Exhibit 1.1
CELCUITY INC.
Common
Stock
(par
value $0.001 per share)
At
Market Issuance Sales Agreement
June
5, 2020
B.
Riley FBR, Inc.
299
Park Avenue, 21st Floor
New
York, NY 10171
Ladies
and Gentlemen:
Celcuity Inc., a
Delaware corporation (the “Company”), confirms its
agreement (this “Agreement”) with B. Riley
FBR, Inc. (the “Agent”) as
follows:
1. Issuance and Sale of Shares.
The Company agrees that, from time to time during the term of this
Agreement, on the terms and subject to the conditions set forth
herein, it may issue and sell through or to the Agent, as sales
agent or principal, shares (the “Placement
Shares”) of the Company’s common
stock, par value $0.001 per share (the “Common Stock”);
provided however, that in
no event shall the Company issue or sell through the Agent such
number of Placement Shares that (a) exceeds the number of shares or
dollar amount of Common Stock registered on the effective
Registration Statement (as defined below) pursuant to which the
offering is being made, (b) exceeds the number of shares or dollar
amount registered on the Prospectus Supplement (as defined below)
or (c) exceeds the number of authorized but unissued shares of
Common Stock (the lesser of (a), (b) and (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 1 on the number of
Placement Shares issued and sold under this Agreement shall be the
sole responsibility of the Company and that the Agent shall have no
obligation in connection with such compliance. The issuance and
sale of Placement Shares through the Agent will be effected
pursuant to the Registration Statement (as defined below), although
nothing in this Agreement shall be construed as requiring the
Company to use the Registration Statement to issue any Placement
Shares.
The
Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended and the rules and regulations
thereunder (the “Securities Act”), with
the Securities and Exchange Commission (the “Commission”), a
registration statement on Form S-3 (File No. 333-227466), including
a base prospectus, relating to certain securities, including the
Placement Shares, to be issued from time to time by the Company,
and which incorporates by reference documents that the Company has
filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the “Exchange Act”). The
Company has prepared a prospectus supplement to the base prospectus
included as part of such registration statement specifically
relating to the Placement Shares (the “Prospectus Supplement”).
The Company will furnish to the Agent, for use by the Agent, copies
of the base prospectus included as part of the registration
statement, as supplemented by the Prospectus Supplement, relating
to the Placement Shares. Except where the context otherwise
requires, such registration statement, and any post-effective
amendment thereto, 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 or deemed to be a part of such registration statement pursuant
to Rule 430B of the Securities Act, or any subsequent
registration statement on Form S-3 filed pursuant to Rule 415(a)(6)
under the Securities Act by the Company to cover any Placement
Shares, is herein called the “Registration Statement.”
The base prospectus, including all documents incorporated or deemed
incorporated therein by reference to the extent such information
has not been superseded or modified in accordance with Rule 412
under the Securities Act (as qualified by Rule 430B(g) of the
Securities Act), included in the Registration Statement, as it may
be supplemented by the Prospectus Supplement, in the form in which
such base prospectus and/or Prospectus Supplement have most
recently been filed by the Company with the Commission pursuant to
Rule 424(b) under the Securities Act is herein called the
“Prospectus.” Any
reference herein to the Registration Statement, the Prospectus or
any amendment or supplement thereto shall be deemed to refer to and
include the documents incorporated by reference therein, and any
reference herein to the terms “amend,”
“amendment” or “supplement” with respect to
the Registration Statement or the Prospectus shall be deemed to
refer to and include the filing after the execution hereof of any
document with the Commission incorporated by reference therein (the
“Incorporated
Documents”).
For
purposes of this Agreement, all references to the Registration
Statement, the Prospectus or to any amendment or supplement thereto
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”).
2. Placements. Each time that the
Company wishes to issue and sell Placement Shares hereunder (each,
a “Placement”), it will
notify the Agent by email (or other method mutually agreed to in
writing by the parties) of the number of Placement Shares, the time
period during which sales are requested to be made, any limitation
on the number of Placement Shares that may be sold in any one day
and any minimum price below which sales may not be made (a
“Placement
Notice”), the form of which is attached hereto as
Schedule 1. The
Placement Notice shall originate from any of the individuals from
the Company set forth on Schedule 3 (with a copy to each
of the other individuals from the Company listed on such schedule),
and shall be addressed to each of the individuals from the Agent
set forth on Schedule
3, as such Schedule
3 may be amended from time to time. The Placement Notice
shall be effective immediately upon receipt by the Agent unless and
until (i) the Agent declines to accept the terms contained therein
for any reason, in its sole discretion, (ii) the entire amount of
the Placement Shares thereunder has been sold, (iii) the Company
suspends or terminates the Placement Notice, which suspension and
termination rights may be exercised by the Company in its sole
discretion, or (iv) this Agreement has been terminated under the
provisions of Section
13. The amount of any discount, commission or other
compensation to be paid by the Company to the Agent in connection
with the sale of the Placement Shares shall be calculated in
accordance with the terms set forth in Schedule 2. It is expressly
acknowledged and agreed that neither the Company nor the Agent will
have any obligation whatsoever with respect to a Placement or any
Placement Shares unless and until the Company delivers a Placement Notice to the Agent
and the Agent does not decline such Placement Notice pursuant to
the terms set forth above, and then only upon the terms specified
therein and herein. In the event of a conflict between the terms of
Sections 2 or
3 of this Agreement
and the terms of a Placement Notice, the terms of the Placement
Notice will control.
3. Sale of Placement Shares by the
Agent. Subject to the terms and conditions of this
Agreement, for the period specified in a Placement Notice, the
Agent will use its commercially reasonable efforts consistent with
its normal trading and sales practices and applicable state and
federal laws, rules and regulations and the rules of the Nasdaq
Stock Market LLC (the “Exchange”), to sell the
Placement Shares up to the amount specified in, and otherwise in
accordance with the terms of, such Placement Notice. The Agent will
provide written confirmation to the Company no later than the
opening of the Trading Day (as defined below) immediately following
the Trading Day on which it has made sales of Placement Shares
hereunder setting forth the number of Placement Shares sold on such
day, the compensation payable by the Company to the Agent pursuant
to Section 2 with
respect to such sales, and the Net Proceeds (as defined below)
payable to the Company, with an itemization of the deductions made
by the Agent (as set forth in Section 5(b)) from the gross
proceeds that it receives from such sales. Subject to the terms of
a Placement Notice, the Agent may sell Placement Shares by any
method permitted by law deemed to be an “at the market
offering” as defined in Rule 415 of the Securities Act.
“Trading
Day” means any day on which shares of Common Stock are
purchased and sold on the Exchange.
4. Suspension of Sales. The
Company or the Agent may, upon notice to the other party in writing
(including by email correspondence to each of the individuals of
the other party set forth on Schedule 3, if receipt of such
correspondence is actually acknowledged by any of the individuals
to whom the notice is sent, other than via auto-reply) or by
telephone (confirmed immediately by verifiable facsimile
transmission or email correspondence to each of the individuals of
the other party set forth on Schedule 3), suspend any sale
of Placement Shares (a “Suspension”);
provided, however, that
such suspension shall not affect or impair any party’s
obligations with respect to any Placement Shares sold hereunder
prior to the receipt of such notice. While a Suspension is in
effect, any obligation under Sections 7(l), 7(m), and 7(n) with respect to the
delivery of certificates, opinions, or comfort letters to the Agent
shall be waived. Each of the parties agrees that no such notice
under this Section
4 shall be effective against any other party unless it is
made to one of the individuals named on Schedule 3 hereto, as such
Schedule may be amended from time to time.
5. Sale and Delivery to the Agent;
Settlement.
a. Sale of Placement Shares. On
the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, upon the
Agent’s acceptance of the terms of a Placement Notice, and
unless the sale of the Placement Shares described therein has been
declined, suspended, or otherwise terminated in accordance with the
terms of this Agreement, the Agent, for the period specified in the
Placement Notice, will use its commercially reasonable efforts
consistent with its normal trading and sales practices and
applicable state and federal laws, rules and regulations and the
rules of the Exchange to sell such Placement Shares up to the
amount specified in, and otherwise in accordance with the terms of,
such Placement Notice. The Company acknowledges and agrees that (i)
there can be no assurance that the Agent will be successful in
selling Placement Shares, (ii) the Agent will incur no liability or
obligation to the Company or any other person or entity if it does
not sell Placement Shares for any reason other than a failure by
the Agent to use its commercially reasonable efforts consistent
with its normal trading and sales practices and applicable state
and federal laws, rules and regulations and the rules of the
Exchange to sell such Placement Shares as required under this
Agreement and (iii) the Agent shall be under no obligation to
purchase Placement Shares on a principal basis pursuant to this
Agreement, except as otherwise agreed by the Agent and the
Company.
b. Settlement of Placement Shares.
Unless otherwise specified in the applicable Placement Notice,
settlement for sales of Placement Shares will occur on the second
(2nd) Trading Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are
made (each, a “Settlement Date”). The
Agent shall notify the Company of each sale of Placement Shares no
later than the opening of trading on the Exchange on the day
following the Trading Day that the Agent sold Placement Shares. The
amount of proceeds to be delivered to the Company on a Settlement
Date against receipt of the Placement Shares sold (the
“Net
Proceeds”) will be equal to the aggregate sales price
received by the Agent, after deduction for (i) the Agent’s
commission, discount or other compensation for such sales payable
by the Company pursuant to Section 2 hereof, and (ii) any
transaction fees imposed by any governmental or self-regulatory
organization in respect of such sales.
c. Delivery of Placement Shares.
On or before each Settlement Date, the Company will, or will cause
its transfer agent to, electronically transfer the Placement Shares
being sold by crediting the Agent’s or its designee’s
account (provided the Agent shall have given the Company written
notice of such designee and such designee’s account
information at least one Trading Day 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 Agent will deliver
the related Net Proceeds in same day funds to an account designated
by the Company on, or prior to, the Settlement Date. The Company
agrees that if the Company, or its transfer agent (if applicable),
defaults in its obligation to deliver Placement Shares on a
Settlement Date through no fault of the Agent, then in addition to
and in no way limiting the rights and obligations set forth in
Section 11(a)
hereto, it will (i) hold the Agent harmless against any loss,
claim, damage, or reasonable, documented expense (including
reasonable and documented legal fees and expenses), as incurred,
arising out of or in connection with such default by the Company or
its transfer agent (if applicable) and (ii) pay to the Agent
(without duplication) any commission, discount, or other
compensation to which the Agent would otherwise have been entitled
absent such default.
d. Limitations on Offering Size.
Under no circumstances shall the Company cause or request the offer
or sale of any Placement Shares if, after giving effect to the sale
of such Placement Shares, the aggregate number of Placement Shares
sold pursuant to this Agreement would exceed the lesser of (i)
together with all sales of Placement Shares under this Agreement,
the Maximum Amount, (ii) the amount available for offer and sale
under the currently effective Registration Statement and (iii) the
amount authorized from time to time to be issued and sold under
this Agreement by the Company’s board of directors, a duly
authorized committee thereof or a duly authorized executive
committee, and notified to the Agent in writing. Under no
circumstances shall the Company cause or request the offer or sale
of any Placement Shares pursuant to this Agreement at a price lower
than the minimum price authorized from time to time by the
Company’s board of directors, a duly authorized committee
thereof or a duly authorized executive committee, and notified to
the Agent in writing.
6. Representations and Warranties of the
Company. Except as disclosed in the Registration Statement
or Prospectus (including the Incorporated Documents), the Company
represents and warrants to, and agrees with the Agent that as of
the date of this Agreement and as of each Applicable Time (as
defined below), unless such representation, warranty or agreement
specifies a different date or time:
a. Registration Statement and
Prospectus. The transactions contemplated by this Agreement
meet the requirements for and comply with the conditions for the
use of Form S-3 under the Securities Act. The Registration
Statement has been filed with the Commission and has been declared
effective under the Securities Act. The Prospectus Supplement will
name the Agent as the agent in the section entitled “Plan of
Distribution.” The Company has not received, and has no
notice of, any order of the Commission preventing or suspending the
use of the Registration Statement, or threatening or instituting
proceedings for that purpose. The Registration Statement and the
offer and sale of Placement Shares as contemplated hereby meet the
requirements of Rule 415 under the Securities Act and comply in all
material respects with said Rule. Any statutes, regulations,
contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement have been so described or
filed, as applicable. Copies of the Registration Statement, the
Prospectus, and any such amendments or supplements and all
documents incorporated by reference therein that were filed with
the Commission on or prior to the date of this Agreement have been
delivered, or are available through EDGAR, to the Agent and its
counsel. The Company has not distributed and, prior to the later to
occur of each Settlement Date and completion of the distribution of
the Placement Shares, will not distribute any offering material in
connection with the offering or sale of the Placement Shares other
than the Registration Statement and the Prospectus and any Issuer
Free Writing Prospectus (as defined below) to which the Agent has
consented, which consent will not be unreasonably withheld or
delayed, or that is required by applicable law or the listing
maintenance requirements of the Exchange. The Common Stock is
currently quoted on the Exchange under the trading symbol
“CELC.” The Company has not, in the 12 months
preceding the date hereof, received notice from the Exchange to the
effect that the Company is not in compliance with the listing or
maintenance requirements of the Exchange. To the Company’s
knowledge, it is in compliance with all such listing and
maintenance requirements.
b. No Misstatement or Omission. At
each Settlement Date, the Registration Statement and the
Prospectus, as of such date, will conform in all material respects
with the requirements of the Securities Act. The Registration
Statement, when it became or becomes effective, did not, and will
not, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus and any
amendment and supplement thereto, on the date thereof and at each
Applicable Time (defined below), did not or will not include an
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
documents incorporated by reference in the Prospectus or any
Prospectus Supplement did not, and any further documents filed and
incorporated by reference therein will not, when filed with the
Commission, contain an untrue statement of a material fact or omit
to state a material fact required to be stated in such document or
necessary to make the statements in such document, in light of the
circumstances under which they were made, not misleading. The
foregoing 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 Agent specifically for
use in the preparation thereof.
c. Conformity with Securities Act and
Exchange Act. The Registration Statement, the Prospectus,
any Issuer Free Writing Prospectus or any amendment or supplement
thereto, and the Incorporated Documents, 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.
d. Financial Information. The
consolidated financial statements of the Company included or
incorporated by reference in the Registration Statement and the
Prospectus, together with the related notes and schedules, present
fairly, in all material respects, the consolidated financial
position of the Company and the Subsidiaries (as defined below) as
of the dates indicated and the consolidated results of operations,
cash flows and changes in stockholders’ equity of the Company
and the Subsidiaries for the periods specified (subject, in the
case of unaudited statements, to normal year-end audit adjustments
which will not be material, either individually or in the
aggregate) and have been prepared in compliance with the published
requirements of the Securities Act and Exchange Act, as applicable,
and in conformity with generally accepted accounting principles in
the United States (“GAAP”) applied on a
consistent basis (except (i) for such adjustments to accounting
standards and practices as are noted therein and (ii) in the case
of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) during the
periods involved; the other financial and statistical data with
respect to the Company and the Subsidiaries contained or
incorporated by reference in the Registration Statement and the
Prospectus are accurately and fairly presented and prepared on a
basis consistent with the financial statements and books and
records of the Company; there are no financial statements
(historical or pro forma) that are required to be included or
incorporated by reference in the Registration Statement or the
Prospectus that are not included or incorporated by reference as
required; the Company and the Subsidiaries do not have any material
liabilities or obligations, direct or contingent (including any off
balance sheet obligations), not described in the Registration
Statement or the Prospectus which are required to be described in
the Registration Statement or Prospectus; and all disclosures
contained or incorporated by reference in the Registration
Statement and the Prospectus, 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.
e. Conformity with EDGAR Filing.
The Prospectus delivered to the Agent for use in connection with
the sale of the Placement Shares pursuant to this Agreement will be
identical to the versions of the Prospectus created to be
transmitted to the Commission for filing via EDGAR, except to the
extent permitted by Regulation S-T.
f. Organization. The Company and
any subsidiary that is a significant subsidiary (as such term is
defined in Rule 1-02 of Regulation S-X promulgated by the
Commission) (each, a “Subsidiary,”
collectively, the “Subsidiaries”) are, and
will be, duly organized, validly existing as a legal entity and in
good standing under the laws of their respective jurisdictions of
organization. The Company and the Subsidiaries are duly licensed or
qualified as foreign legal entities for transaction of business and
in good standing under the laws of each other jurisdiction in which
their respective ownership or lease of property or the conduct of
their respective businesses requires such license or qualification,
and have all company power and authority necessary to own or hold
their respective properties and to conduct their respective
businesses as described in the Registration Statement and the
Prospectus, except where the failure to be so qualified or in good
standing or have such power or authority would not, individually or
in the aggregate, have a material adverse effect on the assets,
business, operations, earnings, properties, condition (financial or
otherwise), prospects, stockholders’ equity or results of
operations of the Company and the Subsidiaries taken as a whole, or
prevent the consummation of the transactions contemplated hereby (a
“Material Adverse
Effect”).
g. Subsidiaries. The Company owns
directly or indirectly, all of the equity interests of the
Subsidiaries free and clear of any lien, charge, security interest,
encumbrance, right of first refusal or other restriction, and all
the equity interests of the Subsidiaries are validly issued and are
fully paid, nonassessable and free of preemptive and similar
rights. The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than
the subsidiaries listed in Exhibit 21.1 to the Company’s
Annual Report on Form 10-K for the most recently ended fiscal year
and other than (i) those subsidiaries not required to be listed on
Exhibit 21.1 by Item 601 of Regulation S-K under the Exchange Act
and (ii) those subsidiaries formed since the last day of the most
recently ended fiscal year.
h. No Violation or Default.
Neither the Company nor any Subsidiary is (i) in violation of
its charter or by-laws or similar organizational documents; (ii) in
default, and no event has occurred that, with notice or lapse of
time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement
or other similar agreement or instrument to which the Company or
any Subsidiary is a party or by which the Company or any Subsidiary
is bound or to which any of the property or assets of the Company
or any Subsidiary is subject; or (iii) in violation of any law or
statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the
case of each of clauses (ii) and (iii) above, for any such
violation or default that would not, individually or in the
aggregate, have a Material Adverse Effect. To the Company’s
knowledge, no other party under any material contract or other
agreement to which it or any Subsidiary is a party is in default in
any respect thereunder where such default would have a Material
Adverse Effect.
i. No Material Adverse Effect.
Since the date of the most recent financial statements of the
Company included or incorporated by reference in the Registration
Statement and Prospectus, there has not been (i) any Material
Adverse Effect, or any development that would result in a Material
Adverse Effect, (ii) any transaction which is material to the
Company and the Subsidiaries taken as a whole, (iii) any obligation
or liability, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or the Subsidiaries, which is
material to the Company and the Subsidiaries taken as a whole, (iv)
any material change in the capital stock (other than (A) the grant
of additional options under the Company’s existing stock
option plans, (B) changes in the number of outstanding shares of
Common Stock of the Company due to the issuance of shares upon the
exercise or conversion of securities exercisable for, or
convertible into, Common Stock, (C) as a result of the issuance of
Placement Shares, (D) any repurchases of capital stock of the
Company, (E) as described in a proxy statement filed on Schedule
14A or a Registration Statement on Form S-4, or (F) otherwise
publicly announced) or outstanding long-term indebtedness of the
Company or the Subsidiaries or (v) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company
or any Subsidiary, other than in each case above in the ordinary
course of business or as otherwise disclosed in the Registration
Statement or Prospectus (including any Incorporated
Documents).
j. Capitalization. The issued and
outstanding shares of capital stock of the Company have been
validly issued, are fully paid and non-assessable and, other than
as disclosed in the Registration Statement or the Prospectus, are
not subject to any preemptive rights, rights of first refusal or
similar rights. The Company has an authorized, issued and
outstanding capitalization as set forth in the Registration
Statement and the Prospectus as of the dates referred to therein
(other than (i) the grant of additional options under the
Company’s existing stock option plans, (ii) changes in the
number of outstanding shares of Common Stock of the Company due to
the issuance of shares upon the exercise or conversion of
securities exercisable for, or convertible into, Common Stock,
(iii) as a result of the issuance of Placement Shares, or (iv) any
repurchases of capital stock of the Company) and such authorized
capital stock conforms to the description thereof set forth in the
Registration Statement and the Prospectus. The description of the
Common Stock in the Registration Statement and the Prospectus is
complete and accurate in all material respects. Except as disclosed
in or contemplated by the Registration Statement or the Prospectus,
the Company does not have outstanding any options to purchase, or
any rights or warrants to subscribe for, or any securities or
obligations convertible into, or exchangeable for, or any contracts
or commitments to issue or sell, any shares of capital stock or
other securities.
k. S-3 Eligibility. At the time
the Registration Statement was or will be 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 or will meet
the then applicable requirements for the use of Form S-3 under the
Securities Act, including, but not limited to, General Instruction
I.B.6 of Form S-3, if applicable. As of the close of trading
on the Exchange on June 1, 2020, the aggregate market value of
the outstanding voting and non-voting common equity (as defined in
Rule 405) of the Company held by persons other than affiliates of
the Company (pursuant to Rule 144 of the Securities Act, those that
directly, or indirectly through one or more intermediaries,
control, or are controlled by, or are under common control with,
the Company) (the “Non-Affiliate Shares”),
was approximately $57.8 million (calculated by multiplying (x) the
price at which the common equity of the Company was last sold on
the Exchange on June 1, 2020 times (y) the number of Non-Affiliate
Shares). 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 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
General Instruction I.B.6 of Form S-3) with the Commission at least
12 calendar months previously reflecting its status as an entity
that is not a shell company.
l. Authorization; Enforceability.
The Company has full legal right, power and authority to enter into
this Agreement and perform the transactions contemplated hereby.
This Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its
terms, except to the extent that (i) enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors’ rights generally and by general
equitable principles and (ii) the indemnification and contribution
provisions of Section
11 hereof may be limited by federal or state securities laws
and public policy considerations in respect thereof.
m. Authorization of Placement
Shares. The Placement Shares, when issued and delivered
pursuant to the terms approved by the board of directors of the
Company or a duly authorized committee thereof, or a duly
authorized executive committee, against payment therefor as
provided herein, will be duly and validly authorized and issued and
fully paid and nonassessable, free and clear of any pledge, lien,
encumbrance, security interest or other claim (other than any
pledge, lien, encumbrance, security interest or other claim arising
from an act or omission of the Agent or a purchaser), including any
statutory or contractual preemptive rights, resale rights, rights
of first refusal or other similar rights, and will be registered
pursuant to Section 12 of the Exchange Act. The Placement Shares,
when issued, will conform in all material respects to the
description thereof set forth in or incorporated into the
Prospectus.
n. No Consents Required. No
consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or any
governmental or regulatory authority is required for the execution,
delivery and performance by the Company of this Agreement, and the
issuance and sale by the Company of the Placement Shares as
contemplated hereby, except for such consents, approvals,
authorizations, orders and registrations or qualifications (i) as
may be required under applicable state securities laws or by the
by-laws and rules of the Financial Industry Regulatory Authority
(“FINRA”) or the Exchange,
including any notices that may be required by the Exchange, in
connection with the sale of the Placement Shares by the Agent, (ii)
as may be required under the Securities Act and (iii) as have been
previously obtained by the Company.
o. No Preferential Rights. (i) No
person, as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the Securities Act (each, a “Person”), has the right,
contractual or otherwise, to cause the Company to issue or sell to
such Person any Common Stock or shares of any other capital stock
or other securities of the Company (other than upon the exercise of
options or warrants to purchase Common Stock or upon the exercise
of options that may be granted from time to time under the
Company’s existing stock option plans), (ii) no Person has
any preemptive rights, rights of first refusal, or any other rights
(whether pursuant to a “poison pill” provision or
otherwise) to purchase any Common Stock or shares of any other
capital stock or other securities of the Company from the Company
which have not been duly waived with respect to the offering
contemplated hereby, (iii) no Person has the right to act as an
underwriter or as a financial advisor to the Company in connection
with the offer and sale of the Common Stock, and (iv) no Person has
the right, contractual or otherwise, to require the Company to
register under the Securities Act any Common Stock or shares of any
other capital stock or other securities of the Company, or to
include any such shares or other securities in the Registration
Statement or the offering contemplated thereby, whether as a result
of the filing or effectiveness of the Registration Statement or the
sale of the Placement Shares as contemplated thereby or otherwise,
except in each case for such rights as have been waived on or prior
to the date hereof.
p. Independent Public Accountant.
Boulay PLLP (the “Accountant”), whose
report on the consolidated financial statements of the Company is
filed with the Commission as part of the Company’s most
recent Annual Report on Form 10-K filed with the Commission and
incorporated into the Registration Statement, are and, during the
periods covered by their report, were independent public
accountants within the meaning of the Securities Act and the Public
Company Accounting Oversight Board (the “PCAOB”). To the
Company’s knowledge, the Accountant 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.
q. Enforceability of Agreements.
All agreements between the Company and third parties expressly
referenced in the Prospectus, other than such agreements that have
expired by their terms or whose termination is disclosed in
documents filed by the Company on EDGAR, are legal, valid and
binding obligations of the Company and, to the Company’s
knowledge, 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, and except
for any unenforceability that, individually or in the aggregate,
would not have a Material Adverse Effect.
r. No Litigation. There are no
legal, governmental or regulatory actions, suits or proceedings
pending, nor, to the Company’s knowledge, any legal,
governmental or regulatory investigations, including any proceeding
before the United States Food and Drug Administration of the U.S.
Department of Health and Human Services (the “FDA”) or comparable
federal, state, local or foreign governmental authorities (it being
understood that the interaction between the Company and the FDA and
such comparable governmental authorities relating to the clinical
development and product approval process shall not be deemed
proceedings for purposes of this representation), to which the
Company or a Subsidiary is a party or to which any property of the
Company or any Subsidiary is the subject that, individually or in
the aggregate, if determined adversely to the Company or any
Subsidiary, would have a Material Adverse Effect; to the
Company’s knowledge, no such actions, suits or proceedings
are threatened or contemplated by any governmental or regulatory
authority or threatened by others that, individually or in the
aggregate, if determined adversely to the Company or any
Subsidiary, would have a Material Adverse Effect; and there are no
current or pending legal, governmental or regulatory actions,
suits, proceedings or, to the Company’s knowledge,
investigations that are required under the Securities Act to be
described in the Prospectus that are not described in the
Prospectus (including any Incorporated Document). The Company is in
compliance with all applicable federal, state, local and foreign
laws, regulations, orders and decrees governing its business as
enforced by the FDA, or any other federal, state or foreign
agencies or bodies engaged in the regulation of the Company’s
business, except where noncompliance would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect. All preclinical and clinical studies conducted by or on
behalf of the Company to support clearance for commercialization of
the Company’s products have been conducted by the Company, or
to the Company’s knowledge by third parties, in compliance
with all applicable federal, state or foreign laws, rules, orders
and regulations, except for such failure or failures to be in
compliance as would not reasonably be expected to have, singularly
or in the aggregate, a Material Adverse Effect.
s. Licenses and Permits. The
Company and the Subsidiaries possess or have obtained, all
licenses, certificates, consents, orders, approvals, permits and
other authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of
their respective businesses as currently conducted, as described in
the Registration Statement and the Prospectus (the
“Permits”), except where
the failure to possess, obtain or make the same would not,
individually or in the aggregate, have a Material Adverse Effect.
Neither the Company nor any Subsidiary has received written notice
of any proceeding relating to revocation or modification of any
such Permit or has any reason to believe that such Permit will not
be renewed in the ordinary course, except where the failure to
obtain any such renewal would not, individually or in the
aggregate, have a Material Adverse Effect.
t. No Material Defaults. Neither
the Company nor any Subsidiary 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 have 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 have a Material Adverse Effect.
u. Certain Market Activities.
Neither the Company, nor any Subsidiary, nor, to the knowledge of
the Company, any of their respective directors, officers or
controlling persons has taken, directly or indirectly, any action
designed, or that has constituted or would cause or result in,
under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Placement Shares.
v. Broker/Dealer Relationships.
Neither the Company nor any Subsidiary or any related entities (i)
is required to register as a “broker” or
“dealer” in accordance with the provisions of the
Exchange Act or (ii) directly or indirectly through one or more
intermediaries, controls or is a “person associated with a
member” or “associated person of a member”
(within the meaning set forth in the FINRA Manual).
w. No Reliance. The Company has
not relied upon the Agent or legal counsel for the Agent for any
legal, tax or accounting advice in connection with the offering and
sale of the Placement Shares.
x. Taxes. The Company and the
Subsidiaries have filed all federal, state, local and foreign tax
returns which have been required to be filed and paid all taxes
shown thereon through the date hereof, to the extent that such
taxes have become due and are not being contested in good faith,
except where the failure to do so would not have a Material Adverse
Effect. Except as otherwise disclosed in or contemplated by the
Registration Statement or the Prospectus, no tax deficiency has
been determined adversely to the Company or any Subsidiary which
has had, or would have, individually or in the aggregate, a
Material Adverse Effect. The Company has no knowledge of any
federal, state or other governmental tax deficiency, penalty or
assessment which has been or might be asserted or threatened
against it which would have a Material Adverse Effect.
y. Title to Real and Personal
Property. The Company and the Subsidiaries have good and
valid title in fee simple to all items of real property and good
and valid title to all personal property described in the
Registration Statement or Prospectus as being owned by them that
are material to the businesses of the Company or such Subsidiary,
in each case free and clear of all liens, encumbrances and claims,
except those that (i) do not materially interfere with the use made
and proposed to be made of such property by the Company and the
Subsidiaries or (ii) would not, individually or in the aggregate,
have a Material Adverse Effect. Any real property described in the
Registration Statement or Prospectus as being leased by the Company
and the Subsidiaries is held by them under valid, existing and
enforceable leases, except those that (A) do not materially
interfere with the use made or proposed to be made of such property
by the Company or the Subsidiaries or (B) would not, individually
or in the aggregate, have a Material Adverse Effect.
z. Intellectual Property. The
Company and the Subsidiaries own or possess adequate enforceable
rights to use all patents, patent applications, trademarks (both
registered and unregistered), trade names, trademark registrations,
service marks, service mark registrations, Internet domain name
registrations, copyrights, copyright registrations, licenses and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) (collectively, the “Intellectual Property”),
necessary for the conduct of their respective businesses as
conducted as of the date hereof, except to the extent that the
failure to own or possess adequate rights to use such Intellectual
Property would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company and the
Subsidiaries have not received any written notice of any claim of
infringement or conflict which asserted Intellectual Property
rights of others, which infringement or conflict, if the subject of
an unfavorable decision, would result in a Material Adverse Effect.
There are no pending, or to the Company’s knowledge,
threatened judicial proceedings or interference proceedings
challenging the Company’s or any Subsidiary’s rights in
or to or the validity of the scope of any of the Company’s or
its Subsidiaries’ patents, patent applications or proprietary
information. No other entity or individual has any right or claim
in any of the Company’s or any of its Subsidiary’s
patents, patent applications or any patent to be issued therefrom
by virtue of any contract, license or other agreement entered into
between such entity or individual and the Company or any Subsidiary
or by any non-contractual obligation, other than by written
licenses granted by the Company or any Subsidiary. The Company has
not received any written notice of any claim challenging the rights
of the Company or its Subsidiaries in or to any Intellectual
Property owned, licensed or optioned by the Company or any
Subsidiary which claim, if the subject of an unfavorable decision,
would result in a Material Adverse Effect.
aa. Compliance with Applicable
Laws. The Company and the Subsidiaries: (i) are and at all
times have been in material compliance with all statutes, rules and
regulations applicable to the ownership, testing, development,
manufacture, packaging, processing, use, distribution, marketing,
labeling, promotion, sale, offer for sale, storage, import, export
or disposal of any product under development, manufactured or
distributed by the Company or the Subsidiaries (“Applicable Laws”), (ii)
have not received any Form 483 from the FDA, notice of adverse
finding, warning letter, or other written correspondence or notice
from the FDA, the European Medicines Agency (the
“EMA”),
or any other federal, state, local or foreign governmental or
regulatory authority alleging or asserting material noncompliance
with any Applicable Laws or any licenses, certificates, approvals,
clearances, authorizations, permits and supplements or amendments
thereto required by any such Applicable Laws (“Authorizations”), which
would, individually or in the aggregate, result in a Material
Adverse Effect; (iii) possess all material Authorizations and such
Authorizations are valid and in full force and effect and neither
the Company nor the Subsidiaries is in material violation of any
term of any such Authorizations; (iv) have not received written
notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from the
FDA, the EMA, or any other federal, state, local or foreign
governmental or regulatory authority or third party alleging that
any Company product, operation or activity is in material violation
of any Applicable Laws or Authorizations and has no knowledge that
the FDA, the EMA, or any other federal, state, local or foreign
governmental or regulatory authority or third party is considering
any such claim, litigation, arbitration, action, suit,
investigation or proceeding against the Company; (v) have not
received written notice that the FDA, EMA, or any other federal,
state, local or foreign governmental or regulatory authority has
taken, is taking or intends to take action to limit, suspend,
modify or revoke any material Authorizations and has no knowledge
that the FDA, EMA, or any other federal, state, local or foreign
governmental or regulatory authority is considering such action;
and (vi) have filed, obtained, maintained or submitted all reports,
documents, forms, notices, applications, records, claims,
submissions and supplements or amendments as required by any
Applicable Laws or Authorizations except where the failure to file
such reports, documents, forms, notices, applications, records,
claims, submissions and supplements or amendments would not result
in a Material Adverse Effect, and that all such reports, documents,
forms, notices, applications, records, claims, submissions and
supplements or amendments were materially complete and correct on
the date filed (or were corrected or supplemented by a subsequent
submission).
bb. Compliance Program. The Company
has established and administers a compliance program applicable to
the Company, to assist the Company and the directors, officers and
employees of the Company in complying with applicable regulatory
guidelines (including, without limitation, those administered by
the FDA, the EMA, and any other foreign, federal, state or local
governmental or regulatory authority performing functions similar
to those performed by the FDA or EMA), except where such
noncompliance would not reasonably be expected to have a Material
Adverse Effect.
cc. Clinical Studies. The
preclinical studies and clinical trials conducted by the Company or
on behalf of the Company were, and, if still pending are, to the
Company’s knowledge, being conducted in all material respects
in compliance with all Applicable Laws and in accordance with
experimental protocols, procedures and controls generally used by
qualified experts in the preclinical study and clinical trials of
biologics as applied to comparable products to those being
developed by the Company; the descriptions of the results of such
preclinical studies and clinical trials contained in the
Registration Statement and the Prospectus are accurate and complete
in all material respects, and, except as set forth in the
Registration Statement and the Prospectus, the Company has no
knowledge of any other clinical trials or preclinical studies, the
results of which reasonably call into question the clinical trial
or preclinical study results described or referred to in the
Registration Statement and the Prospectus when viewed in the
context in which such results are described; and the Company has
not received any written notices or correspondence from the FDA,
the EMA, or any other domestic or foreign governmental agency
requiring the termination, suspension or modification of any
preclinical studies or clinical trials conducted by or on behalf of
the Company that are described in the Registration Statement and
the Prospectus or the results of which are referred to in the
Registration Statement and the Prospectus.
dd. Environmental Laws. The Company
and the Subsidiaries (i) are in compliance with any and all
applicable federal, state, local and foreign laws, rules,
regulations, decisions and orders relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively,
“Environmental
Laws”); (ii) have received and are in compliance
with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses as described in the Registration Statement and the
Prospectus; and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except, in the case of any of clauses
(i), (ii) or (iii) above, for any such failure to comply or failure
to receive required permits, licenses, other approvals or liability
as would not, individually or in the aggregate, have a Material
Adverse Effect.
ee. Disclosure Controls. The
Company maintains a system 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 is not aware of any
material weaknesses in its internal control over financial
reporting (other than as set forth in the Registration Statement or
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
Registration Statement or the Prospectus). The Company has
established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15 and 15d-15) that comply with the
requirements of the Exchange Act. The Company’s certifying
officers have evaluated the effectiveness of the Company’s
controls and procedures as of a date within 90 days prior to the
filing date of the Annual Report on Form 10-K for the fiscal year
most recently ended (such date, the “Evaluation Date”). The
Company presented in its Annual Report on 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 most recent Evaluation Date,
and the “disclosure controls and procedures” are
effective.
ff. Sarbanes-Oxley Act. There is
and has been no failure on the part of the Company or, to the
knowledge of the Company, any of the Company’s directors or
officers, in their capacities as such, to comply in all material
respects with any applicable provisions of the Sarbanes-Oxley Act
and the rules and regulations promulgated thereunder. Each of the
principal executive officer and the principal financial officer of
the Company (or each former principal executive officer of the
Company and each former principal financial officer of the Company
as applicable) has made all certifications required by Sections 302
and 906 of the Sarbanes-Oxley Act with respect to all reports,
schedules, forms, statements and other documents required to be
filed by it or furnished by it to the Commission during the past 12
months. For purposes of the preceding sentence, “principal
executive officer” and “principal financial
officer” shall have the meanings given to such terms in the
Exchange Act Rules 13a-15 and 15d-15.
gg. Finder’s Fees. Neither
the Company nor any Subsidiary has incurred any liability for any
finder’s fees, brokerage commissions or similar payments in
connection with the transactions herein contemplated, except as may
otherwise exist with respect to the Agent pursuant to this
Agreement.
hh. Labor Disputes. No labor
disturbance by or dispute with employees of the Company or any
Subsidiary exists or, to the knowledge of the Company, is
threatened which would result in a Material Adverse
Effect.
ii. Investment Company Act. Neither
the Company nor any Subsidiary is or, after giving effect to the
offering and sale of the Placement Shares, will be required to
register as an “investment company” or an entity
“controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment Company
Act”).
jj. Operations. The operations of
the Company and the 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 the Subsidiaries are
subject, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency having jurisdiction over the
Company (collectively, the “Money Laundering Laws”),
except where the failure to be in such compliance would not 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 Subsidiary with respect
to the Money Laundering Laws is pending or, to the knowledge of the
Company, threatened.
kk. 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 structured finance, special
purpose or limited purpose entity (each, an “Off Balance Sheet
Transaction”) that would 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 Registration Statement or the
Prospectus which have not been described as required.
ll. Underwriter Agreements. Other
than with respect to this agreement, the Company is not a party to
any agreement with an agent or underwriter for any other “at
the market” or continuous equity transaction.
mm. ERISA. To the knowledge of the
Company, (i) each material employee benefit plan, within the
meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”) that is
maintained, administered or contributed to by the Company or any of
its affiliates for employees or former employees of the Company and
the Subsidiaries has been maintained in material compliance with
its terms and the requirements of any applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended (the “Code”); (ii) no
prohibited transaction, within the meaning of Section 406 of ERISA
or Section 4975 of the Code, has occurred which would result in a
material liability to the Company with respect to any such plan
excluding transactions effected pursuant to a statutory or
administrative exemption; and (iii) for each such plan that is
subject to the funding rules of Section 412 of the Code or Section
302 of ERISA, no “accumulated funding deficiency” as
defined in Section 412 of the Code has been incurred, whether or
not waived, and the fair market value of the assets of each such
plan (excluding for these purposes accrued but unpaid
contributions) equals or exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial
assumptions, other than, in the case of (i), (ii) and (iii) above,
as would not have a Material Adverse Effect.
nn. Forward-Looking Statements. No
forward-looking statement (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.
oo. Margin Rules. Neither the
issuance, sale and delivery of the Placement Shares nor the
application of the proceeds thereof by the Company as described in
the Registration Statement and the Prospectus will violate
Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
pp. Insurance. The Company and the
Subsidiaries carry, or are covered by, insurance in such amounts
and covering such risks as the Company and the Subsidiaries
reasonably believe are adequate for the conduct of their
business.
qq. No Improper Practices. (i)
Neither the Company nor, to the Company’s knowledge, the
Subsidiaries, nor to the Company’s knowledge, any of their
respective executive officers has, in the past five years, made any
unlawful contributions to any candidate for any political office
(or failed fully to disclose any contribution in violation of law)
or made any contribution or other payment to any official of, or
candidate for, any federal, state, municipal, or foreign office or
other person charged with similar public or quasi-public duty in
violation of any law or of the character required to be disclosed
in the Prospectus; (ii) no relationship, direct or indirect, exists
between or among the Company or, to the Company’s knowledge,
the Subsidiaries or any affiliate of any of them, on the one hand,
and the directors, officers and stockholders of the Company or, to
the Company’s knowledge, the Subsidiaries, on the other hand,
that is required by the Securities Act to be described in the
Registration Statement and the Prospectus that is not so described;
(iii) no relationship, direct or indirect, exists between or among
the Company or the Subsidiaries or any affiliate of them, on the
one hand, and the directors, officers, stockholders or directors of
the Company or, to the Company’s knowledge, the Subsidiaries,
on the other hand, that is required by the rules of FINRA to be
described in the Registration Statement and the Prospectus that is
not so described; (iv) there are no material outstanding loans or
advances or material guarantees of indebtedness by the Company or,
to the Company’s knowledge, the Subsidiaries to or for the
benefit of any of their respective officers or directors or any of
the members of the families of any of them; and (v) the Company has
not offered, or caused any placement agent to offer, Common Stock
to any person with the intent to influence unlawfully (A) a
customer or supplier of the Company or the Subsidiaries to alter
the customer’s or supplier’s level or type of business
with the Company or the Subsidiaries or (B) a trade journalist or
publication to write or publish favorable information about the
Company or the Subsidiaries or any of their respective products or
services, and, (vi) neither the Company nor the Subsidiaries nor,
to the Company’s knowledge, any employee or agent of the
Company or the Subsidiaries has made any payment of funds of the
Company or the Subsidiaries or received or retained any funds in
violation of any law, rule or regulation (including, without
limitation, the Foreign Corrupt Practices Act of 1977), which
payment, receipt or retention of funds is of a character required
to be disclosed in the Registration Statement or the
Prospectus.
rr. Status Under the Securities
Act. The Company was not and is not an ineligible issuer as
defined in Rule 405 under the Securities Act at the times specified
in Rules 164 and 433 under the Securities Act in connection
with the offering of the Placement Shares.
ss. No Misstatement or Omission in an
Issuer Free Writing Prospectus. Each Issuer Free Writing
Prospectus, as of its issue date and as of each Applicable Time (as
defined in Section
25 below), did not, does not and will not, through the
completion of the Placement or Placements for which such Issuer
Free Writing Prospectus is issued, include any information that
conflicted, conflicts or will conflict with the information
contained in the Registration Statement or the Prospectus,
including any incorporated document deemed to be a part thereof
that has not been superseded or modified. The foregoing sentence
does not apply to statements in or omissions from any Issuer Free
Writing Prospectus based upon and in conformity with written
information furnished to the Company by the Agent specifically for
use therein.
tt. No Conflicts. Neither the
execution of this Agreement, nor the issuance, offering or sale of
the Placement Shares, nor the consummation of any of the
transactions contemplated herein, nor the compliance by the Company
with the terms and provisions hereof will conflict with, or will
result in a breach of, any of the terms and provisions of, or has
constituted or will constitute a default under, or has resulted in
or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to
the terms of any contract or other agreement to which the Company
may be bound or to which any of the property or assets of the
Company is subject, except (i) such conflicts, breaches or
defaults as may have been waived and (ii) such conflicts, breaches
and defaults that would not have a Material Adverse Effect; nor
will such action result (x) in any violation of the provisions of
the organizational or governing documents of the Company, or
(y) in any material violation of the provisions of any statute
or any order, rule or regulation applicable to the Company or of
any court or of any federal, state or other regulatory authority or
other government body having jurisdiction over the Company, except
where such violation would not have a Material Adverse
Effect.
uu. OFAC.
(i) Neither the Company
nor any Subsidiary (collectively, the “Entity”) nor, to the
Company’s knowledge, any director, officer, employee, agent,
affiliate or representative of the Entity, is a government,
individual, or entity (in this paragraph, “Person”) that is, or is
owned or controlled by a Person that is:
(A) the subject of any
sanctions administered or enforced by the U.S. Department of
Treasury’s Office of Foreign Assets Control
(“OFAC”), the United
Nations Security Council (“UNSC”), the European
Union (“EU”), Her Majesty’s
Treasury (“HMT”), or other relevant
sanctions authority (collectively, “Sanctions”),
nor
(B) located, organized
or resident in a country or territory that is the subject of
Sanctions.
(ii) The
Entity will not, directly or indirectly, knowingly use the proceeds
of the offering, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other
Person:
(A) to fund or
facilitate any activities or business of or with any Person or in
any country or territory that, at the time of such funding or
facilitation, is the subject of Sanctions; or
(B) in any other manner
that will result in a violation of Sanctions by any Person
(including any Person participating in the offering, whether as
underwriter, advisor, investor or otherwise).
(iii) The
Entity represents and warrants that, except as detailed in the
Registration Statement and the Prospectus, for the past five (5)
years, it has not knowingly engaged in and is not now knowingly
engaged in any dealing or transactions with any Person, or in any
country or territory, that at the time of the dealing or
transaction is or was the subject of Sanctions.
vv. Stock Transfer Taxes. On each
Settlement Date, all material stock transfer or other taxes (other
than income taxes) which are required to be paid in connection with
the sale and transfer of the Placement Shares to be sold hereunder
will be, or will have been, fully paid or provided for by the
Company and all laws imposing such taxes will be or will have been
fully complied with by the Company in all material
respects.
ww. IT Systems. (i)(A) To the
knowledge of Company, there has been no material security breach or
other material compromise of any Company’s information
technology and computer systems, networks, hardware, software, data
(including the data of their respective customers, employees,
suppliers, vendors and any third party data maintained by or on
behalf of them), equipment or technology (collectively,
“IT Systems and
Data”) and (B) the Company has not been notified of,
and have no knowledge of any event or condition that would
reasonably be expected to result in, any material security breach
or other material compromise to their IT Systems and Data; (ii) the
Company is presently in material compliance with all applicable
laws or statutes and all judgments, orders, rules and regulations
of any court or arbitrator or governmental or regulatory authority,
internal policies and contractual obligations relating to the
privacy and security of IT Systems and Data and to the protection
of such IT Systems and Data from unauthorized use, access,
misappropriation or modification, except as would not, in the case
of this clause (ii), individually or in the aggregate, have a
Material Adverse Effect; and (iii) the Company has implemented
backup and disaster recovery technology consistent with industry
standards and practices.
xx. Certificates. Any certificate
signed by an officer of the Company and delivered to the Agent or
to counsel for the Agent pursuant to or in connection with this
Agreement shall be deemed to be a representation and warranty by
the Company, as applicable, to the Agent as to the matters set
forth therein.
7. Covenants of the Company. The
Company covenants and agrees with the Agent that:
a. Registration Statement
Amendments. After the date of this Agreement and during any
period in which a prospectus relating to any Placement Shares is
required to be delivered by the Agent under the Securities Act
(including in circumstances where such requirement may be satisfied
pursuant to Rule 172 under the Securities Act) (the
“Prospectus Delivery
Period”) (i) the Company will notify the Agent
promptly of the time when any subsequent amendment to the
Registration Statement, other than documents incorporated by
reference or amendments not related to any Placement, has been
filed with the Commission and/or has become effective or any
subsequent supplement to the Prospectus has been filed and of any
request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus related to the Placement or
for additional information related to the Placement, (ii) the
Company will prepare and file with the Commission, promptly upon
the Agent’s request, any amendments or supplements to the
Registration Statement or Prospectus that, upon the advice of the
Company’s legal counsel, may be necessary or advisable in
connection with the distribution of the Placement Shares by the
Agent (provided, however,
that the failure of the Agent to make such request shall not
relieve the Company of any obligation or liability hereunder, or
affect the Agent’s right to rely on the representations and
warranties made by the Company in this Agreement and provided, further, that the only remedy
the Agent shall have with respect to the failure to make such
filing shall be to cease making sales under this Agreement until
such amendment or supplement is filed); (iii) the Company will not
file any amendment or supplement to the Registration Statement or
Prospectus relating to the Placement Shares or a security
convertible into the Placement Shares (other than an Incorporated
Document) unless a copy thereof has been submitted to the Agent
within a reasonable period of time before the filing and the Agent
has not reasonably objected thereto (provided, however, that (A) the failure
of the Agent to make such objection shall not relieve the Company
of any obligation or liability hereunder, or affect the
Agent’s right to rely on the representations and warranties
made by the Company in this Agreement and (B) the Company has no
obligation to provide the Agent any advance copy of such filing or
to provide the Agent an opportunity to object to such filing if the
filing does not name the Agent or does not relate to the
transaction herein provided; and provided, further, that the only
remedy the Agent shall have with respect to the failure by the
Company to obtain such consent shall be to cease making sales under
this Agreement) and the Company will furnish to the Agent at the
time of filing thereof a copy of any document that upon filing is
deemed to be incorporated by reference into the Registration
Statement or Prospectus, except for those documents available via
EDGAR; and (iv) the Company will cause each amendment or supplement
to the Prospectus to be filed with the Commission as required
pursuant to the applicable paragraph of Rule 424(b) of the
Securities Act or, in the case of any document to be incorporated
therein by reference, to be filed with the Commission as required
pursuant to the Exchange Act, within the time period prescribed
(the determination to file or not file any amendment or supplement
with the Commission under this Section 7(a), based on the
Company’s reasonable opinion or reasonable objections, shall
be made exclusively by the Company).
b. Notice of Commission Stop
Orders. The Company will advise the Agent, promptly after it
receives notice or obtains knowledge thereof, of the issuance or
threatened issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement, of the suspension
of the qualification of the Placement Shares for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and it will use its commercially
reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such a stop order should be issued. The
Company will advise the Agent promptly after it receives any
request by the Commission for any amendments to the Registration
Statement or any amendment or supplements to the Prospectus or any
Issuer Free Writing Prospectus or for additional information
related to the offering of the Placement Shares or for additional
information related to the Registration Statement, the Prospectus
or any Issuer Free Writing Prospectus.
c. Delivery of Prospectus; Subsequent
Changes. During the Prospectus Delivery Period, the Company
will comply with all requirements imposed upon it by the Securities
Act, as from time to time in force, and to file on or before their
respective due dates all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any
other provision of or under the Exchange Act. If the Company has
omitted any information from the Registration Statement pursuant to
Rule 430A under the Securities Act, it will use its commercially
reasonable efforts to comply with the provisions of and make all
requisite filings with the Commission pursuant to said Rule 430A
and to notify the Agent promptly of all such filings. If during the
Prospectus Delivery Period any event occurs as a result of which
the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such
Prospectus Delivery Period it is necessary to amend or supplement
the Registration Statement or Prospectus to comply with the
Securities Act, the Company will promptly notify the Agent to
suspend the offering of Placement Shares during such period and the
Company will promptly amend or supplement the Registration
Statement or Prospectus (at the expense of the Company) so as to
correct such statement or omission or effect such compliance;
provided, however, that the
Company may delay the filing of any amendment or supplement, if in
the judgment of the Company, it is in the best interest of the
Company.
d. Listing of Placement Shares.
During the Prospectus Delivery Period, the Company will use its
commercially reasonable efforts to cause the Placement Shares to be
listed on the Exchange and to qualify the Placement Shares for sale
under the securities laws of such jurisdictions in the United
States as the Agent reasonably designates and to continue such
qualifications in effect so long as required for the distribution
of the Placement Shares; provided,
however, that the Company shall not be required in
connection therewith to qualify as a foreign corporation or dealer
in securities, file a general consent to service of process, or
subject itself to taxation in any jurisdiction if it is not
otherwise so subject.
e. Delivery of Registration Statement and
Prospectus. The Company will furnish to the Agent and its
counsel (at the reasonable expense of the Company) copies of the
Registration Statement, the Prospectus (including all documents
incorporated by reference therein) and all amendments and
supplements to the Registration Statement or Prospectus that are
filed with the Commission during the Prospectus Delivery Period
(including all documents filed with the Commission during such
period that are deemed to be incorporated by reference therein), in
each case as soon as reasonably practicable and in such quantities
as the Agent may from time to time reasonably request and, at the
Agent’s request, will also furnish copies of the Prospectus
to each exchange or market on which sales of the Placement Shares
may be made; provided,
however, that the Company shall not be required to furnish
any document (other than the Prospectus) to the Agent to the extent
such document is available on EDGAR.
f. Earnings Statement. The Company
will make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the
end of the Company’s current fiscal quarter, an earnings
statement covering a 12-month period that satisfies the provisions
of Section 11(a) and Rule 158 of the Securities Act.
g. Use of Proceeds. The Company
will use the Net Proceeds as described in the Prospectus in the
section entitled “Use of Proceeds.”
h. Notice of Other Sales. Without
the prior written consent of the Agent, the Company will not,
directly or indirectly, offer to sell, sell, contract to sell,
grant any option to sell or otherwise dispose of any Common Stock
(other than the Placement Shares offered pursuant to this
Agreement) or securities convertible into or exchangeable for
Common Stock, warrants or any rights to purchase or acquire, Common
Stock during the period beginning on the date on which any
Placement Notice is delivered to the Agent hereunder and ending on
the third (3rd) Trading Day immediately following the final
Settlement Date with respect to Placement Shares sold pursuant to
such Placement Notice (or, if the Placement Notice has been
terminated or suspended prior to the sale of all Placement Shares
covered by a Placement Notice, the date of such suspension or
termination); and will not directly or indirectly in any other
“at the market” or continuous equity transaction offer
to sell, sell, contract to sell, grant any option to sell or
otherwise dispose of any Common Stock (other than the Placement
Shares offered pursuant to this Agreement) or securities
convertible into or exchangeable for Common Stock, warrants or any
rights to purchase or acquire, Common Stock prior to the
termination of this Agreement; provided, however, that such
restrictions will not apply in connection with the Company’s
issuance or sale of (i) Common Stock, options to purchase Common
Stock or Common Stock issuable upon the exercise of options,
pursuant to any stock option, or benefits plan, stock ownership
plan or dividend reinvestment plan (but not Common Stock subject to
a waiver to exceed plan limits in its dividend reinvestment plan)
of the Company whether now in effect or hereafter implemented; (ii)
Common Stock issuable upon conversion of securities or the exercise
of warrants, options or other rights in effect or outstanding, and
disclosed in filings by the Company available on EDGAR or otherwise
in writing to the Agent, (iii) Common Stock, or securities
convertible into or exercisable for Common Stock, offered and sold
in a privately negotiated transaction to vendors, customers,
strategic partners or potential strategic partners or other
investors conducted in a manner so as not to be integrated with the
offering of Common Stock hereby and (iv) Common Stock in connection
with any acquisition, strategic investment or other similar
transaction (including any joint venture, strategic alliance or
partnership).
i. Change of Circumstances. The
Company will, at any time during the pendency of a Placement
Notice, advise the Agent promptly after it shall have received
notice or obtained knowledge thereof, of any information or fact
that would alter or affect in any material respect any opinion,
certificate, letter or other document required to be provided to
the Agent pursuant to this Agreement.
j. Due Diligence Cooperation.
During the term of this Agreement, the Company will cooperate with
any reasonable due diligence review conducted by the Agent or its
representatives in connection with the transactions contemplated
hereby, including, without limitation, providing information and
making available documents and senior corporate officers, during
regular business hours and at the Company’s principal
offices, as the Agent may reasonably request.
k. Required Filings Relating to Placement
of Placement Shares. The Company agrees that on such dates
as the Securities Act shall require, the Company will (i) file a
prospectus supplement with the Commission under the applicable
paragraph of Rule 424(b) under the Securities Act (each and every
date a filing under Rule 424(b) is made, a “Filing Date”), which
prospectus supplement will set forth, within the relevant period,
the amount of Placement Shares sold through the Agent, the Net
Proceeds to the Company and the compensation payable by the Company
to the Agent with respect to such Placement Shares, and (ii)
deliver such number of copies of each such prospectus supplement to
each exchange or market on which such sales were effected as may be
required by the rules or regulations of such exchange or
market.
l. Representation Dates;
Certificate. Each time during the term of this Agreement
that the Company:
(i) amends or
supplements (other than a prospectus supplement relating solely to
an offering of securities other than the Placement Shares) the
Registration Statement or the Prospectus relating to the Placement
Shares by means of a post-effective amendment, sticker or
prospectus supplement but not by means of incorporation of
documents by reference into the Registration Statement or the
Prospectus relating to the Placement Shares;
(ii) files
an annual report on Form 10-K under the Exchange Act (including any
Annual Report on Form 10-K/A containing amended audited financial
information or a material amendment to the previously filed Annual
Report on Form 10-K);
(iii) files
its quarterly reports on Form 10-Q under the Exchange Act;
or
(iv) files
a current report on Form 8-K containing amended financial
information (other than information “furnished”
pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure
pursuant to Item 8.01 of Form 8-K relating to the reclassification
of certain properties as discontinued operations in accordance with
Statement of Financial Accounting Standards No. 144) under the
Exchange Act;
(each
date of filing of one or more of the documents referred to in
clauses (i) through (iv) shall be a “Representation
Date”),
the
Company shall furnish the Agent (but in the case of clause (iv)
above only if the Agent reasonably determines that the information
contained in such Form 8-K is material) with a certificate, in the
form attached hereto as Exhibit 7(1). The requirement
to provide a certificate under this Section 7(1) shall be waived
for any Representation Date occurring at a time at which no
Placement Notice is pending, which waiver shall continue until the
earlier to occur of the date the Company delivers a Placement
Notice hereunder (which for such calendar quarter shall be
considered a Representation Date) and the next occurring
Representation Date on which the Company files its Annual Report on
Form 10-K. Notwithstanding the foregoing, (A) upon the delivery of
the first Placement Notice hereunder and (B) if the Company
subsequently decides to sell Placement Shares following a
Representation Date when the Company relied on such waiver and did
not provide the Agent with a certificate under this Section 7(1), then before the
Agent sells any Placement Shares, the Company shall provide the
Agent with a certificate, in the form attached hereto as
Exhibit 7(1), dated
the date of the Placement Notice.
m. Legal Opinion. On or prior to
the date of the first Placement Notice given hereunder the Company
shall cause to be furnished to the Agent a written opinion and a
negative assurance letter of Fredrikson & Byron, P.A.
(“Company
Counsel”), or other counsel reasonably satisfactory to
the Agent, each in form and substance reasonably satisfactory to
the Agent. Thereafter, within five (5) Trading Days of each
Representation Date with respect to which the Company is obligated
to deliver a certificate in the form attached hereto as Exhibit
7(l) for which no waiver is applicable, the Company shall cause to
be furnished to the Agent a negative assurance letter of
Company Counsel in form and substance reasonably satisfactory to
the Agent; provided that, in lieu of such negative assurance for
subsequent periodic filings under the Exchange Act, counsel may
furnish the Agent with a letter (a “Reliance Letter”) to the
effect that the Agent may rely on the negative assurance letter
previously delivered under this Section 7(m) to the same extent as
if it were dated the date of such letter (except that statements in
such prior letter shall be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented as of the
date of the Reliance Letter).
n. Comfort Letter. On or prior to
the date of the first Placement Notice given hereunder and within
five (5) Trading Days after each subsequent Representation Date,
other than pursuant to Section 7(l)(iii), the Company shall cause
its independent accountants to furnish the Agent letters (the
“Comfort
Letters”), dated the date the Comfort Letter is
delivered, which shall meet the requirements set forth in this
Section 7(n). The
Comfort Letter from the Company’s independent accountants
shall be in a form and substance reasonably satisfactory to the
Agent, (i) confirming that they are an independent public
accounting firm within the meaning of the Securities Act and the
PCAOB, (ii) stating, as of such date, the conclusions and findings
of such firm with respect to the financial information and other
matters ordinarily covered by accountants’ “comfort
letters” to underwriters in connection with registered public
offerings (the first such letter, the “Initial Comfort Letter”)
and (iii) updating the Initial Comfort Letter with any
information that would have been included in the Initial Comfort
Letter had it been given on such date and modified as necessary to
relate to the Registration Statement and the Prospectus, as amended
and supplemented to the date of such letter.
o. Market Activities. The Company
will not, directly or indirectly, (i) take any action designed to
cause or result in, or that constitutes or would constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of Common Stock or (ii)
sell, bid for, or purchase Common Stock in violation of Regulation
M, or pay anyone any compensation for soliciting purchases of the
Placement Shares other than the Agent.
p. Investment Company Act. The
Company will conduct its affairs in such a manner so as to
reasonably ensure that neither it nor the Subsidiaries will be or
become, at any time prior to the termination of this Agreement, an
“investment company,” as such term is defined in the
Investment Company Act.
q. No Offer to Sell. Other than an
Issuer Free Writing Prospectus approved in advance by the Company
and the Agent in its capacity as agent hereunder pursuant to
Section 23, neither
of the Agent nor the Company (including its agents and
representatives, other than the Agent in its capacity as such) will
make, use, prepare, authorize, approve or refer to any written
communication (as defined in Rule 405), required to be filed with
the Commission, that constitutes an offer to sell or solicitation
of an offer to buy Placement Shares hereunder.
r. Sarbanes-Oxley Act. The Company
will maintain and keep accurate books and records reflecting its
assets and maintain internal accounting controls in a manner
designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP and including those
policies and procedures that (i) pertain to the maintenance of
records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the assets of the Company, (ii)
provide reasonable assurance that transactions are recorded as
necessary to permit the preparation of the Company’s
consolidated financial statements in accordance with GAAP, (iii)
that receipts and expenditures of the Company are being made only
in accordance with management’s and the Company’s
directors’ authorization, and (iv) provide reasonable
assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company’s assets that
could have a material effect on its financial statements. The
Company will maintain disclosure controls and procedures that
comply with the requirements of the Exchange Act.
8. Representations and Covenants of the
Agent. The Agent represents and warrants that it is duly
registered as a broker-dealer under FINRA, the Exchange Act and the
applicable statutes and regulations of each state in which the
Placement Shares will be offered and sold, except such states in
which the Agent is exempt from registration or such registration is
not otherwise required. The Agent shall continue, for the term of
this Agreement, to be duly registered as a broker-dealer under
FINRA, the Exchange Act and the applicable statutes and regulations
of each state in which the Placement Shares will be offered and
sold, except such states in which it is exempt from registration or
such registration is not otherwise required, during the term of
this Agreement. The Agent shall comply with all applicable law and
regulations in connection with the transactions contemplated by
this Agreement, including the issuance and sale through the Agent
of the Placement Shares.
9. Payment of Expenses. The
Company will pay all expenses incident to the performance of its
obligations under this Agreement, including (a) the preparation,
filing, including any fees required by the Commission, and printing
of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment and supplement
thereto and each Free Writing Prospectus, in such number as the
Agent shall deem reasonably necessary, (b) the printing and
delivery to the Agent of this Agreement and such other documents as
may be required in connection with the offering, purchase, sale,
issuance or delivery of the Placement Shares, (c) the preparation,
issuance and delivery of the certificates, if any, for the
Placement Shares to the Agent, including any stock or other
transfer taxes and any capital duties, stamp duties or other duties
or taxes payable upon the sale, issuance or delivery of the
Placement Shares to the Agent, (d) the fees and disbursements of
the counsel, accountants and other advisors to the Company, (e) the
reasonable and documented out-of-pocket fees and disbursements of
counsel to the Agent incurred in connection with (i) entering into
the transactions contemplated by this Agreement in an amount not to
exceed $50,000 in the aggregate, and (ii) ongoing diligence arising
from the transactions contemplated by this Agreement in an amount
not to exceed $4,500 in the aggregate for one calendar quarter per
fiscal year in connection with the filing of the Company’s
Annual Report on Form 10-K, and $1,500 in the aggregate per
calendar quarter in connection with the filing of the
Company’s quarterly reports on Forms 10-Q; (f) the fees and
expenses of the transfer agent and registrar for the Common Stock,
(g) the filing fees incident to any review by FINRA of the terms of
the sale of the Placement Shares, and (h) the fees and expenses
incurred in connection with the listing of the Placement Shares on
the Exchange.
10. Conditions to the Agent’s
Obligations. The obligations of the Agent hereunder with
respect to a Placement will be subject to the continuing accuracy
and completeness of the representations and warranties made by the
Company herein (other than those representations and warranties
made as of a specified date or time), to the due performance in all
material respects by the Company of its obligations hereunder, to
the completion by the Agent of a due diligence review satisfactory
to it in its reasonable judgment, and to the continuing reasonable
satisfaction (or waiver by the Agent in its sole discretion) of the
following additional conditions:
a. Registration Statement
Effective. The Registration Statement shall remain effective
and shall be available for the sale of all Placement Shares
contemplated to be issued by any Placement Notice.
b. No Material Notices. None of
the following events shall have occurred and be continuing: (i)
receipt by the Company of any request for additional information
from the Commission or any other federal or state governmental
authority during the period of effectiveness of the Registration
Statement, the response to which would require any post-effective
amendments or supplements to the Registration Statement or the
Prospectus; (ii) the issuance by the Commission or any other
federal or state governmental authority of any stop order
suspending the effectiveness of the Registration Statement or
receipt by the Company of notification of the initiation of any
proceedings for that purpose; (iii) receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Placement Shares for
sale in any jurisdiction or receipt by the Company of notification
of the initiation of, or a threat to initiate, any proceeding for
such purpose; or (iv) the occurrence of any event that makes any
material statement made in the Registration Statement or the
Prospectus or any material Incorporated Document untrue in any
material respect or that requires the making of any changes in the
Registration Statement, the Prospectus or any material Incorporated
Document so that, in the case of the Registration Statement, it
will not contain any materially untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and, that
in the case of the Prospectus or any material Incorporated
Document, it will not contain any materially untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
c. No Misstatement or Material
Omission. The Agent shall not have advised the Company that
the Registration Statement or Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact that in
the Agent’s reasonable opinion is material, or omits to state
a fact that in the Agent’s reasonable opinion is material and
is required to be stated therein or is necessary to make the
statements therein not misleading.
d. Material Changes. Except as
contemplated in the Prospectus, or disclosed in the Company’s
reports filed with the Commission, there shall not have been any
Material Adverse Effect, or any development that would cause a
Material Adverse Effect, or a downgrading in or withdrawal of the
rating assigned to any of the Company’s securities (other
than asset backed securities) by any “nationally recognized
statistical rating organization,” as such term is defined by
the Commission for purposes of Rule 436(g)(2) under the Securities
Act (a “Rating
Organization”), or a public announcement by any Rating
Organization that it has under surveillance or review its rating of
any of the Company’s securities (other than asset backed
securities), the effect of which, in the case of any such action by
a Rating Organization described above, in the reasonable judgment
of the Agent (without relieving the Company of any obligation or
liability it may otherwise have), is so material as to make it
impracticable or inadvisable to proceed with the offering of the
Placement Shares on the terms and in the manner contemplated in the
Prospectus.
e. Company Counsel Legal Opinion.
The Agent shall have received the opinion and negative assurance
letter of Company Counsel required to be delivered pursuant to
Section 7(m)
on or before the date on which such delivery of such opinion and
negative assurance letter are required pursuant to Section 7(m).
f. Agent Counsel Legal Opinion.
Agent shall have received from Duane Morris LLP, counsel for the
Agent, such opinion or opinions, on or before the date on which the
delivery of the Company Counsel legal opinion is required pursuant
to Section 7(m),
with respect to such matters as the Agent may reasonably require,
and the Company shall have furnished to such counsel such documents
as they request for enabling them to pass upon such
matters.
g. Comfort Letter. The Agent shall
have received the Comfort Letter required to be delivered pursuant
Section 7(n) on or
before the date on which such delivery of such letter is required
pursuant to Section
7(n).
h. Representation Certificate. The
Agent shall have received the certificate required to be delivered
pursuant to Section
7(1) on or before the date on which delivery of such
certificate is required pursuant to Section 7(1).
i. Secretary’s Certificate.
On or prior to the first Representation Date, the Agent shall have
received a certificate, signed on behalf of the Company by its
corporate Secretary, in form and substance satisfactory to the
Agent and its counsel.
j. No Suspension. Trading in the
Common Stock shall not have been suspended on the Exchange and the
Common Stock shall not have been delisted from the
Exchange.
k. Other Materials. On each date
on which the Company is required to deliver a certificate pursuant
to Section 7(1),
the Company shall have furnished to the Agent such appropriate
further information, certificates and documents as the Agent may
reasonably request and which are usually and customarily furnished
by an issuer of securities in connection with a securities offering
of the type contemplated hereby. All such opinions, certificates,
letters and other documents will be in compliance with the
provisions hereof.
l. Securities Act Filings Made.
All filings with the Commission required by Rule 424 under the
Securities Act to have been filed prior to the issuance of any
Placement Notice hereunder shall have been made within the
applicable time period prescribed for such filing by Rule
424.
m. Approval for Listing. The
Placement Shares shall either have been approved for listing on the
Exchange, subject only to notice of issuance, or the Company shall
have filed an application for listing of the Placement Shares on
the Exchange at, or prior to, the issuance of any Placement
Notice.
n. No Termination Event. There
shall not have occurred any event that would permit the Agent to
terminate this Agreement pursuant to Section 13(a).
11. Indemnification and
Contribution.
a. Company Indemnification. The
Company agrees to indemnify and hold harmless the Agent, its
partners, members, directors, officers, employees and agents and
each person, if any, who controls the Agent within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
as follows:
(i) against any and all
loss, liability, claim, damage and expense whatsoever, as incurred,
joint or several, arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or arising out of any untrue statement or alleged
untrue statement of a material fact included in any related Issuer
Free Writing Prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against
any and all loss, liability, claim, damage and expense whatsoever,
as incurred, joint or several, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 11(d) below) any
such settlement is effected with the written consent of the
Company, which consent shall not unreasonably be delayed or
withheld; and
(iii) against
any and all expense whatsoever, as incurred (including the
reasonable and documented out-of-pocket fees and disbursements of
counsel), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i)
or (ii) above,
provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the
extent arising out of any untrue statement or omission or alleged
untrue statement or omission made solely in reliance upon and in
conformity with written information furnished to the Company by the
Agent expressly for use in the Registration Statement (or any
amendment thereto), or in any related Issuer Free Writing
Prospectus or the Prospectus (or any amendment or supplement
thereto).
b. Indemnification by the Agent.
The Agent agrees to indemnify and hold harmless the Company and its
directors and officers, and each person, if any, who (i) controls
the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act or (ii) is controlled by or is
under common control with the Company against any and all loss,
liability, claim, damage and expense described in the indemnity
contained in Section
11(a), as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendments thereto) or
in any related Issuer Free Writing Prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in
conformity with information relating to the Agent and furnished to
the Company in writing by the Agent expressly for use
therein.
c. Procedure. Any party that
proposes to assert the right to be indemnified under this
Section 11 will,
promptly after receipt of notice of commencement of any action
against such party in respect of which a claim is to be made
against an indemnifying party or parties under this Section 11, notify each such
indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such
indemnifying party will not relieve the indemnifying party from (i)
any liability that it might have to any indemnified party otherwise
than under this Section
11 and (ii) any liability that it may have to any
indemnified party under the foregoing provisions of this
Section 11 unless,
and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the
extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with
any other indemnifying party similarly notified, to assume the
defense of the action, with counsel reasonably satisfactory to the
indemnified party, and after notice from the indemnifying party to
the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for
the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified
party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (1) the
employment of counsel by the indemnified party has been authorized
in writing by the indemnifying party, (2) the indemnified party has
reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the
indemnifying party, (3) a conflict or potential conflict of
interest exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct
the defense of such action on behalf of the indemnified party) or
(4) the indemnifying party has not in fact employed counsel to
assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of
which cases the reasonable and documented out-of-pocket fees,
disbursements and other charges of counsel will be at the expense
of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable and documented out-of-pocket fees,
disbursements and other charges of more than one separate firm
admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such reasonable and
documented out-of-pocket fees, disbursements and other charges will
be reimbursed by the indemnifying party promptly after the
indemnifying party receives a written invoice relating to fees,
disbursements and other charges in reasonable detail. An
indemnifying party will not, in any event, be liable for any
settlement of any action or claim effected without its written
consent. No indemnifying party shall, without the prior written
consent of each indemnified party, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim,
action or proceeding relating to the matters contemplated by this
Section 11 (whether
or not any indemnified party is a party thereto), unless such
settlement, compromise or consent (1) includes an unconditional
release of each indemnified party from all liability arising out of
such litigation, investigation, proceeding or claim and (2) does
not include a statement as to or an admission of fault, culpability
or a failure to act by or on behalf of any indemnified
party.
d. Contribution. In order to
provide for just and equitable contribution in circumstances in
which the indemnification provided for in the foregoing paragraphs
of this Section 11
is applicable in accordance with its terms but for any reason is
held to be unavailable from the Company or the Agent, the Company
and the Agent will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative,
legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than the
Agent, such as persons who control the Company within the meaning
of the Securities Act or the Exchange Act, officers of the Company
who signed the Registration Statement and directors of the Company,
who also may be liable for contribution) to which the Company and
the Agent may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one
hand and the Agent on the other hand. The relative benefits
received by the Company on the one hand and the Agent on the other
hand shall be deemed to be in the same proportion as the total Net
Proceeds from the sale of the Placement Shares (before deducting
expenses) received by the Company bear to the total compensation
received by the Agent (before deducting expenses) from the sale of
Placement Shares on behalf of the Company. If, but only if, the
allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in
such proportion as is appropriate to reflect not only the relative
benefits referred to in the foregoing sentence but also the
relative fault of the Company, on the one hand, and the Agent, on
the other hand, with respect to the statements or omission that
resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault
shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Agent, the intent of the
parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Agent agree that it would not be just and equitable
if contributions pursuant to this Section 11(d) were to be
determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, liability,
expense, or damage, or action in respect thereof, referred to above
in this Section
11(d) shall be deemed to include, for the purpose of this
Section 11(d), any
legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action
or claim to the extent consistent with Section 11(c) hereof.
Notwithstanding the foregoing provisions of this Section 11(d), the Agent shall
not be required to contribute any amount in excess of the
commissions received by it under this Agreement and no person found
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 11(d), any person who
controls a party to this Agreement within the meaning of the
Securities Act or the Exchange Act, and any officers, directors,
partners, employees or agents of the Agent, will have the same
rights to contribution as that party, and each officer who signed
the Registration Statement and director of the Company will have
the same rights to contribution as the Company, subject in each
case to the provisions hereof. Any party entitled to contribution,
promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may
be made under this Section
11(d), will notify any such party or parties from whom
contribution may be sought, but the omission to so notify will not
relieve that party or parties from whom contribution may be sought
from any other obligation it or they may have under this
Section 11(d)
except to the extent that the failure to so notify such other party
materially prejudiced the substantive rights or defenses of the
party from whom contribution is sought. Except for a settlement
entered into pursuant to the last sentence of Section 11(c) hereof, no party
will be liable for contribution with respect to any action or claim
settled without its written consent if such consent is required
pursuant to Section
11(c) hereof.
12. Representations and Agreements to
Survive Delivery. The indemnity and contribution agreements
contained in Section 11 of this Agreement and all representations
and warranties of the Company herein or in certificates delivered
pursuant hereto shall survive, as of their respective dates,
regardless of (i) any investigation made by or on behalf of the
Agent, any controlling persons, or the Company (or any of their
respective officers, directors or controlling persons), (ii)
delivery and acceptance of the Placement Shares and payment
therefor or (iii) any termination of this Agreement.
13. Termination.
a. The Agent may
terminate this Agreement, by notice to the Company, as hereinafter
specified at any time (i) if there has been, since the time of
execution of this Agreement or since the date as of which
information is given in the Prospectus, any Material Adverse
Effect, or any development that would have a Material Adverse
Effect that, in the sole judgment of the Agent, is material and
adverse and makes it impractical or inadvisable to market the
Placement Shares or to enforce contracts for the sale of the
Placement Shares, (ii) if there has occurred any material adverse
change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or
international political, financial or economic conditions, in each
case the effect of which is such as to make it, in the judgment of
the Agent, impracticable or inadvisable to market the Placement
Shares or to enforce contracts for the sale of the Placement
Shares, (iii) if trading in the Common Stock has been suspended or
limited by the Commission or the Exchange, or if trading generally
on the Exchange has been suspended or limited, or minimum prices
for trading have been fixed on the Exchange, (iv) if any suspension
of trading of any securities of the Company on any exchange or in
the over-the-counter market shall have occurred and be continuing,
(v) if a major disruption of securities settlements or clearance
services in the United States shall have occurred and be
continuing, or (vi) if a banking moratorium has been declared
by either U.S. Federal or New York authorities. Any such
termination shall be without liability of any party to any other
party except that the provisions of Section 9 (Payment of
Expenses), Section
11 (Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and
Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination. If the Agent elects to terminate
this Agreement as provided in this Section 13(a), the Agent shall
provide the required notice as specified in Section 14
(Notices).
b. The Company shall
have the right, by giving five (5) days’ notice as
hereinafter specified to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such
termination shall be without liability of any party to any other
party except that the provisions of Section 9 (Payment of
Expenses), Section
11 (Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and
Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination.
c. The Agent shall
have the right, by giving five (5) days’ notice as
hereinafter specified to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such
termination shall be without liability of any party to any other
party except that the provisions of Section 9 (Payment of
Expenses), Section 11
(Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and
Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination.
d. Unless earlier
terminated pursuant to this Section 13, this Agreement
shall automatically terminate upon the issuance and sale of all of
the Placement Shares through the Agent on the terms and subject to
the conditions set forth herein except that the provisions of
Section 9 (Payment
of Expenses), Section
11 (Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and
Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination.
e. This Agreement
shall remain in full force and effect unless terminated pursuant to
Sections 13(a),
(b), (c), or (d) above or otherwise by
mutual agreement of the parties; provided, however, that any such
termination by mutual agreement shall in all cases be deemed to
provide that Section
9 (Payment of Expenses), Section 11 (Indemnification and
Contribution), Section
12 (Representations and Agreements to Survive Delivery),
Section 18
(Governing Law and Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) shall remain in full force and effect. Upon
termination of this Agreement, the Company shall not have any
liability to the Agent for any discount, commission or other
compensation with respect to any Placement Shares not otherwise
sold by the Agent under this Agreement.
f. Any termination of
this Agreement shall be effective on the date specified in such
notice of termination; provided,
however, that such termination shall not be effective until
the close of business on the date of receipt of such notice by the
Agent or the Company, as the case may be. If such termination shall
occur prior to the Settlement Date for any sale of Placement
Shares, such Placement Shares shall settle in accordance with the
provisions of this Agreement.
14. Notices. All notices or other
communications required or permitted to be given by any party to
any other party pursuant to the terms of this Agreement shall be in
writing, unless otherwise specified, and if sent to the Agent,
shall be delivered to:
B.
Riley FBR, Inc.
299
Park Avenue, 21st Floor
New
York, NY 10171
Attention:General
Counsel
Telephone:
(212)
457-9947
Email:
atmdesk@brileyfbr.com
with a
copy to:
Duane Morris
LLP
1540
Broadway
New
York, NY 10036
Attention:
Dean M.
Colucci
Telephone:
(973)
424-2088
Email:
dmcolucci@duanemorris.com
and if
to the Company, shall be delivered to:
Celcuity
Inc.
16305
36th Avenue N., Suite 100
Minneapolis, MN
55446
(763)
392-0123
Attention:
Brian
F. Sullivan
Telephone:
(763)
392-0767
Email:
bsullivan@celcuity.com
with a
copy to:
Fredrikson &
Byron, P.A.
200
South Sixth Street, Suite 4000
Minneapolis,
Minnesota 55402
Attention:
Eric O.
Madson
Telephone:
(612)
492-7394
Email:
emadson@fredlaw.com
Each
party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new
address for such purpose. Each such notice or other communication
shall be deemed given (i) when delivered personally, by email, or
by verifiable facsimile transmission on or before 4:30 p.m., New
York City time, on a Business Day or, if such day is not a Business
Day, on the next succeeding Business Day, (ii) on the next Business
Day after timely delivery to a nationally-recognized overnight
courier and (iii) on the Business Day actually received if
deposited in the U.S. mail (certified or registered mail, return
receipt requested, postage prepaid). For purposes of this
Agreement, “Business
Day” shall mean any day on which the Exchange and
commercial banks in the City of New York are open for
business.
15. Successors and Assigns. This
Agreement shall inure to the benefit of and be binding upon the
Company and the Agent and their respective successors and the
affiliates, controlling persons, officers and directors referred to
in Section 11
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 the Company nor the Agent may assign its rights or
obligations under this Agreement without the prior written consent
of the other party.
16. Adjustments for Stock Splits.
The parties acknowledge and agree that all share-related numbers
contained in this Agreement shall be adjusted to take into account
any share consolidation, stock split, stock dividend, corporate
domestication or similar event effected with respect to the
Placement Shares.
17. Entire Agreement; Amendment;
Severability. This Agreement (including all schedules and
exhibits attached hereto and Placement Notices issued pursuant
hereto) constitutes the entire agreement and supersedes all other
prior and contemporaneous agreements and undertakings, both written
and oral, among the parties hereto with regard to the subject
matter hereof. Neither this Agreement nor any term hereof may be
amended except pursuant to a written instrument executed by the
Company and the Agent. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable as written
by a court of competent jurisdiction, then such provision shall be
given full force and effect to the fullest possible extent that it
is valid, legal and enforceable, and the remainder of the terms and
provisions herein shall be construed as if such invalid, illegal or
unenforceable term or provision was not contained herein, but only
to the extent that giving effect to such provision and the
remainder of the terms and provisions hereof shall be in accordance
with the intent of the parties as reflected in this
Agreement.
18. GOVERNING LAW AND TIME; WAIVER OF JURY
TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER
TO NEW YORK CITY TIME. THE COMPANY AND THE AGENT EACH HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
19. CONSENT TO JURISDICTION. EACH
PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION
OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK,
BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND
HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT,
ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF
SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY
IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO
PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR
NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE
SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY
WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY
LAW.
20. Use of Information. The Agent
may not use any information gained in connection with this
Agreement and the transactions contemplated by this Agreement,
including due diligence, to advise any party with respect to
transactions not expressly approved by the Company.
21. Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument. Delivery of an executed Agreement by one
party to the other may be made by facsimile transmission or email
of a .pdf attachment.
22. Effect of Headings. The
section, Schedule and Exhibit headings herein are for convenience
only and shall not affect the construction hereof.
23. Permitted Free Writing
Prospectuses. The Company represents, warrants and agrees
that, unless it obtains the prior consent of the Agent, and the
Agent represents, warrants and agrees that, unless it obtains the
prior consent of the Company, it has not made and will not make any
offer relating to the Placement Shares that would constitute an
Issuer Free Writing Prospectus, or that would otherwise constitute
a “free writing prospectus,” as defined in Rule 405,
required to be filed with the Commission. Any such free writing
prospectus consented to by the Agent or by the Company, as the case
may be, is hereinafter referred to as a “Permitted Free
Writing Prospectus.” The Company represents and warrants that
it has treated and agrees that it will treat each Permitted Free
Writing Prospectus as an “issuer free writing
prospectus,” as defined in Rule 433, and has complied and
will comply with the requirements of Rule 433 applicable to any
Permitted Free Writing Prospectus, including timely filing with the
Commission where required, legending and record keeping. For the
purposes of clarity, the parties hereto agree that all free writing
prospectuses, if any, listed in Exhibit 23 hereto are Permitted
Free Writing Prospectuses.
24. Absence of Fiduciary
Relationship. The Company acknowledges and agrees
that:
a. The Agent is acting
solely as agent in connection with the public offering of the
Placement Shares and in connection with each transaction
contemplated by this Agreement and the process leading to such
transactions, and no fiduciary or advisory relationship between the
Company or any of its respective affiliates, stockholders (or other
equity holders), creditors or employees or any other party, on the
one hand, and the Agent, on the other hand, has been or will be
created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether or not the Agent has advised or
is advising the Company on other matters, and the Agent has no
obligation to the Company with respect to the transactions
contemplated by this Agreement except the obligations expressly set
forth in this Agreement;
b. It is capable of
evaluating and understanding, and understands and accepts, the
terms, risks and conditions of the transactions contemplated by
this Agreement;
c. The Agent has not
provided any legal, accounting, regulatory or tax advice with
respect to the transactions contemplated by this Agreement and it
has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate;
d. It is aware that
the Agent and its affiliates are engaged in a broad range of
transactions which may involve interests that differ from those of
the Company and the Agent has no obligation to disclose such
interests and transactions to the Company by virtue of any
fiduciary, advisory or agency relationship or otherwise;
and
e. It waives, to the
fullest extent permitted by law, any claims it may have against the
Agent for breach of fiduciary duty or alleged breach of fiduciary
duty in connection with the sale of Placement Shares under this
Agreement and agrees that the Agent shall not have any liability
(whether direct or indirect, in contract, tort or otherwise) to it
in respect of such a fiduciary duty claim or to any person
asserting a fiduciary duty claim on its behalf or in right of it or
the Company, employees or creditors of Company, other than in
respect of the Agent’s obligations under this Agreement and
to keep information provided by the Company to the Agent and its
counsel confidential to the extent not otherwise
publicly-available.
25. Definitions. As used in this
Agreement, the following terms have the respective meanings set
forth below:
“Applicable Time” means
(i) each Representation Date and (ii) the time of each sale of any
Placement Shares pursuant to this Agreement.
“Issuer Free Writing
Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433, relating to the
Placement Shares that (1) is required to be filed with the
Commission by the Company, (2) is a “road show” that is
a “written communication” within the meaning of Rule
433(d)(8)(i) whether or not required to be filed with the
Commission, or (3) is exempt from filing pursuant to Rule
433(d)(5)(i) because it contains a description of the Placement
Shares or of the offering that does not reflect the final terms, in
each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in
the Company’s records pursuant to Rule 433(g) under the
Securities Act.
“Rule
172,” “Rule 405,”
“Rule
415,” “Rule 424,”
“Rule
424(b),” “Rule 430B,” and
“Rule
433” refer to such rules under the Securities
Act.
All
references in this Agreement to financial statements and schedules
and other information that is “contained,”
“included” or “stated” in the Registration
Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial
statements and schedules and other information that is incorporated
by reference in the Registration Statement or the Prospectus, as
the case may be.
All
references in this Agreement to the Registration Statement, the
Prospectus or any amendment or supplement to any of the foregoing
shall be deemed to include the copy filed with the Commission
pursuant to EDGAR; all references in this Agreement to any Issuer
Free Writing Prospectus (other than any Issuer Free Writing
Prospectuses that, pursuant to Rule 433, are not required to be
filed with the Commission) shall be deemed to include the copy
thereof filed with the Commission pursuant to EDGAR; and all
references in this Agreement to “supplements” to the
Prospectus shall include, without limitation, any supplements,
“wrappers” or similar materials prepared in connection
with any offering, sale or private placement of any Placement
Shares by the Agent outside of the United States.
[Remainder
of the page intentionally left blank]
If the
foregoing correctly sets forth the understanding between the
Company and the Agent, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a
binding agreement between the Company and the Agent.
Very
truly yours,
CELCUITY
INC.
By:
/s/
Brian F. Sullivan
Name: Brian F. Sullivan
Title:
Chief Executive Officer
ACCEPTED
as of the date first-above written:
B.
RILEY FBR, INC.
By:
/s/ Patrice
McNicoll
Name:
Patrice McNicoll
Title:
Co-Head of Investment Banking
SCHEDULE 1
FORM OF
PLACEMENT NOTICE
Attention: [●]
Subject: At Market
Issuance--Placement Notice
Ladies
and Gentlemen:
Pursuant to the
terms and subject to the conditions contained in the At Market
Issuance Sales Agreement between Celcuity Inc, a Delaware
corporation (the “Company”), and B. Riley
FBR, Inc. (the “Agent”), dated June 5,
2020, the Company hereby requests that the Agent sell up to [____]
of the Company’s Common Stock, par value $0.001 per share, at
a minimum market price of $per share, during the time period
beginning [month, day, time] and ending [month, day,
time].
SCHEDULE 2
________________________
Compensation
________________________
The
Company shall pay to the Agent in cash, upon each sale of Placement
Shares pursuant to this Agreement, an amount equal to 3.0% of the
gross proceeds from each sale of Placement Shares.
SCHEDULE 3
________________________
Notice Parties
________________________
The Company
Brian F.
Sullivan
bsullivan@celcuity.com
Vicky
Hahne
vhahne@celcuity.com
B. Riley FBR
Seth
Appel
sappel@brileyfbr.com
Patrice
McNicoll
pmcnicoll@brileyfbr.com
Keith
Pompliano
kpompliano@brileyfbr.com
Scott
Ammaturo
sammaturo@brileyfbr.com
with a
copy to atmdesk@brileyfbr.com
EXHIBIT 7(1)
Form of Representation Date Certificate
___________, 20___
This
Representation Date Certificate (this “Certificate”) is executed
and delivered in connection with Section 7(1) of the At Market
Issuance Sales Agreement (the “Agreement”), dated June
5, 2020, and entered into between Celcuity Inc. (the
“Company”) and B. Riley
FBR, Inc. All capitalized terms used but not defined herein shall
have the meanings given to such terms in the
Agreement.
The
Company hereby certifies as follows:
1. As of the date of
this Certificate (i) the Registration Statement does not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein not misleading and (ii) neither the
Registration Statement nor the Prospectus contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading and (iii) no event has occurred as a
result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not untrue or
misleading for this paragraph 1 to be true.
2. Each of the
representations and warranties of the Company contained in the
Agreement were, when originally made, and are, as of the date of
this Certificate, true and correct in all material
respects.
3. Except as waived by
the Agent in writing, each of the covenants required to be
performed by the Company in the Agreement on or prior to the date
of the Agreement, this Representation Date, and each such other
date prior to the date hereof as set forth in the Agreement, has
been duly, timely and fully performed in all material respects and
each condition required to be complied with by the Company on or
prior to the date of the Agreement, this Representation Date, and
each such other date prior to the date hereof as set forth in the
Agreement has been duly, timely and fully complied with in all
material respects.
4. Subsequent to the
date of the most recent financial statements in the Prospectus, and
except as described in the Prospectus, including Incorporated
Documents, there has been no Material Adverse Effect.
5. No stop order
suspending the effectiveness of the Registration Statement or of
any part thereof has been issued, and no proceedings for that
purpose have been instituted or are pending or threatened by any
securities or other governmental authority (including, without
limitation, the Commission).
6. No order suspending
the effectiveness of the Registration Statement or the
qualification or registration of the Placement Shares under the
securities or Blue Sky laws of any
jurisdiction
are in effect and no proceeding for such purpose is pending before,
or threatened, to the Company’s knowledge or in writing by,
any securities or other governmental authority (including, without
limitation, the Commission).
The
undersigned has executed this Representation Date Certificate as of
the date first written above.
CELCUITY
INC.
Name:
Title:
EXHIBIT 23
Permitted Issuer Free Writing Prospectuses
None.