Exhibit
1.1
AT
THE MARKET OFFERING AGREEMENT
January 7,
2019
The
Benchmark Company, LLC
150
East 58th Street, 17th Floor
New
York, New York 10155
Ladies
and Gentlemen:
Youngevity
International, Inc., a corporation organized under the laws of
Delaware (the “
Company
”), confirms its
agreement (this “
Agreement
”) with The
Benchmark Company, LLC (the “
Manager
”) as
follows:
1.
Definitions
. The terms that
follow, when used in this Agreement and any Terms Agreement, shall
have the meanings indicated.
“
Accountants
” shall have
the meaning ascribed to such term in Section
4(l).
“
Action
” shall have the
meaning ascribed to such term in Section 3(s).
“
Affiliate
” shall have the
meaning ascribed to such term in Section 3(v).
“
Applicable Time
” shall
mean, with respect to any Shares, the time of sale of such Shares
pursuant to this Agreement or any relevant Terms
Agreement.
“
Board
” shall have the
meaning ascribed to such term in Section 2(b)(iii).
“
Broker Fee
” shall have
the meaning ascribed to such term in Section 2(b)(v).
“
Business Day
” shall mean
any day other than a Saturday, a Sunday or a legal holiday or a day
on which banking institutions or trust companies are authorized or
obligated by law to close in New York City.
“
Commission
” shall mean
the Securities and Exchange Commission.
“
Common Stock
” shall have
the meaning ascribed to such term in Section
2.
“
Common Stock Equivalents
”
shall have the meaning ascribed to such term in Section
3(h).
“
Company Counsel
” shall
have the meaning ascribed to such term in Section
4(k).
“
DTC
” shall have the
meaning ascribed to such term in Section 2(b)(vii).
“
EDGAR
” shall have the
meaning ascribed to such term in Section 2.
“
Effective Date
” shall
mean each date and time that the Registration Statement and any
post-effective amendment or amendments thereto became or becomes
effective.
“
Electronic Notice
” shall
have the meaning ascribed to such term in Section 10.
“
Evaluation Date
” shall
have the meaning ascribed to such term in Section
3(ee).
“
Exchange Act
” shall have
the meaning ascribed to such term in Section
2.
“
Execution Time
” shall
mean the date and time that this Agreement is executed and
delivered by the parties hereto.
“
FDA
” shall have the
meaning ascribed to such term in Section 3(v).
“
FINRA
” shall have the
meaning ascribed to such term in Section 3(f).
“
Forward Looking
Statements
” shall have the meaning ascribed to such
term in Section 3(ss).
“
Free Writing Prospectus
”
shall mean a free writing prospectus, as defined in Rule
405.
“
Incorporated Documents
”
shall mean the documents or portions thereof filed with the
Commission on or before the Effective Date that are incorporated by
reference in the Registration Statement or the Prospectus and any
documents or portions thereof filed with the Commission after the
Effective Date that are deemed to be incorporated by reference in
the Registration Statement or the Prospectus.
“
Indebtedness
” shall have
the meaning ascribed to such term in Section
3(ll).
“
Intellectual Property
”
shall have the meaning ascribed to such term in Section
3(aa).
“
Issuer Free Writing
Prospectus
” shall mean an issuer free writing
prospectus, as defined in Rule 433.
“
Liens
” shall have the
meaning ascribed to such term in Section 3(a).
“
Losses
” shall have the
meaning ascribed to such term in Section 7(d).
“
Material Adverse Effect
”
shall have the meaning ascribed to such term in Section
3(b).
“
Material Permits
” shall
have the meaning ascribed to such term in Section
3(v).
“
Maximum Amount
” shall
have the meaning ascribed to such term in Section 2.
“
Money Laundering Laws
”
shall have the meaning ascribed to such term in Section
3(pp).
“
Net Proceeds
” shall have
the meaning ascribed to such term in Section 2(b)(v).
“
Nonelection Notice
” shall
have the meaning ascribed to such term in Section 10.
“
Off-Balance Sheet
Transaction
” shall have the meaning ascribed to such
term in Section 3(rr).
“
Permitted Free Writing
Prospectus
” shall have the meaning ascribed to such
term in Section 4(g).
“
Person
” shall have the
meaning ascribed to such term in Section 3(f).
“
Placement
” shall have the
meaning ascribed to such term in Section 2(c).
“
Proceeding
” shall have
the meaning ascribed to such term in Section
3(b).
“
Prospectus
” shall have
the meaning ascribed to such term in Section 2.
“
Prospectus Supplement
”
shall have the meaning ascribed to such term in Section
2.
“
Registration Statement
”
shall have the meaning ascribed to such term in Section
2.
“
Representation Date
”
shall have the meaning ascribed to such term in Section
4(j).
“
Required Approvals
” shall
have the meaning ascribed to such term in Section
3(f).
“
Rule 158
”,
“
Rule
163
”, “
Rule 164
”,
“
Rule
172
”, “
Rule 173
”,
“
Rule
405
”, “
Rule 415
”,
“
Rule
424
”, “
Rule 430B
” and
“
Rule
433
” refer to such rules under the Securities
Act.
“
Sales Notice
” shall have
the meaning ascribed to such term in Section
2(b)(i).
“
Sanctions
” shall have the
meaning ascribed to such term in Section 3(qq).
“
Sanction Countries
” shall
have the meaning ascribed to such term in Section
3(qq).
“
Sanction Persons
” shall
have the meaning ascribed to such term in Section
3(qq).
“
Sarbanes Oxley Act
” shall
have the meaning ascribed to such term in Section
3(q).
“
SEC Reports
” shall have
the meaning ascribed to such term in Section
3(o).
“
Securities Act
” shall
have the meaning ascribed to such term in Section
2.
“
Securities Act
Regulations
” shall have the meaning ascribed to such
term in Section 2.
“
Settlement Date
” shall
mean the second (2
nd
) Trading Day (or
such earlier day as is industry practice for regular-way trading)
following the date on which sales of Shares are made.
“
Subsidiary
” shall have
the meaning ascribed to such term in Section 3(a).
“
Terms Agreement
” shall
have the meaning ascribed to such term in Section
2(a).
“
Time of Delivery
” shall
have the meaning ascribed to such term in Section
2(c).
“Trading
Day” means any day on which the Common Stock is traded on the
Nasdaq Capital Market or any other national securities exchange on
which the Common Stock then trades. While a Sales Notice is in
effect, neither the Manager nor any of its subsidiaries shall, for
its own account, engage in (i) any short sale of any security of
the Company, as defined in Regulation SHO under the Exchange Act or
(ii) any market making bidding, stabilization or other trading
activity with regard to the Common Stock or related derivative
securities, in each case, if such activity would be prohibited
under Regulation M under the Exchange Act or other
anti-manipulation rules under the Securities Act. For the avoidance
of doubt, this restriction shall not apply to transactions by or on
behalf of any customer of the Manager or transactions by the Agent
to facilitate any such transactions by or on behalf of any customer
of the Manager.
“
Trading Market
” means any
of the following exchanges or markets on which the Common Stock is
listed or quoted for trading on the date in question: the NYSE
American, the Nasdaq Capital Market, the Nasdaq Global Market, the
Nasdaq Global Select Market, the New York Stock Exchange, the OTC
Bulletin Board or the OTCQX or OTCQB marketplaces operated by the
OTC Markets Group, Inc. (or any successors to any of the
foregoing).
2.
Sale and Delivery of Shares
.
The Company proposes to issue and sell through or to the Manager,
as sales agent and/or principal, up to $60,000,000 of shares (the
“
Shares
”) of the
Company’s common stock, par value $0.001 per share (the
“
Common
Stock
”), from time to time during the term of this
Agreement and on the terms set forth herein;
provided
,
however
,
that in no event shall the Company
issue or sell through the Manager such number of Shares that (a)
exceeds the number or dollar amount of Common Stock registered on
the Registration Statement, (b) exceeds the number of authorized
but unissued shares of Common Stock or (c) would cause the Company
or the offering of the Shares to not satisfy the eligibility and
transaction requirements for use of Form S-3 (including, if
applicable, General Instruction I.B.6 of Registration Statement on
Form S-3) (the lesser of (a), (b) or (c), the “
Maximum Amount
”).
Notwithstanding anything to the contrary contained herein, the
parties hereto agree that compliance with the limitations set forth
in this Section 2 on the number and aggregate sales price of Shares
issued and sold under this Agreement shall be the sole
responsibility of the Company and that Manager shall have no
obligation in connection with such compliance. Subject to the terms
of a Sales Notice, the Manager may also sell Shares by any other
method permitted by law, including but not limited to in privately
negotiated transactions.
The
Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended (the “
Securities Act
”), and the
rules and regulations thereunder (the “
Securities Act
Regulations
”), with the Commission a registration
statement on Form S-3 (File No. 333-225053), including a base
prospectus, relating to certain securities, including the Shares to
be issued from time to time by the Company, and which incorporates
by reference documents that the Company has filed or will file in
accordance with the provisions of the Securities Exchange Act of
1934, as amended (the “
Exchange Act
”), and the
rules and regulations thereunder. The Company has prepared a
prospectus supplement specifically relating to the Shares (the
“
Prospectus
Supplement
”) to the base prospectus to be included as
part of such registration statement. The Company will furnish to
the Manager, for use by the Manager, copies of the prospectus
included as part of such registration statement, as supplemented by
the Prospectus Supplement, relating to the Shares. Except where the
context otherwise requires, such registration statement, including
all documents filed as part thereof or incorporated by reference
therein, and including any information contained in a Prospectus
(as defined below) subsequently filed with the Commission pursuant
to Rule 424(b) under the Securities Act Regulations or deemed to be
a part of such registration statement pursuant to Rule 430B of the
Securities Act Regulations, is herein called the
“
Registration
Statement
.” Any reference herein to the Registration
Statement, any Prospectus Supplement, Prospectus or any Issuer Free
Writing Prospectus shall be deemed to refer to and include the
Incorporated Documents, including, unless the context otherwise
requires, the documents, if any, filed as exhibits to such
Incorporated Documents. Any reference herein to the terms
“amend,” “amendment” or
“supplement” with respect to the Registration
Statement, any Prospectus Supplement, the Prospectus or any Issuer
Free Writing Prospectus shall be deemed to refer to and include the
filing of any document under the Exchange Act on or after the
most-recent effective date of the Registration Statement, or the
date of the Prospectus Supplement, Prospectus or such Issuer Free
Writing Prospectus, as the case may be, and incorporated therein by
reference. For purposes of this Agreement, all references to the
Registration Statement, the Prospectus or to any amendment or
supplement thereto shall be deemed to include the most recent copy
filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval System, or if applicable, the Interactive
Data Electronic Application system when used by the Commission
(collectively, “
EDGAR
”).
(a)
Appointment
of Manager as Selling Agent; Terms Agreement
. For purposes
of selling the Shares through the Manager pursuant to the terms of
this Agreement, the Company hereby appoints the Manager as
exclusive agent of the Company for the purpose of soliciting
purchases of the Shares from the Company pursuant to this Agreement
and the Manager agrees to use its commercially reasonable efforts
to sell, as sales agent for the Company, the Shares on the terms
and subject to the conditions stated herein. The Company agrees
that, whenever it determines to sell the Shares directly to the
Manager as principal, it will enter into a separate agreement
(each,
(b)
a
“
Terms
Agreement
”) in substantially the form of
Annex I
hereto, relating to
such sale in accordance with Section 2 of this
Agreement.
(c)
Manager Sales
. Subject to the
terms and conditions and in reliance upon the representations and
warranties herein set forth, the Company will issue and agrees to
sell Shares from time to time through the Manager, acting as sales
agent, and the Manager agree to use its commercially reasonable
efforts to sell, as sales agent for the Company, the Shares on the
following terms:
(i)
(A) The Shares are
to be sold on a daily basis or otherwise as shall be agreed to by
the Company and the Manager on any day that is a Trading Day for
the Trading Market, (B) the Company has instructed the Manager by
electronic mail to make such sales (“
Sales Notice
”) and (C)
the Company has satisfied its obligations under Section 6 of this
Agreement, provided that the deliveries required under Section 6
shall only be required to be made on the Execution Time and on a
Representation Date on which a material amendment to the
Registration Statement or Prospectus is made or the Company files
its Annual Report on Form 10-K or a material amendment thereto
under the Exchange Act. The Company will designate the maximum
amount of the Shares to be sold by the Manager daily (subject to
the limitations set forth in Section 2(d)) and the minimum price
per Share at which such Shares may be sold, provided that the Sales
Notice may specify an amount of Shares to be sold on each of
several successive days. Subject to the terms and conditions
hereof, the Manager shall use its commercially reasonable efforts
to sell on a particular day all of the Shares designated for the
sale by the Company on such day. The gross sales price of the
Shares sold under this Section 2(b) shall be the market price for
shares of the Common Stock sold by the Manager under this Section
2(b) on the Trading Market at the time of sale of such Shares.
Notwithstanding the foregoing, if the current Trading Market is not
a national securities exchange, the Company shall not deliver a
Sales Notice hereunder, except for a sale of Shares in a privately
negotiated transaction that is eligible for an exemption from
registration under the applicable state securities laws. It is
expressly acknowledged and agreed that neither the Company nor the
Manager will have any obligation whatsoever with respect to a
Placement or any Placement Shares unless and until the Company
delivers a Sales Notice to the Manager and the Manager does not
decline such Sales Notice pursuant to the terms set forth above,
and then only upon the terms specified therein and herein. In the
event of a conflict between the terms of this Agreement and the
terms of a Sales Notice, the terms of the Sales Notice will
control.
(ii)
The Company
acknowledges and agrees that (A) there can be no assurance that the
Manager will be successful in selling the Shares, (B) the Manager
will incur no liability or obligation to the Company or any other
person or entity if it does not sell the Shares for any reason
other than a failure by the Manager to use their commercially
reasonable efforts consistent with its normal trading and sales
practices and applicable law and regulations to sell such Shares as
required under this Agreement, and (C) the Manager shall be under
no obligation to purchase Shares on a principal basis pursuant to
this Agreement, except as otherwise specifically agreed by the
Manager and the Company pursuant to a Terms Agreement.
(iii)
The Company shall
not authorize the issuance and sale of, and the Manager shall not
be obligated to use their commercially reasonable efforts to sell,
any Share at a price lower than the minimum price therefor
designated from time to time by the Company’s Board of
Directors (the “Board”), or a duly authorized committee
thereof, or such duly authorized officers of the Company, and
notified to the Manager in writing. The Company or the Manager may,
upon notice to the other party hereto by telephone (confirmed
promptly by electronic mail), suspend the offering of the Shares
for any reason and at any time; provided, however, that such
suspension or termination shall not affect or impair the
parties’ respective obligations with respect to the Shares
sold hereunder prior to the giving of such notice.
(iv)
The Manager will
use its commercially reasonable efforts consistent with its normal
trading and sales practices and applicable laws and regulations to
sell the Shares up to the amount specified by the Company. The
Manager may sell Shares by any method permitted by law deemed to be
an “at the market offering” as defined in Rule 415
under the Securities Act, including without limitation sales made
directly on the Trading Market, on any other existing trading
market for the Common Stock or to or through a market maker. The
Manager may also sell Shares in privately negotiated transactions,
provided that the Manager receives the Company’s prior
written approval for any sales in privately negotiated
transactions
.
(v)
The compensation to
the Manager for sales of the Shares under this Section 2(b) shall
be a placement fee of 3.0% of the gross sales price of the Shares
sold pursuant to this Section 2(b) (“Broker Fee”). The
foregoing rate of compensation shall not apply when the Manager act
as principal, in which case the Company may sell Shares to the
Manager as principals at a price agreed upon at the relevant
Applicable Time pursuant to a Terms Agreement. The remaining
proceeds, after deduction of the Broker Fee and deduction for any
transaction fees imposed by any governmental or self-regulatory
organization in respect of such sales, shall constitute the net
proceeds to the Company for such Shares (the “Net
Proceeds”).
(vi)
The Manager shall
provide written confirmation (which may be by facsimile or
electronic mail) to the Company following the close of trading on
the Trading Market each day in which the Shares are sold under this
Section 2(b) setting forth the number of the Shares sold on such
day, the aggregate gross sales proceeds and the Net Proceeds to the
Company, and the compensation payable by the Company to the Manager
with respect to such sales.
(vii)
On or before each
Settlement Date, the Company will, or will cause its transfer agent
to, electronically transfer the Shares being sold by crediting the
Manager’s or its designee’s account (provided the
Manager shall have given the Company written notice of such
designee at least two (2) Trading Days prior to the Settlement
Date) at The Depository Trust Company through its Deposit and
Withdrawal at Custodian System or by such other means of delivery
as may be mutually agreed upon by the parties hereto which in all
cases shall be freely tradable, transferable, registered shares in
good deliverable form. On each Settlement Date, the Manager will
deliver the related Net Proceeds in same day funds to an account
designated by the Company on, or prior to, the Settlement Date. The
Company agrees that if the Company, or its transfer agent (if
applicable), defaults in its obligation to deliver Shares on a
Settlement Date, the Company agrees that in addition to and in no
way limiting the rights and obligations set forth in Section 7(a)
hereto, it will (i) hold the Manager harmless against any loss,
claim, damage, or expense (including reasonable legal fees and
expenses), as incurred, arising out of or in connection with such
default by the Company or its transfer agent (if applicable) and
(ii) pay to the Manager any commission, discount, or other
compensation to which it would otherwise have been entitled absent
such default. If, on any Settlement Date, not all Shares were sold
as issued pursuant to the Sales Notice, then, at the election of
and upon notice from the Company, the Shares shall be applied to a
future Settlement Date or returned to the Company. The Manager will
provide written confirmation to the Company no later than the
opening of the Trading Day immediately following the Trading Day on
which it has made sales of Shares hereunder setting forth the
number of Shares sold on such day, the compensation payable by the
Company to the Manager pursuant to this Section 2 with respect to
such sales, and the Net Proceeds payable to the Company, with an
itemization of the deductions made by the Manager from the gross
proceeds that it receives from such sales.
(viii)
At each Applicable
Time, Settlement Date and Representation Date, the Company shall be
deemed to have affirmed each representation and warranty contained
in this Agreement as if such representation and warranty were made
as of such date, modified or amended as necessary to relate to the
Registration Statement and the Prospectus as amended as of such
date, including such modifications or amendments disclosed in the
Incorporated Documents. Any obligation of the Manager to use their
commercially reasonable efforts to sell the Shares on behalf of the
Company shall be subject to the continuing accuracy of the
representations and warranties of the Company herein, to the
performance by the Company of its obligations hereunder and to the
continuing satisfaction of the additional conditions specified in
Section 6 of this Agreement.
(d)
Maximum Number of Shares
. Under
no circumstances shall the Company cause or request the offer or
sale of any Shares if, after giving effect to the sale of such
Shares, the aggregate amount of Shares sold pursuant to this
Agreement would exceed the lesser of (A) together with all sales of
Shares under this Agreement, the Maximum Amount, (B) the amount
available for offer and sale under the currently effective
Registration Statement and (C) the amount authorized from time to
time to be issued and sold under this Agreement by the Board, a
duly authorized committee thereof or a duly authorized executive
committee, and notified to the Manager in writing. Under no
circumstances shall the Company cause or request the offer or sale
of any Shares pursuant to this Agreement at a price lower than the
minimum price authorized from time to time by the Board, a duly
authorized committee thereof or a duly authorized executive
committee, and notified to the Manager in writing. Further, under
no circumstances shall the Company cause or permit the aggregate
offering amount of Shares sold pursuant to this Agreement to exceed
the Maximum Amount.
(e)
Regulation M Notice
. Unless the
exceptive provisions set forth in Rule 101(c)(1) of Regulation M
under the Exchange Act are satisfied with respect to the Shares,
the Company shall give the Manager at least one (1) Business
Day’s prior notice of its intent to sell any Shares in order
to allow the Manager time to comply with Regulation M.
(f)
Suspension of Sales.
The
Company or the Manager may, upon notice to the other party in
writing (including by email correspondence pursuant to Section 10),
if receipt of such correspondence is actually acknowledged by the
individual to whom the notice is sent, other than via auto-reply)
or by telephone (confirmed immediately by verifiable facsimile
transmission or email correspondence to the individuals of the
other party set forth in Section 10), suspend any sale of Shares (a
“Suspension”);
provided
,
however
, that such Suspension shall not
affect or impair any party’s obligations with respect to any
Shares sold hereunder prior to the receipt of such notice. While a
Suspension is in effect, any obligation under this Agreement with
respect to the delivery of certificates, opinions, or comfort
letters to the Manager, shall be waived. Each of the parties agrees
that no such notice under this Section 2(e) shall be effective
against any other party unless it is made to and acknowledged
(other than via auto-reply) by one of the individuals named in
Section 10, as such Section may be amended from time to
time.
3.
Representations and Warranties
.
The Company represents and warrants to, and agrees with, the
Manager at the Execution Time and on each such time the following
representations and warranties are repeated or deemed to be made
pursuant to this Agreement, as set forth below or in the
Registration Statement, the Prospectus or the Incorporated
Documents.
(a)
Subsidiaries
. All of the direct
and indirect subsidiaries (individually, a “
Subsidiary
”) of the
Company are set forth on Exhibit 21.1 to the Company’s most
recent Annual Report on Form 10-K filed with the Commission. The
Company owns, directly or indirectly, all of the capital stock or
other equity interests of each Subsidiary free and clear of any
“
Liens
”
(which for purposes of this Agreement shall mean a lien, charge,
security interest, encumbrance, right of
first refusal,
preemptive right or other restriction), and all the issued and
outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive
and similar rights to subscribe for or purchase
securities.
(b)
Organization and Qualification
.
The Company and each of the Subsidiaries is an entity duly
incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on
its business as currently conducted except where the failure to be
so qualified would not be expected to have (i) a material adverse
effect on the legality, validity or enforceability of this
Agreement, (ii) a material adverse change in the results of
operations, assets, business, prospects or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole,
from that set forth in the Registration Statement, the Base
Prospectus, any Prospectus Supplement, the Prospectus or the
Incorporated Documents, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a
timely basis its obligations under this Agreement (any of (i), (ii)
or (iii), a “
Material Adverse
Effect
”). Neither the Company nor any Subsidiary is in
violation or default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and the
Subsidiaries is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, could not reasonably be expected to result in a
Material Adverse Effect and no “
Proceeding
” (which for
purposes of this Agreement shall mean any action, claim, suit,
investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition)), has
been instituted or, to the knowledge of the Company, threatened in
any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or
qualification.
(c)
Authorization and Enforcement
.
The Company has the requisite corporate power and authority to
enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder. The
execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company, the Board
or its stockholders in connection herewith other than in connection
with the Required Approvals. This Agreement has been duly executed
and delivered by the Company and constitutes the valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
(d)
No Conflicts
. The execution,
delivery and performance of this Agreement by the Company, the
issuance and sale of the Shares and the consummation by the Company
of the other transactions contemplated herein do not and will not
(i) conflict with or violate any provision of the Company’s
or any Subsidiary’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under,
result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any
rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or
asset of the Company or any Subsidiary is bound or affected, or
(iii) subject to the Required Approvals, conflict with or result in
a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected, except in the case of each of
clauses (ii) and (iii), such as could not reasonably be expected to
result in a Material Adverse Effect.
(e)
No Violation or Default under
Incorporated Documents
. All Incorporated Documents between
the Company and third parties expressly referenced in the
Prospectus are legal, valid and binding obligations of the Company
enforceable in accordance with their respective terms, except to
the extent that (i) enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general equitable
principles and (ii) the indemnification provisions of certain
agreements may be limited by federal or state securities laws or
public policy considerations in respect thereof. Neither the
Company nor any of its Subsidiaries is in default (or with the
giving of notice or lapse of time would be in default) under any
Incorporated Document to which any of them is a party or by which
any of them is bound or to which any of the properties of any of
them is subject, except such defaults that would not, individually
or in the aggregate, have a Material Adverse Effect.
(f)
Filings, Consents and
Approvals.
The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal,
state, local or other governmental authority or other
“Person” (defined as an individual or corporation,
partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of
any kind, including the Trading Market) in connection with the
execution, delivery and performance by the Company of this
Agreement, other than (i) the filings required by this Agreement,
(ii) the filing with the Commission of the Prospectus Supplement,
(iii) the filing of application(s) to and approval by the Trading
Market for the listing of the Shares for trading thereon in the
time and manner required thereby, and (iv) such filings as are
required to be made under applicable state securities laws and the
rules and regulations of the Financial Industry Regulatory
Authority, Inc. (“
FINRA
”) (collectively,
the “
Required
Approvals
”).
(g)
Issuance of Shares
. The Shares
are duly authorized and, when issued and paid for in accordance
with this Agreement, will be duly and validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the
Company. The Company has reserved from its duly authorized capital
stock the maximum number of shares of Common Stock issuable
pursuant to this Agreement. The issuance by the Company of the
Shares has been registered under the Securities Act and all of the
Shares are freely transferable and tradable by the purchasers
thereof without restriction (other than any restrictions arising
solely from an act or omission of such a purchaser). The Shares are
being issued pursuant to the Registration Statement and the
issuance of the Shares has been registered by the Company under the
Securities Act. The Shares, when issued, will conform in all
material respects to the description thereof set forth in or
incorporated into the Prospectus. The “Plan of
Distribution” section within the Registration Statement
permits the issuance and sale of the Shares as contemplated by this
Agreement. Upon receipt of the Shares, the purchasers of such
Shares will have good and marketable title to such Shares and the
Shares will be freely tradable on the Trading Market.
(h)
Capitalization
. The
capitalization of the Company is as set forth in the Registration
Statement, the Prospectus Supplement and the Prospectus as of the
dates reflected therein. Except as set forth in the SEC Reports,
the Company has not issued any capital stock since its most
recently filed periodic report under the Exchange Act, other than
pursuant to the exercise of employee stock options under the
Company’s stock option plans, the issuance of shares of
Common Stock to employees or directors pursuant to the
Company’s employee stock purchase plan and pursuant to the
conversion or exercise of securities exercisable, exchangeable or
convertible into Common Stock (“
Common Stock
Equivalents”
). No Person has any right of first
refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by this
Agreement. Except (i) pursuant to the Company’s stock option
plans and (ii) pursuant to agreements or instruments filed as
exhibits to Incorporated Documents, there are no outstanding
options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for
or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of
Common Stock or Common Stock Equivalents. The issuance and sale of
the Shares will not obligate the Company to issue shares of Common
Stock or other securities to any Person and will not result in a
right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities. All of
the outstanding shares of capital stock of the Company are validly
issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and none of
such outstanding shares was issued in violation of any preemptive
rights or similar rights to subscribe for or purchase securities.
There are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company’s
stockholders.
(i)
Registration Statement
. The
Company meets the requirements for use of Form S-3 under the
Securities Act and has prepared and filed with the Commission the
Registration Statement, including a related Base Prospectus, for
registration under the Securities Act of the offering and sale of
the Shares. The Registration Statement, the Prospectus, any Issuer
Free Writing Prospectus or any amendment or supplement thereto, and
the documents incorporated by reference in the Registration
Statement, the Prospectus or any amendment or supplement thereto,
when such documents were or are filed with the Commission under the
Securities Act or the Exchange Act or became or become effective
under the Securities Act, as the case may be, conformed or will
conform in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable. Such
Registration Statement is effective and available for the offer and
sale of the Shares as of the date hereof. As filed, the Prospectus
contains all information required by the Securities Act and the
rules thereunder, and, except to the extent the Manager shall agree
in writing to a modification, shall be in all substantive respects
in the form furnished to the Manager prior to the Execution Time or
prior to any such time this representation is repeated or deemed to
be made. The Registration Statement, at the Execution Time, each
such time this representation is repeated or deemed to be made, and
at all times during which a prospectus is required by the
Securities Act to be delivered (whether physically or through
compliance with Rule 172, 173 or any similar rule) in connection
with any offer or sale of the Shares, meets the requirements set
forth in Rule 415(a)(1)(x). The initial Effective Date of the
Registration Statement was not earlier than the date three (3)
years before the Execution Time. The Company has not distributed
and, prior to the later to occur of each Settlement Date and
completion of the distribution of the Shares, will not distribute
any offering material in connection with the offering or sale of
the Shares other than the Registration Statement and the Prospectus
and any Issuer Free Writing Prospectus (as defined below) to which
Manager have consented.
(j)
No Misstatement or Omission
.
The Registration Statement, when it became or becomes effective,
and the Prospectus, and any amendment or supplement thereto, on the
date of such Prospectus or amendment or supplement,
conformed and will
conform in all material respects with the requirements of the
Securities Act. At each Settlement Date, the Registration Statement
and the Prospectus, as of such date, will conform in all material
respects with the requirements of the Securities Act. The
Registration Statement, when it became or becomes effective, did
not, and will not, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The
Prospectus and any amendment and supplement thereto, on the date
thereof and at each Applicable Time, did not or will not include an
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of
the Incorporated Documents, when they were filed with the
Commission, contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein, in 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 Base Prospectus,
the Prospectus Supplement or the Prospectus, when such documents
are filed with the Commission, will conform in all material
respects to the requirements of the Exchange Act and the rules
thereunder, as applicable, 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 light of the
circumstances under which they were made, not misleading. The
foregoing shall not apply to statements in, or omissions from, any
such document made in reliance upon, and in conformity with,
information furnished to the Company by the Manager specifically
for use in the preparation thereof.
(k)
Market Capitalization.
At the
time the Registration Statement was originally declared effective,
and at the time the Company’s most recent Annual Report on
Form 10-K was filed with the Commission, the Company met the then
applicable requirements for the use of Form S-3 under the
Securities Act, including, but not limited to, Instruction I.B.1 of
Form S-3. The Company satisfies the pre-1992 eligibility
requirements for the use of a registration statement on Form S-3 in
connection with this offering (the pre-1992 eligibility
requirements for the use of the registration statement on Form S-3
include (i) having a non-affiliate, public common equity float of
at least $150 million or a non-affiliate, public common equity
float of at least $100 million and annual trading volume of at
least three million shares and (ii) having been subject to the
Exchange Act reporting requirements for a period of 36 months). The
Company is not a shell company (as defined in Rule 405 under the
Securities Act) and has not been a shell company for at least
twelve (12) calendar months previously and if it has been a shell
company at any time previously, has filed current Form 10
information (as defined in Instruction I.B.6 of Form S-3) with the
Commission at least twelve (12) calendar months previously
reflecting its status as an entity that is not a shell
company.
(l)
Ineligible Issuer
. As of the
date of this Agreement the Company is an ineligible issuer as
defined in Rule 405 under the Securities Act at the times specified
in Rulers 164 and 433 under the Securities Act in connection with
the offering of the Shares.
(m)
Free Writing Prospectus
. Due to
its status as an “ineligible issuer,” the Company may
be ineligible to use certain Issuer Free Writing Prospectuses. Any
Issuer Free Writing Prospectus will not include any information the
substance of which conflicts with the information contained in the
Registration Statement, including any Incorporated Documents and
any prospectus supplement deemed to be a part thereof that has not
been superseded or modified; and any Issuer Free Writing Prospectus
will not contain 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 under which they were
made, not misleading. The foregoing sentence does not apply to
statements in or omissions from any Issuer Free Writing Prospectus
based upon and in conformity with written information furnished to
the Company by the Manager specifically for use therein. Any Issuer
Free Writing Prospectus that the Company is required to file
pursuant to Rule 433(d) will be filed with the Commission in
accordance with the requirements of the Securities Act and the
rules thereunder. Each Issuer Free Writing Prospectus that the
Company is required to file pursuant to Rule 433(d) or that was
prepared by or behalf of or used by the Company will comply in all
material respects with the requirements of the Securities Act and
the rules thereunder. The Company will not, without the prior
consent of the Manager, prepare, use or refer to, any Issuer Free
Writing Prospectuses.
(n)
Proceedings Related to Registration
Statement
. The Registration Statement is not the subject of
a pending proceeding or examination under Section 8(d) or 8(e) of
the Securities Act, and the Company is not the subject of a pending
proceeding under Section 8A of the Securities Act in connection
with the offering of the Shares. The Company has not received any
notice that the Commission has issued or intends to issue a
stop-order with respect to the Registration Statement or that the
Commission otherwise has suspended or withdrawn the effectiveness
of the Registration Statement, either temporarily or permanently,
or intends or has threatened in writing to do so.
(o)
SEC Reports
. The Company has
complied in all material respects with requirements to file all
reports, schedules, forms, statements and other documents required
to be filed by it under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two
(2) years preceding the date hereof (or such shorter period as the
Company was required by law to file such material) (the foregoing
materials, including the exhibits thereto and documents
incorporated by reference therein, as well as the Registration
Statement, Prospectus and Prospectus Supplement, being collectively
referred to herein as the “
SEC Reports
”) on a timely
basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates other than reports that
have been amended, the SEC Reports complied in all material
respects with the requirements of the Exchange Act and the rules
and regulations of the SEC promulgated thereunder, and none of the
SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading.
(p)
Financial Statements
. The
consolidated financial statements incorporated by reference in the
Registration Statement, the Prospectus or the Incorporated
Documents and any amendments thereof or supplements thereto comply
in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing or as amended or
corrected in a subsequent filing. Such financial statements have
been prepared in accordance with United States generally accepted
accounting principles (“
GAAP
”) applied on a
consistent basis during the periods involved, except as may be
otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not
contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its
consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. All disclosures contained
or incorporated by reference in the Registration Statement, the
Prospectus and the Issuer Free Writing Prospectuses, if any,
regarding “non-GAAP financial measures” (as such term
is defined by the rules and regulations of the Commission) comply
in all material respects with Regulation G of the Exchange Act and
Item 10 of Regulation S-K under the Securities Act, to the extent
applicable.
(q)
Accountants
. The
Company’s current accountants are Mayer Hoffman McCann P.C.
To the knowledge of the Company, such accountants, who the Company
expects will express their opinion with respect to the financial
statements to be included in the Company’s next Annual Report
on Form 10-K, are a registered public accounting firm as required
by the Securities Act and is not in violation of the auditor
independence requirements of the Sarbanes-Oxley Act of 2002 (the
“
Sarbanes-Oxley
Act
”) with respect to the Company.
(r)
Material Adverse Events
. Since
the date of the latest audited financial statements included within
the SEC Reports, except as specifically disclosed in a subsequent
SEC Report or Prospectus Supplement filed prior to or on the date
hereof, (i) there has been no event, occurrence or development that
has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to
be reflected in the Company’s financial statements pursuant
to GAAP or required to be disclosed in filings made with the
Commission, (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock and (v) the Company has not issued
any equity securities to any officer, director or
“
Affiliate
” (defined as
any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed
under Rule 144 under the Securities Act), except pursuant to
existing Company stock option plans. The Company does not have
pending before the Commission any request for confidential
treatment of information. No event, liability or development has
occurred or exists with respect to the Company or its Subsidiaries
or their respective business, properties, operations or financial
condition, that would be required to be disclosed by the Company
under applicable securities laws at the time this representation is
deemed made that has not been publicly disclosed at least one (1)
Business Day prior to the date that this representation is deemed
made.
(s)
Litigation
. There is no action,
suit, inquiry, notice of violation, Proceeding or investigation
pending or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “
Action
”) which (i)
adversely affects or challenges the legality, validity or
enforceability of this Agreement or the Shares or (ii) could, if
there were an unfavorable decision, reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any
Subsidiary, nor, to the knowledge of the Company, any director or
officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has
not been, and to the knowledge of the Company, there is not pending
or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the
Company. The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or
the Securities Act.
(t)
Labor Relations
. No material
labor dispute exists or, to the knowledge of the Company, is
imminent with respect to any of the employees of the Company which
could reasonably be expected to result in a Material Adverse
Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such
employee’s relationship with the Company, and neither the
Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. No
executive officer, to the knowledge of the Company, is, or is now
expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or
agreement or any restrictive covenant, and the continued employment
of each such executive officer does not subject the Company or any
of its Subsidiaries to any liability with respect to any of the
foregoing matters. The Company and its Subsidiaries are in
compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms
and conditions of employment and wages and hours, except where the
failure to be in compliance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(u)
No Existing Defaults.
Neither
the Company nor any Subsidiary (i) is in default under or in
violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it
is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is
in violation of any order of any court, arbitrator or governmental
body, or (iii) is or has been in violation of any statute, rule or
regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws relating to
taxes, environmental protection, occupational health and safety,
product quality and safety and employment and labor matters, except
in each case as could not reasonably be expected to result in a
Material Adverse Effect. The Company has not filed a report
pursuant to Section 13(a) or 15(d) of the Exchange Act since the
filing of its last Annual Report on Form 10-K, indicating that it
(i) has failed to pay any dividend or sinking fund installment on
preferred stock or (ii) has defaulted on any installment on
indebtedness for borrowed money or on any rental on one or more
long-term leases, which defaults, individually or in the aggregate,
would reasonably be expected to have a Material Adverse
Effect.
(v)
Regulatory Permits.
Except as
disclosed in the Registration Statement and the Prospectus, the
Company and its Subsidiaries have made all filings, applications
and submissions required by, possesses and is operating in
compliance with, all approvals, licenses, certificates,
certifications, clearances, consents, grants, exemptions, marks,
notifications, orders, permits and other authorizations issued by,
the appropriate federal, state or foreign governmental or
regulatory authorities (including, without limitation, the United
States Food and Drug Administration (the “
FDA
”), the United States
Drug Enforcement Administration or any other foreign, federal,
state, provincial, court or local government or regulatory
authorities including self-regulatory organizations engaged in the
regulation of clinical trials, pharmaceuticals, biologics or
biohazardous substances or materials) necessary for the ownership
or lease of their respective properties or to conduct its
businesses as described in the Registration Statement and the
Prospectuses (collectively, “Material Permits”), except
for such Permits the failure of which to possess, obtain or make
the same would not reasonably be expected to have a Material
Adverse Effect; the Company is in compliance with the terms and
conditions of all such Permits, except where the failure to be in
compliance would not reasonably be expected to have a Material
Adverse Effect; all of the Permits are valid and in full force and
effect, except where any invalidity, individually or in the
aggregate, would be reasonably expected to have a Material Adverse
Effect; and neither the Company nor any of its Subsidiaries has
received any written notice of proceedings relating to the
limitation, revocation, cancellation, suspension, modification or
non- renewal of any such Permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect, and has any reason to believe that
any such license, certificate, permit or authorization will not be
renewed in the ordinary course.
(w)
Regulatory Filings.
Except as
disclosed in the Registration Statement and the Prospectus, neither
the Company nor any of its Subsidiaries has failed to file with the
applicable regulatory authorities (including, without limitation,
the FDA, or any foreign, federal, state, provincial or local
governmental or regulatory authority performing functions similar
to those performed by the FDA) any required filing, declaration,
listing, registration, report or submission, except for such
failures that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect; except as
disclosed in the Registration Statement and the Prospectuses, all
such filings, declarations, listings, registrations, reports or
submissions were in compliance with applicable laws when filed and
no deficiencies have been asserted by any applicable regulatory
authority with respect to any such filings, declarations, listings,
registrations, reports or submissions, except for any deficiencies
that, individually or in the aggregate, would not have a Material
Adverse Effect. The Company has operated and currently is, in all
material respects, in compliance with the United States Federal
Food, Drug, and Cosmetic Act, all applicable rules and regulations
of the FDA and other federal, state, local and foreign governmental
bodies exercising comparable authority. The Company has no
knowledge of any studies, tests or trials not described in the
Prospectus the results of which reasonably call into question in
any material respect the results of the studies, tests and trials
described in the Prospectus.
(x)
Intentionally Omitted.
(y)
Intentionally
Omitted
.
(z)
Title to Assets
. The Company
and the Subsidiaries have good and marketable title in fee simple
to all real property owned by them that is material to the business
of the Company and the Subsidiaries and good and marketable title
in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and
clear of all Liens, except for Liens as disclosed in the SEC
Reports or Liens that do not materially affect the value of such
property and do not materially interfere with the use made and
proposed to be made of such property by the Company and the
Subsidiaries and Liens for the payment of federal, state or other
taxes, the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by the
Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases of which the Company and the
Subsidiaries are in compliance, except where such non-compliance
would not reasonably be expected to have a Material Adverse
Effect.
(aa)
Intellectual Property.
Except
as disclosed in the Registration Statement and the Prospectus, the
Company and its Subsidiaries own, possess, license or have other
rights to use all foreign and domestic patents, patent
applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, Internet domain names, know-how and other
intellectual property (collectively, the “
Intellectual Property
”),
necessary for the conduct of their respective businesses as now
conducted except to the extent that the failure to own, possess,
license or otherwise hold adequate rights to use such Intellectual
Property would not, individually or in the aggregate, have a
Material Adverse Effect. Except as disclosed in the Registration
Statement and the Prospectus (a) there are no rights of third
parties to any such Intellectual Property owned by the Company and
its Subsidiaries; (b) to the Company’s knowledge, there is no
infringement by third parties of any such Intellectual Property;
(c) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging
the Company’s and its Subsidiaries’ rights in or to any
such Intellectual Property, and the Company is unaware of any facts
which could form a reasonable basis for any such action, suit,
proceeding or claim; (d) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or
claim by others challenging the validity or scope of any such
Intellectual Property; (e) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or
claim by others that the Company and its Subsidiaries infringe or
otherwise violate any patent, trademark, copyright, trade secret or
other proprietary rights of others; (f) to the Company’s
knowledge, there is no third-party U.S. patent or published U.S.
patent application which contains claims for which an Interference
Proceeding (as defined in 35 U.S.C. § 135) has been commenced
against any patent or patent application described in the
Prospectus as being owned by or licensed to the Company; and (g)
the Company and its Subsidiaries have complied with the terms of
each agreement pursuant to which Intellectual Property has been
licensed to the Company or such Subsidiary, and all such agreements
are in full force and effect, except, in the case of any of clauses
(a)-(g) above, for any such infringement by third parties or any
such pending or threatened suit, action, proceeding or claim as
would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.
(bb)
Insurance
. The Company and the
Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are prudent and customary for companies of similar size as the
Company in the businesses in which the Company and the Subsidiaries
are engaged, including, but not limited to, directors and officers
insurance coverage. To the knowledge of the Company, such insurance
contracts and policies are accurate and complete. Neither the
Company nor any Subsidiary has 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 from similar
insurers as may be necessary to continue its business without a
significant increase in cost.
(cc)
Affiliate Transactions
. Except
as set forth in the SEC Reports, the Registration Statement, the
Base Prospectus, any Prospectus Supplement or the Prospectus, none
of the officers or directors of the Company and, to the knowledge
of the Company, none of the employees of the Company is presently a
party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or
from any officer, director or such employee or, to the knowledge of
the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director,
trustee or partner, in each case in excess of $120,000, other than
(i) for payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company
and (iii) for other employee benefits, including stock option
agreements under any stock option plan of the Company or as
disclosed in the SEC Reports.
(dd)
Sarbanes Oxley Compliance
.
Except as disclosed in the Registration Statement, any Prospectus
Supplement or the Prospectus, the Company is in material compliance
with all provisions of the Sarbanes-Oxley Act which are applicable
to it as of the Effective Date.
(ee)
Disclosure Controls
. The
Company and each of its Subsidiaries maintain systems of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company’s internal control
over financial reporting is effective and the Company is not aware
of any material weaknesses in its internal control over financial
reporting (other than as set forth in the Prospectus). Since the
date of the latest audited financial statements of the Company
included in the Prospectus, there has been no change in the
Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial reporting
(other than as set forth in the Prospectus). The Company has
established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15 and 15d-15) for the Company and designed
such disclosure controls and procedures to ensure that material
information relating to the Company and each of its Subsidiaries is
made known to the certifying officers by others within those
entities, particularly during the period in which the
Company’s Annual Report on Form 10-K or any Current Report on
Form 8-K which contains the Company’s quarterly financial
statements, as the case may be, is being prepared. The
Company’s certifying officers have evaluated the
effectiveness of the Company’s controls and procedures as of
a date within one hundred twenty (120) days prior to the filing
date of the Form 10-K for the fiscal year most recently ended (such
date, the “
Evaluation Date
”). The
Company presented in its Form 10-K for the fiscal year most
recently ended the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on
their evaluations as of the Evaluation Date and the disclosure
controls and procedures are effective. Since the Evaluation Date,
there have been no significant changes in the Company’s
internal controls (as such term is defined in Item 307(b) of
Regulation S-K under the Securities Act) or, to the Company’s
knowledge, in other factors that are reasonably likely to
significantly affect the Company’s internal
controls.
(ff)
Finder’s Fees
. Other than
payments to be made to the Manager, no brokerage or finder’s
fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement. The Manager shall have
no obligation with respect to any fees or with respect to any
claims made by or on behalf of other Persons for fees of a type
contemplated in this Section that may be due in connection with the
transactions contemplated by this Agreement.
(gg)
No Other Sales Agency
Agreement
. At such time as the Company
conducts an offering of its securities pursuant to the terms of
this Agreement, theCompany shall have not entered into any other
sales agency agreements or othersimilar arrangements with any agent
or any other representative in respect of at the market offerings
of the Shares.
(hh)
Regulation M Compliance
. The
Company has not, and to its knowledge no one acting on its behalf
has, (i) taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or
resale of any of the Shares, (ii) sold, bid for, purchased, or paid
any compensation for soliciting purchases of, any of the Shares or
(iii) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company,
other than, in the case of clauses (ii) and (iii), compensation
paid to the Manager in connection with the sales of the
Shares.
(ii)
Listing and Maintenance
Requirements
. The issuance and sale of the Shares as
contemplated in this Agreement does not contravene the rules and
regulations of the Trading Market. The Common Stock registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge
is likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act nor has the Company
received any notification that the Commission is contemplating
terminating such registration. Except as disclosed in the
Registration Statement, any Prospectus Supplement or the
Prospectus, the Company has not, in the twelve (12) months
preceding the date hereof, received notice from any Trading Market
on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or
maintenance requirements of such Trading Market. The Company has no
reason to reasonably believe that it will not in the foreseeable
future continue to be in compliance with all such listing and
maintenance requirements.
(jj)
Application of Takeover
Protections
. Except as set forth in the Registration
Statement, any Prospectus Supplement or the Prospectus, the Company
and its Board have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the
Company’s Certificate of Incorporation (or similar charter
documents) or the laws of its state of incorporation that is or
could become applicable to the purchasers of the
Shares.
(kk)
Investment Company
. The Company
is not, and is not an Affiliate of, and immediately after receipt
of payment for the Shares, will not be or be an Affiliate of, an
“investment company” within the meaning of the
Investment Company Act of 1940, as amended. The Company currently
intends to conduct its business in a manner so that it will not
become subject to the Investment Company Act of 1940, as
amended.
(ll)
Solvency
. Based on the
financial condition of the Company as of the Effective Date, (i)
the Company’s fair saleable value of its assets exceeds the
amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature and (ii) the current
cash flow of the Company, together with the proceeds the Company
would receive, were it to liquidate all of its assets, after taking
into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its debt when such amounts
are required to be paid. Within one (1) year of the Effective Date,
the Company does not intend to incur debts beyond its ability to
pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt). The
SEC Reports set forth as of the dates thereof all outstanding
secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has
commitments. For the purposes of this Agreement,
“
Indebtedness
”
shall mean (a) any liabilities for borrowed money or amounts owed
in excess of $50,000 (other than accrued liabilities and trade
accounts payable incurred in the ordinary course of business), (b)
all guaranties, endorsements and other contingent obligations in
respect of indebtedness of others, whether or not the same are or
should be reflected in the Company’s balance sheet (or the
notes thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in
the ordinary course of business; and (c) the present value of any
lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP. Neither the Company nor any
Subsidiary is in default with respect to any
Indebtedness.
(mm)
Tax Status
. Except for matters
that would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect, the
Company and each Subsidiary have filed all necessary federal, state
and foreign income and franchise tax returns and have paid or
accrued all taxes shown as due thereon, and the Company has no
knowledge of a tax deficiency which has been asserted or threatened
against the Company or any Subsidiary.
(nn)
No Reliance
. The Company has
not relied upon the Manager or legal counsel for the Manager for
any legal, tax or accounting advice in connection with the offering
and sale of the Shares.
(oo)
Foreign Corrupt Practices
.
Neither the Company nor any Subsidiary nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the
Company or any Subsidiary is aware of or has taken any action,
directly or indirectly, that could result in a violation by such
persons of the Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder or the U.K. Bribery Act
2010 or similar law of any other relevant jurisdiction; and neither
the Company nor any Subsidiary nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the
Company or any Subsidiary is aware of or has taken any action,
directly or indirectly, that could result in a sanction for
violation by such persons of the Foreign Corrupt Practices Act of
1977, as amended, and the rules and regulations thereunder or the
U.K. Bribery Act 2010 or similar law of any other relevant
jurisdiction; and prohibition of noncompliance therewith is covered
by the codes of conduct or other procedures instituted and
maintained by the Company and the Subsidiaries.
(pp)
AML Compliance
. The operations
of the Company and its Subsidiaries are and have been conducted at
all times in compliance with applicable financial record keeping
and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions to which the Company or its Subsidiaries are
subject, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the
“
Money Laundering
Laws
”), except as would not reasonably be expected to
result in a Material Adverse Effect; and no action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
Subsidiaries with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.
(qq)
Office of Foreign Assets
Control
. Neither the Company nor any Subsidiary nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any Subsidiary (i) is currently subject
to any sanctions administered or imposed by the United States
(including any administered or enforced by the Office of Foreign
Assets Control of the U.S. Treasury Department, the U.S. Department
of State, or the Bureau of Industry and Security of the U.S.
Department of Commerce), the United Nations Security Council, the
European Union, or the United Kingdom (including sanctions
administered or controlled by Her Majesty’s Treasury)
(collectively, “
Sanctions
” and such
persons, “
Sanction
Persons
”) or (ii) will, directly or indirectly, use
the proceeds of this offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture
partner or other person in any manner that will result in a
violation of any economic Sanctions by, or could result in the
imposition of Sanctions against, any person (including any person
participating in the offering, whether as underwriter, advisor,
investor or otherwise). Neither the Company nor any Subsidiary nor,
to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or any of the Subsidiaries, is
a person that is, or is 50% or more owned or otherwise controlled
by a person that is: (i) the subject of any Sanctions; or (ii)
located, organized or resident in a country or territory that is,
or whose government is, the subject of Sanctions that broadly
prohibit dealings with that country or territory (currently, Cuba,
Iran, North Korea, Sudan, and Syria) (collectively,
“
Sanctioned
Countries
” and each, a “
Sanctioned Country
”).
Except as has been disclosed to the Manager or is not material to
the analysis under any Sanctions, neither the Company nor any
Subsidiary has engaged in any dealings or transactions with or for
the benefit of a Sanctioned Person, or with or in a Sanctioned
Country, in the preceding three (3) years, nor does the Company or
any Subsidiary have any plans to increase its dealings or
transactions with Sanctioned Persons, or with or in Sanctioned
Countries.
(rr)
Off-Balance Sheet Arrangements
.
There are no transactions, arrangements and other relationships
between and/or among the Company, and/or, to the knowledge of the
Company, any of its affiliates and any unconsolidated entity,
including, but not limited to, any structural finance, special
purpose or limited purpose entity (each, an “
Off Balance Sheet
Transaction
”) that could reasonably be expected to
affect materially the Company’s liquidity or the availability
of or requirements for its capital resources, including those Off
Balance Sheet Transactions described in the Commission’s
Statement about Management’s Discussion and Analysis of
Financial Conditions and Results of Operations (Release Nos.
33-8056, 34-45321, FR
61
), required to be described in the Prospectus which have
not been described as required.
(ss)
Forward Looking Statements.
No
forward-looking statements (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) (a
“
Forward Looking
Statement
”) contained in the Registration Statement
and the Prospectus has been made or reaffirmed without a reasonable
basis or has been disclosed other than in good faith. The Forward
Looking Statements incorporated by reference in the Registration
Statement and the Prospectus from the Company’s Annual Report
on Form 10-K for the fiscal year most recently ended (i) are within
the coverage of the safe harbor for forward looking statements set
forth in Section 27A of the Securities Act, Rule 175(b) under the
Securities Act or Rule 3b-6 under the Exchange Act, as applicable,
(ii) were made by the Company with a reasonable basis and in good
faith and reflect the Company’s good faith commercially
reasonable best estimate of the matters described therein, and
(iii) have been prepared in accordance with Item 10 of Regulation
S-K under the Securities Act.
(tt)
Statistical and Market-Related
Data
. Any third-party statistical and market-related data
included or incorporated by reference in a Registration Statement,
the Prospectus or any Prospectus Supplement are based on or derived
from sources that the Company believes to be reliable and
accurate.
(uu)
FINRA Member Shareholders
.
There are no affiliations with any FINRA member firm among the
Company’s officers, directors or, to the knowledge of the
Company, any five percent (5%) or greater stockholder of the
Company, except as set forth in the Registration Statement, the
Base Prospectus, any Prospectus Supplement or the
Prospectus.
(vv)
DTC Eligibility
. The Company,
through its transfer agent, currently participates in the DTC Fast
Automated Securities Transfer (FAST) Program and the Shares can be
transferred electronically to third parties via the DTC Fast
Automated Securities Transfer (FAST) Program.
4.
Agreements
. The Company agrees
with the Manager that:
(a)
Right to Review Amendments and
Supplements to Registration Statement and Prospectus
. During
any period when the delivery of a prospectus relating to the Shares
is required (including in circumstances where such requirement may
be satisfied pursuant to Rule 172, 173 or any similar rule) to be
delivered under the Securities Act in connection with the offering
or the sale of Shares, the Company will not file any amendment to
the Registration Statement or supplement (including any Prospectus
Supplement) to the Base Prospectus unless the Company has furnished
to the Manager a copy for its review prior to filing and will not
file any such proposed amendment or supplement to which the Manager
reasonably object. The Company has properly completed the
Prospectus, in a form approved by the Manager, and filed such
Prospectus, as amended at the Execution Time, with the Commission
pursuant to the applicable paragraph of Rule 424(b) by the
Execution Time and will cause any supplement to the Prospectus to
be properly completed, in a form approved by the Manager, and will
file such supplement with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed thereby
and will provide evidence reasonably satisfactory to the Manager of
such timely filing. The Company will promptly advise the Manager
(i) when the Prospectus, and any supplement thereto, shall have
been filed (if required) with the Commission pursuant to Rule
424(b), (ii) when, during any period when the delivery of a
prospectus (whether physically or through compliance with Rule 172,
173 or any similar rule) is required under the Securities Act in
connection with the offering or sale of the Shares, any amendment
to the Registration Statement shall have been filed or become
effective (other than any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act), (iii) of
any request by
the
Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any
supplement to the Prospectus or for any additional information,
(iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any notice
objecting to its use or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by the Company
of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any
such stop order or the occurrence of any such suspension or
objection to the use of the Registration Statement and, upon such
issuance, occurrence or notice of objection, to obtain as soon as
possible the withdrawal of such stop order or relief from such
occurrence or objection, including, if necessary, by filing an
amendment to the Registration Statement or a new registration
statement and using its best efforts to have such amendment or new
registration statement declared effective as soon as
practicable.
(b)
Subsequent Events.
If, at any
time on or after an Applicable Time but prior to the related
Settlement Date, any event occurs as a result of which the
Registration Statement or Prospectus would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made or the circumstances then
prevailing not misleading, the Company will (i) notify promptly the
Manager so that any use of the Registration Statement or Prospectus
may cease until such are amended or supplemented; (ii) amend or
supplement the Registration Statement or Prospectus to correct such
statement or omission; and (iii) supply any amendment or supplement
to the Manager in such quantities as the Manager may reasonably
request.
(c)
Notification of Subsequent
Filings
. During any period when the delivery of a prospectus
relating to the Shares is required (including in circumstances
where such requirement may be satisfied pursuant to Rule 172, 173
or any similar rule) to be delivered under the Securities Act, any
event occurs as a result of which the Prospectus as then
supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were
made at such time not misleading, or if it shall be necessary to
amend the Registration Statement, file a new registration statement
or supplement the Prospectus to comply with the Securities Act or
the Exchange Act or the respective rules thereunder, including in
connection with use or delivery of the Prospectus, the Company
promptly will (i) notify the Manager of any such event, (ii)
subject to Section 4(a), prepare and file with the Commission an
amendment or supplement or new registration statement which will
correct such statement or omission or effect such compliance, (iii)
use its best efforts to have any amendment to the Registration
Statement or new registration statement declared effective as soon
as practicable in order to avoid any disruption in use of the
Prospectus and (iv) supply any supplemented Prospectus to the
Manager in such quantities as the Manager may reasonably
request.
(d)
Earnings Statements
. As soon as
practicable, the Company will make generally available to its
security holders and to the Manager an earnings statement or
statements of the Company and its Subsidiaries which will satisfy
the provisions of Section 11(a) of the Securities Act and Rule
158.
(e)
Delivery of Registration
Statement.
Upon the request of the Manager, the Company will
furnish to the Manager and counsel for the Manager, without charge,
signed copies of the Registration Statement (including exhibits
thereto) and, so long as delivery of a prospectus by the Manager or
dealer may be required by the Securities Act (including in
circumstances where such requirement may be satisfied pursuant to
Rule 172, 173 or any similar rule), as many copies of the
Prospectus and each Issuer Free Writing Prospectus and any
supplement thereto as the Manager may reasonably request. The
Company will pay the expenses of printing or other production of
all documents relating to the offering.
(f)
Qualification of Shares.
The
Company will arrange, if necessary, for the qualification of the
Shares for sale under the laws of such jurisdictions as the Manager
may reasonably designate and will maintain such qualifications in
effect so long as required for the distribution of the Shares;
provided that in no event shall the Company be obligated to qualify
to do business in any jurisdiction where it is not now so qualified
or to take any action that would subject it to service of process
in suits, other than those arising out of the offering or sale of
the Shares, in any jurisdiction where it is not now so
subject.
(g)
Free Writing Prospectus
. The
Company agrees that, unless it has or shall have obtained the prior
written consent of the Manager, and the Manager agrees with the
Company that, unless it has or shall have obtained, as the case may
be, the prior written consent of the Company, it has not made and
will not make any offer relating to the Shares hereunder that would
constitute an Issuer Free Writing Prospectus or that would
otherwise constitute a “free writing prospectus” (as
defined in Rule 405) required to be filed by the Company with the
Commission or retained by the Company under Rule 433. Any such free
writing prospectus consented to by the Manager or the Company is
hereinafter referred to as a “
Permitted Free Writing
Prospectus
.” The Company agrees that (i) it has
treated and will treat, as the case may be, each Permitted Free
Writing Prospectus as an Issuer Free Writing Prospectus and (ii) it
has complied and will comply, as the case may be, with the
requirements of Rules 164 and 433 applicable to any Permitted Free
Writing Prospectus, including in respect of timely filing with the
Commission, legending and record keeping.
(h)
Subsequent Equity Issuances
.
Neither the Company nor any Subsidiary will offer, sell, issue,
contract to sell, contract to issue or otherwise dispose of,
directly or indirectly, any other shares of Common Stock or any
Common Stock Equivalents (other than the Shares) during the term of
this Agreement while any Sales Notice is outstanding and
unfulfilled without the prior written consent of the Manager;
provided
,
however
, that the
Company may issue and sell Common Stock pursuant to any employee
stock option plan, stock ownership plan or dividend reinvestment
plan of the Company in effect at the Execution Time, and the
Company may issue Common Stock issuable upon the conversion or
exercise of Common Stock Equivalents outstanding at the Execution
Time.
(i)
Market Manipulation
. Until the
termination of this Agreement, the Company will not take, directly
or indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, stabilization or manipulation in
violation of the Securities Act, Exchange Act or the rules and
regulations thereunder of the price of any security of the Company
to facilitate the sale or resale of the Shares hereunder or
otherwise violate any provision of Regulation M under the Exchange
Act.
(j)
Notification of Incorrect
Certificate
. The Company will, at any time during the term
of this Agreement, as supplemented from time to time, advise the
Manager immediately after it shall have received notice or obtained
knowledge thereof, of any information or fact that would alter or
affect in any material respect any opinion, certificate, letter and
other document provided to the Manager pursuant to Section 6
herein.
(k)
Certification of Accuracy of
Disclosure
. Upon commencement of the offering of the Shares
under this Agreement (and upon the recommencement of the offering
of the Shares under this Agreement following the termination of a
suspension of sales hereunder lasting more than thirty (30) Trading
Days), and each time that (i) the Registration Statement or
Prospectus shall be amended or supplemented, other than by means of
Incorporated Documents, (ii) the Company files its Annual Report on
Form 10-K under the Exchange Act, (iii) the Company files its
quarterly reports on Form 10-Q under the Exchange Act, (iv) the
Company files a Current Report on Form 8-K containing amended
financial information (other than information that is furnished and
not filed), if the Manager reasonably determine that the
information in such Form 8-K is material, or (v) the Shares are
delivered to the Manager as principals at the Time of Delivery
pursuant to a Terms Agreement (such commencement or recommencement
date and each such date referred to in (i), (ii), (iii), (iv) and
(v) above, a “
Representation Date
”),
unless waived by the Manager, the Company shall furnish or cause to
be furnished to the Manager forthwith a certificate dated and
delivered on the Representation Date, in form reasonably
satisfactory to the Manager to the effect that the statements
contained in the certificate referred to in Section 6(c) of this
Agreement which were last furnished to the Manager are true and
correct at the Representation Date, as though made at and as of
such date (except that such statements shall be deemed to relate to
the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in
said Section 6(c), modified as necessary to relate to the
Registration Statement and the Prospectus as amended and
supplemented to the date of delivery of such
certificate.
(l)
Bring Down Opinions; Negative
Assurance
. Within five (5) Business Days of each
Representation Date with respect to which the Company is obligated
to deliver a certificate pursuant to Section 4(k) above, unless
waived by the Manager, the Company shall furnish or cause to be
furnished forthwith to the Manager a written opinion of counsel to
the Company (“
Company Counsel
”)
addressed to the Manager and dated and delivered on such
Representation Date, in form and substance reasonably satisfactory
to the Manager. The Company shall not be required to furnish the
opinion or comfort letter if the Company does not intend to deliver
a Sales Notice in such quarter until it delivers its next Sales
Notice.
(m)
Accountants’ Bring Down
“Comfort” Letter
. At each Representation Date
with respect to which the Company is obligated to deliver a
certificate pursuant to Section 4(k) above, unless waived by the
Manager, the Company shall cause (1) the Company’s auditors
(the “
Accountants
”), or other
independent accountants satisfactory to the Manager forthwith to
furnish the Manager a letter, and (2) the Chief Financial Officer
of the Company forthwith to furnish the Manager a certificate, in
each case dated on such Representation Date, in form satisfactory
to the Manager, of the same tenor as the letters and certificate
referred to in Section 6 of this Agreement but modified to relate
to the Registration Statement and the Prospectus, as amended and
supplemented to the date of such letters and certificate; provided,
however, that the Company will not be required to cause the
Accountants to furnish such letters to the Manager in connection
with the filing of a Current Report on Form 8-K unless (i) such
Current Report on Form 8-K is filed at any time during which a
prospectus relating to the Shares is required to be delivered under
the Securities Act and (ii) the Manager has requested such letter
based upon the event or events reported in such Current Report on
Form 8-K.
(n)
Due Diligence Session
. Upon
commencement of the offering of the Shares under this Agreement,
and at each Representation Date, the Company will conduct a due
diligence session, in form and substance, reasonably satisfactory
to the Manager, which shall include representatives of management
and Accountants. The Company shall cooperate timely with any
reasonable due diligence request from or review conducted by the
Manager or their agents from time to time in connection with the
transactions contemplated by this Agreement, including, without
limitation, providing information and available documents and
access to appropriate corporate officers and the Company’s
agents during regular business hours and at the Company’s
principal offices, and timely furnishing or causing to be furnished
such certificates, letters and opinions from the Company, its
officers and its agents, as the Manager may reasonably
request.
(o)
Change of Circumstances
. The
Company will, at any time during the pendency of a Sales Notice,
advise the Manager promptly after it shall have received notice or
obtained knowledge thereof, of any information or fact that would
reasonably likely alter or affect in any material respect any
opinion, certificate, letter or other document required to be
provided to the Manager pursuant to this Agreement.
(p)
Acknowledgment of Trading
. The
Company consents to the Manager trading in the Common Stock for the
Manager’s own accounts and for the accounts of their clients
at the same time as sales of the Shares occur pursuant to this
Agreement or pursuant to a Terms Agreement.
(q)
Disclosure of Shares Sold
. The
Company will disclose in its Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, as applicable, the number of Shares
sold through the Manager under this Agreement, the Net Proceeds to
the Company and the compensation paid by the Company with respect
to sales of Shares pursuant to this Agreement during the relevant
quarter.
(r)
Intentionally Omitted.
(s)
Bring Down of Representations and
Warranties
. Each acceptance by the Company of an offer to
purchase the Shares hereunder, and each execution and delivery by
the Company of a Terms Agreement, shall be deemed to be an
affirmation to the Manager that the representations and warranties
of the Company contained in or made pursuant to this Agreement are
true and correct as of the date of such acceptance or of such Terms
Agreement as though made at and as of such date, and an undertaking
that such representations and warranties will be true and correct
as of the Settlement Date for the Shares relating to such
acceptance or as of the Time of Delivery relating to such sale, as
the case may be, as though made at and as of such date (except that
such representations and warranties shall be deemed to relate to
the Registration Statement and the Prospectus as amended and
supplemented relating to such Shares).
(t)
Reservation of Shares
. The
Company shall ensure that there are at all times sufficient shares
of Common Stock to provide for the issuance, free of any preemptive
rights, out of its authorized but unissued shares of Common Stock
or shares of Common Stock held in treasury, of the maximum
aggregate number of Shares authorized for issuance by the Board
pursuant to the terms of this Agreement. The Company will use its
commercially reasonable efforts to cause the Shares to be listed
for trading on the Trading Market and to maintain such
listing.
(u)
Obligation under Exchange Act
.
During any period when the delivery of a prospectus relating to the
Shares is required (including in circumstances where such
requirement may be satisfied pursuant to Rule 172, 173 or any
similar rule) to be delivered under the Securities Act, the Company
will file all documents required to be filed with the Commission
pursuant to the Exchange Act within the time periods required by
the Exchange Act and the regulations thereunder.
(v)
Use of Proceeds
. The Company
will apply the Net Proceeds from the sale of the Shares in the
manner set forth in the Prospectus.
(w)
Intentionally Omitted.
(x)
Additional Registration
Statement
. Until such time that this Agreement is
terminated, to the extent that the Registration Statement is not
available for the sales of the Shares as contemplated by this
Agreement, the Company shall file a new registration statement with
respect to any additional shares of Common Stock necessary to
complete such sales of the Shares and use commercially reasonable
efforts to cause such registration statement to become effective as
promptly as practicable. After the effectiveness of any such
registration statement, all references to “
Registration Statement
”
included in this Agreement shall be deemed to include such new
registration statement, including all documents incorporated by
reference therein pursuant to Item 12 of Form S-3.
(x)
Market Activities
. The Company
will not, directly or indirectly,
(i) ta
ke any action
designed to cause or result in, or that constitutes or might
reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of shares of Common Stock hereunder
or (ii) sell, bid for, or purchase shares of Common Stock, or pay
anyone any compensation for soliciting purchases of the Shares
other than the Manager.
(y)
Investment Company Act.
The
Company will conduct its affairs in such a manner so as to
reasonably ensure that neither it nor any of its Subsidiaries will
be or become, at any time prior to the termination of this
Agreement, an “investment company,” as such term is
defined in the Investment Company Act of 1940, as
amended.
(z)
Blue Sky and Other
Qualifications
.
The
Company will use its commercially reasonable efforts, in
cooperation with the Manager, to qualify the Shares for offering
and sale, or to obtain an exemption for the Shares to be offered
and sold, under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Manager may
designate and to maintain such qualifications and exemptions in
effect for so long as required for the distribution of the Shares
(but in no event for less than one (1) year from the date of this
Agreement);
provided
,
however
, that the Company
shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or
to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Shares have been so qualified or exempt,
the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such
qualification or exemption, as the case may be, in effect for so
long as required for the distribution of the Shares (but in no
event for less than one (1) year from the date of this
Agreement).
5.
Payment of Expenses
. The
Company agrees to pay the costs and expenses incident to the
performance of its obligations under this Agreement, whether or not
the transactions contemplated hereby are consummated, including
without limitation: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement
(including financial statements and exhibits thereto), the
Prospectus and each Issuer Free Writing Prospectus, and each
amendment or supplement to any of them; (ii)
the printing (or
reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the
Registration Statement, the Prospectus, and each Issuer Free
Writing Prospectus, and all amendments or supplements to any of
them, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Shares; (iii) the
preparation, printing, authentication, issuance and delivery of
certificates for the Shares, including any stamp or transfer taxes
in connection with the original issuance and sale of the Shares;
(iv) the printing (or reproduction) and delivery of this Agreement,
any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the
offering of the Shares; (v) the listing of the Shares on the
Trading Market; (vi) any registration or qualification of the
Shares for offer and sale under the securities or blue sky laws of
the several states (including filing fees and the reasonable fees
and expenses of counsel for the Manager relating to such
registration and qualification); (vii) the fees and expenses of the
Company’s accountants and the fees and expenses of counsel
(including a total of one local and special counsel) for the
Company; (viii) the filing fee under FINRA Rule 5110; (ix) the
reasonable fees and expenses of the Manager’s counsel, not to
exceed $25,000; and (x) all other costs and expenses incident to
the performance by the Company of its obligations
hereunder.
6.
Conditions to the Obligations of the
Manager
. The obligations of the Manager under this Agreement
and any Terms Agreement shall be subject to (i) the accuracy of the
representations and warranties on the part of the Company contained
herein as of the Execution Time, each Representation Date, and as
of each Applicable Time, Settlement Date and Time of Delivery, (ii)
to the performance by the Company of its obligations hereunder and
(iii) the following additional conditions:
(a)
Filing of Prospectus
Supplement
. The Prospectus, and any supplement thereto,
required by Rule 424 to be filed with the Commission have been, or
will be, filed in the manner and within the time period required by
Rule 424(b) with respect to any sale of Shares; each Prospectus
Supplement shall have been filed in the manner required by Rule
424(b) within the time period required hereunder and under the
Securities Act; any other material required to be filed by the
Company pursuant to Rule 433(d) under the Securities Act, shall
have been filed with the Commission within the applicable time
periods prescribed for such filings by Rule 433; and no stop order
suspending the effectiveness of the Registration Statement or any
notice objecting to its use shall have been issued and no
proceedings for that purpose shall have been instituted or
threatened.
(b)
Delivery of Opinion
. The
Company shall have caused the Company Counsel to furnish to the
Manager, as required by Section 4(l) and upon reasonable advance
notice in connection with any offering of the Shares, its opinion
and negative assurance statement, dated as of such date and
addressed to the Manager in form and substance acceptable to the
Manager.
(c)
Delivery of Officer’s
Certificate
. The Company shall have furnished or caused to
be furnished to the Manager on each Representation Date, or to the
extent reasonably requested by the Manager and upon reasonable
advance notice in connection with any offering of the Shares, a
certificate of the Company signed by the Chief Executive Officer or
the principal financial or accounting officer of the Company, dated
as of such date, to the effect that the signer of such certificate
has carefully examined the Registration Statement, the Prospectus,
any Prospectus Supplement and any documents incorporated by
reference therein and any supplements or amendments thereto and
this Agreement and that:
(i)
the
representations and warranties of the Company in this Agreement are
true and correct in all material respects on and as of such date
with the same effect as if made on such date and the Company has
complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to such
date;
(ii)
no
stop order suspending the effectiveness of the Registration
Statement or any notice objecting to its use has been issued and no
proceedings for that purpose have been instituted or, to the
Company’s knowledge, threatened; and
(iii)
since
the date of the most recent financial statements included in the
Registration Statement, the Prospectus and the Incorporated
Documents, there has been no Material Adverse Effect on the
condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Registration Statement and the Prospectus.
(d)
Delivery of Accountants’
“Comfort” Letter
. The Company shall have
requested and caused the Accountants to have furnished to the
Manager, as required by Section 4(m) and upon reasonable advance
notice in connection with
any
offering of the Shares, letters (which may refer to letters
previously delivered to the Manager), dated as of such date, in
form and substance satisfactory to the Manager, confirming that
they are independent accountants within the meaning of the
Securities Act and the Exchange Act and the respective applicable
rules and regulations adopted by the Commission thereunder and that
they have performed a review of any unaudited interim financial
information of the Company included or incorporated by reference in
the Registration Statement and the Prospectus and provide customary
“comfort” as to such review in form and substance
satisfactory to the Manager.
(e)
Secretary’s Certificate
.
The Company shall deliver to the Manager a certificate of the
Secretary of the Company and attested to by an executive officer of
the Company, dated as of such date, certifying as to (i) the
Certificate of Incorporation of the Company, (ii) the Bylaws of the
Company, (iii) the resolutions of the Board of Directors of the
Company authorizing the execution, delivery and performance of this
Agreement and the issuance of the Shares and (iv) the incumbency of
the officers duly authorized to execute this Agreement and the
other documents contemplated by this Agreement.
(f)
No Material Adverse Event
.
Since the respective dates as of which information is disclosed in
the Registration Statement, the Prospectus and the Incorporated
Documents, except as otherwise stated therein, there shall not have
been (i) any change or decrease in previously reported results
specified in the letter or letters referred to in paragraph (d) of
this Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Registration Statement, the
Prospectus and the Incorporated Documents (exclusive of any
amendment or supplement thereto) the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the reasonable
judgment of the Manager, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery
of the Shares as contemplated by the Registration Statement
(exclusive of any amendment thereof), the Incorporated Documents
and the Prospectus (exclusive of any amendment or supplement
thereto).
(g)
No Misstatement or Material
Omission
. The Manager shall not have advised the Company
that the Registration Statement or Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact that in
the Manager’s reasonable opinion is material, or omits to
state a fact that in the Manager’s reasonable opinion is
material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(h)
Payment of All Fees
. The
Company shall have paid the required Commission filing fees
relating to the Shares within the time period required by Rule
456(b)(1)(i) of the Securities Act without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and 457(r) of
the Securities Act and, if applicable, shall have updated the
“Calculation of Registration Fee” table in accordance
with Rule 456(b)(1)(ii) either in a post-effective amendment to the
Registration Statement or on the cover page of a prospectus filed
pursuant to Rule 424(b).
(i)
No FINRA Objections
. FINRA
shall not have raised any objection with the Manager with respect
to the fairness and reasonableness of the terms and arrangements
under this Agreement.
(j)
Shares Listed on Trading
Market
. The Shares shall have been listed and admitted and
authorized for trading on the Trading Market, and satisfactory
evidence of such actions shall have been provided to the
Manager.
(k)
Other Assurances
. Prior to each
Settlement Date and Time of Delivery, as applicable, the Company
shall have furnished to the Manager such further information,
certificates and documents as the Manager may reasonably
request.
If any
of the conditions specified in this Section 6 shall not have been
fulfilled when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this
Agreement shall not be reasonably satisfactory in form and
substance to the Manager and counsel for the Manager, this
Agreement and all obligations of the Manager hereunder may be
canceled at, or at any time prior to, any Settlement Date or Time
of Delivery, as applicable, by the Manager. Notice of such
cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The
documents required to be delivered by this Section 6 shall be
delivered to the office of Sheppard Mullin Richter & Hampton
LLP, counsel for the Manager, at 30 Rockefeller Plaza, 39th Floor,
New York, New York 10112, on each such date as provided in this
Agreement.
7.
Indemnification and
Contribution
.
(a)
Indemnification by Company
. The
Company agrees to indemnify and hold harmless the Manager, the
directors, officers, employees and agents of the Manager and each
person who controls the Manager within the meaning of either the
Securities Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or
any of them may become subject under the Securities Act, the
Exchange Act or other Federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the
registration of the Shares as originally filed or in any amendment
thereof, or in the Base Prospectus, any Prospectus Supplement, the
Prospectus, any Issuer Free Writing Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action;
provided
,
however
, that the Company will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with
written information furnished to the Company by the Manager
specifically for inclusion therein. The indemnification obligations
of the Company under this Agreement will cease to apply to the
extent that a court of competent jurisdiction in a final judgment
that has become non-appealable shall determine that such losses,
claims, damages or liabilities (or actions in respect thereof) were
solely caused by the gross negligence, willful misconduct or fraud
of the Manager. This indemnity agreement will be in addition to any
liability that the Company may otherwise have.
(b)
Indemnification by Manager
. The
Manager agrees to indemnify and hold harmless the Company, each of
its directors, each of its officers who signs the Registration
Statement, and each person who controls the Company within the
meaning of either the Securities Act or the Exchange Act, to the
same extent as the foregoing indemnity from the Company to the
Manager, but only with reference to written information relating to
the Manager furnished to the Company by the Manager specifically
for inclusion in the documents referred to in the foregoing
indemnity;
provided
,
however
, that in no case shall
the Manager be responsible for any amount in excess of the Broker
Fee applicable to the Shares and paid hereunder, except to the
extent that a court of competent jurisdiction in a final judgment
that has become non-appealable shall determine that such losses,
claims, damages or liabilities (or actions in respect thereof) were
solely caused by the gross negligence, willful misconduct, or fraud
of the Manager. This indemnity agreement will be in addition to any
liability which the Manager may otherwise have.
(c)
Indemnification Procedures.
Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying
party in writing of the commencement thereof; but the failure so to
notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent
it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights
and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraph (a)
or (b) above. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party’s choice at the
indemnifying party’s expense to represent the indemnified
party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below); provided,
however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party’s
election to appoint counsel to represent the indemnified party in
an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying
party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after
notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying
party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or
proceeding.
(d)
Contribution.
In the event that
the indemnity provided in paragraph (a), (b) or (c) of this Section
7 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and the Manager agree to
contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in
connection with investigating or defending the same) (collectively
“
Losses
”) to which the
Company and the Manager may be subject in such proportion as is
appropriate to reflect the relative benefits received by the
Company on the one hand and by the Manager on the other from the
offering of the Shares; provided, however, that in no case shall
the Manager be responsible for any amount in excess of the Broker
Fee applicable to the Shares and paid hereunder, except to the
extent that a court of competent jurisdiction in a final judgment
that has become non-appealable shall determine that such losses,
claims, damages or liabilities (or actions in respect thereof) were
solely caused by the gross negligence, willful misconduct, or fraud
of the Manager. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and
the Manager severally shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand and of the Manager on
the other in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to
be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the
Manager shall be deemed to be equal to the Broker Fee applicable to
the Shares and paid hereunder as determined by this Agreement.
Relative fault shall be determined by reference to, among other
things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the
one hand or the Manager on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company
and the Manager agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of
this paragraph (d), 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. For
purposes of this Section 7, each person who controls the Manager
within the meaning of either the Securities Act or the Exchange Act
and each director, officer, employee and agent of the Manager shall
have the same rights to contribution as the Manager, and each
person who controls the Company within the meaning of either the
Securities Act or the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
8.
Termination
.
(a)
The Company shall
have the right, by giving written notice as hereinafter specified,
to terminate the provisions of this Agreement in its sole
discretion at any time upon one (1) Business Day’s prior
written notice, unless waived by the Manager and provided that the
Agreement remains operational during the one (1) Business Days
following receipt of such written notice. Any such termination
shall be without liability of any party to any other party except
that (i) with respect to any pending sale, through the Manager for
the Company, the obligations of the Company, including in respect
of compensation of the Manager, shall remain in full force and
effect notwithstanding the termination and (ii) the provisions of
Sections 5, 6, 7, 8, 9, 10, 12 and 14 of this Agreement shall
remain in full force and effect notwithstanding such
termination.
(b)
The Manager shall
have the right, by giving written notice as hereinafter specified,
to terminate the provisions of this Agreement (relating to the
solicitation of offers to purchase the Shares) in its sole
discretion at any time upon thirty (30) Business Days’ prior
written notice, unless waived by the Company. Any such termination
shall be without liability of any party to any other party except
that the provisions of Sections 5, 6, 7, 8, 9, 10, 12 and 14 of
this Agreement shall remain in full force and effect
notwithstanding such termination.
(c)
This Agreement
shall remain in full force and effect until the earlier of May 29,
2021 and such date that this Agreement is terminated pursuant to
Sections 8(a) or (b) above or otherwise by mutual agreement of the
parties, provided that any such termination by mutual agreement
shall in all cases be deemed to provide that Sections 5, 6, 7, 8,
9, 10, 12 and 14 shall remain in full force and
effect.
(d)
Any termination of
this Agreement shall be effective on the date specified in such
notice of termination, provided that such termination shall not be
effective until the close of business on the date of receipt of
such notice by the Manager or the Company, as the case may be. If
such termination shall occur prior to the Settlement Date or Time
of Delivery for any sale of the Shares, such sale shall settle in
accordance with the provisions of Section 2(b) of this
Agreement.
(e)
In the case of any
purchase of Shares by the Manager pursuant to a Terms Agreement,
the obligations of the Manager pursuant to such Terms Agreement
shall be subject to termination, in the absolute discretion of the
Manager, by prompt oral notice given to the Company prior to the
Time of Delivery relating to such Shares, if any, and confirmed
promptly by facsimile or electronic mail, if since the time of
execution of the Terms Agreement and prior to such delivery and
payment, (i) trading in the Common Stock shall have been suspended
by the Commission or the Trading Market or trading in securities
generally on the Trading Market shall have been suspended or
limited or minimum prices shall have been established on the
Trading Market, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets
is such as to make it, in the sole judgment of the Manager,
impractical or inadvisable to proceed with the offering or delivery
of the Shares as contemplated by the Prospectus (exclusive of any
amendment or supplement thereto).
9.
Representations and
Indemnities to Survive.
The respective agreements,
representations, warranties, indemnities and other statements of
the Company or its officers and of the Manager set forth in or made
pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by the Manager or the Company
or any of the officers, directors, employees, agents or controlling
persons referred to in Section 7, and will survive delivery of and
payment for the Shares.
10.
Notices
. All communications
hereunder will be in writing and effective only on receipt, and
will be mailed, delivered or facsimiled to the addresses of the
Company and Manager, respectively, set forth on the signature pages
hereto, with copies to the following:
If to
the Company to:
Youngevity
International,Inc.
2400
Boswell Road
Chula
Vista, California, 91914
Attn:
David Briskie
Facsimile: (619)
934-3205
Email:
With a
copy to:
Gracin
& Marlow, LLP
The
Chrysler Building
405
Lexington Avenue
26
th
Floor
New
York, NY 10174
Attn:
Leslie Marlow, Esq.
Facsimile: (212)
907-6457
If to
the Manager to:
The
Benchmark Company, LLC
150
East 58th Street, 17th Floor
New
York, New York 10155
Attn: Richard
Messina
Email:
rmessina@benchmarkcompany.com
With a
copy to:
Sheppard, Mullin,
Richter & Hampton LLP
30
Rockefeller Plaza, 39th Floor
New
York, New York 10112 Attn: Richard A. Friedman, Esq.
Attn:
Richard A. Friedman, Esq.
Facsimile: (212)
655-1729
An
electronic communication (“
Electronic Notice
”) shall
be deemed written notice for purposes of this Section 10 if sent to
the electronic mail address specified by the receiving party under
separate cover. Electronic Notice shall be deemed received at the
time the party sending Electronic Notice receives verification of
receipt by the receiving party. Any party receiving Electronic
Notice may request and shall be entitled to receive the notice on
paper, in a nonelectronic form (“
Nonelectronic Notic
e”)
which shall be sent to the requesting party within ten (10) days of
receipt of the written request for Nonelectronic
Notice.
11.
Successors and Assigns
. This
Agreement shall inure to the benefit of and be binding upon the
Company and the Manager and their respective successors and the
affiliates, controlling persons, officers and directors referred to
in Section 10 hereof. References to any of the parties contained in
this Agreement shall be deemed to include the successors and
permitted assigns of such party. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the
parties hereto or their respective successors and permitted assigns
any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.
Neither party may assign its rights or obligations under this
Agreement without the prior written consent of the other party;
provided
,
however
, that the
Manager may assign its rights and obligations hereunder to an
affiliate thereof without obtaining the Company’s
consent.
12.
No Fiduciary Duty.
The Company
hereby acknowledges that (a) the purchase and sale of the Shares
pursuant to this Agreement is an arm’s-length commercial
transaction between the Company, on the one hand, and the Manager
and any affiliate through which it may be acting, on the other, (b)
the Manager is acting solely as sales agent and/or principal in
connection with the purchase and sale of the Company’s
securities and not as a fiduciary of the Company and (c) the
Company’s engagement of the Manager in connection with the
offering and the process leading up to the offering is as
independent contractors and not in any other capacity. Furthermore,
the Company agrees that it is solely responsible for making its own
judgments in connection with the offering (irrespective of whether
the Manager have advised or are currently advising the Company on
related or other matters). The Company agrees that it will not
claim that the Manager has rendered advisory services of any nature
or respect, or owe an agency, fiduciary or similar duty to the
Company, in connection with such transaction or the process leading
thereto.
13.
Entire Agreement; Amendment;
Severability
. This Agreement (including all schedules and
exhibits attached hereto and Sales Notices issued pursuant hereto)
and any Terms Agreement constitutes the entire agreement and
supersedes all other prior and contemporaneous agreements and
undertakings, both written and oral, among the parties hereto with
regard to the subject matter hereof. Neither this Agreement, any
Terms Agreement, if any, nor any term hereof may be amended except
pursuant to a written instrument executed by the Company and the
Manager. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable as written by a court of
competent jurisdiction, then such provision shall be given full
force and effect to the fullest possible extent that it is valid,
legal and enforceable, and the remainder of the terms and
provisions herein shall be construed as if such invalid, illegal or
unenforceable term or provision was not contained herein, but only
to the extent that giving effect to such provision and the
remainder of the terms and provisions hereof shall be in accordance
with the intent of the parties as reflected in this
Agreement.
14.
Applicable Law
. This Agreement
and any Terms Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New
York.
15.
WAIVER OF JURY TRIAL
. THE
COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY TERMS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
16.
Counterparts
. This Agreement
and any Terms Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which
together shall constitute one and the same agreement, which may be
delivered by facsimile or in .pdf file via e-mail.
17.
Headings
. The section headings
used in this Agreement and any Terms Agreement are for convenience
only and shall not affect the construction hereof.
18.
Adjustments for Stock Splits
.
The parties acknowledge and agree that all share-related numbers
contained in this Agreement shall be adjusted to take into account
any stock split, stock dividend or similar event effected with
respect to the shares of Common Stock.
***************************
If the
foregoing is in accordance with your understanding, please sign and
return to
us a
counterpart hereof, whereupon this Terms Agreement, including those
provisions of
the At
The Market Offering Agreement incorporated herein by reference,
shall constitute
a
binding agreement between the Manager and the Company.
YOUNGEVITY INTERNATIONAL, INC.
By:
/s/ David
Briskie
Name:
David Briskie
Title:
President and Chief Financial Officer
ACCEPTED
as of the date first written above.
THE BENCHMARK COMPANY, LLC
________________________________
By:
Name:
Title:
ANNEX
I
Form
of Terms Agreement
YOUNGEVITY
INTERNATIONAL, INC. TERMS AGREEMENT
Dear
Sirs:
Youngevity
International, Inc. (the “
Company
”) proposes,
subject to the terms and conditions stated herein and in the At The
Market Offering Agreement, dated
January 7,
2019
(the “
At
The Market Offering Agreement
”), between the Company
and The Benchmark Company, LLC (the “
Manage
r”) to issue and
sell to Manager the securities specified in the
Schedule I
hereto (the
“
Purchased
Shares
”).
Each of
the provisions of the At The Market Offering Agreement not
specifically related to the solicitation by the Manager, as agents
of the Company, of offers to purchase securities is incorporated
herein by reference in its entirety, and shall be deemed to be part
of this Terms Agreement to the same extent as if such provisions
had been set forth in full herein. Each of the representations and
warranties set forth therein shall be deemed to have been made at
and as of the date of this Terms Agreement and the Time of
Delivery, except that each representation and warranty in Section 3
of the At The Market Offering Agreement which makes reference to
the Prospectus (as therein defined) shall be deemed to be a
representation and warranty as of the date of the At The Market
Offering Agreement in relation to the Prospectus, and also a
representation and warranty as of the date of this Terms Agreement
and the Time of Delivery in relation to the Prospectus as amended
and supplemented to relate to the Purchased Shares.
An
amendment to the Registration Statement (as defined in the At The
Market Offering Agreement), or a supplement to the Prospectus, as
the case may be, relating to the Purchased Shares, in the form
heretofore delivered to the Benchmark is now proposed to be filed
with the Securities and Exchange Commission.
Subject
to the terms and conditions set forth herein and in the At The
Market Offering Agreement which are incorporated herein by
reference, the Company agrees to issue and sell to the Manager(s)
and the Manager(s) agree to purchase from the Company the number of
shares of the Purchased Shares at the time and place and at the
purchase price set forth in the
Schedule I
attached
hereto.
If the
foregoing is in accordance with your understanding, please sign and
return to us a counterpart hereof, whereupon this Terms Agreement,
including those provisions of the At The Market Offering Agreement
incorporated herein by reference, shall constitute a binding
agreement between the Manager and the Company.
|
YOUNGEVITY
INTERNATIONAL, INC.
|
By:
__________________________________________
Name:
Title:
ACCEPTED as of the
date first written above.
THE
BENCHMARK COMPANY, LLC
By:
__________________________________________
Name:
Title:
