warrants and
the Warrant Shares at any time that the Warrants are exercisable.
The Company shall provide to the Warrant Agent and each Holder
prompt written notice of any time that the Company is unable to
deliver the Warrant Shares via DTC transfer or otherwise without
restrictive legend because (A) the Commission has issued a stop
order with respect to the Registration Statement, (B) the
Commission otherwise has suspended or withdrawn the effectiveness
of the Registration Statement, either temporarily or permanently,
(C) the Company has suspended or withdrawn the effectiveness of the
Registration Statement, either temporarily or permanently, (D) the
prospectus contained in the Registration Statement is not available
for the issuance of the Warrant Shares to the Holder or (E)
otherwise (each a “Restrictive Legend
Event”). To the extent
that the Warrants cannot be exercised as a result of a Restrictive
Legend Event or a Restrictive Legend Event occurs after a Holder
has exercised Warrants in accordance with the terms of the Warrants
but prior to the delivery of the Warrant Shares, the Company shall,
at the election of the Holder, which shall be given within five (5)
days of receipt of such notice of the Restrictive Legend Event,
either (A) rescind the previously submitted Election to Purchase
and the Company shall return all consideration paid by registered
holder for such shares upon such rescission or (B) treat the
attempted exercise as a cashless exercise as described in paragraph
(ii) below and refund the cash portion of the exercise price to the
Holder.
(ii) If
a Restrictive Legend Event has occurred, the Warrant shall only be
exercisable on a cashless basis. Notwithstanding anything herein to
the contrary, the Company shall not be required to make any cash
payments or net cash settlement to the Holder in lieu of delivery
of the Warrant Shares. Upon a “cashless exercise”, the
Holder shall be entitled to receive the number of Warrant Shares
equal to the quotient obtained by dividing (A-B) (X) by (A),
where:
(A)
= the last VWAP immediately preceding the date of exercise giving
rise to the applicable “cashless exercise”, as set
forth in the applicable Election to Purchase (to clarify, the
“last VWAP” will be the last VWAP as calculated over an
entire Trading Day such that, in the event that this Warrant is
exercised at a time that the Trading Market is open, the prior
Trading Day’s VWAP shall be used in this
calculation);
(B)
= the Exercise Price of the Warrant, as adjusted as set forth
herein; and
(X)
= the number of Warrant Shares that would be issuable upon exercise
of the Warrant in accordance with the terms of the Warrant if such
exercise were by means of a cash exercise rather than a cashless
exercise.
If the Warrant Shares are issued in such a cashless exercise, the
Company acknowledges and agrees that, in accordance with Section
3(a)(9) of the Securities Act, the Warrant Shares shall take on the
registered characteristics of the Warrants being exercised and the
Company agrees not to take any position contrary thereto. Upon
receipt of an Election to Purchase for a cashless exercise, the
Warrant Agent will promptly deliver a copy of the Election to
Purchase to the Company to confirm the number of Warrant Shares
issuable in connection with the cashless exercise. The Company
shall calculate and transmit to the Warrant Agent in a written
notice, and the Warrant Agent shall have no duty, responsibility or
obligation under this section to calculate, the number of Warrant
Shares issuable in connection with any cashless exercise. The
Warrant Agent shall be entitled to rely conclusively on any such
written notice provided by the Company, and the Warrant Agent shall
not be liable for any action taken, suffered or omitted to be taken
by it in accordance with such written instructions or pursuant to
this Warrant Agreement. Notwithstanding anything herein to the
contrary, on the Termination Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this
Section 3.3.7.
3.3.8. Disputes.
In the case of a dispute as to the determination of the Exercise
Price or the arithmetic calculation of the number of Warrant Shares
issuable in connection with any exercise, the Company shall
promptly deliver to the Holder the number of Warrant Shares that
are not disputed.
3.3.9. Compensation for
Buy-In on Failure to Timely Deliver Warrant Shares Upon
Exercise. In addition to
any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder the Warrant
Shares in accordance with the provisions of Section 2(d)(i) above
pursuant to an exercise on or before the Warrant Share Delivery
Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the
Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if
any, by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue
times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored
(in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have
been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms
hereof.
3.3.10. Beneficial Ownership
Limitation. The Company shall
not effect any exercise of this Warrant, and a Holder shall not
have the right to exercise any portion of a Warrant, pursuant to
Section 3 or otherwise, to the extent that after giving effect to
such issuance after exercise as set forth on the applicable Notice
of Exercise, the Holder (together with the Holder’s
Affiliates, and any other Persons acting as a group together with
the Holder or any of the Holder’s Affiliates (such Persons,
“Attribution
Parties”)), would
beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder
and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of such Warrant
with respect to which such determination is being made, but shall
exclude the number of shares of Common Stock which would be
issuable upon (i) exercise of the remaining, non-exercised portion
of such Warrant beneficially owned by the Holder or any of its
Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or non-converted portion of any other securities
of the Company (including, without limitation, any other Common
Stock Equivalents (as defined in the Definitive Certificate
attached as Annex C
hereto)) subject to a limitation on
conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its Affiliates or
Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 3.3.10, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 3.3.10
applies, the determination of whether a Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of a
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether a Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of a Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 3.3.10, in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including such Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The
“Beneficial Ownership
Limitation” shall be
4.99% (or, upon election by a Holder prior to the issuance of any
Warrants, 9.99%) of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock issuable upon exercise of a Warrant. The
Holder, upon notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 3.3.10,
provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock upon exercise of this Warrant held by the
Holder and the provisions of this Section 3.3.10 shall continue to
apply. Any increase in the Beneficial Ownership Limitation will not
be effective until the 61st day after such notice is delivered to the
Company. The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with
the terms of this Section 3.3.10 to correct this paragraph (or any
portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation herein contained or to
make changes or supplements necessary or desirable to properly give
effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of this
Warrant.
4. Adjustments.
4.1. Adjustment upon
Subdivisions or Combinations.
If the Company, at any time while the Warrants are outstanding: (i)
pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or
equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any shares of
Common Stock issued by the Company upon exercise of the Warrants),
(ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of
shares, or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case
the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of each Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of
such Warrant shall remain unchanged. Any adjustment made pursuant
to this Section 4.1 shall become effective immediately after the
record date for the determination of stockholders entitled to
receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.
4.2. Adjustment for Other
Distributions.
(a) Subsequent Rights
Offerings. In addition to any
adjustments pursuant to Section 4.1 above, if at any time the
Company grants, issues or sells any Common Stock Equivalents or
rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common
Stock (the “Purchase
Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of a Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in
abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
(b) Pro Rata
Distributions. During such time
as the Warrants are outstanding, if the Company shall declare or
make any dividend or other distribution of its assets (or rights to
acquire its assets) to holders of shares of Common Stock, by way of
return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction)
(a “Distribution”),
at any time after the issuance of the Warrants, then, in each such
case, the Holder shall be entitled to participate in such
Distribution to the same extent that the Holder would have
participated therein if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of such Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such
Distribution, or, if no such record is taken, the date as of which
the record holders of shares of Common Stock are to be determined
for the participation in such Distribution (provided, however,
to the extent that the Holder’s right to participate in any
such Distribution would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result
of such Distribution to such extent) and the portion of such
Distribution shall be held in abeyance for the benefit of the
Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership
Limitation).
4.3. Reclassification,
Consolidation, Purchase, Combination, Sale or
Conveyance. If, at any time
while the Warrants are outstanding, (i) the Company, directly or
indirectly, in one or more related transactions effects any merger
or consolidation of the Company with or into another Person, (ii)
the Company, directly or indirectly, effects any sale, lease,
license, assignment, transfer, conveyance or other disposition of
all or substantially all of its assets in one or a series of
related transactions, (iii) any, direct or indirect, purchase
offer, tender offer or exchange offer (whether by the Company or
another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for
other securities, cash or property and has been accepted by the
holders of 50% or more of the outstanding Common Stock, (iv) the
Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or
recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property,
or (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or
other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person or group of Persons whereby such
other Person or group acquires more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business
combination) (each a “Fundamental
Transaction”), then, upon
any subsequent exercise of a Warrant, the Holder shall have the
right to receive, for each Warrant Share that would have been
issuable upon such exercise immediately prior to the occurrence of
such Fundamental Transaction, at the option of the Holder (without
regard to any limitation in Section 3.3.10 on the exercise of a
Warrant), the number of shares of Common Stock of the successor or
acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the
“Alternate
Consideration”)
receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 3.3.10 on the exercise
of a Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in
such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given
any choice as to the securities, cash or property to be received in
a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction.
The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the
“Successor
Entity”) to assume in
writing all of the obligations of the Company under the Warrants in
accordance with the provisions of this Section 4.3 pursuant to
written agreements and shall, upon the written request of such
Holder, deliver to such Holder in exchange for the Warrant a
security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which
is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to
the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such
shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such exercise price being for
the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and
substance to the Holder. Upon the occurrence of any such
Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of the Warrants referring
to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under the
Warrants with the same effect as if such Successor Entity had been
named as the Company therein.
The Company shall instruct the Warrant Agent in writing, which
includes facsimile and/or email, to mail by first class mail,
postage prepaid, to each Holder, written notice of the execution of
any such amendment, supplement or agreement with the Successor
Entity. Any supplemented or amended agreement entered into by the
successor corporation or transferee shall provide for adjustments,
which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 4.3. The Warrant Agent
shall have no duty, responsibility or obligation to determine the
correctness of any provisions contained in such agreement or such
notice, including but not limited to any provisions relating either
to the kind or amount of securities or other property receivable
upon exercise of warrants or with respect to the method employed
and provided therein for any adjustments, and shall be entitled to
rely conclusively for all purposes upon the provisions contained in
any such agreement. The provisions of this Section 4.3 shall
similarly apply to successive reclassifications, changes,
consolidations, mergers, sales and conveyances of the kind
described above. Notwithstanding the requirement to provide or mail
written notice to a Holder set forth in this Section 4.3, the
Company shall not be required to provide or mail a written notice
to any Holder, and shall not be required to instruct the Warrant
Agent to provide or mail a written notice if the transaction or
transactions resulting in any adjustment described in this Section
4.3 is disclosed publicly via a press release, Current Report on
Form 8-K, other filing with the Commission or other means of public
dissemination.
4.4. Notices to
Holder.
(a) Adjustment to Exercise
Price. Whenever the Exercise
Price is adjusted pursuant to any provision of this Section 4, the
Company shall promptly deliver to the Holder by facsimile or email
a notice setting forth the Exercise Price after such adjustment and
any resulting adjustment to the number of Warrant Shares and
setting forth a brief statement of the facts requiring such
adjustment.
(b) Notice to Allow
Exercise by Holder. If (A) the
Company shall declare a dividend (or any other distribution in
whatever form) on the Common Stock, (B) the Company shall declare a
special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders
of the Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Company shall be required in
connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the
Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the
Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in
each case, the Company shall cause to be delivered by facsimile or
email to the Holder at its last facsimile number or email address
as it shall appear upon the Warrant Register of the Company, at
least ten (10) calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action
required to be specified in such notice. To the extent that any
notice provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K. The
Holder shall remain entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date
of the event triggering such notice except as may otherwise be
expressly set forth herein. Notwithstanding the requirement to
provide or mail written notice to a Holder set forth in this
Section 4.4, the Company shall not be required to provide or mail a
written notice to any Holder, and shall not be required to instruct
the Warrant Agent to provide or mail a written notice if the
transaction or transactions described in this Section 4.4 are
disclosed publicly via a press release, Current Report on Form 8-K,
other filing with the Commission or other means of public
dissemination.
4.5. Other
Events. If any event occurs of
the type contemplated by the provisions of Section 4.1 or 4.2 but
not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, Adjustment
Rights, phantom stock rights or other rights with equity features
to all holders of Common Stock for no consideration), then the
Company’s Board of Directors will, at its discretion and in
good faith, make an adjustment in the Exercise Price and the number
of Warrant Shares or designate such additional consideration to be
deemed issuable upon exercise of a Warrant, so as to protect the
rights of the registered Holder. No adjustment to the Exercise
Price will be made pursuant to more than one sub-section of this
Section 4 in connection with a single issuance.
4.6. Notices of Changes in
Warrant. Upon every adjustment
of the Exercise Price or the number of Warrant Shares issuable upon
exercise of a Warrant, the Company shall give written notice
thereof to the Warrant Agent, which notice shall state the Exercise
Price resulting from such adjustment and the increase or decrease,
if any, in the number of Warrant Shares purchasable at such price
upon the exercise of a Warrant, setting forth in reasonable detail
the method of calculation and the facts upon which such calculation
is based. Upon the occurrence of any event specified in Sections
4.1 or 4.2, then, in any such event, the Company shall give written
notice to each Holder, at the last address set forth for such
holder in the Warrant Register, as of the record date or the
effective date of the event. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such
event. The Warrant Agent shall be entitled to rely conclusively on,
and shall be fully protected in relying on, any certificate, notice
or instructions provided by the Company with respect to any
adjustment of the Exercise Price or the number of shares issuable
upon exercise of a Warrant, or any related matter, and the Warrant
Agent shall not be liable for any action taken, suffered or omitted
to be taken by it in accordance with any such certificate, notice
or instructions or pursuant to this Warrant Agreement. The Warrant
Agent shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received written notice thereof from
the Company.
5. Restrictive Legends;
Fractional Warrants. In the
event that a Warrant Certificate surrendered for transfer bears a
restrictive legend, the Warrant Agent shall not register that
transfer until the Warrant Agent has received an opinion of counsel
for the Company stating that such transfer may be made and
indicating whether the Warrants must also bear a restrictive legend
upon that transfer. The Warrant Agent shall not be required to
effect any registration of transfer or exchange which will result
in the transfer of or delivery of a Warrant Certificate for a
fraction of a Warrant.
6. [RESERVED].
7. Other Provisions
Relating to Rights of Holders of Warrants.
7.1. No Rights as
Stockholder. Except as
otherwise specifically provided herein, a Holder, solely in its
capacity as a holder of Warrants, shall not be entitled to vote or
receive dividends or be deemed the holder of share capital of the
Company for any purpose, nor shall anything contained in this
Warrant Agreement be construed to confer upon a Holder, solely in
its capacity as the registered holder of Warrants, any of the
rights of a stockholder of the Company or any right to vote, give
or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of share capital,
consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights or rights to
participate in new issues of shares, or otherwise, prior to the
issuance to the Holder of the Warrant Shares which it is then
entitled to receive upon the due exercise of
Warrants.
7.2. Reservation of Common
Stock. The Company shall at all
times reserve and keep available a number of its authorized but
unissued shares of Common Stock that will be sufficient to permit
the exercise in full of all outstanding Warrants issued pursuant to
this Warrant Agreement.
8. Concerning the Warrant
Agent and Other Matters.
8.1. Any
instructions given to the Warrant Agent orally, as permitted by any
provision of this Warrant Agreement, shall be confirmed in writing
by the Company as soon as practicable. The Warrant Agent shall not
be liable or responsible and shall be fully authorized and
protected for acting, or failing to act, in accordance with any
oral instructions which do not conform with the written
confirmation received in accordance with this Section
8.1.
8.2.
(a) Whether or not any Warrants are exercised, for the Warrant
Agent’s services as agent for the Company hereunder, the
Company shall pay to the Warrant Agent such fees as may be
separately agreed between the Company and Warrant Agent and the
Warrant Agent’s out of pocket expenses in connection with
this Warrant Agreement, including, without limitation, the fees and
expenses of the Warrant Agent’s counsel. While the Warrant
Agent endeavors to maintain out-of-pocket charges (both internal
and external) at competitive rates, these charges may not reflect
actual out-of-pocket costs, and may include handling charges to
cover internal processing and use of the Warrant Agent’s
billing systems.
(b)
All amounts owed by the Company to the Warrant Agent under this
Warrant Agreement are due within 30 days of the invoice date.
Delinquent payments are subject to a late payment charge of one and
one-half percent (1.5%) per month commencing 45 days from the
invoice date. The Company agrees to reimburse the Warrant Agent for
any attorney’s fees and any other costs associated with
collecting delinquent payments.
(c)
No provision of this Warrant Agreement shall require Warrant Agent
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties under this
Warrant Agreement or in the exercise of its rights.
8.3. As
agent for the Company hereunder the Warrant Agent:
(a) shall
have no duties or obligations other than those specifically set
forth herein or as may subsequently be agreed to in writing by the
Warrant Agent and the Company;
(b) shall
be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value, or
genuineness of the Warrants or any Warrant Shares;
(c) shall
not be obligated to take any legal action hereunder; if, however,
the Warrant Agent determines to take any legal action hereunder,
and where the taking of such action might, in its judgment, subject
or expose it to any expense or liability it shall not be required
to act unless it has been furnished with an indemnity reasonably
satisfactory to it;
(d) may
rely on and shall be fully authorized and protected in acting or
failing to act upon any certificate, instrument, opinion, notice,
letter, telegram, telex, facsimile transmission or other document
or security delivered to the Warrant Agent and believed by it to be
genuine and to have been signed by the proper party or
parties;
(e) shall
not be liable or responsible for any recital or statement contained
in the Registration Statement or any other documents relating
thereto;
(f) shall
not be liable or responsible for any failure on the part of the
Company to comply with any of its covenants and obligations
relating to the Warrants, including without limitation obligations
under applicable securities laws;
(g) may
rely on and shall be fully authorized and protected in acting or
failing to act upon the written, telephonic or oral instructions
with respect to any matter relating to its duties as Warrant Agent
covered by this Warrant Agreement (or supplementing or qualifying
any such actions) of officers of the Company, and is hereby
authorized and directed to accept instructions with respect to the
performance of its duties hereunder from the Company or counsel to
the Company, and may apply to the Company, for advice or
instructions in connection with the Warrant Agent’s duties
hereunder, and the Warrant Agent shall not be liable for any delay
in acting while waiting for those instructions; any applications by
the Warrant Agent for written instructions from the Company may, at
the option of the Agent, set forth in writing any action proposed
to be taken or omitted by the Warrant Agent under this Warrant
Agreement and the date on or after which such action shall be taken
or such omission shall be effective; the Warrant Agent shall not be
liable for any action taken by, or omission of, the Warrant Agent
in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not
be less than five business days after the date such application is
sent to the Company, unless the Company shall have consented in
writing to any earlier date) unless prior to taking any such
action, the Warrant Agent shall have received written instructions
in response to such application specifying the action to be taken
or omitted;
(h) may
consult with counsel satisfactory to the Warrant Agent, including
its in-house counsel, and the advice of such counsel shall be full
and complete authorization and protection in respect of any action
taken, suffered, or omitted by it hereunder in good faith and in
accordance with the advice of such counsel;
(i) may
perform any of its duties hereunder either directly or by or
through nominees, correspondents, designees, or subagents, and it
shall not be liable or responsible for any misconduct or negligence
on the part of any nominee, correspondent, designee, or subagent
appointed with reasonable care by it in connection with this
Warrant Agreement;
(j) is
not authorized, and shall have no obligation, to pay any brokers,
dealers, or soliciting fees to any person and
(k) shall
not be required hereunder to comply with the laws or regulations of
any country other than the United States of America or any
political subdivision thereof.
8.4.
(a) In the absence of gross negligence
or willful or illegal misconduct on its part, the Warrant Agent
shall not be liable for any action taken, suffered, or omitted by
it or for any error of judgment made by it in the performance of
its duties under this Warrant Agreement. Anything in this Warrant
Agreement to the contrary notwithstanding, in no event shall
Warrant Agent be liable for special, indirect, incidental,
consequential or punitive losses or damages of any kind whatsoever
(including but not limited to lost profits), even if the Warrant
Agent has been advised of the possibility of such losses or damages
and regardless of the form of action. Any liability of the Warrant
Agent will be limited in the aggregate to the amount of fees paid
by the Company hereunder. The Warrant Agent shall not be liable for
any failures, delays or losses, arising directly or indirectly out
of conditions beyond its reasonable control including, but not
limited to, acts of government, exchange or market ruling,
suspension of trading, work stoppages or labor disputes, fires,
civil disobedience, riots, rebellions, storms, electrical or
mechanical failure, computer hardware or software failure,
communications facilities failures including telephone failure,
war, terrorism, insurrection, earthquakes, floods, acts of God or
similar occurrences.
(b)
In the event any question or dispute arises with respect to the
proper interpretation of the Warrants or the Warrant Agent’s
duties under this Warrant Agreement or the rights of the Company or
of any Holder, the Warrant Agent shall not be required to act and
shall not be held liable or responsible for its refusal to act
until the question or dispute has been judicially settled (and, if
appropriate, it may file a suit in interpleader or for a
declaratory judgment for such purpose) by final judgment rendered
by a court of competent jurisdiction, binding on all persons
interested in the matter which is no longer subject to review or
appeal, or settled by a written document in form and substance
satisfactory to Warrant Agent and executed by the Company and each
such Holder. In addition, the Warrant Agent may require for such
purpose, but shall not be obligated to require, the execution of
such written settlement by all the Holders and all other persons
that may have an interest in the settlement.
8.5. The Company covenants to indemnify the
Warrant Agent and hold it harmless from and against any loss,
liability, claim or expense (“Loss”)
arising out of or in connection with the Warrant Agent’s
duties under this Warrant Agreement, including the costs and
expenses of defending itself against any Loss, unless such Loss
shall have been determined by a court of competent jurisdiction to
be a result of the Warrant Agent’s gross negligence or
willful misconduct.
8.6. Unless terminated earlier by the parties
hereto, this Agreement shall terminate 90 days after the earlier of
the Expiration Date and the date on which no Warrants remain
outstanding (the “Termination
Date”). On the business
day following the Termination Date, the Agent shall deliver to the
Company any entitlements, if any, held by the Warrant Agent under
this Warrant Agreement. The Agent’s right to be reimbursed
for fees, charges and out-of-pocket expenses as provided in this
Section 8 shall survive the termination of this Warrant
Agreement.
8.7. If
any provision of this Warrant Agreement shall be held illegal,
invalid, or unenforceable by any court, this Warrant Agreement
shall be construed and enforced as if such provision had not been
contained herein and shall be deemed an Agreement among the parties
to it to the full extent permitted by applicable law.
8.8. The
Company represents and warrants that (a) it is duly incorporated
and validly existing under the laws of its jurisdiction of
incorporation, (b) the offer and sale of the Warrants and the
execution, delivery and performance of all transactions
contemplated thereby (including this Warrant Agreement) have been
duly authorized by all necessary corporate action and will not
result in a breach of or constitute a default under the articles of
association, bylaws or any similar document of the Company or any
indenture, agreement or instrument to which it is a party or is
bound, (c) this Warrant Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid, binding
and enforceable obligation of the Company, (d) the Warrants will
comply in all material respects with all applicable requirements of
law and (e) to the best of its knowledge, there is no litigation
pending or threatened as of the date hereof in connection with the
offering of the Warrants.
8.9. In
the event of inconsistency between this Warrant Agreement and the
descriptions in the Registration Statement, as they may from time
to time be amended, the terms of this Warrant Agreement shall
control.
8.10. Set forth in Annex
D hereto is a list of the
names and specimen signatures of the persons authorized to act for
the Company under this Warrant Agreement (the
“Authorized
Representatives”). The
Company shall, from time to time, certify to you the names and
signatures of any other persons authorized to act for the Company
under this Warrant Agreement.
8.11. Any
notice, statement or demand authorized by this Warrant Agreement to
be given or made by the Warrant Agent or by the holder of any
Warrant to or on the Company, including without limitation, any
Notice of Exercise, shall be delivered by e-mail, hand or sent by
registered or certified mail or overnight courier service,
addressed (until another address is filed in writing by the Company
with the Warrant Agent) as set forth below and if to any holder any
notice, statement or demand shall be given to the last address set
forth for such holder (if any) in the Warrant
Register:
Recruiter.com
Group, Inc.
100
Waugh Dr. Suite 300
Houston, Texas
77007
Attention:
Evan Sohn, Chief Executive Officer
Email:
with a copy (which shall not constitute notice) to:
Lucosky
Brookman LLP
101
Wood Avenue South, Fifth Floor
Woodbridge, New
Jersey 08830
Attention: Joseph
Lucosky, Esq.
Fax No:
732 395 4401
email:
Any notice, statement or demand authorized by this Warrant
Agreement to be given or made by the holder of any Warrant or by
the Company to or on the Warrant Agent shall be delivered by
facsimile, hand or sent by registered or certified mail or
overnight courier service, addressed (until another address is
filed in writing by the Warrant Agent with the Company), as
follows:
Philadelphia Stock
Transfer, Inc.
2320
Haverford Rd.
Ardmore, PA
19003
Attn:
Bob Winterle
Email:
Any notice or other communication or deliveries hereunder shall be
deemed given and effective on the earliest of (i) the time of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number or email at the email address set
forth in this Section prior to 5:30 p.m. (New York City time) on
any date, (ii) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the
facsimile number or email at the email address set forth in this
Section on a day that is not a Trading Day or later than 5:30 p.m.
(New York City time) on any Trading Day, (iii) the second Trading
Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be
given.
8.12. (a)
This Warrant Agreement shall be governed by and construed in
accordance with the laws of the State of New York. All actions and
proceedings relating to or arising from, directly or indirectly,
this Warrant Agreement may be litigated in courts located within
the Borough of Manhattan in the City and State of New York. The
Company hereby submits to the personal jurisdiction of such courts
and consents that any service of process may be made by certified
or registered mail, return receipt requested, directed to the
Company at its address last specified for notices hereunder. Each
of the parties hereto hereby waives the right to a trial by jury in
any action or proceeding arising out of or relating to this Warrant
Agreement.
(b)
This Warrant Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the parties hereto. This Warrant
Agreement may not be assigned, or otherwise transferred, in whole
or in part, by either party without the prior written consent of
the other party, which the other party will not unreasonably
withhold, condition or delay; except that (i) consent is not
required for an assignment or delegation of duties by Warrant Agent
to any affiliate of Warrant Agent and (ii) any reorganization,
merger, consolidation, sale of assets or other form of business
combination by Warrant Agent or the Company shall not be deemed to
constitute an assignment of this Warrant Agreement.
(c)
No provision of this Warrant Agreement may be amended, modified or
waived, except in a written document signed by both the Company and
the Warrant Agent, and the vote or written consent of Holders of at
least 50.1% of the then outstanding Warrants, provided that
adjustments may be made to the Warrant terms and rights in
accordance with Section 4 without the consent of the Holders.
Notwithstanding the foregoing, the Company and the Warrant Agent
may amend or supplement this Warrant Agreement without the consent
of any Holder for the purpose of curing any ambiguity, or curing,
correcting or supplementing any defective provision contained
herein or adding or changing any other provisions with respect to
matters or questions arising under this Agreement as the parties
may deem necessary or desirable and that the parties determine, in
good faith, shall not adversely affect the interest of the
Holders.
8.13. Payment of
Taxes. The Company will from
time to time promptly pay all taxes and charges that may be imposed
upon the Company or the Warrant Agent in respect of the issuance or
delivery of Warrant Shares upon the exercise of Warrants, but the
Company may require the Holders to pay any transfer taxes in
respect of the Warrants or such shares. The Warrant Agent may
refrain from registering any transfer of Warrants or any delivery
of any Warrant Shares unless or until the persons requesting the
registration or issuance shall have paid to the Warrant Agent for
the account of the Company the amount of such tax or charge, if
any, or shall have established to the reasonable satisfaction of
the Company and the Warrant Agent that such tax or charge, if any,
has been paid.
8.14. Resignation of Warrant
Agent.
8.14.1. Appointment of
Successor Warrant Agent. The
Warrant Agent, or any successor to it hereafter appointed, may
resign its duties and be discharged from all further duties and
liabilities hereunder after giving thirty (30) days’ notice
in writing to the Company, or such shorter period of time agreed to
by the Company. The Company may terminate the services of the
Warrant Agent, or any successor Warrant Agent, after giving thirty
(30) days’ notice in writing to the Warrant Agent or
successor Warrant Agent, or such shorter period of time as agreed.
If the office of the Warrant Agent becomes vacant by resignation,
termination or incapacity to act or otherwise, the Company shall
appoint in writing a successor Warrant Agent in place of the
Warrant Agent. If the Company shall fail to make such appointment
within a period of 30 days after it has been notified in writing of
such resignation or incapacity by the Warrant Agent, then the
Warrant Agent or any Holder may apply to any court of competent
jurisdiction for the appointment of a successor Warrant Agent at
the Company’s cost. Pending appointment of a successor to
such Warrant Agent, either by the Company or by such a court, the
duties of the Warrant Agent shall be carried out by the Company.
Any successor Warrant Agent (but not including the initial Warrant
Agent), whether appointed by the Company or by such court, shall be
a person organized and existing under the laws of any state of the
United States of America, in good standing, and authorized under
such laws to exercise corporate trust powers and subject to
supervision or examination by federal or state authority. After
appointment, any successor Warrant Agent shall be vested with all
the authority, powers, rights, immunities, duties, and obligations
of its predecessor Warrant Agent with like effect as if originally
named as Warrant Agent hereunder, without any further act or deed,
and except for executing and delivering documents as provided in
the sentence that follows, the predecessor Warrant Agent shall have
no further duties, obligations, responsibilities or liabilities
hereunder, but shall be entitled to all rights that survive the
termination of this Warrant Agreement and the resignation or
removal of the Warrant Agent, including but not limited to its
right to indemnity hereunder. If for any reason it becomes
necessary or appropriate or at the request of the Company, the
predecessor Warrant Agent shall execute and deliver, at the expense
of the Company, an instrument transferring to such successor
Warrant Agent all the authority, powers, and rights of such
predecessor Warrant Agent hereunder; and upon request of any
successor Warrant Agent the Company shall make, execute,
acknowledge, and deliver any and all instruments in writing for
more fully and effectually vesting in and confirming to such
successor Warrant Agent all such authority, powers, rights,
immunities, duties, and obligations.
8.14.2. Notice of Successor
Warrant Agent. In the event a
successor Warrant Agent shall be appointed, the Company shall give
notice thereof to the predecessor Warrant Agent and the transfer
agent for the Common Stock not later than the effective date of any
such appointment.
8.14.3. Merger or
Consolidation of Warrant Agent.
Any person into which the Warrant Agent may be merged or converted
or with which it may be consolidated or any person resulting from
any merger, conversion or consolidation to which the Warrant Agent
shall be a party or any person succeeding to the shareowner
services business of the Warrant Agent or any successor Warrant
Agent shall be the successor Warrant Agent under this Warrant
Agreement, without any further act or deed. For purposes of this
Warrant Agreement, “person” shall mean any individual,
firm, corporation, partnership, limited liability company, joint
venture, association, trust or other entity, and shall include any
successor (by merger or otherwise) thereof or
thereto.
9. Miscellaneous
Provisions.
9.1. Persons Having Rights
under this Warrant Agreement.
Nothing in this Warrant Agreement expressed and nothing that may be
implied from any of the provisions hereof is intended, or shall be
construed, to confer upon, or give to, any person or corporation
other than the parties hereto and the Holders any right, remedy, or
claim under or by reason of this Warrant Agreement or of any
covenant, condition, stipulation, promise, or agreement
hereof.
9.2. Examination of the
Warrant Agreement. A copy of
this Warrant Agreement shall be available at all reasonable times
at the office of the Warrant Agent designated for such purpose for
inspection by any Holder. Prior to such inspection, the Warrant
Agent may require any such holder to provide reasonable evidence of
its interest in the Warrants.
9.3. Counterparts.
This Warrant Agreement may be executed in any number of original,
facsimile or electronic counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
9.4. Effect of
Headings. The Section headings
herein are for convenience only and are not part of this Warrant
Agreement and shall not affect the interpretation
thereof.
10. Certain
Definitions. As used herein,
the following terms shall have the following
meanings:
(i) “Adjustment
Right” means any right
granted with respect to any securities issued in connection with,
or with respect to, any issuance, sale or delivery (or deemed
issuance, sale or delivery in accordance with Section 4) of Common
Stock (other than rights of the type described in Section 4.2 and
4.3 hereof) that could result in a decrease in the net
consideration received by the Company in connection with, or with
respect to, such securities (including, without limitation, any
cash settlement rights, cash adjustment or other similar rights)
but excluding anti-dilution and other similar rights (including
pursuant to Section 4.4 of this Agreement).
(ii) “Trading
Day” means any day on
which the Common Stock is traded on the Trading Market, or, if the
Trading Market is not the principal trading market for the Common
Stock, then on the principal securities exchange or securities
market in the United States on which the Common Stock is then
traded, provided that “Trading Day” shall not include
any day on which the Common Stock is are scheduled to trade on such
exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of
trading on such exchange or market (or if such exchange or market
does not designate in advance the closing time of trading on such
exchange or market, then during the hour ending at 4:00 P.M., New
York City time).
(iii) “Trading
Market” means NYSE
American, the Nasdaq Capital Market, the Nasdaq Global Market, the
Nasdaq Global Select Market or the New York Stock Exchange (or any
successors to any of the foregoing).
(iv) “VWAP”
means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time)), (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date
(or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on
OTCQB or OTCQX and if prices for the Common Stock are then reported
on the Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by
the holders of a majority in interest of the Warrants then
outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, this Warrant Agent Agreement has been duly
executed by the parties hereto as of the day and year first above
written.
RECRUITER.COM
GROUP, INC.
By:_____________________________________
Name:
Evan Sohn
Title:
Chief Executive Officer
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PHILADELPHIA
STOCK TRANSFER,
INC.,
as Warrant Agent
By:_____________________________________
Name:
Title:
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[Signature Page—Warrant Agent Agreement]
Annex A - Form of Global
Certificate
Annex B - Election to
Purchase
Annex C - Form of
Certificated Warrant
Annex D - Authorized
Representatives
Annex E - Form of Warrant
Certificate Request Notice
ANNEX A
[FORM OF GLOBAL CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
RECRUITER.COM GROUP, INC.
WARRANT CERTIFICATE
NOT EXERCISABLE AFTER JULY 2, 2026
This certifies that the person whose name and
address appears below, or registered assigns, is the registered
owner of the number of Warrants set forth below. Each Warrant
entitles its registered holder to purchase from RECRUITER.COM
GROUP, INC., a Nevada corporation (the “Company”),
at any time prior to 5:00 P.M. (New York City time) on July 2,
2026, one share of common stock, par value $0.0001 per share, of
the Company (each, a “Warrant
Share” and collectively,
the “Warrant
Shares”), at an exercise
price of $5.50 per share, subject to possible adjustments as
provided in the Warrant Agreement (as defined
below).
This
Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the designated office of the Warrant Agent, may
be exchanged for another Warrant Certificate or Warrant
Certificates evidencing the same number of Warrants as the Warrant
Certificate or Warrant Certificates surrendered. A transfer of the
Warrants evidenced hereby may be registered upon surrender of this
Warrant Certificate at the designated office of the Warrant Agent
by the registered holder in person or by a duly authorized
attorney, properly endorsed or accompanied by proper instruments of
transfer, a signature guarantee, and such other and further
documentation as the Warrant Agent may reasonably request and duly
stamped as may be required by the laws of the State of New York and
of the United States of America.
The terms and conditions of the Warrants and the
rights and obligations of the holder of this Warrant Certificate
are set forth in the Warrant Agent Agreement dated as of July 2,
2021 (the “Warrant
Agreement”) between the
Company and Philadelphia Stock Transfer, Inc. (the “Warrant
Agent”). A copy of the
Warrant Agreement is available for inspection during business hours
at the office of the Warrant Agent.
This
Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized
signatory of the Warrant Agent.
WITNESS
the facsimile signature of a proper officer of the
Company.
RECRUITER.COM GROUP, INC.
By:_____________________________________
Name:
Evan Sohn
Title:
Chief Executive Officer
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Dated: July 2, 2021
Countersigned:
PHILEDELPHIA STOCK TRANSFER, INC.
as Warrant Agent
By:
__________________________
Name:
__________________________
Title::
__________________________
Certificate No.: 1 Number of Warrants: 2,760,000
WARRANT CUSIP NO.: 75630B113
[Name
& Address of Holder]
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RECRUITER.COM GROUP, INC.
Philadelphia
Stock Transfer, Inc., Warrant Agent
By
mail:
___________________________________
By hand
or overnight courier:__________________
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ANNEX B
NOTICE OF EXERCISE
TO:
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RECRUITER.COM GROUP, INC.
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(1)
The undersigned hereby elects to purchase ________ Warrant Shares
of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if
any.
(2)
Payment shall take the form of (check applicable box):
[ ]
in lawful money of the United States; or
[ ]
if permitted the cancellation of such number of Warrant Shares as
is necessary, in accordance with the formula set forth in
subsection 2(c), to exercise this Warrant with respect to the
maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection
2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or
in such other name as is specified below:
_______________________________________________________
The Warrant Shares shall be delivered to the following DWAC Account
Number:
________________________________________________________
________________________________________________________
________________________________________________________
[SIGNATURE OF HOLDER]
Name of
Investing Entity:
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Signature of Authorized Signatory of Investing
Entity:
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Name of
Authorized Signatory:
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Title
of Authorized Signatory:
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Date:
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ANNEX C
[FORM OF CERTIFICATED WARRANT]
COMMON STOCK PURCHASE WARRANT
RECRUITER.COM GROUP, INC.
Warrant
Shares: _______
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Initial
Exercise Date: July 2, 2021
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Issue
Date: July 2, 2021
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THIS COMMON STOCK PURCHASE WARRANT (the
“Warrant”)
certifies that, for value received, _____________ or its assigns
(the “Holder”)
is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on
or after July 2, 2021 (the
“Initial Exercise
Date”) and on or prior to
5:00 p.m. (New York City time) on July 2, 2026 (the
“Termination
Date”) but not
thereafter, to subscribe for and purchase from Recruiter.com Group,
Inc., a Nevada corporation (the “Company”),
up to ______ shares (as subject to adjustment hereunder, the
“Warrant
Shares”) of Common Stock.
The purchase price of one share of Common Stock under this Warrant
shall be equal to the Exercise Price, as defined in Section 2(b).
This Warrant shall initially be issued and maintained in the form
of a security held in book-entry form and the Depository Trust
Company or its nominee (“DTC”) shall initially be the sole registered
holder of this Warrant, subject to a Holder’s right to elect
to receive a Warrant in certificated form pursuant to the terms of
the Warrant Agent Agreement, in which case this sentence shall not
apply.
Section
1. Definitions.
In addition to the terms defined elsewhere in this Warrant, the
following terms have the meanings indicated in this Section
1:
“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed
under Rule 405 under the Securities Act.
“Business
Day” means any day except
any Saturday, any Sunday, any day which is a federal legal holiday
in the United States or any day on which banking institutions in
the State of New York are authorized or required by law or other
governmental action to close.
“Commission”
means the United States Securities and Exchange
Commission.
“Common
Stock” means the common
stock of the Company, par value $0.0001 per share, and any other
class of securities into which such securities may hereafter be
reclassified or changed.
“Common Stock
Equivalents” means any
securities of the Company or the Subsidiaries which would entitle
the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, right, option,
warrant or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Stock
“Exchange
Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Person”
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any
kind.
“Proceeding”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or
partial proceeding, such as a deposition), whether commenced or
threatened.
“Registration
Statement” means the
Company’s registration statement on Form S-1 (File No.
333-249208), as the same may be
amended from time to time.
“Restrictive Legend
Event” means any time
that the Company is unable to deliver the Warrant Shares via DTC
transfer or otherwise without restrictive legend because (A) the
Commission has issued a stop order with respect to the Registration
Statement, (B) the Commission otherwise has suspended or withdrawn
the effectiveness of the Registration Statement, either temporarily
or permanently, (C) the Company has suspended or withdrawn the
effectiveness of the Registration Statement, either temporarily or
permanently, (D) the prospectus contained in the Registration
Statement is not available for the issuance of the Warrant Shares
to the Holder or (E) otherwise.
“Rule
144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“Securities
Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
“Trading
Day” means a day on which
the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the
following markets or exchanges on which the Common Stock is listed
or quoted for trading on the date in question: the NYSE American,
the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, or the New York Stock Exchange (or any
successors to any of the foregoing).
“Transfer
Agent” means Philadelphia
Stock Transfer, Inc., with a mailing address of 2320
Haverford Rd., Ardmore, PA 19003 and a
facsimile number of 484-416-3597, and any successor transfer agent
of the Company.
“Warrant Agent
Agreement” means that
certain Warrant Agent Agreement, dated as of the Initial Exercise
Date, between the Company and the Warrant
Agent.
“Warrant
Agent” means the Transfer
Agent and any successor warrant agent of the
Company.
“Warrants”
means this Warrant and other Common Stock Purchase Warrants issued
by the Company pursuant to the Registration
Statement.
Section
2. Exercise.
a)
Exercise of the purchase rights represented by this Warrant may be
made, in whole or in part, at any time or times on or after the
Issuance Date and on or before close of business on the Termination
Date by delivery to the Company or the Warrant Agent of a duly
executed facsimile copy (or email attachment) of the Notice of
Exercise in the form annexed hereto (the “Notice of
Exercise”). Within the earlier of (i) two (2) Trading Days
and (ii) the number of Trading Days comprising the Standard
Settlement Period (as defined in Section 2(d)(i)) following the
date of exercise as aforesaid, the Holder shall deliver the
aggregate Exercise Price for the shares specified in the applicable
Notice of Exercise to the Company by wire transfer or
cashier’s check drawn on a United States bank unless the
cashless exercise procedure specified in Section 2(c) below is
specified in the applicable Notice of Exercise. No ink-original
Notice of Exercise shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any
Notice of Exercise form be required. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date the final Notice of Exercise is
delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise
within one (1) Trading Day of receipt of such notice. The
Holder and any assignee, by acceptance of this Warrant, acknowledge
and agree that, by reason of the provisions of this paragraph,
following the purchase of a portion of the Warrant Shares
hereunder, the number of Warrant Shares available for purchase
hereunder at any given time may be less than the amount stated on
the face hereof.
Notwithstanding the
foregoing in this Section 2(a), a holder whose interest in this
Warrant is a beneficial interest in certificate(s) representing
this Warrant held in book-entry form through DTC (or another
established clearing corporation performing similar functions),
shall effect exercises made pursuant to this Section 2(a) by
delivering to DTC (or such other clearing corporation, as
applicable) the appropriate instruction form for exercise,
complying with the procedures to effect exercise that are required
by DTC (or such other clearing corporation, as applicable), subject
to a Holder’s right to elect to receive a Warrant in
certificated form pursuant to the terms of the Warrant Agent
Agreement, in which case this sentence shall not
apply.
b) Exercise
Price. The exercise price per
share of the Common Stock under this Warrant shall
be $5.50, subject to adjustment hereunder (the
“Exercise
Price”).
c) Cashless
Exercise. If at the time of
exercise hereof there is no effective registration statement
registering, or the prospectus contained therein is not available
for the issuance of the Warrant Shares to the Holder, then this
Warrant shall only be exercised, in whole or in part, at such time
by means of a “cashless exercise” in which the Holder
shall be entitled to receive a number of Warrant Shares equal to
the quotient (if such quotient would be a positive number) obtained
by dividing [(A-B) (X)] by (A), where:
(A)
= the last VWAP immediately preceding the time of delivery of the
Notice of Exercise giving rise to the applicable “cashless
exercise”, as set forth in the applicable Notice of Exercise
(to clarify, the “last VWAP” will be the last VWAP as
calculated over an entire Trading Day such that, in the event that
this Warrant is exercised at a time that the Trading Market is
open, the prior Trading Day’s VWAP shall be used in this
calculation);
(B)
= the Exercise Price of this Warrant, as adjusted hereunder;
and
(X)
= the number of Warrant Shares that would be issuable upon exercise
of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise rather than a
cashless exercise.
If Warrant Shares are issued in such a cashless exercise, the
parties acknowledge and agree that in accordance with Section
3(a)(9) of the Securities Act, the Warrant Shares shall take on the
registered characteristics of the Warrants being exercised. The
Company agrees not to take any position contrary to this Section
2(c).
“VWAP”
means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time)), (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date
(or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on
OTCQB or OTCQX and if prices for the Common Stock are then reported
on the Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by
the holders of a majority in interest of the Warrants then
outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
Notwithstanding
anything herein to the contrary, on the Termination Date, this
Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2(c). Furthermore, if a Restrictive
Legend Event has occurred, the Warrant shall only be exercisable on
a cashless basis. Notwithstanding anything herein to the contrary,
the Company shall not be required to make any cash payments or net
cash settlement to the Holder in lieu of delivery of the Warrant
Shares.
d) Mechanics of
Exercise.
i. Delivery of Warrant
Shares Upon Exercise. The
Company shall cause the Warrant Shares purchased hereunder to be
transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s or its designee’s balance
account with The Depository Trust Company through its Deposit or
Withdrawal at Custodian system (“DWAC”)
if the Transfer Agent is then a participant in such system and
either (A) there is an effective registration statement permitting
the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) this Warrant is being exercised via
cashless exercise, and otherwise by physical delivery of a
certificate, registered in the Company’s share register in
the name of the Holder or its designee, for the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to
the address specified by the Holder in the Notice of Exercise by
the date that is earlier of (i) two (2) Trading Days after the
delivery to the Company of the Notice of Exercise and (ii) the
number of Trading Days comprising the Standard Settlement Period
after the delivery to the Company of the Notice of Exercise and
provided that payment in full of the aggregate Exercise Price
(other than in the case of a cashless exercise) is received by the
Company one (1) Trading Day thereafter (such date, the
“Warrant Share Delivery
Date”). Upon delivery of
the Notice of Exercise, the Holder shall be deemed for all
corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the Warrant
Shares, provided that payment of the aggregate Exercise Price
(other than in the case of a cashless exercise) is received within
the earlier of (i) two (2) Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period following
the delivery of the Notice of Exercise. If the Company fails for
any reason to deliver to the Holder the Warrant Shares subject to a
Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as
a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the
applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the fifth Trading Day after such liquidated
damages begin to accrue) for each Trading Day after such Warrant
Share Delivery Date until such Warrant Shares are delivered or
Holder rescinds such exercise. The Company agrees to maintain a
transfer agent that is a participant in the FAST program so long as
this Warrant remains outstanding and exercisable. As used herein,
“Standard Settlement
Period” means the
standard settlement period, expressed in a number of Trading Days,
on the Company’s primary Trading Market with respect to the
Common Stock as in effect on the date of delivery of the Notice of
Exercise.
ii. Delivery of New
Warrants Upon Exercise. If this
Warrant shall have been exercised in part, the Company shall, at
the request of a Holder and upon surrender of this Warrant
certificate, at the time of delivery of the Warrant Shares, deliver
to the Holder a new Warrant evidencing the rights of the Holder to
purchase the unpurchased Warrant Shares called for by this Warrant,
which new Warrant shall in all other respects be identical with
this Warrant.
iii. Rescission
Rights. If the Company fails to
cause the Transfer Agent to transmit to the Holder the Warrant
Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery
Date, then the Holder will have the right to rescind such
exercise.
iv. Compensation for
Buy-In on Failure to Timely Deliver Warrant Shares Upon
Exercise. In addition to any
other rights available to the Holder, if the Company fails to cause
the Transfer Agent to transmit to the Holder the Warrant Shares in
accordance with the provisions of Section 2(d)(i) above pursuant to
an exercise on or before the Warrant Share Delivery Date, and if
after such date the Holder is required by its broker to purchase
(in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant
Shares which the Holder anticipated receiving upon such exercise (a
“Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if
any, by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue
times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored
(in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have
been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms
hereof.
v. No Fractional Shares
or Scrip. No fractional shares
or scrip representing fractional shares shall be issued upon the
exercise of this Warrant. As to any fraction of a share which the
Holder would otherwise be entitled to purchase upon such exercise,
the Company shall, at its election, either pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole
share.
vi. Charges, Taxes and
Expenses. Issuance of Warrant
Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance
of such Warrant Shares, all of which taxes and expenses shall be
paid by the Company, and such Warrant Shares shall be issued in the
name of the Holder or in such name or names as may be directed by
the Holder; provided, however,
that in the event Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder and the Company may require, as
a condition thereto, the payment of a sum sufficient to reimburse
it for any transfer tax incidental thereto. The Company shall pay
all Transfer Agent fees required for same-day processing of any
Notice of Exercise and all fees to the Depository Trust Company (or
another established clearing corporation performing similar
functions) required for same-day electronic delivery of the Warrant
Shares.
vii. Closing of
Books. The Company will not
close its stockholder books or records in any manner which prevents
the timely exercise of this Warrant, pursuant to the terms
hereof.
e) Holder’s
Exercise Limitations. The
Company shall not effect any exercise of this Warrant, and a Holder
shall not have the right to exercise any portion of this Warrant,
pursuant to Section 2 or otherwise, to the extent that after giving
effect to such issuance after exercise as set forth on the
applicable Notice of Exercise, the Holder (together with the
Holder’s Affiliates, and any other Persons acting as a group
together with the Holder or any of the Holder’s Affiliates
(such Persons, “Attribution
Parties”)), would
beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder
and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant
with respect to which such determination is being made, but shall
exclude the number of shares of Common Stock which would be
issuable upon (i) exercise of the remaining, non-exercised portion
of this Warrant beneficially owned by the Holder or any of its
Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or non-converted portion of any other securities
of the Company (including, without limitation, any other Common
Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for
purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The
“Beneficial Ownership
Limitation” shall be
4.99% (or, upon election by a Holder prior to the issuance of any
Warrants, 9.99%) of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock issuable upon exercise of this Warrant. The
Holder, upon notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 2(e),
provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock upon exercise of this Warrant held by the
Holder and the provisions of this Section 2(e) shall continue to
apply. Any increase in the Beneficial Ownership Limitation will not
be effective until the 61st day after such notice is delivered to the
Company. The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with
the terms of this Section 2(e) to correct this paragraph (or any
portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation herein contained or to
make changes or supplements necessary or desirable to properly give
effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of this
Warrant.
Section
3. Certain
Adjustments.
(a) Stock Dividends and
Splits. If the Company, at any
time while this Warrant is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt,
shall not include any shares of Common Stock issued by the Company
upon exercise of this Warrant), (ii) subdivides outstanding shares
of Common Stock into a larger number of shares, (iii) combines
(including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (iv) issues by
reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares, if
any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock
outstanding immediately after such event, and the number of shares
issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to this
Section 3(a) shall become effective immediately after the record
date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination
or re-classification.
(b) Subsequent Rights
Offerings. In addition to any
adjustments pursuant to Section 3(a) above, if at any time the
Company grants, issues or sells any Common Stock Equivalents or
rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common
Stock (the “Purchase
Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in
abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
(c) Pro Rata
Distributions. During such time
as this Warrant is outstanding, if the Company shall declare or
make any dividend or other distribution of its assets (or rights to
acquire its assets) to holders of shares of Common Stock, by way of
return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction)
(a “Distribution”),
at any time after the issuance of this Warrant, then, in each such
case, the Holder shall be entitled to participate in such
Distribution to the same extent that the Holder would have
participated therein if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such
Distribution, or, if no such record is taken, the date as of which
the record holders of shares of Common Stock are to be determined
for the participation in such Distribution (provided, however,
to the extent that the Holder’s right to participate in any
such Distribution would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result
of such Distribution to such extent) and the portion of such
Distribution shall be held in abeyance for the benefit of the
Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership
Limitation).
(d) Fundamental
Transaction. If, at any time
while this Warrant is outstanding, (i) the Company, directly or
indirectly, in one or more related transactions effects any merger
or consolidation of the Company with or into another Person, (ii)
the Company, directly or indirectly, effects any sale, lease,
license, assignment, transfer, conveyance or other disposition of
all or substantially all of its assets in one or a series of
related transactions, (iii) any, direct or indirect, purchase
offer, tender offer or exchange offer (whether by the Company or
another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for
other securities, cash or property and has been accepted by the
holders of 50% or more of the outstanding Common Stock, (iv) the
Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or
recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property,
or (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or
other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person or group of Persons whereby such
other Person or group acquires more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business
combination) (each a “Fundamental
Transaction”), then, upon
any subsequent exercise of this Warrant, the Holder shall have the
right to receive, for each Warrant Share that would have been
issuable upon such exercise immediately prior to the occurrence of
such Fundamental Transaction, at the option of the Holder (without
regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of shares of Common Stock of the successor or
acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the
“Alternate
Consideration”)
receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such
Fundamental Transaction. The Company shall cause any successor
entity in a Fundamental Transaction in which the Company is not the
survivor (the “Successor
Entity”) to assume in
writing all of the obligations of the Company under this Warrant in
accordance with the provisions of this Section 3(d) pursuant to
written agreements and shall, upon the written request of such
Holder, deliver to such Holder in exchange for this Warrant a
security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant, which
is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to
the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such
shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such exercise price being for
the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and
substance to the Holder. Upon the occurrence of any such
Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant referring
to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this
Warrant with the same effect as if such Successor Entity had been
named as the Company herein.
(e) Calculations.
All calculations under this Section 3 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock
deemed to be issued and outstanding as of a given date shall be the
sum of the number of shares of Common Stock (excluding treasury
shares, if any) issued and outstanding.
(f) Notice to
Holder.
i. Adjustment to Exercise
Price. Whenever the Exercise
Price is adjusted pursuant to any provision of this Section 3, the
Company shall promptly deliver to the Holder by facsimile or email
a notice setting forth the Exercise Price after such adjustment and
any resulting adjustment to the number of Warrant Shares and
setting forth a brief statement of the facts requiring such
adjustment.
ii. Notice to Allow
Exercise by Holder. If (A) the
Company shall declare a dividend (or any other distribution in
whatever form) on the Common Stock, (B) the Company shall declare a
special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders
of the Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Company shall be required in
connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the
Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the
Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in
each case, the Company shall cause to be delivered by facsimile or
email to the Holder at its last facsimile number or email address
as it shall appear upon the Warrant Register of the Company, at
least ten (10) calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action
required to be specified in such notice. To the extent that any
notice provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K. The
Holder shall remain entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date
of the event triggering such notice except as may otherwise be
expressly set forth herein. Notwithstanding the requirement to
provide or mail written notice to a Holder set forth in this
Section 3, the Company shall not be required to provide or mail a
written notice to any Holder, and shall not be required to instruct
the Warrant Agent to provide or mail a written notice if the
transaction or transactions resulting in any adjustment described
in this Section 3 is disclosed publicly via a press release,
Current Report on Form 8-K, other filing with the Commission or
other means of public dissemination.
Section
4. Transfer of
Warrant.
(a) Transferability.
This Warrant and all rights hereunder are transferable, in whole or
in part, upon surrender of this Warrant at the principal office of
the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making
of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and
this Warrant shall promptly be cancelled. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days
of the date the Holder delivers an assignment form to the Company
assigning this Warrant full. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant
issued.
(b) New
Warrants. If this Warrant is
not held in global form through DTC (or any successor depository),
this Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the
Holder or its agent or attorney. Subject to compliance with Section
4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice. All Warrants issued on
transfers or exchanges shall be dated the original Initial Exercise
Date of this Warrant and shall be identical with this Warrant
except as to the number of Warrant Shares issuable pursuant
thereto.
(c) Warrant
Register. The Warrant Agent
shall register this Warrant, upon records to be maintained by the
Warrant Agent for that purpose (the “Warrant
Register”), in the name
of the record Holder hereof from time to time. The Company and the
Warrant Agent may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the
contrary.
Section
5. Miscellaneous.
(a) No Rights as
Stockholder Until Exercise.
This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to
the exercise hereof as set forth in Section 2(d)(i), except as
expressly set forth in Section 3.
(b) Loss, Theft,
Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably
satisfactory to it, and upon surrender and cancellation of such
Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and
dated as of such cancellation, in lieu of such Warrant or stock
certificate.
(c) Saturdays, Sundays,
Holidays, etc. If the last or
appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a Business Day, then,
such action may be taken or such right may be exercised on the next
succeeding Business Day.
(d) Authorized
Shares.
(i) The
Company covenants that, during the period the Warrant is
outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of issuing the necessary
Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which
the Common Stock may be listed. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of
the purchase rights represented by this Warrant and payment for
such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and non-assessable and free from all
taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).
(ii) Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations
under this Warrant.
(iii) Before
taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction
thereof.
(e) Governing
Law. All questions concerning
the construction, validity, enforcement and interpretation of this
Warrant shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without
regard to the principles of conflict of laws thereof. Each party
agrees that all legal Proceedings concerning the interpretation,
enforcement and defense of this Warrant shall be commenced in the
state and federal courts sitting in the City of New York, Borough
of Manhattan (the “New York
Courts”). Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of
the New York Courts for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the
enforcement of any provision hereunder), and hereby irrevocably
waives, and agrees not to assert in any suit, action or Proceeding,
any claim that it is not personally subject to the jurisdiction of
such New York Courts, or such New York Courts are improper or
inconvenient venue for such Proceeding. Each party hereto 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 Warrant. If any party shall
commence an action or Proceeding to enforce any provisions of this
Warrant, then the prevailing party in such action or Proceeding
shall be reimbursed by the other party for its attorneys’
fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or
Proceeding.
(f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, and the Holder does
not utilize cashless exercise, will have restrictions upon resale
imposed by state and federal securities laws.
(g) Nonwaiver and
Expenses. No course of dealing
or any delay or failure to exercise any right hereunder on the part
of Holder shall operate as a waiver of such right or otherwise
prejudice the Holder’s rights, powers or remedies. Without
limiting any other provision of this Warrant, if the Company
willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the
Company shall pay to the Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to,
reasonable attorneys’ fees, including those of appellate
Proceedings, incurred by the Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.
(h) Notices.
Any and all notices or other communications or deliveries to be
provided by the Holders hereunder including, without limitation,
any Notice of Exercise, shall be in writing and delivered
personally, by facsimile or by email, or sent by a nationally
recognized overnight courier service, addressed to the Company, at
Recruiter.com Group, Inc., 100 Waugh Dr. Suite 300, Houston,
Texas 77007, Attention: Evan Sohn,
Jr., Chief Executive Officer, email address: or such other
facsimile number, email address or address as the Company may
specify for such purposes by notice to the Holders. Any and all
notices or other communications or deliveries to be provided by the
Company hereunder shall be in writing and delivered personally, by
facsimile, or sent by a nationally recognized overnight courier
service addressed to each Holder at the facsimile number or address
of such Holder appearing on the books of the Warrant Agent. Any
notice or other communication or deliveries hereunder shall be
deemed given and effective on the earliest of (i) the time of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number or email at the email address set
forth in this Section prior to 5:30 p.m. (New York City time) on
any date, (ii) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the
facsimile number or email at the email address set forth in this
Section on a day that is not a Trading Day or later than 5:30 p.m.
(New York City time) on any Trading Day, (iii) the second Trading
Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given.
Notwithstanding any other provision of this Warrant, where this
Warrant provides for notice of any event to the Holder, if this
Warrant is held in global form by DTC (or any successor
depositary), such notice shall be sufficiently given if given to
DTC (or any successor depositary) pursuant to the procedures of DTC
(or such successor depositary), subject to a Holder’s right
to elect to receive a Warrant in certificated form pursuant to the
terms of the Warrant Agent Agreement, in which case this sentence
shall not apply.
(i) Warrant Agent
Agreement. If this Warrant
is held in global form through DTC (or any successor depositary),
this Warrant is issued subject to the Warrant Agent Agreement. To
the extent any provision of this Warrant conflicts with the express
provisions of the Warrant Agent Agreement, the provisions of the
Warrant Agent Agreement shall govern and be
controlling.
(j) Limitation of
Liability. No provision hereof,
in the absence of any affirmative action by the Holder to exercise
this Warrant to purchase Warrant Shares, and no enumeration herein
of the rights or privileges of the Holder, shall give rise to any
liability of the Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the
Company.
(k) Remedies.
The Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company
agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of
this Warrant and hereby agrees to waive and not to assert the
defense in any action for specific performance that a remedy at law
would be adequate.
(l) Successors and
Assigns. Subject to applicable
securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon
the successors and permitted assigns of the Company and the
successors and permitted assigns of Holder. The provisions of this
Warrant are intended to be for the benefit of any Holder from time
to time of this Warrant and shall be enforceable by the Holder or
holder of Warrant Shares.
(m) Amendment. This
Warrant may be modified or amended or the provisions hereof waived
with the written consent of the Company, on the one hand, and
either: (i) the Holder or the beneficial owner of this Warrant, on
the other hand, or (ii) the vote or written consent of Holders of
at least 50.1% of the then outstanding Warrants issued pursuant to
the Warrant Agent Agreement, on the other hand, provided that
adjustments may be made to the terms and rights of this Warrant in
accordance with Section 3 of this Warrant without the consent of
any Holder or beneficial owner of the Warrants.
(n) Severability.
Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be
prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the
remaining provisions of this Warrant.
(o) Headings.
The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of
this Warrant.
********************
(Signature Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized as of the date first above
indicated.
|
RECRUITER.COM
GROUP, INC.
By:_____________________________________
Name:
Evan Sohn
Title:
Chief Executive Officer
|
|
|
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NOTICE OF EXERCISE
TO:
|
RECRUITER.COM GROUP, INC.
|
(1)
The undersigned hereby elects to purchase ________ Warrant Shares
of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if
any.
(2)
Payment shall take the form of (check applicable box):
[ ]
in lawful money of the United States; or
[ ]
if permitted the cancellation of such number of Warrant Shares as
is necessary, in accordance with the formula set forth in
subsection 2(c), to exercise this Warrant with respect to the
maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection
2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or
in such other name as is specified below:
_______________________________________________________
The Warrant Shares shall be delivered to the following DWAC Account
Number:
________________________________________________________
________________________________________________________
________________________________________________________
[SIGNATURE OF HOLDER]
Name of
Investing Entity:
|
|
Signature of Authorized Signatory of Investing
Entity:
|
|
Name of
Authorized Signatory:
|
|
Title
of Authorized Signatory:
|
|
Date:
|
|
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply
required information. Do not use this form to purchase
shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
Name:
________________________________________________________________________
(Please
Print)
|
|
|
|
|
|
Address:
________________________________________________________________________
(Please
Print)
|
|
|
|
|
|
Phone
Number:
__________________________________________________________
|
|
|
|
Email
Address:
__________________________________________________________
Dated:
_____________________ __, ______
|
|
Holder’s
Signature: ________________________________________________
Holder’s
Address: ________________________________________________
|
|
|
|
ANNEX D
AUTHORIZED REPRESENTATIVES
Name: Evan
Sohn
|
Title: Chief Executive
Officer
|
Signature:_________________________
|
|
|
|
|
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|
|
|
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Name: Miles
Jennings
|
Title: Chief Operating
Officer
|
Signature:_________________________
|
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|
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|
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|
|
|
|
Name: Judy
Krandel
|
Title: Chief Financial
Officer
|
Signature:_________________________
|
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ANNEX E
Form of Warrant Certificate Request Notice
WARRANT CERTIFICATE REQUEST NOTICE
To:
Philadelphia Stock Transfer, Inc., as Warrant Agent for
Recruiter.com Group, Inc. (the “Company”)
The
undersigned Holder of Common Stock Purchase Warrants
(“Warrants”) in the form of Global Warrants issued by
the Company hereby elects to receive a Definitive Certificate
evidencing the Warrants held by the Holder as specified
below:
|
1.
|
Name of
Holder of Warrants in form of Global Warrants:
____________________________________
|
|
2.
|
Name of
Holder in Definitive Certificate (if different from name of Holder
of Warrants in form of Global Warrants):
__________________________________________________________________________________
|
|
3.
|
Number
of Warrants in name of Holder in form of Global Warrants:
___________________________
|
|
4.
|
Number
of Warrants for which Definitive Certificate shall be issued:
__________________________
|
|
5.
|
Number
of Warrants in name of Holder in form of Global Warrants after
issuance of Definitive
Certificate,
if any:
___________________________________________________________________
|
|
6.
|
Definitive
Certificate shall be delivered to the following
address:
|
The
undersigned hereby acknowledges and agrees that, in connection with
this Warrant Exchange and the issuance of the Definitive
Certificate, the Holder is deemed to have surrendered the number of
Warrants in form of Global Warrants in the name of the Holder equal
to the number of Warrants evidenced by the Definitive
Certificate.
[SIGNATURE OF HOLDER]
Name
of Investing Entity:
____________________________________________________
Signature of Authorized
Signatory of Investing Entity:
____________________________________________________
Name
of Authorized Signatory:
____________________________________________________
Title
of Authorized Signatory:
Date:
____________________________________________________
EXHIBIT 99.1
Recruiter.com Announces Pricing of Upsized $12.0 Million Public
Offering and Nasdaq Listing
HOUSTON, TX / ACCESSWIRE / June 30, 2021
/ Recruiter.com Group, Inc. (NASDAQ:RCRT)(NASDAQ:RCRTW)
("Recruiter.com" or the "Company"), an on-demand recruiting
platform, today announced the pricing of its public
offering of 2,400,000 units at a price to the public of $5.00 per
unit. Each unit issued in the offering consists of one share of
common stock and one warrant to purchase one share of common stock
at an exercise price of $5.50 per share. The Common Stock and
Warrants are immediately separable from the units and will be
issued separately. The Warrants are exercisable immediately, expire
five years from the date of issuance and will have an exercise
price of $5.50 per share.
The
Common Stock and Warrants have been approved to list on the Nasdaq
Capital Market under the symbols "RCRT" and "RCRTW," respectively,
and are expected to begin trading on June 30, 2021. The Company
expects to receive gross proceeds of approximately $12.0 million,
before deducting underwriting discounts and commissions and other
estimated offering expenses.
In
addition, the Company has granted the underwriters a 45-day option
to purchase up to an additional 360,000 shares of common stock
and/or warrants to purchase 360,000 shares of Common Stock, or any
combination thereof, to cover over-allotments, if any.
The
Company intends to use the proceeds to invest in sales and
marketing efforts for its on-demand recruiting software
subscription tools and services, strategic acquisitions and related
expenses, and general working capital.
Joseph
Gunnar & Co., LLC is acting as sole book-running manager for
the offering.
The
offering is expected to close on July 2, 2021, subject to customary
closing conditions.
The
Securities and Exchange Commission ("SEC") declared effective a
registration statement on Form S-1 relating to these securities on
June 29, 2021. A final prospectus relating to this offering will be
filed with the Securities and Exchange Commission. The offering is
being made only by means of a prospectus. Copies of the final
prospectus relating to the offering may be obtained, when
available, by contacting Joseph Gunnar & Co., LLC at 30 Broad
Street / FLR. 11, New York, Ny 10004 attn: Operations. Investors
may also obtain these documents at no cost by visiting the SEC's
website at https://www.sec.gov.
This
press release shall not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of
these securities in any state or jurisdiction in which such an
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or
jurisdiction.
About Recruiter.com Group, Inc.
Recruiter.com
is an online hiring platform delivering on-demand recruiting
technology and services to both large and small businesses. With AI
and video technology, and the world's largest network of
recruiters, Recruiter.com delivers on-tap recruiting that flexes
with hiring needs. To learn more, visit https://www.recruiter.com.
For
investor information, visit https://investors.recruiter.com
Please follow social media channels for additional
updates:
●
LinkedIn Recruiter
Network Group: https://www.linkedin.com/groups/42370/
●
LinkedIn Company
Page: https://www.linkedin.com/company/1240434
●
Twitter Company
Page: https://twitter.com/recruiterdotcom
●
Facebook Company
Page: https://www.facebook.com/RecruiterDotCom
Company Contact:
Evan
Sohn
CEO
Recruiter.com
Group, Inc.
info@recruiter.com
Investor Relations:
Dave
Gentry
RedChip
Companies, Inc.
Phone:
(407) 491-4498
dave@redchip.com
Cautionary Note Regarding Forward-Looking Statements:
This
press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
The words "forecasts" "believe," "may," "estimate," "continue,"
"anticipate," "intend," "should," "plan," "could," "target,"
"potential," "is likely," "will," "expect" and similar expressions,
as they relate to us, are intended to identify forward-looking
statements. We have based these forward-looking statements
primarily on our current expectations and projections about future
events and financial trends that we believe may affect our
financial condition, results of operations, business strategy, and
financial needs. Important factors that could cause actual results
to differ from those in the forward-looking statements include
continued demand for professional hiring, the accuracy of the
Recruiter Index® survey, the impact of the COVID-19 pandemic
on the job market and the economy as virus levels are again rising
in many states, and the Risk Factors contained within our filings
with the Securities and Exchange Commission, including our Annual
Report on Form 10-K for the year ended December 31, 2020. Any
forward-looking statement made by us herein speaks only as of the
date on which it is made. Factors or events that could cause our
actual results to differ may emerge from time to time, and it is
not possible for us to predict all of them. We undertake no
obligation to publicly update any forward-looking statements,
whether as a result of new information, future developments or
otherwise, except as may be required by law.
EXHIBIT 99.2
Recruiter.com Announces Closing of Upsized $12.0 Million Public
Offering and Nasdaq Listing
HOUSTON, TX / ACCESSWIRE / July 2, 2021 / Recruiter.com Group, Inc. (Nasdaq:RCRT,
Nasdaq:RCRTW) ("Recruiter.com" or the "Company"),
an on-demand recruiting
platform, today announced
the closing of its underwritten public offering of 2,400,000 units
at a price to the public of $5.00 per unit, for gross proceeds of
$12,000,000, before deducting underwriting discounts and offering
expenses. In addition, the Company has granted the underwriters a
45-day option to purchase up to an additional 360,000 shares of
common stock and/or warrants to purchase 360,000 shares of Common
Stock, or any combination thereof, to cover over-allotments, if
any.
Each unit issued in the offering consists of one share of common
stock (the "Common Stock") and one warrant to purchase one share of
common stock (the "Warrants"). The Common Stock and Warrants are
immediately separable from the units and will be issued separately.
The Warrants are exercisable immediately, expire five years from
the date of issuance and will have an exercise price of $5.50 per
share. In addition, on July 2, the underwriter partially exercised
its over-allotment option by purchasing additional Warrants to
purchase 360,000 shares of Common Stock.
Joseph Gunnar & Co., LLC, the sole book-running manager for the
offering, seeks to finance companies that are poised to accomplish
great things for shareholders. Joseph A. Alagna, Chairman and CEO
added, "We are pleased to have assisted Recruiter.com as it
attained a national exchange listing and growth capital via this
transaction."
The Common Stock and Warrants were approved to list on the Nasdaq
Capital Market under the symbols "RCRT" and "RCRTW," respectively,
and began trading there on June 30, 2021.
The Company intends to use the proceeds of the offering to invest
in sales and marketing efforts for its on-demand recruiting
software subscription tools and services, strategic acquisitions
and related expenses, and general working capital.
The Securities and Exchange Commission ("SEC") declared effective a
registration statement on Form S-1 relating to these securities on
June 29, 2021. A final prospectus relating to this offering was
filed with the Securities and Exchange Commission on July 1, 2021.
The offering was made only by means of a prospectus. Copies of the
final prospectus relating to the offering may be obtained by
contacting Joseph Gunnar & Co., LLC at 30 Broad Street / FLR.
11, New York, NY 10004, Attn: Operations. Investors may also obtain
these documents at no cost by visiting the SEC's website
at https://www.sec.gov.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of
these securities in any state or jurisdiction in which such an
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or
jurisdiction.
About Recruiter.com Group, Inc.
Recruiter.com is an online hiring platform delivering on-demand
recruiting technology and services to both large and small
businesses. With AI and video technology, and the world's largest
network of recruiters, Recruiter.com delivers on-tap recruiting
that flexes with hiring needs. To learn more,
visit https://www.recruiter.com.
For investor information, visit https://investors.recruiter.com
Please follow social media channels for additional
updates:
●
LinkedIn Recruiter Network
Group: https://www.linkedin.com/groups/42370/
●
LinkedIn Company Page: https://www.linkedin.com/company/1240434
●
Twitter Company Page: https://twitter.com/recruiterdotcom
●
Facebook Company Page: https://www.facebook.com/RecruiterDotCom
Company Contact:
Evan Sohn
CEO
Recruiter.com Group, Inc.
info@recruiter.com
Investor Relations:
Dave Gentry
RedChip Companies, Inc.
Phone: (407) 491-4498
dave@redchip.com
Cautionary Note Regarding Forward-Looking Statements:
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
The words "forecasts" "believe," "may," "estimate," "continue,"
"anticipate," "intend," "should," "plan," "could," "target,"
"potential," "is likely," "will," "expect" and similar expressions,
as they relate to us, are intended to identify forward-looking
statements. We have based these forward-looking statements
primarily on our current expectations and projections about future
events and financial trends that we believe may affect our
financial condition, results of operations, business strategy, and
financial needs. Important factors that could cause actual results
to differ from those in the forward-looking statements include
continued demand for professional hiring, the accuracy of the
Recruiter Index® survey, the impact of the COVID-19 pandemic
on the job market and the economy as virus levels are again rising
in many states, and the Risk Factors contained within our filings
with the Securities and Exchange Commission, including our Annual
Report on Form 10-K for the year ended December 31, 2020. Any
forward-looking statement made by us herein speaks only as of the
date on which it is made. Factors or events that could cause our
actual results to differ may emerge from time to time, and it is
not possible for us to predict all of them. We undertake no
obligation to publicly update any forward-looking statements,
whether as a result of new information, future developments or
otherwise, except as may be required by law.