Exhibit 99.1
SECURITIES PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”)
is dated as of February 20, 2021, between ChromaDex Corporation, a
Delaware corporation (the “Company”),
and the purchaser identified on the signature pages hereto
(including its successors and assigns, the “Purchaser”).
WHEREAS, subject to
the terms and conditions set forth in this Agreement, the Company
desires to issue and sell to the Purchaser, and the Purchaser,
severally and not jointly, desires to purchase from the Company,
securities of the Company as more fully described in this
Agreement; and
WHEREAS, the
Company and the Purchaser intend to enter into a registration
rights agreement (the “Registration Rights
Agreement”), which
shall provide for, among other things, the terms and conditions
upon which the Shares shall be registered for re-sale under the
Securities Act.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company
and the Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1
Definitions. In
addition to the terms defined elsewhere in this Agreement, for all
purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:
“Acquiring
Person” shall have
the meaning ascribed to such term in Section 4.4.
“Action”
shall have the meaning ascribed to such term in Section
3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed
under Rule 405 under the Securities Act.
“Board of
Directors” means
the board of directors of the Company.
“Business
Day” means any day
except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by
law or other governmental action to close.
“Change of
Control” means the
occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events: (i) any
“person” (as such term is used in Section
13(d) and 14(d) of the Exchange Act (as defined below)) becomes the
“beneficial
owner” (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of
securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then outstanding securities other
than by virtue of a merger, consolidation or similar transaction;
(ii) the consummation of a merger or consolidation of the Company
with or into another entity or any other corporate reorganization
(or similar transaction), if more than fifty percent (50%) of the
combined voting power of the continuing or surviving
entity’s securities
outstanding immediately after such merger, consolidation or other
reorganization (or similar transaction) is owned by persons who
were not stockholders of the Company immediately prior to such
merger, consolidation or other reorganization; or (iii) the
consummation of a sale, transfer or other disposition of all or
substantially all of the Company’s assets.
“Closing”
means the closing of the purchase and sale of the Shares pursuant
to Section 2.1.
“Closing
Date” means the
date on which the Closing is consummated.
“Commission”
means the United States Securities and Exchange
Commission.
“Common
Stock” means the
common stock of the Company, par value $0.001 per share, and any
other class of securities into which such securities may hereafter
be reclassified or changed.
“Common Stock
Equivalents” means
any securities of the Company or the Subsidiaries which would
entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock.
“Company
Counsel” means
Cooley LLP, with offices located at 4401 Eastgate Mall, San Diego,
CA 92121.
“Employee
Plan” means (A) an
employee benefit plan within the meaning of Section 3(3) of ERISA
whether or not subject to ERISA; (B) stock option plans, stock
purchase plans, bonus or incentive award plans, severance pay
plans, programs or arrangements, deferred compensation arrangements
or agreements, employment agreements, executive compensation plans,
programs, agreements or arrangements, change in control plans,
programs or arrangements, supplemental income arrangements,
vacation plans, and all other employee benefit plans, agreements,
and arrangements, not described in (A) above; and (C) plans or
arrangements providing compensation to employee and non-employee
directors, in each case in which the Company or any ERISA Affiliate
sponsors, contributes to, or provides benefits under or through
such plan, or has any obligation to contribute to or provide
benefits under or through such plan, or if such plan provides
benefits to or otherwise covers any current or former employee,
officer or director of the Company or any ERISA Affiliate (or their
spouses, dependents, or beneficiaries).
“Equity
Interest” means
any share, capital stock, partnership, limited liability company,
member or similar equity interest or voting right in any Person,
and any option, warrant, right (including conversion, stock
appreciation, put, call, redemption, repurchase or similar rights),
security (including debt securities), commitment, obligation,
agreement or arrangement that is convertible, exchangeable or
exercisable into or for, or give any Person a right to subscribe
for or acquire, or whose value is linked to or based upon, any such
share, capital stock, partnership, limited liability company,
member or similar equity interest or voting right.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.
“ERISA
Affiliate” means
any entity that would have ever been considered a single employer
with the Company under Section 4001(b) of ERISA or part of the same
“controlled
group” as the Company for
purposes of Section 302(d)(3) of ERISA.
“Evaluation
Date” shall have
the meaning ascribed to such term in Section 3.1(r).
“Exchange
Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as
amended.
“FDA” shall have the meaning ascribed to
such term in Section 3.1(dd).
“GAAP”
shall have the meaning ascribed to such term in Section
3.1(h).
“Governmental
Authority” shall
mean any federal, state, foreign or local government, or any
political subdivision thereof or any arbitrator, court,
administrative or regulatory agency, commission, department, board,
bureau, body or other government, authority or instrumentality or
any entity or Person exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
“Intellectual Property
Rights” shall have
the meaning ascribed to such term in Section 3.1(o).
“Law” or “law” shall mean any supranational,
national, federal, state, regional, provincial, local or municipal
constitution, treaty, law, statute, ordinance, code, determination,
principle of common law or any other requirement having the effect
of law of any Governmental Authority (including any rule,
regulation, plan, injunction, judgment, order, award, decree,
ruling, requirement, guidance, policy or charge thereunder or
related thereto), in each case as amended as of the date hereof,
whether in the United States or a foreign
jurisdiction.
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right
of first refusal, mortgage, claim, easement, right-of-way, option,
title retention agreement, preemptive right or other
restriction.
“Material Adverse
Effect” shall mean
any change, event, condition, effect, development, state of facts
or occurrence (each, an “Effect”)
that, individually or when taken together with all other Effects,
has had or would be reasonably likely to have (a) a material
adverse effect on the business, condition (financial or other),
assets, liabilities or results of operations of the Company, taken
as a whole, or (b) a material adverse effect on the
Company’s ability to
timely perform its obligations under, or timely consummate any of
the transactions contemplated by, the Agreement (including the sale
of the Shares), in accordance with the terms of this Agreement;
provided, that
for purposes of clause (a) hereof, the following Effects shall not
constitute a “Material
Adverse Effect: (i) changes occurring after the date hereof in
conditions in the United States of America or global economy or
capital or financial markets generally, including changes in
interest or exchange rates, (ii) changes occurring after the date
hereof in law (or the interpretation thereof) or changes to U.S.
GAAP occurring after the date hereof that, in each case, generally
affect the biotechnology, biopharmaceutical or nutraceutical
industries, (iii) acts of war, sabotage or terrorism occurring
after the date hereof, or any escalation or worsening of any such
acts of war, sabotage or terrorism, or (iv) earthquakes,
hurricanes, floods or other natural disasters (including the
COVID-19 pandemic) occurring after the date hereof, provided,
however, that any Effect referred to in clauses (i)-(iv) above
shall be taken into account in determining whether a Material
Adverse Effect has occurred or would be reasonably likely to occur
only if such Effect has had or would be reasonably likely to have a
disproportionate effect on the Company or its Subsidiaries, taken
as a whole, compared to other companies in the general industries
in which the Company or any of its Subsidiaries
operate.
“Material
Permits” shall
have the meaning ascribed to such term in Section
3.1(m).
“Per Share Purchase
Price” equals
$6.50, subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this
Agreement.
“Person”
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
“Proceeding”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or
partial proceeding, such as a deposition), whether commenced or
threatened.
“Products”
means products and/or services currently or previously researched,
designed, developed, manufactured, performed, licensed, packaged,
labeled, tested, marketed, processed, handled, sold, stored,
distributed, transported, provided and/or otherwise made available
by or on behalf of the Company or its Subsidiaries.
“Purchase
Price” means
$24,999,994.50, which for the avoidance of doubt, represents the
product of (x) the Shares multiplied by
(y) the Per Share Purchase Price.
“Purchaser
Party” shall have
the meaning ascribed to such term in Section 4.6.
“Regulation
FD” means
Regulation FD promulgated by the Commission pursuant to the
Exchange Act, as such Regulation may be amended or interpreted from
time to time, or any similar rule or regulation hereafter adopted
by the Commission having substantially the same purpose and effect
as such Regulation.
“Required
Approvals” shall
have the meaning ascribed to such term in Section
3.1(e).
“Rule
144” means Rule
144 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“Rule
424” means Rule
424 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“SEC
Reports” shall
have the meaning ascribed to such term in Section
3.1(h).
“Securities
Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Shares”
means 3,846,153
shares of Common Stock.
“Short
Sales” means all
“short sales” as defined in Rule 200 of
Regulation SHO under the Exchange Act (but shall not be deemed to
include locating and/or borrowing shares of Common
Stock).
“Subscription
Amount” means, as
to the Purchaser, its pro rata share of the Purchase Price, as
specified below the Purchaser’s name on the signature page of this
Agreement and next to the heading “Subscription Amount,” in United States dollars and in
immediately available funds.
“Subsidiary”
means any subsidiary of the Company as set forth in the SEC
Reports, and shall, where applicable, also include any direct or
indirect subsidiary of the Company formed or acquired after the
date hereof.
“Trading
Day” means a day
on which the principal Trading Market is open for
trading.
“Trading
Market” means any
of the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the NYSE MKT,
the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange (or any
successors to any of the foregoing).
“Transaction
Documents” means
this Agreement, the Registration Rights Agreement and any other
documents or agreements executed in connection with the
transactions contemplated hereunder.
“Transfer
Agent” means
Computershare, the current transfer agent of the Company, with a
mailing address of 462 South 4th Street, Suite 1600,
Louisville, Kentucky 40202 and any successor transfer agent of the
Company.
ARTICLE II.
PURCHASE
AND SALE; REGISTRATION OF SHARES
2.1
Closing. Upon
satisfaction of the covenants and conditions set forth in Sections
2.2 and 2.3, the Closing shall occur at 10:00am (New York City
time) on February 23, 2021 at the offices of Company Counsel, or at
such other time and location as the parties shall mutually agree in
writing. At the Closing, upon the terms and subject to the
conditions set forth herein, the Company agrees to sell, and the
Purchaser agrees to purchase, the Shares in exchange for payment by
the Purchaser of an aggregate amount equal to the Purchase Price.
The Purchaser’s applicable Subscription Amount as set forth on
the signature page hereto executed by the Purchaser shall be made
available for “Delivery Versus Payment” settlement with the Company or its designee. At
the Closing, the Company shall deliver to the Purchaser its
respective pro rata share of the Shares (based on the
Purchaser’s applicable Subscription Amount relative to the
aggregate Purchase Price), and the Company and the Purchaser shall
deliver the other items set forth in Section 2.2 deliverable at the
Closing. Settlement of the Shares shall occur via
“Delivery Versus Payment” (“DVP”) (i.e.,
on the Closing Date, the Company shall issue the Shares registered
in the Purchaser’s name and address and released by the Transfer
Agent directly to the account(s) identified by the Purchaser, and
payment therefor shall be made by the Purchaser (by wire transfer
to the Company)). All Shares shall be delivered to the Purchaser
hereunder free and clear of all Liens, other than restrictions on
transferability arising under applicable federal securities
laws.
2.2
Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to
be delivered to the Purchaser the following:
(i) a
legal opinion of Company Counsel, in form and substance reasonably
acceptable to the Purchaser;
(ii)
the Company’s wire
instructions, on Company letterhead and executed by the Chief
Executive Officer or Chief Financial Officer;
(iii)
a copy of the irrevocable instructions to the Transfer Agent
instructing the Transfer Agent to deliver to the Purchaser, on an
expedited basis, a certificate evidencing the number of the
Purchaser’s Shares
registered in the name of the Purchaser;
(iv)
the Registration Rights Agreement, in form and substance reasonably
acceptable to the Purchaser, executed by a duly authorized officer
of the Company; provided, that the Purchaser may waive delivery of
such Registration Rights Agreement at the Closing, in which case,
the provisions of Section 4.11 shall apply; and
(v) a
certificate, signed by a duly elected officer of the Company,
certifying as of the Closing Date as to the satisfaction of each of
the conditions set forth in Section 2.3(b)(i), (ii) and
(iv).
(b)
On or prior to the Closing Date, the Purchaser shall deliver or
cause to be delivered to the Company the Purchaser’s Subscription Amount, which shall
be made available for “Delivery Versus Payment” settlement with the Company or its
designee.
2.3
Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing
are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) on the Closing Date of
the representations and warranties of the Purchaser contained
herein (unless as of a specific date therein in which case they
shall be accurate in all material respects as of such
date);
(ii) all
obligations, covenants and agreements of the Purchaser required to
be performed at or prior to the Closing Date shall have been
performed in all material respects; and
(iii)
the delivery by the Purchaser of the items set forth in Section
2.2(b) of this Agreement.
(b) The
respective obligations of the Purchaser hereunder in connection
with the Closing are subject to the following conditions being
met:
(i) the
accuracy on the Closing Date of the representations and warranties
of the Company contained herein (unless as of a specific date
therein in which case they shall be accurate as of such date,
without giving effect, in each case, to any material or Material
Adverse Effect qualifiers), except that where the failure to be
accurate does not constitute a Material Adverse
Effect;
(ii)
all obligations, covenants and agreements of the Company required
to be performed at or prior to the Closing Date shall have been
performed in all material respects;
(iii)
the delivery by the Company of the items set forth in Section
2.2(a) of this Agreement;
(iv)
there shall have been no Material Adverse Effect with respect to
the Company since the date hereof;
(v)
from the date hereof to the Closing Date, trading in the Common
Stock shall not have been suspended by the Commission or the
Company’s principal
Trading Market, and, at any time prior to the Closing Date, trading
in securities generally as reported by Bloomberg L.P. shall not
have been suspended or limited, or minimum prices shall not have
been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium
have been declared either by the United States or New York State
authorities nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international
calamity (including the COVID-19 pandemic) of such magnitude in its
effect on, or any material adverse change in, any financial market
which, in each case, in the reasonable judgment of the Purchaser,
makes it impracticable or inadvisable to purchase the Shares at the
Closing;
(vi) all
authorizations, approvals, or permits, if any, of any governmental
authority or regulatory body of the United States or of any state
in the United States that are binding upon the Company and that are
required in connection with the lawful sale and issuance of the
Shares at the Closing pursuant to this Agreement shall have been
duly obtained and shall be effective on and as of the date of the
Closing, and no stop order or other order enjoining the sale of the
Shares shall have been issued and no proceedings for such purpose
shall be pending or, to the knowledge of the Company, threatened by
the Commission, or any commissioner of corporations or similar
officer of any state in the United States having jurisdiction over
this transaction; and
(vii) the
sale and issuance of the Shares shall be legally permitted by all
laws and regulations to which Purchaser and the Company are
subject.
ARTICLE III.
REPRESENTATIONS
AND WARRANTIES
3.1
Representations and
Warranties of the Company. Except as set forth in the
Disclosure Schedule to this Agreement (the “Disclosure
Schedule”), which
Disclosure Schedule shall be deemed a part hereof and shall qualify
any representation or warranty otherwise made herein to the extent
of the disclosure contained in the corresponding section of the
Disclosure Schedule, the Company hereby makes the following
representations and warranties to the Purchaser as of the date
hereof and as of the Closing Date (except for the representations
and warranties that speak as of a specific date, which shall be
made as of such date):
(a) Subsidiaries.
All of the direct and indirect Subsidiaries of the Company are set
forth in the SEC Reports. The Company owns, directly or indirectly,
all of the issued and outstanding capital stock or other equity
interests of each Subsidiary free and clear of any Liens, and all
of the issued and outstanding shares of capital stock or other
Equity Interests of each Subsidiary are validly issued and are
fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase Equity Interests of each
Subsidiary.
(b) Organization
and Qualification. The Company and each of the Subsidiaries
is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation or organization, with all requisite power and
authority to own, lease, operate and use its properties and assets
and to carry on its business as currently conducted and as it is
presently proposed to be conducted. Neither the Company nor any
Subsidiary is in violation nor default of any of the provisions of
its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and
the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except, in
the case of any Subsidiary, where the failure to be so qualified or
in good standing, as the case may be, has not had and would not
reasonably be expected to result in, individually or in the
aggregate, a Material Adverse Effect and no Proceeding has been
instituted, is pending, or, to the Company’s knowledge, has been threatened in
any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or
qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction
Documents to which it is a party and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of
this Agreement and each of the other Transaction Documents by the
Company and the consummation by it of the transactions contemplated
hereby and thereby (including the issuance and sale of the Shares
by the Company) have been duly authorized by all necessary action
on the part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s stockholders in connection
herewith or therewith other than the Required Approvals. This
Agreement and each other Transaction Document to which it is a
party has been (or upon delivery will have been) duly executed by
the Company and, when delivered in accordance with the terms hereof
and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of
creditors’ rights
generally, (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies
and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the
Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Shares and the
consummation by it of the transactions contemplated hereby and
thereby do not and will not conflict with, violate, result in a
breach of or constitute (upon notice or lapse of time or both) a
default under, or result in the creation or imposition of any Lien
upon any properties or assets of the Company or any Subsidiary or
give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both)
under any (i) certificate or articles of incorporation, bylaws or
other organizational or charter documents of the Company or any of
its Subsidiaries, or (ii) any agreement, credit facility, debt or
other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (iii) subject to
the Company’s receipt or
filing, as applicable, of the Required Approvals, any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority in the United
States to which the Company or a Subsidiary is subject (including
federal and state securities laws and regulations and the rules and
regulations of any self regulatory organization to which the
Company or its securities are subject, including all Trading
Markets), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of clause (ii),
as has not had and would not reasonably be expected to result in,
individually or in the aggregate, a Material Adverse
Effect.
(e) Filings,
Consents and Approvals. The Company is not required to
obtain any consent, waiver, approval, authorization or order of,
give any notice to, or make any filing or registration with, any
court or other federal, state, local or other governmental
authority or other Person in the United States in connection with
the execution, delivery and performance by the Company of the
Transaction Documents (including the offer, sale or issuance of the
Shares by the Company), other than those filings that are set forth
on Schedule 3.1(e)
of the Disclosure Schedule (collectively, the “Required
Approvals”). The
Required Approvals will be timely filed by the Company within the
applicable periods therefor.
(f)
Issuance of
Shares. The Shares are duly authorized and, when issued and
paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens, other than restrictions on transferability
under applicable federal securities laws. Each holder of the Shares
will not be subject to personal liability by reason of being such a
holder. The Shares are not and will not be subject to any
preemptive rights held by any holders of any security of the
Company or any similar contractual rights granted by the Company to
any Person. All corporate action required to be taken for the
authorization, issuance and sale of the Shares has been duly and
validly taken. The Shares shall be issued by the Company in
compliance with all federal and state securities laws.
(g) Capitalization.
(i)
As of the close of business on the date
immediately prior to the date of this Agreement (the “Capitalization
Date”), the
authorized capital stock of the Company consists of 150,000,000
shares of Common Stock, of which 62,376,724 such shares of Common
Stock are issued and outstanding (the “Outstanding Common
Stock”).
(ii) As
of the close of business on the Capitalization Date, except as set
forth on Schedule
3.1(g)(ii) of the Disclosure Schedule, there are no Equity
Interests of the Company issued and outstanding or subject to
issuance. Schedule 3(g)(ii) of the Disclosure Schedules sets forth
(x) a list of all stock options granted, awarded or otherwise
outstanding as of the Capitalization Date (including, among other
things, the name of grantee, number and type of Equity Interests
subject to the option, exercise price, grant price, market price on
grant date, vesting schedule and grant date for each such listed
stock option) (collectively, the “Outstanding Company
Options”), (y) a
list of all restricted stock grants which are outstanding as of the
Capitalization Date (including the name of grantee, number and type
of Equity Interests granted, purchase price per share and grant
date for each such listed restricted stock grant) (collectively,
the “Outstanding Company
RSAs”) and (z) a
list of all warrants to purchase capital stock of the Company which
are outstanding as of the Capitalization Date (including the name
of the holder of, exercise price for, expiration date of and number
and type of Equity Interests issuable under each such listed
warrant) (collectively, the “Outstanding Company
Warrants”).
(iii) The
Company has not issued any Equity Interests since its most recently
filed periodic or cur rent report under the Exchange Act, other
than pursuant to the exercise of employee stock options under the
Company’s stock option
plans, the issuance of shares of Common Stock to employees pursuant
to the Company’s employee
stock purchase plans and pursuant to the conversion and/or exercise
of other Equity Interests outstanding as of the date of the most
recently filed periodic report under the Exchange Act. No Person
has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. Except for
the Outstanding Company Options, the Outstanding Company RSAs, the
Outstanding Company Warrants and as a result of the purchase and
sale of the Shares, there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common
Stock or other Equity Interests, or contracts, commitments,
understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of
Common Stock or other Equity Interests. Except with respect to the
Outstanding Company Options and the Outstanding Company RSAs and
the related award agreements to which the Company is a party, there
are no obligations (whether outstanding or authorized) of the
Company or any Company Subsidiary requiring the repurchase of any
Equity Interests of the Company. The issuance and sale of the
Shares will not obligate the Company to issue shares of Common
Stock or other Equity Interests to any Person (other than the
Purchaser) and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset
price under any of such Equity Interests. All of the outstanding
Equity Interests of the Company are duly authorized, validly
issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and none of
such outstanding Equity Interests was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase
Equity Interests. The offers and sales of the Company’s Equity Interests were at all
relevant times either registered under the Securities Act and the
applicable state securities or Blue Sky laws or, based in part on
the representations and warranties of the applicable purchasers,
exempt from such registration requirements. No further approval or
authorization of any stockholder or the Board of Directors is
required for the issuance and sale of the Shares pursuant to the
Transaction Documents. Except as listed on Schedule 3.1(g)(iii),
there are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company’s Equity Interests to which the
Company is a party or, to the knowledge of the Company, between or
among any of the Company’s holders of Equity
Interests.
(h) SEC
Reports; Financial Statements. The Company has filed all
reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period
as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto
and documents incorporated by reference therein, being collectively
referred to herein as the “SEC Reports”) on a timely basis or has received
a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act,
as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in
effect at the time of filing. Such financial statements have been
prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the
periods involved (“GAAP”), except as may be otherwise
specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material
respects the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end
audit adjustments. The agreements and documents described in the
SEC Reports conform to the descriptions thereof contained therein
and there are no agreements or other documents required by the
Securities Act and the rules and regulations thereunder to be
described in the SEC Reports that have not been so filed. Each
agreement or other instrument (however characterized or described)
to which the Company is a party or by which it is or may be bound
or affected and (i) that is referred to in the SEC Reports, or (ii)
is material to the Company’s business, has been duly authorized
and validly executed by the Company, is in full force and effect in
all material respects and is enforceable against the Company and,
to the Company’s
knowledge, the other parties thereto, in accordance with its terms,
except (x) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting
creditors’ rights
generally, (y) as enforceability of any indemnification or
contribution provision may be limited under the federal and state
securities laws, and (z) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject
to the equitable defenses and to the discretion of the court before
which any proceeding therefore may be brought. Except as described
in the SEC Reports, none of such agreements or instruments has been
assigned by the Company, and neither the Company nor, to the best
of the Company’s
knowledge, any other party is in default thereunder and, to the
best of the Company’s
knowledge, no event has occurred that, with the lapse of time or
the giving of notice, or both, would constitute a default
thereunder. Performance by the Company of such agreements or
instruments will not result in a violation of any existing
applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its assets or businesses,
including, without limitation, those relating to environmental laws
and regulations.
(i) Material
Changes; Undisclosed Events, Liabilities or Developments.
Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a
subsequent SEC Report, (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to,
either individually or in the aggregate, result in a Material
Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be reflected
in the Company’s
financial statements pursuant to GAAP or disclosed in filings made
with the Commission, (iii) the Company has not altered its method
of accounting or the manner in which it keeps its accounting books
and records other than as required by GAAP, (iv) the Company has
not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock,
(v) the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing Company
stock option plans and (vi) no officer or director of the Company
has resigned from any position with the Company. The Company does
not have pending before the Commission any request for confidential
treatment of information. Except for the issuance of the Shares
contemplated by this Agreement, no event, liability, fact,
circumstance, occurrence or development has occurred or exists or
is reasonably expected to occur or exist with respect to the
Company or its Subsidiaries or their respective businesses,
prospects, properties, operations, assets or financial condition
that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made
or deemed made that has not been publicly disclosed at least 1
Trading Day prior to the date that this representation is made.
Unless otherwise disclosed in an SEC Report filed prior to the date
hereof, the Company has not: (i) issued any securities or incurred
any liability or obligation, direct or contingent, for borrowed
money; or (ii) declared or paid any dividend or made any other
distribution on or in respect to its capital stock.
(j) Litigation.
Since January 1, 2015, except as disclosed in the SEC Reports,
there is no claim, complaint, action, arbitration, charge, hearing,
inquiry, litigation, suit, inquiry, notice of violation, audit,
examination, investigation or any other proceeding or any
settlement, judgment, order, award, injunction or decree pending or
other proceeding (whether civil, criminal, administrative,
investigative or informal), including, without limitation, an
informal investigation or partial proceeding, such as a deposition,
whether commenced or threatened, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any
of their respective properties, at Law or in equity, before or by
any Governmental Authority, or brought by any third party
(collectively, an “Action”) which: (i) adversely affects or
challenges the legality, validity or enforceability of any of the
Transaction Documents or the Shares or (ii) could have or
reasonably be expected to result in a Material Adverse Effect. Nor
to the Company’s
knowledge does there exist any basis for any such Action. Since
January 1, 2015, except as disclosed in the SEC Reports, neither
the Company nor any Subsidiary, and, to the knowledge of the
Company, no director or officer thereof, is or has been the subject
of any Action involving a claim of violation of or liability under
federal or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the knowledge of the Company,
there is not pending or contemplated, any investigation by the
Commission involving the Company or, to the knowledge of the
Company, any current or former director or officer of the Company.
The Commission has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by
the Company or any Subsidiary under the Exchange Act or the
Securities Act.
(k) Labor
Relations. No labor dispute exists or, to the knowledge of
the Company, is imminent with respect to any of the employees of
the Company. None of the Company’s or its Subsidiaries’ employees is a member of a union
that relates to such employee’s relationship with the Company or
such Subsidiary, and neither the Company nor any of its
Subsidiaries is a party to a collective bargaining agreement, and
the Company and its Subsidiaries believe that their relationships
with their employees are good. To the knowledge of the Company, no
executive officer of the Company or any Subsidiary, is, or is now
expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or
agreement or any restrictive covenant in favor of any third party,
and the continued employment of each such executive officer does
not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its
Subsidiaries are in material compliance with all U.S. federal,
state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of
employment and wages and hours.
(l)
Compliance. The
Company is and has been since January 1, 2015, in compliance with
all Laws of any Governmental Authority applicable to its
businesses, Products or operations, except in each case as could
not have or reasonably be expected to have a material and adverse
impact on the Company and its Subsidiaries, taken as a whole. Since
January 1, 2015, except as set forth in the SEC Reports, neither
the Company nor any Subsidiary: (i) is in default under or in
violation of (and, to the knowledge of the Company, no event has
occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received
notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or
any of its properties is bound (whether or not such default or
violation has been waived), (ii) is or has been in violation of any
judgment, decree or order of any court, arbitrator or other
Governmental Authority or (iii) is or has been in violation of any
applicable Law of any Governmental Authority, including, without
limitation, all Laws relating to taxes, environmental protection,
occupational health and safety, product development, manufacturing,
quality and safety and employment and labor matters, except in each
case as could not have or reasonably be expected to result in a
Material Adverse Effect.
(m)
Regulatory
Permits. Since January 1, 2015, the Company and the
Subsidiaries have possessed all certificates, approvals,
agreements, licenses, registrations, exemptions, clearances,
authorizations and permits issued by the appropriate Governmental
Authorities necessary to conduct their respective businesses as
described in the SEC Reports, including, without limitation, those
relating to the Products of the Company or the Subsidiaries, except
where the failure to possess such certificates, approvals,
agreements, licenses, registrations, exemptions, clearances,
authorizations and permits, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect
(each, a “Material
Permit”), and neither the
Company nor any Subsidiary has received any notice of proceedings
relating to, nor to the knowledge of the Company does there exist
any basis for, the revocation or modification of any Material
Permit. The disclosures in the SEC Reports concerning the effects
of federal, state, local and all foreign regulation on the
Company’s business as
currently contemplated are correct.
(n) Title
to Assets. The Company and the Subsidiaries have good and
marketable title in fee simple to, or have valid and marketable
rights to lease or otherwise use, all real property and all
personal property that is material to the business of the Company
and the Subsidiaries, in each case free and clear of all Liens,
except for (i) Liens as do not materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by the Company and the Subsidiaries and (ii)
Liens for the payment of federal, state or other taxes, for which
appropriate reserves have been made in accordance with GAAP, and
the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by the
Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance in all material
respects.
(o) Intellectual
Property.
(i) The
Company and the Subsidiaries have, or have rights to (A) use, all
patents and patent applications (collectively, “Patents”);
trademarks, trademark applications, service marks, logos, packaging
designs, Internet domain names and trade names (collectively,
“Marks”);
know-how and trade secrets including without limitation any
inventions (whether or not patentable) (collectively, “Trade Secrets”), copyrights, licenses and other
intellectual property rights and similar rights necessary or
required for use in connection with their respective businesses as
described in the SEC Reports (“Business”)
and (B) to sell all Products, and which the failure to do so could
have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). None of,
and neither the Company nor any Subsidiary has received a notice
(written or otherwise) that any of, the Intellectual Property
Rights has expired, terminated or been abandoned, or is expected to
expire or terminate or be abandoned, within two (2) years from the
date of this Agreement, except as could not reasonably be expected
to result in a Material Adverse Effect. Neither the Company nor any
Subsidiary has received, since the date of the latest audited
financial statements included within the SEC Reports, a written
notice of a claim or otherwise has any knowledge that the
Intellectual Property Rights violate or infringe upon the rights of
any Person, except as could not reasonably be expected to result in
a Material Adverse Effect. All Intellectual Property Rights owned
by or exclusively licensed to the Company or the Subsidiaries that
have been issued by, or registered with, or the subject of an
application filed with, as applicable, the U.S. Patent and
Trademark Office, the U.S. Copyright Office or any similar office
or agency anywhere in the world are currently in material
compliance with formal legal requirements (including without
limitation, as applicable, payment of filing, assignment
recordations, examination and maintenance fees, inventor
declarations, proofs of working or use, timely post-registration
filing of affidavits of use and incontestability, and renewal
applications). To the knowledge of the Company, all such
Intellectual Property Rights are valid and enforceable and there is
no existing infringement by another Person of any of the
Intellectual Property Rights. The Company and its Subsidiaries have
taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties,
except where failure to do so could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(ii)
No Patent has been or is now involved in any reissue,
re-examination, inter-partes review, post-grant review, or
opposition proceeding; all products made, used or sold under the
Patents have been marked with the proper patent
notice.
(iii)
There are no pending or, to the knowledge of the Company,
threatened claims against the Company alleging that any of the
operation of the Business or any activity by the Company, or
manufacture, sale, offer for sale, importation, and/or use of any
Product infringes or violates (or in the past infringed or
violated) the rights of others (“Third Party IP
Assets”) or
constitutes a misappropriation of (or in the past constituted a
misappropriation of) any subject matter of any Third Party IP
Assets or that any of the Intellectual Property Rights are invalid
or unenforceable.
(iv)
Neither the operation of the Business, nor any activity by the
Company, nor manufacture, use, importation, offer for sale and/or
sale of any Product, to the knowledge of the Company, infringes or
violates (or in the past infringed or violated) any Third Party IP
Asset or constitutes a misappropriation of (or in the past
constituted a misappropriation of) any subject matter of any Third
Party IP Asset.
(v)
The Company owns all rights
in or to all inventions, improvements, ideas, discoveries,
writings, works of authorship, other intellectual property, and
information relating to the Business that have been created or
developed by each employee, consultant or contractor of the Company
or the Subsidiaries within the scope of employment or engagement,
as applicable, and all Intellectual Property Rights related
thereto; in each case where a Patent is held by the Company or the
Subsidiaries by assignment, the assignment has been duly recorded
with the U.S. Patent and Trademark Office and all similar offices
and agencies anywhere in the world in which foreign counterparts
are registered or issued.
(vi)
Schedule 3.1(o)(vi) contains a complete and accurate list of all
Patents owned by the Company and the Subsidiaries or used or held
for use by the Company or the Subsidiaries in the Business,
registered and material unregistered Marks owned by the Company or
the Subsidiaries or used or held for use by the Company or the
Subsidiaries in the Business and registered and material
unregistered copyrights owned by the Company or the Subsidiaries or
used or held for use by the Company or the Subsidiaries in the
Business.
(p)
Insurance. The
Company and the Subsidiaries are insured by insurers of
nationally-recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which the Company and the Subsidiaries are engaged,
including, but not limited to, directors and officers insurance
coverage. Neither the Company nor any Subsidiary has received any
notice of cancellation of any such insurance, nor, to the
Company’s knowledge, will
it or any Subsidiary be unable to renew their respective existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to
continue its business without a significant increase in
cost.
(q)
Transactions With
Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company or any
Subsidiary and, to the knowledge of the Company, none of the
employees of the Company or any Subsidiary is presently a party to
any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or
personal property to or from, providing for the borrowing of money
from or lending of money to or otherwise requiring payments to or
from, any officer, director or such employee or, to the knowledge
of the Company, any entity in which any officer, director, or any
such employee has a substantial interest or is an officer,
director, trustee, stockholder, member or partner, in each case in
excess of $120,000 other than for (i) payment of salary or
consulting fees for services rendered, (ii) reimbursement for
expenses incurred on behalf of the Company and (iii) other employee
benefits, including stock option agreements under any stock option
plan of the Company.
(r) Sarbanes-Oxley;
Internal Accounting Controls. The Company and the
Subsidiaries are in compliance in all material respects with any
and all applicable requirements of the Sarbanes-Oxley Act of 2002
that are effective as of the date hereof, and any and all rules and
regulations applicable to them promulgated by the Commission
thereunder that are effective as of the date hereof and as of the
Closing Date. The Company and the Subsidiaries maintain 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 and liability
accountability, (iii) access to assets or incurrence of liabilities
is permitted only in accordance with management’s general or specific authorization,
and (iv) the recorded accountability for assets and liabilities is
compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any
differences. The Company and the Subsidiaries have established
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries
and designed such disclosure controls and procedures to provide
ensure that information required to be disclosed by the Company in
the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms. The
Company’s certifying
officers have evaluated the effectiveness of the disclosure
controls and procedures of the Company and the Subsidiaries as of
the end of the period covered by the most recently filed periodic
report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most
recently filed periodic report under the Exchange Act the
conclusions of the certifying officers about the effectiveness of
the disclosure controls and procedures based on their evaluations
as of the Evaluation Date. Since the Evaluation Date, there have
been no changes in the internal control over financial reporting
(as such term is defined in the Exchange Act) of the Company and
its Subsidiaries that have materially affected, or is reasonably
likely to materially affect, the internal control over financial
reporting of the Company and its Subsidiaries.
(s)
Certain Fees.
No brokerage or finder’s
fees or commissions are or will be payable by the Company, any
Subsidiary or Affiliate of the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated
by the Transaction Documents. The Company has not made any direct
or indirect payments (in cash, securities or otherwise) to: (i) any
person, as a finder’s
fee, consulting fee or otherwise, in consideration of such person
raising capital for the Company or introducing to the Company
persons who raised or provided capital to the Company; (ii) any
FINRA member; or (iii) any person or entity that has any direct or
indirect affiliation or association with any FINRA member, within
the twelve months prior to the Execution Date. None of the net
proceeds of the Offering will be paid by the Company to any
participating FINRA member or its affiliates, except as
specifically authorized herein.
(t) Investment
Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Shares will not be or
be an Affiliate of, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended. The Company shall
conduct its business in a manner so that it will not become an
“investment
company” subject to
registration under the Investment Company Act of 1940, as amended.
Notwithstanding the foregoing, for purposes of this Section 3.1(t),
“Affiliates” does not include the Persons who are
Affiliates of the Company solely because they are holders of the
Company’s securities.
(u) Registration
Rights. No Person has any right to cause the Company or any
Subsidiary to effect the registration under the Securities Act of
any securities of the Company or any Subsidiary, except as set
forth in the Registration Rights Agreement.
(v) Listing
and Maintenance Requirements. The Common Stock is registered
pursuant to Section 12(b) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such
registration. The Company has not, in the three years preceding the
date hereof, received notice from any Trading Market on which the
Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no
reason to believe that it will not in the foreseeable future
continue to be, in compliance with all such listing and maintenance
requirements.
(w)
Application of
Takeover Protections. The Company and the Board of Directors
have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the
Company’s certificate of
incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable as a
result of the Purchaser and the Company fulfilling their
obligations or exercising their rights under the Transaction
Documents, including without limitation as a result of the
Company’s issuance of the
Shares and the Purchaser’
ownership of the Shares.
(x)
Disclosure. The
SEC Reports, when they were filed with the Commission, conformed in
all material respects to the requirements of the Exchange Act and
the applicable rules and regulations, and none of such documents,
when they were filed with the Commission, contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made not misleading. There are
no documents required to be filed with the Commission in connection
with the transaction contemplated hereby that (x) have not been
filed as required pursuant to the Securities Act or (y) will not be
filed within the requisite time period. The press releases
disseminated by the Company during the twelve months preceding the
date of this Agreement taken as a whole do 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, in light of the circumstances under which they
were made and when made, not misleading.
(y)
No
Integrated Offering. Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that
would cause this offering of the Shares pursuant to the Transaction
Documents to be integrated with prior offerings by the Company for
purposes of any applicable law, regulation or stockholder approval
provisions, including, without limitation, under the rules and
regulations of any Trading Market on which any of the securities of
the Company are listed or designated.
(z)
Solvency. Based
on the consolidated financial condition of the Company as of the
Closing Date, after giving effect to the receipt by the Company of
the proceeds from the sale of the Shares hereunder, (i) the fair
saleable value of the Company’s assets exceeds the amount that
will be required to be paid on or in respect of the
Company’s existing debts
and other liabilities (including known contingent liabilities) as
they mature, (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business as now
conducted and as proposed to be conducted including its capital
needs taking into account the particular capital requirements of
the business conducted by the Company, consolidated and projected
capital requirements and capital availability thereof, and (iii)
the current cash flow of the Company, together with the proceeds
the Company would receive, were it to liquidate all of its assets,
after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of its
liabilities when such amounts are required to be paid. The Company
does not intend to incur debts beyond its ability to pay such debts
as they mature (taking into account the timing and amounts of cash
to be payable on or in respect of its debt). The Company has no
knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the
bankruptcy or reorganization laws of any jurisdiction within one
year from the Closing Date. The SEC Reports sets forth as of the
date hereof all outstanding secured and unsecured indebtedness of
the Company or any Subsidiary, or for which the Company or any
Subsidiary has commitments.
(aa)
Tax
Status. Except as set forth on Schedule 3.1(aa) of the
Disclosure Schedule, the Company and its Subsidiaries each (i) has
timely and properly filed all United States federal, state, local
and foreign Tax returns, Tax reports, information returns,
declarations of estimated Tax and other declarations and statements
with respect to Taxes (collectively, the “Tax
Returns”) required
to be filed by it, (ii) such Tax Returns are true, correct and
complete in all material respects and the Company has paid all
Taxes and other governmental assessments and charges that are
material in amount and required to be paid (whether disputed or
not) by it, whether or not shown on the Tax Returns to be due, and
(iii) has set aside on its books provision reasonably adequate for
the payment of all material Taxes for periods subsequent to the
periods to which such Tax Returns apply. There are no unpaid Taxes
in any material amount claimed to be due by the Taxing authority of
any jurisdiction, and the officers of the Company or of any
Subsidiary know of no basis for any such claim. The provisions for
Taxes payable, if any, shown on the financial statements filed with
the SEC Reports are sufficient for all accrued and unpaid taxes,
whether or not disputed, and for all periods to and including the
dates of such consolidated financial statements. Neither the Company nor any
Subsidiary of the Company is a party to any claim, dispute, audit,
pending action or proceeding, nor is any such claim, dispute,
action or proceeding threatened by any Taxing authority, for the
assessment or collection of any Taxes and no claim for the
assessment or collection of any Taxes has been asserted against the
Company or any Subsidiary that has not been settled with all
amounts due having been paid. Neither the Company nor any
Subsidiary of the Company has been notified that either the
Internal Revenue Service or any other Taxing authority has raised
any issues, or notified the Company or a Subsidiary of an intent to
raise such issues, in connection with any Tax Return of the
Company. No Lien with respect to Taxes has been filed and no
deficiency or addition to Taxes, interest or penalties for any
Taxes with respect to any income, properties or operations of the
Company or any Subsidiary of the Company has been proposed,
asserted or assessed against the Company or any Subsidiary of the
Company. The Company has never been a “United States real property holding
corporation” as defined
in Section 897(c)(2) of
the Internal Revenue Code of 1986, as amended (the “Code”)
and Section 1.897-2(b) of
the Treasury Regulations promulgated thereunder. The Company and
each of its Subsidiaries has complied in all material respects with
all applicable Laws relating to the payment and withholding of
Taxes, including sales and use Taxes, and has withheld and paid
over all amounts required by Law to be withheld and paid from the
wages or salaries of employees, and neither the Company nor any of
its Subsidiaries is liable for any Taxes for failure to comply with
such Laws. No claim, or notice of claim, has ever been made by an
authority in a jurisdiction where the Company or a Subsidiary of
the Company does not file Tax Returns that the Company or a
Subsidiary is or may be subject to taxation by that jurisdiction.
Neither the Company nor any Subsidiary of the Company has been a
member of an affiliated group of corporations within the meaning of
Section 1504(a) of the
Code filing a combined federal income Tax return nor does the
Company or any Subsidiary of the Company have any liability for
Taxes of any other Person under Treasury Regulations § 1.1502-6 (or any similar
provision of foreign, state or local Law) or otherwise, other than
the consolidated group of which the Company is currently the parent
corporation. Neither the
Company nor any Subsidiary of the Company is a party to any Tax
allocation, indemnity or sharing arrangement. Neither the Company
nor any Subsidiary of the Company has engaged in any transaction
that could give rise to a disclosure obligation as a “reportable transaction” under Section 6011 of the Code and Treasury
Regulations promulgated thereunder. Neither the Company nor any
Subsidiary of the Company will be required to include any item of
income in, or exclude any item of deduction from, taxable income
for any taxable period (or portion thereof) ending after the
Closing Date as a result of any: (i) change in method of accounting
for a taxable period ending on or prior to the Closing Date; (ii)
use of an improper method of accounting for a taxable period ending
on or prior to the Closing Date; (iii) “closing agreement” as described in Section 7121 of the
Code (or any corresponding or similar provision of U.S. state,
local or non-U.S. income Tax law) executed on or prior to the
Closing Date; (iv) intercompany transactions or any excess loss
account described in Treasury Regulations under Section 1502 of the
Code (or any corresponding or similar provision of U.S. state,
local or non-U.S. income Tax law); (v) installment sale or open
transaction disposition made on or prior to the Closing Date; (vi)
prepaid amount received on or prior to the Closing Date; (vii)
election made under Section 108(i) of the Code prior to the
Closing; (viii) the application of Section 952(c)(2) of the Code;
(ix) application of Section 951 of the Code with respect to income
earned or recognized or payments received prior to the Closing; or
(x) any similar election, action, or agreement that would have the
effect of deferring any liability for Taxes of the Company or any
of its Subsidiaries from any period ending on or before the Closing
Date to any period ending after such date. The Company has not
distributed stock of another entity, and has not had its stock
distributed by another entity, in a transaction that was purported
or intended to be governed in whole or in part by
Section 355 or 361 of the
Code. The term “Taxes”
means (A) all federal, state, local, foreign, and other net income,
gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, lease, service, service use,
withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, windfall profits, alternative or
add-on minimum taxes, customs, unclaimed property or escheat,
duties or other taxes, fees, assessments, or charges of any kind
whatsoever, together with any interest and any penalties, additions
to tax, or additional amounts with respect thereto and
(B) any liability for the
payment of any amount of the type described in the immediately
preceding clause (A) as a
result of (1) being a
“transferee” (within the meaning of
Section 6901 of the Code
or any other applicable law) of another Person, (2) being a member of an affiliated,
combined, consolidated or unitary group or (3) any contractual
liability.
(bb)
Foreign
Corrupt Practices. Neither the Company nor any Subsidiary,
nor to the knowledge of the Company or any Subsidiary, any agent or
other person acting on behalf of the Company or any Subsidiary, has
(i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or
campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company or any Subsidiary (or made by any
person acting on its behalf of which the Company is aware) which is
in violation of law, or (iv) violated in any material respect any
provision of FCPA. The Company has taken reasonable steps to ensure
that its accounting controls and procedures are sufficient to cause
the Company to comply in all material respects with the
FCPA.
(cc)
Accountants.
Marcum LLP (the “Company
Auditor”) (i) is
an independent registered public accounting firm as required by the
Exchange Act and (ii) to the knowledge of the Company, shall
express its opinion with respect to the financial statements to be
included in the Company’s
Annual Report for the fiscal year ending December 30, 2021. The
Company Auditor has not, during the previous three (3) years,
provided to the Company any non-audit services, as such term is
used in Section 10A(g) of the Exchange Act.
(dd)
Regulatory
Matters.
(i) Since
January 1, 2015, each Product of the Company or the Subsidiaries
has been in all material respects: (i) formulated, developed,
designed, licensed, manufactured, tested, processed, handled,
stored, labeled, packaged, transported, marketed and advertised in
compliance with all applicable Laws and requirements, including,
but not limited to, the statutes and regulations enforced by the
U.S. Food and Drug Administration (“FDA”) and the Federal Trade Commission
(“FTC”) and (ii) in compliance with all
applicable Laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application
approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling,
advertising, record keeping and filing of reports.
(ii)
Since January 1, 2015, there have been no product holds, stop
sales, or other corrective action taken by the Company or its
Subsidiaries (or their agents) or requested or ordered or any
adverse action taken by any Governmental Authority relating to the
Company, its Subsidiaries, or their respective Products, and the
Company or its Subsidiaries have not initiated or participated in a
recall, market withdrawal, safety alert, dear health care
professional letter or other corrective action.
(iii)
Since January 1, 2015, there has been no pending, completed or, to
the Company's knowledge, threatened, claim, charge, complaint, or
Action against the Company or any of its Subsidiaries, and none of
the Company or any of its Subsidiaries has received any notice,
warning letter or other communication from the FDA, FTC, or any
other Governmental Authority, which: (i) contests the premarket
clearance, licensure, registration, or approval, use, development,
distribution, manufacture, packaging, testing, processing,
handling, sale, labeling and/or promotion of any Product, (ii)
withdraws its approval of, requests the recall, suspension, or
seizure of, or withdraws or orders the withdrawal of advertising or
sales promotional materials relating to, any Product, (iii) imposes
a clinical hold on any clinical investigation by the Company or any
of its Subsidiaries, (iv) enjoins production at any facility of the
Company or any of its Subsidiaries, (v) enters or proposes to enter
into a consent decree of permanent injunction with the Company or
any of its Subsidiaries, or (vi) otherwise alleges any violation of
any Laws, rules or regulations by the Company or any of its
Subsidiaries.
(iv)
Since January 1, 2015, the properties, business and operations of
the Company and its Subsidiaries have been and are being conducted
in all material respects in accordance with all applicable Laws,
rules and regulations of the FDA or other Governmental Authority.
The Company has not been informed by the FDA that the FDA will
prohibit the development, marketing, sale, license or use in the
United States of any product proposed to be developed, produced or
marketed by or on behalf of the Company or its Subsidiaries, nor
has the FDA expressed any concern as to approving or clearing for
marketing any product or product claim being, or proposed to be,
developed or used by the Company. All Products claiming to be or
containing a New Dietary Ingredient (NDI) or having an ingredient
that is claimed to be Generally Recognized as Safe (GRAS) have
complied with the applicable statutes and regulations enforced by
the FDA
(ee)
Office of
Foreign Assets Control. Neither the Company nor any
Subsidiary nor, to the Company's knowledge, any director, officer,
agent, employee or affiliate of the Company or any Subsidiary is
currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury
Department.
(ff)
U.S. Real
Property Holding Corporation. The Company is not and has
never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as
amended.
(gg)
Bank
Holding Company Act. Neither the Company nor any of its
Subsidiaries or Affiliates is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation by the Board of
Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of
its Subsidiaries or Affiliates owns or controls, directly or
indirectly, five percent (5%) or more of the outstanding shares of
any class of voting securities or twenty-five percent (25%) or more
of the total equity of a bank or any entity that is subject to the
BHCA and to regulation by the Federal Reserve. Neither the Company
nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity
that is subject to the BHCA and to regulation by the Federal
Reserve. Notwithstanding the foregoing, for purposes of this
Section 3.1(gg), “Affiliates” does not include Persons
who are Affiliates of the Company solely because they are holders
of the Company’s securities.
(hh)
Money
Laundering. The operations of the Company and its
Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and applicable rules
and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action, suit or proceeding
by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any Subsidiary with respect
to the Money Laundering Laws is pending or, to the knowledge of the
Company or any Subsidiary, threatened.
(ii)
Acknowledgment
Regarding Purchaser’s Purchase of Shares. The Company
acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm’s
length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby. The Company further acknowledges
that no Purchaser is acting as a financial advisor or fiduciary of
the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated thereby and
any advice given by the Purchaser or any of its respective
representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely
incidental to the Purchaser’s purchase of the Shares. The
Company further represents to the Purchaser that the
Company’s decision to
enter into this Agreement and the other Transaction Documents has
been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its
representatives.
(jj)
Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in
this Agreement or elsewhere herein to the contrary notwithstanding
(except for Section 3.2(f) hereof), it is understood and
acknowledged by the Company that: (i) as of the date of this
Agreement, the Purchaser has not been asked by the Company to
agree, nor has the Purchaser agreed, to desist from purchasing or
selling, long and/or short, securities of the Company, or
“derivative” securities based on securities
issued by the Company or to hold the Shares for any specified term;
(ii) past or future open market or other transactions by the
Purchaser, specifically including, without limitation, Short Sales
or “derivative”
transactions, before or after the closing of this or future private
placement transactions, may negatively impact the market price of
the Company’s
publicly-traded securities; (iii) the Purchaser, and
counter-parties in “derivative” transactions to which the Purchaser
is a party, directly or indirectly, presently may have a
“short” position in the Common Stock, and
(iv) the Purchaser shall not be deemed to have any affiliation with
or control over any arm’s
length counter-party in any “derivative” transaction. The Company further
understands and acknowledges that (y) the Purchaser may engage in
hedging activities at various times during the period that the
Shares are outstanding in compliance with all applicable Laws, and
(z) such hedging activities (if any) could reduce the value of the
existing stockholders' equity interests in the Company at and after
the time that the hedging activities as conducted in compliance
with all applicable Laws, are being conducted. The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any
of the Transaction Documents.
(kk)
Regulation
M Compliance. The
Company has not, and to its knowledge no one acting on its behalf
has, (i) taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or
resale of any of the Shares, (ii) sold, bid for, purchased, or,
paid any compensation for soliciting purchases of, any of the
Shares, or (iii) paid or agreed to pay to any Person any
compensation for soliciting another to purchase any other
securities of the Company.
(ll)
Environmental
Matters. To the knowledge of the Company, neither it nor any
of its Subsidiaries is (i) in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or
any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, “Environmental
Matters”), (ii)
owns or operates any real property contaminated with any substance
that is in violation of any Environmental Laws, (iii) is liable for
any offsite disposal or contamination pursuant to any Environmental
Laws, or (iv) is subject to any Action or claim relating to any
Environmental Laws, in each case, which violation, contamination,
liability, Action or claim has had, or would have, individually or
in the aggregate, a Material Adverse Effect; and there is no
pending investigation or, to the Company’s Knowledge, investigation
threatened in writing that might lead to such a claim.
(mm) Warranties and Product
Liabilities. Since January 1, 2015, there have been no
claims against the Company or its Subsidiaries for product
liability, personal injury, property damage, indemnity, warranty or
other similar claims arising from the ingestion or other use of the
Products of the Company or its Subsidiaries. There are no material
Liabilities arising from any injury resulting from the ingestion or
other use of the Company’s Products, or arising from warranty
or other claims or returns with respect to any Product(s),
individually or in the aggregate. All Products have been designed,
developed, manufactured, labeled, packaged, processed, handled,
stored, advertised, marketed, sold, transported and/or distributed
so as to meet and comply in all material respects with all
applicable standards and requirements of any Governmental
Authority, product specifications, applicable licenses or
contractual commitments and express warranties.
(nn)
Employee
Benefit Plans
(i)
Each Employee Plan that is intended to qualify under Section 401(a)
of the Code is so qualified and has received a favorable
determination or approval letter from the IRS with respect to such
qualification, or may rely on an opinion letter issued by the IRS
with respect to a prototype plan adopted in accordance with the
requirements for such reliance, or has time remaining for
application to the IRS for a determination of the qualified status
of such Employee Plan for any period for which such Employee Plan
would not otherwise be covered by an IRS determination and, to the
knowledge of the Company, no event or omission has occurred that
would cause any Employee Plan to lose such
qualification.
(ii)
Each Employee Plan is, and has been operated in material compliance
with applicable laws and regulations and is and has been
administered in all material respects in accordance with applicable
laws and regulations and with its terms. No litigation or
governmental administrative proceeding, audit or other proceeding
(other than those relating to routine claims for benefits) is
pending or, to the knowledge of the Company, threatened with
respect to any Employee Plan or, to the knowledge of the Company,
any fiduciary or service provider thereof, and, to the knowledge of
the Company, there is no reasonable basis for any such litigation
or proceeding. All payments and/or contributions required to have
been made with respect to all Employee Plans either have been made
or have been accrued in accordance with the terms of the applicable
Employee Plan and applicable law. The Employee Plans satisfy in all
material respects any applicable minimum coverage and
discrimination requirements under the Code.
(iii)
Neither the Company nor any ERISA Affiliate has ever maintained,
contributed to, or been required to contribute to (a) any employee
benefit plan that is or was subject to Title IV of ERISA, Section
412 of the Code, Section 302 of ERISA, (b) a Multiemployer Plan,
(c) any funded welfare benefit plan within the meaning of Section
419 of the Code, (d) any “multiple employer plan” (within the meaning of Section 210
of ERISA or Section 413(c) of the Code), or (e) any “multiple employer welfare
arrangement” (as such
term is defined in Section 3(40) of ERISA), and neither the Company
nor any ERISA Affiliate has ever incurred any liability under Title
IV of ERISA that has not been paid in full.
(iv) None of the
Employee Plans provides health care or any other non-pension
benefits to any employees after their employment is terminated
(other than as required by Part 6 of Subtitle B of Title I of ERISA
or similar state law) and the Company has never promised to provide
such post-termination benefits, other than employment agreements or
offer letters with certain of the Company’s officers that provide for
post-termination health benefits.
(v)
The per share exercise price of each Company Option is no less than
the fair market value of a share of Common Stock on the date of
grant of such Company Option determined in a manner consistent with
Section 409A of the Code. Each Employee Plan that constitutes in
any part a nonqualified deferred compensation plan within the
meaning of Section 409A of the Code has been operated and
maintained in all material respects in operational and documentary
compliance with Section 409A of the Code and applicable guidance
thereunder. No payment to be made under any Employee Plan is, or to
the knowledge of the Company, will be, subject to the penalties of
Section 409A(a)(1) of the Code.
(vi)
No Employee Plan is subject to the laws of any jurisdiction outside
the United States.
(vii)
Neither the
execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby could (either alone or in
conjunction with any other event): (a) result in, or cause the
accelerated vesting, payment, funding or delivery of, or increase
the amount or value of, any payment or benefit to any employee,
officer, director or other service provider of the Company or any
of its Subsidiaries; (b) result in any “parachute payment” as defined in Section 280G(b)(2) of
the Code (whether or not such payment is considered to be
reasonable compensation for services rendered); or (c) result in a
requirement to pay any tax “gross-up” or similar “make-whole” payments to any employee, director
or consultant of the Company or any Subsidiary.
(viii) No Employee Plan,
individually or collectively, could give rise to the payment of any
amount that would not be deductible pursuant to Section 162(m) of
the Code or any other provision of the Code or any similar foreign
law, as a result of the transactions contemplated by this Agreement
alone or together with any other event.
3.2
Representations and
Warranties of the Purchaser. The Purchaser, for itself and
for no other Purchaser, hereby represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows
(unless as of a specific date therein, in which case they shall be
accurate as of such date):
(a) Organization;
Authority. The Purchaser is either an individual or an
entity duly incorporated or formed, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
formation with full right, corporate, partnership limited liability
company or similar power and authority to enter into and to
consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of the Transaction Documents
and performance by the Purchaser of the transactions contemplated
by the Transaction Documents have been duly authorized by all
necessary corporate, partnership, limited liability company or
similar action, as applicable, on the part of the Purchaser. Each
Transaction Document to which it is a party has been duly executed
by the Purchaser, and when delivered by the Purchaser in accordance
with the terms hereof, will constitute the valid and legally
binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited
by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by
applicable law.
(b) Understandings or
Arrangements. The Purchaser is acquiring the Shares as
principal for its own account and not with a present view toward
the public sale or distribution thereof, and has no present
intention of selling or distributing any of the Shares or any
direct or indirect arrangement or understanding with any other
persons to distribute or regarding the distribution of the Shares
(this representation and warranty not limiting the
Purchaser’s right to sell
the Shares pursuant to the pursuant to an effective registration
statement under the Securities Act or otherwise in compliance with
applicable federal and state securities laws). The Purchaser is
acquiring the Shares hereunder in the ordinary course of its
business. The Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any
offers to buy, purchase or otherwise acquire or take a pledge of)
any of the Shares except pursuant to and in accordance with the
Securities Act.
(c)
Purchaser
Status. At the time the Purchaser was offered the Shares, it
was, and as of the date hereof it is either: (i) an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional
buyer” as defined in Rule
144A(a) under the Securities Act. The Purchaser is not a
broker-dealer registered under Section 15 of the Exchange Act. The Purchaser is acting alone in its
determination as to whether to invest in the Shares. The Purchaser
has delivered a questionnaire in form reasonably satisfactory to
the Company with respect to the “bad actor” provisions of Rule 506(d) promulgated under the Securities Act.
The Purchaser is not, as of the date of this Agreement, party to
any voting agreements or similar arrangements with respect to the
Shares, except the Registration Rights Agreement. The Purchaser represents and
warrants that it: (A) is
not and will not become a party to (1) any agreement, arrangement or
understanding with, and has not given any commitment or assurance
to, any person or entity as to how such person, if serving as a
director or if elected as a director of the Company, will act or
vote on any issue or question (a “Voting
Commitment”) or
(2) any Voting Commitment that could limit or interfere with such
person’s ability to
comply, if serving as or elected as a director of the Company, with
such person’s fiduciary
duties under applicable law; (B) is not and will not become a party
to any agreement, arrangement or understanding with any person or
entity other than the corporation with respect to any direct or
indirect compensation, reimbursement or indemnification in
connection with service or action as a director of the
Company.
(d) Experience of The
Purchaser. The Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Shares,
and has so evaluated the merits and risks of such investment. The
Purchaser is able to bear the economic risk of an investment in the
Shares and, at the present time, is able to afford a complete loss
of such investment.
(e) Access to
Information. The Purchaser acknowledges that it has had the
opportunity to review the Transaction Documents (including all
exhibits and schedules thereto) and the SEC Reports and has been
afforded, (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives
of the Company concerning the terms and conditions of the offering
of the Shares and the merits and risks of investing in the Shares;
(ii) access to information about the Company and its financial
condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment;
and (iii) the opportunity to obtain such additional information
that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to make an informed investment
decision with respect to the investment.
(f) Certain Transactions
and Confidentiality. Other than consummating the
transactions contemplated hereunder, the Purchaser has not, nor has
any Person acting on behalf of or pursuant to any understanding
with the Purchaser, directly or indirectly executed any purchases
or sales, including Short Sales, of the securities of the Company
during the period commencing as of the time that the Purchaser
first received a term sheet (written or oral) from the Company or
any other Person representing the Company setting forth the
material pricing terms of the transactions contemplated hereunder
and ending immediately prior to the execution hereof.
Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of the Purchaser’s assets and the portfolio managers
have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of the
Purchaser’s assets, the
representation set forth above shall only apply with respect to the
portion of assets managed by the portfolio manager that made the
investment decision to purchase the Shares covered by this
Agreement. Other than to other Persons party to this Agreement or
to the Purchaser’s
representatives, including, without limitation, its officers,
directors, partners, legal and other advisors, employees, agents
and Affiliates, the Purchaser has maintained the confidentiality of
all disclosures made to it in connection with this transaction
(including the existence and terms of this
transaction).
(g)
Foreign
Purchaser. If the Purchaser is not a United
States person (as defined by Section 7701(a)(30) of the Internal
Revenue Code of 1986, as amended, or if Purchaser is a US
subsidiary or affiliate of a foreign parent company, “Foreign
Purchaser”), the
Purchaser hereby represents that it has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with
any invitation to subscribe for the Shares or any use of this
Agreement, including (i) the legal requirements within its
jurisdiction for the purchase of the Shares, (ii) any foreign
exchange restrictions applicable to such purchase, (iii) any
government or other consents that may need to be obtained, and (iv)
the income tax and other tax consequences, if any, that may be
relevant to the purchase, holding, redemption, sale or transfer of
the Shares. Each Foreign Purchaser further represents that either
(x) it does not now, nor will it after the Closing, hold ten
percent (10%) or greater, directly or indirectly, of the voting
interest in the Company or (y) if it does or will, such Foreign
Purchaser shall notify the Company and shall provide such
information as the Company may reasonably request to comply with
state, federal, or local regulations. The Company’s offer and sale and Foreign
Purchaser’s subscription
and payment for and continued beneficial ownership of the Shares
will not violate any applicable securities or other laws of Foreign
Purchaser’s
jurisdiction.
(h) Legends. The
Purchaser understands that the certificates representing the Shares
will bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of the
certificates for such Shares):
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS OFFERED,
SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE
COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED TO THE EXTENT THAT SUCH OPINION IS REQUIRED PURSUANT
TO THAT CERTAIN COMMON STOCK PURCHASE AGREEMENT UNDER WHICH THE
SECURITIES WERE ISSUED.
(i)
Reliance
on Exemptions. The Purchaser understands that the Shares are
being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and
state securities laws and that the Company is relying upon the
truth and accuracy of, and Purchaser’s compliance with, the
representations, warranties, agreements, acknowledgments and
understandings of Purchaser set forth herein in order to determine
the availability of such exemptions and the eligibility of
Purchaser to acquire the Shares.
The
Company acknowledges and agrees that the representations contained
in this Section 3.2 shall not modify, amend or affect the
Purchaser’s right to rely
on the Company’s
representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction
Document or any other document or instrument executed and/or
delivered in connection with this Agreement or the consummation of
the transactions contemplated hereby.
ARTICLE IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1 Furnishing
of Information. Until
the time that no Purchaser owns Shares, the Company covenants to
timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be
filed by the Company after the date hereof pursuant to the Exchange
Act even if the Company is not then subject to the reporting
requirements of the Exchange Act. The rights set forth in this Section 4.1 shall
terminate upon the consummation of a Change of
Control.
4.2 Integration.
The Company shall not sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Shares for purposes of the rules and
regulations of any Trading Market such that it would require
stockholder approval prior to the closing of such other transaction
unless stockholder approval is obtained before the closing of such
subsequent transaction.
4.3
Securities
Laws Disclosure; Publicity. The Company shall (a) prior to
8:00 a.m. (New York City time) on the Trading Day immediately
following the date hereof, issue a press release (the “Press
Release”) in form
and substance reasonably acceptable to the Purchaser disclosing the
material terms of the transactions contemplated hereby, and (b)
file a Current Report on Form 8-K, describing the terms of the
transactions contemplated by the Transaction Documents in the form
required by the Exchange Act and attaching the material Transaction
Documents as exhibits thereto, with the Commission within the time
required by the Exchange Act (such filing, together with all
attachments and exhibits, the “8-K
Filing”). From and
after the filing of the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2020 (the
“2020
10-K”), the Company represents to the Purchaser that
it shall have publicly disclosed all material, non-public
information delivered to the Purchaser by the Company or any of its
Subsidiaries, or any of their respective officers, directors,
employees or agents in connection with the transactions
contemplated by the Transaction Documents. In addition, effective
upon the filing of the 2020 10-K, the Company acknowledges and
agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company,
any of its Subsidiaries or any of their respective officers,
directors, agents, employees or Affiliates on the one hand, and the
Purchaser or any of their Affiliates on the other hand, shall
terminate, except for any confidentiality agreement referenced in
Section 5.2 and any confidentiality and similar obligations that
may exist in connection with a Purchaser’s relationship with
a member of the Board of Directors. The Company shall consult with
the Purchaser, and consider in good faith any comments the
Purchaser may have on, the 8-K Filing. Without limiting the
generality of the foregoing, from and after the date of this
Agreement until the date on which the Purchaser ceases to hold any
Shares, the Company shall not, directly or indirectly, issue any
press release or make any filing with the Commission, in each case,
to the extent such press release or filing identifies the Purchaser
or the transactions contemplated by this Agreement, unless the
Company first consults with the Purchaser, and considers in good
faith any comments that the Purchaser may have on, such materials;
provided, that
the Company may make any subsequent press release or filings with
the Commission that are substantially consistent in form with any
such materials previously approved by the Purchaser in the manner
provided for in this Section 4.3 without being required to first
consult the Purchaser as otherwise required in this
Section 4.3.
4.4 Stockholder
Rights Plan. No claim will be made or enforced by the
Company or, with the consent of the Company, any other Person, that
the Purchaser is an “Acquiring
Person” under any
control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that the Purchaser could be deemed to trigger the
provisions of any such plan or arrangement, by virtue of receiving
Shares under the Transaction Documents or under any other agreement
between the Company and the Purchaser.
4.5 Use
of Proceeds. The Company shall use the net proceeds from the
sale of the Shares hereunder for working capital purposes and shall
not use such proceeds: (a) for the satisfaction of any portion of
the Company’s debt (other
than payment of trade payables in the ordinary course of the
Company’s business and
prior practices), (b) for the redemption of any Common Stock or
Common Stock Equivalents, or (c) in violation of FCPA or the Office
of Foreign Assets Control of the U.S. Department of the Treasury
regulations.
4.6 Indemnification
of Purchaser. Subject to the provisions of this Section 4.6,
the Company will indemnify and hold the Purchaser and its
directors, officers, stockholders, members, partners, employees and
agents (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such
title or any other title), each Person who controls the Purchaser
(within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, stockholders,
agents, members, partners or employees (and any other Persons with
a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such
controlling persons (each, a “Purchaser
Party”) harmless
from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs
of investigation that any such Purchaser Party may suffer or incur
as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the
Company in this Agreement or in the other Transaction Documents or
(b) any action instituted against the Purchaser Parties in any
capacity, or any of them or their respective Affiliates, by (i) any
current or former stockholder of the Company who is not an
Affiliate of such Purchaser Party, with respect to any of the
transactions contemplated by the Transaction Documents or (ii) any
other third-party with respect to any of the transactions
contemplated by the Transaction Documents (unless, in either case,
such action is based upon a breach of such Purchaser
Party’s representations,
warranties or covenants under the Transaction Documents or any
agreements or understandings such Purchaser Party may have with any
such stockholder or any violations by such Purchaser Party of state
or federal securities laws or any conduct by such Purchaser Party
which constitutes fraud, gross negligence, willful misconduct or
malfeasance). If any action shall be brought against any Purchaser
Party in respect of which indemnity may be sought pursuant to this
Agreement, such Purchaser Party shall promptly notify the Company
in writing, and the Company shall have the right to assume the
defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party, which right shall remain in
effect if and for so long as the Company continues to diligently
defend against such action; provided, that
in no event shall the Company be entitled to assume the defense of
any action if such action (i) is with respect to a criminal
proceeding, action, indictment, allegation or investigation or (ii)
seeks an injunction or other equitable relief against any Purchaser
Party. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense
of such Purchaser Party except to the extent that (i) the
employment thereof has been specifically authorized by the Company
in writing, (ii) the Company has failed after a reasonable period
of time to assume such defense and to employ counsel or (iii) in
such action there is, in the reasonable opinion of counsel, a
material conflict on any material issue between the position of the
Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses
of no more than one such separate counsel. The Company will not be
liable to any Purchaser Party under this Agreement (y) for any
settlement by a Purchaser Party effected without the
Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or
(z) to the extent, but only to the extent that a loss, claim,
damage or liability is attributable to any Purchaser
Party’s breach of any of
the representations, warranties, covenants or agreements made by
such Purchaser Party in this Agreement or in the other Transaction
Documents. The indemnification required by this Section 4.6 shall
be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are
received or are incurred. The indemnity agreements contained herein
shall be in addition to any cause of action or similar right of any
Purchaser Party against the Company or others and any liabilities
the Company may be subject to pursuant to law.
4.7 Listing
of Common Stock. The Company hereby agrees to use reasonable
best efforts to maintain the listing or quotation of the Common
Stock on the Trading Market on which it is currently listed, and
concurrently with the Closing, the Company shall apply to list or
quote all of the Shares on such Trading Market and promptly secure
the listing of all of the Shares on such Trading Market. The
Company further agrees, if the Company applies to have the Common
Stock traded on any other Trading Market, it will then include in
such application all of the Shares, and will take such other action
as is reasonably necessary to cause all of the Shares to be listed
or quoted on such other Trading Market as promptly as possible. The
Company will then take all action reasonably necessary to continue
the listing and trading of its Common Stock on a Trading Market and
will comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Trading Market. The
Company agrees to maintain the eligibility of the Common Stock for
electronic transfer through the Depository Trust Company or another
established clearing corporation, including, without limitation, by
timely payment of fees to the Depository Trust Company or such
other established clearing corporation in connection with such
electronic transfer.
4.8 Equal
Treatment of Purchaser. No consideration (including any
modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of
any provision of the Transaction Documents unless the same
consideration is also offered to all of the parties to such
Transaction Document. For clarification purposes, this provision
constitutes a separate right granted to the Purchaser by the
Company and negotiated separately by the Purchaser.
4.9
Certain Transactions
and Confidentiality. The Purchaser covenants that neither it
nor any Affiliate acting on its behalf or pursuant to any
understanding with it will execute any purchases or sales,
including Short Sales of any of the Company’s securities during the period
commencing with the execution of this Agreement and ending at such
time that the transactions contemplated by this Agreement are first
publicly announced pursuant to the initial press release as
described in Section 4.3.
The Purchaser covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the
Company pursuant to the initial press release as described in
Section 4.3, the Purchaser will maintain the confidentiality of the
existence and terms of this transaction and the information
included in the Disclosure Schedule. Notwithstanding the foregoing, the Company
expressly acknowledges and agrees that (i) no Purchaser makes any
representation, warranty or covenant hereby that it will not engage
in effecting transactions in any securities of the Company after
the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the press release as
described in Section 4.3 (so long as such transactions comply with
all applicable Laws and, if applicable, the Company’s insider
trading, securities trading and similar policies), (ii) no
Purchaser shall be restricted or prohibited from effecting any
transactions in any securities of the Company in accordance with
applicable securities Laws from and after the time that the
transactions contemplated by this Agreement are first publicly
announced pursuant to the press release described in Section 4.3
(so long as such transactions comply with all applicable Laws, and,
if applicable, the Company’s insider trading, securities
trading and similar policies) and (iii) no Purchaser shall have any
duty of confidentiality or duty not to trade in the securities of
the Company to the Company or its Subsidiaries after the issuance
of the press release as described in Section 4.3 (other than, if
applicable, under confidentiality policies of the Company, any
confidentiality agreement referenced in Section 5.2 and any
confidentiality and similar obligations that may exist in
connection with a Purchaser’s relationship with a member of
the Board of Directors). Notwithstanding the foregoing, in the case
of a Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of the
Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio
managers managing other portions of the Purchaser’s assets or
internal access to information received by the portfolio managers
managing other portions of the Purchaser’s assets in
connection with such portfolio managers’ investment
decisions, the covenant set forth above shall only apply with
respect to the portion of assets managed by the portfolio manager
that made the investment decision to purchase the Shares covered by
this Agreement.
4.10
Reservation of
Shares. As of the date hereof, the Company has reserved and
the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of Shares for
the purpose of enabling the Company to issue Shares pursuant to
this Agreement.
4.11
Registration Rights
Agreement. In the event that the Purchaser waives in writing
the condition precedent to the Closing contained in Section
2.2(a)(iv), then from and after the Closing, the Purchaser and the
Company shall use reasonable best efforts to negotiate, in good
faith, the terms of the Registration Rights Agreement, and the
Company and the Purchaser shall enter into the Registration Rights
Agreement promptly after the Closing (and in any event within forty
eight (48) hours thereafter).
ARTICLE V.
MISCELLANEOUS
5.1
Fees and
Expenses. Each party shall pay all fees and expenses that it
incurs (including on account of any of their respective advisers,
counsel, accountants and other experts) in connection with the
negotiation, preparation, execution and delivery of this Agreement
(including all Transfer Agent fees (including, without limitation,
any fees required for same-day processing of any instruction letter
delivered by the Company), stamp taxes and other taxes and duties
levied in connection with the delivery of any Shares to the
Purchaser) (collectively, the “Transaction
Expenses”);
provided,
however, that
all Transfer Agent fees and transfer taxes arising in connection
with the sale and transfer of the Shares hereunder shall be borne
by the Company.
5.2
Entire
Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, and any confidentiality agreements
between the parties currently in existence, contain the entire
understanding of the parties with respect to the subject matter
hereof and thereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents,
exhibits and schedules.
5.3
Notices. Any
and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of: (a) the date of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number or email attachment at the email
address as set forth on the signature pages attached hereto at or
prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the
next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number or
email attachment at the email address as set forth on the signature
pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) the
second (2nd)
Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (d) upon actual
receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set
forth on the signature pages attached hereto. To the extent that
any notice provided pursuant to any Transaction Document
constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K.
5.4
Amendments;
Waivers. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and the
Purchaser, or, in the case of a waiver, by the party against whom
enforcement of any such waived provision is sought; provided, that
no waiver of any rights hereunder by one Purchaser shall be
effective as against any other Purchaser. No waiver of any default
with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future
or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right. Any amendment effected in
accordance with accordance with this Section 5.4 shall be binding
upon the Purchaser and the Company.
5.5
Headings. The
headings herein are for convenience only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of
the provisions hereof.
5.6
Successors
and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the
Purchaser (other than by merger).
5.7
No
Third-Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as
otherwise set forth in Section 4.6.
5.8
Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all
legal Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any
other Transaction Documents (whether brought against a party hereto
or its respective affiliates, directors, officers, stockholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of
New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any Action or
Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is
improper or is an inconvenient venue for such Proceeding. Each
party hereby irrevocably waives personal service of process and
consents to process being served in any such Action or Proceeding
by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other
manner permitted by law. If any party shall commence an Action or
Proceeding to enforce any provisions of the Transaction Documents,
then, in addition to the obligations of the Company under Section
4.6, the prevailing party in such Action or Proceeding shall be
reimbursed by the non-prevailing party for its reasonable
attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and
prosecution of such Action or Proceeding.
5.9
Survival. The
representations and warranties contained herein shall survive the
Closing and the delivery of the Shares.
5.10
Attorneys’
Fees. In the event that any Action is instituted under or in
relation to this Agreement, including without limitation to enforce
any provision in this Agreement, the prevailing party in such
dispute shall be entitled to recover from the losing party all
fees, costs and expenses of enforcing any right of such prevailing
party under or with respect to this Agreement, including without
limitation, such reasonable fees and expenses of attorneys and
accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
5.11
Execution. This
Agreement may be executed in two or more counterparts, all of which
when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by
each party and delivered to each other party, it being understood
that the parties need not sign the same counterpart. In the event
that any signature is delivered by facsimile transmission or by
e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature page were an original
thereof.
5.12
Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their
commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or
unenforceable.
5.13
Rescission
and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions
of) any of the other Transaction Documents, whenever the Purchaser
exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related
obligations within the periods therein provided, then, until the
time the Company performs such obligations, the Purchaser may
rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or
election in whole or in part without prejudice to its future
actions and rights.
5.14
Replacement of
Shares. If any certificate or instrument evidencing any
Shares is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and
upon cancellation thereof (in the case of mutilation), or in lieu
of and substitution therefor, a new certificate or instrument, but
only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction. The applicant for a new
certificate or instrument under such circumstances shall also pay
any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement
Shares.
5.15
Remedies. In
addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, the Purchaser and
the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any
breach of obligations contained in the Transaction Documents and
hereby agree to waive and not to assert in any Action for specific
performance of any such obligation the defense that a remedy at law
would be adequate.
5.16
Payment
Set Aside. To the extent that the Company makes a payment or
payments to the Purchaser pursuant to any Transaction Document or
the Purchaser enforces or exercises its rights thereunder, and such
payment or payments or the proceeds of such enforcement or exercise
or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by
or are required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the
extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.
5.18
Saturdays,
Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such
action may be taken or such right may be exercised on the next
succeeding Business Day.
5.19 Construction.
The parties agree that each of them and/or their respective counsel
have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the
Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in
any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Common Stock that occur after the
date of this Agreement.
5.20
WAIVER
OF JURY TRIAL. IN
ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY
PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND
INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.
5.21
Tax
Filings. The Company shall cooperate, and shall cause each
of its Subsidiaries to cooperate, with the Purchaser in providing
the Purchaser with any information reasonably requested by the
Purchaser for it to timely make all filings, returns, reports,
forms or calculations in order to assist the Purchaser and its
direct and indirect owners with the preparation of their tax
returns, obtaining any benefit pursuant to applicable Tax law, or
complying with any other Tax law that the Purchaser or its direct
or indirect owners are subject.
5.22
Disclosure
Schedule. Any matter or item disclosed in one section of the
Disclosure Schedule shall be deemed to have been disclosed in each
other section of the Disclosure Schedule in which it is reasonably
apparent on the face of such disclosure that the information is
required to be so disclosed. From and after the date of this
Agreement until the Closing Date, the Company may prepare and
deliver to the Purchaser supplements and/or amendments to the
Disclosure Schedules (each, an “Update”) with respect to
matters first arising after the date hereof and each such Update
shall be deemed to be an amendment to this Agreement for all
purposes hereof other than for purposes of the conditions set forth
in Section
2.3(b)(i) or Section
2.3(b)(iv).
5.23
Waiver of
Conflicts. Each party to this Agreement acknowledges that
Company Counsel, outside general counsel to the Company, has in the
past performed and is or may now or in the future represent the
Purchaser or its affiliates in matters unrelated to the
transactions contemplated by this Agreement (the “Financing”),
including representation of the Purchaser or its affiliates in
matters of a similar nature to the Financing. The applicable rules
of professional conduct require that Company Counsel inform the
parties hereunder of this representation and obtain their consent.
Company Counsel has served as outside general counsel to the
Company and has negotiated the terms of the Financing solely on
behalf of the Company. The Company and the Purchaser hereby
(a) acknowledge that they
have had an opportunity to ask for and have obtained information
relevant to such representation, including disclosure of the
reasonably foreseeable adverse consequences of such representation;
(b) acknowledge that with
respect to the Financing, Company Counsel has represented solely
the Company, and not the Purchaser or any stockholder, director or
employee of the Company or the Purchaser; and (c) gives its informed consent to Company
Counsel’s representation
of the Company in the Financing.
(Signature Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.
|
CHROMADEX CORPORATION
|
Address for Notice:
10900 Wilshire Blvd. Suite 650
Los Angeles, CA 90024
|
|
By:
/s/ Robert
Fried
Name: Robert
Fried
Title: Chief Executive
Officer
With a copy to
(which shall not constitute notice):
|
E-Mail:
rob.fried@chromadex.com
|
|
Cooley
LLP
Thomas
A. Coll
E-mail:
collta@cooley.com
Fax:
(858) 550-6420
|
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR
PURCHASER FOLLOWS]
IN
WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.
Name of
Purchaser: EverFund
Signature of Authorized
Signatory of Purchaser: /s/ Cai Xiaoxiao
Name of
Authorized Signatory: Cai Xiaoxiao
Title
of Authorized Signatory: Director
Address
for Notice to Purchaser: Suite 3008, 30/F, Two Exchange Square, 8
Connaught Place, Central, Hong Kong.
Address
for Delivery of Shares to Purchaser (if not same as address for
notice):
|
|
Closing
|
|
Subscription Amount
|
$24,999,994.50
|
|
Shares
|
3,846,153
Shares
|
Exhibit 99.2
REGISTRATION RIGHTS AGREEMENT
This
REGISTRATION RIGHTS AGREEMENT (the “Agreement”)
is made as of February 20, 2021 by and between ChromaDex
Corporation, a corporation organized and existing under the laws of
the State of Delaware (the “Company”),
and the purchaser signatory hereto (the “Purchaser”).
RECITALS
WHEREAS, the
Company and the Purchaser are parties to a Securities Purchase
Agreement, dated as of February 20, 2021 (the “Purchase
Agreement”),
pursuant to which the Purchaser is purchasing up to an aggregate of
3,846,153 shares of Common Stock; and
WHEREAS, in
connection with the consummation of the transactions contemplated
by the Purchase Agreement, and pursuant to the terms of the
Purchase Agreement, the parties desire to enter into this Agreement
in order to grant certain rights to the Purchaser as set forth
below.
NOW,
THEREFORE, in consideration of the covenants and promises set forth
herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
AGREEMENT
1.
Certain
Definitions. Unless the context otherwise requires, the
following terms, for all purposes of this Agreement, shall have the
meanings specified in this Section 1.
“Affiliate”
has the meaning set forth in Rule 12b-2 of the rules and
regulations promulgated under the Exchange Act; provided,
however, that
for purposes of this Agreement, the Purchaser and its Affiliates,
on the one hand, and the Company and its Affiliates, on the other,
shall not be deemed to be “Affiliates”
of one another.
“Allowed
Delay” has the
meaning set forth in Section 2.1(b)(ii).
“Board”
means the board of directors of the Company.
“Business
Days” has the
meaning ascribed to such term in the Purchase
Agreement.
“Closing
Date” has the
meaning ascribed to such term in the Purchase
Agreement.
“Common
Stock” means
shares of the common stock, par value $0.001 per share, of the
Company.
“Effective
Date” means the
date that a Registration Statement filed pursuant to Section 2.1(a)
is first declared effective by the SEC.
“Effectiveness
Deadline” means,
with respect to the Shelf Registration Statement or New
Registration Statement, the ninetieth (90th) calendar day
following the Closing Date (or, in the event the SEC reviews and
has written comments to the Shelf Registration Statement or the New
Registration Statement, the one hundred twentieth (120th) calendar day
following the Closing Date); provided, however, that if the
Effectiveness Deadline falls on a Saturday, Sunday or other day
that the SEC is closed for business, the Effectiveness Deadline
shall be extended to the next Business Day on which the SEC is open
for business; provided, further, that if the SEC is closed for
operations due to a government shutdown, the Effectiveness Deadline
shall be extended by the same amount of days that the SEC remains
closed for operations.
“Exchange
Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.
“Filing
Deadline” has the
meaning set forth in Section 2.1(a).
“FINRA”
means the Financial Industry Regulatory Authority.
“Form
S-3” means such
form under the Securities Act as in effect on the date hereof or
any successor or similar registration form under the Securities Act
subsequently adopted by the Commission that permits inclusion or
incorporation of substantial information by reference to other
documents filed by the Company with the Commission.
“Free Writing
Prospectus” means
an issuer free writing prospectus, as defined in Rule 433 under the
Securities Act, relating to an offer of Registrable
Securities.
“Holder”
means any Purchaser owning or having the right to acquire
Registrable Securities.
“Liquidated
Damages” has the
meaning set forth in Section 2.1(c).
“New Registration
Statement” has the
meaning set forth in Section 2.1(a).
“Participating
Holder” means with
respect to any registration, any Holder of Registrable Securities
covered by the applicable Registration Statement.
“Person”
has the meaning ascribed to such term in the Purchase
Agreement.
“Prospectus”
means the prospectus included in any Registration Statement, all
amendments and supplements to such prospectus, including pre- and
post-effective amendments to such Registration Statement, and all
other material incorporated by reference in such
prospectus.
“Register,”
“registered”
and “registration”
refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act, and
the declaration or ordering of effectiveness of such registration
statement or document.
“Registrable
Securities” means
the Shares issued at the Closing (as defined in the Purchase
Agreement) and any Common Stock issued as (or issuable upon the
conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, such Shares.
Notwithstanding the foregoing, Shares shall cease to be Registrable
Securities for all purposes hereunder upon the earliest to occur of
the following: (A) the sale by any Person of such Shares to the
public either pursuant to a registration statement under the
Securities Act or under Rule 144 (in which case, only such Shares
sold shall cease to be Registrable Securities) or (B) such Shares
becoming eligible for sale by the Holder pursuant to Rule 144
without restriction.
“Registration
Statement” means
any registration statement of the Company that covers Registrable
Securities pursuant to the provisions of this Agreement filed with,
or to be filed with, the SEC under the rules and regulations
promulgated under the Securities Act, including the related
Prospectus, amendments and supplements to such registration
statement, including pre- and post-effective amendments, and all
exhibits and all material incorporated by reference in such
registration statement.
“Registration
Expenses” has the
meaning set forth in Section 2.3.
“Remainder Registration
Statement” has the
meaning set forth in Section 2.1.
“Rule
144” means Rule
144 as promulgated by the SEC under the Securities Act, as such
rule may be amended from time to time, or any similar successor
rule that may be promulgated by the SEC.
“Rule
145” means Rule
145 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule
or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
“SEC” or “Commission”
means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.
“SEC
Guidance” means
(i) any publicly-available written or oral guidance, comments,
requirements or requests of the Commission staff and (ii) the
Securities Act.
“Securities
Act” means the
Securities Act of 1933, as amended, or any similar successor
federal statute and the rules and regulations thereunder, all as
the same shall be in effect from time to time.
“Shares”
has the meaning ascribed to such terms in the Purchase
Agreement.
“Shelf Registration
Statement” has the
meaning set forth in Section 2.1(a).
“Subsidiaries”
means each corporation, limited liability company, partnership,
association, joint venture or other business entity of which any
party or any of its Affiliates owns, directly or indirectly, more
than 50% of the stock or other equity interest entitled to vote on
the election of the members of the board of directors or similar
governing body.
“Transaction
Documents” means
this Agreement and the Purchase Agreement, all exhibits and
schedules thereto and hereto and any other documents or agreement
executed in connection with the transactions contemplated hereunder
or thereunder.
2. Registration
Rights.
2.1
Shelf
Registration.
(a) Registration
Statements. On or
prior to 30 days following the Closing Date (the
“Filing
Deadline”), the Company shall prepare and file with the
SEC a Registration Statement on Form S-3 (or, if Form S-3 is not
then available to the Company, on such form of registration
statement as is then available to effect a registration for resale
of the Registrable Securities) for an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act
(the “Shelf
Registration Statement”). Such Shelf Registration Statement shall,
subject to the limitations of Form S-3, include the aggregate
amount of Registrable Securities to be registered therein and shall
contain (except if otherwise required pursuant to written comments
received from the Commission upon a review of such Shelf
Registration Statement) the “Plan of Distribution” section
in substantially the form attached
hereto as Annex
A. To the extent the staff of
the SEC does not permit all of the Registrable Securities to be
registered on the Shelf Registration Statement filed pursuant to
this Section 2.1(a) or for any other reason any Registrable
Securities are not then included in a Registration Statement filed
under this Agreement, the Company shall (i) inform each of the
Holders thereof and use its commercially reasonable efforts to file
amendments to the Shelf Registration Statement as required by the
Commission and/or (ii) withdraw the Shelf Registration Statement
and file a new registration statement (a “New
Registration Statement”), in either case covering the maximum number of
Registrable Securities permitted to be registered by the SEC, on
Form S-3 or such other form available to register for resale the
Registrable Securities as a secondary offering; provided, however,
that prior to filing such amendment or New Registration Statement,
the Company shall be obligated to use its commercially reasonable
efforts to advocate with the SEC for the registration of all of the
Registrable Securities in accordance with the SEC Guidance,
including without limitation, the Manual of Publicly Available
Telephone Interpretations D.29. Notwithstanding any other provision
of this Agreement and subject to the payment of liquidated damages
in Section 2.1(c), if any SEC Guidance sets forth a limitation of
the number of Registrable Securities permitted to be registered on
a particular Registration Statement as a secondary offering (and
notwithstanding that the Company used diligent efforts to advocate
with the SEC for the registration of all or a greater number of
Registrable Securities), unless otherwise directed in writing by a
Holder as to its Registrable Securities, the number of Registrable
Securities to be registered on such Registration Statement will
first be reduced by Registrable Securities not acquired pursuant to
the Purchase Agreement (whether pursuant to registration rights or
otherwise), and second by Registrable Securities represented by
Shares (applied, in the case that some Shares may be registered, to
the Holders on a pro rata basis based on the total number of
unregistered Shares held by such Holders, subject to a
determination by the Commission that certain Holders must be
reduced first based on the number of Shares held by such Holders).
In the event the Company amends the Shelf Registration Statement or
files a New Registration Statement, as the case may be, under
clauses (i) or (ii) above, the Company will use its commercially
reasonable efforts to file with the SEC, as promptly as allowed by
SEC or SEC Guidance provided to the Company or to registrants of
securities in general, one or more Registration Statements on Form
S-3 or such other form available to register for resale those
Registrable Securities that were not registered for resale on the
Shelf Registration Statement, as amended, or the New Registration
Statement (the “Remainder
Registration Statement”).
(b)
Effectiveness.
(i) The
Company shall use reasonable best efforts to have the Shelf
Registration Statement or New Registration Statement declared
effective prior to the Effectiveness Deadline (including filing
with the Commission a request for acceleration of effectiveness in
accordance with Rule 461 promulgated under the Securities Act), and
shall use its commercially reasonable efforts to keep the Shelf
Registration Statement or New Registration Statement continuously
effective under the Securities Act until the earlier of (i) such
time as all of the Registrable Securities covered by such
Registration Statement have been publicly sold by the Holders or
(ii) the date that all Registrable Securities covered by such
Registration Statement may be sold by non-affiliates without volume
or manner-of-sale restrictions pursuant to Rule 144 and without the
requirement for the Company to be in compliance with the current
public information requirement under Rule 144 as determined by
counsel to the Company pursuant to a written opinion letter to such
effect, addressed and reasonably acceptable to the
Company’s transfer agent
(the “Effectiveness
Period”). The
Company shall notify the Purchaser by facsimile or e-mail as
promptly as practicable, and in any event, within twenty-four (24)
hours, after any Registration Statement is declared effective and
shall simultaneously provide the Purchaser with copies of any
related Prospectus to be used in connection with the sale or other
disposition of the securities covered thereby.
(ii)
For not more than twenty (20) consecutive days or for a total of
not more than forty-five (45) days in any twelve (12) month period,
the Company may suspend the use of any Prospectus included in any
Registration Statement contemplated by this Section 2 in the event
that the Company determines in good faith that such suspension is
necessary to (A) delay the disclosure of material non-public
information concerning the Company, the disclosure of which at the
time is not, in the good faith opinion of the Company, in the best
interests of the Company or (B) amend or supplement the
Registration Statement or the related Prospectus so that such
Registration Statement or Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the case of the Prospectus in light of the
circumstances under which they were made, not misleading (an
“Allowed
Delay”);
provided, that
the Company shall promptly (a) notify the Purchaser in writing of
the commencement of and the reasons for an Allowed Delay, but shall
not (without the prior written consent of the Purchaser) disclose
to the Purchaser any material non-public information giving rise to
an Allowed Delay, (b) advise the Purchaser in writing to cease all
sales under the Registration Statement until the end of the Allowed
Delay and (c) use commercially reasonable efforts to terminate an
Allowed Delay as promptly as practicable.
(c) If:
(i) the Shelf Registration Statement is not filed with the SEC on
or prior to the Filing Deadline, (ii) the Shelf Registration
Statement or the New Registration Statement, as applicable, is not
declared effective by the SEC (or otherwise does not become
effective) for any reason on or prior to the Effectiveness
Deadline, (iii) after its Effective Date and other than for an
Allowed Delay, (A) such Registration Statement ceases for any
reason (including without limitation by reason of a stop order, or
the Company’s failure to
update the Registration Statement), to remain continuously
effective as to all Registrable Securities included in such
Registration Statement or (B) the Company suspends the use of the
Prospectus contained in the Registration Statement, or (iv) the
Company fails to satisfy the current public information requirement
pursuant to Rule 144(c)(1) as a result of which the Holders are
unable to sell Registrable Securities without restriction under
Rule 144 (or any successor thereto) and fails to cure any such
failure to satisfy the Rule 144(c)(1) requirement within 10
business days following the date upon which the Holder notifies the
Company in writing that such Holder is unable to sell Registrable
Securities as a result thereof (any such failure or breach in
clauses (i) through (iv) above being referred to as an “Event,” and the date on which such Event
occurs, being referred to as an “Event Date”), then in addition to any other
rights the Holders may have hereunder or under applicable law, on
each such Event Date and on each monthly anniversary of each such
Event Date (if the applicable Event shall not have been cured by
such date) until the earlier of (1) the applicable Event is cured
or (2) the Registrable Securities are eligible for resale pursuant
to Rule 144 without manner of sale or volume restrictions, the
Company shall pay to each Holder an amount in cash, as partial
liquidated damages and not as a penalty (“Liquidated
Damages”), equal
to one percent (1.0%) of the aggregate purchase price paid by such
Holder pursuant to the Purchase Agreement for any unregistered
Registrable Securities then held by such Holder. The parties agree
that (1) notwithstanding anything to the contrary herein or in the
Purchase Agreement, no Liquidated Damages shall be payable with
respect to any period after the expiration of the Effectiveness
Period (it being understood that this sentence shall not relieve
the Company of any Liquidated Damages accruing prior to the
Effectiveness Deadline) and in no event shall, the aggregate amount
of Liquidated Damages payable to a Holder exceed, in the aggregate,
five percent (5%) of the aggregate purchase price paid by such
Holder pursuant to the Purchase Agreement and (2) in no event shall
the Company be liable in any thirty (30) day period for Liquidated
Damages under this Agreement in excess of one percent (1.0%) of the
aggregate purchase price paid by the Holders pursuant to the
Purchase Agreement. If the Company fails to pay any Liquidated
Damages pursuant to this Section 2.1(c) in full within five (5)
Business Days after the date payable, the Company will pay interest
thereon at a rate of one percent (1.0%) per month (or such lesser
maximum amount that is permitted to be paid by applicable law) to
the Holder, accruing daily from the date such Liquidated Damages
are due until such amounts, plus all such interest thereon, are
paid in full. The Liquidated Damages pursuant to the terms hereof
shall apply on a daily pro-rata basis for any portion of a month
prior to the cure of an Event, except in the case of the first
Event Date. The Company shall not be liable for Liquidated Damages
under this Agreement as to any Registrable Securities which are not
permitted by the Commission to be included in a Registration
Statement due solely to SEC Guidance from the time that it is
determined that such Registrable Securities are not permitted to be
registered until such time as the provisions of this Agreement as
to the Remainder Registration Statements required to be filed
hereunder are triggered, in which case the provisions of this
Section 2.1(c) shall once again apply, if applicable. In such case,
the Liquidated Damages shall be calculated to only apply to the
percentage of Registrable Securities which are permitted in
accordance with SEC Guidance to be included in such Registration
Statement. The Effectiveness Deadline for a Registration Statement
shall be extended without default or Liquidated Damages hereunder
in the event that the Company’s failure to obtain the
effectiveness of such Registration Statement on a timely basis
results from the failure of the Purchaser to timely provide the
Company with information requested by the Company and necessary to
complete the Registration Statement in accordance with the
requirements of the Securities Act (in which the Effectiveness
Deadline would be extended with respect to Registrable Securities
held by the Purchaser).
(d) In
the event that Form S-3 is not available for the registration of the
resale of Registrable Securities hereunder, the Company shall (i)
register the resale of the Registrable Securities on another
appropriate form reasonably acceptable to the Holder and (ii)
undertake to register the Registrable Securities on Form S-3
promptly after such form is available, provided that the
Company shall maintain the effectiveness of the Registration
Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been
declared effective by the Commission.
2.2
Piggyback
Registrations; Prohibition on Filing other Registration
Statements
(a) If
at any time after the Shelf Registration Statement is declared
effective, there is not then an effective registration statement
covering all of the Registrable Securities, and the Company
determines to prepare and file with the SEC a Registration
Statement relating to an offering for its own account or the
account of others of any of its equity securities, then the Company
shall send to each Holder written notice of such determination and,
if within 15 days after the date of such notice, any such Holder
shall so request in writing, the Company shall include in such
Registration Statement all or any part of the Registrable
Securities such Holder requests to be registered.
(b) The
Company shall have the right, in its sole discretion, to terminate
or withdraw any registration initiated by it under this Section 2.2
prior to the effectiveness of such registration whether or not any
Holder has elected to include Registrable Securities in such
registration.
(c)
Prior to the Effective Date of the Shelf Registration Statement,
neither the Company nor any of its security holders (other than the
Holders in such capacity pursuant hereto) may include securities of
the Company in a Registration Statement other than the Registrable
Securities and the Company shall not enter into any agreement
providing any such right to any of its security holders. The
Company shall not file with the Commission a registration statement
relating to an offering for its own account under the Securities
Act of any of its equity securities other than a registration
statement on Form S-8 or, in connection with an acquisition, on
Form S-4 until the earlier of (i) the date that is thirty (30) days
after the date the Shelf Registration Statement in the first
sentence of this clause (c) is declared effective or (ii) the date
that all Registrable Securities are eligible for resale by
non-affiliates without volume or manner of sale restrictions under
Rule 144 and without the requirement for the company to be in
compliance with the current public information requirements under
Rule 144. For the avoidance of doubt, the Company shall not be
prohibited (i) from preparing and filing with the Commission a
registration statement relating to an offering of Common Stock by
existing stockholders of the Company under the Securities Act
pursuant to the terms of registration rights held by such
stockholder, (ii) from filing amendments to registration statements
filed prior to the date of this Agreement or (iii) from filing
prospectus supplements relating to any offering of securities of
the Company pursuant to any registration statement filed by the
Company prior to the date of this Agreement, provided that any such
filing is in accordance with the terms and restrictions of the
Purchase Agreement.
2.3
Expenses. All
expenses incident to the Company’s performance of or compliance with
this Agreement shall be paid by the Company, other than
underwriting discounts or commissions deducted from the proceeds in
respect of any Registrable Securities, including (i) all
registration and filing fees, and any other fees and expenses
associated with filings required to be made with the SEC, FINRA or
any other regulatory authority and, if applicable, the fees and
expenses of any “qualified independent
underwriter” as such term
is defined in NASD Rule 2720 (or any successor provision) and of
its counsel, (ii) all fees and expenses in connection with
compliance with any securities or “Blue Sky” laws (including fees and
disbursements of counsel for the underwriters in connection with
“Blue Sky” qualifications of the Registrable
Securities), (iii) all printing, duplicating, word processing,
messenger, telephone, facsimile and delivery expenses (including
expenses of printing certificates for the Registrable Securities in
a form eligible for deposit with The Depository Trust Company and
of printing Prospectuses and Free Writing Prospectuses), (iv) all
fees and disbursements of counsel for the Company and of all
independent certified public accountants of the Company (including
the expenses of any special audit and cold comfort letters required
by or incident to such performance), (v) Securities Act liability
insurance or similar insurance if the Company so desires or the
underwriters so require in accordance with then-customary
underwriting practice, (vi) all fees and expenses incurred in
connection with the listing of Registrable Securities on any
securities exchange or quotation of the Registrable Securities on
any inter-dealer quotation system, (vii) any reasonable fees and
disbursements of underwriters customarily paid by issuers or
sellers of securities, (viii) all fees and expenses of any special
experts or other Persons retained by the Company in connection with
any registration, (ix) all of the Company’s internal expenses (including all
salaries and expenses of its officers and employees performing
legal or accounting duties), (x) all expenses related to the
“road-show” for any underwritten offering,
including all travel, meals and lodging, (xi) all reasonable fees
and disbursements of one legal counsel for the Participating
Holders, as selected by the Purchaser, in an amount not to exceed
$50,000 in the aggregate during the term of this Agreement, and
(xii) any other fees and disbursements customarily paid by the
issuers of securities. All such expenses are referred to herein as
“Registration
Expenses.” The
Company shall not be required to pay any underwriting discounts and
commissions and transfer taxes, if any, attributable to the sale of
Registrable Securities.
2.4
Company
Obligations. The Company will use reasonable best efforts to
effect the registration of the Registrable Securities in accordance
with the terms hereof, and pursuant thereto the Company
will:
(a)
prepare the required Registration Statement including all exhibits
and financial statements required under the Securities Act to be
filed therewith, and before filing a Registration Statement,
Prospectus or any Free Writing Prospectus, or any amendments or
supplements thereto, (x) furnish to the Participating Holders, if
any, copies of all documents prepared to be filed, which documents
shall be subject to the review of such Participating Holders and
their respective counsel and (y) except in the case of a
registration under Section 2.2, not file any Registration Statement
or Prospectus or amendments or supplements thereto to which any
Participating Holders shall reasonably object;
(b)
file with the SEC a Registration Statement relating to the
Registrable Securities including all exhibits and financial
statements required by the SEC to be filed therewith, and use
commercially reasonable efforts to cause such Registration
Statement to become effective under the Securities
Act;
(c)
prepare and file with the SEC such pre- and post-effective
amendments to such Registration Statement, supplements to the
Prospectus and such amendments or supplements to any Free Writing
Prospectus as may be (y) reasonably requested by any Participating
Holder or (z) necessary to keep such registration effective for the
period of time required by this Agreement, and comply with
provisions of the applicable securities laws with respect to the
sale or other disposition of all securities covered by such
Registration Statement during such period in accordance with the
intended method or methods of disposition by the sellers thereof
set forth in such Registration Statement;
(d)
promptly notify the Participating Holders, and (if requested)
confirm such advice in writing and provide copies of the relevant
documents, as soon as reasonably practicable after notice thereof
is received by the Company (A) when the applicable Registration
Statement or any amendment thereto has been filed or becomes
effective, and when the applicable Prospectus or Free Writing
Prospectus or any amendment or supplement thereto has been filed,
(B) of any written comments by the SEC or any request by the SEC
for amendments or supplements to such Registration Statement,
Prospectus or Free Writing Prospectus or for additional
information, (C) of the issuance by the SEC of any stop order
suspending the effectiveness of such Registration Statement or any
order by the SEC preventing or suspending the use of any
preliminary or final Prospectus or any Free Writing Prospectus or
the initiation or threatening of any proceedings for such purposes,
(D) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Registrable
Securities for offering or sale in any jurisdiction and (E) of the
receipt by the Company of any notification with respect to the
initiation or threatening of any proceeding for the suspension of
the qualification of the Registrable Securities for offering or
sale in any jurisdiction;
(e)
promptly notify the Participating Holders when the Company becomes
aware of the happening of any event as a result of which the
Registration Statement, the Prospectus included in such
Registration Statement (as then in effect) or any Free Writing
Prospectus contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein (in the case of such Prospectus, any preliminary Prospectus
or any Free Writing Prospectus, in light of the circumstances under
which they were made) not misleading, when any Free Writing
Prospectus includes information that may conflict with the
information contained in the Registration Statement, or, if for any
other reason it shall be necessary during such time period to amend
or supplement such Registration Statement, Prospectus or Free
Writing Prospectus in order to comply with the Securities Act and,
in either case as promptly as reasonably practicable thereafter,
prepare and file with the SEC and furnish without charge to the
Participating Holders an amendment or supplement to such
Registration Statement, Prospectus or Free Writing Prospectus which
shall correct such misstatement or omission or effect such
compliance;
(f)
promptly incorporate in a Prospectus supplement, Free Writing
Prospectus or post-effective amendment to the applicable
Registration Statement such information as the Participating
Holders agree should be included therein relating to the plan of
distribution with respect to such Registrable Securities, and make
all required filings of such Prospectus supplement, Free Writing
Prospectus or post-effective amendment as soon as reasonably
practicable after being notified of the matters to be incorporated
in such Prospectus supplement, Free Writing Prospectus or
post-effective amendment;
(g)
furnish to each Participating Holder, without charge, as many
conformed copies as such Participating Holder may reasonably
request of the applicable Registration Statement and any amendment
or post-effective amendment thereto, including financial statements
and schedules, all documents incorporated therein by reference and
all exhibits (including those incorporated by
reference);
(h)
deliver to each Participating Holder, without charge, as many
copies of the applicable Prospectus (including each preliminary
Prospectus), any Free Writing Prospectus and any amendment or
supplement thereto as such Participating Holder may reasonably
request (it being understood that the Company consents to the use
of such Prospectus, any Free Writing Prospectus and any amendment
or supplement thereto by such Participating Holder in connection
with the offering and sale of the Registrable Securities thereby)
and such other documents as such Participating Holder may
reasonably request in order to facilitate the disposition of the
Registrable Securities by such Participating Holder;
(i) on
or prior to the date on which the Registration Statement is
declared effective, use its reasonable best efforts to register or
qualify, and cooperate with the Participating Holders and their
respective counsel, in connection with the registration or
qualification of such Registrable Securities for offer and sale
under the securities or “Blue Sky” laws of each state and other
jurisdiction of the United States as any Participating Holder or
their respective counsel reasonably request in writing and do any
and all other acts or things reasonably necessary or advisable to
keep such registration or qualification in effect for such period
as required by this Agreement, provided that
the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or
to take any action which would subject it to taxation or general
service of process in any such jurisdiction where it is not then so
subject;
(j)
cooperate with the Participating Holders to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends, and
enable such Registrable Securities to be in such denominations and
registered in such names as may be requested at least two (2)
Business Days prior to any sale of Registrable
Securities;
(k) use
its reasonable best efforts to cause the Registrable Securities
covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may
be necessary to enable the seller or sellers thereof to consummate
the disposition of such Registrable Securities;
(l)
make such representations and warranties to the Participating
Holders in form, substance and scope as are customarily made by
issuers in secondary underwritten public offerings;
(m)
enter into such customary agreements (including underwriting and
indemnification agreements) and take all such other actions as the
Purchaser reasonably requests in order to expedite or facilitate
the registration and disposition of such Registrable
Securities;
(n)
obtain for delivery to the Participating Holders an opinion or
opinions from counsel for the Company dated the effective date of
the Registration Statement or, in the event of an underwritten
offering, the date of the closing under the underwriting agreement,
in customary form, scope and substance, which opinions shall be
reasonably satisfactory to such Participating Holders or
underwriters, as the case may be, and their respective
counsel;
(o)
cooperate with each Participating Holder participating in the
disposition of such Registrable Securities and their respective
counsel in connection with any filings required to be made with
FINRA or any other securities regulatory authority;
(p) use
its reasonable best efforts to comply with all applicable
securities laws and make available to its security holders, as soon
as reasonably practicable, an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and the rules and
regulations promulgated thereunder;
(q)
provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by the applicable
Registration Statement from and after a date not later than the
effective date of such Registration Statement;
(r) use
commercially reasonable efforts to cause all Registrable Securities
covered by the Registration Statement to be listed on each
securities exchange on which any of the Common Stock is then listed
or quoted and on each inter-dealer quotation system on which any of
the Common Stock is then quoted;
(s) the
Company shall make available, during normal business hours, for
inspection and review by the Purchaser, advisors to and
representatives of the Purchaser (who may or may not be affiliated
with the Purchaser and who are reasonably acceptable to the
Company), all financial and other records, all SEC Reports (as
defined in the Purchase Agreement) and other filings with the SEC,
and all other corporate documents and properties of the Company as
may be reasonably necessary for the purpose of such review, and
cause the Company’s
officers, directors and employees, within a reasonable time period,
to supply all such information reasonably requested by the
Purchaser or any such representative, advisor or underwriter in
connection with such Registration Statement (including, without
limitation, in response to all questions and other inquiries
reasonably made or submitted by any of them), prior to and from
time to time after the filing and effectiveness of the Registration
Statement for the sole purpose of enabling the Purchaser and such
representatives, advisors and underwriters and their respective
accountants and attorneys to conduct initial and ongoing due
diligence with respect to the Company and the accuracy of such
Registration Statement; and
(t)
with a view to making available to the Purchaser the benefits of
Rule 144 (or its successor rule) and any other rule or regulation
of the SEC that may at any time permit the Purchaser to sell shares
of Common Stock to the public without registration, the Company
covenants and agrees to: (i) make and keep public information
available, as those terms are understood and defined in Rule 144,
until the earlier of (A) the date as all of the Registrable
Securities may be sold without restriction by the holders thereof
pursuant to Rule 144 or any other rule of similar effect or (B)
such date as all of the Registrable Securities shall have been
resold; (ii) file with the SEC in a timely manner all reports and
other documents required of the Company under the Exchange Act; and
(iii) furnish to the Purchaser upon request, as long as the
Purchaser owns any Registrable Securities, (A) a written statement
by the Company that it has complied with the reporting requirements
of the Exchange Act, (B) a copy of the Company’s most recent Annual Report on Form
10-K or Quarterly Report on Form 10-Q, and (C) such other
information as may be reasonably requested in order to avail the
Purchaser of any rule or regulation of the SEC that permits the
selling of any such Registrable Securities without
registration.
All such information made available or provided
pursuant to this Section 2.4 shall be treated as confidential
information and shall not be disclosed by the Purchaser to any
other Person other than the Purchaser’s respective officers,
directors, employees, accountants, consultants, legal counsel,
investment bankers, advisors and authorized agents (collectively,
the “Purchaser
Representatives”);
provided, that, each such Purchaser Representative shall be
informed that such confidential information is strictly
confidential and shall be subject to confidentiality restrictions
in favor of the Purchaser with respect to the confidential
information disclosed by the Purchaser to such Purchaser
Representative. Notwithstanding anything to the contrary herein,
the foregoing restrictions shall not prevent the disclosure by the
Purchaser of any information (x) that is required to be disclosed
by order of a court of competent jurisdiction, administrative body
or other Governmental Authority (as defined in the Purchase
Agreement), or by subpoena, summons or legal process, or by law,
rule or regulation or (y) that is publicly available (other than by
a breach of the Purchaser’s confidentiality obligations to
the Company), provided that, to the extent permitted by Law (as
defined in the Purchase Agreement), in the event the Purchaser or
Purchaser Representative is required to make a disclosure pursuant
to clause (x) hereof, it shall provide to the Board prompt notice
of such disclosure (other than any such disclosure required by any
administrative body or other Governmental Authority in the exercise
of its regulatory or other oversight authority with respect to such
Purchaser or Purchaser Representative). The confidentiality
obligations herein shall, with respect to the Purchaser, expire on
the second (2nd) anniversary of the date on which the Purchaser
ceases to hold any Shares.
2.5
Obligations of the
Purchaser.
(a) The
Purchaser shall furnish in writing to the Company such information
regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held
by it, as shall be reasonably required to effect the registration
of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably
request. At least five (5) Business Days prior to the first
anticipated filing date of any Registration Statement, the Company
shall notify the Purchaser of the information the Company requires
from the Purchaser if the Purchaser elects to have any of its
Registrable Securities included in the Registration Statement. The
Purchaser shall provide such information to the Company at least
two (2) Business Days prior to the first anticipated filing date of
such Registration Statement if the Purchaser elects to have any of
its Registrable Securities included in the Registration
Statement.
(b) The
Purchaser, by its acceptance of the Registrable Securities agrees
to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of a
Registration Statement hereunder, unless the Purchaser has notified
the Company in writing of its election to exclude all of its
Registrable Securities from such Registration
Statement.
(c) The
Purchaser agrees that, upon receipt of any notice from the Company
of either (i) the commencement of an Allowed Delay pursuant to
Section 2.1(b) or (ii) the happening of an event pursuant to
Section 2.4(d) and Section 2.4(e) hereof, the Purchaser will
immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable
Securities, until the Purchaser is advised by the Company that such
dispositions may again be made.
2.6
Indemnification.
(a)
Indemnification by the
Company. The Company will indemnify and hold harmless the
Purchaser and its officers, directors, members, employees and
agents, successors and assigns, and each other person, if any, who
controls such Purchaser within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or
several, to which they may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement, any
preliminary Prospectus or final Prospectus, or any amendment or
supplement thereof or any omission or alleged omission to state a
material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of
prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading; (ii) any “Blue Sky” application or other document
executed by the Company specifically for that purpose or based upon
written information furnished by the Company filed in any state or
other jurisdiction in order to qualify any or all of the
Registrable Securities under the securities laws thereof (any such
application, document or information herein called a “Blue Sky
Application”);
(iii) the omission or alleged omission to state in a Blue Sky
Application a material fact required to be stated therein or
necessary to make the statements therein not misleading, in light
of the circumstances in which they were made; (iv) any violation by
the Company or its agents of any rule or regulation promulgated
under the Securities Act applicable to the Company or its agents
and relating to action or inaction required of the Company in
connection with such registration; or (v) any failure to register
or qualify the Registrable Securities included in any such
Registration Statement in any state where the Company or its agents
has affirmatively undertaken or agreed in writing that the Company
will undertake such registration or qualification on the
Purchaser’s behalf and
will reimburse the Purchaser, and each such officer, director or
member and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided,
however, that
the Company will not be liable in any such case if and to the
extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information
furnished by the Purchaser or any such controlling person in
writing specifically for use in such Registration Statement or
Prospectus.
(b)
Indemnification by the
Purchaser. The Purchaser agrees, severally but not jointly,
to indemnify and hold harmless, to the fullest extent permitted by
law, the Company, its directors, officers, employees, stockholders
and each person who controls the Company (within the meaning of the
Securities Act) against any losses, claims, damages, liabilities
and expense (including reasonable attorney fees) resulting from any
untrue statement or alleged untrue statement of a material fact or
any omission or alleged omission of a material fact required to be
stated in the Registration Statement or Prospectus or preliminary
Prospectus or amendment or supplement thereto or necessary to make
the statements therein (in the case of any Prospectus or form of
prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading, to the extent, but only
to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission is contained in any
information furnished in writing by the Purchaser to the Company
specifically for inclusion in such Registration Statement or
Prospectus or amendment or supplement thereto. In no event shall
the liability of the Purchaser be greater in amount than the dollar
amount of the proceeds (net of all expense paid by the Purchaser in
connection with any claim relating to this Section 2.6 and the
amount of any damages the Purchaser has otherwise been required to
pay by reason of such untrue statement or omission) received by the
Purchaser upon the sale of the Registrable Securities included in
the Registration Statement giving rise to such indemnification
obligation.
(c)
Conduct of
Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks
indemnification and (ii) permit such indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to
the indemnified party (provided,
however, that
such indemnified party shall, at the expense of the indemnifying
party, be entitled to counsel of its own choosing to monitor such
defense); provided that,
subject to the preceding sentence, any Person entitled to
indemnification hereunder shall have the right to employ separate
counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such
Person unless (a) the indemnifying party has agreed to pay such
fees or expenses, or (b) the indemnifying party shall have failed
to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of
any such Person, based upon written advice of its counsel, a
conflict of interest exists between such person and the
indemnifying party with respect to such claims (in which case, if
the Person notifies the indemnifying party in writing that such
Person elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right
to assume the defense of such claim on behalf of such Person); and
provided,
further, that
the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations
hereunder, except to the extent that such failure to give notice
shall materially adversely affect the indemnifying party in the
defense of any such claim or litigation. It is understood that the
indemnifying party shall not, in connection with any proceeding in
the same jurisdiction, be liable for fees or expenses of more than
one separate firm of attorneys at any time for all such indemnified
parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into
any settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect of such claim or
litigation.
(d)
Contribution.
If for any reason the indemnification provided for in the preceding
paragraphs (a) and (b) is unavailable to an indemnified party or
insufficient to hold it harmless, other than as expressly specified
therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to
reflect the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable
considerations. No Person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the Securities Act shall be
entitled to contribution from any Person not guilty of such
fraudulent misrepresentation. In no event shall the contribution
obligation of a holder of Registrable Securities be greater in
amount than the dollar amount of the proceeds (net of all expenses
paid by such holder in connection with any claim relating to this
Section 2.6 and the amount of any damages such holder has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the
sale of the Registrable Securities giving rise to such contribution
obligation.
2.7 Termination of
Registration Rights. The registration rights provided to the
Holders under Section 2
shall terminate in their entirety upon the earlier to occur of: (i)
the date two years from the Closing Date; or (ii) at such time as
there are no Registrable Securities. Notwithstanding the foregoing,
Sections 2.3, 2.6 and 3 shall survive the termination of such
registration rights.
3. Miscellaneous.
3.1 Governing Law;
Jurisdiction. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of
Delaware without regard to the choice of law principles thereof.
Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the state and federal courts located in the State
of Delaware for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Agreement and the
transactions contemplated hereby. Service of process in connection
with any such suit, action or proceeding may be served on each
party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of
the parties hereto irrevocably consents to the jurisdiction of any
such court in any such suit, action or proceeding and to the laying
of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum.
3.2 Successors and
Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding
upon, the successor and assigns of the parties hereto (other than
the rights of any Holder under Section 2 hereof, which shall not be
assignable and shall not inure to the benefit of any successor or
assign of a Holder). The Company may not assign its rights or
obligations hereunder except with the prior written consent of each
Holder. Each Holder may assign their respective rights hereunder
(other than the rights of any Holder under Section 2 hereof, which
shall not be assignable and shall not inure to the benefit of any
successor or assign of a Holder) in the manner and to the Persons
permitted under the Purchase Agreement.
3.3 Entire Agreement;
Amendment. This Agreement and the other Transaction
Documents constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof
and thereof. Any previous agreements among the parties relative to
the specific subject matter hereof are superseded by this
Agreement. Neither this Agreement nor any provision hereof may be
amended, changed, waived, discharged or terminated other than by a
written instrument signed by the party against who enforcement of
any such amendment, change, waiver, discharge or termination is
sought.
3.4 Notices. All
notices and other communications provided for or permitted
hereunder shall be made as set forth in Section 5.3 of the Purchase
Agreement.
3.5 Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their
commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or
unenforceable.
3.6 Headings. The
headings herein are for convenience only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of
the provisions hereof.
3.7 Counterparts.
This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature page were an original
thereof.
3.8 Delays or
Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party upon any
breach or default of any other party under this Agreement shall
impair any such right, power or remedy, nor shall it be construed
to be a waiver of any such breach or default, or any acquiescence
therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter
occurring. It is further agreed that any waiver, permit, consent or
approval of any kind or character of any breach or default under
this Agreement, or any waiver of any provisions or conditions of
this Agreement must be in writing and shall be effective only to
the extent specifically set forth in writing, and that all
remedies, either under this Agreement, by law or otherwise, shall
be cumulative and not alternative.
3.9
Consents.
Any permission, consent, or approval of any kind or character under
this Agreement shall be in writing and shall be effective only to
the extent specifically set forth in such writing.
3.10 SPECIFIC
PERFORMANCE. THE PARTIES HERETO AGREE THAT IRREPARABLE
DAMAGE WOULD OCCUR IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS
AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH ITS SPECIFIC INTENT
OR WERE OTHERWISE BREACHED. IT IS ACCORDINGLY AGREED THAT THE
PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS, WITHOUT
BOND, TO PREVENT OR CURE BREACHES OF THE PROVISIONS OF THIS
AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS
HEREOF, THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY
MAY BE ENTITLED BY LAW OR EQUITY, AND ANY PARTY SUED FOR BREACH OF
THIS AGREEMENT EXPRESSLY WAIVES ANY DEFENSE THAT A REMEDY IN
DAMAGES WOULD BE ADEQUATE.
3.11 Construction of
Agreement. No provision of this Agreement shall be construed
against either party as the drafter thereof.
3.12 Section
References. Unless otherwise stated, any reference contained
herein to a Section or subsection refers to the provisions of this
Agreement.
3.13 Variations of
Pronouns. All pronouns and all variations thereof shall be
deemed to refer to the masculine, feminine, or neuter, singular or
plural, as the context in which they are used may
require.
[Remainder of Page Intentionally Left Blank; Signature Pages
Follow]
IN
WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first written
above.
|
ChromaDex Corporation
By: /s/ Robert
Fried
Name: Robert Fried
Title
: Chief Executive
Officer
|
[Signature
Page to Registration Rights Agreement]
IN
WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first written
above.
|
|
|
|
|
PURCHASER:
EVERFUND
By:
/s/ Cai Xiaoxiao
Name:
Cai Xiaoxiao
Title:
Director
|
[Signature
Page to Registration Rights Agreement]
Annex A
PLAN OF DISTRIBUTION
We are
registering the shares of common stock issued to the selling
stockholders to permit the resale of these shares of common stock
by the holders of the shares of common stock from time to time
after the date of this prospectus. We will not receive any of the
proceeds from the sale by the selling stockholders of the shares of
common stock. We will bear all fees and expenses incident to our
obligation to register the shares of common stock.
The
selling stockholders may sell all or a portion of the shares of
common stock beneficially owned by them and offered hereby from
time to time directly or through one or more underwriters,
broker-dealers or agents. If the shares of common stock are sold
through underwriters or broker-dealers, the selling stockholders
will be responsible for underwriting discounts or commissions or
agent’s commissions. The
shares of common stock may be sold on any national securities
exchange or quotation service on which the securities may be listed
or quoted at the time of sale, in the over-the-counter market or in
transactions otherwise than on these exchanges or systems or in the
over-the-counter market and in one or more transactions at fixed
prices, at prevailing market prices at the time of the sale, at
varying prices determined at the time of sale, or at negotiated
prices. These sales may be effected in transactions, which may
involve crosses or block transactions. The selling stockholders may
use any one or more of the following methods when selling
shares:
● ordinary brokerage
transactions and transactions in which the broker-dealer solicits
purchasers;
● block trades in which the
broker-dealer will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to
facilitate the transaction;
● purchases by a broker-dealer
as principal and resale by the broker-dealer for its
account;
● an exchange distribution in
accordance with the rules of the applicable exchange;
● privately negotiated
transactions;
● settlement of short sales
entered into after the effective date of the registration statement
of which this prospectus is a part;
● broker-dealers may agree with
the selling stockholders to sell a specified number of such shares
at a stipulated price per share;
● through the writing or
settlement of options or other hedging transactions, whether such
options are listed on an options exchange or
otherwise;
● a combination of any such
methods of sale; and
● any other method permitted
pursuant to applicable law.
The
selling stockholders also may resell all or a portion of the shares
in open market transactions in reliance upon Rule 144 under the Securities Act, as
permitted by that rule, or Section 4(1) under the Securities Act, if
available, rather than under this prospectus, provided that they
meet the criteria and conform to the requirements of those
provisions.
Broker-dealers engaged by the selling
stockholders may arrange for other broker-dealers to participate in
sales. If the selling stockholders effect such transactions by
selling shares of common stock to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or
agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or
commissions from purchasers of the shares of common stock for whom
they may act as agent or to whom they may sell as principal. Such
commissions will be in amounts to be negotiated, but, except as set
forth in a supplement to this Prospectus, in the case of an agency
transaction will not be in excess of a customary brokerage
commission in compliance with FINRA Rule 5110.
In
connection with sales of the shares of common stock or otherwise,
the selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn
engage in short sales of the shares of common stock in the course
of hedging in positions they assume. The selling stockholders may
also sell shares of common stock short and if such short sale shall
take place after the date that this Registration Statement is
declared effective by the Commission, the selling stockholders may
deliver shares of common stock covered by this prospectus to close
out short positions and to return borrowed shares in connection
with such short sales. The selling stockholders may also loan or
pledge shares of common stock to broker-dealers that in turn may
sell such shares, to the extent permitted by applicable law. The
selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or
the creation of one or more derivative securities which require the
delivery to such broker-dealer or other financial institution of
shares offered by this prospectus, which shares such broker-dealer
or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction). Notwithstanding the foregoing, the selling
stockholders have been advised that they may not use shares
registered on this registration statement to cover short sales of
our common stock made prior to the date the registration statement,
of which this prospectus forms a part, has been declared effective
by the SEC.
The
selling stockholders may, from time to time, pledge or grant a
security interest in some or all of the warrants or shares of
common stock owned by them and, if they default in the performance
of their secured obligations, the pledgees or secured parties may
offer and sell the shares of common stock from time to time
pursuant to this prospectus or any amendment to this prospectus
under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933, as
amended, amending, if necessary, the list of selling stockholders
to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus. The selling
stockholders also may transfer and donate the shares of common
stock in other circumstances in which case the transferees, donees,
pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus.
The
selling stockholders and any broker-dealer or agents participating
in the distribution of the shares of common stock may be deemed to
be “underwriters” within the meaning of
Section 2(11) of the
Securities Act in connection with such sales. In such event, any
commissions paid, or any discounts or concessions allowed to, any
such broker-dealer or agent and any profit on the resale of the
shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Selling
Stockholders who are “underwriters” within the meaning of
Section 2(11) of the
Securities Act will be subject to the prospectus delivery
requirements of the Securities Act and may be subject to certain
statutory liabilities of, including but not limited to,
Sections 11, 12 and 17 of
the Securities Act and Rule 10b-5 under the Securities Exchange
Act of 1934, as amended, or the Exchange Act.
Each
selling stockholder has informed the Company that it is not a
registered broker-dealer and does not have any written or oral
agreement or understanding, directly or indirectly, with any person
to distribute the common stock. Upon the Company being notified in
writing by a selling stockholder that any material arrangement has
been entered into with a broker-dealer for the sale of common stock
through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a
supplement to this prospectus will be filed, if required, pursuant
to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling
stockholder and of the participating broker-dealer(s),
(ii) the number of shares
involved, (iii) the price
at which such the shares of common stock were sold,
(iv) the commissions paid
or discounts or concessions allowed to such broker-dealer(s), where
applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this
prospectus, and (vi) other
facts material to the transaction. In no event shall any
broker-dealer receive fees, commissions and markups, which, in the
aggregate, would exceed eight percent (8%).
Under
the securities laws of some states, the shares of common stock may
be sold in such states only through registered or licensed brokers
or dealers. In addition, in some states the shares of common stock
may not be sold unless such shares have been registered or
qualified for sale in such state or an exemption from registration
or qualification is available and is complied with.
There
can be no assurance that any selling stockholder will sell any or
all of the shares of common stock registered pursuant to the shelf
registration statement, of which this prospectus forms a
part.
Each
selling stockholder and any other person participating in such
distribution will be subject to applicable provisions of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, including, without limitation,
Regulation M of the
Exchange Act, which may limit the timing of purchases and sales of
any of the shares of common stock by the selling stockholder and
any other participating person. Regulation M may also restrict the ability of
any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the
shares of common stock. All of the foregoing may affect the
marketability of the shares of common stock and the ability of any
person or entity to engage in market-making activities with respect
to the shares of common stock.
We will
pay all expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, including, without
limitation, Securities and Exchange Commission filing fees and
expenses of compliance with state securities or “blue sky” laws; provided, however, that each
selling stockholder will pay all underwriting discounts and selling
commissions, if any, and any legal expenses incurred by it. We will
indemnify the selling stockholders against certain liabilities,
including some liabilities under the Securities Act, in accordance
with a registration rights agreement, or the selling stockholders
will be entitled to contribution. We may be indemnified by the
selling stockholders against civil liabilities, including
liabilities under the Securities Act, that may arise from any
written information furnished to us by the selling stockholders
specifically for use in this prospectus, in accordance with the
related registration rights agreements, or we may be entitled to
contribution.