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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

  

Date of report (Date of earliest event reported) December 24, 2020

 

Accelerate Diagnostics, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation)

 

001-31822   84-1072256
(Commission File Number)   (IRS Employer Identification No.)

 

3950 South Country Club Road, Suite 470, Tucson, Arizona   85714
(Address of principal executive offices)   (Zip Code)

 

(520) 365-3100

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, $0.001 par value per share AXDX

The Nasdaq Stock Market LLC

(The Nasdaq Capital Market)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On December 24, 2020, Accelerate Diagnostics, Inc. (the “Company”) entered into a securities purchase agreement (the “Securities Purchase Agreement”) with Jack W. Schuler, John Patience, Matthew Strobeck, Mark C. Miller, Thomas D. Brown and Jack Phillips, or entities affiliated with such persons (collectively, the “Purchasers”), for the issuance and sale by the Company of an aggregate of 4,166,663 shares of the Company’s common stock (the “Shares”) to the Purchasers in an offering (the “Private Placement”) exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder. Each of the Purchasers is a member of the Company’s board of directors and an “accredited investor” as defined in Rule 501(a) under the Securities Act. Mr. Phillips also serves as the Company’s President and Chief Executive Officer.

 

Pursuant to the Securities Purchase Agreement, the Purchasers have agreed to purchase the Shares at a purchase price (determined in accordance with Nasdaq rules relating to the “market value” of the Company’s common stock) of $7.68 per share, which is equal to the consolidated closing bid price reported by Nasdaq immediately preceding the time the Company entered into the Securities Purchase Agreement, for an aggregate purchase price of approximately $32 million. The Securities Purchase Agreement includes customary representations, warranties and covenants by the parties to the agreement.

 

The closing of the purchase and sale of the Shares is expected to occur in three approximately equal tranches, subject to the satisfaction of customary closing conditions, including clearance under the Hart Scott-Rodino Antitrust Improvements Act of 1976, as amended, following the date of the execution of the Securities Purchase Agreement with respect to the closing of the first tranche, March 31, 2021 with respect to the closing of the second tranche and June 30, 2021 with respect to the closing of the third tranche.

 

Additionally, on December 24, 2020, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Purchasers pursuant to which the Company has agreed to register the resale of the Shares. In accordance with the Registration Rights Agreement, the Company is required to prepare and file a registration statement with the U.S. Securities and Exchange Commission (the “SEC”) by the 90th calendar day following the closing date for the third tranche and to use reasonable best efforts to have the registration statement declared effective as soon as practicable after the filing.

 

The foregoing description of the Securities Purchase Agreement and the Registration Rights Agreement is not complete and is qualified in its entirety by reference to the full text of the Securities Purchase Agreement and the Registration Rights Agreement, which are filed herewith as Exhibit 10.1 and 10.2, respectively, and incorporated herein by reference in their entirety.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The information set forth in Item 1.01 above is incorporated by reference into this Item 3.02.

 

 

 

 

Item 7.01 Regulation FD Disclosure.

 

The Company intends to file a replacement shelf registration statement on Form S-3 (the “New Registration Statement”) with the SEC in January 2021 to register the offer and sale by the Company from time to time of any combination of common stock, preferred stock, debt securities, warrants, subscription rights or units, in one or more offerings, up to an aggregate amount of $150,000,000. The New Registration Statement replaces the Company’s prior registration statement on Form S-3 (File No. 333-217297), which expired on April 13, 2020.

 

The New Registration Statement has not yet been filed with the SEC. The securities may not be sold and offers to buy may not be accepted prior to the time such registration statement becomes effective. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities in any state or other jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

 

The information disclosed under this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)           Exhibits.  

 

Exhibit    
Number   Description
     
10.1   Securities Purchase Agreement, dated December 24, 2020, by and among Accelerate Diagnostics, Inc. and the purchasers party thereto
10.2   Registration Rights Agreement, dated December 24, 2020, by and among Accelerate Diagnostics, Inc. and the purchasers party thereto
104   Cover Page Interactive Data File (cover page XBRL tags are embedded within the Inline XBRL document)

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

ACCELERATE DIAGNOSTICS, INC.
(Registrant)
Date: December 28, 2020  
/s/ Steve Reichling
  Steve Reichling
  Chief Financial Officer

  

 

 

 

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of December 24, 2020, by and among Accelerate Diagnostics, Inc., a Delaware corporation (the “Company”), and each purchaser identified on Annex I attached hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined below) and Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchasers, and the Purchasers desire to purchase from the Company, certain securities of the Company, as more fully described in this Agreement.

 

WHEREAS, contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which, among other things, the Company will agree to provide registration rights with respect to the certain securities of the Company under the Securities Act and the rules and regulations promulgated thereunder and applicable state securities laws.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

 

ARTICLE 1.
DEFINITIONS

 

1.1.          Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1:

 

Agreement” has the meaning set forth in the Preamble.

 

Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or threatened in writing against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency, regulatory authority (federal, state, county, local or foreign), stock market, stock exchange or trading facility.

 

Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144.

 

Business Day” means any day except Saturday, Sunday and any day which is a federal legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

Closing” means a closing of the purchase and sale of the Securities for each Tranche pursuant to Article II.

 

 

 

 

Closing Date” means the means the Business Day on which all of the conditions set forth in Sections 5.1 and 5.2 hereof are satisfied following (i) the date of execution of this Agreement with respect to the Closing of the first Tranche, (ii) March 31, 2021 with respect to the Closing of the second Tranche and (iii) June 30, 2021 with respect to the Closing of the third Tranche, or such other dates as the parties may agree.

 

Commission” means the Securities and Exchange Commission.

 

Common Stock” means the common stock of the Company, par value $0.001 per share, and any securities into which such common stock may hereafter be reclassified.

 

Company” has the meaning set forth in the Preamble.

 

Company Deliverables” has the meaning set forth in Section 2.2(a).

 

Company Party” has the meaning set forth in Section 4.2(b).

 

Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

HSR Act” means the Hart Scott-Rodino Antitrust Improvements Act of 1976, as amended, and its implementing regulations.

 

Indemnified Party” has the meaning set forth in Section 4.2(c).

 

Indemnifying Party” has the meaning set forth in Section 4.2(c).

 

Investment Amount” means, with respect to each Purchaser, the aggregate amount to be paid for the Securities purchased hereunder as set forth opposite the name of such Purchaser under the heading “Investment Amount” on Annex I attached hereto, in United States dollars and in immediately available funds.

 

Lead Purchaser” means the Purchaser purchasing a majority of the Securities pursuant to this Agreement.

 

Lien” means any lien, charge, encumbrance, security interest, right of first refusal or other restrictions of any kind.

 

Losses” has the meaning set forth in Section 4.2(a).

 

Material Adverse Effect” has the meaning set forth in Section 3.1(d).

 

Nasdaq” means The Nasdaq Stock Market.

 

Outside Date” means the 60th day following the date of this Agreement.

 

Per Share Purchase Price” equals $7.68, which is the “market value” of the Common Stock in accordance with Nasdaq rules and equal to the consolidated closing bid price of the Common Stock reported on The Nasdaq Capital Market immediately preceding the time this Agreement is entered into.

 

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Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

Purchaser” or “Purchasers” has the meaning set forth in the Preamble.

 

Purchaser Deliverables” has the meaning set forth in Section 2.2(b).

 

Purchaser Party” has the meaning set forth in Section 4.2(a).

 

Registration Rights Agreement” has the meaning set forth in the Recitals.

 

Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

SEC Reports” has the meaning set forth in Section 3.2(e).

 

Securities” means the shares of Common Stock issued or issuable to the Purchasers pursuant to this Agreement.

 

Securities Act” means the Securities Act of 1933, as amended.

 

Short Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-US broker dealers or foreign regulated brokers.

 

Subsidiary” means any “significant subsidiary” as defined in Rule 1-02(w) of the Regulation S-X promulgated by the Commission under the Exchange Act.

 

Tranche” has the meaning set forth in Section 2.1(a).

 

Transaction Documents” means this Agreement, the Registration Rights Agreement and any other documents or agreements explicitly contemplated hereunder.

 

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ARTICLE 2.
PURCHASE AND SALE

 

2.1.          Closings.

 

(a)                Subject to the terms and conditions set forth in this Agreement, the Company shall issue and sell to each Purchaser, and each Purchaser will purchase, severally and not jointly, the aggregate number of Securities set forth opposite the name of such Purchaser under the heading “Number of Securities Purchased” on Annex I attached hereto, which shall be equal to such Purchaser’s Investment Amount divided by the Per Share Purchase Price (rounded down to the nearest whole share), in three approximately equal tranches (each, a “Tranche”).

 

(b)               The Closing of each Tranche shall take place remotely via the electronic exchange of documents and signatures on the applicable Closing Date, or in such other manner as the parties agree in writing. For accounting and computational purposes, a Closing will be deemed to have occurred at 12:01 a.m. (New York time) on such Closing Date.

 

2.2.          Closing Deliveries.

 

(a)               At the Closing for each Tranche, the Company shall deliver or cause to be delivered to each Purchaser the following (the “Company Deliverables”):

 

(i)            in the case of the Closing for the first Tranche:

 

(A) this Agreement, duly executed by the Company;

 

(B) the Registration Rights Agreement, duly executed by the Company;

 

(C) confirmation from Nasdaq that it has completed its review of the Company’s submission of a Notification Form: Listing of Additional Shares for the listing of the Securities with no objections to the transactions contemplated herein; and

 

(ii)           a certificate evidencing the number of Securities purchased by such Purchaser in the Tranche and registered in the name of such Purchaser as specified on Annex I attached hereto;

 

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(b)               At the Closing for each Tranche, each Purchaser shall deliver or cause to be delivered to the Company the following (the “Purchaser Deliverables”):

 

(i)                in the case of the Closing for the first Tranche:

 

  (A) this Agreement, duly executed by such Purchaser;
 
  (B) the Registration Rights Agreement, duly executed by such Purchaser; and

 

(ii)               such Purchaser’s payment for the Securities purchased by it in the Tranche (which, for the avoidance of doubt, will be approximately one-third (1/3) of such Purchaser’s Investment Amount), in United States dollars and in immediately available funds, by wire transfer to an account designated in writing by the Company for such purpose.

 

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES

 

3.1.          Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to each Purchaser:

 

(a)               Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into the Transaction Documents and to consummate the transactions contemplated thereby. The execution and delivery of the Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary action on the part of the Company. Each of the Transaction Documents has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

 

(b)               Issuance of the Securities. The Securities have been duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens. The Company has reserved from its duly authorized capital stock the shares of Common Stock issuable pursuant to this Agreement.

 

(c)               Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims (other than such fees or commissions owed by any such Purchaser pursuant to written agreements executed by such Purchaser which fees or commissions shall be the sole responsibility of such Purchaser) made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

 

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(d)               No Violation or Default. Neither the Company nor any of its subsidiaries is: (i) in violation of its charter or by-laws 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, condition or other obligation 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 or by which the Company or any of its subsidiaries is bound or to which any property, right or asset of the Company or any of its subsidiaries is subject; or (iii) in violation of any law or statute applicable to the Company or any of its subsidiaries or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or any of its subsidiaries or any of their respective property or assets, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its subsidiaries, taken as a whole or on the performance by the Company of its obligations under the Transaction Documents (a “Material Adverse Effect”).

 

(e)               No Conflicts. The execution, delivery and performance by the Company of the Transaction Documents and the issuance, sale and delivery of the Securities will not: (i) result in any violation of the provisions of the charter or by-laws or similar organizational documents of the Company or any of its subsidiaries; (ii) conflict with or result in a breach or violation of any of the terms or provisions of, constitute a default under, result in the termination, modification or acceleration of, or result in the creation or imposition of any lien, charge or encumbrance upon any property, right or asset of the Company or any of its subsidiaries pursuant to, 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 or by which the Company or any of its subsidiaries is bound or to which any property, right or asset of the Company or any of its subsidiaries is subject; or (iii) result in the violation of any law or statute applicable to the Company or any of its subsidiaries or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or any of its subsidiaries or any of their respective property or assets, except, in the case of clauses (ii) and (iii) above, for any such conflict, breach, violation, default, lien, charge or encumbrance that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

3.2.          Representations and Warranties of the Purchasers. Each Purchaser hereby, for itself and for no other Purchaser, hereby represents and warrants to the Company as follows:

 

(a)               Authorization; Enforcement. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into the Transaction Documents and to consummate the transactions contemplated thereby. The execution and delivery of the Transaction Documents by such Purchaser and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each of the Transaction Documents has been (or upon delivery will have been) duly executed by such Purchaser and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of such Purchaser enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

 

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(b)               Investment Intent. Such Purchaser is acquiring the Securities as principal for its own account for investment purposes only and not with a view to or for distributing or reselling such Securities or any part thereof, without prejudice, however, to such Purchaser’s right at all times to sell or otherwise dispose of all or any part of Securities in compliance with applicable federal and state securities laws. Subject to the immediately preceding sentence, nothing contained herein shall be deemed a representation or warranty by such Purchaser to hold the Securities for any period of time. Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities.

 

(c)               Purchaser Status. At the time Such Purchaser was offered the Securities, it was, and at the date hereof it is, (i) knowledgeable, sophisticated and experienced in making, and qualified to make, decisions with respect to investments in securities representing and investment decision similar to that involved in the purchase of the Securities, including investments in securities issued by the Company and comparable entities, and (ii) an “accredited investor” as defined in Rule 501(a) under the Securities Act. Such Purchaser is not a registered broker-dealer under Section 15 of the Exchange Act.

 

(d)               General Solicitation. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

(e)               Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents and the Company’s reports required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (the “SEC Reports”), and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and completeness of the SEC Reports and the Company’s representations and warranties contained in this Agreement, subject to the exceptions thereto and as set forth therein, as the case may be.

 

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(f)                Certain Trading Activities. Such Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with it, engaged in any transactions in the securities of the Company (including, without limitations, any Short Sales involving the Company’s securities) since the 30th day prior to the date of this Agreement. Such Purchaser covenants that neither it nor any Person acting on its behalf or pursuant to any understanding with it will engage in any transactions in the securities of the Company (including Short Sales) during the period from the date hereof until the earlier of such time as (i) the transactions contemplated by this Agreement are publicly disclosed or (ii) this Agreement is terminated in full pursuant to Section 6.5.

 

(g)               Reliance on Purchaser Representations. Such Purchaser understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of the Securities Act and the rules and regulations promulgated thereunder, and state securities laws and that the Company is relying upon the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of such Purchaser to acquire the Securities. Under such laws and rules and regulations, the Securities may be resold without registration under the Securities Act only in certain limited circumstances. Such Purchaser represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations.

 

(h)               Risks of Investment. Such Purchaser understands that its investment in the Securities involves a significant degree of risk, including a risk of total loss of its investment, and such Purchaser has full cognizance of and understands all of the risk factors related to its purchase of the Securities, including, but not limited to, those set forth under the caption “Risk Factors” in the SEC Reports. Such Purchaser understands that the market price of the Common Stock has been volatile and that no representation is being made as to the future value of the Common Stock. Such Purchaser has the knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities and has the ability to bear the economic risks of an investment in the Securities.

 

(i)                No Approvals. Such Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

 

(j)                Independent Investment Decision. Such Purchaser has independently evaluated the merits of its decision to purchase Securities pursuant to this Agreement, and such Purchaser confirms that it has not relied on the advice of any other Purchaser’s business and/or legal counsel in making such decision. Such Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to such Purchaser in connection with the purchase of the Securities constitutes legal, tax or investment advice. Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Securities.

 

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(k)               Residency. Such Purchaser’s residence (if an individual) or offices in which its investment decision with respect to the Securities was made (if an entity) are located at the address set forth under such Purchaser’s name on Annex I attached hereto.

  

ARTICLE 4.
OTHER AGREEMENTS OF THE PARTIES

 

4.1.          Transfer Restrictions.

 

(a)               Compliance with Laws. Notwithstanding any other provision of this Article 4, each Purchaser covenants that the Securities may be disposed of only pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and in compliance with any applicable U.S. state and federal securities laws. In connection with any transfer of the Securities other than (i) pursuant to an effective registration statement, (ii) to the Company or (iii) pursuant to Rule 144 (provided that the Purchaser provides the Company with reasonable assurances (in the form of seller and, if applicable, broker representation letters) that the securities may be sold pursuant to such rule), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of the Transaction Documents and shall have the rights of a Purchaser under the Transaction Documents with respect to such transferred Securities.

 

(b)               Legends. Certificates evidencing the Securities will contain the legend in substantially the following form:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, OR OTHERWISE DISPOSED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

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4.2.          Indemnification.

 

(a)         The Company will indemnify and hold each Purchaser and its directors, officers, employees, agents and Affiliates (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively, “Losses”) that any such Purchaser Party may suffer or incur as a result of or relating to any misrepresentation, breach or inaccuracy of any representation, warranty, covenant or agreement made by the Company in the Transaction Documents.

 

(b)        Each Purchaser will, severally and not jointly, indemnify and hold the Company and its directors, officers, employees, agents and Affiliates (each, a “Company Party”) harmless from any and all Losses that any such Company Party may suffer or incur as a result of or relating to any misrepresentation, breach or inaccuracy of any representation, warranty, covenant or agreement made by such Purchaser in the Transaction Documents.

 

(c)         In addition to the indemnities contained in this Section 4.2, if any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (each, an “Indemnified Party”), each Person from whom indemnity is sought (each, an “Indemnifying Party”) shall reimburse the Indemnified Party for its reasonable legal and other expenses (including the cost of any investigation, preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred.

 

4.3.           HSR Act. To the extent applicable, each Purchaser shall make all filings required, and take any other action necessary, under the HSR Act to consummate the transactions contemplated in the Transaction Documents.

 

ARTICLE 5.

CONDITIONS PRECEDENT TO CLOSING

 

5.1.          Conditions Precedent to the Obligations of the Purchasers to Purchase Securities. The obligation of each Purchaser to acquire Securities at the Closing for each Tranche is subject to the satisfaction or waiver by such Purchaser, at or before such Closing, of each of the following conditions:

 

(a)         Representations and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material respects as of the date when made and as of the applicable Closing Date for the Closing of such Tranche as though made on and as of such date;

 

(b)         Performance. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to such Closing;

 

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(c)         No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents;

 

(d)         Company Deliverables. The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a).

 

(e)         HSR Act. All applicable waiting periods, if any, in respect of the transactions contemplated in the Transaction Documents under the HSR Act will have expired or terminated.

 

5.2.          Conditions Precedent to the Obligations of the Company to sell Securities. The obligation of the Company to sell Securities to each Purchaser at the Closing for each Tranche is subject to the satisfaction or waiver by the Company, at or before such Closing, of each of the following conditions:

 

(a)         Representations and Warranties. The representations and warranties made by each Purchaser contained herein shall be true and correct in all material respects as of the date when made and as of the applicable Closing Date for the Closing of such Tranche as though made on and as of such date;

 

(b)         Performance. Such Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by such Purchaser at or prior to such Closing;

 

(c)         No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents; and

 

(d)         Purchaser Deliverables. Such Purchaser shall have delivered its Purchaser Deliverables in accordance with Section 2.2(b).

 

(e)         HSR Act. All applicable waiting periods for all Purchasers, if any, in respect of the transactions contemplated in the Transaction Documents under the HSR Act will have expired or terminated.

 

ARTICLE 6.

MISCELLANEOUS

 

6.1.          Fees and Expenses. Each of the Company and the respective Purchasers has relied on the advice of its own respective counsel. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement; provided, that the Company shall reimburse the Lead Purchaser for the filing fees and reasonable attorneys’ fees incurred in connection with the preparation and filing of any Notification and Report Forms and accompanying materials required to be filed under the HSR Act that cover and/or allow the acquisition of the Securities by the Lead Purchaser, including any required corrective filings and accompanying explanatory letters (the “Applicable HSR Filings”); provided, further, that for the avoidance of doubt, in no event will such required reimbursement include (i) any penalties or fines imposed on the Lead Purchaser due to any violation(s) of the HSR Act or (ii) any legal fees arising in connection with any such violations, including in connection with the preparation and filing of a corrective Notification and Report Form under the HSR Act relating to any such violation(s).

 

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6.2.          Entire Agreement. The Transaction Documents contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations, oral or written, with respect to such matters. At or after each Closing, and without further consideration, the Company and the Purchasers will execute and deliver to the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents.

 

6.3.          Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, sent by electronic mail, telecopied (upon telephonic confirmation of receipt), on the first Business Day following the date of dispatch if delivered by a recognized next day courier service, or on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

 

If to the Company: Accelerate Diagnostics, Inc.
3950 S. Country Club Rd. #470
Tucson, AZ 85714
Fax: (520) 269-6580
E-mail: mbridge@axdx.com
Attn: Michael Bridge

 

with a copy to: Snell & Wilmer L.L.P.
One Arizona Center
400 East Van Buren
Phoenix, AZ 85004-2202
Fax: (602) 382-6070
Attn: Dan Mahoney and Joshua Schneiderman

 

If to a Purchaser:                To the address set forth under such Purchaser’s name on Annex I attached hereto.

 

6.4.          Amendments; Waivers; No Additional Consideration. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and the Purchasers. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

 

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6.5.          Termination. This Agreement may be terminated prior to the Closing Date for the first Tranche on a Purchaser-by-Purchaser basis:

 

(a)         by written agreement of such Purchaser and the Company; or

 

(b)         by the Company or such Purchaser upon written notice to the other, if the first Closing shall not have taken place by 6:30 p.m. Eastern time on the Outside Date; provided, that in the event the first Closing shall not have occurred by such time due to the Purchasers’ failure to satisfy the conditions set forth in Section 5.2(e) relating to the HSR Act, the deadline for purposes of this Section 6.5(b) shall be extended to 6:30 p.m. Eastern time on the fifth Business Day following such date that all applicable waiting periods for all Purchasers, if any, in respect of the transactions contemplated in the Transaction Documents under the HSR Act will have expired or terminated; provided, further, that the right to terminate this Agreement under this Section 6.5(b) shall not be available to any Person whose failure to comply with its obligations under this Agreement has been the cause of or resulted in the failure of such Closing to occur on or before such time.

 

Upon a termination in accordance with this Section 6.5, the Company and such Purchaser shall not have any further obligation or liability (including as arising from such termination) to the other.

 

6.6.          Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties and their counsel to express their mutual intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

 

6.7.          Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. This Agreement, or any rights or obligations hereunder, may not be assigned by the Company (except by merger or in connection with another entity acquiring all or substantially all of the Company’s assets) without the prior written consent of each Purchaser. Any Purchaser may assign its rights hereunder in whole or in part to any Person to whom such Purchaser assigns or transfers any Securities in compliance with the Transaction Documents and applicable law; provided, that such transferee shall agree in writing to be bound by the terms and conditions of the Transaction Documents and provides written notice of assignment to the Company promptly after such assignment is effected.

 

6.8.          No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

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6.9.          Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement and any other Transaction Document shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Document (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the New York courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Agreement and any other Transaction Document), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement and any other Transaction Document, or the transactions contemplated thereby. If a party shall commence a Proceeding to enforce any provisions of this Agreement or any other Transaction Document, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

 

6.10.        Survival. The representations, warranties, agreements and covenants contained herein shall survive the Closing Date for the third Tranche and the delivery of the Securities for a period of one (1) year thereafter, after which time they shall expire and be of no further force or effect.

 

6.11.        Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

6.12.        Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

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6.13.        Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities. If a replacement certificate or instrument evidencing any Securities is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.

 

6.14.        Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

  “COMPANY”:
  ACCELERATE DIAGNOSTICS, INC.,
  a Delaware corporation
   
  /s/ Michael Bridge
  Name: Michael Bridge
  Title: Senior Vice President and General Counsel

 

  “PURCHASERS”:
  Jack W. Schuler Living Trust
   
  /s/ Jack W. Schuler
  Name: Jack W. Schuler
  Title: President

 

  John Patience Trust, dated July 23, 1993
   
  /s/ John Patience
  Name: John Patience
  Title: Trustee

 

  Birchview Fund, LLC
   
  /s/ Matthew Strobeck
  Name: Matthew Strobeck
  Title: Managing Partner

 

  Mark C. Miller Trust, dated April 26, 2002
   
  /s/ Mark C. Miller
  Name: Mark C. Miller
  Title: Trustee

 

  Thomas D. Brown
   
  /s/ Thomas D. Brown
  Name: Thomas D. Brown

 

  John J. Phillips
   
  /s/ Jack Phillips
  Name: Jack Phillips

 

 

 

 

ANNEX I

 

SCHEDULE OF PURCHASERS

 

Name and Address   Investment Amount     Number of Securities Purchased  
Jack W. Schuler Living Trust
100 N. Field Drive
Suite 360
Lake Forest, IL 60045
  $ 30,450,000       3,964,843  
John Patience Trust, dated July 23, 1993
3550 E. Placita De La Raza
Tucson, AZ 85715
  $ 500,000       65,104  
Birchview Fund, LLC
688 Pine Street
Suite D
Burlington, VT
  $ 450,000       58,593  
Mark C. Miller Trust, dated April 26, 2002
1520 Artaius Parkway
#7350
Libertyville, IL 60048
  $ 300,000       39,062  
Thomas D. Brown
29890 Tanya Trail
Libertyville, IL 60048
  $ 200,000       26,041  
John J. Phillips
3950 S. Country Club Road
#470
Tucson, AZ 85714
  $ 100,000       13,020  
Totals:   $ 32,000,000       4,166,663  

 

 

 

 

EXHIBIT A

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

 

 

 

Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is dated as of December 24, 2020, by and among Accelerate Diagnostics, Inc., a Delaware corporation (the “Company”), and the several Purchasers (as defined below) signatory hereto.

 

WHEREAS, contemporaneously with the execution and delivery of this Agreement, the parties hereto have entered into that certain Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), pursuant to which the Company desires to issue and sell to the Purchasers, and the Purchasers desire to purchase from the Company, certain securities of the Company for which the Company has agreed to provide registration rights.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

 

ARTICLE 1.

DEFINITIONS

 

1.1.            Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

 

Agreement” has the meaning set forth in the Preamble.

 

Company” has the meaning set forth in the Preamble.

 

Cut Back Shares” has the meaning set forth in Section 2.4.

 

Commission Restrictions” has the meaning set forth in Section 2.4.

 

Effective Period” has the meaning set forth in Section 3.1(a).

 

Filing Deadline” means the 90th calendar day following the Closing Date for the third Tranche; provided, that if the Filing Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Filing Deadline shall be extended to the next business day on which the Commission is open for business.

 

FINRA” means the Financial Industry Regulatory Authority, Inc.

 

Prospectus” means (i) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and (ii) any “free writing prospectus” as defined in Rule 405 under the Securities Act.

 

 

 

 

Public Offering” means the offer and sale of Registrable Securities for cash pursuant to an effective Registration Statement under the Securities Act (other than a Registration Statement on Form S-4 or Form S-8 or any successor form).

 

Purchase Agreement” has the meaning set forth in the Recitals.

 

“Purchaser” means each Purchaser identified in the Purchase Agreement and any affiliate or permitted transferee of any Purchaser who is a subsequent holder of Registrable Securities.

 

Register,” “registered” and “registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such Registration Statement or document.

 

Registrable Securities” means (i) the Securities and (ii) all securities directly or indirectly issued with respect to the Securities by way of a stock dividend or stock split, or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (w) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such Registration Statement, (x) such securities shall have been transferred pursuant to Rule 144, (y) such holder is able to immediately sell all of such securities under Rule 144 without any restrictions on transfer (including without application of paragraphs (c), (d), (e), (f) and (h) of Rule 144), as reasonably determined by the Company, upon the advice of counsel to the Company, or (z) such securities shall have ceased to be outstanding.

 

Registration Statement” means any registration statement of the Company under the Securities Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

 

Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

Underwritten Public Offering” means an underwritten Public Offering, including any bought deal or block sale to a financial institution conducted as an underwritten Public Offering.

 

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ARTICLE 2.

REGISTRATION

 

2.1.            Registration Statement.

 

(a)               On or prior to the Filing Deadline, the Company shall prepare and file with the Commission one Registration Statement covering the resale of all of the Registrable Securities. Each Registration Statement filed hereunder shall be on Form S-3 and for an offering to be made on a continuous basis pursuant to Rule 415 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith, subject to the provisions of Section 2.1(b)) and, subject to any Commission comments, such Registration Statement shall include the plan of distribution attached hereto as Exhibit A; provided, that no Purchaser shall be named as an “underwriter” in such Registration Statement without such Purchaser’s prior written consent. Such Registration Statement also shall cover, to the extent allowable under the Securities Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities. Such Registration Statement (and each amendment or supplement thereto) shall be provided in accordance with Section 3.1(c) to each Purchaser prior to its filing or other submission.

 

(b)               If Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.

 

2.2.            Expenses. All expenses incident to the Company’s performance of or compliance with this Agreement (excluding any underwriting discounts and selling commissions and all legal fees and expenses of legal counsel for any Purchaser, which shall be borne solely by the Purchasers) shall be paid by the Company, including (i) all registration and filing fees, and any other fees and expenses associated with filings required to be made with the Commission or FINRA, (ii) all fees and expenses in connection with compliance with any securities or “Blue Sky” laws, (iii) all printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing prospectuses), (iv) all fees and disbursements of counsel for the Company and of all independent certified public accountants or independent auditors of the Company and any subsidiaries of the Company (including the expenses of any special audit and comfort letters required by or incident to such performance), (v) Securities Act liability insurance or similar insurance if the Company so desires, (vi) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange or quotation of the Registrable Securities on any inter-dealer quotation system, (vii) all reasonable fees and expenses of any other Persons retained by the Company in connection with any Registration Statement or sale, and (viii) all of the Company’s internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties). To the extent that underwriting discounts and selling commissions are incurred in connection with the sale of Registrable Securities in an Underwritten Public Offering hereunder, such underwriting discounts and selling commissions shall be borne solely by each Purchaser, as applicable.

 

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2.3.            Effectiveness.

 

(a)               The Company shall use reasonable best efforts to have any Registration Statement declared effective as soon as practicable after the filing. The Company shall respond promptly to any and all comments made by the staff of the SEC on any Registration Statement, and shall submit to the SEC, within two (2) business days after the Company learns that no review of the Registration Statement will be made by the staff of the SEC or that the staff of the SEC has no further comments on such Registration Statement, as the case may be, a request for acceleration of the effectiveness of such Registration Statement to a time and date not later than two business days after the submission of such request. The Company shall notify each Purchaser by facsimile or e-mail as promptly as practicable, and in any event, within 24 hours, after any such Registration Statement is declared effective and shall, upon request, provide each Purchaser with copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby.

 

(b)               Notwithstanding anything to the contrary contained herein, the Company may, upon written notice to any holder of Registrable Securities included in a Registration Statement, suspend the use of any Registration Statement, including any Prospectus that forms a part of a Registration Statement, if the Company (X) determines that it would be required to make disclosure of material information in the Registration Statement that the Company has a bona fide business purpose for preserving as confidential, (Y) determines it must amend or supplement the Registration Statement or the related Prospectus so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances under which they were made, not misleading or (Z) has experienced or is experiencing some other material non-public event, including a pending transaction involving the Company, the disclosure of which at such time, in the good faith judgment of the Company, would adversely affect the Company; provided, however, in no event shall holders of Registrable Securities be suspended from selling Registrable Securities pursuant to the Registration Statement for a period that exceeds 30 consecutive Business Days or 60 total Business Days in any 360-day period. Upon disclosure of such information or the termination of the condition described above, the Company shall provide prompt notice to holders whose Registrable Securities are included in the Registration Statement, and shall promptly terminate any suspension of sales it has put into effect and shall take such other reasonable actions to permit registered sales of Registrable Securities as contemplated hereby.

 

2.4.            Rule 415; Cutback. If at any time the SEC takes the position that the offering of some or all of the Registrable Securities in a Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415, the Company shall (i) remove from the Registration Statement such portion of the Registrable Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the SEC may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “Commission Restrictions”); provided, however, that the Company shall not agree to name any Purchaser as an “underwriter” in such Registration Statement without the prior written consent of such Purchaser. From and after such date as the Company is able to effect the registration of such Cut Back Shares in accordance with any Commission Restrictions applicable to such Cut Back Shares, all of the provisions of this Article 2 (including the Company’s obligations with respect to the filing of a Registration Statement and its obligations to use reasonable best efforts to have such Registration Statement declared effective within the time periods set forth herein) shall again be applicable to such Cut Back Shares; provided, however, that the Filing Deadline for the Registration Statement including such Cut Back Shares shall be 30 Business Days after such Restriction Termination Date.

 

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2.5.            Other Limitations. Notwithstanding any other provision herein or in the Purchase Agreement, the applicable filing deadline for a Registration Statement shall be extended in the event that the Company’s failure to make such filing results solely and directly from the failure of a Purchaser to timely provide the Company with information requested by the Company in writing as being necessary to complete a Registration Statement in accordance with the requirements of the 1933 Act (in which case any such deadline would be extended with respect to all Registrable Securities during the period from the date of such written request until such time as such Purchaser provides such requested information).

 

ARTICLE 3.

REGISTRATION PROCEDURES

 

3.1.            Obligations of the Company. In connection with the registration of the Securities,, the Company shall:

 

(a)               use reasonable best efforts to cause each such Registration Statement to become effective and to remain continuously effective until such time as the earlier of: (i) there are no longer Registrable Securities held by such Purchaser, or (ii) all of the Registrable Securities of such Purchaser can be sold pursuant to Rule 144 without regard to the volume-of-sale limitations imposed under Rule 144(e) (the “Effectiveness Period”) and advise such Purchaser promptly in writing when the Effectiveness Period has expired;

 

(b)               prepare and file with the SEC such amendments and post-effective amendments to such Registration Statement and the related Prospectus as may be necessary to keep such Registration Statement effective for the Effectiveness Period and to comply with the provisions of the Securities Act and the Exchange Act with respect to the distribution of all of the Registrable Securities covered thereby;

 

(c)               provide copies to such Purchaser and permit such Purchaser’s legal counsel to review each Registration Statement and all amendments and supplements at least four (4) business days in advance of their filing with the SEC; provided, that the Company shall duly consider any comments received no later than two (2) business days prior to the filing of such Registration Statement, amendment or supplement, but shall not be required to accept any such comments to which it reasonably objects;

 

(d)               if requested by a Purchaser, furnish to such Purchaser and its legal counsel (i) immediately after the same is prepared and publicly distributed, filed with the SEC, or received by the Company (but not later than 24 hours after the filing date, receipt date or sending date, as the case may be) one (1) copy of any Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion of any thereof which contains information for which the Company has sought confidential treatment or it reasonably believes would constitute material and non-public information) and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as such Purchaser may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Purchaser that are covered by the related Registration Statement; provided, however, that the Company shall have no obligation to provide any document pursuant to this clause that is available on the Commission’s EDGAR system;

 

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(e)               use reasonable best efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest possible moment and to notify such Purchaser of the issuance of such order and the resolution thereof;

 

(f)                use reasonable best efforts to register or qualify (unless an exemption from the registration or qualification exists) or cooperate with such Purchaser and its counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or “Blue Sky” laws of such domestic jurisdictions as are reasonably requested by such Purchaser and do any and all other reasonable acts or filings necessary or advisable to enable a distribution in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3.1(f), (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be so subject but for this Section 3.1(f), or (iii) file a general consent to service of process in any such jurisdictions;

 

(g)               promptly notify such Purchaser, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as a result of which, the Prospectus includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and as promptly as reasonably possible prepare, file with the SEC and furnish to such holder a supplement to or an amendment of such Prospectus as may be necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

 

(h)               otherwise use reasonable best efforts to comply with all applicable rules and regulations of the SEC under the Securities Act and the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement or amendment thereof, with the SEC pursuant to Rule 424 under the Securities Act, promptly inform such Purchaser in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, such Purchaser is required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and

 

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(i)                 if requested by a Purchaser, cooperate with such Purchaser to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to an effective Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreement and applicable law, of all restrictive legends, and to enable such certificates to be in such denominations and registered in such names as any such Purchaser may request.

 

3.2.            Obligations of Each Purchaser. In connection with the registration of the Securities, each Purchaser shall:

 

(a)               furnish in writing to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request. At least five (5) business days prior to the first anticipated filing date of any Registration Statement, the Company shall notify each Purchaser of the information the Company requires from such Purchaser if the Purchaser is to have any of the Registrable Securities included in such Registration Statement. Such Purchaser shall provide such information to the Company at least two (2) business days prior to the first anticipated filing date of such Registration Statement if such Purchaser is to have any of the Registrable Securities included in such Registration Statement. If such Purchaser fails to provide to the Company the information required by this Section 3.2(a) by such date, the Company shall not be obligated to include such Purchaser’s Registrable Securities in such Registration Statement and shall have no obligation to register such Registrable Securities under the Securities Act; and

 

(b)               by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of a Registration Statement hereunder, unless such Purchaser has notified the Company in writing of its election to exclude all of its Registrable Securities from such Registration Statement.

 

ARTICLE 4.

INDEMNIFICATION

 

4.1.            Indemnification by the Company. The Company will indemnify and hold each Purchaser Party harmless from any and all Losses to which it may become subject under the Securities Act or otherwise, insofar as such Losses arise out of or are based upon (i) any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof (it being understood that each Purchaser has approved Exhibit A hereto for this purpose) or (ii) any violation by the Company of any rule or regulation promulgated under the Securities Act or Exchange Act applicable to the Company and relating to action or inaction required of the Company in connection with such registration; provided, however, that the Company will not be liable in any such case if and to the extent that any such Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished on behalf of a Purchaser in writing specifically for use in such Registration Statement or Prospectus; and provided, further, that the foregoing indemnity shall not apply to amounts paid in settlement of any Losses if such settlement is effected without the consent of the Company.

 

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4.2.            Indemnification by the Purchasers. Each Purchaser, for any Registration Statement in which it is named as a selling stockholder, will, severally and not jointly, indemnify and hold each Company Party harmless from any and all Losses resulting from any untrue statement of a material fact or any omission of a material fact required to be stated in the Registration Statement or Prospectus or preliminary Prospectus or amendment or supplement thereto or necessary to make the statements therein not misleading, to the extent, but only to the extent that such untrue statement or omission is contained in any information furnished in writing on behalf of such Purchaser to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto and has not been corrected in a subsequent writing prior to the sale of the Registrable Securities thereunder; provided, however, that the foregoing indemnity shall not apply to amounts paid in settlement of any Losses if such settlement is effected without the consent of such Purchaser. In no event shall the liability of any Purchaser be greater in amount than the dollar amount of the proceeds (net of all expense paid by such Purchaser in connection with any claim relating to this Article 4 and the amount of any damages such Purchaser has otherwise been required to pay by reason of such untrue statement or omission) received by such Purchaser upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.

 

4.3.            Conduct of Indemnification Proceedings. Any Person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, that any Person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (a) the indemnifying party has agreed to pay such fees or expenses, (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such Person or (c) in the reasonable judgment of any such Person, based upon written advice of its counsel, a conflict of interest exists between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, which shall not be unreasonably withheld or conditioned, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.

 

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4.4.            Contribution. If for any reason the indemnification provided for in Section 4.1 and Section 4.2 is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. Relative fault shall be determined by reference to whether any alleged untrue statement or omission relates to information provided by the Company or by a holder of Registrable Securities. No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation. In no event shall the contribution obligation of any Purchaser be greater in amount than the dollar amount of the proceeds (net of all expense paid by such Purchaser in connection with any claim relating to this Article 4 and the amount of any damages such Purchaser has otherwise been required to pay by reason of such untrue statement or omission) received by such Purchaser upon the sale of the Registrable Securities included in the Registration Statement giving rise to such contribution obligation.

 

ARTICLE 5.

MISCELLANEOUS

 

5.1.            Notices. All notices and other communications provided for or permitted hereunder shall be made as set forth in the Purchase Agreement.

 

5.2.            Amendments; Waivers; No Additional Consideration. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and Purchasers holding no less than a majority of the then outstanding Registrable Securities. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

 

5.3.            Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties and their counsel to express their mutual intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

 

5.4.            Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. This Agreement, or any rights or obligations hereunder, may not be assigned by the Company (except by merger or in connection with another entity acquiring all or substantially all of the Company’s assets) without the prior written consent of each Purchaser. Any Purchaser may assign its rights hereunder in whole or in part to any Person to whom such Purchaser assigns or transfers any Securities in compliance with the Transaction Documents and applicable law; provided, that such transferee shall agree in writing to be bound by the terms and conditions of the Transaction Documents and provides written notice of assignment to the Company promptly after such assignment is effected.

 

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5.5.            No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

5.6.            Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Purchase Agreement.

 

5.7.            Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

5.8.            Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

5.9.            Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

  “COMPANY”:
  ACCELERATE DIAGNOSTICS, INC.,
  a Delaware corporation
   
  /s/ Michael Bridge
  Name: Michael Bridge
  Title: Senior Vice President and General Counsel

 

  “PURCHASERS”:
  Jack W. Schuler Living Trust
   
  /s/ Jack W. Schuler
  Name: Jack W. Schuler
  Title: President

 

  John Patience Trust, dated July 23, 1993
   
  /s/ John Patience
  Name: John Patience
  Title: Trustee

 

  Birchview Fund, LLC
   
  /s/ Matthew Strobeck
  Name: Matthew Strobeck
  Title: Managing Partner

 

  Mark C. Miller Trust, dated April 26, 2002
   
  /s/ Mark C. Miller
  Name: Mark C. Miller
  Title: Trustee

 

  Thomas D. Brown
   
  /s/ Thomas D. Brown
  Name: Thomas D. Brown

 

  John J. Phillips
   
  /s/ Jack Phillips
  Name: Jack Phillips

 

 

 

EXHIBIT A

 

PLAN OF DISTRIBUTION

 

The selling stockholders and any of their pledgees, donees, transferees, assignees or other successors-in-interest may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.

 

The selling stockholders may use one or more of the following methods when disposing of the shares or interests therein:

 

· ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

· block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

 

· through brokers, dealers or underwriters that may act solely as agents;

 

· purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

· an exchange distribution in accordance with the rules of the applicable exchange;

 

· privately negotiated transactions;

 

· through the writing or settlement of options or other hedging transactions entered into after the effective date of the registration statement of which this prospectus is a part, whether through an options exchange or otherwise;

 

· broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

 

· a combination of any such methods of disposition; and

 

· any other method permitted pursuant to applicable law.

 

The selling stockholders may also sell shares under Rule 144 or Rule 904 under the Securities Act of 1933, as amended, or Securities Act, if available, or Section 4(a)(1) under the Securities Act, rather than under this prospectus.

 

 

 

Broker-dealers engaged by the selling stockholders may arrange for other broker-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.

 

The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell shares of common stock from time to time under this prospectus, or under a supplement or amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.

 

Upon being notified in writing by a selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of common stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, we will file a supplement to this prospectus, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such shares of common stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon being notified in writing by a selling stockholder that a donee or pledge intends to sell more than 500 shares of common stock, we will file a supplement to this prospectus if then required in accordance with applicable securities law.

 

The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

 

In connection with the sale of the shares of common stock or interests in shares of common stock, the selling stockholders may enter into hedging transactions after the effective date of the registration statement of which this prospectus is a part with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of common stock short after the effective date of the registration statement of which this prospectus is a part and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other transactions after the effective date of the registration statement of which this prospectus is a part with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

 

 

 

 

The selling stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The maximum commission or discount to be received by any member of the Financial Industry Regulatory Authority (FINRA) or independent broker-dealer will not be greater than 8% of the initial gross proceeds from the sale of any security being sold.

 

We have advised the selling stockholders that they are required to comply with Regulation M promulgated under the Securities Exchange Act of 1934, as amended, during such time as they may be engaged in a distribution of the shares. The foregoing may affect the marketability of the common stock.

 

The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering.

 

We are required to pay all fees and expenses incident to the registration of the shares. We have agreed to indemnify the selling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act or otherwise.

 

We have agreed with the selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier of (a) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement or (b) the date on which the shares of common stock covered by this prospectus may be sold or transferred pursuant to Rule 144 under the Securities Act without any volume limitations under such rule.