EXHIBIT 1.1
Palatin Technologies, Inc.
11,481,481 Series A Units Consisting of One Share of Common Stock and One Series H
Warrant to Purchase 0.75 of a Share of Common Stock
2,218,045 Series B Units Consisting of One Pre-Funded Series I Warrant to Purchase One
Share of Common Stock and One Series H Warrant to Purchase 0.75 of a Share of
Common Stock
Underwriting Agreement
August 1, 2016
Canaccord Genuity Inc.
As Representative of the several Underwriters
listed in
Schedule 1
hereto
99 High Street, 11th Floor
Boston, Massachusetts 02110
Ladies and Gentlemen:
Palatin Technologies, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the several Underwriters listed in
Schedule 1
hereto (the “Underwriters”), for whom you are acting as representative (the “Representative”), an aggregate of (a) 11,481,481
Series A units (the “Series A Units”), each Series A Unit consisting of (i) one share (each, a “Share”) of common stock, $0.01 par value per share, of the Company (the “Common Stock”) and (ii) one Series H warrant to purchase 0.75 of a share of Common Stock at an exercise price equal to $0.70 per share (each, a “Series H Warrant”) and (b) 2,218,045 Series B units (the “Series B Units” and together with the Series A Units, the “Units”), each
Series B Unit consisting of (i) one pre-funded warrant to purchase one share of Common Stock at an exercise price equal to $0.01 per share (each a “Series I Warrant” and together with the Series H Warrants, the “Warrants”) and (ii) one Series H Warrant. The shares of Common Stock underlying the Warrants are referred to herein as the “Warrant Shares.” The Shares, Warrants and Warrant Shares are described in the Prospectus that is referred to below. The Units will not be issued
or certificated. The Shares and the Series H Warrants comprising the Series A Units are immediately separable and will be issued separately, but will be purchased together in the offering. The Series I Warrants and the Series H Warrants comprising the Series B Units are immediately separable and will be issued separately, but will be purchased together in the offering.
The Company hereby confirms its agreement with the several Underwriters concerning the purchase and sale of the Units, as follows:
1.
Registration Statement
. The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively, the “Securities Act”), a registration statement on Form S-3 (File No. 333-206047), including a prospectus, relating to the Units. Such registration statement, as amended, at the time it became effective, including the information, if any, deemed pursuant to Rule 430A, 430B or 430C under the Securities Act to be part of the registration statement at the time of its effectiveness (“Rule 430 Information”), is referred to herein as
the “Registration Statement”; and as used herein, the term “Preliminary Prospectus” means each prospectus included in such registration statement (and any amendments thereto) before effectiveness, any prospectus filed with the Commission pursuant to Rule 424(a) under the Securities Act and the prospectus included in the Registration Statement at the time of its effectiveness that omits Rule 430 Information, and the term “Prospectus” means the prospectus in the form first used
(or made available upon request of purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation of sales of the Units. If the Company has filed an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term “Registration Statement” shall be deemed to include such Rule 462 Registration Statement. Any reference in this Agreement to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act, as of the effective date of the Registration Statement or the date of such Preliminary Prospectus or the Prospectus, as the case may be and any reference to “amend”, “amendment” or “supplement” with respect to the Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after such date under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Exchange Act”) that are deemed to be incorporated by reference therein. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Registration Statement and the Prospectus.
At or prior to the Applicable Time (as defined below), the Company had prepared the following information (collectively, the “Pricing Disclosure Package”): (a) each “free-writing prospectus” (as defined pursuant to Rule 405 under the Securities Act) listed on
Annex A
hereto and
(b) the pricing information listed on
Annex B
hereto.
“Applicable Time” means 5:00 p.m. New York City time, on August 1, 2016.
2.
Purchase of the Units by the Underwriters
.
The Company agrees to issue and sell the Units to the several Underwriters as provided in this Agreement, and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase at a price for each Unit (the “Purchase Price”)
of $0.6345 for the Series A Units and $0.6251 for the Series B Units from the Company the respective number of Units set forth opposite such Underwriter’s name in
Schedule 1
hereto.
(a)
The Company understands that the Underwriters intend to make a public offering of the Units as soon after the effectiveness of this Agreement as in the judgment of the Representative is advisable, and initially to offer the Units on the terms
set forth in the Prospectus. The Company acknowledges and agrees that the Underwriters may offer and sell Units to or through any affiliate of an Underwriter.
(b)
Payment for the Units shall be made by wire transfer in immediately available funds to the accounts specified by the Company to the Representative, at the offices of Goodwin Procter LLP at 10:00 a.m., New York City time, on August 4, 2016,
or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representative and the Company may agree upon in writing. The time and date of such payment for the Units is referred to herein as the “Closing Date.”
Payment for the Units to be purchased on the Closing Date shall be made against delivery to the Representative for the respective accounts of the several Underwriters of the Units to be purchased on such date with any transfer taxes payable in connection with the sale of such Units duly paid by the Company. The Shares shall be delivered to the Underwriters
through the facilities of The Depository Trust Company (“DTC”) for the account of the Underwriters. The Warrants shall be delivered by the Company in physical certificated form to the purchasers, in each case in such names and in such denominations as the Representative may direct by notice in writing to the Company given not later than 1:00 p.m., New York City time, on business day prior to the Closing Date.
(c)
The Company acknowledges and agrees that the Underwriters are acting solely in the capacity of an arm’s length contractual counterparty to the Company with respect to the offering of Units contemplated hereby (including in connection
with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person. Additionally, neither the Representative nor any other Underwriter is advising the Company or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriters shall have no responsibility or liability to the Company with respect thereto. Any review by the Underwriters of the Company, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Underwriters and shall not be on behalf of the Company.
3.
Representations and Warranties of the Company
. The Company represents and warrants to each Underwriter that:
(a)
Preliminary Prospectus.
No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus included in the Pricing Disclosure Package,
at the time of filing thereof, complied in all material respects with the Securities Act, and no Preliminary Prospectus, at the time of filing thereof, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
provided
that the Company makes no representation and warranty with respect to any statements or omissions
made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representative expressly for use in any Preliminary Prospectus, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 7(b) hereof.
(b)
Pricing Disclosure Package
. The Pricing Disclosure Package as of the Applicable Time did not, and as of the Closing Date, will not, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
provided
that the Company makes no representation and warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representative expressly for use in such Pricing Disclosure Package,
it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 7(b) hereof.
(c)
Issuer Free Writing Prospectus.
Other than the Registration Statement, the Preliminary Prospectus and the Prospectus, the Company (including its agents and representatives,
other than the Underwriters in their capacity as such) has not prepared, used, authorized, approved or referred to and will not prepare, use, authorize, approve or refer to any “written communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Units (each such communication by the Company or its agents and representatives (other than a communication referred to in clause (i) below) an “Issuer Free Writing Prospectus”)
other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act or (ii) the documents listed on
Annex A
hereto, each electronic road show and any other written communications approved in writing in advance by the Representative. Each such Issuer Free Writing Prospectus complied in all material respects with the Securities Act, has been or will be (within the time period specified
in Rule 433) filed in accordance with the Securities Act (to the extent required thereby) and, when taken together with the Preliminary Prospectus accompanying, or delivered prior to delivery of, such Issuer Free Writing Prospectus, did not, and as of the Closing Date, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
provided
that
the Company makes no representation and warranty with respect to any statements or omissions made in each such Issuer Free Writing Prospectus or Preliminary Prospectus in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representative expressly for use in such Issuer Free Writing Prospectus or Preliminary Prospectus, it being understood and agreed that the only such information furnished by any Underwriter consists
of the information described as such in Section 7(b) hereof.
(d)
Registration Statement and Prospectus.
The Registration Statement has been declared effective by the Commission. No order suspending the effectiveness of the Registration
Statement has been issued by the Commission, and no proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Company or related to the offering of the Units has been initiated or, to the knowledge of the Company, threatened by the Commission. As of the applicable effective date of the Registration Statement and any post-effective amendment thereto, the Registration Statement and any such post-effective amendment complied and will comply in all material respects with the Securities
Act, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as of the Closing Date, the Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading;
provided
that the Company makes no representation and warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representative expressly for use in the Registration Statement and the Prospectus and any amendment or supplement thereto, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in Section 7(b) hereof. The proposed offering of the Units will be made pursuant to General Instruction I.B.6. of Form S-3. The aggregate market value of securities sold by or on behalf of the Company under the Registration Statement during the 12 month period immediately prior to, and including, the sale of the Units pursuant to this Agreement is no more than one-third of the aggregate market value of the voting and non-voting common
equity held by non-affiliates of the Company, as determined pursuant to General Instruction I.B.6 of Form S-3.
(e)
Incorporated Documents.
The documents incorporated by reference in the Registration Statement, the Prospectus and the Pricing Disclosure Package, when they were filed with the Commission conformed in
all material respects to the requirements of the Exchange Act, and none of such documents contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statement, the Prospectus or the Pricing Disclosure Package, when such documents are filed with the Commission will conform in all material
respects to the requirements of the Exchange Act and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f)
Financial Statements.
The financial statements (including the related notes thereto) of the Company included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package
and the Prospectus comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as applicable, and present fairly, in all material respects, the financial position of the Company as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis throughout
the periods covered thereby (except as otherwise stated therein and subject in the case of unaudited financial statements to the absence of footnotes and normal year end adjustments), and any supporting schedules included or incorporated by reference in the Registration Statement present fairly, in all material respects, the information required to be stated therein; and the other financial information regarding the Company included or incorporated by reference in the Registration Statement, the Pricing Disclosure
Package and the Prospectus has been derived from the accounting records of the Company and presents fairly, in all material respects, the information shown thereby.
(g)
No Material Adverse Change.
Since the date of the most recent financial statements of the Company included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and
the Prospectus, (i) there has not been any change in the capital stock (other than the issuance of shares of Common Stock upon exercise of stock options and warrants described as outstanding in, and the grant of options, restricted stock units and awards under existing equity incentive plans described in, the Registration Statement, the Pricing Disclosure Package and the Prospectus), short-term debt or long-term debt of the Company, or any dividend or distribution of any kind declared, set aside for payment,
paid or made by the Company on any class of capital stock, or any material adverse change, or any development that would reasonably be expected to result in a material adverse change, in or affecting the business, properties, management, financial position, shareholders’ equity, results of operations or prospects of the Company; (ii) the Company has not entered into any transaction or agreement (whether or not in the ordinary course of business) that is material to the Company or incurred any liability
or obligation, direct or contingent, that is material to the Company; and (iii) the Company has not sustained any loss or interference with its business that is material to the Company and that is either from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, except in each case as otherwise disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus.
(h)
Organization and Good Standing.
The Company is duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority
necessary to hold its properties and conduct its business where it is engaged, except where the failure to be so qualified or in good standing or have such power or authority would not have a material adverse effect on the business, properties, management, financial position, shareholders’ equity, results of operations or prospects of the Company or on the performance by the Company of its obligations under this Agreement (a “Material Adverse Effect”). The Company does not own, directly or indirectly,
any shares of stock or any other equity interests or long-term debt securities of any corporation, firm, partnership, joint venture, association or other entity other than RhoMed Incorporated.
(i)
Capitalization.
The Company has an authorized capitalization as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus. All the outstanding shares of capital stock
of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any pre-emptive or similar rights; except as described in or expressly contemplated by the Pricing Disclosure Package and the Prospectus, there are no outstanding rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company, or any contract,
commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of the Company, any such convertible or exchangeable securities or any such rights, warrants or options; the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(j)
Stock Options.
With respect to the stock options (the “Stock Options”) granted pursuant to the stock-based compensation plans of the Company (the “Company Stock Plans”),
(i) each Stock Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies, (ii) each grant of a Stock Option was duly authorized no later than the date on which the grant of such Stock Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the board of directors of the Company (or a duly constituted and authorized committee thereof) and any required shareholder approval
by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto, (iii) each such grant was made in accordance with the terms of the Company Stock Plans, the Exchange Act and all other applicable laws and regulatory rules or requirements, including the rules of the NYSE MKT and any other exchange on which Company securities are traded, and (iv) each such grant was properly accounted for in accordance with GAAP in
the financial statements (including the related notes) of the Company and, to the extent granted on or prior July 1, 2015,
disclosed in the Company’s filings with the Commission in accordance with the Exchange Act and all other applicable laws. The Company has not knowingly granted, and there is no and has been no policy or practice of the Company of granting, Stock Options prior to, or otherwise coordinating the grant of Stock Options with, the release or other public announcement of material information regarding the Company or its results of operations or prospects.
(k)
Due Authorization.
The Company has full right, power and authority to execute and deliver this Agreement; and all action required to be taken for the due and proper authorization, execution and delivery
by it of this Agreement and the consummation by it of the transactions contemplated hereby has been duly and validly taken.
(l)
Underwriting Agreement.
This Agreement has been duly authorized, executed and delivered by the Company.
(m)
The Shares.
The Shares to be issued and sold by the Company hereunder have been duly authorized by the Company and, when issued and delivered and paid for as provided herein, will be duly and validly
issued, will be fully paid and nonassessable and will conform to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package and the Prospectus; and the issuance of the Shares is not subject to any preemptive or similar rights.
(n)
The Warrants.
The Warrants to be issued and sold by the Company hereunder, when executed and delivered pursuant to the terms of this Agreement, will be duly authorized, executed and delivered by the
Company and will conform to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(o)
The Warrant Shares
. The Warrant Shares have been duly authorized and reserved for issuance pursuant to the terms of the Warrants, and when issued by the Company upon valid exercise of the Warrants and
payment of the exercise price, will be duly and validly issued, will be fully paid and nonassessable and will conform to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package and the Prospectus; and the issuance of the Warrant Shares is not subject to any preemptive or similar rights.
(p)
No Violation or Default.
The Company is not (i) in violation of its charter or by-laws; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any
court or arbitrator or governmental or regulatory authority
,
except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.
(q)
No Conflicts.
The execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Units by the Company and the consummation by the Company of the transactions contemplated
by this Agreement will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, (ii) result
in any violation of the provisions of the charter or by-laws of the Company or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (i) and (iii) above, for any such conflict, breach, violation or default that would not, individually or in the aggregate, have a Material Adverse Effect.
(r)
No Consents Required.
No consent, approval, authorization, order, license, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is
required for the execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Units and the consummation of the transactions contemplated by this Agreement, except for (i) where the failure to obtain any such consent, approval, authorization, order, registration or qualification would not, individually or in the aggregate, affect the Company's ability to consummate the transactions contemplated by this Agreement, and (ii) the registration of the Units under the Securities
Act and such consents, approvals, authorizations, orders and registrations or qualifications as may be required by the Financial Industry Regulatory Authority, Inc. (“FINRA”), the NYSE MKT, or under applicable state securities laws in connection with the purchase and distribution of the Units by the Underwriters.
(s)
Legal Proceedings.
Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no legal, governmental or regulatory investigations, actions, suits
or proceedings pending to which the Company is or may reasonably be expected to become a party or to which any property of the Company is or may reasonably be expected to become the subject that, individually or in the aggregate, if determined adversely to the Company, could reasonably be expected to have a Material Adverse Effect; to the knowledge of the Company, no such investigations, actions, suits or proceedings are threatened or, contemplated by any governmental or regulatory authority or threatened by
others; and (i) there are no current or pending legal, governmental or regulatory actions, suits or proceedings that are required under the Securities Act to be described in the Registration Statement, the Pricing Disclosure Package or the Prospectus that are not so described in the Registration Statement, the Pricing Disclosure Package and the Prospectus and (ii) there are no statutes, regulations or contracts or other documents that are required under the Securities Act to be filed as exhibits to the Registration
Statement or described in the Registration Statement, the Pricing Disclosure Package or the Prospectus that are not so filed as exhibits to the Registration Statement (or the documents incorporated by reference therein) or described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(t)
Independent Accountants
. KPMG LLP, which has certified certain financial statements of the Company, is an independent registered public accounting firm with respect to the Company within the applicable
rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board (United States) and as required by the Securities Act.
(u)
Title to Real and Personal Property.
Except as described in the Registration Statement, the Pricing Disclosure Package or the Prospectus, the Company has good and marketable title in fee simple (in the
case of real property) to, or has valid and marketable rights to lease or otherwise use, all items of real and personal property and assets that are material to the business of the Company, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company or (ii) could not reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect.
(v)
Title to Intellectual Property.
The Company owns or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service
mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of its business as currently conducted or as described in the Registration Statement, the Pricing Disclosure Package or the Prospectus to be conducted. The conduct of its business will not conflict in any material respect with any such rights of others. The Company has not received any notice of any claim
of infringement, misappropriation or conflict with any such rights of others in connection with its patents, patent rights, licenses, inventions, trademarks, service marks, trade names, copyrights and know-how.
(w)
No Undisclosed Relationships.
No relationship, direct or indirect, exists between or among the Company, on the one hand, and the directors or officers of the Company, or, to the Company’s knowledge,
the shareholders, customers or suppliers of the Company, on the other, that is required by the Securities Act to be described in the Registration Statement and the Prospectus and that is not so described in such documents and in the Pricing Disclosure Package.
(x)
Investment Company Act.
The Company is not and, after giving effect to the offering and sale of the Units and the application of the proceeds thereof received by the Company as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, will not be required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder.
(y)
Taxes.
The Company has paid all federal, state, local and foreign taxes and filed all tax returns required to be paid or filed through the date hereof, except where such failure to pay or file would
not reasonably be expected to have a Material Adverse Effect; and except as otherwise disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its properties or assets and have a Material Adverse Effect either individually or in the aggregate.
(z)
Licenses and Permits.
The Company possesses all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local
or foreign governmental or regulatory authorities that are necessary for the ownership or lease of its properties or the conduct of its business as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except where the failure to possess or make the same would not, individually or in the aggregate, have a Material Adverse Effect; and except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not received notice of
any revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course.
(aa)
No Labor Disputes.
No labor disturbance by or dispute with employees of the Company exists or, to the knowledge of the Company, is contemplated or threatened, and the Company is not aware of any existing
or imminent labor disturbance by, or dispute with, the employees of any of its principal suppliers, contractors or customers, except such as would not have a Material Adverse Effect.
(bb)
Compliance with and Liability under Environmental Laws.
(i) The Company (a) is in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, decisions, judgments,
decrees and orders relating to pollution or the protection of the environment, natural resources or human health or safety (other than the Federal Food, Drug and Cosmetic Act, which is addressed at subsection (rr)), including those relating to the generation, storage, treatment, use, handling, transportation, Release or threat of Release of Hazardous Materials (collectively, “Environmental Laws”), (b) has received and is in compliance with all permits, licenses, certificates or other authorizations
or approvals required of it under applicable Environmental Laws to conduct its business, (c) has not received notice of any actual or potential liability under or relating to, or actual or potential violation of, any Environmental Laws, including for the investigation or remediation of any Release or threat of Release of Hazardous Materials, and has no knowledge of any event or condition that would reasonably be expected to result in any such notice, (d) is not conducting or paying for, in whole or in part, any
investigation, remediation or other corrective action pursuant to any Environmental Law at any location, and (e) is not a party to any order, decree or agreement that imposes any obligation or liability under any Environmental Law, and (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the Company, except in the case of each of (i) and (ii) above, for any such matter, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;
and (iii) except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (a) there are no proceedings that are pending or, to the knowledge of the Company, contemplated, against the Company under any Environmental Laws in which a governmental entity is also a party, other than such proceedings regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed, (b) the Company is not aware of any facts or issues regarding compliance with Environmental
Laws, or liabilities or other obligations under Environmental Laws, including the Release or threat of Release of Hazardous Materials, that could reasonably be expected to have a material effect on the capital expenditures, earnings or competitive position of the Company, and (c) the Company does not anticipate material capital expenditures relating to any Environmental Laws.
(cc)
Hazardous Materials
. There has been no storage, generation, transportation, use, handling, treatment, Release or threat of Release of Hazardous Materials by, relating to or caused by the Company (or,
to the knowledge of the Company, any other entity (including any predecessor) for whose acts or omissions the Company is or could reasonably be expected to be liable) at, on, under or from any property or facility now or previously owned, operated or leased by the Company, or at, on, under or from any other property or facility, in violation of any Environmental Laws or in a manner or amount or to a location that could reasonably be expected to result in any liability for the Company under any Environmental Law,
except for any violation or liability which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. “Hazardous Materials” means any material, chemical, substance, waste, pollutant, contaminant, compound, mixture, or constituent thereof, in any form or amount, including petroleum (including crude oil or any fraction thereof) and petroleum products, natural gas liquids, asbestos and asbestos containing materials, naturally occurring radioactive materials,
brine, and drilling mud, regulated or which can give rise to liability under any Environmental Law. “Release” means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, or migrating in, into or through the environment, or in, into, from or through any building or structure.
(dd)
Compliance with ERISA.
(i) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for which the Company
or any member of its “Controlled Group” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”)) would have any liability (each, a “Plan”) has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to, ERISA and the Code, except for noncompliance that could
not reasonably be expected to result in material liability to the Company; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan excluding transactions effected pursuant to a statutory or administrative exemption that could reasonably be expected to result in a material liability to the Company; (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, the minimum funding
standard of Section 412 of the Code or Section 302 of ERISA, as applicable, has been satisfied (without taking into account any waiver thereof or extension of any amortization period) and is reasonably expected to be satisfied in the future (without taking into account any waiver thereof or extension of any amortization period); (iv) the fair market value of the assets of each Plan exceeds the present value of all benefits accrued under such Plan (determined based on those assumptions used to fund such Plan);
(v) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur that either has resulted, or could reasonably be expected to result, in material liability to the Company; (vi) neither the Company nor any member of the Controlled Group has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the PBGC, in the ordinary course and without default) in respect of a
Plan (including a “multiemployer plan”, within the meaning of Section 4001(a)(3) of ERISA); and (vii) there is no pending audit or, to the knowledge of the Company, investigation by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other governmental agency or any foreign regulatory agency with respect to any Plan that could reasonably be expected to result in material liability to the Company.
(ee)
Disclosure Controls
. The Company maintains an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that complies with the requirements
of the Exchange Act and that has been designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. The
Company has carried out evaluations of the effectiveness of its disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.
(ff)
Accounting Controls.
The Company maintains a system of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that complies with the requirements
of the Exchange Act and has been designed by, or under the supervision of, its principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences and (v) interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement fairly presents the information called for in all material respects and is prepared in accordance with the Commission’s rules and guidelines applicable thereto. Based on the Company’s most recent evaluation of its internal controls over financial reporting pursuant to Rule 13a-15(c) of the Exchange Act, except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, there are no material weaknesses in the Company’s internal controls. The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which have adversely affected or are reasonably likely to adversely affect the Company’s ability to record, process, summarize
and report financial information; and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.
(gg)
eXtensible Business Reporting Language
. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement fairly presents the information
called for and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto in all material respects.
(hh)
Insurance.
The Company has insurance covering its properties, operations, personnel and businesses which insurance is in amounts and insures against such losses and risks that the Company believes are
prudent and customary for a company of its size and in the business in which it is engaged, and adequate to protect the Company and its business; the Company has not (i) received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable
cost from similar insurers as may be necessary to continue its business.
(ii)
No Unlawful Payments.
Neither the Company nor, to the knowledge of the Company, any director, officer, employee, agent, affiliate or other person acting on behalf of the Company has (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery or anti-corruption laws; or (iv) taken an act in furtherance of any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment. The Company has instituted and maintains and will continue to maintain policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws.
(jj)
Compliance with Money Laundering Laws
. The operations of the Company are and have been conducted at all times in material compliance with applicable financial recordkeeping and reporting requirements,
including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all jurisdictions where the Company conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(kk)
No Conflicts with Sanctions Laws.
Neither the Company, nor, to the knowledge of the Company, any of its directors, officers, employees, agents, or affiliates, is currently the subject or the target
of any sanctions administered or enforced by the U.S. Government, (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State), the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company located, organized or resident in a country or territory that is the subject or the target of Sanctions; and the Company
will not directly or indirectly use the proceeds of the offering of the Units hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person, or in any country or territory, that, at the time of such funding or facilitation, is the subject or the target of Sanctions, or (ii) in any other manner that will result in a violation by any person (including any person participating
in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.
(ll)
No Broker’s Fees.
The Company is not a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against the Company or
any Underwriter for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Units.
(mm)
No Registration Rights
. No person has the right to require the Company to register any securities for sale under the Securities Act by reason of the filing of the Registration Statement with the Commission
or the issuance and sale of the Units by the Company, except for such rights which have been waived prior to the date of this Agreement.
(nn)
No Stabilization.
The Company has not taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price
of any security of the Company.
(oo)
Margin Rules
. The application of the proceeds received by the Company from the issuance, sale and delivery of the Units as described in the Registration Statement, the Pricing Disclosure Package and
the Prospectus will not violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.
(pp)
Forward-Looking Statements.
No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration Statement, the Pricing
Disclosure Package or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(qq)
Statistical and Market Data.
Nothing has come to the attention of the Company that has caused the Company to believe that the statistical and market-related data included in the Registration Statement,
the Pricing Disclosure Package and the Prospectus is not based on or derived from sources that are reliable and accurate in all material respects.
(rr)
Sarbanes-Oxley Act
. There is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s directors or officers, in their capacities as such, to
comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications.
(ss)
Food and Drug Administration
. Except in each case as otherwise disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not been advised, and has no
reason to believe, that it is not conducting business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business, and the Company: (i) is and at all times has been in material compliance with all federal, state and local statutes, rules or regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any
product under development, manufactured or distributed by the Company (“Applicable Laws”); (ii) has not received any correspondence or notice from the U.S. Food and Drug Administration (the “FDA”) or any other federal, state, local or foreign governmental or regulatory authority alleging or asserting material noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable
Laws (“Authorizations”); (iii) possesses all material Authorizations and such Authorizations are valid and in full force and effect and the Company is not in material violation of any term of any such Authorizations; (iv) has not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from the FDA or any other federal, state, local or foreign governmental or regulatory authority or third party alleging that any product operation or activity
is in material violation of Section 361 of the Public Health Services Act, any Applicable Laws or Authorizations and has no knowledge that the FDA or any other federal, state, local or foreign governmental or regulatory authority or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (v) has not received notice that the FDA or any other federal, state, local or foreign governmental or regulatory authority has taken, is taking or intends to take action
to limit, suspend, modify or revoke any material Authorizations and has no knowledge that the FDA or any other federal, state, local or foreign governmental or regulatory authority is considering such action; (vi) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments were materially complete and correct on the date filed (or were corrected or supplemented by a subsequent submission); and (vii) has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, “dear doctor” letter, or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect or
violation and, to the Company’s knowledge, no third party has initiated, conducted or intends to initiate any such notice or action.
(tt)
Preclinical and Clinical Trials
. The studies, tests and preclinical and clinical trials conducted by, or on behalf of the Company were and, if still pending, are, being conducted in all material respects
in accordance with clinical protocols, procedures and controls pursuant to accepted professional scientific standards and all Applicable Laws and Authorizations, including, without limitation, the Federal Food, Drug and Cosmetic Act and the rules and regulations promulgated thereunder (collectively, “FFDCA”). The descriptions of the results of such studies, tests and trials contained in the Registration Statement and the Prospectus are accurate and complete in all material respects and fairly present
the data derived from such studies, tests and trials. The Company is not aware of any studies, tests or trials, the results of which the Company believes reasonably call into question the study, test, or trial results described or referred to in the Registration Statement and the Prospectus when viewed in the context in which such results are described and the clinical state of development. The Company has not received any notices or correspondence from the FDA or any other federal, state, local or foreign governmental
or regulatory authority requiring the termination, suspension or material modification of any studies, tests or preclinical or clinical trials conducted by or on behalf of the Company.
4.
Further Agreements of the Company
. The Company covenants and agrees with each Underwriter that:
(a)
Required Filings.
The Company will file the final Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act, will file any Issuer Free Writing Prospectus to the extent
required by Rule 433 under the Securities Act; will file timely all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act during the Prospectus Delivery Period; and will furnish copies of the Prospectus and each Issuer Free Writing Prospectus (to the extent not previously delivered) to the Underwriters in New York City prior to 10:00 a.m., New York City time, on the business day next
succeeding the date of this Agreement in such quantities as the Representative may reasonably request. As used herein, the term “Prospectus Delivery Period” means such period of time after the first date of the public offering of the Units as in the opinion of counsel for the Underwriters a prospectus relating to the Units is required by law to be delivered (or required to be delivered but for Rule 172 under the Securities Act) in connection with sales of the Units by any Underwriter or dealer.
(b) [
Intentionally Omitted
.]
(c)
Amendments or Supplements, Issuer Free Writing Prospectuses.
Before preparing, using, authorizing, approving, referring to or filing any Issuer Free Writing Prospectus, and before filing any amendment or supplement to the Registration Statement
or the Prospectus, whether before or after the time that the Registration Statement becomes effective, from the date hereof through the Prospectus Delivery Period, the Company will furnish to the Representative and counsel for the Underwriters a copy of the proposed Issuer Free Writing Prospectus, amendment or supplement for review and will not prepare, use or file any such Issuer Free Writing Prospectus or file any such proposed amendment or supplement to which the Representative reasonably objects.
(d)
Notice to the Representative.
The Company will advise the Representative promptly, and confirm such advice in writing, (i) when any amendment to the Registration Statement has been filed or becomes effective; (ii) when any supplement to the Prospectus
or any Issuer Free Writing Prospectus or any amendment to the Prospectus has been filed or distributed; (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or the receipt of any comments from the Commission relating to the Registration Statement or any other request by the Commission for any additional information; (iv) of the issuance by the Commission of any order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of any Preliminary Prospectus, any of the Pricing Disclosure Package or the Prospectus or the initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities Act; (v) of the occurrence of any event or development within the Prospectus Delivery Period as a result of which the Prospectus, the Pricing Disclosure Package or any Issuer Free Writing Prospectus as then amended or supplemented would include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus, the Pricing Disclosure Package or any such Issuer Free Writing Prospectus is delivered to a purchaser, not misleading; and (vi) of the receipt by the Company of any notice with respect to any suspension of the qualification of the Units for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Company will
use its commercially reasonable efforts to prevent the issuance of any such order suspending the effectiveness of the Registration Statement, preventing or suspending the use of any Preliminary Prospectus, any of the Pricing Disclosure Package or the Prospectus or suspending any such qualification of the Units and, if any such order is issued, will obtain as soon as possible the withdrawal thereof.
(e)
Ongoing Compliance.
(1) If during the Prospectus Delivery Period (i) any event or development shall occur or condition shall exist as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Prospectus to comply with law, the Company will immediately notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission and furnish to the Underwriters and to such dealers as the Representative may designate such
amendments or supplements to the Prospectus as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law and (2) if at any time prior to the Closing Date (i) any event or development shall occur or condition shall exist as a result of which the Pricing Disclosure Package as then amended or supplemented would include any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Pricing Disclosure Package is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Pricing Disclosure Package to comply with law, the Company will immediately notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission (to the extent required) and
furnish to the Underwriters and to such dealers as the Representative may designate, such amendments or supplements to the Pricing Disclosure Package as may be necessary so that the statements in the Pricing Disclosure Package as so amended or supplemented will not, in the light of the circumstances existing when the Pricing Disclosure Package is delivered to a purchaser, be misleading or so that the Pricing Disclosure Package will comply with law.
(f)
Blue Sky Compliance.
The Company will qualify the Units for offer and sale under the securities or Blue Sky laws of such United States jurisdictions as the Representative shall reasonably request and will continue such qualifications in effect
so long as required for distribution of the Units;
provided
that the Company shall not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.
(g)
Earning Statement.
The Company will make generally available to its security holders and the Representative as soon as practicable an earning statement that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 of
the Commission promulgated thereunder covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the “effective date” (as defined in Rule 158) of the Registration Statement, provided that the Company will be deemed to have complied with such requirement by filing on EDGAR a report that satisfies such requirement.
(h)
Clear Market.
For a period of 30 days after the date of the Prospectus, the Company will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, or file with the Commission a new registration statement under the Securities Act relating to, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership
of the Common Stock or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, without the prior written consent of the Representative, other than (A) the Units to be sold hereunder, (B) awards granted under the Company’s Stock Plans in existence on the date hereof or any shares of Common Stock of the Company issued upon the exercise of options or restricted stock units
granted, or grants made, under Company Stock Plans, or (C) shares of Common Stock of the Company issued upon the exercise of currently outstanding warrants and the Warrants to be sold hereunder.
(i)
Use of Proceeds.
The Company will apply the net proceeds it receives from the sale of the Units as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus under the heading “Use of Proceeds.”
(j)
No Stabilization.
The Company will not take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Common Stock.
(k)
Exchange Listing
. The Company will use its best efforts to list, subject to notice of issuance, the Shares and Warrant Shares on the NYSE MKT.
(l)
Warrant Shares
. The Company shall reserve and keep available at all times a sufficient number of shares of Common Stock for purpose of enabling the Company to issue the Warrant Shares.
(m)
Reports.
During the period beginning on the Closing Date and ending three years thereafter, the Company will furnish to the Representative, as soon as they are available, copies of all reports or other communications (financial or other) furnished
to holders of the Units, and copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange or automatic quotation system;
provided
the Company will be deemed to have furnished such reports and financial statements to the Representative to the extent they are filed on the Commission’s Electronic Data Gathering, Analysis, and Retrieval system.
(n)
Record Retention
. The Company will, pursuant to reasonable procedures developed in good faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the Commission in accordance with Rule 433 under the Securities Act.
5.
Certain Agreements of the Underwriters
. Each Underwriter hereby represents and agrees that:
(a) It has not used, authorized use of, referred to or participated in the planning for use of, and will not use, authorize use of, refer to or participate in the planning for use of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act (which term
includes use of any written information furnished to the Commission by the Company and not incorporated by reference into the Registration Statement and any press release issued by the Company) other than (i) a free writing prospectus that contains no “issuer information” (as defined in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation by reference) in the Preliminary Prospectus or a previously filed Issuer Free Writing Prospectus, (ii) any Issuer Free
Writing Prospectus listed on
Annex A
or prepared pursuant to Section 3(c) above (including any electronic road show), or (iii) any free writing prospectus prepared by such underwriter and approved by the Company in advance in writing (each such free writing prospectus referred to in clauses (i) or (iii), an “Underwriter Free Writing Prospectus”).
(b) It has not and will not, without the prior written consent of the Company, use any free writing prospectus that contains the final terms of the Units unless such terms have previously been included in a free writing prospectus filed with the Commission.
(c) It is not subject to any pending proceeding under Section 8A of the Securities Act with respect to the offering (and will promptly notify the Company if any such proceeding against it is initiated during the Prospectus Delivery Period).
6.
Conditions of Underwriters’ Obligations.
The obligation of each Underwriter to purchase the Units on the Closing Date as provided herein is subject to the performance by the Company of its respective covenants and other obligations
hereunder and to the following additional conditions:
(a)
Registration Compliance; No Stop Order.
No order suspending the effectiveness of the Registration Statement shall be in effect, and no proceeding for such purpose or pursuant to Section 8A under the Securities Act shall be pending before or,
to the knowledge of the Company, threatened by the Commission; the Prospectus and each Issuer Free Writing Prospectus, if any, shall have been timely filed with the Commission under the Securities Act (in the case of an Issuer Free Writing Prospectus, to the extent required by Rule 433 under the Securities Act) and in accordance with Section 4(a) hereof; and all requests by the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representative.
(b)
Representations and Warranties.
The respective representations and warranties of the Company contained herein shall be true and correct on the date hereof and on and as of the Closing Date; and the statements of the Company and its officers made
in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date.
(c) [
Intentionally Omitted
]
.
(d)
No Material Adverse Change.
No event or condition of a type described in Section 3(g) hereof shall have occurred or shall exist, which event or condition is not described in the Pricing Disclosure Package (excluding any amendment or supplement
thereto) and the Prospectus (excluding any amendment or supplement thereto) and the effect of which in the judgment of the Representative makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Units on the Closing Date, on the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the Prospectus.
(e)
Officer’s Certificate.
The Representative shall have received on and as of the Closing Date (x) a certificate of the chief financial officer and chief executive officer of the Company (i) confirming that such officers have carefully
reviewed the Registration Statement, the Pricing Disclosure Package and the Prospectus and, to the knowledge of such officers, the representations of the Company set forth in Sections 3(b) and 3(d) hereof are true and correct, (ii) confirming that the other representations and warranties of the Company in this Agreement are true and correct and that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, and
(iii) to the effect set forth in paragraphs (a) and (d) above.
(f)
Chief Financial Officer Certificate.
On the date of this Agreement and on the Closing Date, the Chief Financial Officer of the Company shall have furnished to the Representative, a certificate, dated the respective dates of delivery thereof
and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representative, with respect to the financial statements and certain financial information contained or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(g)
Opinion of Counsel for the Company.
Thompson Hine LLP, counsel for the Company, shall have furnished to the Representative, at the request of the Company, their written opinion and negative assurance statement, dated the Closing Date, and addressed
to the Underwriters, in form and substance reasonably satisfactory to the Representative.
(h)
[Intentionally Omitted]
.
(i)
[Intentionally Omitted]
.
(j)
Opinion of Counsel for the Underwriters.
The Representative shall have received on and as of the Closing Date, an opinion and negative assurance statement of Goodwin Procter LLP, counsel for the Underwriters, and such counsel shall have received
such documents and information as they may reasonably request to enable them to pass upon such matters.
(k)
No Legal Impediment to Issuance and/or Sale.
No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would,
as of the Closing Date, prevent the issuance or sale of the Units by the Company; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Units by the Company.
(l)
[Intentionally Omitted]
.
(m)
Exchange Listing.
The Shares and Warrant Shares, shall have been approved for listing on the NYSE MKT, subject to official notice of issuance.
(n)
Lock-up Agreements
. The “lock-up” agreements, each substantially in the form of
Exhibit A
hereto, between you and certain officers and directors of the Company identified on
Schedule
2
hereto, relating to sales and certain other dispositions of shares of Common Stock or certain other securities, delivered to you on or before the date hereof, shall be full force and effect on the Closing Date.
(o)
Secretary’s Certificate
.
The Representative shall have received on and as of the Closing Date,
a certificate of the Secretary of the Company.
(p)
FINRA.
FINRA shall not have raised any objection with respect to the fairness or reasonableness of the underwriting, or other arrangements of the transactions, contemplated hereby.
(q)
Additional Documents.
On or prior to the Closing Date, the Company shall have furnished to the Representative such further certificates and documents as the Representative may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to the Representative and counsel for the Underwriters.
7.
Indemnification and Contribution
.
(a)
Indemnification of the Underwriters by the Company.
The Company agrees to indemnify and hold harmless each Underwriter, its affiliates, directors and officers and each person, if any, who controls such Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, not misleading, (ii) or any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Securities Act, any road show as defined in Rule 433(h) under the Securities Act (a “road
show”) or any Pricing Disclosure Package (including any Pricing Disclosure Package that has subsequently been amended), or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with any information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representative expressly for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in subsection (b) below.
(b)
Indemnification of the Company by the Underwriters.
Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Underwriter furnished to the Company in writing by such Underwriter through the Representative expressly for use in the Registration Statement, the
Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus, any road show or any Pricing Disclosure Package (including any Pricing Disclosure Package that has subsequently been amended), it being understood and agreed upon that the only such information furnished by any Underwriter consists of the following information in the “Underwriting” section of the Prospectus: the third, tenth and eleventh paragraphs.
(c)
Notice and Procedures.
If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to the
preceding paragraphs of this Section 7, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing;
provided
that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under the preceding paragraphs of this Section 7 except to the extent that it has been materially prejudiced (through the forfeiture
of substantive rights or defenses) by such failure; and
provided further
that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under the preceding paragraphs of this Section 7. If any such claim or action shall be brought against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall be entitled to participate therein
and, to the extent it wishes, either by itself or jointly with any other similarly notified Indemnifying Person, to assume the defense thereof with counsel reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 7 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of
such counsel related to such proceeding, as incurred. After notice from the Indemnifying Person to the Indemnified Person of its election to assume the defense of such proceeding, the Indemnifying Person shall not be liable to the Indemnified Person under this Section 7 for any legal or other expenses subsequently incurred by the Indemnified Person in connection with the defense thereof other than for reasonable costs of investigation; provided, however, that in any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in
addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees
and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for any Underwriter, its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by the Representative, any such separate firm for the Company, its directors, its officers who signed the Registration Statement and any control persons of the Company
shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying
Person reimburse the Indemnified Person for fees and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person shall,
without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability arising out of claims that are the subject matter of such proceeding
and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(d)
Contribution.
If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person
under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters on the other, from the offering of the Units or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company, on the one hand, and the Underwriters on the other, in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters on the other, shall be deemed to be in the same respective proportions as the net proceeds (before deducting
expenses) received by the Company from the sale of the Units and the total underwriting discounts and commissions received by the Underwriters in connection therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate offering price of the Units. The relative fault of the Company, on the one hand, and the Underwriters on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(e)
Limitation on Liability.
The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to paragraph (d) above were determined by
pro
rata
allocation
(even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action
or claim. Notwithstanding the provisions of paragraphs (d) and (e), in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the offering of the Units exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to paragraphs (d) and (e) are several in proportion to their respective purchase obligations hereunder and not joint.
(f)
Non-Exclusive Remedies.
The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity.
8.
Effectiveness of Agreement
. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.
9.
Termination
. This Agreement may be terminated in the absolute discretion of the Representative, by notice to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by any of the New York Stock Exchange, the NYSE MKT, or The Nasdaq Stock Market; (ii) trading of any securities issued or guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity
or crisis, either within or outside the United States, that, in the judgment of the Representative, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Units on the Closing Date, on the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the Prospectus.
10.
Defaulting Underwriter
.
(a) If, on the Closing Date, any Underwriter defaults on its obligation to purchase the Units that it has agreed to purchase hereunder on such date, the non-defaulting Underwriters may in their discretion arrange for the purchase of such Shares by other persons satisfactory to the Company
on the terms contained in this Agreement. If, within 36 hours after any such default by any Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Units, then the Company shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters to purchase such Units on such terms. If other persons become obligated or agree to purchase the Units of a defaulting Underwriter, either the non-defaulting Underwriters or the
Company may postpone the Closing Date for up to five full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters may be necessary in the Registration Statement and the Prospectus or in any other document or arrangement, and the Company agrees to promptly prepare any amendment or supplement to the Registration Statement and the Prospectus that effects any such changes. As used in this Agreement, the term “Underwriter” includes, for
all purposes of this Agreement unless the context otherwise requires, any person not listed in
Schedule 1
hereto that, pursuant to this Section 10, purchases Units that a defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Units of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters, the Company as provided in paragraph (a) above, the aggregate number of Units that remain unpurchased on the Closing Date does not
exceed one-eleventh of the aggregate number of Units to be purchased on such date, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of Units that such Underwriter agreed to purchase hereunder on such date plus such Underwriter’s pro rata share (based on the number of Units that such Underwriter agreed to purchase on such date) of the Units of such defaulting Underwriter or Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Units of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters, the Company as provided in paragraph (a) above, the aggregate number of Units that remain unpurchased on the Closing Date, exceeds
one-eleventh of the aggregate amount of Units to be purchased on such date, or if the Company shall not exercise the right described in paragraph (b) above, then this Agreement shall terminate without liability on the part of the non-defaulting Underwriters. Any termination of this Agreement pursuant to this Section 10 shall be without liability on the part of the Company, except that the Company will continue to be liable for the payment of expenses as set forth in Section 11 hereof and except that the
provisions of Section 7 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company or any non-defaulting Underwriter for damages caused by its default.
11.
Payment of Expenses
.
(a) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company will pay or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including without limitation, (i) the costs
incident to the authorization, issuance, sale, preparation and delivery of the Units and any taxes payable in that connection; (ii) the costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Preliminary Prospectus, any Issuer Free Writing Prospectus, any Pricing Disclosure Package and the Prospectus (including all exhibits, amendments and supplements thereto) and the distribution thereof; (iii) the fees and expenses of the Company’s counsel
and independent accountants; (v) the fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the Units under the state or foreign securities or blue sky laws of such jurisdictions as the Representative may designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and expenses incurred by counsel for the Underwriters); (vi) the cost of preparing stock certificates; (vii) the
costs and charges of any transfer agent and any registrar; (viii) all expenses and application fees incurred in connection with any filing with, and clearance of the offering by, FINRA; (ix) all expenses incurred by the Company in connection with any “road show” presentation to potential investors; (x) all expenses and application fees related to the listing of the Shares and Warrant Shares on the NYSE MKT; and (xi) the out-of-pocket costs and expenses (including the fees and expenses of counsel)
incurred by the Underwriters in connection with this Agreement and the offering contemplated hereby in an amount not to exceed $50,000 in the aggregate.
(b) If (i) this Agreement is terminated pursuant to Section 9, (ii) the Company for any reason fails to tender the Shares or Warrants for delivery to the Underwriters or (iii) the Underwriters decline to purchase the Units for any reason permitted under this Agreement, the Company agrees
to reimburse the Underwriters for all documented out-of-pocket costs and expenses (including the fees and expenses of their counsel) reasonably incurred by the Underwriters in connection with this Agreement and the offering contemplated hereby; provided, however, that in the case of termination under Section 10(c), the Company shall not reimburse the defaulting underwriter for any out-of-pocket costs and expenses incurred by such defaulting underwriter.
12.
Persons Entitled to Benefit of Agreement
. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and any controlling persons referred to in Section
7 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Units from any Underwriter shall be deemed to be a successor merely by reason of such purchase.
13.
Survival
. The respective indemnities, rights of contribution, representations, warranties and agreements of the Company and the Underwriters contained in this Agreement or made by or on behalf of the Company or the Underwriters pursuant
to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Units and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Company or the Underwriters.
14.
Certain Defined Terms
. For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; and (b) the term “business day”
means any day other than a day on which banks are permitted or required to be closed in New York City.
15.
Miscellaneous
.
(a)
Notices.
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication. Notices to the Underwriters shall be given
to the Representative c/o Canaccord Genuity Inc., 99 High Street, 11th Floor, Boston, Massachusetts 02110, Attention: General Counsel. Notices to the Company shall be given to it at the address of the Company set forth in the Registration Statement, Attention: Secretary.
(b)
Governing Law.
This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed
in such state.
(c)
Counterparts.
This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.
(d)
Amendments or Waivers.
No amendment or waiver of any provision of this Agreement, nor any consent to or approval of any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.
(e)
Headings.
The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.
If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.
|
|
Very truly yours,
PALATIN TECHNOLOGIES, INC.
|
|
|
|
|
|
|
|
|
|
/s/
Stephen T. Wills
|
|
|
|
By:
|
|
|
|
|
|
Stephen T. Wills, Authorized Officer
|
|
|
|
|
Executive Vice President, Chief Financial Officer and Chief Operating Officer
|
|
ACCEPTED:
CANCCORD GENUITY INC.
For itself and on behalf of the several Underwriters
listed in
Schedule 1
hereto.
|
By: /s/
Jennifer Pardi
|
|
|
|
|
|
Authorized Signatory
|
|
|
|
|
|
Jennifer Pardi
|
|
Senior Managing Director
|
Schedule 1
UNDERWRITERS
|
Underwriter
|
|
|
|
Canaccord Genuity Inc.
|
6,314,815
|
1,219,925
|
|
ROTH Capital Partners LLC
|
5,166,666
|
998,120
|
|
Total
|
11,481,481
|
2,218,045
|
Schedule 2
PERSONS EXECUTING LOCK-UP AGREEMENTS
Carl Spana
Stephen T. Wills
Annex A
ISSUER FREE WRITING PROSPECTUSES
None.
Annex B
PRICING INFORMATION
Public Offering Price: $0.675 per Series A Unit and $0.665 per Series B Unit
Number of Series A Units Offered: 11,481,481 Series A Units (consisting of (i) 11,481,481 shares of Common Stock and (ii) Series H Warrants to purchase 8,611,112 shares of Common Stock)
Number of Series B Units Offered: 2,218,045 Series B Units (consisting of (i) 2,218,045 pre-funded Series I Warrants and (ii) Series H Warrants to purchase 1,663,534 shares of Common Stock)
Series H Warrant Exercise Price $0.70 per share
Series I Warrant Exercise Price: $0.01 per share
Underwriting Discount: 6.0%
Closing Date: August 4, 2016
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
[____], 2016
Canaccord Genuity Inc.
As Representative of the several Underwriters
99 High Street, 11th Floor
Boston, Massachusetts 02110
RE: Palatin Technologies, Inc. --- Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representative of the several Underwriters, propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Palatin Technologies, Inc., a Delaware corporation (the “Company”) providing for the public offering (the “Public Offering”) by the several Underwriters
named in Schedule 1 to the Underwriting Agreement (the “Underwriters”), of common stock, $0.01 par value per share, of the Company (the “Common Stock”) and Warrants to purchase Common Stock (the “Warrants”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters’ agreement to purchase and make the Public Offering of the Common Stock and Warrants, and for other good and valuable consideration receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of the Representative on behalf of the Underwriters, the undersigned
will not, during the period ending 30 days after the date of the prospectus relating to the Public Offering (the “Lock-Up Period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (including without limitation,
Common Stock or such other securities which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and securities which may be issued upon exercise of a stock option or warrant), or publicly disclose the intention to make any offer, sale, pledge or disposition, (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock or such other
securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise or (3) make any demand for or exercise any right with respect to the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock without the prior written consent of the Representative, in each case other than (A) transfers of shares of Common Stock as a bona fide gift or gifts,
(B) transfers to any trust for the direct or indirect benefit of the undersigned or a member of the immediate family (as defined below) of the undersigned in a transaction not involving the disposition for value, or (C) transfers by will, other testamentary document or intestate succession to the legal representative, heir, beneficiary, or a member of the immediate family of the undersigned;
provided
that in the case of any transfer or distribution pursuant to clause
(A), (B), or (C), each donee or distributee shall execute and deliver to the Representative a lock-up letter in the form of this paragraph; and
provided
,
further
, that in the case of any transfer or distribution pursuant to clause (A), (B), or (C), no filing by any party (donor, donee, transferor or transferee) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or other public announcement
shall be required or shall be made voluntarily in connection with such transfer or distribution (other than a filing on a Form 5 made after the expiration of the Lock-Up Period).
Furthermore, notwithstanding the restrictions imposed by this Letter Agreement, the undersigned may, without the prior written consent of the Representative, (i) exercise an option to purchase shares of Common Stock granted under any stock incentive plan or stock purchase plan of the Company (provided that any shares issued upon such exercise shall
remain subject to the restrictions set forth in clause (1) above), (ii) transfer shares of Common Stock acquired on the open market following the closing of the Public Offering or (iii) sell shares of Common Stock pursuant to the terms of a plan established under Rule 10b5-1 that was in existence prior to the date of this Letter Agreement (a “10b5-1 Plan”);
provided
that no filing by any party (donor, donee, transferor or transferee) under the Exchange
Act or other public announcement shall be required or shall be made voluntarily in connection with such transfer (other than a filing on a Form 5 if such filing is required by the Exchange Act, or a filing on Form 4 reporting a sale of Common Stock pursuant to a 10b5-1 Plan).
For purposes of this Letter Agreement, "Immediate Family" shall mean any relationship by blood, marriage, or adoption, not more remote than first cousin.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement has not been executed on or before August 31, 2016, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock and Warrants to be sold thereunder, the undersigned
shall be released from all obligations under this Letter Agreement. The undersigned understands that the Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering in reliance upon this Letter Agreement.
This Letter Agreement and any claim, controversy or dispute arising under or related to this Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.
Very truly yours,
Name:____________________________________
By: ______________________________________
-3-
PALATIN TECHNOLOGIES, INC.
SERIES H 2016 WARRANT TO PURCHASE [ ]SHARES
OF COMMON STOCK
Series H 2016 Warrant No. [ ]
August [ ], 2016 (the “
Date of Grant
”)
THIS WARRANT (this “
Warrant
”) certifies that, for value received, [ ] and its assignees (the, “
Holder
") are entitled to subscribe for and purchase [ ]
shares (as adjusted pursuant
to
Section 4
hereof, the
“Warrant Shares
”) of the fully paid and nonassessable common stock, par value $0.01 per share, (the “
Common Stock
”) of PALATIN TECHNOLOGIES, INC., a Delaware corporation (the “
Company
”), at a price per Warrant Share, equal
to $[ ] (such price and such other price as shall result, from time to time, from the adjustments specified in
Section 4
hereof is herein referred to as the “
Warrant
Price
”), subject to the provisions and upon the terms and conditions hereinafter set forth.
1.
Term
. The purchase right represented by this Warrant is exercisable, in whole or in part, at any time and from the date immediately after the six (6) month anniversary of the Date of Grant through the date that is the five (5) year anniversary of the Date of Grant (the “
Term
”).
2.
Method of Exercise; Payment; Issuance of New Warrant
. Subject to
Section 1
and
Section 10
hereof, the purchase right represented by this Warrant may be exercised by the
Holder, in whole or in part and from time to time, at the election of the Holder, by (a) delivery by the Holder to the Company of an exercise notice in the form attached hereto as Exhibit A (each, an “
Exercise Notice
”) and, either (a) within one (1) Trading Day (as defined below) of the date said Exercise Notice is delivered to the Company, payment to the Company, by certified or bank check or by wire transfer to an account designated
by the Company (a “
Wire Transfer
”), of an amount equal to the then applicable Warrant Price multiplied by the number of Warrant Shares then being purchased (each, an “
Aggregate Exercise Price
”) or (b) valid exercise pursuant to such Exercise Notice of the Conversion Right (as defined below) provided for in
Section 9.1
hereof.
No ink-original Exercise Notice shall be required, nor physical surrender of this Warrant, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Exercise Notice form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant
to the Company for cancellation within three (3) Trading Days of the date the final Exercise Notice is delivered to the Company. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Person or Persons in whose name(s) any certificate(s) representing the Warrant Shares have been issued, or will be issued after the exercise of this Warrant, shall be deemed to have become the holder(s) of record, and shall be treated for all purposes as the record
holder(s), of the Warrant Shares represented thereby (and such Warrant Shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised and payment is made for such Warrant Shares. On or before the third Trading Day following the date on which the Company has received an Exercise Notice in the form attached hereto as Exhibit A, but not in any event prior to the time the Holder has delivered the Aggregate Exercise Price (or valid exercise
of the Conversion Right pursuant to Section 9.1 hereof) (the “
Share Delivery Date
”), the Company shall, (X) provided that the Company’s transfer agent for the Common Stock (the “
Transfer Agent
”) is participating in the Direct Registration System (including any successor thereto, “
DRS
”) or The Depository
Trust Company (“
DTC
”) Fast Automated Securities Transfer Program (including any successor thereto, the “
FAST Program
”), upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to either the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal
At Custodian system, or to the Holder’s or its designee’s direct registration account, or (Y), if the Transfer Agent is not participating in either the DRS or FAST Program, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate (which shall be unlegended, provided that the Warrant Shares subject to the Exercise Notice are included in an effective Registration Statement or all applicable requirements of Rule 144, including the holding period thereof,
are met, and subject in all cases to requirements of, and compliance with, securities laws then in effect), registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise.
As used herein, “
Trading Day
” means any day on which the Common Stock are traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities
market on which the Common Stock is then traded;
provided
that
“Trading Day” shall not include any day on which the Common Stock are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock are suspended from trading during the final hour of trading on
such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).
The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
3.
Stock Fully Paid; Reservation of Warrant Shares
. All Warrant Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance pursuant to the terms and conditions herein, be duly authorized, validly issued, fully paid and nonassessable, and free
from all preemptive rights and taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved, for the purpose of the issuance of Warrant Shares, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant.
4.
Adjustment of Warrant Price and Number of Warrant Shares
. The number and kind of securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:
(a)
Stock Dividends and Splits
. If the Company, at any time from and after the Date of Grant and while this Warrant is outstanding: (i) subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into
a greater number of shares, the Warrant Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased, or (ii) combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Warrant Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately
decreased. Any adjustment under this Section 4(a) shall become effective at the close of business on the date the subdivision or combination becomes effective.
(b)
Par Value
. The Company shall not subdivide (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares if it would cause the Warrant Price to be less than
the par value of the Common Stock.
(c)
Rights Upon Distribution of Assets
. If the Company shall declare or make any dividend or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “
Distribution
”), at any time after the Date of Grant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder
had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise of this Warrant) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution would result
in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage,
at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution to be held similarly in abeyance) to the same extent as if there had been no such limitation).
(d)
Purchase Rights
. In addition to any adjustments pursuant to this Section 4 above, if at any time after the Date of Grant and prior to the Expiration Date the Company grants, issues or sells any rights, warrants or options to subscribe for or purchase shares
of Common Stock or other stock or securities, directly or indirectly convertible into, or exercisable or exchangeable for, shares of Common Stock, or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “
Purchase Rights
”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise of this Warrant) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the
extent that the Holder’s right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right (and beneficial ownership) to such extent shall be held in abeyance for the Holder until such
time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation).
(e)
Calculations
. All calculations under this Section 4 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 4, the number of shares of Common Stock deemed to be issued and outstanding as of a given
date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
5.
Notice of Adjustments
. Whenever the Warrant Price or the number of Warrant Shares purchasable hereunder is adjusted pursuant to
Section 4
hereof, the Company shall deliver to the Holder of this Warrant a certificate,
signed by its chief financial officer and setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Warrant Shares purchasable hereunder after giving effect to such adjustment. Copies of which such certificate shall be mailed (without regard to
Section 13
hereof, by first class mail, postage prepaid) to the Holder.
6.
Fractional Shares
. No fractional shares of Common Stock will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor based on the fair market value (as mutually determined by the Company
and the Holder) of the Common Stock on the date of exercise/in an amount equal to such fraction multiplied by the Warrant Price.
7.
[Intentionally Omitted]
.
8.
Rights as Shareholders; Information
. No Holder, as such, shall be entitled to vote or receive dividends or be deemed the holder of Common Stock which may at any time be issuable upon the exercise hereof for any purpose, nor shall anything contained herein be construed
to confer upon the Holder, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to receive notice of meetings, or, subject to the terms of this Warrant, to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the Warrant Shares shall have become deliverable, as provided herein.
9.
Additional Rights
.
9.1
Right to Convert Warrant into Stock: Net Issuance
.
(a)
Right to Convert
. If at the time of exercise of this Warrant there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of, the Warrant Shares to the Holder, then in addition to and without limiting
the rights of the Holder under the terms of this Warrant, subject to
Section 10
, the Holder shall have the right to convert this Warrant or any portion thereof (the “
Conversion Right
”) into Warrant Shares as provided in this
Section 9.1
at any time or from time to time beginning on the day following the six-month anniversary of the date of issuance.
Upon exercise of the Conversion Right with respect to a particular number of Warrant Shares (the “
Converted Warrant
Shares
”), the Company shall deliver to the Holder (without payment by the Holder of any exercise price or any cash or other consideration) that number of Warrant Shares as is determined according to the following formula:
(A x B) - (A x C)
B
Where: A = the total number of shares with respect to which this Warrant is then being exercised;
B = the Weighted Average Price of the shares of Common Stock on the Trading Day immediately preceding the date of the Exercise Notice; and
C = the Warrant Price then in effect for the applicable Warrant Shares at the time of such exercise.
No fractional shares shall be issuable upon exercise of the Conversion Right, and, if the number of shares to be issued determined in accordance with the foregoing formula is other than a whole number, the Company shall pay to the Holder a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Warrant
Price. For purposes of this
Section 9
, shares issued pursuant to the Conversion Right shall be treated as if they were issued upon the exercise of this Warrant.
“
Weighted Average Price
” as used herein, shall mean,
for any security as of any date, the dollar volume-weighted average price for such security on the NYSE MKT during the period beginning at 9:30:01 a.m., New York City time (or such other time as the NYSE MKT publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York City time (or such other time as the NYSE MKT publicly announces is the official close of trading), as reported by Bloomberg through its “
Volume at Price
” function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m., New York City time (or such other time as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York City time (or such other time as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the
lowest closing ask price of any of the market makers for such security as reported by the OTC Markets. If the Weighted Average Price cannot be calculated for such security on such date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to
Section
15
with the term “Weighted Average Price” being substituted for the term “Warrant Price”.
All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
(b)
Method of Exercise
. The Conversion Right may be exercised by the Holder by delivery to the Company of an Exercise Notice electing to exercise, all or any part, of this Warrant as designated in such Exercise Notice pursuant to the Conversion Right. No ink-original Exercise
Notice shall be required, nor physical surrender of this Warrant, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Exercise Notice form be required to effect an exercise using the Conversion Right. Such conversion shall be effective upon receipt by the Company of such Exercise Notice, or on such later date as is specified therein (the “
Conversion Date
”), and, at the election of the Holder, may be made contingent
upon the closing of the sale of the Company’s Common Stock to the public in a public offering pursuant to a registration statement under the Act (a “
Public Offering
”). The Converted Warrant Shares shall be delivered to the Holder on or prior to the applicable Share Delivery Date and, if applicable, a new warrant evidencing the balance of the Warrant Shares available for issuance, shall be issued as of the Conversion Date and shall be
delivered to the holder within thirty (30) days following the Conversion Date.
9.2
Exercise Prior to Expiration.
Subject to Section 10 below, to the extent this Warrant is not previously exercised as to all of the Warrant Shares subject hereto, and if the Weighted Average Price of one share of Common Stock is greater than the Warrant Price
then in effect, this Warrant shall be deemed automatically exercised pursuant to
Section 9.1
above (even if not surrendered) immediately before its expiration. To the extent this Warrant or any portion thereof is deemed automatically exercised pursuant to this
Section 9.2
, the Company agrees to notify the Holder of the number of Warrant Shares, if any, the Holder is to receive by reason of such automatic
exercise, to the extent not prohibited pursuant to
Section 10
.
10.
Beneficial Ownership Limitation on Exercises
. The Company shall not effect the exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, if (and then only to the extent that),
after giving effect to such exercise, such Holder together with the other Attribution Parties (as defined below) collectively would beneficially own in excess of 9.99% (such percentage cap, the “
Maximum Percentage
”) of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution
Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of Warrant Shares with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any other Attribution Party and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities
of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including these Series H Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this
Section 10
. For purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For purposes of determining
the number of Warrant Shares the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission, as the case may be, (2) a more recent public announcement by the Company or (3) any other written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding (the “
Reported Outstanding Share Number
”). If the Company receives a Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent
that the issuance of Warrant Shares stated in the Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this
Section 10
, to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the “
Reduction Shares
”)
and (ii) as soon as reasonably practicable, return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, where such request indicates that it is being made pursuant to this Warrant, the Company shall, within two (2) Trading Days, confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Company, including these Series H Warrants, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon the exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number
of outstanding shares of Common Stock (as determined under Section 13(d) of the Exchange Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “
Excess Shares
”) shall be deemed null and void and shall be cancelled
ab initio
, and the Holder shall not have the power to vote or to transfer
the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. For purposes of clarity, the shares of Common Stock underlying this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose, including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. The provisions of this
paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this
Section 10
to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this
Section 10
or to make changes or supplements necessary or desirable to properly give effect to such limitation.
The limitation as contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.
As used in this Warrant, “
Attribution Parties
” means, collectively, the following Persons and entities: (i) [insert Holder parties] or any of its Affiliates or principals, (ii) any direct or indirect
Affiliates of the Holder or of any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties
to the Maximum Percentage.
11.
Modification and Waiver
. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the Company and the Holder.
12.
Notices
. Any notice, request, communication or other document required or permitted to be given or delivered to the Holder or the Company shall be delivered, or shall be sent by certified or registered mail, postage prepaid, to the Holder
at its address as shown on the books of the Company or to the Company at the address indicated therefor on the signature page of this Warrant.
13.
Binding Effect on Successors
. This Warrant shall be binding upon any entity succeeding the Company by merger or consolidation, and all of the obligations of the Company relating to the Warrant Shares shall survive the exercise, conversion
and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder.
14.
Dispute Resolution
. In the case of a dispute as to the determination of the Warrant Price or the arithmetic calculation of the Warrant Shares, the Company shall
submit the disputed determinations or arithmetic calculations via email or facsimile within two (2) Trading Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Warrant Price or the Warrant Shares within five (5) Trading Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Trading Days submit
via email or facsimile (a) the disputed determination of the Warrant Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall use reasonable best efforts to cause the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results
no later than ten (10) Trading Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error. The expenses of the investment bank and accountant will be borne by the Company, unless the investment bank or accountant determines that the determination of the Warrant Price or the arithmetic calculation of the Warrant Shares by the Company was
correct, in which case the expenses of the investment bank and accountant will be borne by the Holder.
15.
Lost Warrants
. The Company covenants to the Holder that, upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction,
upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant, the Company will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant.
16.
Descriptive Headings
. The descriptive headings of the various Sections of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. The language in this Warrant shall be construed as to its fair meaning
without regard to which party drafted this Warrant.
17.
Governing Law
. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of New York without giving effect to any choice or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of New York.
18.
[Intentionally Omitted].
19.
Remedies
. In case any one or more of the covenants or agreements contained in this Warrant shall have been breached, the holders hereof (in the case of a breach by the Company), or the Company (in the case of a breach by the Holder), may
proceed to protect and enforce their or its rights either by suit in equity and/or by action at law, including, but not limited to, an action for damages as a result of any such breach and/or an action for specific performance of any such covenant or agreement contained in this Warrant.
20.
Severability
. The invalidity or unenforceability of any provision of this Warrant in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction, or affect any other provision of this Warrant,
which shall remain in full force and effect.
21.
Recovery of Litigation Costs
. If any legal action or other proceeding is brought for the enforcement of this Warrant, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this
Warrant, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.
22.
Entire Agreement; Modification
. This Warrant constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations, and undertakings
of the parties, whether oral or written, with respect to such subject matter.
23.
No Third-Party Beneficiaries
. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and, in the case of the Holder, permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant.
24.
Counterparts
. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, email
or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.
[Remainder of page left intentionally blank. Signature page follows.]
The Company has caused this Warrant to be duly executed and delivered as of the Date of Grant specified above.
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PALATIN TECHNOLOGIES, INC.
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Date
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/s/
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Name
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Name
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Title
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Title
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Address:
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4B Cedar Brook Drive
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Cranbury, NJ 08512
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[SIGNATURE PAGE TO COMMON STOCK WARRANT]
-11-
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
SERIES H 2016 WARRANT TO PURCHASE COMMON STOCK
PALATIN TECHNOLOGIES, INC.
The undersigned holder hereby exercises the right to purchase __________________________ of the shares of Common Stock (“
Warrant Shares
”) of Palatin Technologies, Inc., a Delaware corporation (the “
Company
”),
evidenced by the attached copy of the Warrant to Purchase Common Stock (the “
Warrant
”). Capitalized terms used in this Exercise Notice and not otherwise defined shall have the respective meanings set forth in the Warrant.
1.
Form of Warrant Price
. The holder intends that payment of the Warrant Price shall be made as:
____________ a “
Cash Exercise
” with respect to _________________ Warrant Shares;
and/or
____________ a “
Cashless Exercise
” in accordance with the terms of the Warrant in
connection with the exercise of the Warrant for _______________ Warrant Shares.
2.
Payment of Warrant Price
. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant to this Exercise Notice and the Warrant, the holder shall pay the aggregate Warrant Price in the sum of $___________________ to the Company
in accordance with the terms of the Warrant.
3.
Delivery of Warrant Shares
. The Company shall deliver to the holder Warrant Shares in accordance with the terms of the Warrant.
4.
Representations and Warranties
. By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise evidenced hereby the holder, together with all Attribution Parties, will not beneficially own in excess of the number of shares
of Common Stock (determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended) permitted to be owned under Section 10 of this Warrant to which this notice relates.
5.
Number of Shares
. The total number of shares of Common Stock currently held by the holder, including all Attribution Parties is, as of the date hereof and after giving effect to the exercise evidenced hereby, ________________.
Date: _________________, 20___.
[Name of Registered Holder]
By:
_____________________________
Name:
_____________________________
Title:
_____________________________
ACKNOWLEDGMENT
The Company hereby acknowledges this Exercise Notice.
Palatin Technologies, Inc.
By:
_____________________________
Name:
_____________________________
EXHIBIT 4.2
SERIES I 2016 COMMON STOCK PURCHASE WARRANT CERTIFICATE
Palatin Technologies, Inc.
No. Series 2016 I- [ ]
Number of Shares of Common Stock: [ ]
Date of Issuance: August [ ], 2016 (the “
Issuance Date
”)
THIS COMMON STOCK
PURCHASE WARRANT (the “
Warrant
”) certifies that, for value received, [ ], the registered holder of this
Warrant or its permitted assigns (the “
Holder
”) is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in this Warrant, at any time or times on or after the
Issuance Date
, but not after 5:30 p.m., New York City time, on the Expiration Date, to subscribe for and purchase from Palatin Technologies, Inc., a Delaware corporation
(the “
Company
”), up to [ ] shares (the “
Warrant Shares
”) of Common Stock.
Section 1
.
Definitions
.
Capitalized terms used in this Warrant have the meanings set forth in this Warrant, including Section 9 below.
Section 2
.
Exercise
.
a)
Exercise of Warrant
.
Subject to the terms and conditions of this Warrant (including, without limitation,
the limitation set forth in Section 2(d)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date, in whole or in part (but not as to fractional shares), by delivery of a written notice, in the form attached to this Warrant as
Exhibit A
or in such other form as is satisfactory to the Company (the “
Exercise Notice
”), of the Holder’s election to exercise this Warrant. Within
two (2) Trading Days following the Exercise Notice, the Holder shall make payment to the Company of an amount equal to the applicable Exercise Price (as defined in Section 2(b)) multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “
Aggregate Exercise Price
”) in cash or by wire transfer of immediately available funds, or by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined
in Section 2(c)).
The Holder shall not be required to surrender this Warrant in order to effect an exercise under this Warrant, unless the Holder has purchased all of the Warrant Shares available under this Warrant and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation as soon as practicable after the date the final Exercise Notice is delivered to the Company. Execution and delivery of the Exercise Notice
with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the second Trading Day following the date on which the Company has received the Exercise Notice, the Company shall transmit by email or facsimile an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company’s transfer agent for the Common
Stock (the “
Transfer Agent
”). The Company shall deliver any objection to the Exercise Notice on or before the second Trading Day following the date on which the Company has received the Exercise Notice. In the event of any discrepancy or dispute as to the remaining number of Warrant Shares, the records of the Company and the Holder’s broker or brokers shall be controlling and determinative in the absence
of manifest error. On or before the third Trading Day following the date on which the Company has received the Exercise Notice
, but not in any event prior to the time the Holder has delivered the Aggregate Exercise Price (or notice of a Cashless Exercise)
(the “
Share Delivery Date
”), the Company shall, (X)
provided
that
the Transfer Agent is participating in the Direct Registration System (including any successor thereto, “
DRS
”) or The Depository Trust Company (“
DTC
”) Fast Automated Securities Transfer Program (including any successor thereto, the “
FAST Program
”),
upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to either the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, or to the Holder’s or its designee’s direct registration account, or (Y), if the Transfer Agent is not participating in either the DRS or FAST Program, issue and dispatch by overnight courier to the address as specified in the
Exercise Notice, a certificate (which shall be unlegended
, provided that the Warrant Shares subject to the Exercise Notice are included in an effective Registration Statement or all applicable requirements of Rule 144, including the holding period thereof, are met, and
subject in all cases to requirements of, and compliance with, securities laws then in effect), registered in the Company’s share register in the name of the Holder or its designee, for the
number of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC or DRS account or the date of delivery of the certificates evidencing such Warrant Shares, as the case
may be. If this Warrant is submitted in connection with any exercise pursuant to this Section 2(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three Trading Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 4(b)) representing the right to purchase the number of Warrant
Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. The Company shall pay any and all taxes that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant;
provided
,
however
,
that the Company shall not be required to pay any stamp or other tax or governmental charge required to be paid in connection with any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder or any other Attribution Party (as defined below), and in the event that any such transfer is involved, the Company shall not be required to effect any such transfer until such tax or other charge shall have been paid or it has been established to the
Company’s reasonable satisfaction that no such tax or other charge is due. The Holder shall be responsible for all income tax liability that may arise as a result of holding or transferring this Warrant.
The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares under this Warrant, the number of Warrant Shares available
for purchase under this Warrant at any given time may be less than the amount stated on the face of this Warrant.
b)
Exercise Price
. The exercise price per share of Common Stock issuable under this Warrant shall be $0.01, subject to adjustment pursuant
to the terms of this Warrant (the “
Exercise Price
”).
c)
Cashless Exercise
.
Upon exercise of this Warrant, in lieu of making the cash payment otherwise contemplated to be made to the
Company upon such exercise, the Holder can elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (a “
Cashless Exercise
”):
Net Number =
(A x B) - (A x C)
B
For purposes of the foregoing formula:
A =
the total number of shares with respect to which this Warrant is then being exercised;
B =
the Weighted Average Price of the shares of Common Stock on the Trading Day immediately preceding the date of the Exercise Notice; and
C =
the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
d)
Beneficial Ownership Limitation on Exercises
.
The Company shall not effect the exercise of any portion of this Warrant, and the Holder shall not have the right to
exercise any portion of this Warrant, if (and then only to the extent that) after giving effect to such exercise, such Holder together with the other Attribution Parties (as defined below) collectively would beneficially own in excess of 9.99% (such percentage cap, the “
Maximum Percentage
”) of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing
sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portion of this Warrant
beneficially owned by the Holder or any other Attribution Party and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including the Series H Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 2(d). For purposes of this paragraph,
beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For purposes of determining the number of shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and
Exchange
Commission, as the case may be, (2) a more recent public announcement by the Company or (3) any other written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding
(the “
Reported Outstanding Share Number
”). If the Company receives an Exercise Notice from a Holder at a time when the actual number of outstanding shares of Common
Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify such Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 2(d), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice
(the
number of shares by which such purchase is reduced, the “
Reduction Shares
”) and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares.
For any reason at any time, upon the written or oral request of the Holder, where such request
indicates that it is being made pursuant to this Warrant,
the Company shall within two Trading Days confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the Series H Warrants, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance
of shares of Common Stock to the Holder upon the exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the Exchange Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “
Excess
Shares
”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares.
Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase
not effective until the sixty-first (61
st
) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 19.99% (except that such increased percentage may exceed 19.99% in the event that (x) the Company obtains the approval of its stockholders as required by the applicable rules of the Principal Market or applicable Eligible Market for issuances of shares of Common Stock in excess of such amount or (y) the
Company is not subject to rules of the Principal Market or applicable Eligible Market limiting issuances of shares of Common Stock in excess of such amount) as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61
st
) day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and
not to any other holder of the
Series H
Warrants that is not an Attribution Party. For purposes of clarity, the shares of Common Stock underlying this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 2(d) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 2(d) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation as contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.
As used in this Warrant, “
Attribution Parties
” means, collectively, the following Persons and entities: (i) [insert Holder parties] or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the
Holder or any of the foregoing parties in (i), (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the
Maximum Percentage.
e)
Fractional Shares
. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.
As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price.
f)
Failure to Timely Deliver Shares
. In addition to any other rights available to the Holder, if the Company fails to deliver to the
Holder the Warrant Shares or to credit the Holder’s balance account with DRS or DTC or through the FAST Program for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise pursuant to an exercise on or before the Share Delivery Date, and if after such date the Holder purchases (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant
Shares that the Holder anticipated receiving from the Company upon such exercise (a “
Buy-In
”), then the Company shall, within three Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common
Stock so purchased (the “
Buy-In Price
”), at which point the Company’s obligation to deliver such shares or credit such Holder’s balance account with DRS or DTC (and to issue such Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder such Common Stock or credit the Holder’s balance account with DRS or DTC and
pay
cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Weighted Average Price of the Common Stock on the date of the event giving rise to the Company’s obligation to deliver such shares. The Company shall be liable for all payments to the Holder pursuant to this Section 2(f) and such payments shall be a liability and debt obligation of the Company, and the Holder shall be a creditor of the Company
with respect to such obligation, that is immediately due and payable pursuant to and in accordance with this Section 2(f).
Section 3
.
Certain
Adjustments
.
a)
Stock Dividends and Splits
. If the Company, at any time from and after the Issuance Date and while this Warrant is outstanding: (i)
subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased, or (ii) combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 3(a) shall become effective at the close of business on the date the subdivision or combination becomes effective. If any event occurs of the type contemplated by the provisions of this Section 3(a) but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features to the holders of the Company’s equity securities), then the Company’s Board of Directors will make an appropriate adjustment in the Exercise Price and the number of Warrant Shares so as to protect the rights of the Holder
as if it had been a holder of the shares of Common Stock issuable upon exercise of this Warrant (without regard to any limitation on such exercise of this Warrant);
provided
,
that
no
such adjustment will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 3(a)
in any manner that is adverse to the Holder
.
b)
Par Value
. T
he Company shall not subdivide (by any stock split, stock dividend, recapitalization or otherwise) one or more
classes of its outstanding shares of Common Stock into a greater number of shares if it would cause the Exercise Price to be less than the par value of the Common Stock
.
c)
Rights Upon Distribution of Assets
. If the Company shall declare or make any dividend or other distributions of its assets (or rights
to acquire its assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “
Distribution
”), at any time after the
Issuance
Date,
then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise of this Warrant) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to
be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance
for the benefit of the Holder until such time
or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution to be held similarly in abeyance) to the same extent as if there had been no such limitation).
d)
Purchase Rights
. In addition to any adjustments pursuant to Section 3 above, if at any time after the
Issuance
Date
and prior to the Expiration Date the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “
Purchase Rights
”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise of this Warrant) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (
provided
,
however
,
that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such Common Shares as a result of such Purchase Right to such extent) and such Purchase Right (and beneficial ownership) to such extent shall be held in abeyance for the Holder until
such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right
(and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance)
to the same extent as if there had been no such limitation).
e)
Calculations
. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case
may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
Section 4
.
Transfer
of Warrant
.
a)
Transferability
. Subject to compliance with applicable securities laws, this Warrant and all rights under this Warrant are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with the Assignment Form, in the form attached to this Warrant as
Exhibit B
or in such other form as is satisfactory to the Company, duly executed by the Holder or its agent or attorney and, if any, funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon
such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. This Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant
Shares prior to having a new Warrant issued.
b)
New Warrants
. This Warrant may be divided or combined with other Series I 2016 Warrants upon presentation of this Warrant at the aforesaid
office of the Company or its designated agent, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Notwithstanding anything to the contrary in this Section 4(b), in no event shall this Warrant be subdivided into units of less than 5,000 Warrant Shares (as adjusted for stock splits, stock dividends, recapitalizations or similar events) and such new Warrants shall not be further subdivided. Subject to compliance
with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall include reference to the initial Issuance Date set forth on the first page of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c)
Warrant Register
. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “
Warrant
Register
”), in the name of the record Holder of this Warrant from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner of this Warrant for the purpose of any exercise of this Warrant or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5
.
Reservation of Warrant Shares
.
a)
[Intentionally Omitted]
b)
Reservation
. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as provided in this Warrant, the number of shares of Common Stock which are then issuable and deliverable upon the exercise of this entire Warrant
(without regard to any limitations on the exercise of this Warrant and taking into account the adjustments and restrictions in Section 3), free from preemptive or any other contingent purchase
rights of Persons other than the Holder. The Company covenants that all shares of Common Stock so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms of this Warrant, will be duly and validly authorized, issued and fully paid and nonassessable. The Company will take all such actions as may be reasonably necessary to assure that such shares of Common Stock may be issued as provided in this Warrant without violation of any applicable law or
regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed.
Section 6
.
Miscellaneous
.
a)
No Rights as Stockholder Until Exercise
. Except as otherwise provided in this Warrant, this Warrant does not entitle the Holder to
any voting rights nor any right to receive notice of meetings or any other rights as a stockholder of the Company prior to the exercise of this Warrant as set forth in Section 2.
b)
Loss, Theft, Destruction or Mutilation of Warrant
. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation of such Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor and dated as of such cancellation, in lieu of such Warrant.
c)
Noncircumvention
. The Company covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par
value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant and (iii) shall, for so long as this Warrant is outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely
for the purpose of effecting the exercise of this Warrant, the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of this Warrant (without regard to any limitations on exercise of this Warrant).
d)
Saturdays, Sundays, Holidays, etc
. If the last or appointed day for the taking of any action or the expiration of any right required
or granted in this Warrant shall not be a Business Day, then, such action may be taken or such right may be exercised on the next Business Day.
e)
Governing Law and Jurisdiction
. This Warrant shall be governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City
of New York, Borough of Manhattan, for the adjudication of any dispute under this Warrant or in connection herewith or with any transaction contemplated in this Warrant or discussed in this Warrant, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The
Company hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address it set forth on the signature page to this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained in this Warrant shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained in this Warrant shall
be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE UNDER THIS WARRANT OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY
.
f)
Dispute Resolution
. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via email or facsimile within two Trading Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within five Trading Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two
Trading Days submit via email or facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall use reasonable best efforts to cause the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the
Holder of the results no later than 10 Trading Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error. The expenses of the investment bank and accountant will be borne by the Company, unless the investment bank or accountant determines that the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares
by the Company was correct, in which case the expenses of the investment bank and accountant will be borne by the Holder.
g)
Nonwaiver
. No course of dealing or any delay or failure to exercise any right under this Warrant on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies.
h)
Notices
. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including,
in reasonable detail, a description of such action and the reason or reasons therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) reasonably promptly following any adjustment of the Exercise Price or the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least 10 days prior to the date on which the Company closes its books or takes a record (A) with respect
to any dividend or distribution upon the shares of Common Stock, or (B) with respect to any events that give rights to the Holder pursuant to Section 3(e) of this Warrant;
provided
, that in each case, such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.
i)
Limitation of Liability
. No provision of this Warrant, in the absence of any affirmative action by Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration in this Warrant of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j)
Remedies
. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate
and further agrees to waive any requirement by the Holder to post any bond
.
k)
Successors and Assigns
. Subject to applicable securities laws, this Warrant and the rights and obligations, including the limitation
contained in Section 2(d) of this Warrant, evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
l)
Amendment
. This Warrant may be modified or amended or the provisions of this Warrant waived with the written consent of the Company
and the holders
of
Series I 2016 Warrants;
provided
, that the provisions of Section 2(d) may not be waived and may not be modified or amended in any manner inconsistent with the terms and provisions of Section 2(d) and with the intended beneficial ownership limitation contained in Section 2(d).
m)
Severability
. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n)
Headings
. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
Section 7
.
No
Right to Setoff
.
The Company shall make any and all payments due to the Holder pursuant to and in accordance with the terms of this Warrant without the Company having any right under this Warrant or pursuant to applicable law to offset any amounts due and owing (or to become due and owing) under this Warrant to the Holder.
Section 8
.
Certain
Definitions
.
For purposes of this Warrant, the following terms shall have the following meanings:
a)
“
Affiliate
” means, with respect to any Person, any other Person which directly or indirectly
through one or more intermediaries Controls, is controlled by, or is under common control with, such Person
as such terms are used in and construed under Rule 405 and Rule 144 under the Securities Act
(and includes, without limitation, any investment manager or advisor of any Person, any fund under management or advised by any Person, and any funds with a common investment manager or advisor).
b)
“
Aggregate
Exercise Price
”
has the meaning set forth in Section 2(a).
c)
“
Attribution Parties
”
has the meaning set forth in Section 2(d).
d)
“
Bloomberg
” means Bloomberg, L.P.
e)
“
Business Day
” means any day other than Saturday, Sunday or other day on which commercial banks
in The City of New York are authorized or required by law or executive order to remain closed.
f)
“
Buy-In
”
has the meaning set forth in Section 2(f).
g)
“
Buy-In Price
”
has the meaning set forth in Section 2(f).
h)
“
Cashless Exercise
”
has the meaning set forth in Section 2(c).
i)
“
Closing Sale Price
” means, for any security as of any date, the last closing trade price for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last
trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing
Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 6(f). All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
j)
“
Common Stock
” means (i) the Company’s shares of Common Stock, par value $0.01 per share,
and (ii) any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.
k)
“
Company
” has the meaning set forth in the Preamble.
l)
“
Control
” (including the terms “controlling”, “controlled by”
or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
m)
“
Convertible Securities
” means any stock or securities (other than Options) directly or indirectly
convertible into or exercisable or exchangeable for shares of Common Stock.
n)
“
Distribution
”
has the meaning set forth in Section 3(c).
o)
“
DRS
”
has the meaning set forth in Section 2(a).
p)
“
DTC
”
has the meaning set forth in Section 2(a).
q)
“
Eligible Market
” means the Principal Market, The New York Stock Exchange, Inc., or The NASDAQ
Stock Market LLC.
r)
“
Excess Shares
”
has the meaning set forth in Section 2(d).
s)
“
Exchange Act
” means the Securities Exchange Act of 1934, as amended.
t)
“
Exercise Notice
”
has the meaning set forth in Section 2(a).
u)
“
Exercise Price
”
has the meaning set forth in Section 2(b).
v)
“
Expiration Date
” means the ten (10) year anniversary of the Issuance Date.
w)
“
FAST Program
”
has the meaning set forth in Section 2(a).
x)
“
Group
” means a “group”
as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder
.
y)
“
Holder
” has the meaning set forth in the Preamble.
z)
“
Issuance Date
” has the meaning set forth in the Preamble.
aa)
“
Maximum Percentage
”
has the meaning set forth in Section 2(d).
ab)
“
Options
” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
ac)
“
Person
” means an individual, a limited liability company, a partnership, a limited partnership,
a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or political subdivision or any department, agency or instrumentality thereof.
ad)
“
Principal Market
” means The NYSE MKT.
ae)
“
Purchase Rights
”
has the meaning set forth in Section 3(e).
af)
“
Reduction Shares
”
has the meaning set forth in Section 2(d).
ag)
“
Reported Outstanding Share Number
”
has the meaning set forth in Section 2(d).
ah)
“
Share Delivery Date
”
has the meaning set forth in Section 2(a).
ai)
“
Series H Warrants
” means the Series H 2016 Warrants to purchase 0.75 of a share of Common
Stock, issued by the Company on the date hereof.
aj)
“
Trading Day
” means any day on which the Common Stock are traded on the Principal Market, or,
if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded;
provided
that
“Trading Day” shall not include any day on which the Common Stock are scheduled to trade on such
exchange or market for less than 4.5 hours or any day that the Common Stock are suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).
ak)
“
Transfer Agent
”
has the meaning set forth in Section 2(a).
al)
“
Warrant
” has the meaning set forth in the Preamble.
am)
“
Warrant Register
”
has the meaning set forth in Section 4(c).
an)
“
Warrant Shares
” has the meaning set forth in the Preamble.
ao)
“
Weighted Average Price
” means, for any security as of any date, the dollar volume-weighted
average price for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York City time (or such other time as the Principal Market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York City time (or such other time as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average
price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York City time (or such other time as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York City time (or such other time as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg
for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported by the OTC Markets. If the Weighted Average Price cannot be calculated for such security on such date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security,
then such dispute shall be resolved pursuant to Section 6(f) with the term “Weighted Average Price” being substituted for the term “Exercise Price”.
All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
********************
(Signature Pages Follow)
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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PALATIN TECHNOLOGIES, INC.
By: ________________________
Name: Stephen T. Wills
Title: Executive Vice President, Chief Financial Officer and Chief Operating Officer
|
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
SERIES I 2016 WARRANT TO PURCHASE COMMON STOCK
PALATIN TECHNOLOGIES, INC.
No. Series 2016 I X-XX
The undersigned holder hereby exercises the right to purchase __________________________ of the shares of Common Stock (“Warrant Shares”) of Palatin Technologies, Inc., a Delaware corporation (the “Company”), evidenced by the attached copy of the Warrant to Purchase Common Stock (the “Warrant”). Capitalized
terms used in this Exercise Notice and not otherwise defined shall have the respective meanings set forth in the Warrant.
1.
Form of Exercise Price
. The Holder intends that payment of the Exercise Price shall be made as:
____________ a “Cash Exercise” with respect to _________________ Warrant Shares; and/or
____________ a “Cashless Exercise” in accordance with the terms of the Warrant in connection with the exercise of the Warrant for _______________
Warrant Shares.
2.
Payment of Exercise Price
. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant to this Exercise Notice and the Warrant, the Holder shall pay the Aggregate
Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.
3.
Delivery of Warrant Shares
. The Company shall deliver to the holder Warrant Shares in accordance with the terms of the Warrant.
4.
Representations and Warranties
. By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise evidenced hereby the Holder,
together with all Attribution Parties, will not beneficially own in excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended) permitted to be owned under Section 2(d) of this Warrant to which this notice relates.
5.
Number of Shares
. The total number of shares of Common Stock held by the Holder, together with all Attribution Parties is, as of the date hereof and after giving effect to the exercise evidenced hereby, ___________.
Date: _________________, 20___.
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[Name of Registered Holder]
By:
_____________________________
Name:
_____________________________
Title:
_____________________________
|
ACKNOWLEDGMENT
The Company hereby acknowledges this Exercise Notice.
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Palatin Technologies, Inc.
By:
_____________________________
Name:
_____________________________
Title:
_____________________________
|
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to
_______________________________________________ whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________, _______
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Holder’s Signature:
_____________________________
Holder’s Address:
_____________________________
_____________________________
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