INUVO, INC. COMMON STOCK SALES AGREEMENT
Exhibit 1.1
COMMON STOCK
May 28,
2021
A.G.P./Alliance
Global Partners
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Ladies
and Gentlemen:
Inuvo,
Inc., a Nevada corporation (the “Company”),
confirms its agreement (this “Agreement”)
with A.G.P./Alliance Global Partners, as follows:
1. Issuance
and Sale of Shares. The Company
agrees that, from time to time during the term of this Agreement as
set forth below, on the terms and subject to the conditions set
forth herein, it may issue and sell to or through A.G.P./Alliance
Global Partners, acting as agent and/or principal (the
“Sales
Agent”), shares of the
Company’s common stock, par value $0.001 per share (the
“Common
Stock”), subject to the
limitations set forth in Section 3(b)
hereof. The issuance and sale of
shares of Common Stock to or through the Sales Agent will be
effected pursuant to the Registration Statement (as defined below)
filed by the Company and which was declared effective under the
Securities Act (as defined below) by the U.S. Securities and
Exchange Commission (the “Commission”).
The
Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations
thereunder (collectively, the “Securities
Act”), with the Commission, not earlier than three
years prior to the date hereof, a shelf registration statement on
Form S-3 (File No. 333-253018), including a base prospectus (the
“Base
Prospectus”), relating to certain securities,
including the Common Stock, to be issued from time to time by the
Company, and which incorporates by reference documents that the
Company has filed or will file in accordance with the provisions of
the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively, the “Exchange
Act”). The Company has prepared a prospectus
supplement specifically relating to the offering of Common Stock
pursuant to this Agreement (the “ATM
Prospectus” and, together with the Base Prospectus,
collectively, the “Initial
Prospectus”). The Company will furnish to the Sales
Agent, for use by the Sales Agent, copies of the ATM Prospectus
included as part of such registration statement, relating to the
Placement Shares (as defined below). Except where the context
otherwise requires, such registration statement, as amended at the
time of such registration statement’s effectiveness for
purposes of Section 11 of the Securities Act, including all
documents filed as part thereof or incorporated by reference
therein, and including any information contained in any prospectus
subsequently filed with the Commission pursuant to Rule 424(b)
under the Securities Act or deemed to be a part of such
registration statement pursuant to Rule 430B or 462(b) of the
Securities Act, is herein called the “Registration
Statement.” The Initial Prospectus, including all
documents incorporated therein by reference (to the extent such
information has not been superseded or modified in accordance with
Rule 412 under the Securities Act (as qualified by Rule 430B(g) of
the Securities Act), as may be supplemented from time to time by
any additional prospectus supplement, in the form in which such
Base Prospectus and/or ATM Prospectus have most recently been filed
by the Company with the Commission pursuant to Rule 424(b) under
the Securities Act, together with any “issuer free writing
prospectus” (“Issuer Free Writing
Prospectus”), as defined in Rule 433 of the Securities
Act (“Rule
433”), relating to the Placement Shares that (i) is
required to be filed with the Commission by the Company or (ii) is
exempt from filing pursuant to Rule 433(d)(5)(i), in each case in
the form filed or required to be filed with the Commission or, if
not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g), is herein called
the “Prospectus.”
Any reference herein to the Registration Statement, the Prospectus
or any amendment or supplement thereto shall be deemed to refer to
and include the documents incorporated by reference therein, and
any reference herein to the terms “amend,”
“amendment” or “supplement” with respect to
the Registration Statement or the Prospectus shall be deemed to
refer to and include the filing after the execution hereof of any
document with the Commission deemed to be incorporated by reference
therein. For purposes of this Agreement, all references to the
Registration Statement, the Prospectus or to any amendment or
supplement thereto shall be deemed to include any copy filed with
the Commission pursuant to either the Electronic Data Gathering
Analysis and Retrieval System, or if applicable, the Interactive
Data Electronic Applications (collectively “XXXXX”).
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2. Placements.
Each time that the Company wishes to issue and sell shares of
Common Stock through the Sales Agent, as agent, hereunder (each, a
“Placement”),
it will notify the Sales Agent by email notice (or other method
mutually agreed to in writing by the parties) (a
“Placement
Notice”) containing the
parameters in accordance with which it desires the Common Stock to
be sold, which shall at a minimum include the number of shares of
Common Stock to be issued (the “Placement
Shares”), the time period
during which sales are requested to be made, any limitation on the
number of shares of Common Stock that may be sold in any one
Trading Day (as defined in Section
3) and any minimum price below
which sales may not be made, a form of which containing such
minimum sales parameters necessary is attached hereto as
Schedule
1. The Placement Notice shall
originate from any of the individuals from the Company set forth
on Schedule
2 (with a copy to each of the
other individuals from the Company listed on such schedule), and
shall be addressed to each of the individuals from the Sales Agent
set forth on Schedule 2,
as such Schedule
2 may be amended from time to
time. The Placement Notice shall be effective upon receipt by the
Sales Agent unless and until (i) in accordance with the notice
requirements set forth in Section
4, the Sales Agent declines to
accept the terms contained therein for any reason, in its sole
discretion, (ii) the entire amount of the Placement Shares have
been sold, (iii) in accordance with the notice requirements set
forth in Section
4, the Company suspends or
terminates the Placement Notice, (iv) the Company issues a
subsequent Placement Notice with parameters superseding those on
the earlier dated Placement Notice, or (v) the Agreement has been
terminated under the provisions of Section
11. The amount of any discount,
commission or other compensation to be paid by the Company to the
Sales Agent in connection with the sale of the Placement Shares
through the Sales Agent, as agent, shall be as set forth in
Schedule
3. It is expressly acknowledged
and agreed that neither the Company nor the Sales Agent will have
any obligation whatsoever with respect to a Placement or any
Placement Shares unless and until the Company delivers a Placement
Notice to the Sales Agent and the Sales Agent does not decline such
Placement Notice pursuant to the terms set forth above, and then
only upon the terms specified therein and herein. In the event of a
conflict between the terms of this Agreement and the terms of a
Placement Notice, the terms of the Placement Notice will
control.
3. Sale
of Placement Shares by the Sales Agent.
(a) Subject
to the terms and conditions herein set forth, upon the
Company’s issuance of a Placement Notice, and unless the sale
of the Placement Shares described therein has been declined,
suspended, or otherwise terminated in accordance with the terms of
this Agreement, the Sales Agent, as agent for the Company, will use
its commercially reasonable efforts consistent with its normal
trading and sales practices and applicable state and federal laws,
rules and regulations and the rules of NYSE American (the
“Exchange”),
for the period specified in the Placement Notice, to sell such
Placement Shares up to the amount specified by the Company in, and
otherwise in accordance with the terms of such Placement Notice. If
acting as agent hereunder, the Sales Agent will provide written
confirmation to the Company (including by email correspondence to
each of the individuals of the Company set forth on
Schedule
2, if receipt of such
correspondence is actually acknowledged by any of the individuals
to whom the notice is sent, other than via auto-reply) no later
than the opening of the Trading Day (as defined below) immediately
following the Trading Day on which it has made sales of Placement
Shares hereunder setting forth the number of Placement Shares sold
on such day, the volume-weighted average price of the Placement
Shares, the compensation payable by the Company to the Sales Agent
pursuant to Section 2
with respect to such sales, and the
Net Proceeds (as defined below) payable to the Company, with an
itemization of the deductions made by the Sales Agent (as set forth
in Section
5(a)) from the gross proceeds
that it receives from such sales. Subject to the terms of the
Placement Notice, the Sales Agent may sell Placement Shares by any
method permitted by law deemed to be an “at the market”
offering as defined in Rule 415 under the Securities Act, including
without limitation sales made directly on the Exchange, on any
other existing trading market for the Common Stock or to or through
a market maker. Subject to the terms of a Placement Notice, the
Sales Agent may also sell Placement Shares by any other method
permitted by law, including but not limited to in negotiated
transactions, with the Company’s prior written consent. The
Company acknowledges and agrees that (i) there can be no assurance
that the Sales Agent will be successful in selling Placement
Shares, (ii) the Sales Agent will incur no liability or
obligation to the Company or any other person or entity if it does
not sell Placement Shares for any reason other than a failure by
the Sales Agent to use its commercially reasonable efforts
consistent with its normal trading and sales practices and
applicable law and regulations to sell such Placement Shares as
required under this Agreement and (iii) the Sales Agent shall be
under no obligation to purchase Placement Shares on a principal
basis pursuant to this Agreement, except as otherwise agreed by the
Sales Agent and the Company in writing and expressly set forth in a
Placement Notice. For the purposes hereof,
“Trading
Day” means any day on
which the Company’s Common Stock is purchased and sold on the
principal market on which the Common Stock is listed or
quoted.
(b) Under
no circumstances shall the Company cause or request the offer or
sale of any Placement Shares if, after giving effect to the sale of
such Placement Shares, the aggregate number or gross sales proceeds
of Placement Shares sold pursuant to this Agreement would exceed
the lesser of: (i) the number or dollar amount of shares of Common
Stock registered pursuant to the Registration Statement pursuant to
which the offering hereunder is being made, (ii) the number of
authorized but unissued and unreserved shares of Common Stock,
(iii) the number or dollar amount of shares of Common Stock
permitted to be offered and sold by the Company under Form S-3,
(iv) the number or dollar amount of shares of Common Stock
authorized from time to time to be issued and sold under this
Agreement by the Company’s board of directors, a duly
authorized committee thereof or a duly authorized executive
committee, and notified to the Sales Agent in writing or (v) the
number or dollar amount of shares of Common Stock for which the
Company has filed the ATM Prospectus or other prospectus supplement
specifically relating to the offering of the Placement Shares
pursuant to this Agreement. Under no circumstances shall the
Company cause or request the offer or sale of any Placement Shares
pursuant to this Agreement at a price lower than the minimum price
authorized from time to time by the Company’s board of
directors, a duly authorized committee thereof or a duly authorized
executive committee, and notified to the Sales Agent in writing.
Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge and agree that compliance with the
limitations set forth in this Section 3(b) on the number or dollar
amount of Placement Shares that may be issued and sold under this
Agreement from time to time shall be the sole responsibility of the
Company, and that the Sales Agent shall have no obligation in
connection with such compliance.
(c) During
the term of this Agreement, neither the Sales Agent nor any of its
affiliates or subsidiaries shall engage in (i) any short sale of
any security of the Company or (ii) any sale of any security of the
Company that the Sales Agent does not own or any sale which is
consummated by the delivery of a security of the Company borrowed
by, or for the account of, the Sales Agent. During the term of this
Agreement and notwithstanding anything to the contrary herein, the
Sales Agent agrees that in no event will the Sales Agent or its
affiliates engage in any market making, bidding, stabilization or
other trading activity with regard to the Common Stock or related
derivative securities if such activity would be prohibited under
Regulation M or other anti-manipulation rules under the Exchange
Act.
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4. Suspension
of Sales.
(a) The
Company or the Sales Agent may, upon notice to the other party in
writing (including by email correspondence to each of the
individuals of the other party set forth on Schedule
2, if receipt of such
correspondence is actually acknowledged by any of the individuals
to whom the notice is sent, other than via auto-reply) or by
telephone (confirmed immediately by verifiable facsimile
transmission or email correspondence to each of the individuals of
the other party set forth on Schedule
2), suspend any sale of
Placement Shares for a period of time (a “Suspension
Period”);
provided, however, that such suspension shall not affect or impair
either party’s obligations with respect to any Placement
Shares sold hereunder prior to the receipt of such notice. Each of
the parties agrees that no such notice under this
Section
4 shall be effective against
the other unless it is made to one of the individuals named
on Schedule
2 hereto, as such schedule may
be amended from time to time. During a Suspension Period, the
Company shall not issue any Placement Notices and the Sales Agent
shall not sell any Placement Shares hereunder. The party that
issued a suspension notice shall notify the other party in writing
of the Trading Day on which the Suspension Period shall expire not
later than twenty-four (24) hours prior to such Trading
Day.
(b) Notwithstanding
any other provision of this Agreement, during any period in which
the Company is in possession of material non-public information,
the Company and the Sales Agent agree that (i) no sale of Placement
Shares will take place, (ii) the Company shall not request the sale
of any Placement Shares, and (iii) the Sales Agent shall not be
obligated to sell or offer to sell any Placement
Shares.
5. Settlement.
(a) Settlement
of Placement Shares. Unless
otherwise specified in the applicable Placement Notice, settlement
for sales of Placement Shares will occur on the second
(2nd)
Trading Day (or such earlier day as is industry practice for
regular-way trading) following the respective Point of Sale (as
defined below) (each, a “Settlement
Date”). The amount of
proceeds to be delivered to the Company on a Settlement Date
against receipt of the Placement Shares sold (the
“Net
Proceeds”) will be equal
to the aggregate sales price received by the Sales Agent at which
such Placement Shares were sold, after deduction for (i) the Sales
Agent’s discount, commission or other compensation for such
sales payable by the Company pursuant to Section 2
hereof, (ii) any other amounts due and
payable by the Company to the Sales Agent hereunder pursuant to
Section 7(g) (Expenses) hereof and (iii) any transaction fees,
trading expenses or execution fees imposed by any clearing
organization or any governmental or self-regulatory organization
and any other fees incurred by the Sales Agent in respect of such
sales.
(b) Delivery
of Placement Shares. On or
before each Settlement Date, the Company will, or will cause its
transfer agent to, electronically transfer the Placement Shares
being sold by crediting the Sales Agent’s or its
designee’s account (provided the Sales Agent shall have given
the Company written notice of such designee prior to the Settlement
Date) at The Depository Trust Company through its Deposit and
Withdrawal at Custodian System or by such other means of delivery
as may be mutually agreed upon by the parties hereto which in all
cases shall be freely tradable, transferable, registered shares in
good deliverable form. On each Settlement Date, the Sales Agent
will deliver the related Net Proceeds in same day funds to an
account designated by the Company on, or prior to, the Settlement
Date. The Company agrees that if the Company, or its transfer agent
(if applicable), defaults in its obligation to deliver duly
authorized Placement Shares on a Settlement Date, the Company
agrees that, in addition to and in no way limiting the rights and
obligations set forth in Section 9(a)
(Indemnification and Contribution)
hereto, the Company will (i) hold the Sales Agent, its directors,
officers, members, partners, employees and agents of the Sales
Agent, each broker dealer affiliate of the Sales Agent, and each
person, if any, who (A) controls the Sales Agent within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange
Act or (B) is controlled by or is under common control with the
Sales Agent (each, a “Sales
Agent Affiliate”), and
the Sales Agent’s clearing organization, harmless against any
loss, claim, damage, or reasonable expense (including reasonable
legal fees and expenses), as incurred, arising out of or in
connection with such default by the Company or its transfer agent
(if applicable) and (ii) pay to the Sales Agent any commission,
discount, or other compensation to which it would otherwise have
been entitled absent such default.
6. Representations
and Warranties of the Company.
The Company, on behalf of itself and its subsidiaries, represents
and warrants to, and agrees with, the Sales Agent that as of each
Applicable Time (as defined in Section
22(a)), unless such
representation, warranty or agreement specifies a different time or
times:
(a) Compliance
with Registration Requirements.
The Registration Statement was declared effective by the Commission
under the Securities Act on March 15, 2021. The Company has
complied to the Commission’s satisfaction with all requests
of the Commission for additional or supplemental information
related to the Registration Statement and the Prospectus. No stop
order suspending the effectiveness of the Registration Statement or
any Rule 462(b) Registration Statement is in effect and no
proceedings for such purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated or threatened
by the Commission. The Registration Statement and, assuming no act
or omission on the part of the Sales Agent that would make such
statements untrue, the offer and sale of the Placement Shares as
contemplated hereby meet the requirements of Rule 415 under the
Securities Act and comply in all material respects with said Rule.
In the section entitled “Plan of Distribution” in the
ATM Prospectus, the Company has named A.G.P./Alliance Global
Partners as an agent that the Company has engaged in connection
with the transactions contemplated by this Agreement. At the time
of filing the Registration Statement, the Company was not and is
not an “ineligible issuer” as defined in Rule 405 under
the Securities Act.
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(b) No
Misstatement or Omission. The
Registration Statement and any post-effective amendment thereto, at
the time it became or becomes effective, complied or will comply in
all material respects with the Securities Act. The Prospectus, and
any amendment or supplement thereto, on the date of such Prospectus
or amendment or supplement, complied or will comply in all material
respects with the Securities Act. The Registration Statement and
any post-effective amendment thereto, at the time it became or
becomes effective, did not and will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus, as amended or supplemented,
as of its date, did not and, as of each Point of Sale and each
Settlement Date, will not contain any 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 representations and
warranties set forth in the two immediately preceding sentences do
not apply to statements in or omissions from the Registration
Statement or any post-effective amendment thereto, or the
Prospectus, or any amendments or supplements thereto, made in
reliance upon and in conformity with information relating to the
Sales Agent furnished to the Company in writing by the Sales Agent
expressly for use therein. “Point
of Sale” means, for a
Placement, the time at which an acquiror of Placement Shares
entered into a contract, binding upon such acquiror, to acquire
such Placement Shares.
(c) Offering
Materials Furnished to the Sales Agent. Copies of the Registration Statement, the
Prospectus, and all amendments or supplements thereto and all
documents incorporated by reference therein that were filed with
the Commission on or prior to the date of this Agreement, have been
delivered, or are publicly available through XXXXX, to the Sales
Agent. Each Prospectus delivered to the Sales Agent for use in
connection with the sale of the Placement Shares pursuant to this
Agreement will be identical to the version of such Prospectus filed
with the Commission via XXXXX, except to the extent permitted by
Regulation S-T.
(d) Distribution
of Offering Material By the Company. The Company has not distributed and will not
distribute, prior to the completion of the Sales Agent’s
distribution of the Placement Shares, any offering material in
connection with the offering and sale of the Placement Shares other
than the Prospectus or the Registration
Statement.
(e) The
Sales Agreement. This Agreement
has been duly authorized, executed and delivered by the Company,
and constitutes a valid, legal, and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, except as rights to indemnity hereunder may be limited by
federal or state securities laws and except as such enforceability
may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally, and subject to general principles of equity. The Company
has full corporate power and authority to enter into this Agreement
and to authorize, issue and sell the Placement Shares as
contemplated by this Agreement. This Agreement conforms in all
material respects to the descriptions thereof in the Registration
Statement and the Prospectus.
(f) Authorization
of the Placement Shares. The
Placement Shares, when issued and paid for as contemplated herein,
will be validly issued, fully paid and nonassessable, will be
issued in compliance with all applicable securities laws, and will
be free of preemptive, registration or similar rights, and will
conform to the description of the Common Stock contained in the
Registration Statement and the Prospectus.
(g) No
Applicable Registration or Other Similar Rights. There are no persons with registration or other
similar rights to have any equity or debt securities registered for
sale under the Registration Statement or included in the offering
contemplated by this Agreement, except for such rights as have been
duly waived. No person has the right to act as an underwriter or as
a financial advisor to the Company in connection with the offer and
sale of the Placement Shares hereunder, whether as a result of the
filing or effectiveness of the Registration Statement or the sale
of the Placement Shares as contemplated hereby or
otherwise.
(h) No
Material Adverse Change. Except
as otherwise disclosed in the Prospectus, subsequent to the
respective dates as of which information is given in the
Prospectus: (i) there has been no material adverse change in the
business, properties, prospects, operations, condition (financial
or otherwise) or results of operations of the Company and its
subsidiaries, taken as a whole (any such change is called a
“Material
Adverse Change”), which,
individually or in the aggregate, has had or would reasonably be
expected to result in a Material Adverse Change; (ii) the
Company and its subsidiaries, considered as one entity, have not
incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business nor entered into
any material transaction or agreement not in the ordinary course of
business; (iii) there has been no dividend or distribution of any
kind declared, paid or made by the Company or, except for regular
quarterly dividends publicly announced by the Company or dividends
paid to the Company or other subsidiaries, by any of its
subsidiaries on any class of capital stock or repurchase or
redemption by the Company or any of its subsidiaries of any class
of capital stock; (iv) no officer or director of the Company has
resigned from any position with the Company; and (v) there has not
been any Material Adverse Change in the Company’s long-term
debt.
(i) Independent
Accountants. To the knowledge
of the Company, Xxxxx Xxxxxxx XxXxxx P.C., whose report is filed
with the Commission and included or incorporated by reference in
the Registration Statement and the Prospectus, is an independent
registered public accounting firm as required by the Securities Act
and the Public Company Accounting Oversight
Board.
(j) Financial
Statements. The financial
statements incorporated by reference in the Registration Statement
and in the Prospectus, together with the related notes and
schedules, comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, and fairly
present the consolidated financial position of the Company and its
subsidiaries as of and at the dates indicated and the results of
their operations and cash flows for the periods therein specified.
Such financial statements and supporting schedules have been
prepared in conformity with U.S. generally accepted accounting
principles (“GAAP”) applied on a consistent basis throughout
the periods involved, provided, that, unaudited interim financial
statements are subject to year-end audit adjustments that are not
expected to be material in the aggregate and do not contain all
footnotes required by GAAP. No other financial statements, pro
forma financial information or schedules are required under the
Securities Act or the Exchange Act to be included in or
incorporated by reference in the Registration Statement or the
Prospectus.
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(k) Forward-Looking
Statements. The Company had a
reasonable basis for, and made in good faith, each
“forward-looking statement” (within the meaning of
Section 27A of the Securities Act or Section 21E of the Exchange
Act) contained or incorporated by reference in the Registration
Statement or the Prospectus.
(l) Statistical
and Marketing-Related Data. All
statistical or market-related data included or incorporated by
reference in the Registration Statement or the Prospectus are based
on or derived from sources that the Company reasonably believes to
be reliable and accurate, and, to the Company’s knowledge,
the Company has obtained the written consent to the use of such
data from such sources to the extent required.
(m) XBRL.
The interactive data in eXtensible Business Reporting Language
included or incorporated by reference in the Registration Statement
fairly presents the information called for in all material respects
and has been prepared in accordance with the Commission’s
rules and guidelines applicable thereto.
(n) Incorporation
and Good Standing of the Company; No
Subsidiaries. The Company is a
corporation duly incorporated and validly existing under the laws
of the State of Nevada and in good standing under such laws. The
Company has requisite corporate power to carry on its business as
described in the Prospectus. The Company is duly qualified to
transact business and is in good standing in all jurisdictions in
which the conduct of its business requires such qualification;
except where the failure to be so qualified or to be in good
standing would not result in a Material Adverse Change. The Company
does not have any subsidiaries, other than those listed in the
Exhibit 21.1 of the Company’s most recent Annual Report on
Form 10-K that was filed with the Commission, and does not own or
control, directly or indirectly, any corporation, association or
any other entity.
(o) Capital
Stock Matters. The Company has
an authorized capitalization as set forth in the Registration
Statement and the Prospectus. The form of certificates for the
Common Stock conforms to the corporate law of the jurisdiction of
the Company’s incorporation. All of the issued and
outstanding shares of capital stock of the Company are duly
authorized and validly issued, fully paid and nonassessable, and
have been issued in compliance with all applicable securities laws,
and conform to the description thereof in the Registration
Statement and the Prospectus. None of the outstanding shares of
capital stock of the Company were issued in violation of any
preemptive rights, rights of first refusal or other similar rights
to subscribe for or purchase securities of the Company. All of the
issued shares of capital stock or other equity interests of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and nonassessable and, except as set forth
in the Registration Statement and the Prospectus, are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims. Except for the issuances of
options or restricted stock units pursuant to the Company’s
incentive plans or as otherwise set forth in the Registration
Statement and the Prospectus, since the respective dates as of
which information is provided in the Registration Statement or the
Prospectus, the Company has not entered into or granted any
convertible or exchangeable securities, options, warrants,
agreements, contracts or other rights in existence to purchase or
acquire from the Company any shares of the capital stock of the
Company.
(p) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals
Required. The Company’s
execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby or by the
Registration Statement and the Prospectus (including the issuance
and sale of the Placement Shares and the use of the proceeds from
the sale of the Placement Shares as described in the Prospectus
under the caption “Use of Proceeds”) will not (A)
result in a material breach or violation of any of the terms and
provisions of, or constitute a default under, any law, order, rule
or regulation to which the Company or any subsidiary is subject, or
by which any property or asset of the Company or any subsidiary is
bound or affected, (B) conflict with, result in any violation
or breach of, or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to
others any right of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) (a
“Default
Acceleration Event”) of,
any agreement, lease, credit facility, debt, note, bond, mortgage,
indenture or other instrument (“Contract”)
or obligation or other understanding to which the Company or any
subsidiary is a party or by which any property or asset of the
Company or any subsidiary is bound or affected, except to the
extent that such conflict, default, or Default Acceleration Event
is not reasonably likely to result in a Material Adverse Change, or
(C) result in a breach or violation of any of the terms and
provisions of, or constitute a default under, the Company’s
articles of incorporation or bylaws. Except as set forth in the
Registration Statement and the Prospectus, neither the Company nor
any of its subsidiaries is in violation, breach or default under
its articles of incorporation, by-laws or other equivalent
organizational or governing documents. Neither the Company nor any
its subsidiaries nor, to its knowledge, any other party, is in
violation, breach or default of any Contract that has resulted in
or could reasonably be expected to result in a Material Adverse
Change. Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution
and delivery by the Company of this Agreement and the performance
of the Company of the transactions herein contemplated has been
obtained or made and is in full force and effect, except (i) with
respect to any Applicable Time at which the Sales Agent would not
be able to rely on Rule 5110(b)(7)(C)(i) of the Financial Industry
Regulatory Authority, Inc. (“FINRA”),
such additional steps as may be required by FINRA, (ii) filings
with the Commission required under the Securities Act or the
Exchange Act, or filings with the Exchange pursuant to the rules
and regulations of the Exchange, in each case that are contemplated
by this Agreement to be made after the date of this Agreement, and
(iii) such additional steps as may be necessary to qualify the
Common Stock for sale by the Sales Agent under state securities or
Blue Sky laws.
(q) No
Material Actions or Proceedings. Except as set forth in the Registration
Statement and the Prospectus, there is not pending or, to the
knowledge of the Company, threatened, any action, suit or
proceeding to which the Company or any of its subsidiaries is a
party or of which any property or assets of the Company or any of
its subsidiaries is the subject before or by any court or
governmental agency, authority or body, or any arbitrator or
mediator, which action, suit, or proceeding would reasonably be
expected, individually or in the aggregate, to result in a Material
Adverse Change.
5
(r) Labor
Disputes. There is (A) no
unfair labor practice complaint pending against the Company, or any
of its subsidiaries, nor to the Company’s knowledge,
threatened against it or any of its subsidiaries, before the
National Labor Relations Board, any state or local labor relation
board or any foreign labor relations board, and no grievance or
arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or any of
its subsidiaries, or, to the Company’s knowledge, threatened
against it and (B) no labor disturbance by the employees of the
Company or any of its subsidiaries exists or, to the
Company’s knowledge, is imminent, and the Company is not
aware of any existing or imminent labor disturbance by the
employees of any of its or its subsidiaries, principal suppliers,
manufacturers, customers or contractors, that could reasonably be
expected, singularly or in the aggregate, to have a Material
Adverse Change. The Company is not aware that any key employee or
significant group of employees of the Company and its subsidiaries,
taken as a whole, plan to terminate employment with the Company or
any such subsidiary.
(s) All
Necessary Permits, etc. Except
as set forth in the Registration Statement and the Prospectus, the
Company and each of its subsidiaries holds, and is in compliance
with, all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders
(“Permits”)
of any governmental or self-regulatory agency, authority or body
required for the conduct of its business, and all such Permits are
in full force and effect, except, in each case, where the lack of
such Permits, individually or in the aggregate would not result in
a Material Adverse Change.
(t) Tax
Law Compliance. Other than as
disclosed in the Registration Statement and the Prospectus, each of
the Company and its subsidiaries has (a) filed all material
foreign, federal, state and local tax 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 and (b) 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. The provisions for taxes payable, if any, shown on the
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus 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. Other than as disclosed in the Registration Statement
and the Prospectus, no material 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 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. There are no tax
liens against the assets, properties or business of the Company or
any of its subsidiaries. The term “taxes”
mean all federal, state, local, foreign, and other net income,
gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, lease, service, service use,
withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, windfall profits, customs, duties or
other taxes, fees, assessments, or charges of any kind whatever,
together with any interest and any penalties, additions to tax, or
additional amounts with respect thereto. The term
“returns”
means all returns, declarations, reports, statements, and other
documents required to be filed in respect to
taxes.
(u) Company
Not an “Investment Company”. The Company is not, and will not be,
either after receipt of payment for the Placement Shares or after
the application of the proceeds therefrom as described under
“Use of Proceeds” in the Registration Statement or the
Prospectus, required to register as an “investment
company” under the Investment Company Act of 1940, as amended
(the “Investment
Company Act”).
(v) Insurance.
The Company and each of its subsidiaries carries, or is covered by,
insurance in such amounts and covering such risks as is adequate
for the conduct of its business and the value of its properties and
as is customary for companies engaged in similar businesses in
similar industries, and all such insurance is in full force and
effect. Neither the Company nor any of its subsidiaries has reason
to believe that it will not be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be
necessary or appropriate to conduct its business as now conducted
and at a cost that would not result in a Material Adverse
Change.
(w) No
Price Stabilization or Manipulation. Neither the Company nor any of its subsidiaries
has taken, directly or indirectly (without giving any effect to the
activities of the Agent), any action designed to or that might
cause or result in stabilization or manipulation of the price of
the Common Stock or of any “reference security” (as
defined in Rule 100 of Regulation M under the Exchange Act
(“Regulation
M”)) with respect to the
Common Stock, whether to facilitate the sale or resale of the
Placement Shares or otherwise, and has taken no action which would
directly or indirectly violate Regulation M.
(x) Related
Party Transactions. There are
no business relationships or related party transactions involving
the Company, any of its subsidiaries, or any other person required
to be described in the Registration Statement and the Prospectus
that have not been described as required pursuant to the Securities
Act.
(y) Exchange
Act Compliance. The documents
incorporated or deemed to be incorporated by reference in the
Registration Statement, the Prospectus or any amendment or
supplement thereto, at the time they were or hereafter are filed
with the Commission under the Exchange Act, complied and will
comply in all material respects with the requirements of the
Exchange Act, and, when read together with the other information in
the Prospectus, at each Point of Sale and each Settlement Date,
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the 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.
6
(z) Conformity
of Issuer Free Writing Prospectus. Each Issuer Free Writing Prospectus conformed or
will conform in all material respects to the requirements of the
Securities Act on the date of first use, and the Company has
complied or will comply with any filing requirements applicable to
such Issuer Free Writing Prospectus pursuant to the Securities Act.
Each Issuer Free Writing Prospectus, as of its issue date and at
all subsequent times through the completion of the public offer and
sale of the Placement Shares, did not, does not and will not
include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement or the
Prospectus, including any document incorporated by reference
therein that has not been superseded or modified. The Company has
not made any offer relating to the Placement Shares that would
constitute an Issuer Free Writing Prospectus without the prior
written consent of the Sales Agent. The Company has retained in
accordance with the Securities Act all Issuer Free Writing
Prospectuses that were not required to be filed pursuant to the
Securities Act.
(aa) Compliance
with Environmental Laws. The
Company and its subsidiaries are in compliance with all foreign,
federal, state and local rules, laws and regulations relating to
the use, treatment, storage and disposal of hazardous or toxic
substances or waste and protection of health and safety or the
environment which are applicable to their businesses
(“Environmental
Laws”), except where the
failure to comply has not had and would not reasonably be expected
to have, singularly or in the aggregate, a Material Adverse Change.
There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any
kind of toxic or other wastes or other hazardous substances by, due
to, or caused by the Company or any of its subsidiaries (or, to the
Company’s knowledge, any other entity for whose acts or
omissions the Company or any of its subsidiaries is or may
otherwise be liable) upon any of the property now or previously
owned or leased by the Company or any of its subsidiaries, or upon
any other property, in violation of any law, statute, ordinance,
rule, regulation, order, judgment, decree or permit or which would,
under any law, statute, ordinance, rule (including rule of common
law), regulation, order, judgment, decree or permit, give rise to
any liability, except for any violation or liability which has not
had and would not reasonably be expected to have, singularly or in
the aggregate, a Material Adverse Change; and there has been no
disposal, discharge, emission or other release of any kind onto
such property or into the environment surrounding such property of
any toxic or other wastes or other hazardous substances with
respect to which the Company or any of its subsidiaries has
knowledge, which such disposal, discharge, emission, or other
release would not result in a Material Adverse
Change.
(bb) Intellectual
Property. The Company and each
of its subsidiaries own or possess or have valid rights to use all
patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service xxxx registrations,
copyrights, licenses, inventions, trade secrets and similar rights
(“Intellectual
Property Rights”)
necessary for the conduct of the business of the Company and its
subsidiaries as currently carried on and as described in the
Registration Statement and the Prospectus, except as would not be
reasonably likely to result in a Material Adverse Change. To the
knowledge of the Company, no action or use by the Company or any of
its subsidiaries necessary for the conduct of their business as
currently carried on and as described in the Registration Statement
and the Prospectus will involve or give rise to any infringement
of, or license or similar fees for, any Intellectual Property
Rights of others, except where such action, use, license or fee is
not reasonably likely to result in a Material Adverse Change.
Neither the Company nor any of its subsidiaries have 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 or any of its subsidiaries; (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
or any of its subsidiaries 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
6(bb), reasonably be expected
to result in a Material Adverse Change; (C) the Intellectual
Property Rights owned by the Company or any of its subsidiaries
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
6(bb), 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 or any of its
subsidiaries infringes, misappropriates or otherwise violates any
Intellectual Property Rights or other proprietary rights of others,
neither the Company nor any of its subsidiaries has 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
6(bb), reasonably be expected
to result in a Material Adverse Change; and (E) except as disclosed
in the Registration Statement and the Prospectus, to the
Company’s knowledge, no employee of the Company or any of its
subsidiaries 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 any of its subsidiaries, or actions undertaken
by the employee while employed with the Company or any of its
subsidiaries 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 or any of its
subsidiaries which has not been patented has been kept
confidential. Neither the Company nor any of its subsidiaries is 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 and the Prospectus and are not described therein. The
Registration Statement 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
or its subsidiaries has been obtained or is being used by the
Company or any of its subsidiaries in violation of any contractual
obligation binding on the Company or any such subsidiary or, to the
Company’s knowledge, any of its or its subsidiaries’
officers, directors or employees, or otherwise in violation of the
rights of any persons, except for violations that would not result
in a Material Adverse Change.
(cc) Reserved.
(dd) Brokers.
Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person (other than as
contemplated by this Agreement) that would give rise to a valid
claim against the Company or any of its subsidiaries or the Sales
Agent for a brokerage commission, finder’s fee or like
payment in connection with the offering and sale of the Placement
Shares by the Sales Agent under this Agreement.
7
(ee) No
Outstanding Loans or Other Indebtedness. 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 of
its subsidiaries to or for the benefit of any of the officers or
directors of the Company or executive officers of any of its
subsidiaries to the extent such executive officers may be deemed
executive officers of the Company, or any of their respective
family members, except as disclosed in the Registration Statement
and the Prospectus. The Company has not directly or indirectly
extended or maintained credit, arranged for the extension of
credit, or renewed an extension of credit, in the form of a
personal loan to or for any director or executive officer of the
Company.
(ff) No
Reliance. The Company has not
relied upon the Sales Agent or legal counsel for the Sales Agent
for any legal, tax or accounting advice in connection with the
offering and sale of the Placement Shares.
(gg) Broker-Dealer
Status. Neither the Company nor
any of its related entities (i) is required to register as a
“broker” or “dealer” in accordance with the
provisions of the Exchange Act or (ii) directly or indirectly
through one or more intermediaries, controls or is a “person
associated with a member” or “associated person of a
member” (within the meaning of Article I of the NASD Manual
administered by FINRA). To the Company’s knowledge, there are
no affiliations or associations between any member of FINRA and any
of the Company’s officers, directors or 5% or greater
security holders, except as set forth in the Registration
Statement.
(hh) Public
Float Calculation. At the time
the Registration Statement and any Rule 462(b) Registration
Statement was or will be filed with the Commission, at the time the
Registration Statement and any Rule 462(b) Registration Statement
was or will be declared effective by the Commission, and at the
time the Company’s most recent Annual Report on Form 10-K was
filed with the Commission, the Company met or will meet the then
applicable requirements for the use of Form S-3 under the
Securities Act, including, but not limited to, General Instruction
I.B.1. of Form S-3, if and for so long as
applicable.
(ii) FINRA
Matters. All of the information
provided to the Sales Agent or to counsel for the Sales Agent by
the Company, its counsel, its officers and directors and, to the
Company’s knowledge, the holders of any securities (debt or
equity) or options to acquire any securities of the Company in
connection with the offering of the Placement Shares is true,
complete, correct and compliant with FINRA’s rules in all
material respects and any letters, filings or other supplemental
information provided to FINRA pursuant to FINRA Rules or NASD
Conduct Rules is true, complete and correct in all material
respects. Except as disclosed in the Registration Statement and the
Prospectus, there is no (i) officer or director of the Company,
(ii) to the Company’s knowledge, 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 that were acquired during the 180-day period immediately
preceding the date of this Agreement that is an affiliate or
associated person of a FINRA member participating in the offer,
issuance and sale of the Placement Shares as contemplated by this
Agreement and the Registration Statement and the Prospectus (as
determined in accordance with the rules and regulations of
FINRA).
(jj) Compliance
with Orders. Neither the
Company nor any of its subsidiaries is in violation of any material
judgment, decree, or order of any court, arbitrator or other
governmental authority.
(kk) Compliance
with laws. The Company and its
subsidiaries have been and are in compliance with all applicable
laws, rules and regulations, except where failure to be so in
compliance would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Change. The Company and
its subsidiaries maintain internal policies and procedures designed
to ensure that they shall remain in material compliance with all
applicable laws, rules and regulations applicable to the Company,
and such internal policies and procedures are reviewed
periodically.
(ll) Sarbanes–Oxley
Act. There is and has been no
failure on the part of the Company or any of the Company’s
directors or officers, in their capacities as such, to comply in
all material respects with any applicable provision of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Xxxxxxxx-Xxxxx
Act”), including Section
402 related to loans and Sections 302 and 906 related to
certifications.
(mm) Disclosure
Controls And Procedures. Except
as set forth in the Registration Statement and the Prospectus, the
Company and its subsidiaries maintain systems of “internal
control over financial reporting” (as defined under Rules
13a-15 and 15d-15 under the Exchange Act) that comply with the
requirements of the Exchange Act and have been designed by, or
under the supervision of, their respective principal executive and
principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP,
including, but not limited to, internal accounting controls
sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization; (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; and (v) the interactive data in
eXtensible Business Reporting Language included or incorporated by
reference in the Registration Statement and the Prospectus fairly
present the information called for in all material respects and are
prepared in accordance with the Commission’s rules and
guidelines applicable thereto. Since the date of the latest audited
financial statements included in the Registration Statement and the
Prospectus, 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.
8
(nn) ERISA.
The Company, its subsidiaries and any “employee benefit
plan” (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively,
“ERISA”))
established or maintained by the Company, its subsidiaries or any
of their “ERISA Affiliates” (as defined below) are in
compliance in all material respects with ERISA.
“ERISA
Affiliate” means, with
respect to the Company and each of its subsidiaries, any member of
any group of organizations described in Sections 414(b),(c),(m) or
(o) of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (the
“Code”)
of which the Company or any of its subsidiaries is a member. No
“reportable event” (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any
“employee benefit plan” established or maintained by
the Company, or any of its subsidiaries or any of their ERISA
Affiliates. No “employee benefit plan” established or
maintained by the Company, any of its subsidiaries or any of their
ERISA Affiliates, if such “employee benefit plan” were
terminated, would have any “amount of unfunded benefit
liabilities” (as defined under ERISA). Neither the Company
nor any of its subsidiaries nor any of their ERISA Affiliates has
incurred or reasonably expects to incur any material liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any “employee benefit plan” or (ii)
Sections 412, 4971, 4975 or 4980B of the Code. Each “employee
benefit plan” established or maintained by the Company, any
of its subsidiaries or any of their ERISA Affiliates that is
intended to be qualified under Section 401(a) of the Code is so
qualified and, to the knowledge of the Company, nothing has
occurred, whether by action or failure to act, which would cause
the loss of such qualification.
(oo) Contracts
and Agreements. The agreements
and documents described in the Registration Statement 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 to be described in the
Registration Statement 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 the Company or any of
its subsidiaries is a party or by which it is or may be bound or
affected and (i) that is referred to in the Registration Statement
and the Prospectus, or (ii) is material to the Company’s or
its subsidiaries’ business, has been duly authorized and
validly executed by the Company, is in full force and effect in all
material respects and is enforceable against the Company or any of
its subsidiaries 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. Except as disclosed
in the Registration Statement and the Prospectus, none of such
agreements or instruments has been assigned by the Company or its
subsidiaries, and neither the Company, its subsidiaries nor, to the
Company’s knowledge, any other party is in default thereunder
and, to the Company’s knowledge, no event has occurred that,
with the lapse of time or the giving of notice, or both, would
constitute a default thereunder. To the Company’s knowledge,
performance by the Company or any of its subsidiaries 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 agency or
court, domestic or foreign, having jurisdiction over the Company,
its subsidiaries or any of their assets or businesses (each, a
“Governmental
Entity”), including,
without limitation, those relating to environmental laws and
regulations.
(pp) Title
to Properties. Except as set
forth in the Registration Statement and the Prospectus, the Company
and each of its subsidiaries have good and marketable title in fee
simple to, or have valid rights to lease or otherwise use, all
items of real or personal property which are material to the
business of the Company, in each case free and clear of all liens,
encumbrances, security interests, claims and defects that do not,
singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by the Company or any of its subsidiaries;
and all of the leases and subleases material to the business of the
Company, and under which the Company or any of its subsidiaries
hold properties described in the Registration Statement and the
Prospectus, are in full force and effect, and neither the Company
nor any of its subsidiaries has received any notice of any material
claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any of its subsidiaries under any of the
leases or subleases mentioned above, or affecting or questioning
the rights of the Company or any of its subsidiaries to the
continued possession of the leased or subleased premises under any
such lease or sublease, which would result in a Material Adverse
Change.
(qq) No
Unlawful Contributions or Other Payments. No payments or inducements have been made or
given, directly or indirectly, to any federal or local official or
candidate for, any federal or state office in the United States or
foreign offices by the Company, any of its subsidiaries or any of
their officers or directors, or, to the knowledge of the Company,
by any of its employees or agents or any other person in connection
with any opportunity, contract, permit, certificate, consent,
order, approval, waiver or other authorization relating to the
business of the Company or any of its subsidiaries, except for such
payments or inducements as were lawful under applicable laws, rules
and regulations. Neither the Company, any of its subsidiaries, nor,
to the knowledge of the Company, any director, officer, agent,
employee or other person associated with or acting on behalf of the
Company or any of its subsidiaries, (i) has used any corporate
funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any
direct or indirect unlawful payment to any government official or
employee from corporate funds; or (iii) made any bribe, unlawful
rebate, payoff, influence payment, kickback or other unlawful
payment in connection with the business of the
Company.
(rr) Foreign
Corrupt Practices Act. None of
the Company, any of its subsidiaries or, to the knowledge of the
Company, any director, officer, agent, employee, affiliate or other
person acting on behalf of the Company or any of its subsidiaries,
is aware of or has taken any action, directly or indirectly, that
would result in a violation by such persons of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations
thereunder (collectively, the “FCPA”),
including, without limitation, making use of the mails or any means
or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the
payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the
FCPA. The Company and its subsidiaries 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.
9
(ss) Money
Laundering Laws. The operations
of the Company and its subsidiaries are and have been conducted at
all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively,
the “Money
Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering
Laws is pending or, to the knowledge of the Company,
threatened.
(tt) OFAC.
None of the Company, any of its subsidiaries or, to the knowledge
of the Company, any director, officer, agent, employee, affiliate
or person acting on behalf of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”);
and the Company will not directly or indirectly use the proceeds of
the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(uu) Exchange
Listing. The Common Stock is
registered pursuant to Section 12(b) of the Exchange Act and is
currently listed on the Exchange under the trading symbol
“INUV”. Except as disclosed in the Registration
Statement and the Prospectus, there is no action pending by the
Company or, to the Company’s knowledge, the Exchange to
delist the Common Stock from the Exchange, nor has the Company
received any notification that the Exchange is contemplating
terminating such listing. The Company has no intention to delist
the Common Stock from the Exchange or to deregister the Common
Stock under the Exchange Act, in either case, at any time during
the period commencing on the date of this Agreement through and
including the 90th calendar day after the termination of this
Agreement. The Company has filed with the Exchange a Supplemental
Listing Application for the offering of the Placement Shares as
contemplated in this Agreement. The issuance and sale of the
Placement Shares under this Agreement does not contravene the rules
and regulations of the Exchange.
(vv) Margin
Rules. The Company owns no
“margin securities” as that term is defined in
Regulation U of the Board of Governors of the Federal Reserve
System (the “Federal
Reserve Board”), and none
of the proceeds from the issuance, sale and delivery of the
Placement Shares as contemplated by this Agreement and as described
in the Registration Statement and the Prospectus will be used,
directly or indirectly, for the purpose of purchasing or carrying
any margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of
the shares of Common Stock to be considered a “purpose
credit” within the meanings of Regulation T, U or X of the
Federal Reserve Board.
(ww) Underwriter
Agreements. The Company is not
a party to any agreement with an agent or underwriter for any other
“at-the-market” or continuous equity
transaction.
(xx) Board
of Directors. The
qualifications of the persons serving as board members of the
Company and the overall composition of the Company’s Board of
Directors comply with the applicable requirements of the Exchange
Act and the Xxxxxxxx-Xxxxx Act and the listing rules of the
Exchange applicable to the Company. At least one member of the
Audit Committee of the Board of Directors of the Company qualifies
as an “audit committee financial expert,” as such term
is defined under Regulation S-K and the listing rules of the
Exchange. In addition, at least a majority of the persons serving
on the Board of Directors of the Company qualify as
“independent,” as defined under the listing rules of
the Exchange.
(yy) No
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 offer and sale of the Placement
Shares hereunder 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.
(zz) No
Material Defaults. Neither the
Company nor any of its subsidiaries has defaulted on any
installment on indebtedness for borrowed money or on any rental on
one or more long-term leases, which defaults, individually or in
the aggregate, could reasonably be expected to result in a Material
Adverse Change. The Company has not filed a report pursuant to
Section 13(a) or 15(d) of the Exchange Act since the filing of its
last Annual Report on Form 10-K, indicating that it (i) has failed
to pay any dividend or sinking fund installment on preferred stock
or (ii) has defaulted on any installment on indebtedness for
borrowed money or on any rental on one or more long-term leases,
which defaults, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse
Change.
(aa) Books
and Records. The minute books
of the Company and each of its subsidiaries have been made
available to the Sales Agent and counsel for the Sales Agent, and
such books (i) contain a substantially complete summary of all
meetings and material actions of the board of directors (including
each board committee) and stockholders of the Company (or analogous
governing bodies and interest holders, as applicable) and each of
its subsidiaries since the time of its respective incorporation or
organization through the date of the latest meeting and action, and
(ii) accurately reflects in all material respects all transactions
referred to in such minutes.
(bb) Continued
Business. No supplier,
customer, distributor or sales agent of the Company or any
subsidiary has notified the Company or any subsidiary that it
intends to discontinue or decrease the rate of business done with
the Company or any subsidiary, except where such discontinuation or
decrease has not resulted in and could not reasonably be expected
to result in a Material Adverse Change.
10
(cc) Regulations.
The disclosures in the Registration Statement and the Prospectus
concerning the effects of federal, state, local and all foreign
regulation on the Company’s business in the past and as
currently contemplated are correct in all material respects and no
other such regulations are required to be disclosed in the
Registration Statement and the Prospectus which are not so
disclosed.
(dd) Confidentiality
and Non-Competitions. To the
Company’s knowledge, no director, officer, key employee or
consultant of the Company or any of its subsidiaries is subject to
any confidentiality, non-disclosure, non-competition agreement or
non-solicitation agreement with any employer or prior employer that
could reasonably be expected to materially affect his or her
ability to be and act in his or her respective capacity for the
Company or to result in a Material Adverse
Change.
(ee) Information
Technology. The Company’s
and its subsidiaries’ information technology assets and
equipment, computers, systems, networks, hardware, software,
websites, applications, and databases (collectively,
“IT
Systems”) operate and
perform in all respects as required in connection with the
operation of the business of the Company and its subsidiaries as
currently conducted, except where such failure to operate and
perform would reasonably be expected to result in a Material
Adverse Change. The Company and its Subsidiaries maintain
commercially reasonable controls, policies, procedures, and
safeguards to maintain and protect their material confidential
information and the integrity, continuous operation, redundancy and
security of all IT Systems and all personal, personally
identifiable, sensitive, confidential or regulated data
(“Personal
Data”) processed and
stored thereon, and to the knowledge of the Company, there have
been no breaches, incidents, violations, outages, compromises or
unauthorized uses of or accesses to same, except for those that
have been remedied without material cost or liability or the duty
to notify any other person, nor any incidents under internal review
or investigations relating to the same. The Company and its
subsidiaries are presently in compliance in all material respects
with all applicable laws or statutes and all applicable judgments,
orders, rules and regulations of any court or arbitrator or
governmental or regulatory authority, internal policies and
contractual obligations relating to the privacy and security of IT
Systems and Personal Data and to the protection of such IT Systems
and Personal Data from unauthorized use, access, misappropriation
or modification, except for any such noncompliance that would not
result in a Material Adverse Change.
(ff) Dividend
Restrictions.
Except as
described in the Registration Statement and the Prospectus, no
subsidiary of the Company is prohibited or restricted, directly or
indirectly, from paying dividends to the Company, or from making
any other distribution with respect to such subsidiary’s
equity securities or from repaying to the Company or any other
subsidiary of the Company any amounts that may from time to time
become due under any loans or advances to such subsidiary from the
Company or from transferring any property or assets to the Company
or to any other subsidiary.
Any
certificate signed by an officer of the Company and delivered to
the Sales Agent or to counsel for the Sales Agent pursuant to or in
connection with this Agreement shall be deemed to be a
representation and warranty by the Company to the Sales Agent as to
the matters set forth therein.
The
Company acknowledges that the Sales Agent and, for purposes of the
opinions to be delivered pursuant to Section 7 hereof, counsel to
the Company and counsel to the Sales Agent, will rely upon the
accuracy and truthfulness of the foregoing representations and
hereby consents to such reliance.
7. Covenants
of the Company. The Company
covenants and agrees with the Sales Agent that:
(a) Registration
Statement Amendments. After the
date of this Agreement and during any period in which a Prospectus
relating to any Placement Shares is required to be delivered by the
Sales Agent under the Securities Act (including in circumstances
where such requirement may be satisfied pursuant to Rule 153 or
Rule 172 under the Securities Act), (i) the Company will notify the
Sales Agent promptly of the time when any subsequent amendment to
the Registration Statement, other than documents incorporated by
reference, has been filed with the Commission and/or has become
effective or any subsequent supplement to the Prospectus has been
filed and of any request by the Commission for any amendment or
supplement to the Registration Statement or Prospectus or for
additional information; (ii) the Company will prepare and file with
the Commission, promptly upon the Sales Agent’s reasonable
request, any amendments or supplements to the Registration
Statement or Prospectus that, in the Sales Agent’s reasonable
opinion, may be necessary or advisable in connection with the
distribution of the Placement Shares by the Sales Agent
(provided, however, that the failure of the Sales Agent to make such
request shall not relieve the Company of any obligation or
liability hereunder, or affect the Sales Agent’s right to
rely on the representations and warranties made by the Company in
this Agreement, and provided, further, that the only remedy the Sales Agent shall have
with respect to the failure to make such filing shall be to cease
making sales under this Agreement until such amendment or
supplement is filed); (iii) the Company will not file any amendment
or supplement to the Registration Statement or Prospectus, other
than documents incorporated by reference, relating to the Placement
Shares or a security convertible into the Placement Shares unless a
copy thereof has been submitted to the Sales Agent within a
reasonable period of time before the filing and the Sales Agent has
not reasonably objected thereto (provided, however, that the failure of the Sales Agent to make such
objection shall not relieve the Company of any obligation or
liability hereunder, or affect the Sales Agent’s right to
rely on the representations and warranties made by the Company in
this Agreement, and provided, further, that the only remedy the Sales Agent shall have
with respect to the failure by the Company to obtain such consent
shall be to cease making sales under this Agreement); (iv) the
Company will furnish to the Sales Agent at the time of filing
thereof a copy of any document that upon filing is deemed to be
incorporated by reference into the Registration Statement or
Prospectus, except for those documents available via XXXXX; and (v)
the Company will cause each amendment or supplement to the
Prospectus, other than documents incorporated by reference, to be
filed with the Commission as required pursuant to the applicable
paragraph of Rule 424(b) of the Securities Act (without reliance on
Rule 424(b)(8) of the Securities Act) or, in the case of any
documents incorporated by reference, to be filed with the
Commission as required pursuant to the Exchange Act, within the
time period prescribed.
(b) Notice
of Commission Stop Orders. The
Company will advise the Sales Agent, promptly after it receives
notice or obtains knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any notice objecting to, or other order
preventing or suspending the use of, the Prospectus, of the
suspension of the qualification of the Placement Shares for
offering or sale in any jurisdiction, or of the initiation of any
proceeding for any such purpose or any examination pursuant to
Section 8(e) of the Securities Act, or if the Company becomes the
subject of a proceeding under Section 8A of the Securities Act in
connection with the offering of the Placement Shares; and it will
promptly use its commercially reasonable efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a
stop order should be issued. Until such time as any stop order is
lifted, the Sales Agent shall cease making offers and sales under
this Agreement.
11
(c) Delivery
of Prospectus; Subsequent Changes. During any period in which a Prospectus relating
to the Placement Shares is required to be delivered by the Sales
Agent under the Securities Act with respect to a pending sale of
the Placement Shares (including in circumstances where such
requirement may be satisfied pursuant to Rule 153 or Rule 172 under
the Securities Act), the Company will comply in all material
respects with all requirements imposed upon it by the Securities
Act, as from time to time in force, and to file on or before their
respective due dates all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any
other provision of or under the Exchange Act. If during such period
any event occurs as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary
to amend or supplement the Registration Statement or Prospectus to
comply with the Securities Act, the Company will promptly notify
the Sales Agent to suspend the offering of Placement Shares during
such period and the Company will promptly amend or supplement the
Registration Statement or Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such
compliance; provided, however, that the Company may delay any such amendment or
supplement if, in the reasonable judgment of the Company, it is in
the best interests of the Company to do so.
(d) Listing
of Placement Shares. During any
period in which the Prospectus relating to the Placement Shares is
required to be delivered by the Sales Agent under the Securities
Act with respect to a pending sale of the Placement Shares
(including in circumstances where such requirement may be satisfied
pursuant to Rule 153 or Rule 172 under the Securities Act), the
Company will use its commercially reasonable efforts to cause the
Placement Shares to be listed on the Exchange and to qualify the
Placement Shares for sale under the securities laws of such
jurisdictions as the Sales Agent reasonably designates and to
continue such qualifications in effect so long as required for the
distribution of the Placement Shares; provided, however, that the Company shall not be required in
connection therewith to qualify as a foreign corporation or dealer
in securities or file a general consent to service of process in
any jurisdiction.
(e) Delivery
of Registration Statement and Prospectus. The Company will furnish to the Sales Agent and
its counsel (at the expense of the Company) copies of the
Registration Statement, the Prospectus (including all documents
incorporated by reference therein) and all amendments and
supplements to the Registration Statement or Prospectus that are
filed with the Commission during any period in which a Prospectus
relating to the Placement Shares is required to be delivered under
the Securities Act (including all documents filed with the
Commission during such period that are deemed to be incorporated by
reference therein), in each case as soon as reasonably practicable
and in such quantities as the Sales Agent may from time to time
reasonably request and, at the Sales Agent’s request, will
also furnish copies of the Prospectus to each exchange or market on
which sales of the Placement Shares may be made;
provided,
however, that the Company shall not be required to
furnish any document (other than the Prospectus) to the Sales Agent
to the extent such document is available on
XXXXX.
(f) Earnings
Statement. The Company will
make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the
end of the Company’s current fiscal quarter, an earnings
statement of the Company and its subsidiaries (which need not be
audited) covering a 12-month period that complies with Section
11(a) and Rule 158 of the Securities Act. The terms “earnings
statement” and “make generally available to its
security holders” shall have the meanings set forth in Rule
158 under the Securities Act.
(g) Expenses.
The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated in accordance with
the provisions of Section 11
hereunder, will pay the following
expenses all incident to the performance of its obligations
hereunder, including, but not limited to, expenses relating to (i)
the preparation, printing and filing of the Registration Statement
and each amendment and supplement thereto, of each Prospectus and
of each amendment and supplement thereto, (ii) the preparation,
issuance and delivery of the Placement Shares, including any stock
or other transfer taxes and any stamp or other duties payable upon
the sale, issuance or delivery of the Placement Shares to the Sales
Agent, (iii) the fees and disbursements of the counsel, accountants
and other advisors to the Company in connection with the
transactions contemplated by this Agreement; (iv) the qualification
of the Placement Shares under securities laws in accordance with
the provisions of Section 7(d)
of this Agreement, including filing
fees (provided, however, that any fees or disbursements of counsel for
the Sales Agent in connection therewith shall be paid by the Sales
Agent except as set forth in (ix) below), (v) the printing and
delivery to the Sales Agent of copies of the Prospectus and any
amendments or supplements thereto, and of this Agreement, (vi) the
fees and expenses incurred in connection with the listing or
qualification of the Placement Shares for trading on the Exchange,
(vii) the fees and expenses of the transfer agent or registrar for
the Common Stock; (viii) filing fees and expenses, if any, of the
Commission and the FINRA Corporate Financing Department
(provided, however, that any fees or disbursements of counsel for
the Sales Agent in connection therewith shall be paid by the Sales
Agent except as set forth in (ix) below), and (ix) the Company
shall reimburse the Sales Agent for its reasonable out-of-pocket
costs and expenses (including but not limited to the reasonable
legal fees and expenses of the Sales Agent) in the amount of
$35,000 for implementation and up to an additional $10,000 per
fiscal year for maintenance. The implementation costs shall be paid
from the proceeds of the first draw downs.
(h) Use
of Proceeds. The Company will
use the Net Proceeds as described in the Prospectus in the section
entitled “Use of Proceeds.”
(i) Notice
of Other Sales. The Company (I)
shall provide the Sales Agent notice at least two (2) days before
it offers to sell, contracts to sell, sells, grants any option to
sell or otherwise disposes of any shares of Common Stock (other
than Placement Shares offered pursuant to the provisions of this
Agreement) or securities convertible into or exchangeable for
Common Stock, or warrants or any rights to purchase or acquire
Common Stock, during the period beginning on the fifth
(5th)
Trading Day immediately prior to the date on which any Placement
Notice is delivered to the Sales Agent hereunder and ending on the
fifth (5th)
Trading Day immediately following the final Settlement Date with
respect to Placement Shares sold pursuant to such Placement Notice
(or, if the Placement Notice has been terminated or suspended prior
to the sale of all Placement Shares covered by a Placement Notice,
the fifth (5th)
Trading Day immediately following the date of such suspension or
termination), and (II) will not directly or indirectly enter into
or utilize any other “at-the-market” or continuous
equity transaction to offer to sell, sell, contract to sell, grant
any option to sell or otherwise dispose of any shares of Common
Stock (other than the Placement Shares offered pursuant to this
Agreement) or securities convertible into or exchangeable for
shares of Common Stock, warrants or any rights to purchase or
acquire, shares of Common Stock prior to the termination of this
Agreement; provided, however, that such notice requirements or restrictions,
as the case may be, will not be required in connection with the
Company’s issuance or sale of (i) shares of Common Stock,
options to purchase shares of Common Stock, other equity awards or
shares of Common Stock issuable upon the exercise of options or
other equity awards, pursuant to any employee or director stock
option or benefits plan, stock ownership plan or dividend
reinvestment plan of the Company whether now in effect or hereafter
implemented, (ii) shares of Common Stock issuable upon exchange,
conversion or redemption of securities or the exercise of warrants,
options, or other rights in effect or outstanding, and disclosed in
filings by the Company available on XXXXX or otherwise in writing
(including by email correspondence) to the Sales Agent and (iii)
shares of Common Stock or securities convertible into or
exchangeable for shares of Common Stock as consideration for
mergers, acquisitions, sale or purchase of assets or other business
combinations or strategic alliances occurring after the date of
this Agreement which are not issued for capital raising purposes.
Notwithstanding the foregoing, the Company shall provide the Sales
Agent notice at least two (2) days prior to pursuing any private or
public offerings of equity and/or other securities (including debt
securities) in one or more transactions.
12
(j) Change
of Circumstances. The Company
will, at any time during a fiscal quarter in which the Company
intends to tender a Placement Notice or sell Placement Shares,
advise the Sales Agent promptly after it shall have received notice
or obtained knowledge thereof, of any information or fact that
would alter or affect in any material respect any opinion,
certificate, letter or other document provided to the Sales Agent
pursuant to this Agreement.
(k) Due
Diligence Cooperation. The
Company will cooperate with any reasonable due diligence review
conducted by the Sales Agent or its agents in connection with the
transactions contemplated hereby, including, without limitation,
providing information and making available documents and senior
corporate officers, during regular business hours and at the
Company’s principal offices, as the Sales Agent may
reasonably request.
(l) Required
Filings Relating to Placement of Placement
Shares. The Company shall set
forth in each Annual Report on Form 10-K and Quarterly Report on
Form 10-Q filed by the Company with the Commission in respect of
any quarter in which sales of Placement Shares were made by or
through the Sales Agent under this Agreement, with regard to the
relevant period, the amount of Placement Shares sold to or through
the Sales Agent, the Net Proceeds to the Company and the
compensation payable by the Company to the Sales Agent with respect
to such sales of Placement Shares. To the extent that the filing of
a prospectus supplement with the Commission with respect to any
sales of Placement Shares becomes required under Rule 424(b) under
the Securities Act, the Company agrees that, on or before such
dates as the Securities Act shall require, the Company will (i)
file a prospectus supplement with the Commission under the
applicable paragraph of Rule 424(b) under the Securities Act, which
prospectus supplement will set forth, with regard to the relevant
period, the amount of Placement Shares sold to or through the Sales
Agent, the Net Proceeds to the Company and the compensation payable
by the Company to the Sales Agent with respect to such Placement
Shares, and (ii) deliver such number of copies of each such
prospectus supplement to each exchange or market on which such
sales were effected as may be required by the rules or regulations
of such exchange or market. The Company shall afford the Sales
Agent and its counsel with a reasonable opportunity to review and
comment upon, shall consult with the Sales Agent and its counsel on
the form and substance of, and shall give due consideration to all
such comments from the Sales Agent or its counsel on, any such
filing prior to the issuance, filing or public disclosure thereof;
provided, however, that the Company shall not be required to submit
for review (A) any portion of any periodic reports filed with the
Commission under the Exchange Act other than the specific
disclosure relating to any sales of Placement Shares and (B) any
disclosure contained in periodic reports filed with the Commission
under the Exchange Act if it shall have previously provided the
same disclosure for review in connection with a previous
filing.
(m) Representation
Dates; Certificate. On or prior
to the date the first Placement Notice is given hereunder and each
time the Company (i) files the Prospectus relating to the Placement
Shares or amends or supplements the Registration Statement or the
Prospectus relating to the Placement Shares (other than (A) a
prospectus supplement filed in accordance with Section 7(l)
of this Agreement or (B) a supplement
or amendment that relates to an offering of securities other than
the Placement Shares) by means of a post-effective amendment,
sticker, or supplement but not by means of incorporation of
document(s) by reference to the Registration Statement or the
Prospectus relating to the Placement Shares; (ii) files an annual
report on Form 10-K under the Exchange Act (including any Form
10-K/A containing amended financial information or a material
amendment to the previously filed Form 10-K); (iii) files a
quarterly report on Form 10-Q under the Exchange Act; or (iv) files
a current report on Form 8-K containing amended financial
information (other than an earnings release, to
“furnish” information pursuant to Items 2.02 or 7.01 of
Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K
relating to the reclassification of certain properties as
discontinued operations in accordance with Statement of Financial
Accounting Standards No. 144) under the Exchange Act (each date of
filing of one or more of the documents referred to in clauses (i)
through (iv) shall be a “Representation
Date”), the Company shall
furnish the Sales Agent within three (3) Trading Days after each
Representation Date with a certificate, in the form attached hereto
as Exhibit
7(m). The requirement to
provide a certificate under this Section 7(m)
shall be waived for any Representation
Date occurring at a time at which no Placement Notice is pending,
which waiver shall continue until the earlier to occur of the date
the Company delivers a Placement Notice hereunder (which for such
calendar quarter shall be considered a Representation Date) and the
next occurring Representation Date; provided, however, that such waiver shall not apply for any
Representation Date on which the Company files its annual report on
Form 10-K. Notwithstanding the foregoing, if the Company
subsequently decides to sell Placement Shares following a
Representation Date when the Company relied on such waiver and did
not provide the Sales Agent with a certificate under this
Section
7(m), then before the Company
delivers the Placement Notice or the Sales Agent sells any
Placement Shares, the Company shall provide the Sales Agent with a
certificate, in the form attached hereto as Exhibit
7(m), dated the date of the
Placement Notice.
(n) Legal
Opinion. On or prior to the
date the first Placement Notice is given hereunder, the Company
shall cause to be furnished to the Sales Agent (i) the written
opinion and negative assurances of Porter, Wright, Xxxxxx &
Xxxxxx LLP, as counsel to the Company, or other counsel reasonably
satisfactory to the Sales Agent (“SEC
Counsel”) and (ii) the
written opinion of XxXxxxxx Carano LLP, as local Nevada counsel to
the Company (“Nevada
Counsel” and together
with SEC Counsel, “Company
Counsel”) substantially
in the forms previously agreed between the Company and the Sales
Agent. Thereafter, within three (3) Trading Days after each
Representation Date with respect to which the Company is obligated
to deliver a certificate pursuant to Section 7(m)
for which no waiver is applicable
pursuant to Section
7(m), and not more than once
per calendar quarter, the Company shall cause to be furnished to
the Sales Agent the written opinions and, as applicable, negative
assurance of each Company Counsel substantially in the forms
previously agreed between the Company and the Sales Agent,
modified, as necessary, to relate to the Registration Statement and
the Prospectus as then amended or supplemented; provided, however, that if Company Counsel has previously furnished
to the Sales Agent such written opinions and, as applicable,
negative assurance of such counsel, in each case substantially in
the forms previously agreed between the Company and the Sales
Agent, then each Company Counsel may, in respect of any future
Representation Date, furnish the Sales Agent with a letter signed
by such Company Counsel (each, a “Reliance
Letter”) in lieu of such
opinions and, as applicable, negative assurance of Company Counsel
to the effect that the Sales Agent may rely on the prior opinions
and, as applicable, negative assurance of Company Counsel delivered
pursuant to this Section 7(n)
to the same extent as if it were dated
the date of such Reliance Letter (except that statements in such
prior opinions and negative assurance (as applicable) shall be
deemed to relate to the Registration Statement and the Prospectus
as amended or supplemented to the date of such Reliance
Letter).
(o) Comfort
Letter. On or prior to the date
the first Placement Notice is given hereunder and within three (3)
Trading Days after each subsequent Representation Date with respect
to which the Company is obligated to deliver a certificate pursuant
to Section 7(m) for which no waiver is applicable pursuant to
Section 7(m), other than a Representation Date under
Section
7(m)(iii) or
Section
7(m)(iv) unless with respect to
a Representation Date under Section
7(m)(iv) the Sales Agent
reasonably requests delivery thereof, the Company shall cause its
independent accountants to furnish the Sales Agent letters (the
“Comfort
Letters”), dated the date
that the Comfort Letter is delivered, in form and substance
satisfactory to the Sales Agent, (i) confirming that they are an
independent registered public accounting firm within the meaning of
the Securities Act, the Exchange Act and the rules and regulations
of the PCAOB and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of such date,
the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by
accountants’ “comfort letters” to the Sales Agent
in connection with registered public offerings (the first such
letter, the “Initial
Comfort Letter”) and
(iii) updating the Initial Comfort Letter with any information that
would have been included in the Initial Comfort Letter had it been
given on such date and modified as necessary to relate to the
Registration Statement and the Prospectus, as amended and
supplemented to the date of such letter.
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(p) CFO
Certification. On or prior to
the date the first Placement Notice is given hereunder and within
three (3) Trading Days after each subsequent Representation Date
with respect to which the Company is obligated to deliver a
certificate pursuant to Section 7(m) for which no waiver is
applicable pursuant to Section 7(m), the Company shall furnish the
Sales Agent with certificates, signed on behalf of the Company by
its Chief Financial Officer (each, a “CFO
Certificate”), dated the
date that the CFO Certificate is delivered, in form and substance
satisfactory to the Sales Agent and its counsel, certifying as to
such financial and statistical information, forward-looking
statements and other matters as the Sales Agent may reasonably
request which is not addressed within the Comfort
Letters.
(q) Market
Activities. The Company will
not, directly or indirectly, (i) take any action designed to cause
or result in, or that constitutes or might reasonably be expected
to constitute, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Common Stock or (ii) sell, bid for, or purchase shares of Common
Stock in violation of Regulation M, or pay anyone any compensation
for soliciting purchases of the Placement Shares other than the
Sales Agent.
(r) Insurance.
The Company and its subsidiaries shall maintain, or cause to be
maintained, insurance in such amounts and covering such risks as is
reasonable and customary for the business in which it is
engaged.
(s) Investment
Company Act. The Company will
conduct its affairs in such a manner so as to reasonably ensure
that neither it nor its subsidiaries or, after giving effect to the
offering and sale of the Placement Shares and the application of
proceeds therefrom as described in the Prospectus, will be, an
“investment company” within the meaning of such term
under the Investment Company Act.
(t) Securities
Act and Exchange Act. The
Company will use its commercially reasonable efforts to comply with
all requirements imposed upon it by the Securities Act and the
Exchange Act as from time to time in force, so far as necessary to
permit the continuance of sales of, or dealings in, the Placement
Shares as contemplated by the provisions hereof and the
Prospectus.
(u) No
Offer to Sell. Other than the
Prospectus and an Issuer Free Writing Prospectus approved in
advance by the Company and the Sales Agent in its capacity as
principal or agent hereunder, neither the Sales Agent nor the
Company (including its agents and representatives, other than the
Sales Agent in its capacity as such) will make, use, prepare,
authorize, approve or refer to any written communication (as
defined in Rule 405 under the Securities Act), required to be filed
with the Commission, that constitutes an offer to sell or
solicitation of an offer to buy Placement Shares
hereunder.
(v) Xxxxxxxx-Xxxxx
Act. The Company and its
subsidiaries will use their commercially reasonable efforts to
comply with all effective applicable provisions of the
Xxxxxxxx-Xxxxx Act.
(w) Transfer
Agent. The Company shall
maintain, at its sole expense, a registrar and transfer agent for
the Common Stock.
8. Conditions
to the Sales Agent’s Obligations. The obligations of the Sales Agent hereunder
with respect to a Placement will be subject to the continuing
accuracy and completeness of the representations and warranties
made by the Company herein, to the due performance by the Company
of its obligations hereunder, to the completion by the Sales Agent
of a due diligence review satisfactory to the Sales Agent in its
reasonable judgment, and to the continuing satisfaction (or waiver
by the Sales Agent in its sole discretion) of the following
additional conditions:
(a) Registration
Statement Effective. The
Registration Statement shall be effective and shall be available
for the sale of all Placement Shares contemplated to be issued by
any Placement Notice which have not yet been issued and sold
pursuant to such Registration Statement.
(b) Securities
Act Filings Made. The Company
shall have filed with the Commission the ATM Prospectus pursuant to
Rule 424(b) under the Securities Act not later than the
Commission’s close of business on the second Business Day
following the date of this Agreement. All other filings with the
Commission required by Rule 424(b) or Rule 433 under the Securities
Act to have been filed prior to the issuance of any Placement
Notice hereunder shall have been made within the applicable time
period prescribed for such filing by Rule 424(b) (without reliance
on Rule 424(b)(8) of the Securities Act) or Rule 433, as
applicable.
(c) No
Material Notices. None of the
following events shall have occurred and be continuing: (i) receipt
by the Company or any of its subsidiaries of any request for
additional information from the Commission or any other federal or
state governmental authority during the period of effectiveness of
the Registration Statement, the response to which would require any
post-effective amendments or supplements to the Registration
Statement or the Prospectus; (ii) the issuance by the Commission or
any other federal or state governmental authority of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt by
the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the
Placement Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; or (iv) the
occurrence of any event that makes any material statement made in
the Registration Statement or the Prospectus or any material
document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the
making of any changes in the Registration Statement, related
Prospectus or such documents so that, in the case of the
Registration Statement, it will not contain any materially untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and, that in the case of the Prospectus, it
will not contain any materially 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.
14
(d) No
Misstatement or Material Omission. The Sales Agent shall not have advised the
Company that the Registration Statement or Prospectus, or any
amendment or supplement thereto, contains an untrue statement of
fact that in the Sales Agent’s reasonable opinion is
material, or omits to state a fact that in the Sales Agent’s
reasonable opinion is material and is required to be stated therein
or is necessary to make the statements therein not
misleading.
(e) Material
Changes. Except as contemplated
in the Prospectus, or disclosed in the Company’s reports
filed with the Commission, there shall not have been any material
adverse change in the authorized capital stock of the Company or
any Material Adverse Change or any development that could
reasonably be expected to result in a Material Adverse Change, or
any downgrading in or withdrawal of the rating assigned to any of
the Company’s securities (other than asset backed securities)
by any rating organization or a public announcement by any rating
organization that it has under surveillance or review its rating of
any of the Company’s securities (other than asset backed
securities), the effect of which, in the case of any such action by
a rating organization described above, in the reasonable judgment
of the Sales Agent (without relieving the Company of any obligation
or liability it may otherwise have), is so material as to make it
impracticable or inadvisable to proceed with the offering of the
Placement Shares on the terms and in the manner contemplated by
this Agreement and the Prospectus.
(f) Representation
Certificate. The Sales Agent
shall have received the certificate required to be delivered
pursuant to Section 7(m)
on or before the date on which
delivery of such certificate is required pursuant to
Section
7(m).
(g) Legal
Opinions. The Sales Agent shall
have received the opinions and, as applicable, negative assurances
of each Company Counsel to be delivered pursuant
Section
7(n) on or before the date on
which such delivery of such opinions and negative assurances is
required pursuant to Section
7(n).
(h) Comfort
Letter. The Sales Agent shall
have received the Comfort Letter required to be delivered
pursuant Section 7(o)
on or before the date on which such
delivery of such Comfort Letter is required pursuant to
Section
7(o).
(i) CFO
Certificate. The Sales Agent
shall have received the CFO Certificate required to be delivered
pursuant to Section 7(p)
on or before the date on which
delivery of such CFO Certificate is required pursuant to
Section
7(p).
(j) Secretary’s
Certificate. On or prior to the
date the first Placement Notice is given hereunder, the Sales Agent
shall have received a certificate, signed on behalf of the Company
by its corporate Secretary, certifying as to (i) the articles of
incorporation of the Company (as the same may be amended or
restated from time to time), (ii) the bylaws of the Company (as the
same may be amended or restated from time to time), (iii) the
resolutions of the Board of Directors of the Company (or a
committee thereof) authorizing the execution, delivery and
performance of this Agreement and the issuance of the Placement
Shares and (iv) the incumbency of the officers duly authorized to
execute this Agreement and the other documents contemplated by this
Agreement.
(k) No
Suspension. Trading in the
Common Stock shall not have been suspended on the Exchange and the
Common Stock shall not have been delisted from the
Exchange.
(l) Other
Materials. On each date on
which the Company is required to deliver a certificate pursuant
to Section
7(m), the Company shall have
furnished to the Sales Agent such appropriate further opinions,
certificates, letters and documents as the Sales Agent may have
reasonably requested. All such opinions, certificates, letters and
other documents shall have been in compliance with the provisions
hereof. The Company will furnish the Sales Agent with such
conformed copies of such opinions, certificates, letters and other
documents as the Sales Agent shall have reasonably
requested.
(m) Approval
for Listing. The Placement
Shares shall either have been (i) approved for listing on the
Exchange, subject only to notice of issuance, or (ii) the Company
shall have filed an application for listing of the Placement Shares
on the Exchange at, or prior to, the issuance of any Placement
Notice.
(n) No
Termination Event. There shall
not have occurred any event that would permit the Sales Agent to
terminate this Agreement pursuant to Section
11(a).
(o) FINRA.
The Sales Agent shall have received a letter from the Corporate
Financing Department of FINRA confirming that such department has
determined to raise no objection with respect to the fairness or
reasonableness of the terms and arrangements related to the sale of
the Placement Shares pursuant to this
Agreement.
15
9. Indemnification
and Contribution.
(a) Company
Indemnification. Except to the
extent not permitted under federal or state securities laws, the
Company agrees to indemnify and hold harmless the Sales Agent, the
directors, officers, members, partners, employees and agents of the
Sales Agent each broker dealer affiliate of the Sales Agent, and
each the Sales Agent Affiliate, if any, from and against any and
all losses, claims, liabilities, expenses and damages (including,
but not limited to, any and all reasonable investigative, legal and
other expenses incurred in connection with, and any and all amounts
paid in settlement (in accordance with Section
9(c)) of, any action, suit or
proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third
party, or otherwise, or any claim asserted), as and when incurred,
to which the Sales Agent, or any such person, may become subject
under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based, directly or indirectly, on (x) any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any
amendment or supplement thereto or in any Issuer Free Writing
Prospectus or in any application or other document executed by or
on behalf of the Company or based on written information furnished
by or on behalf of the Company filed in any jurisdiction in order
to qualify the Common Stock under the securities laws thereof or
filed with the Commission, (y) the omission or alleged omission to
state in any such document a material fact required to be stated in
it or necessary to make the statements in it not misleading or (z)
any breach by any of the indemnifying parties of any of their
respective representations, warranties and agreements contained in
this Agreement; provided,
however, that this indemnity
agreement shall not apply to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Placement
Shares pursuant to this Agreement and is caused directly by an
untrue statement or omission made in reliance upon and in strict
conformity with written information relating to the Sales Agent and
furnished to the Company by the Sales Agent expressly for inclusion
in any document as described in clause (x) of this
Section
9(a). This indemnity agreement
will be in addition to any liability that the Company might
otherwise have.
(b) The
Sales Agent Indemnification.
Except to the extent not permitted under federal or state
securities laws, the Sales Agent agrees to indemnify and hold
harmless the Company and its directors and each officer of the
Company that signed the Registration Statement, and each person, if
any, who (i) controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act or (ii) is
controlled by or is under common control with the Company (each, a
“Company
Affiliate”) from and
against any and all losses, claims, liabilities, expenses and
damages (including, but not limited to, any and all reasonable
investigative, legal and other expenses incurred in connection
with, and any and all amounts paid in settlement (in accordance
with Section
9(c)) of, any action, suit or
proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third
party, or otherwise, or any claim asserted), as and when incurred,
to which any such Company Affiliate, may become subject under the
Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, liabilities, expenses or damages arise out of
or are based, directly or indirectly, on (x) any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or any amendment or
supplement thereto, or (y) the omission or alleged omission to
state in any such document a material fact required to be stated in
it or necessary to make the statements in it not misleading;
provided, however, that this indemnity agreement shall apply only
to the extent that such loss, claim, liability, expense or damage
is caused directly by an untrue statement or omission made in
reliance upon and in strict conformity with written information
relating to the Sales Agent and furnished to the Company by the
Sales Agent expressly for inclusion in any document as described in
clause (x) of this Section
9(b).
(c) Procedure.
Any party that proposes to assert the right to be indemnified under
this Section 9
will, promptly after receipt of notice
of commencement of any action against such party in respect of
which a claim is to be made against an indemnifying party or
parties under this Section
9, notify each such
indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such
indemnifying party will not relieve the indemnifying party from (i)
any liability that it might have to any indemnified party otherwise
than under this Section 9
and (ii) any liability that it may
have to any indemnified party under the foregoing provision of
this Section 9
unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or
defenses by the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying
party of its commencement, the indemnifying party will be entitled
to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified
party, jointly with any other indemnifying party similarly
notified, to assume the defense of the action, with counsel
reasonably satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in
connection with the defense. The indemnified party will have the
right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense
of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are
different from or in addition to those available to the
indemnifying party, (3) a conflict or potential conflict exists
(based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of
such action on behalf of the indemnified party) or (4) the
indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases
the reasonable fees, disbursements and other charges of counsel
will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice
in such jurisdiction at any one time for all such indemnified party
or parties. All such fees, disbursements and other charges will be
reimbursed by the indemnifying party promptly as they are incurred.
An indemnifying party will not, in any event, be liable for any
settlement of any action or claim effected without its written
consent. No indemnifying party shall, without the prior written
consent of each indemnified party, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim,
action or proceeding relating to the matters contemplated by
this Section 9
(whether or not any indemnified party
is a party thereto), unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from
all liability arising or that may arise out of such claim, action
or proceeding.
16
(d) Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 9
is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company
or the Sales Agent, the Company and the Sales Agent will contribute
to the total losses, claims, liabilities, expenses and damages
(including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons
other than the Sales Agent, such as persons who control the Company
within the meaning of the Securities Act, officers of the Company
who signed the Registration Statement and directors of the Company,
who also may be liable for contribution) to which the Company and
the Sales Agent may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the
Company on the one hand and the Sales Agent on the other. The
relative benefits received by the Company on the one hand and the
Sales Agent on the other hand shall be deemed to be in the same
proportion as the total Net Proceeds from the sale of the Placement
Shares (before deducting expenses) received by the Company bear to
the total compensation received by the Sales Agent from the sale of
Placement Shares on behalf of the Company. If, but only if, the
allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in
such proportion as is appropriate to reflect not only the relative
benefits referred to in the foregoing sentence but also the
relative fault of the Company, on the one hand, and the Sales
Agent, on the other, with respect to the statements or omission
that resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault
shall be determined by reference to, among other things, 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 Sales Agent, 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 Sales Agent agree that it would not be just and
equitable if contributions pursuant to this Section 9(d)
were to be determined by pro rata
allocation or by any other method of allocation that does not take
into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the
loss, claim, liability, expense, or damage, or action in respect
thereof, referred to above in this Section 9(d)
shall be deemed to include, for the
purpose of this Section
9(d), any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim
to the extent consistent with Section 9(c)
hereof. Notwithstanding the foregoing
provisions of this Section
9(d), the Sales Agent shall not
be required to contribute any amount in excess of the commissions
received by it under this Agreement and no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section
9(d), any person who controls a
party to this Agreement within the meaning of the Securities Act
will have the same rights to contribution as that party (and any
officers, directors, members, partners, employees or agents of the
Sales Agent and each broker dealer affiliate of the Sales Agent
will have the same rights to contribution as the Sales Agent), and
each officer of the Company who signed the Registration Statement
and each director of the Company will have the same rights to
contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt
of notice of commencement of any action against such party in
respect of which a claim for contribution may be made under
this Section
9(d), will notify any such
party or parties from whom contribution may be sought, but the
omission to so notify will not relieve that party or parties from
whom contribution may be sought from any other obligation it or
they may have under this Section 9(d)
except to the extent that the failure
to so notify such other party materially prejudiced the substantive
rights or defenses of the party from whom contribution is sought.
Except for a settlement entered into pursuant to the last sentence
of Section 9(c)
hereof, no party will be liable for
contribution with respect to any action or claim settled without
its written consent if such consent is required pursuant to
Section
9(c) hereof.
10. Representations
and Agreements to Survive Delivery. The indemnity and contribution agreements
contained in Section 9
of this Agreement and all
representations and warranties of the Company herein or in
certificates delivered pursuant hereto shall survive, as of their
respective dates, regardless of (i) any investigation made by or on
behalf of the Sales Agent, any controlling person of the Sales
Agent, or the Company (or any of their respective officers,
directors, members or controlling persons), (ii) delivery and
acceptance of the Placement Shares and payment therefor or (iii)
any termination of this Agreement.
11. Termination.
(a) The
Sales Agent shall have the right by giving notice as hereinafter
specified at any time to terminate this Agreement if (i) any
Material Adverse Change, or any development that could reasonably
be expected to result in a Material Adverse Change has occurred
that, in the reasonable judgment of the Sales Agent, may materially
impair the ability of the Sales Agent to sell the Placement Shares
hereunder, (ii) the Company shall have failed, refused or been
unable to perform any agreement on its part to be performed
hereunder; provided, however, in the case of any failure of the Company to
deliver (or cause another person to deliver) any certification,
opinion, or letter required under Sections
7(m), 7(n),
7(o),
7(p)
or 7(q),
the Sales Agent’s right to terminate shall not arise unless
such failure to deliver (or cause to be delivered) continues for
more than thirty (30) days from the date such delivery was
required, (iii) any other condition of the Sales Agent’s
obligations hereunder is not fulfilled, or (iv) any suspension or
limitation of trading in the Placement Shares or in securities
generally on the Exchange shall have occurred (including automatic
halt in trading pursuant to market-decline triggers, other than
those in which solely program trading is temporarily halted), or a
major disruption of securities settlements or clearing services in
the United States shall have occurred, or minimum prices for
trading have been fixed on the Exchange. Any such termination shall
be without liability of any party to any other party except that
the provisions of Section 7(g)
(Expenses), Section 9
(Indemnification and
Contribution), Section 10
(Representations and Agreements to
Survive Delivery), Section
11(f), Section 16
(Applicable Law; Consent to
Jurisdiction) and Section 17
(Waiver of Jury Trial) hereof shall
remain in full force and effect notwithstanding such termination.
If the Sales Agent elects to terminate this Agreement as provided
in this Section
11(a), the Sales Agent shall
provide the required notice as specified in Section 12
(Notices).
(b) The
Company shall have the right, by giving ten (10) days’ notice
as hereinafter specified in Section
12, to terminate this Agreement
in its sole discretion at any time after the date of this
Agreement. Any such termination shall be without liability of any
party to any other party except that the provisions of
Section
7(g), Section
9, Section
10, Section
11(f), Section 16
and Section 17
hereof shall remain in full force and
effect notwithstanding such termination.
17
(c) The
Sales Agent shall have the right, by giving ten (10) days’
notice as hereinafter specified in Section
12, to terminate this Agreement
in its sole discretion at any time after the date of this
Agreement. Any such termination shall be without liability of any
party to any other party except that the provisions of
Section
7(g), Section
9, Section
10, Section
11(f), Section 16
and Section 17
hereof shall remain in full force and
effect notwithstanding such termination.
(d) Unless
earlier terminated pursuant to this Section
11, this Agreement shall
automatically terminate upon the earlier to occur of (i) issuance
and sale of all of the Placement Shares to or through the Sales
Agent on the terms and subject to the conditions set forth herein
and (ii) the expiration of the Registration Statement on the third
(3rd)
anniversary of the initial effective date of the Registration
Statement pursuant to Rule 415(a)(5) under the Securities
Act; provided that the provisions of Section
7(g), Section
9, Section
10, Section
11(f), Section 16
and Section 17
hereof shall remain in full force and
effect notwithstanding such termination.
(e) This
Agreement shall remain in full force and effect unless terminated
pursuant to Sections
11(a), (b), (c)
or (d)
above or otherwise by mutual agreement
of the parties; provided, however, that any such termination by mutual agreement
shall in all cases be deemed to provide that Section
7(g), Section
9, Section
10, Section
11(f), Section 16
and Section 17
shall remain in full force and
effect.
(f) Any
termination of this Agreement shall be effective on the date
specified in such notice of termination; provided, however, that such termination shall not be effective
until the close of business on the date of receipt of such notice
by the Sales Agent or the Company, as the case may be. If such
termination shall occur prior to the Settlement Date for any sale
of Placement Shares, such termination shall not become effective
until the close of business on such Settlement Date and such
Placement Shares shall settle in accordance with the provisions of
this Agreement.
12. Notices.
All notices or other communications required or permitted to be
given by any party to any other party pursuant to the terms of this
Agreement shall be in writing, unless otherwise specified, and if
sent to the Sales Agent, shall be delivered to:
A.G.P./Alliance
Global Partners
000
Xxxxxxx Xxx.
Xxx
Xxxx, XX 00000
Attention: Xxxxxx
X. Xxxxxxx
Email:
xxx@xxxxxxxxx.xxx
with a
copy (which shall not constitute notice) to:
Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
000
Xxxxx Xxx.
Xxx
Xxxx, XX 00000
Attention: Xxxx X.
Xxxxxxxxxx; Xxxxxx X. Xxxxxxxxxx
Email:
XXXxxxxxxxxx@xxxxx.xxx; XXXxxxxxxxxx@xxxxx.xxx
and if
to the Company, shall be delivered to:
000
Xxxxxxxxx Xxxxxxx Xxx., Xxxxx 000
Xxxxxx
Xxxx, Xxxxxxxx 00000
Attention: Xxxx X.
Xxxxxxx, General Counsel
Email:
xxxx.xxxxxxx@xxxxx.xxx
18
with a
copy (which shall not constitute notice) to:
Porter,
Wright, Xxxxxx & Xxxxxx LLP
00
Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx
00000
Attention: Xxxxxx
X. Xxxxxxxxx
Email:
xxxxxxxxxx@xxxxxxxxxxxx.xxx
and
XxXxxxxx Carano
LLP
000 X.
Xxxxxxx Xxxxxx
Xxxxx
Xxxxx
Xxxx,
XX 00000
Attention: Xxxxx X.
Xxxxxxxxxxx
Email:
xxxxxxxxxxxx@xxxxxxxxxxxxxx.xxx
Each
party may change such address for notices by sending to the other
party to this Agreement written notice of a new address for such
purpose. Each such notice or other communication shall be deemed
given (i) when delivered personally or by verifiable facsimile
transmission (with an original to follow) on or before 4:30 p.m.,
New York City time, on a Business Day or, if such day is not a
Business Day, on the next succeeding Business Day, (ii) on the next
Business Day after timely delivery to a nationally-recognized
overnight courier and (iii) on the Business Day actually received
if deposited in the U.S. mail (certified or registered mail, return
receipt requested, postage prepaid). For purposes of this
Agreement, “Business
Day” shall mean any day on which the Exchange and
commercial banks in the City of New York are open for
business.
An
electronic communication (“Electronic
Notice”) shall be deemed written notice for purposes
of this Section 12
if sent to the electronic mail address specified by the receiving
party under separate cover. Electronic Notice shall be deemed
received at the time the party sending Electronic Notice receives
confirmation of receipt by the receiving party (other than pursuant
to auto-reply). Any party receiving Electronic Notice may request
and shall be entitled to receive the notice on paper, in a
nonelectronic form (“Nonelectronic
Notice”) which shall be sent to the requesting party
within ten (10) days of receipt of the written request for
Nonelectronic Notice.
13. Successors
and Assigns. This Agreement
shall inure to the benefit of and be binding upon the Company and
the Sales Agent and their respective successors and permitted
assigns and, as to Sections 5(b)
and 9, the other indemnified parties specified therein.
References to any of the parties contained in this Agreement shall
be deemed to include the successors and permitted assigns of such
party. Nothing in this Agreement, express or implied, is intended
to confer upon any other person any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. Neither party may assign its
rights or obligations under this Agreement without the prior
written consent of the other party; provided, however, that the Sales Agent may assign its rights and
obligations hereunder to an affiliate of the Sales Agent without
obtaining the Company’s consent.
14. Adjustments
for Share Splits. The parties
acknowledge and agree that all share-related numbers contained in
this Agreement shall be adjusted to take into account any share
split, share dividend or similar event effected with respect to the
Common Stock.
19
15. Entire
Agreement; Amendment; Severability. This Agreement (including all schedules and
exhibits attached hereto and Placement Notices issued pursuant
hereto) and any other writing entered into by the parties relating
to this Agreement constitutes the entire agreement and supersedes
all other prior and contemporaneous agreements and undertakings,
both written and oral, among the parties hereto with regard to the
subject matter hereof. Neither this Agreement nor any term hereof
may be amended except pursuant to a written instrument executed by
the Company and the Sales Agent. In the event that any one or more
of the provisions contained herein, or the application thereof in
any circumstance, is held invalid, illegal or unenforceable as
written by a court of competent jurisdiction, then such provision
shall be given full force and effect to the fullest possible extent
that it is valid, legal and enforceable, and the remainder of the
terms and provisions herein shall be construed as if such invalid,
illegal or unenforceable term or provision was not contained
herein, but only to the extent that giving effect to such provision
and the remainder of the terms and provisions hereof shall be in
accordance with the intent of the parties as reflected in this
Agreement.
16. Applicable
Law; Consent to Jurisdiction.
This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York, without regard to
the principles of conflicts of laws. Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan, for
the adjudication of any dispute hereunder or in connection with any
transaction contemplated hereby, 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 any such
court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof
(certified or registered mail, return receipt requested) to such
party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.
17. Waiver
of Jury Trial. The Company and
the Sales Agent each hereby irrevocably waives any right it may
have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or any transaction contemplated
hereby.
18. Absence
of Fiduciary Relationship. The
Company acknowledges and agrees that:
(a) the
Sales Agent is acting solely as agent in connection with the sale
of the Placement Shares contemplated by this Agreement and the
process leading to such transactions, and no fiduciary or advisory
relationship between the Company or any of its respective
affiliates, stockholders (or other equity holders), creditors or
employees or any other party, on the one hand, and the Sales Agent,
on the other hand, has been or will be created in respect of any of
the transactions contemplated by this Agreement, irrespective of
whether the Sales Agent has advised or is advising the Company on
other matters, and the Sales Agent has no obligation to the Company
with respect to the transactions contemplated by this Agreement,
except the obligations expressly set forth in this
Agreement;
(b) the
Company is capable of evaluating and understanding and understands
and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement;
(c) the
Sales Agent has not provided any legal, accounting, regulatory or
tax advice with respect to the transactions contemplated by this
Agreement, and the Company has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed
appropriate;
(d) the
Company has been advised and is aware that the Sales Agent and its
affiliates are engaged in a broad range of transactions which may
involve interests that differ from those of the Company and that
the Sales Agent has no obligation to disclose such interests and
transactions to the Company by virtue of any fiduciary, advisory or
agency relationship; and
(e) the
Company waives, to the fullest extent permitted by law, any claims
it may have against the Sales Agent, for breach of fiduciary duty
or alleged breach of fiduciary duty and agrees that the Sales Agent
shall have no liability (whether direct or indirect, in contract,
tort or otherwise) to the Company in respect of such a fiduciary
claim or to any person asserting a fiduciary duty claim on behalf
of or in right of the Company, including stockholders, partners,
employees or creditors of the Company.
20
19. Use
of Information. The Sales Agent
may not provide any information gained in connection with this
Agreement and the transactions contemplated by this Agreement,
including due diligence, to any third party other than its legal
counsel advising it on this Agreement unless expressly approved by
the Company in writing.
20. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Delivery of an executed
Agreement by one party to the other may be made by facsimile, email
or other means of electronic transmission.
21. Effect
of Headings; Knowledge of the Company. The section and Exhibit headings herein are for
convenience only and shall not affect the construction hereof. All
references in this Agreement to the “knowledge of the
Company” or the “Company’s knowledge” or
similar qualifiers shall mean the actual knowledge of the directors
and officers of the Company, after due inquiry.
22. Definitions.
As used in this Agreement, the following term has the meaning set
forth below:
(a) “Applicable
Time” means the date of
this Agreement, each Representation Date, each date on which a
Placement Notice is given, each Point of Sale, and each Settlement
Date.
[Remainder
of Page Intentionally Blank]
21
If the
foregoing correctly sets forth the understanding between the
Company and the Sales Agent, please so indicate in the space
provided below for that purpose, whereupon this letter shall
constitute a binding agreement between the Company and the Sales
Agent.
Very
truly yours,
INUVO, INC.
By:
/s/ Xxxxxxx X.
Xxxx
Name:
Xxxxxxx X.
Xxxx
Title:
Chief Executive
Officer
ACCEPTED
as of the date first-above written:
A.G.P./ALLIANCE GLOBAL PARTNERS
By:
/s/ Xxxxxx X.
Xxxxxxx
Name:
Xxxxxx X.
Xxxxxxx
Title:
Managing
Director
SCHEDULE 1
Placement Notice
From:
To:
A.G.P./Alliance
Global Partners
Attention: Xxxxxx
X. Xxxxxxx, Managing Director
Subject:
Placement
Notice
Date:
[
]
Ladies
and Gentlemen:
Pursuant to the terms and subject to the
conditions contained in the Sales Agreement (the
“Sales
Agreement”) between
Inuvo, Inc., a Nevada corporation (the “Company”),
and A.G.P./Alliance Global Partners (the “Sales
Agent”), dated May 28,
2021, the Company hereby requests that the Sales Agent sell up to
$[ ] in shares of the Company’s common stock, par value
$0.001 per share (the “Placement
Shares”), at a minimum
market price of $[] per share, during the time period beginning []
and ending [] at 4:00 pm ET [and with no more than []% of the daily
trading volume sold in any one Trading Day].
[The
Company may include such other sale parameters as it deems
appropriate.]
Capitalized
terms used and not defined herein shall have the respective
meanings assigned to them in the Sales Agreement.
________________________
Name:
Title:
Schedule
1-Page 1
SCHEDULE 2
Authorized Individuals
Inuvo
1.
Xxxxxxx X. Xxxx,
Chief Executive Officer
2.
Xxxxxxx X. Xxxx,
Chief Financial Officer
A.G.P./Alliance Global Partners
1.
Xxxxxx X. Xxxxxxx,
Managing Director
Schedule
2-Page 1
SCHEDULE 3
Compensation
The
Company shall pay to the Sales Agent in cash, upon each sale of
Placement Shares through the Sales Agent pursuant to this
Agreement, an amount equal to 3.0% of the aggregate gross proceeds
from each sale of Placement Shares.
The
foregoing rate of compensation shall not apply when the Sales Agent
purchases Placement Shares on a principal basis, in which case the
Company may sell the Placement Shares to the Sales Agent as
principal at a price to be mutually agreed upon by the Company and
the Sales Agent at the relevant Point of Sale pursuant to the
applicable Placement Notice (it being hereby acknowledged and
agreed that the Sales Agent shall be under no obligation to
purchase Placement Shares on a principal basis pursuant to the
Sales Agreement, except as otherwise agreed by the Sales Agent and
the Company in writing and expressly set forth in a Placement
Notice).
Schedule
3-Page 1
EXHIBIT 7(m)
Form of
Certificate
The undersigned, the duly qualified
and appointed _____________________ of Inuvo, Inc., a Nevada
corporation (the “Company”),
does hereby certify in such capacity and on behalf of the Company,
pursuant to Section
7(m) of the Sales
Agreement, dated May 28, 2021 (the “Sales
Agreement”), between the
Company and A.G.P./Alliance Global Partners,
that:
i.
the representations and warranties of the Company
in Section
6 of the Sales Agreement
(A) to the extent such representations and warranties are subject
to qualifications and exceptions contained therein relating to
materiality or Material Adverse Change, are true and correct on and
as of the date hereof with the same force and effect as if
expressly made on and as of the date hereof, except for those
representations and warranties that speak solely as of a specific
date and which were true and correct as of such date, and (B) to
the extent such representations and warranties are not subject to
any qualifications or exceptions, are true and correct in all
material respects as of the date hereof as if made on and as of the
date hereof with the same force and effect as if expressly made on
and as of the date hereof except for those representations and
warranties that speak solely as of a specific date and which were
true and correct as of such date;
ii.
the
Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the
Sales Agreement at or prior to the date hereof;
iii.
as
of the date hereof, (i) the Registration Statement does not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein not misleading, (ii) the Prospectus does not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading and (iii) no event has
occurred as a result of which it is necessary to amend or
supplement the Registration Statement or the Prospectus in order to
make the statements therein not untrue or misleading for clauses
(i) and (ii) above, respectively, to be true and
correct;
iv.
there
has been no Material Adverse Change since the date as of which
information is given in the Prospectus, as amended or
supplemented;
v.
the
Company will not be in possession of any material non-public
information at the time of delivery of any Placement Notice and/or
as long as such Placement Notice is effective; and
vi.
the
aggregate offering price of the Placement Shares that may be issued
and sold pursuant to the Sales Agreement and the maximum number or
amount of Placement Shares that may be sold pursuant to the Sales
Agreement have been duly authorized by the Company’s board of
directors or a duly authorized committee thereof.
Terms used herein and not defined herein have the meanings ascribed
to them in the Sales Agreement.
| Dated: |
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INUVO, INC. |
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By:
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Name:
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Title:
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Exhibit
7(m)-Page 1
