ENDRA LIFE SCIENCES INC. Common Stock (par value $0.0001 per share) At-The- Market Issuance Sales Agreement
Exhibit 1.1
Common Stock
(par value $0.0001 per share)
September 25,
2020
Ascendiant Capital
Markets, LLC
00000
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx,
XX 00000
Ladies
and Gentlemen:
ENDRA
Life Sciences Inc., a Delaware corporation (the “Company”), confirms its
agreement (this “Agreement”) with
Ascendiant Capital Markets, LLC and the other sales agents set
forth on Annex 1 hereto (each, an “Agent” and, collectively,
the “Agents”), as
follows:
1. Issuance
and Sale of Shares. The Company agrees to issue and sell
through or to the Agents, shares (the “Placement Shares”) of the
Company’s common stock, par value $0.0001 per share (the
“Common
Stock”), from time to time during the term of this
Agreement and on the terms set forth in this Agreement;
provided however, that in
no event will the Company issue or sell through or to the Agents
such dollar amount of Placement Shares that would exceed
$6,800,000 in the aggregate (the “Maximum Amount”).
Notwithstanding anything to the contrary contained herein, the
parties hereto agree that compliance with the limitations set forth
in this Section 1 on the amount of Placement Shares issued and sold
under this Agreement will be the sole responsibility of the Company
and that the Agents will have no obligation in connection with such
compliance. The issuance and sale of Placement Shares through or to
the Agents will be effected pursuant to the Registration Statement
(as defined below) filed by the Company and declared effective by
the U.S. Securities and Exchange Commission (the
“SEC”),
although nothing in this Agreement will be construed as requiring
the Company to use the Registration Statement to issue Common
Stock.
The
Company has filed with the SEC, in accordance with the provisions
of the Securities Act of 1933, as amended (the “Securities Act”), and the
rules and regulations thereunder (the “Securities Act
Regulations”), a registration statement on Form S-3
(File No. 333-229090), including a base prospectus, relating to
certain securities, including the Placement Shares, 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 (the “Exchange Act”), and the
rules and regulations thereunder. The Company has prepared a
prospectus supplement specifically relating to the Placement Shares
(the “Prospectus
Supplement”) to the base prospectus included as part
of the registration statement. The Company will furnish to
the Agents, for use by them,
copies of the prospectus included as part of the registration
statement, as supplemented by the Prospectus Supplement, relating
to the Placement Shares. Except when the context otherwise
requires, such registration statement, including all documents
filed as part thereof or incorporated by reference therein, and
including any information contained in a Prospectus (as defined
below) subsequently filed with the SEC pursuant to Rule 424(b)
under the Securities Act Regulations or deemed to be a part of the
registration statement pursuant to Rule 430B of the Securities
Act Regulations, is herein called the “Registration Statement.”
The base prospectus, including all documents incorporated therein
by reference, included in the Registration Statement, as it may be
supplemented by the Prospectus Supplement, in the form in which the
prospectus and/or Prospectus Supplement have most recently been
filed by the Company with the SEC pursuant to Rule 424(b)
under the Securities Act Regulations is herein called the
“Prospectus.” Any
reference herein to the Registration Statement, the Prospectus, or
any amendment or supplement thereto will be deemed to refer to and
include the documents incorporated by reference therein, and any
reference herein to the terms “amend,”
“amendment,” or “supplement” respecting the
Registration Statement or the Prospectus will be deemed to refer to
and include the filing after the execution hereof of any document
with the SEC deemed to be incorporated by reference therein (the
“Incorporated
Documents”).
For
purposes of this Agreement, all references to the Registration
Statement, the Prospectus, or to any amendment or supplement
thereto will be deemed to include the most recent copy filed with
the SEC pursuant to its Electronic Data Gathering Analysis and
Retrieval System, or if applicable, the Interactive Data Electronic
Application system when used by the SEC (collectively,
“XXXXX”).
2. Placements.
Each time that the Company wishes to issue and sell Placement
Shares hereunder (each, a “Placement”), it will
notify the Designated Agent by email notice (or other method
mutually agreed to in writing by the parties) of the number of
Placement Shares, the period during which sales are requested to be
made, any limitation on the number of Placement Shares that may be
sold in any one day, and any minimum price below which sales may
not be made (a “Placement Notice”), the
form of which is attached hereto as Schedule 1. The Placement
Notice will originate from any of the individuals from the Company
set forth on Schedule
3 (with a copy to each of the other individuals from the
Company listed on the schedule) and will be addressed to each of
the individuals from the Designated Agent that are set forth on
Schedule 3, as
Schedule 3 may be
amended from time to time. The Placement Notice will be effective
unless and until: (a) the Designated Agent declines to accept
the terms contained therein for any reason, in its sole discretion;
(b) the entire amount of the Placement Shares thereunder have
been sold; (c) the Company suspends or terminates the
Placement Notice; or (d) the Agreement has been terminated
under the provisions of Section 13. The amount of any discount,
commission, or other compensation to be paid by the Company to the
Designated Agent in connection with the sale of the Placement
Shares will be calculated in accordance with the terms set forth in
Schedule 2. Neither
the Company nor the Designated Agent will have any obligation
whatsoever respecting a Placement or any Placement Shares unless
and until the Company delivers a Placement Notice to the Designated
Agent and the Designated 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 Sections 2, 3, and 4 of this Agreement and the
terms of a Placement Notice, the terms of the Placement Notice will
control.
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3. Sale
of Placement Shares by the Agents. Subject to the terms and
conditions of this Agreement, each Agent, at any time it is a
Designated Agent, for the period specified in the Placement Notice,
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 Nasdaq, Inc. (the
“Exchange”), to sell the
Placement Shares up to the amount specified, and otherwise in
accordance with the terms of such Placement Notice. The Designated
Agent will provide written confirmation to the Company no later
than the opening of the Trading Day (as defined below) immediately
following the Trading Day on which it has sold Placement Shares
hereunder, setting forth the number of Placement Shares sold on
such day, the compensation payable by the Company to the Designated
Agent pursuant to Section 2 for such sales,
and the Net Proceeds (as defined below) payable to the Company,
with an itemization of the deductions made by the Designated Agent
(as set forth in Section 5(b)) from the
gross proceeds that it receives from such sales. Subject to the
terms of the Placement Notice, Placement Shares may be sold
hereunder by any method permitted by law deemed to be an “at
the market” offering as defined in Rule 415(a)(1)(x) and
415(a)(4) of the Securities Act Regulations, including sales made
directly on the Exchange or on any other existing trading market
for the Common Stock, to or through a market maker or directly to
the Placement Agent as principal in negotiated transactions.
Subject to the terms of a Placement Notice, the Designated Agent
may also sell Placement Shares by any other method permitted by
law, including in privately negotiated transactions, with the
Company’s consent. “Trading Day” means any
day on which Common Stock is purchased and sold on the
Exchange.
4. Suspension
of Sales. The Company or the Designated 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
3, 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 email correspondence to each of the individuals of
the other party set forth on Schedule 3), suspend any sale
of Placement Shares; provided, however, that such suspension will
not affect or impair any party’s obligations respecting 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 will be
effective against any other party unless it is made to one of the
individuals named on Schedule 3 hereto, as such
schedule may be amended from time to time.
5. Sale
and Delivery to the Agents; Settlement.
(a) Sale
of Placement Shares.
On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, upon
delivery 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, each Agent, at any time it is a Designated Agent, for
the period specified in the Placement Notice, 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 the Exchange to sell such
Placement Shares up to the amount specified, and otherwise in
accordance with the terms of such Placement Notice. The Company
acknowledges and agrees that: (i) there can be no assurance
that any Agent will be successful in selling Placement Shares;
(ii) no Agent will incur any liability or obligation to the
Company or any other Person (as defined herein) if it does not sell
Placement Shares for any reason other than a failure by such 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) no Agent will be under any obligation to
purchase Placement Shares on a principal basis pursuant to this
Agreement, except as otherwise agreed by such Agent and the
Company.
(b) Settlement
of Placement Shares.
Unless otherwise specified in the applicable Placement Notice,
settlement for sales of Placement Shares will occur on the second
Trading Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are
made (each, a “Settlement Date”).
The
Agent shall notify the Company of each sale of Placement Shares no
later than opening day following the Trading Day that the Agent
sold Placement Shares. 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 Agent, after
deduction for: (i) the Agent’s commission, discount, or
other compensation for such sales payable by the Company pursuant
to Section 2
hereof; (ii) any transaction fees imposed by any governmental
or self-regulatory organization for such sales, and (iii) the
balance of any unpaid costs or expenses to be paid or reimbursed by
the Company pursuant to this Agreement.
(c) 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 Designated Agent’s or its
designee’s account (provided the Designated Agent will have
given the Company written notice of such designee a reasonable
period of time 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 will be freely
tradable, transferable, registered shares in good deliverable form.
On each Settlement Date, the Designated 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 Placement Shares on a
Settlement Date through no fault of the Designated Agent, that in
addition to and in no way limiting the rights and obligations set
forth in Section
11(a) hereto, it will: (i) hold the Designated Agent
harmless against any loss, claim, damage, or expense (including
reasonable and documented 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
Designated Agent (without duplication) any commission, discount, or
other compensation to which it would otherwise have been entitled
absent such default.
(d) Limitations
on Offering Size.
Under no circumstances will 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 gross sales proceeds of
Placement Shares sold pursuant to this Agreement would exceed the
lesser of: (i) together with all sales of Placement Shares
under this Agreement, the Maximum Amount; or (ii) the amount
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 Agents in writing. Under no
circumstances will 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 Agents in writing.
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6. Representations
and Warranties of the Company. The Company represents and
warrants to, and agrees with, each of the Agents that as of the
date of this Agreement and as of each Applicable Time (as defined
below), unless such representation, warranty or agreement specifies
a different date or time:
(a) Registration
Statement and Prospectus. The Company and, assuming no act
or omission on the part of the Agents that would make such
statement untrue, the transactions contemplated by this Agreement
meet the requirements for and comply with the conditions for the
use of Form S-3 under the Securities Act. The Registration
Statement has been filed with the SEC and has been declared
effective under the Securities Act. The Prospectus Supplement will
name the Agents as the agents in the section entitled “Plan
of Distribution.” The Company has not received, and has no
notice of, any order of the SEC preventing or suspending the use of
the Registration Statement or threatening or instituting
proceedings for that purpose. The Registration Statement and the
offer and sale of Placement Shares as contemplated hereby meet the
requirements of Rule 415 under the Securities Act and comply
in all material respects with said Rule. Any statutes, regulations,
contracts, or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement have been so described or
filed. Copies of the Registration Statement, the Prospectus, and
any such amendments or supplements and all documents incorporated
by reference therein that were filed with the SEC on or prior to
the date of this Agreement have been delivered, or are available
through XXXXX, to the Agents and their respective counsel. The
Company has not distributed and, prior to the later to occur of
each Settlement Date and completion of the distribution of the
Placement Shares, will not distribute any offering material in
connection with the offering or sale of the Placement Shares other
than the Registration Statement and the Prospectus and any Issuer
Free Writing Prospectus (as defined below) to which the Agents have
consented. The Common Stock is currently listed on the Exchange
under the trading symbol “NDRA.” Except as disclosed in the
Registration Statement, including the Incorporated Documents, the
Company has not, in the 12 months preceding the date hereof,
received notice from the Exchange to the effect that the Company is
not in compliance with the Exchange’s listing or maintenance
requirements. Except as disclosed in the Registration Statement,
including the Incorporated Documents, or the Prospectus, the
Company has no reason to believe that it will not in the
foreseeable future continue to be in compliance with all such
listing and maintenance requirements.
(b) No
Misstatement or Omission. The Registration Statement, when
it became effective, and the Prospectus, and any amendment or
supplement thereto, on the date of such Prospectus or amendment or
supplement, conformed and will conform in all material respects
with the requirements of the Securities Act. At each Settlement
Date, the Registration Statement and the Prospectus, as of such
date, will conform in all material respects with the requirements
of the Securities Act. The Registration Statement, when it became
or becomes effective, did not, and 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 statements
therein not misleading. The Prospectus and any amendment and
supplement thereto, on the date thereof and at each Applicable Time
(defined below), did not or will not include an untrue statement of
a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading. The documents incorporated by
reference in the Prospectus or any Prospectus Supplement did not,
and any further documents filed and incorporated by reference
therein will not, when filed with the SEC, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated in such document or necessary to make the
statements in such document, in light of the circumstances under
which they were made, not misleading. The foregoing will not apply
to statements in, or omissions from, any such document made in
reliance upon, and in conformity with, information furnished to the
Company by the Agents specifically for use in the preparation
thereof.
(c) Conformity
with Securities Act and Exchange Act. The documents
incorporated by reference in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, when such
documents were or are filed with the SEC under the Securities Act
or the Exchange Act or became or become effective under the
Securities Act, as the case may be, conformed or will conform in
all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable.
(d) Financial
Information. The consolidated financial statements of the
Company included or incorporated by reference in the Registration
Statement, the Prospectus, and the Issuer Free Writing
Prospectuses, if any, together with the related notes and
schedules, complied as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto as in effect as of the
time of filing. Such financial statements have been prepared in
accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except:
(i) as may be otherwise indicated in such financial statements
or the notes thereto; or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be
condensed or summary statements) and fairly present in all material
respects the consolidated financial position of the Company and the
Subsidiaries as of the dates indicated and the consolidated results
of operations and cash flows of the Company for the periods
specified (subject, in the case of unaudited statements, to normal
year-end audit adjustments that will not be material, either
individually or in the aggregate); the other financial and
statistical data respecting the Company and the Subsidiaries
contained or incorporated by reference in the Registration
Statement, the Prospectus, and the Issuer Free Writing
Prospectuses, if any, are accurately and fairly presented and
prepared on a basis consistent with the financial statements and
books and records of the Company; there are no financial statements
(historical or pro forma) that are required to be included or
incorporated by reference in the Registration Statement or the
Prospectus that are not included or incorporated by reference as
required; the Company and the Subsidiaries (as defined below) do
not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations), not
described in the Registration Statement (including the exhibits
thereto) and the Prospectus that are required to be described in
the Registration Statement or the Prospectus (including exhibits
thereto and Incorporated Documents); and all disclosures contained
or incorporated by reference in the Registration Statement, the
Prospectus, and the Issuer Free Writing Prospectuses, if any,
regarding “non-GAAP financial measures” (as such term
is defined by the rules and regulations of the SEC) comply in all
material respects with Regulation G of the Exchange Act and Item 10
of Regulation S-K under the Securities Act, to the extent
applicable.
(e) Conformity
with XXXXX Filing. The Prospectus delivered to the Agents
for use in connection with the sale of the Placement Shares
pursuant to this Agreement will be identical to the versions of the
Prospectus created to be transmitted to the SEC for filing via
XXXXX, except to the extent permitted by Regulation
S-T.
(f) Organization.
The Company and each of its Subsidiaries are, and will be, duly
organized, validly existing as a corporation, limited partnership,
limited liability company, or other legal entity, and in good
standing under the laws of their respective jurisdictions of
organization, except where the failure to be in good standing would
not, individually or in the aggregate, have a Material Adverse
Effect (as defined below) or would reasonably be expected to have a
Material Adverse Effect. The Company and each of its Subsidiaries
are, and will be, duly qualified as a foreign corporation for
transaction of business and in good standing under the laws of each
other jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires
such qualification, and have all corporate power and authority
necessary to own or hold their respective properties and to conduct
their respective businesses as described in the Registration
Statement and the Prospectus, except where the failure to be so
qualified or in good standing or have such power or authority would
not, individually or in the aggregate, have a material adverse
effect or would reasonably be expected to have a material adverse
effect on the assets, business, operations, earnings, properties,
condition (financial or otherwise), prospects, stockholders’
equity, or results of operations of the Company and the
Subsidiaries (as defined below) taken as a whole, or prevent or
materially interfere with consummation of the transactions
contemplated hereby (a “Material Adverse
Effect”).
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(g) Subsidiaries.
The subsidiaries set forth on Schedule 4 (collectively, the
“Subsidiaries”), are the
Company’s only subsidiaries. Except as set forth in the
Registration Statement and in the Prospectus, the Company owns,
directly or indirectly, all of the equity interests of the
Subsidiaries free and clear of any lien, charge, security interest,
encumbrance, right of first refusal, or other restriction, and all
the equity interests of the Subsidiaries are validly issued and are
fully paid, nonassessable, and free of preemptive and similar
rights.
(h) No
Violation or Default. Neither the Company nor any of its
Subsidiaries is: (i) in violation of its charter or bylaws or
similar organizational documents; (ii) in default, and no
event has occurred that, with notice or lapse of time or both,
would constitute such a default, in the due performance or
observance of any term, covenant, or condition contained in any
indenture, mortgage, deed of trust, loan agreement, or other
agreement or instrument to which the Company or any of its
Subsidiaries is a party, by which the Company or any of its
Subsidiaries is bound, or to which any of the property or assets of
the Company or any of its Subsidiaries are subject; or
(iii) in violation of any law or statute or any judgment,
order, rule, or regulation of any court, arbitrator, or
governmental or regulatory authority, except, in the case of each
of clauses (ii) and (iii) above, for any such violation or default
that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Except as described in
the Prospectus, the Prospectus Supplement, or the Incorporated
Documents, to the Company’s knowledge, no other party under
any material contract or other agreement to which it or any of its
Subsidiaries is a party is in default in any respect thereunder
where such default would reasonably be expected to have a Material
Adverse Effect.
(i) No
Material Adverse Change. Subsequent to the respective dates
as of which information is given in the Registration Statement, the
Prospectus, and the Free Writing Prospectuses, if any (including
any document deemed incorporated by reference therein), there has
not been: (i) any Material Adverse Effect, or any development
involving a prospective Material Adverse Effect, in or affecting
the business, properties, management, financial, condition
(financial or otherwise), results of operations, or prospects of
the Company and the Subsidiaries taken as a whole; (ii) any
transaction that is material to the Company and the Subsidiaries
taken as a whole; (iii) any obligation or liability, direct or
contingent (including any off-balance sheet obligations), incurred
by the Company or any Subsidiary, that is material to the Company
and the Subsidiaries taken as a whole; (iv) any material
change in the capital stock (other than as a result of the sale of
Placement Shares or other than as described in a proxy statement
filed on Schedule 14A or a Registration Statement on Form S-4 and
otherwise publicly announced) or outstanding long-term indebtedness
of the Company or any of its Subsidiaries; or (v) any dividend
or distribution of any kind declared, paid, or made on the capital
stock of the Company or any Subsidiary, other than in each case
above, in the ordinary course of business or as otherwise disclosed
in the Registration Statement or Prospectus (including any document
deemed incorporated by reference therein).
(j) Capitalization.
The issued and outstanding shares of capital stock of the Company
have been validly issued, are fully paid, and nonassessable. The
Company has an authorized, issued, and outstanding capitalization
as set forth in the Registration Statement and the Prospectus as of
the dates referred to therein (other than the grant of additional
options under the Company’s existing stock option plans or
changes in the number of outstanding Common Stock of the Company
due to the issuance of shares upon the exercise or conversion of
securities exercisable for, or convertible into, Common Stock
outstanding on the date hereof or as a result of the issuance of
Placement Shares), and such authorized capital stock conforms to
the description thereof set forth in the Registration Statement and
the Prospectus. The description of the Common Stock in the
Registration Statement and the Prospectus is complete and accurate
in all material respects. Except as disclosed in or contemplated by
the Registration Statement or the Prospectus, as of the date
referred to therein, the Company did not have reserved or available
for issuance any shares of Common Stock in respect of options, any
rights or warrants to subscribe for, any securities or obligations
convertible into or exchangeable for, or any contracts or
commitments to issue or sell, any shares of capital stock or other
securities.
(k) Authorization;
Enforceability. The Company has full legal right, power, and
authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized,
executed, and delivered by the Company and is a legal, valid, and
binding agreement of the Company enforceable in accordance with its
terms, except to the extent that: (i) enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting creditors’ rights generally and by
general equitable principles; and (ii) the indemnification and
contribution provisions of Section 11 hereof may be
limited by federal or state securities laws and public policy
considerations in respect thereof.
(l) Authorization
of Placement Shares. The Placement Shares, when issued and
delivered pursuant to the terms approved by the board of directors
of the Company or a duly authorized committee thereof, or a duly
authorized executive committee, against payment therefor as
provided herein, will be duly and validly authorized and issued and
fully paid and nonassessable, free and clear of any pledge, lien,
encumbrance, security interest, or other claim (other than any
pledge, lien, encumbrance, security interest, or other claim
arising from an act or omission of any Agent or a purchaser),
including any statutory or contractual preemptive rights, resale
rights, rights of first refusal, or other similar rights, and will
be registered pursuant to Section 12 of the Exchange Act. The
Placement Shares, when issued, will conform in all material
respects to the description thereof set forth in or incorporated
into the Prospectus.
(m) No
Consents Required. No consent, approval, authorization,
order, registration, or qualification of or with any court or
arbitrator or any governmental or regulatory authority is required
for the execution, delivery, and performance by the Company of this
Agreement, and the issuance and sale by the Company of the
Placement Shares as contemplated hereby, except for such consents,
approvals, authorizations, orders, and registrations or
qualifications as may be required under applicable state securities
laws or by the bylaws and rules of the Financial Industry
Regulatory Authority (“FINRA”) or the Exchange
in connection with the sale of the Placement Shares by the
Agents.
(n) No
Preferential Rights. Except as set forth in the Registration
Statement and the Prospectus: (i) no person, as such term is
defined in Rule 1-02 of Regulation S-X promulgated under the
Securities Act (each, a “Person”), has the right,
contractual or otherwise, to cause the Company to issue or sell to
such Person any Common Stock or shares of any other capital stock
or other securities of the Company (other than upon the exercise of
options or warrants to purchase Common Stock or upon the exercise
of options that may be granted from time to time under the
Company’s stock option plans); (ii) no Person has any
preemptive rights, rights of first refusal, or any other rights
(whether pursuant to a “poison pill” provision or
otherwise) to purchase any Common Stock or shares of any other
capital stock or other securities of the Company from the Company
that have not been duly waived respecting the offering contemplated
hereby; (iii) 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 Common Stock; and (iv) no Person has the
right, contractual or otherwise, to require the Company to register
under the Securities Act any Common Stock or shares of any other
capital stock or other securities of the Company, or to include any
such shares or other securities in the Registration Statement or
the offering contemplated thereby, whether as a result of the
filing or effectiveness of the Registration Statement or the sale
of the Placement Shares as contemplated thereby or otherwise,
except for such rights as have been waived on or prior to the date
hereof.
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(o) Independent
Public Accountant. RBSM
LLP (the “Accountants”), whose
reports on the consolidated financial statements of the Company are
filed with the SEC as part of the Company’s most recent
Annual Report on Form 10-K and incorporated into the Registration
Statement, is and, during the periods covered by its report, was an
independent registered public accounting firm within the meaning of
the Securities Act and the Public Company Accounting Oversight
Board (United States). To the Company’s knowledge, after due
inquiry, the Accountants are not in violation of the auditor
independence requirements of the Xxxxxxxx-Xxxxx Act of 2002 (the
“Xxxxxxxx-Xxxxx
Act”) respecting the Company.
(p) Enforceability
of Agreements. To the Company’s knowledge, all
agreements between the Company and third parties expressly
referenced in the Prospectus, other than such agreements that have
expired by their terms or whose termination is disclosed in
documents filed by the Company on XXXXX, are legal, valid, and
binding obligations of the Company enforceable in accordance with
their respective terms, except to the extent that:
(i) enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting
creditors’ rights generally and by general equitable
principles; and (ii) the indemnification provisions of certain
agreements may be limited be federal or state securities laws or
public policy considerations in respect thereof, except for any
unenforceability that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse
Effect.
(q) No
Litigation. Except as set forth in the Registration
Statement or the Prospectus: (i) there are no legal,
governmental, or regulatory actions, suits, or proceedings pending
or, to the Company’s knowledge, any legal, governmental, or
regulatory investigations to which the Company or a Subsidiary is a
party or to which any property of the Company or any of its
Subsidiaries is the subject that, individually or in the aggregate,
if determined adversely to the Company or any of its Subsidiaries,
would reasonably be expected to have a Material Adverse Effect or
materially and adversely affect the ability of the Company to
perform its obligations under this Agreement; (ii) to the
Company’s knowledge, no actions, suits, or proceedings are
threatened or contemplated by any governmental or regulatory
authority or threatened by others that, individually or in the
aggregate, if determined adversely to the Company or any of its
Subsidiaries, would reasonably be expected to have a Material
Adverse Effect; (iii) there are no current or pending legal,
governmental, or regulatory, actions, suits, proceedings or, to the
Company’s knowledge, investigations that are required under
the Securities Act to be described in the Prospectus that are not
described in the Prospectus; and (iv) there are no contracts
or other documents that are required under the Securities Act to be
filed as exhibits to the Registration Statement that are not so
filed.
(r) Licenses
and Permits. Except as set forth in the Registration
Statement or the Prospectus, the Company and each of its
Subsidiaries possess or have obtained all licenses, certificates,
consents, orders, approvals, permits, and other authorizations
issued by, and have made all declarations and filings with, the
appropriate federal, state, local, or foreign governmental or
regulatory authorities that are necessary for the ownership or
lease of their respective properties or the conduct of their
respective businesses as described in the Registration Statement
and the Prospectus (the “Permits”), except where
the failure to possess, obtain, or make the same would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Except as disclosed in the Registration
Statement or the Prospectus, neither the Company nor its
Subsidiaries have received written notice of any proceeding
relating to revocation or modification of any such Permit or have
any reason to believe that such Permit will not be renewed in the
ordinary course, except when the failure to obtain any such renewal
would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(s) S-3
Eligibility. (i) At the time of filing the Registration
Statement; and (ii) if applicable, at the time of the most
recent amendment thereto for the purposes of complying with Section
10(a)(3) of the Securities Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to
Section 13 or 15(d) of the Exchange Act, or form of prospectus),
the Company met the then-applicable requirements for use of Form
S-3 under the Securities Act, including compliance with General
Instruction I.B. of Form S-3, for the sale of up to the Maximum
Amount of Placement Shares.
(t) No
Material Defaults. Except as set forth in the Registration
Statement and Prospectus, neither the Company nor any of the
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, would reasonably
be expected to have a Material Adverse Effect. Except as set forth
in the Registration Statement and Prospectus, 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
have a Material Adverse Effect.
(u) Certain
Market Activities. Neither the Company or any of the
Subsidiaries, nor, to the Company’s knowledge, any of their
respective directors, officers, or controlling Persons has taken,
directly or indirectly, any action designed, or that has
constituted or might reasonably be expected to cause or result in,
under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Placement Shares.
(v) Broker-Dealer
Relationships. Neither the Company nor any of the
Subsidiaries or any related entities: (i) are 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, control or are a “person associated with a
member” or “associated person of a member”
(within the meaning set forth in the FINRA rules).
(w) No
Reliance. The Company has not relied upon the Agents or
legal counsel for any Agent for any legal, tax, or accounting
advice in connection with the offering and sale of the Placement
Shares.
5
(x) Taxes.
The Company and each of its Subsidiaries have filed all federal,
state, local, and foreign tax returns that have been required to be
filed and paid all taxes shown thereon through the date hereof, to
the extent that such taxes have become due and are not being
contested in good faith, except when the failure to do so would not
reasonably be expected to have a Material Adverse Effect. Except as
otherwise disclosed in or contemplated by the Registration
Statement or the Prospectus, no tax deficiency has been determined
adversely to the Company or any of its Subsidiaries that has had,
or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. The Company has no knowledge
of any federal, state, or other governmental tax deficiency,
penalty, or assessment that has been or might be asserted or
threatened against it that could have a Material Adverse
Effect.
(y) Title
to Real and Personal Property. The Company and each of its
Subsidiaries have good and defensible title to all of their real
and personal property owned by them, in each case, free and clear
of all liens, encumbrances, and defects, except as described in the
Registration Statement and Prospectus or that do not materially
affect the value of the properties of the Company and its
Subsidiaries, considered as one enterprise, and do not interfere in
any material respect with the use made and proposed to be made of
such properties by the Company and its Subsidiaries, considered as
one enterprise; and all of the leases, subleases, and other rights
under which the Company or any of its Subsidiaries holds or uses
properties described in the Registration Statement and Prospectus
are in full force and effect, with such exceptions as would not
reasonably be expected to have a Material Adverse Effect, and
neither the Company nor any of its Subsidiaries has any notice of
any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or its Subsidiaries under any
of the leases, subleases, and other rights mentioned above, or
affecting or questioning the rights of the Company or any
Subsidiary thereof to the continued possession or use of the leased
or subleased premises or the premises granted by leases, subleases,
and other rights. The Company and each of its Subsidiaries have the
consents, easements, rights-of-way, or licenses from any Person as
are necessary to enable them to conduct their business in the
manner described in the Registration Statement and the Prospectus,
subject to such qualifications as may be set forth in the
Registration Statement and the Prospectus, and except for the
consents, easements, rights-of-way, or licenses the lack of which
would not have, individually or in the aggregate, a Material
Adverse Effect.
(z) Intellectual
Property. Except as set forth in the Registration Statement
or the Prospectus, to the Company’s knowledge, the Company
and its Subsidiaries own or possess adequate enforceable rights to
use all patents, patent applications, trademarks (both registered
and unregistered), service marks, trade names, trademark
registrations, service xxxx registrations, copyrights, licenses,
and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems, or
procedures) (collectively, the “Intellectual Property”),
necessary for the conduct of their respective businesses as
conducted as of the date hereof, except to the extent that the
failure to own or possess adequate rights to use such Intellectual
Property would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; except as disclosed in
writing to the Agents, the Company and any of its Subsidiaries have
not received any written notice of any claim of infringement or
conflict that asserted Intellectual Property rights of others,
which infringement or conflict, if the subject of an unfavorable
decision, would result in a Material Adverse Effect; there are no
pending, or to the Company’s knowledge, threatened judicial
proceedings or interference proceedings against the Company or its
Subsidiaries challenging the Company’s or its
Subsidiaries’ rights in or to or the validity of the scope of
any of the Company’s or its Subsidiaries’ material
patents, patent applications, or proprietary information; to the
Company’s knowledge, no other entity or individual has any
right or claim in any of the Company’s or its
Subsidiaries’ owned, material patents, patent applications,
or any patent to be issued therefrom by virtue of any contract,
license, or other agreement entered into between such entity or
individual and the Company or a Subsidiary or by any
non-contractual obligation of the Company or a Subsidiary, other
than by written licenses granted by the Company or a Subsidiary;
the Company and its Subsidiaries have not received any written
notice of any claim challenging the rights of the Company or a
Subsidiary in or to any Intellectual Property owned, licensed, or
optioned by the Company or such Subsidiary that, if the subject of
an unfavorable decision, would result in a Material Adverse
Effect.
(aa) Environmental
Laws. Except as set forth in the Registration Statement or
the Prospectus, the Company and its Subsidiaries: (i) are in
compliance with any and all applicable federal, state, local, and
foreign laws, rules, regulations, decisions, and orders relating to
the protection of human health and safety, the environment,
hazardous or toxic substances or wastes, pollutants, or
contaminants (collectively, “Environmental Laws”);
(ii) have received and are in compliance with all permits,
licenses, or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses as
described in the Registration Statement and the Prospectus;
(iii) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants, or
contaminants, except, in the case of any of clauses (i), (ii), or
(iii) above, for any such failure to comply or failure to receive
required permits, licenses, other approvals or liability as would
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; and (iv) there are no costs or
liabilities arising under Environmental Laws respecting the
operation of the Company’s and each of its
Subsidiaries’ properties (including any capital or operating
expenditures required for clean-up or closure of the properties,
compliance with Environmental Laws, any permit, license, or
approval or any related legal constraints or operating activities,
and any potential liabilities of third parties assumed under
contract by the Company or any of its Subsidiaries) that would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(bb) Disclosure
Controls. Except as set forth in the Registration Statement
or the Prospectus, the Company and each of its Subsidiaries
maintain systems of internal accounting controls designed 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
generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken respecting any differences. The Company
is not aware of any material weaknesses in its internal control
over financial reporting (other than as set forth in the
Prospectus). Since the date of the latest audited financial
statements of the Company included in 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 (other than as set forth in the
Prospectus). Except as set forth in the Registration Statement or
the Prospectus, the Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for
the Company and designed such disclosure controls and procedures to
ensure that material information relating to the Company and each
of its Subsidiaries is made known to the certifying officers by
others within those entities, particularly during the period in
which the Company’s Annual Report on Form 10-K or Quarterly
Report on Form 10-Q, as the case may be, is being prepared. The
Company’s certifying officers have evaluated the
effectiveness of the Company’s controls and procedures as of
a date within 90 days prior to the filing date of the Form 10-K for
the fiscal year most recently ended (such date, the
“Evaluation
Date”). The Company presented in its Form 10-K for the
fiscal year most recently ended the conclusions of the certifying
officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date.
Since the Evaluation Date, there have been no significant changes
in the Company’s internal controls (as such term is defined
in Item 307(b) of Regulation S-K under the Securities
Act).
(cc) Xxxxxxxx-Xxxxx.
There is and has been no failure on the part of the Company or, to
the knowledge of the Company, any of the Company’s directors
or officers, in their capacities as such, to comply with any
applicable provisions of the Xxxxxxxx-Xxxxx Act and the rules and
regulations promulgated thereunder. Each of the principal executive
officer and the principal financial officer of the Company (or each
former principal executive officer of the Company and each former
principal financial officer of the Company as applicable) has made
all certifications required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act respecting all reports, schedules, forms,
statements, and other documents required to be filed by it or
furnished by it to the SEC. For purposes of the preceding sentence,
“principal executive officer” and “principal
financial officer” will have the meanings given to such terms
in the Xxxxxxxx-Xxxxx Act.
6
(dd) Finder’s
Fees. Neither the Company nor any of the Subsidiaries has
incurred any liability for any finder’s fees, brokerage
commissions, or similar payments in connection with the
transactions herein contemplated, except as may otherwise exist
respecting the Agents pursuant to this Agreement.
(ee) Labor
Disputes. No labor disturbance by or dispute with employees
of the Company or any of its Subsidiaries exists or, to the
knowledge of the Company, is threatened that would reasonably be
expected to result in a Material Adverse Effect.
(ff) Investment
Company Act. Neither the Company nor any of the Subsidiaries
is or, after giving effect to the offering and sale of the
Placement Shares, will be an “investment company” or an
entity “controlled” by an “investment
company,” as such terms are defined in the Investment Company
Act of 1940, as amended (the “Investment Company
Act”).
(gg) Operations.
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 to which the Company or
its Subsidiaries are subject, the rules and regulations thereunder,
and any related or similar rules, regulations, or guidelines,
issued, administered, or enforced by any governmental agency having
jurisdiction over the Company (collectively, the
“Money Laundering
Laws”), except as would not reasonably be expected to
result in a Material Adverse Effect; 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 respecting the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.
(hh) Off-Balance
Sheet Arrangements. There are no transactions, arrangements,
and other relationships between and/or among the Company, and/or,
to the knowledge of the Company, any of its affiliates and any
unconsolidated entity, including any structural finance, special
purpose, or limited purpose entity (each, an “Off Balance Sheet
Transaction”) that could reasonably be expected to
affect materially the Company’s liquidity or the availability
of or requirements for its capital resources, including those Off
Balance Sheet Transactions described in the SEC’s Statement
about Management’s Discussion and Analysis of Financial
Conditions and Results of Operations (Release Nos. 33-8056;
34-45321; FR-61), required to be described in the Prospectus that
have not been described as required.
(jj) 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.
(jj) ERISA.
To the knowledge of the Company: (i) each material employee
benefit plan, within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended
(“ERISA”), that is
maintained, administered, or contributed to by the Company or any
of its Subsidiaries (other than a Multiemployer Plan, within the
meaning of Section 3(37) of ERISA) for employees or former
employees of the Company and any of its Subsidiaries has been
maintained in compliance with its terms and the requirements of any
applicable statutes, orders, rules, and regulations, including
ERISA and the Internal Revenue Code of 1986, as amended (the
“Code”); (ii) no
prohibited transaction, within the meaning of Section 406 of ERISA
or Section 4975 of the Code, has occurred respecting any such plan
(excluding transactions effected pursuant to a statutory or
administrative exemption); and (iii) for each such plan that
is subject to the funding rules of Section 412 of the Code or
Section 302 of ERISA, no “accumulated funding
deficiency” as defined in Section 412 of the Code has been
incurred, whether or not waived, and the fair market value of the
assets of each such plan (excluding for these purposes accrued but
unpaid contributions) equals or exceeds the present value of all
benefits accrued under such plan determined using reasonable
actuarial assumptions, other than, in the case of (i), (ii), and
(iii) above, as would not reasonably be expected to have a Material
Adverse Effect.
(kk) Margin
Rules. Neither the issuance, sale, and delivery of the
Placement Shares nor the application of the proceeds thereof by the
Company as described in the Registration Statement and the
Prospectus will violate Regulation T, U, or X of the Board of
Governors of the Federal Reserve System or any other regulation of
such Board of Governors.
(ll) Insurance.
The Company and each of its Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as the Company
and each of its Subsidiaries reasonably believe are adequate for
the conduct of their properties and as is customary for companies
of similar size engaged in similar businesses in similar
industries.
(mm) No
Improper Practices. (i) Neither the Company nor, to the
Company’s knowledge, the Subsidiaries or any of their
respective executive officers has, in the past five years, made any
unlawful contributions to any candidate for any political office
(or failed fully to disclose any contribution in violation of law)
or made any contribution or other payment to any official of, or
candidate for, any federal, state, municipal, or foreign office or
other Person charged with similar public or quasi-public duty in
violation of any law or of the character required to be disclosed
in the Prospectus; (ii) no relationship, direct or indirect,
exists between or among the Company or, to the Company’s
knowledge, any Subsidiary or any affiliate of any of them, on the
one hand, and the directors, officers and stockholders of the
Company or, to the Company’s knowledge, any Subsidiary, on
the other hand, that is required by the Securities Act to be
described in the Registration Statement and the Prospectus that is
not so described; (iii) no relationship, direct or indirect,
exists between or among the Company or any Subsidiary or any
affiliate of them, on the one hand, and the directors, officers,
stockholders, or directors of the Company or, to the
Company’s knowledge, any Subsidiary, on the other hand, that
is required by the rules of FINRA to be described in the
Registration Statement and the Prospectus that is not so described;
(iv) except as described in the Prospectus, there are no
material outstanding loans or advances or material guarantees of
indebtedness by the Company or, to the Company’s knowledge,
any Subsidiary to or for the benefit of any of their respective
officers or directors or any of the members of the families of any
of them; and (v) the Company has not offered, or caused any
placement agent to offer, Common Stock to any Person with the
intent to influence unlawfully: (1) a customer or supplier of
the Company or any Subsidiary to alter the customer’s or
supplier’s level or type of business with the Company or any
Subsidiary; or (2) a trade journalist or publication to write
or publish favorable information about the Company or any
Subsidiary or any of their respective products or services; and
(vi) neither the Company nor any Subsidiary nor, to the
Company’s knowledge, any employee or agent of the Company or
any Subsidiary has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any
law, rule, or regulation (including the Foreign Corrupt Practices
Act of 1977), which payment, receipt, or retention of funds is of a
character required to be disclosed in the Registration Statement or
the Prospectus.
7
(nn) Status
under the Securities Act. The Company was not and is not an
ineligible issuer as defined in Rule 405 under the Securities Act
at the times specified in Rules 164 and 433 under the Securities
Act in connection with the offering of the Placement
Shares.
(oo) No
Misstatement or Omission in an Issuer Free Writing
Prospectus. Each Issuer Free Writing Prospectus, as of its
issue date and as of each Applicable Time (as defined in
Section 25 below),
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 incorporated document deemed to be a part thereof
that has not been superseded or modified. The foregoing sentence
does not apply to statements in or omissions from any Issuer Free
Writing Prospectus based upon and in conformity with written
information furnished to the Company by the Agents specifically for
use therein.
(pp) No
Conflicts. None of the execution of this Agreement; the
issuance, offering, or sale of the Placement Shares; the
consummation of any of the transactions contemplated herein; or the
compliance by the Company with the terms and provisions hereof will
conflict with or result in a breach of any of the terms and
provisions of; constitute or will constitute a default under; or
has resulted in or will result in the creation or imposition of any
lien, charge, or encumbrance upon any property or assets of the
Company pursuant to the terms of any contract or other agreement to
which the Company may be bound or to which any of the property or
assets of the Company is subject, except: (i) such conflicts,
breaches, or defaults as may have been waived; and (ii) such
conflicts, breaches, and defaults that would not reasonably be
expected to have a Material Adverse Effect; nor will such action
result in any violation of the provisions of the organizational or
governing documents of the Company or in any material violation of
the provisions of any statute or any order, rule, or regulation
applicable to the Company or of any court or of any federal, state,
or other regulatory authority or other government body having
jurisdiction over the Company, except where such violation would
not reasonably be expected to have a Material Adverse
Effect.
(qq) Regulatory
Compliance.
(i)
Neither the Company
nor any of its Subsidiaries (each, an “Entity”) nor any
director, officer, employee, agent, affiliate, or representative of
the Entity, is a government, individual, or entity that is owned or
controlled by any director, officer, employee, agent, affiliate, or
representative of the Entity that is:
(1) the
subject of any sanctions administered or enforced by the U.S.
Department of Treasury’s Office of Foreign Assets Control,
the United Nations Security Council, the European Union, Her
Majesty’s Treasury, or other relevant sanctions authority
(collectively, “Sanctions”);
or
(2) located,
organized, or resident in a country or territory that is the
subject of Sanctions (including Burma/Myanmar, Cuba, Iran, North
Korea, Sudan and Syria).
(ii) The
Company, on behalf of each Entity, represents and covenants that it
will not, directly or indirectly, use, lend, contribute, or
otherwise make available the proceeds of the offering governed by
this Agreement to any subsidiary, joint venture partner, or other
director, officer, employee, agent, affiliate, or representative of
the Entity:
(1) to
fund or facilitate any activities or business of or with any Person
or in any country or territory that, at the time of such funding or
facilitation, is the subject of Sanctions; or
(2) in
any other manner that will result in a violation of Sanctions by
any Person (including any Person participating in the offering,
whether as underwriter, advisor, investor, or
otherwise).
(iii) Except
as detailed in the Prospectus, for the past five years, the Entity
has not knowingly engaged in, is not now knowingly engaged in, and
will not engage in, any dealings or transactions with any Person,
or in any country or territory, that at the time of the dealing or
transaction is or was the subject of Sanctions.
(rr) Stock
Transfer Taxes. On each Settlement Date, all stock transfer
or other taxes (other than income taxes) that are required to be
paid in connection with the sale and transfer of the Placement
Shares to be sold hereunder will be, or will have been, fully paid
or provided for by the Company and all laws imposing such taxes
will be or will have been fully complied with in all material
respects.
Any
certificate signed by an officer of the Company and delivered to
the Agents or to counsel for any Agent pursuant to or in connection
with this Agreement will be deemed to be a representation and
warranty by the Company, as applicable, to the Agents as to the
matters set forth therein.
7. Covenants
of the Company. The Company covenants and agrees with the
Agents 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 Agents under the
Securities Act (including in circumstances when such requirement
may be satisfied pursuant to Rule 172 under the Securities Act):
(i) the Company will notify the Agents promptly of the time
when any subsequent amendment to the Registration Statement, other
than documents incorporated by reference, has been filed with the
SEC and/or has become effective or any subsequent supplement to the
Prospectus has been filed and of any request by the SEC for any
amendment or supplement to the Registration Statement or Prospectus
or for additional information; (ii) the Company will prepare
and file with the SEC, promptly upon the Agents’ reasonable
request, any amendments or supplements to the Registration
Statement or Prospectus that, in the Agents’ reasonable
opinion, may be necessary or advisable in connection with the
distribution of the Placement Shares by the Agents (provided, however, that the failure of
the Agents to make such request will not relieve the Company of any
obligation or liability hereunder, or affect the Agents’
right to rely on the representations and warranties made by the
Company in this Agreement and provided, further, that the only
remedy the Agents will have respecting the failure to make such
filing will 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 relating to the Placement Shares or a security
convertible into the Placement Shares unless a copy thereof has
been submitted to the Agents within a reasonable period of time
before the filing and the Agents have not reasonably objected
thereto (provided,
however, that (A) the
failure of the Agents to make such objection will not relieve the
Company of any obligation or liability hereunder, or affect the
Agents’ right to rely on the representations and warranties
made by the Company in this Agreement and provided, further, that
the only remedy the Agents will have respecting the failure by the
Company to provide the Agents with such copy will be to cease
making sales under this Agreement and (B) the Company will have no
obligation to provide the Agents any advance copy of such filing or
provide to the Agents an opportunity to object to such filing if
the filing does not name the Agents and does not relate to the
transactions pursuant hereto) and the Company will furnish to the
Agents 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 (iv) the Company will cause each
amendment or supplement to the Prospectus to be filed with the SEC
as required pursuant to the applicable paragraph of Rule 424(b) of
the Securities Act or, in the case of any document to be
incorporated therein by reference, to be filed with the SEC as
required pursuant to the Exchange Act, within the period prescribed
(the determination to file or not file any amendment or supplement
with the SEC under this Section 7(a), based on the
Company’s reasonable opinion or reasonable objections, will
be made exclusively by the Company).
8
(b) Notice
of SEC Stop Orders. The Company will advise the Agents,
promptly after it receives notice or obtains knowledge thereof, of
the issuance or threatened issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement, of the
suspension of the qualification of the Placement Shares for
offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose; 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. The Company will advise the Agents
promptly after it receives any request by the SEC for any
amendments to the Registration Statement or any amendment or
supplements to the Prospectus or any Issuer Free Writing Prospectus
or for additional information related to the offering of the
Placement Shares or for additional information related to the
Registration Statement, the Prospectus or any Issuer Free Writing
Prospectus.
(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 Agents under the Securities Act respecting the
offer and sale of the Placement Shares (including in circumstances
where such requirement may be satisfied pursuant to Rule 172 under
the Securities Act) (the “Prospectus Delivery
Period”), the Company will comply 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 SEC pursuant to
Sections 13(a), 13(c), 14, 15(d), or any other provision of or
under the Exchange Act. If the Company has omitted any information
from the Registration Statement pursuant to Rule 430A under the
Securities Act, it will use its commercially reasonable efforts to
comply with the provisions of and make all requisite filings with
the SEC pursuant to said Rule 430A and to notify the Agents
promptly of all such filings. If during the Prospectus Delivery
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 the Prospectus Delivery
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 Agents 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 amendment or supplement, if in the sole
discretion of the Company, it is in the Company’s best
interest to do so.
(d) Listing
of Placement Shares. During the Prospectus Delivery Period,
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 Agents reasonably designate and to continue
such qualifications in effect so long as required for the
distribution of the Placement Shares; provided, however, that the
Company will 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 Agents and their respective 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 SEC during the
Prospectus Delivery Period (including all documents filed with the
SEC 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 Agents may from time to time
reasonably request and, at the Agents’ 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 will not be required to furnish any document
(other than the Prospectus) to the Agents 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 covering a 12-month period that
satisfies the provisions of Section 11(a) and Rule 158 of the
Securities Act. The Company’s compliance with the reporting
requirements of the Exchange Act shall be deemed to satisfy this
Section 7(f).
(g) Use
of Proceeds. The Company will use the Net Proceeds as
described in the Prospectus in the section entitled “Use of
Proceeds.”
(h) Notice
of Other Sales. Without the prior written notice to the
Designated Agent, the Company will not, directly or indirectly,
offer to sell, sell, contract to sell, grant any option to sell or
otherwise dispose of any Common Stock (other than the Placement
Shares offered pursuant to this Agreement) or securities
convertible into or exchangeable for Common Stock, warrants or any
rights to purchase or acquire, Common Stock during the period
beginning on the fifth Trading Day immediately prior to the date on
which any Placement Notice is delivered to the Designated Agent
hereunder and ending on the fifth Trading Day immediately following
the final Settlement Date respecting 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 date of such suspension or
termination); and will not directly or indirectly in any other
“at-the-market” offering sell, contract to sell, grant
any option to sell or otherwise dispose of any Common Stock (other
than the Placement Shares offered pursuant to this Agreement) or
securities convertible into or exchangeable for Common Stock,
warrants or any rights to purchase or acquire, Common Stock prior
to the termination of this Agreement; provided, however, that such restrictions will
not be required in connection with the Company’s issuance or
sale of: (1) Common Stock, options to purchase Common Stock or
Common Stock issuable upon the exercise of options, pursuant to any
employee or director stock option or benefits plan, stock ownership
plan or dividend reinvestment plan (but not Common Stock subject to
a waiver to exceed plan limits in its dividend reinvestment plan)
of the Company whether now in effect or hereafter implemented;
(2) Common Stock issuable upon conversion of securities or in
respect of dividends accruing thereon 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
to the Agents; and (3) Common Stock, or securities convertible
into or exercisable for Common Stock, offered and sold in a
privately negotiated transaction to vendors, customers, strategic
partners or potential strategic partners who are qualified
institutional buyers and not more than three Persons that are
“accredited investors” within the meaning of such term
under paragraph (a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) of Rule
501 under the Securities Act and otherwise conducted in a manner so
as not to be integrated with the offering of Common Stock
hereby.
(i) Change
of Circumstances. The Company will, at any time during the
pendency of a Placement Notice, advise the Designated Agent
promptly after it will 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 required to be provided to the Agents pursuant to this
Agreement.
(j) Due
Diligence Cooperation. The Company will cooperate with any
reasonable due diligence review conducted by the Agents or its
representatives in connection with the transactions contemplated
hereby, including providing information and making available
documents and senior corporate officers, during regular business
hours and at the Company’s principal offices or such other
location mutually agreed to by the parties, as the Agents may
reasonably request.
9
(k) Disclosure
of Shares Sold. The Company will disclose in its Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q, as
applicable, the amount of Placement Shares sold through the Agents,
the Net Proceeds to the Company and the compensation payable by the
Company to the Agents respecting such Placement Shares within the
relevant period.
(l) Representation
Dates; Certificate. On the date of this Agreement and each
time the Company:
(i)
files the
Prospectus relating to the Placement Shares or amends or
supplements (other than a prospectus supplement relating solely to
an offering of securities other than the Placement Shares) the
Registration Statement or the Prospectus relating to the Placement
Shares by means of a post-effective amendment, sticker, or
supplement but not by means of incorporation of documents by
reference into 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 that contains restated financial statements);
(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 audited financial information
(other than information “furnished” 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) will be a “Representation
Date”);
the
Company will furnish the Agents (but in the case of clause (iv)
above only if the Agents reasonably determine that the information
contained in such Form 8-K is material) with a certificate, in the
form attached hereto as Exhibit A. The requirement to
provide a certificate under this Section 7(l) will be waived for
any Representation Date occurring at a time at which no Placement
Notice is pending, which waiver will continue until the earlier to
occur of the date the Company delivers a Placement Notice hereunder
(which for such calendar quarter will be considered a
Representation Date) and the next occurring Representation Date;
provided, however, that such waiver will 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 Agents with a certificate under this Section 7(l),
then before the Company delivers the Placement Notice or the Agents
sell any Placement Shares, the Company will provide the Agents with
a certificate, in the form attached hereto as Exhibit A, dated the date of
the Placement Notice.
(m) Legal
Opinion. On the date of this Agreement and within five
Trading Days of each Representation Date for which the Company is
obligated to deliver a certificate in the form attached hereto as
Exhibit A for which
no waiver is applicable, the Company will cause to be furnished to
the Agents written opinions of K&L Gates LLP
(“Company
Counsel”), or other counsel reasonably satisfactory to
the Agents, in form and substance reasonably satisfactory to the
Agents and its counsel; provided, however, the Company will be required
to furnish to the Agents no more than one opinion hereunder per
calendar quarter; provided,
further, that in lieu of such opinions for subsequent periodic
filings under the Exchange Act, Company Counsel may furnish the
Agents with a letter (a “Reliance Letter”) to the
effect that the Agents may rely on a prior opinion delivered under
this Section 7(m)
to the same extent as if it were dated the date of such letter
(except that statements in such prior opinion will be deemed to
relate to the Registration Statement and the Prospectus as amended
or supplemented as of the date of the Reliance
Letter).
(n) Comfort
Letters. On the date of this Agreement and within five
Trading Days of each Representation Date, other than pursuant to
Section 7(l)(iii),
for which the Company is obligated to deliver a certificate in the
form attached hereto as Exhibit A for which no waiver
is applicable, the Company will cause its Accountants to furnish
the Agents letters (the “Comfort Letters”), dated
the date the Comfort Letters are delivered, which will meet the
requirements set forth in this Section 7(n). The Comfort
Letter from each of the Accountants will be in a form and substance
reasonably satisfactory to the Agents: (i) confirming that
they are an independent public accounting firm within the meaning
of the Securities Act and the PCAOB; (ii) stating, as of such
date, the conclusions and findings of such firm respecting the
financial information and other matters ordinarily covered by
accountants’ “comfort letters” to underwriters 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.
(o) 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 Common Stock; or
(ii) sell, bid for, or purchase Common Stock in violation of
Regulation M, or pay anyone any compensation for soliciting
purchases of the Placement Shares other than the
Agents.
(p) Investment
Company Act. The Company will conduct its affairs in such a
manner so as to reasonably ensure that neither it nor any of its
Subsidiaries will be or become, at any time prior to the
termination of this Agreement, an “investment company,”
as such term is defined in the Investment Company Act.
(q) No
Offer to Sell. Other than an Issuer Free Writing Prospectus
approved in advance by the Company and the Agents in their capacity
as agents hereunder, neither the Agents nor the Company (including
its agents and representatives, other than the Agents in their
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 SEC, that
constitutes an offer to sell or solicitation of an offer to buy
Placement Shares hereunder.
10
(r) Xxxxxxxx-Xxxxx
Act. The Company and the Subsidiaries will maintain and keep
accurate books and records reflecting their assets and maintain
internal accounting controls in a manner designed to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles and including those policies and procedures that:
(i) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (ii) provide
reasonable assurance that transactions are recorded as necessary to
permit the preparation of the Company’s consolidated
financial statements in accordance with generally accepted
accounting principles; (iii) that receipts and expenditures of
the Company are being made only in accordance with
management’s and the Company’s directors’
authorization; and (iv) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a
material effect on its financial statements. The Company and the
Subsidiaries will use commercially reasonable efforts to maintain
such controls and other procedures, including those required by
Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act, and the applicable
regulations thereunder that are designed to ensure that information
required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the periods specified in the
SEC’s rules and forms, including controls and procedures
designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange
Act is accumulated and communicated to the Company’s
management, including its principal executive officer and principal
financial officer, or individuals performing similar functions, as
appropriate to allow timely decisions regarding required disclosure
and to ensure that material information relating to the Company or
the Subsidiaries is made known to them by others within those
entities, particularly during the period in which such periodic
reports are being prepared.
8. Representations
and Covenants of the Agents. Each Agent represents and
warrants that it is duly registered as a broker-dealer under FINRA,
the Exchange Act, and the applicable statutes and regulations of
each state in which the Placement Shares will be offered and sold,
except such states in which such Agent is exempt from registration
or such registration is not otherwise required. Each Agent will
continue, for the term of this Agreement, to be duly registered as
a broker-dealer under FINRA, the Exchange Act, and the applicable
statutes and regulations of each state in which the Placement
Shares will be offered and sold, except such states in which such
Agent is exempt from registration or such registration is not
otherwise required, during the term of this Agreement. The Agents
will comply with all applicable law and regulations in connection
with the Placement Shares, including Regulation M.
9. Payment
of Expenses. The Company will pay all expenses incident to
the performance of its obligations under this Agreement, including:
(i) the preparation, filing, including any fees required by
the SEC, and printing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each
amendment and supplement thereto and each Free Writing Prospectus,
in such number as the Agents will reasonably deem necessary; (ii)
the printing and delivery to the Agents of this Agreement and such
other documents as may reasonably be required in connection with
the offering, purchase, sale, issuance, or delivery of the
Placement Shares; (iii) the preparation, issuance, and
delivery of the certificates, if any, for the Placement Shares to
the Agents, including any stock or other transfer taxes and any
capital duties, stamp duties, or other duties or taxes payable upon
the sale, issuance, or delivery of the Placement Shares to the
Agents; (iv) the fees and disbursements of the counsel,
accountants, and other advisors to the Company; (v) the fees
and expenses of the transfer agent and registrar for the Common
Stock; (vi) the filing fees incident to any review by FINRA of
the terms of the sale of the Placement Shares; (vii) the fees
and expenses incurred in connection with the listing of the
Placement Shares on the Exchange; (viii) usual and customary
transaction, ticket, and similar charges; (ix) $25,000 of the fees
and expenses of the Agents’ legal counsel initially and,
thereafter, the reasonable fees and expenses of Ascendiant’s
legal counsel over $25,000 incurred in connection with quarterly
and annual bring-downs required hereunder up to a maximum amount of
$2,500 for each such bring-down.
10. Conditions
to the Agents’ Obligations. The obligations of each
Agent hereunder respecting 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 such
Agent of a due diligence review satisfactory to it in its
reasonable judgment, and to the continuing satisfaction (or waiver
by such Agent in its sole discretion) of the following additional
conditions:
(a)
Registration Statement
Effective. The Company shall at all times maintain in effect
the Registration Statement, which will be available for the sale of
all Placement Shares contemplated to be issued by any Placement
Notice.
(b)
No Material Notices. None of
the following events will have occurred and be continuing:
(i) receipt by the Company of any request for additional
information from the SEC 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 SEC 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 respecting 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 requires the making of any changes in the Registration
Statement, the Prospectus or 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.
(c)
No Misstatement or Material
Omission. Such Agent will 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 Agent’s reasonable opinion is material, or omits to state
a fact that in the Agent’s opinion is material and is
required to be stated therein or is necessary to make the
statements therein not misleading.
(d)
Material Changes. Except as
contemplated in the Prospectus, or disclosed in the Company’s
reports filed with the SEC, there will not have been any material
adverse change, on a consolidated basis, in the authorized capital
stock of the Company or any Material Adverse Effect, or any
development that could reasonably be expected to cause a Material
Adverse Effect.
(e)
Legal Opinion. Such Agent will
have received the opinions of Company Counsel required to be
delivered pursuant Section
7(m) on or before the date on which such delivery of such
opinions is required pursuant to Section 7(m).
11
(f)
Comfort Letters. Such Agent
will have received the Comfort Letters required to be delivered
pursuant Section
7(n) on or before the date on which such delivery of such
letter is required pursuant to Section 7(n).
(g)
Representation Certificate.
Such Agent will have received the certificate required to be
delivered pursuant to Section 7(l) on or before the
date on which delivery of such certificate is required pursuant to
Section
7(l).
(h)
No Suspension. Trading in the
Common Stock will not have been suspended on the Exchange and the
Common Stock will not have been delisted from the
Exchange.
(i)
Other Materials. On each date
on which the Company is required to deliver a certificate pursuant
to Section 7(l),
the Company will have furnished to such Agent such appropriate
further information, certificates, and documents as such Agent may
reasonably request and that are usually and customarily furnished
by an issuer of securities in connection with a securities
offering. All such opinions, certificates, letters, and other
documents will be in compliance with the provisions hereof. The
Company will furnish such Agent with such conformed copies of such
opinions, certificates, letters, and other documents as such Agent
will reasonably request.
(j)
Securities Act Filings Made.
All filings with the SEC required by Rule 424 under the Securities
Act to have been filed prior to the issuance of any Placement
Notice hereunder will have been made within the applicable period
prescribed for such filing by Rule 424.
(k)
Approval for Listing. The
Placement Shares will either have been approved for listing on the
Exchange, subject only to notice of issuance, or the Company will
have filed an application for listing of the Placement Shares on
the Exchange at, or prior to, the issuance of any Placement
Notice.
(l)
No Termination Event. No event
will have occurred that would permit such Agent to terminate this
Agreement pursuant to Section 13(a).
11. Indemnification
and Contribution.
(a)
Company Indemnification. The
Company agrees to indemnify and hold harmless the Agents,
their partners, members, directors,
officers, employees, and agents and each Person, if any, who
controls any Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act as
follows:
(i) against
any and all loss, liability, claim, damage, and expense whatsoever,
as incurred, joint or several, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto),
or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or arising out of any untrue statement or
alleged untrue statement of a material fact included in any related
Issuer Free Writing Prospectus or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against
any and all loss, liability, claim, damage and expense whatsoever,
as incurred, joint or several, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that any such settlement is effected with the
written consent of the Company, which consent will not unreasonably
be delayed or withheld; and
(iii) against
any and all expense whatsoever, as incurred (including the
reasonable fees and disbursements of counsel), reasonably incurred
in investigating, preparing or defending against any litigation, or
any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not
paid under (i) or (ii) above;
provided,
however,
that this indemnity agreement will not apply to any loss,
liability, claim, damage, or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or
omission made solely in reliance upon and in conformity with
written information furnished to the Company by the Agents expressly for use in the
Registration Statement (or any amendment thereto), or in any
related Issuer Free Writing Prospectus or the Prospectus (or any
amendment or supplement thereto).
12
(b) Agent
Indemnification. The Agents agree, jointly and severally, to
indemnify and hold harmless the Company and its directors and each
officer of the Company who signed the Registration Statement, and
each Person, if any, that: (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 against any and all loss, liability,
claim, damage, and expense described in the indemnity contained in
Section 11(c), as
incurred, but only respecting untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration
Statement (or any amendments thereto), the Prospectus (or any
amendment or supplement thereto) or any Free Writing Prospectus in
reliance upon and in conformity with information furnished to the
Company in writing by the Agents expressly for use
therein.
(c) Procedure.
(i) Any
party that proposes to assert the right to be indemnified under
this Section 11
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 11, 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:
(1) any liability that it might have to any indemnified party
otherwise than under this Section 11; and (2) any
liability that it may have to any indemnified party under the
foregoing provision of this Section 11 unless, and only to
the extent that, such omission results in the forfeiture or
material impairment of substantive rights or defenses by the
indemnifying party.
(ii) 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.
(iii) 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.
(iv) It
is understood that the indemnifying party or parties will 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 after the
indemnifying party receives a written invoice relating to fees,
disbursements and other charges in reasonable detail.
(v) 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 will, 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 11 (whether
or not any indemnified party is a party thereto), unless such
settlement, compromise or consent: (i) includes an
unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding, or
claim; and (ii) does not include a statement as to or an
admission of fault, culpability, or a failure to act by or on
behalf of any indemnified party.
(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 11 is applicable in
accordance with its terms but for any reason is held to be
unavailable from the Company or the Agents, the Company and the
Agentswill 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 Agents, such as Persons that
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 Agents may be subject in such
proportion as is appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Agents, on the
other hand. The relative benefits received by the Company, on the
one hand, and the Agents, on the other hand, will 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 Agents
(before deducting expenses) 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 will 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 Agents, on the other hand,
respecting 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 respecting
such offering. Such relative fault will 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 Agents, 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 Agents
agree that it would not be just and equitable if contributions
pursuant to this Section
11(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 11(d) will be deemed to
include, for the purpose of this Section 11(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 11(c) hereof. Notwithstanding
the foregoing provisions of this Section 11(d), the Agents will
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 11(d), any Person who
controls a party to this Agreement within the meaning of the
Securities Act, and any officers, directors, partners, employees or
agents of the Agents, will have the same rights to contribution as
that party, and each officer and director of the Company who signed
the Registration Statement 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 11(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 11(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 11(c) hereof, no party
will be liable for contribution respecting any action or claim
settled without its written consent if such consent is required
pursuant to Section
11(c) hereof.
13
12. Representations
and Agreements to Survive Delivery. The indemnity and
contribution agreements contained in Section 11 of this Agreement
and all representations and warranties of the Company herein or in
certificates delivered pursuant hereto will survive, as of their
respective dates, regardless of: (a) any investigation made by
or on behalf of the Agents, any controlling Persons, or the Company
(or any of their respective officers, directors, or controlling
Persons); (b) delivery and acceptance of the Placement Shares
and payment therefor; or (c) any termination of this
Agreement.
13. Termination.
(a) The
Agents may terminate this Agreement, by notice to the Company, as
hereinafter specified at any time: (i) if there has been,
since the time of execution of this Agreement or since the date as
of which information is given in the Prospectus, any Material
Adverse Effect, or any development has occurred that is reasonably
likely to have a Material Adverse Effect or in the sole judgment of
the Agents makes it impractical or inadvisable to market the
Placement Shares or to enforce contracts for the sale of the
Placement Shares; (ii) if there has occurred any material
adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or
international political, financial or economic conditions, in each
case the effect of which is such as to make it, in the judgment of
the Agents, impracticable or inadvisable to market the Placement
Shares or to enforce contracts for the sale of the Placement
Shares; (iii) if trading in the Common Stock has been
suspended or limited by the SEC or the Exchange, or if trading
generally on the Exchange has been suspended or limited, or minimum
prices for trading have been fixed on the Exchange; (iv) if
any suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market will have occurred and
be continuing; (v) if a major disruption of securities
settlements or clearance services in the United States will have
occurred and be continuing; or (vi) if a banking moratorium
has been declared by either U.S. Federal or New York authorities.
Any such termination will be without liability of any party to any
other party except that the provisions of Section 9 (Expenses),
Section 11
(Indemnification), Section
12 (Survival of Representations), Section 18 (Applicable Law;
Waiver of Jury Trial), and Section 19 (Consent to
Jurisdiction) hereof will remain in full force and effect
notwithstanding such termination. If the Agents elect to terminate
this Agreement as provided in this Section 13(a), the Agents will
provide the required notice as specified in Section 14
(Notices).
(b) (i) The
Company will have the right, by giving 10 days’ notice as
hereinafter specified to terminate this Agreement in its sole
discretion at any time after the date of this
Agreement.
(ii) If
any Agent decline any commercially
reasonable placement notice pursuant to Section 2(a)
of this Agreement, then the Company
will have the right to terminate this Agreement with respect to
such Agent by giving written notice of termination to such
Agents. Any such termination will be
effective immediately upon a delivery of a termination notice by
the Company to such Agent.
Any
termination pursuant to Section 13(b) will be without
liability of any party to any other party except that the
provisions of Section
9, Section
11, Section
12, Section
18, and Section
19 hereof will remain in full force and effect
notwithstanding such termination.
(c) The
Agents will have the right, by giving 10 days’ notice as
hereinafter specified to terminate this Agreement in their
discretion at any time after the date of this Agreement. Any such
termination will be without liability of any party to any other
party except that the provisions of Section 9, Section 11, Section 12, Section 18, and Section 19 hereof will remain
in full force and effect notwithstanding such
termination.
(d) Unless
earlier terminated pursuant to this Section 13, this Agreement will
automatically terminate upon the earlier to occur of: (i) the
two-year anniversary of the date hereof; or (ii) the issuance
and sale of all of the Placement Shares through the Agents on the
terms and subject to the conditions set forth herein, except that,
in either such case, the provisions of Section 9, Section 11, Section 12, Section 18 and Section 19 hereof will remain
in full force and effect notwithstanding such
termination.
(e) This
Agreement will remain in full force and effect unless terminated
pursuant to Sections
13(a), (b),
(c), or
(d) above or
otherwise by mutual agreement of the parties. Upon termination of
this Agreement, the Company will not have any liability to any
Agent for any discount, commission, or other compensation
respecting any Placement Shares not otherwise sold by an Agent
under this Agreement.
(f) Any
termination of this Agreement will be effective on the date
specified in such notice of termination; provided, however, that such termination will not
be effective until the close of business on the date of receipt of
such notice by the Agent or Agents, as applicable, or the Company,
as the case may be. If such termination will occur prior to the
Settlement Date for any sale of Placement Shares, such Placement
Shares will settle in accordance with the provisions of this
Agreement.
14. Notices.
(a) 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 will be in writing, unless otherwise specified, and if
sent to Ascendiant, will be delivered to:
Ascendiant Capital
Markets, LLC
Attention: Managing
Partner
00000
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx,
XX 00000
14
with a
copy to:
Xxxxx
Xxxx & Sessions, P.C.
Attention: Xxxxx
Xxxxxxxx
000
Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx
Xxxx Xxxx, XX 00000
and if
to the Company, will be delivered to:
Attention: Xxxxx
Xxxxx, Chief Financial Officer
0000
Xxxxx Xxxxx, Xxxxx 000
Xxx
Xxxxx, XX 00000
with a
copy to:
K&L
Gates LLP
Attention: Xxxx
Xxxxx
000
Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX
00000
Notice
to any other Agent shall be sent to its address set forth in Annex
1 hereto.
(b)
Each such notice or
other communication will be deemed given: (i) when delivered
personally 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; or (ii) on the next Business Day
after timely delivery to a nationally recognized overnight courier.
For purposes of this Agreement, “Business Day” will mean
any day on which the Exchange and commercial banks in the City of
New York are open for business.
(c)
An electronic
communication (“Electronic Notice”) will
be deemed written notice for purposes of this Section 14 if sent to the
electronic mail address specified by the receiving party under
separate cover. Electronic Notice will be deemed received at the
time the party sending Electronic Notice receives confirmation of
receipt by the receiving party. Any party receiving Electronic
Notice may request and will be entitled to receive the notice on
paper, in a nonelectronic form (“Nonelectronic Notice”),
which will be sent to the requesting party within 10 days of
receipt of the written request for Nonelectronic
Notice.
(d)
Each party to this
Agreement may change such address for notices by sending to the
parties to this Agreement written notice of a new address for such
purpose.
15. Successors
and Assigns. This Agreement will inure to the benefit of and
be binding upon the Company and the Agents and their respective
successors and the affiliates, controlling persons, partners, members, officers, directors,
employees, and agents referred to in Section 11 hereof. References
to any of the parties contained in this Agreement will 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 party other than the parties hereto or their respective
successors and permitted assigns 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.
16. Adjustments
for Stock Splits. The parties acknowledge and agree that all
share-related numbers contained in this Agreement will be adjusted
to take into account any share consolidation, stock split, stock
dividend, corporate domestication or similar event effected
respecting the Placement Shares.
15
17. Entire
Agreement; Amendment; Severability. This Agreement
(including all schedules and exhibits attached hereto and Placement
Notices issued pursuant hereto), by and between the Company and the
Agents constitutes the entire agreement of the parties respecting
the subject matter hereof and thereof 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 and thereof. Neither this Agreement nor any term
hereof may be amended except pursuant to a written instrument
executed by the Company and the Agents. 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 will 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 will 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
will be in accordance with the intent of the parties as reflected
in this Agreement.
18. APPLICABLE
LAW; WAIVER OF JURY TRIAL.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME. THE
COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
19. CONSENT
TO JURISDICTION. 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
WILL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN WILL BE DEEMED TO LIMIT IN ANY
WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY
LAW.
20. Use
of Information. The Agents may not use any information
gained in connection with this Agreement and the transactions
contemplated by this Agreement, including due diligence, to advise
any party respecting transactions not expressly approved in writing
by the Company. The Agents acknowledge that any information gained
in connection with this Agreement and the transactions contemplated
by this Agreement are subject to confidentiality and other
restrictions pursuant to the Confidentiality Agreement and agrees
to abide by the terms of the Confidentiality
Agreement.
21. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which will be deemed an original, but all of which together will
constitute one and the same instrument. Delivery of an executed
Agreement by one party to the other may be made by facsimile
transmission.
22. Effect
of Headings. The section and exhibit headings herein are for
convenience only and will not affect the construction
hereof.
23. Permitted
Free Writing Prospectuses. The Company represents, warrants,
and agrees that, unless it obtains the prior consent of the Agents,
and each Agent represents, warrants and agrees that, unless it
obtains the prior consent of the Company, it has not made and will
not make any offer relating to the Placement Shares that would
constitute an Issuer Free Writing Prospectus, or that would
otherwise constitute a “free writing prospectus,” as
defined in Rule 405, required to be filed with the SEC. Any
such free writing prospectus consented to by the Agents or by the
Company, as the case may be, is hereinafter referred to as a
“Permitted Free Writing Prospectus.” The Company
represents and warrants that it has treated and agrees that it will
treat each Permitted Free Writing Prospectus as an “issuer
free writing prospectus,” as defined in Rule 433, and
has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including
timely filing with the SEC where required, legending, and
recordkeeping. For the purposes of clarity, the parties hereto
agree that all free writing prospectuses, if any, listed in
Exhibit B
hereto are Permitted Free Writing Prospectuses.
24. Absence
of Fiduciary Relationship. The Company acknowledges and
agrees that:
(a) Each
Agent is acting solely as agent in connection with the public
offering of the Placement Shares and in connection with each
transaction 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 such 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 or not such Agent has advised or is advising the Company on
other matters, and such Agent has no obligation to the Company
respecting the transactions contemplated by this Agreement except
the obligations expressly set forth in this Agreement;
(b) it
is capable of evaluating and understanding, and understands and
accepts, the terms, risks and conditions of the transactions
contemplated by this Agreement;
(c) the
Agents have not provided any legal, accounting, regulatory or tax
advice respecting the transactions contemplated by this Agreement
and it has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate;
16
(d) it
is aware that the Agents and their respective affiliates are
engaged in a broad range of transactions that may involve interests
that differ from those of the Company and the Agents have no
obligation to disclose such interests and transactions to the
Company by virtue of any fiduciary, advisory or agency relationship
or otherwise; provided that the Agents hereby agree not to engage
in any such transaction that would cause its interests to be in
direct conflict with the best interests of the Company;
and
(e) it
waives, to the fullest extent permitted by law, any claims it may
have against any Agent for breach of fiduciary duty or alleged
breach of fiduciary duty in connection with the sale of Placement
Shares under this Agreement and agrees that no Agent will have any
liability (whether direct or indirect, in contract, tort or
otherwise) to it in respect of such a fiduciary duty claim or to
any Person asserting a fiduciary duty claim on its behalf or in
right of it or the Company, employees or creditors of Company,
other than in respect of such Agent’s obligations under this
Agreement and to keep information provided by the Company to the
Agent’s and the Agents’ counsel confidential to the
extent not otherwise publicly available.
25. Definitions.
As used in this Agreement, the following terms have the respective
meanings set forth below:
(a) “Applicable
Time” means: (i) each Representation Date; and
(ii) the time of each sale of any Placement Shares pursuant to
this Agreement.
(b) “Designated
Agent” means, as of any given time, an Agent that the
Company has designated as sales agent to sell Placement Shares
pursuant to the terms of this Agreement, which shall initially be
Ascendiant Capital Markets, LLC.
(c) “Issuer Free Writing
Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433, relating to the
Placement Shares.
(d) “Rule 164,”
“Rule
172,” “Rule 405,”
“Rule
415,” “Rule 424,”
“Rule 424(b),”
“Rule 430A,”
“Rule 430B,” and
“Rule 433” refer to
such rules under the Securities Act Regulations.
(e) All
references in this Agreement to financial statements and schedules
and other information that is “contained,”
“included,” or “stated” in the Registration
Statement or the Prospectus (and all other references of like
import) will be deemed to mean and include all such financial
statements and schedules and other information that is incorporated
by reference in the Registration Statement or the
Prospectus, as the case may
be.
(f) All references in
this Agreement to the Registration Statement, the Prospectus or any
amendment or supplement to any of the foregoing will be deemed to
include the copy filed with the SEC pursuant to XXXXX; all
references in this Agreement to any Issuer Free Writing Prospectus
(other than any Issuer Free Writing Prospectuses that, pursuant to
Rule 433, are not required to be filed with the SEC) will be
deemed to include the copy thereof filed with the SEC pursuant to
XXXXX; and all references in this Agreement to
“supplements” to the Prospectus will include any
supplements, “wrappers,” or similar materials prepared
in connection with any offering, sale, or private placement of any
Placement Shares by Ascendiant outside of the United
States.
[Signature
Page Follows]
17
If the
foregoing correctly sets forth the understanding between the
Company and the Agents, please so indicate in the space provided
below for that purpose, whereupon this letter will constitute a
binding agreement between the Company and the Agents.
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Very
truly yours,
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By:
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/s/ Xxxxxxxx
Xxxxxxxx
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Name:
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Xxxxxxxx
Xxxxxxxx
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Title:
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Chief
Executive Officer
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ACCEPTED as of the
date first-above written:
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ASCENDIANT
CAPITAL MARKETS, LLC
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By:
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/s/
Xxxxxxx X. Xxxxxxx
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Name:
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Xxxxxxx
X. Xxxxxxx
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Title:
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Managing
Partner
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SCHEDULE 1
_________________________________
FORM OF PLACEMENT NOTICE
_________________________________
From:
ENDRA Life Sciences Inc.
To:
[Ascendiant Capital
Markets, LLC]
Attention:
[Xxxxxxx X. Xxxxxxx]
Subject:
At-The-Market
Issuance--Placement Notice
Gentlemen:
Pursuant to the
terms and subject to the conditions contained in the At-The-Market
Issuance Sales Agreement between ENDRA Life Sciences Inc., a
Delaware corporation (the “Company”) and the Agents
party thereto (“Ascendiant”), dated
September 25, 2020, the Company hereby requests that [Ascendiant]
sell up to ____________ of the Company’s Common Stock, par
value $0.0001 per share, at a minimum market price of $_______ per
share, during the period beginning [month, day, time] and ending
[month, day, time].
19
SCHEDULE 2
__________________________
Compensation
__________________________
The
Company will pay to the Designated Agent in cash, upon each sale of
Placement Shares pursuant to this Agreement, an amount equal to
three percent (3.0%) of the gross proceeds from each sale of
Placement Shares.
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SCHEDULE 3
__________________________
Notice Parties
__________________________
The Company:
Xxxxx
Xxxxx
Ascendiant:
Xxxxxxx
X. Xxxxxxx
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SCHEDULE 4
__________________________
Subsidiaries
__________________________
1.
ENDRA Life Sciences
Canada Inc. is a corporation formed under the laws of Ontario,
Canada in July 2017.
2.
ENDRA Life Sciences
Holding B.V. is a private limited company formed under the laws of
the Netherlands in July 2020.
3.
ENDRA Life Sciences
Ltd. is a private limited company formed under the laws of the
United Kingdom in August 2020.
22
Exhibit A
Form of Representation Date Certificate
This
Officer’s Certificate (this “Certificate”) is executed
and delivered in connection with Section 7(l) of the At-The-Market
Issuance Sales Agreement (the “Agreement”), dated
September 25, 2020, and entered into between ENDRA Life Sciences
Inc. (the “Company”) and the Agents
party thereto. All capitalized terms used but not defined herein
shall have the meanings given to such terms in the
Agreement
The
undersigned, a duly appointed and authorized officer of the
Company, having made all necessary inquiries to establish the
accuracy of the statements below and having been authorized by the
Company to execute this certificate, hereby certifies, in his
capacity as such officer and not in his individual capacity, as
follows:
1.
As of the date of
this Certificate, (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 and (ii) neither the
Registration Statement nor the Prospectus 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
Prospectus in order to make the statements therein not untrue or
misleading.
2.
Each of the
representations and warranties of the Company contained in the
Agreement were, when originally made, and are, as of the date of
this Certificate, true and correct in all material
respects.
3.
Each of the
covenants required to be performed by the Company in the Agreement
on or prior to the date of the Agreement, this Representation Date,
and each such other date as set forth in the Agreement, has been
duly, timely and fully performed in all material respects and each
condition required to be complied with by the Company on or prior
to the date of the Agreement, this Representation Date, and each
such other date as set forth in the Agreement has been duly, timely
and fully complied with in all material respects.
4.
Subsequent to the
date of the most recent financial statements in the Prospectus,
there has been no Material Adverse Effect.
5.
No stop order
suspending the effectiveness of the Registration Statement or of
any part thereof has been issued, and no proceedings for that
purpose have been instituted or are pending or threatened by any
securities or other governmental authority (including, without
limitation, the Commission).
The
undersigned has executed this Officer’s Certificate as of the
date first written above.
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____________________________
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Name:
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23
