AEHR TEST SYSTEMS EQUITY DISTRIBUTION AGREEMENT
September
17, 2021
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CAPITAL GROUP LLC
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Ladies
and Gentlemen:
AEHR
Test Systems, a California corporation (collectively with its
subsidiaries and affiliates, including, without limitation, all
entities disclosed or described in the Registration Statement as
being subsidiaries or affiliates of AEHR Test Systems, the
“Company”),
proposes to issue and sell through ▇▇▇▇▇-▇▇▇▇▇▇ Capital Group LLC,
as sales agent (the “Manager”), on the terms set forth
in this Equity Distribution Agreement (this “Agreement”), up to $25,000,000
(the “Shares”)
of its common stock, par value $0.01 (“Common Stock”).
The
Company has filed with the Securities and Exchange Commission (the
“Commission”) a
registration statement on Form S-3 (File No. 333-259317),
including a prospectus, relating to the securities (the
“Shelf
Securities”), including the Shares, to be issued from
time to time by the Company. The registration statement as of its
most recent effective date, including the information (if any)
deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A or Rule 430B under
the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder (the
“Securities
Act”), together with any additional registration
statement on Form S-3 filed pursuant to Rule 462(b) under the
Securities Act, is hereinafter referred to as the
“Registration
Statement”, and the related prospectus covering the
Shelf Securities and filed as part of the Registration Statement,
together with any amendments or supplements thereto as of the most
recent effective date of the Registration Statement, is hereinafter
referred to as the “Basic
Prospectus”. “Prospectus Supplement” means the
final prospectus supplement, relating to the Shares, filed by the
Company with the Commission pursuant to Rule 424(b) under the
Securities Act on or before the second business day after the date
hereof, in the form furnished by the Company to the Manager in
connection with the offering of the Shares. “Prospectus” means the Basic
Prospectus, as supplemented by the Prospectus Supplement and the
most recent Interim Prospectus Supplement (as defined in
Section 6(c) below), if any. For
purposes of this Agreement, “free writing prospectus” has the
meaning set forth in Rule 405 under the Securities Act.
“Permitted Free Writing
Prospectuses” means the documents listed on Schedule I
hereto or otherwise approved in writing by the Manager in
accordance with Section 6(b), and
“broadly available road
show” means a “bona fide electronic road
show” as defined in Rule 433(h)(5) under the Securities
Act that has been made available without restriction to any person.
As used herein, the terms “Registration Statement”,
“Basic Prospectus”, “Prospectus
Supplement”, “Interim Prospectus Supplement” and
“Prospectus” shall include the documents, if any,
incorporated by reference therein. The terms “supplement”, “amendment” and “amend”, as used herein with
respect to the Registration Statement, the Basic Prospectus, the
Prospectus Supplement, any Interim Prospectus Supplement or the
Prospectus, shall include all documents subsequently filed by the
Company with the Commission pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder (the “Exchange Act”), that are deemed to
be incorporated by reference therein (the “Incorporated Documents”). All
references in this Agreement to the Registration Statement, the
Basic Prospectus, the Prospectus Supplement, any Interim Prospectus
Supplement, the Prospectus or any amendments or supplements to any
of the foregoing, shall include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System (“▇▇▇▇▇”).
1. Representations and Warranties. The
Company represents and warrants to and agrees with the Manager
that:
(a) Registration Statement. The Company
meets the requirements for use of Form S-3 under the Securities
Act. The Registration Statement has become effective. No
post-effective amendment to the Registration Statement has been
filed; no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act and
no proceedings for that purpose or pursuant to Section 8A of
the Securities Act have been instituted or are pending or, to the
Company’s knowledge, are contemplated by the Commission, and
any request on the part of the Commission for additional
information has been complied with.
(b) Compliance with Registration
Requirements. (i) (A) At the respective times the
Registration Statement and each amendment thereto became effective,
(B) at each deemed effective date with respect to the Manager
pursuant to Rule 430B(f)(2) under the Securities Act (each, a
“Deemed Effective
Time”), (C) as of each time Shares are sold
pursuant to this Agreement (each, a “Time of Sale”), (D) at each
Settlement Date (as defined in Section 4 below) and (E) at all times during which
a prospectus is required by the Securities Act to be delivered
(whether physically or through compliance with Rule 172 under
the Securities Act or any similar rule) in connection with any sale
of Shares (the “Delivery
Period”), the Registration Statement complied and will
comply in all material respects with the requirements of the
Securities Act; (ii) the Basic Prospectus complied at the time
it was filed with the Commission, complies as of the date hereof
and, as of each Time of Sale and at all times during the Delivery
Period, will comply in all material respects with the rules and
regulations under the Securities Act; (iii) each of the
Prospectus Supplement, any Interim Prospectus Supplement and the
Prospectus will comply, as of the date that such document is filed
with the Commission, as of each Time of Sale, as of each Settlement
Date and at all times during the Delivery Period, in all material
respects with the rules and regulations under the Securities Act;
and (iv) the Incorporated Documents, when they were filed with
the Commission, conformed in all material respects to the
requirements of the Exchange Act, and any further Incorporated
Documents so filed and incorporated by reference, when they are
filed with the Commission, will conform in all material respects to
the requirements of the Exchange Act.
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(c) General Disclosure Package. (i) As
of the date hereof, at the respective times that the Registration
Statement and each amendment thereto became effective and at each
Deemed Effective Time, the Registration Statement did not and will
not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make
the statements therein not misleading; (ii) as of each Time of
Sale, the Prospectus (as amended and supplemented at such Time of
Sale) and any Permitted Free Writing Prospectus then in use,
considered together (collectively, the “General Disclosure Package”), did
not contain and will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; (iii) as of its date,
the Prospectus did not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; and (iv) at any
Settlement Date, the Prospectus (as amended and supplemented at
such Settlement Date) did not and will not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided, however, that this representation and
warranty shall not apply to any statement or omission made in
reliance upon and in conformity with information furnished in
writing to the Company by the Manager expressly for use in the
Prospectus or in the General Disclosure Package.
(d) Issuer Free Writing Prospectus. Any
free writing prospectus that the Company was, or is required to,
file pursuant to Rule 433(d) under the Securities Act has
been, or will be, filed with the Commission in accordance with the
requirements of the Securities Act . Each free writing prospectus
that the Company has filed, or is required to file, pursuant to
Rule 433(d) under the Securities Act or that was prepared by
or on behalf of or used or referred to by the Company complies or
will comply in all material respects with the requirements of the
Securities Act. Each free writing prospectus, as of its issue date
and at all subsequent times through the completion of the public
offer and sale of the Shares, or until any earlier date that the
Company notified or notifies the Manager, did not, does not and
will not include any material information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statement or the Prospectus; provided, however, that this representation and
warranty shall not apply to any statement or omission made in
reliance upon and in conformity with information furnished in
writing to the Company by the Manager expressly for use in a free
writing prospectus, the Registration Statement or the Prospectus.
Each broadly available road show, if any, when considered together
with the General Disclosure Package, does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that this representation and
warranty shall not apply to any statement or omission made in
reliance upon and in conformity with information furnished in
writing to the Company by the Manager expressly for use in a
broadly available road show and the General Disclosure Package.
Except for the Permitted Free Writing Prospectuses, if any, and
electronic road shows, if any, furnished to and approved by the
Manager in accordance with Section 6(b), the Company has not prepared, used or
referred to, and will not, prepare, use or refer to, any free
writing prospectus.
(e) Incorporated Documents. The
Incorporated Documents, when they were filed with the Commission,
conformed in all material respects to the requirements of the
Exchange Act, and none of such documents contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. and any
further documents so filed and incorporated by reference in the
Registration Statement, the General Disclosure Package or the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the
Exchange Act and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading.
(f) Financial Statements. The financial
statements of the Company filed with the Commission and included or
incorporated by reference in the Registration Statement, the
General Disclosure Package or the Prospectus, present fairly in all
material respects the financial condition of the Company as of and
at the dates indicated, and each of the statements of operations,
cash flows and stockholders’ equity of the Company for the
periods specified. such financial statements have been prepared in
conformity with generally accepted accounting principles in the
United States of America (“GAAP”) applied on a consistent
basis throughout the periods involved except to the extent
disclosed in the notes thereto. There are no financial statements
(historical or pro forma) that are required to be included or
incorporated by reference in the Registration Statement, the
General Disclosure Package or the Prospectus that are not included
or incorporated by reference as required. All non-GAAP financial
measures (as defined in Regulation G promulgated by the
Commission pursuant to the Exchange Act) and ratios derived using
non-GAAP financial measures included or incorporated by reference
in the Registration Statement, the General Disclosure Package or
the Prospectus have been presented in compliance with Item 10 of
Regulation S-K. Except as disclosed in the General Disclosure
Package or the Prospectus, the Company is not party to any
off-balance sheet transactions, arrangements, obligations
(including contingent obligations) or other persons that may have a
material current or future effect on the Company’s financial
condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources or significant
components of revenues or expenses. The interactive data in
eXtensible Business Reporting Language included or incorporated by
reference in the Registration Statement, the General Disclosure
Package or the Prospectus fairly presents the information called
for in all material respects and has been prepared in all material
respects in accordance with the Commission’s rules and
guidelines applicable thereto.
(g) No Material Adverse Effect. Except as
otherwise set forth in the Registration Statement, the General
Disclosure Package or the Prospectus, since the date of the latest
audited financial statements included in the General Disclosure
Package, there has been no (i) material adverse change in the
assets, earnings, business, properties, management, results of
operations or prospects of the Company, whether or not arising in
the ordinary course of business or as a result of the ongoing
COVID-19 pandemic, or the ability of the Company to perform its
obligations under this Agreement, individually or in the aggregate
(a “Material Adverse
Effect”). (ii) transaction which is material to
the Company and has not been publicly disclosed. (iii) material
liability or obligation, direct or contingent (including without
limitation any off-balance sheet obligations or any losses or interference with business from
fire, explosion, flood, earthquakes, accident or other calamity,
whether or not covered by insurance, or from any strike, labor
dispute or court or governmental action, order or decree),
incurred by the Company, individually or in the aggregate.
(iv) change in the capital stock of the Company (other than as
described in the Registration Statement or the issuance or
retention of shares of Common Stock upon the exercise of stock
options or the vesting, exercise or settlement of other awards
described as outstanding in, and the grant of options and awards
under other existing equity incentive plans described in, the
Registration Statement, the General Disclosure Package or the
Prospectus). (v) material change in the outstanding indebtedness of
the Company. (vi) dividend or distribution of any kind declared,
paid or made on the Common Stock; or (vii) alteration in the
Company’s method of accounting.
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(h) Organization and Good Standing. The
Company and each of its Subsidiaries (as defined below) have been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the respective jurisdiction of its
incorporation or organization with power and authority (corporate
and other) to own, lease and operate its properties and conduct its
business as described in the Registration Statement, the General
Disclosure Package and the Prospectus and to enter into and perform
its obligations under this Agreement, and has been duly qualified
as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require
such qualification, except where the failure so to qualify or be in
good standing would not have a Material Adverse
Effect.
(i) Capitalization. The Company has an
authorized capitalization as set forth in the Registration
Statement, the General Disclosure Package and the Prospectus, and
all of the issued and outstanding shares of Common Stock of the
Company have been duly and validly authorized and issued, including
in compliance with all federal and state securities laws, are fully
paid and non-assessable and conform to the descriptions thereof
contained in the Registration Statement, the General Disclosure
Package and the Prospectus; and none of the issued and outstanding
shares of capital stock of the Company are subject to any
preemptive or similar rights.
(j) The Shares. The Shares have been, and
as of each Settlement Date will be, duly authorized and when issued
and delivered in accordance with the terms of this Agreement
against payment therefor in accordance with the terms hereof, will
be validly issued, including in compliance with all federal and
state securities laws, fully paid and non-assessable, will conform
to the descriptions thereof contained in the Registration
Statement, the General Disclosure Package and the Prospectus and
the issuance of such Shares will not be subject to any preemptive
or similar rights.
(k) Stock Exchange
Listing. The Common Stock is
registered pursuant to Section 12(b) or 12(g) of the Exchange Act
and is listed on the Nasdaq Capital Market (the
“Exchange”), and the Company has taken no action
designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or
delisting the Common Stock from the Exchange, nor has the Company
received any notification that the Commission or the Exchange is
contemplating terminating such registration or listing. To the
Company’s knowledge, it has complied in all material respects
with the applicable requirements of the Exchange for maintenance of
inclusion of the Common Stock on the Exchange.
(l) Equity Distribution Agreement. This
Agreement has been duly authorized, executed and delivered by the
Company.
(m) No Preemptive Rights. Except as
described in the Registration Statement, the General Disclosure
Package or the Prospectus, there are no options, warrants,
preemptive rights, rights of first refusal or other rights to
subscribe for or to purchase any equity securities of the
Company.
(n) Descriptions and Exhibits. There are no
statutes, regulations, documents or contracts of a character
required to be described in the Registration Statement, the General
Disclosure Package or the Prospectus or to be filed as an exhibit
to the Registration Statement which are not described or filed as
required.
(o) Non-Contravention. The issue and sale
of the Shares to be sold by the Company hereunder, the execution of
this Agreement by the Company and the compliance by the Company
with all of the provisions of this Agreement and the consummation
of the transactions herein contemplated (i) will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or any other evidence of
indebtedness or other agreement or instrument to which the Company
is a party or by which the Company is bound or to which any of the
property or assets of the Company are subject; (ii) will not result
in any violation of the provisions of the certificate or articles
of incorporation or by-laws (or other organization documents) of
the Company; and (iii) will not result in any violation of any
statute or any order, decree, rule or regulation of any court or
governmental or administrative agency or body having jurisdiction
over the Company or any of its properties, except, in the case of
clauses (i) and (iii) above, where such breaches, violations or
defaults would not, individually or in the aggregate, have a
Material Adverse Effect.
(p) No Violations. Neither the Company nor
its Subsidiaries (as defined below) is (i) in violation of its
articles or certificate of incorporation, bylaws (or other
organizational or charter documents), (ii) in violation of any
law, ordinance, administrative or governmental rule or regulation
applicable to the Company or the Subsidiary, (iii) in
violation of any decree of any court or governmental agency or body
having jurisdiction over the Company or the Subsidiary, or (iv) in
default in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other
evidence of indebtedness or in any agreement, indenture, lease or
other instrument to which the Company or a Subsidiary is a party or
by which it or any of its properties may be bound, except, in the
case of clauses (ii), (iii) and (iv), where any such violation
or default, individually or in the aggregate, would not have a
Material Adverse Effect.
(q) No
Outstanding Loans or Other Extensions of Credit. The Company does not have any outstanding
extension of credit, in the form of a personal loan, to or for any
director or executive officer (or equivalent thereof) of the
Company except for such extensions of credit as are expressly
permitted by Section 13(k) of the Exchange Act.
(r) Other Underwriting
Agreements. Except for this
Agreement, the Company is not a party to any agreement with an
agent or underwriter for any other “at the market” or
continuous equity transaction.
(s) No Consents Required. No consent,
approval, authorization, order, license, registration or
qualification of or with any court or arbitrator or governmental or
regulatory authority is required for the execution, delivery and
performance by the Company of this Agreement, the issuance and sale
of the Shares and the consummation of the transactions contemplated
by this Agreement, except for the registration of the Shares under
the Securities Act and such consents, approvals, authorizations,
orders and registrations or qualifications as may be required under
applicable state securities laws in connection with the purchase
and distribution of the Shares by the Manager.
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(t) FINRA Exemption. To enable the Manager
to rely upon Rule 5110(h)(1)(C) of the Financial Industry
Regulatory Authority (“FINRA”), the Company represents
that it is an “experienced issuer” as defined in FINRA
Rule 5110(j)(6).
(u) Legal Proceedings. Other than as set
forth in the Registration Statement, the General Disclosure Package
or the Prospectus, there are no actions, suits, proceedings,
inquiries or investigations brought by or before any legal or
governmental entity pending to which the Company is a party or of
which any property of the Company is the subject which, if
determined adversely to the Company, individually or in the
aggregate, would have a Material Adverse Effect, or would prevent
or impair the consummation of the transactions contemplated by this
Agreement, or which are required to be described in the
Registration Statement, the General Disclosure Package or the
Prospectus; and, to the Company’s knowledge, no such actions,
suits, proceedings, inquiries or investigations are threatened or
contemplated by governmental authorities or others.
(v) Independent Accountant. BPM LLP
(“Company
Auditor”), who has certified certain financial
statements of the Company, was, at all applicable times, an
independent registered public accounting firm with respect to the
Company within the applicable rules and regulations adopted by the
Commission and the Public Company Accounting Oversight Board and as
required by the Securities Act.
(w) Title to Real and Personal Property.
Except (a) as otherwise set forth in the Registration Statement,
the General Disclosure Package or the Prospectus, (b) for
liens, security interests and similar encumbrances under any liens,
security interests or similar encumbrances made pursuant to credit
facilities or indentures of the Company or (c) as would not
have a Material Adverse Effect, individually or in the aggregate,
the Company has good and marketable title to all of the real and
personal properties and assets reflected as owned in the financial
statements referred to in Section 1(f) or elsewhere in the
Registration Statement, the General Disclosure Package or the
Prospectus, in each case free and clear of any security interests,
mortgages, liens, pledges, charges, encumbrances, equities, adverse
claims and other defects or restrictions. No real property owned,
leased, licensed or used by the Company lies in an area which is,
or will be, subject to restrictions which would prohibit, and no
statements of facts relating to the actions or inaction of another
person or entity or his or its ownership, leasing, licensing or
usage of any real or personal property exists or will exist which
would prevent, the continued effective ownership, leasing,
licensing, exploration, development, production or usage of such
real property in the business of the Company as presently conducted
or as the Registration Statement, the General Disclosure Package or
the Prospectus indicates the Company contemplates conducting,
except as may be properly described in the Registration Statement,
the General Disclosure Package or the Prospectus or such as in the
aggregate do not now cause and will not in the future cause a
Material Adverse Effect. The real
property, improvements, equipment and personal property held under
lease by the Company or of a Subsidiary are held under valid and
enforceable leases, with such exceptions as would
not, individually or in the
aggregate, have a Material
Adverse Effect.
(x) Title to Intellectual Property.
Except as otherwise disclosed in the
Registration Statement, the General Disclosure Package, or the
Prospectus, the Company, including its Subsidiaries, own, or have
obtained valid and enforceable licenses for, the inventions, patent
applications, patents, trademarks, trade names, service names,
copyrights, trade secrets and other intellectual property described
in the Registration Statement, the General Disclosure Package or
the Prospectus as being owned or licensed by them or which are
necessary for the conduct of the Company’s and its
Subsidiaries’ businesses as currently conducted or as
currently proposed to be conducted (collectively,
“Intellectual
Property”), except as
would not have a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole, and except as enforceability of any
licenses may be limited by bankruptcy and other similar laws
affecting the rights of creditors generally and general principles
of equity. To the Company’s knowledge, the conduct of
the Company’s and its Subsidiaries’ businesses does not
and will not infringe, misappropriate or otherwise conflict in any
material respect with any intellectual property rights of others.
To the Company’s knowledge: (i)
there are no third parties who have rights to any registered
Intellectual Property, other than any co-owner of any patent
constituting Intellectual Property who is listed on the records of
the U.S. Patent and Trademark Office and any co-owner of any patent
application constituting Intellectual Property who is named in such
patent application; and (ii) there is no infringement by third
parties of any Intellectual Property. There is no pending or, to
the Company’s knowledge, threatened action, suit, proceeding
or claim by others: (A) challenging the Company’s rights in
or to any Intellectual Property, and the Company is not aware of
any facts which would form a reasonable basis for any such action,
suit, proceeding or claim; (B) challenging the validity,
enforceability or scope of any Intellectual Property, and the
Company is not aware of any facts that would form a reasonable
basis for any such action, suit, proceeding or claim; or (C)
asserting that the Company or any of its Subsidiaries infringes or
otherwise violates, or would, upon the expansion or
commercialization of any product or service described in the
Registration Statement, the General Disclosure Package or the
Prospectus as under development, infringe or violate, any patent,
trademark, trade name, service name, copyright, trade secret or
other proprietary rights of others, and the Company is not aware of
any facts which would form a reasonable basis for any such action,
suit, proceeding or claim. The Company and its subsidiaries have
complied with the terms of each agreement pursuant to which
Intellectual Property has been licensed to the Company or any
Subsidiary, and all such agreements are in full force and effect.
There are no material defects in any of the patents or patent
applications included in the Intellectual Property. The Company and
its Subsidiaries have taken commercially reasonable steps to
protect, maintain and safeguard their Intellectual Property,
including the execution of nondisclosure and confidentiality
agreements. The Intellectual Property described in the Registration
Statement, the General Disclosure Package or the Prospectus as
under development by the Company or any Subsidiary fall within the
scope of the claims of one or more patents owned by, or exclusively
licensed to, the Company or any Subsidiary.
(y) No Undisclosed Relationships. No
relationship, direct or indirect, exists between or among the
Company, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company, on the other
hand, that is required to be described, incorporated by reference
or included in the Registration Statement, the General Disclosure
Package or the Prospectus and which is not so described,
incorporated or included.
(z) Subsidiaries. All of the direct and
indirect Subsidiaries of the Company are set forth in the reports
filed with the Commission pursuant to Section 13(a), 13(e), 14 or
15(d) of the Exchange Act and all are set forth on Exhibit 21.1 to
the Company’s most recent annual report on Form 10-K. The
Company owns, directly or indirectly, all of the 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 of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities. “Subsidiary” means any subsidiary
of the Company and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the
date hereof.
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(aa) Dividend
Restrictions. Except as
disclosed in the Registration Statement, General Disclosure Package
or Prospectus, and subject to the existence of legally available
funds, no Subsidiary of the Company is currently prohibited or
restricted, directly or indirectly, from paying dividends to the
Company, or from making any other distribution with respect to such
Subsidiary’s equity securities or from repaying to the
Company or any other Subsidiary of the Company any amounts that may
from time to time become due under any loans or advances to such
Subsidiary from the Company or from transferring any property or
assets to the Company or to any other
Subsidiary.
(bb) Investment
Company Act. The Company is not and, after giving effect to
the offering and sale of the Shares as contemplated herein and the
application of the Net Proceeds (as defined in Section 3 below)
therefrom as described in the General Disclosure Package and the
Prospectus, will not be required to register as an
“investment company”, as such term is defined in the
Investment Company Act of 1940, as amended.
(cc) Taxes.
All United States federal income tax returns of the Company
required by law to be filed have been filed and all taxes shown by
such returns or otherwise assessed, which are due and payable, have
been paid, except for such taxes, if any, as are being or will be
contested in good faith and as to which adequate reserves have been
provided. The Company has filed all other tax returns that are
required to have been filed by it pursuant to applicable foreign,
state, local or other law, except insofar as the failure to file
such returns, individually or in the aggregate, would not result in
a Material Adverse Effect; and the Company has paid all taxes due
pursuant to such returns or pursuant to any assessment received by
the Company except for such taxes, if any, as are being or will be
contested in good faith and as to which adequate reserves have been
provided or insofar as the non-payment of such taxes, individually
or in the aggregate, would not result in a Material Adverse
Effect.
(dd) Licenses
and Permits. The Company possesses all permits, licenses,
approvals, consents and other authorizations (collectively,
“Permits”)
issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the businesses
currently operated by it; the Company is in compliance with the
terms and conditions of all such Permits and all of the Permits are
valid and in full force and effect, except, in each case, where the
failure so to possess or comply with or where the invalidity of
such Permits or the failure of such Permits to be in full force and
effect, individually or in the aggregate, would not have a Material
Adverse Effect; and the Company has not received any notice of
proceedings relating to the revocation or material modification of
any such Permits.
(ee) No
Labor Disputes. No material labor dispute with the employees
of the Company exists, or is imminent or threatened. The Company is
not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers,
customers or contractors, which, individually or in the aggregate,
may reasonably be expected to result in a Material Adverse
Effect.
(ff) Compliance
with and Liability under Environmental Laws. Except as
described in the Registration Statement, the General Disclosure
Package or the Prospectus, there has been no storage, disposal,
generation, manufacture, refinement, transportation, handling or
treatment of hazardous substances or hazardous wastes by the
Company (or any of its predecessors in interest), at, upon or from
any of the property now or previously owned, leased or operated by
the Company in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit that would require
the Company to undertake any remedial action under any applicable
law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action that would not,
individually or in the aggregate with all such violations and
remedial actions, cause a Material Adverse Effect. Except for
abandonment and similar costs incurred or to be incurred in the
ordinary course of business of the Company, there has been no
material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto any property now or previously
owned, leased or operated by the Company or into the environment
surrounding such property of any hazardous substances or hazardous
wastes due to or caused by the Company (or, to the Company’s
knowledge, any of its predecessors in interest), except for any
such spill, discharge, leak, emission, injection, escape, dumping
or release that would not, singularly or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, result in a Material Adverse Effect. and the
terms “hazardous
substances,” and “hazardous wastes” shall be
construed broadly to include such terms and similar terms, all of
which shall have the meanings specified in any applicable local,
state and federal laws or regulations with respect to environmental
protection. Except as set forth in the Registration Statement, the
General Disclosure Package or the Prospectus, the Company has not
been named as a “potentially responsible party” under
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(gg) Compliance
with ERISA. Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), (whether or not subject
to ERISA) that is sponsored, maintained, administered, contributed
or required to be contributed to by the Company or any entity that
would be treated as a single employer with any of the foregoing
pursuant to Section 414 of the Internal Revenue Code of 1986,
as amended (the “Code”) (each such plan, a
“Plan”) has been
maintained, administered and operated in compliance with its terms
and the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Code,
except to the extent that failure to so comply, individually or in
the aggregate, would not have a Material Adverse Effect.
The fair market value of the assets of
each Plan (excluding for these purposes accrued but unpaid
contributions) exceeds the present value of all benefits accrued
under such Plan determined using reasonable actuarial assumptions.
No other event set forth in Section 4043(b) of ERISA (excluding
events with respect to which the 30-day notice requirement under
Section 4043 of ERISA has been waived) has occurred with respect to
any Plan. No
prohibited transaction, within the meaning of Section 406 of
ERISA or Section 4975 of the Code, has occurred with respect
to any Plan, excluding transactions effected pursuant to a
statutory or administrative exemption that has resulted in or could
reasonably be expected to have a Material Adverse Effect. The
Company could not reasonably be expected to have any liability
(whether actual, contingent or otherwise) (i) with respect to any
Plan subject to Section 412 of the Code or to Title IV of
ERISA or (ii) with respect to any Plan or other contract,
agreement, arrangement or policy that provides for retiree or
post-employment welfare benefits other than as required by
Section 4980B of the Code or similar state laws.
5
(hh) Disclosure
Controls. The Company has established and maintains
disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Exchange Act) which (i) are designed to
ensure that material information relating to the Company is made
known to the Company’s principal executive officer and its
principal financial officer by others within the Company,
particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared; (ii) have
been evaluated for effectiveness as of a date within 90 days prior
to the earlier of the date that the Company filed its most recent
annual or quarterly report with the Commission and the date of the
General Disclosure Package; and (iii) are designed to be effective
in all material respects to perform the functions for which they
were established. Except as described in the Registration
Statement, the General Disclosure Package or the Prospectus, since
the date of the latest audited financial statements included in or
incorporated by reference into the Registration Statement, the
General Disclosure Package or the Prospectus, the Company has not
been advised of any (i) significant deficiencies or material
weaknesses in the design or operation of its disclosure controls
and procedures or (ii) any fraud that involves management or
other employees who have a significant role in the Company’s
disclosure controls and procedures.
(ii) Internal
Controls Over Financial Reporting. The Company maintains a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific
authorizations. (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP
as applied in the United States and to maintain asset
accountability. (iii) access to assets is permitted only in
accordance with management’s general or specific
authorizations. (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences; and
(v) the interactive data in eXtensible
Business Reporting Language included or incorporated by reference
in the Registration Statement, the General Disclosure Package or the Prospectus fairly presents the information
called for in all material respects and has been prepared in all
material respects in accordance with the Commission’s rules
and guidelines applicable thereto. The Company’s
system of “internal control over
financial reporting” (as defined in Rule 13a-15(f) of the
Exchange Act) complies with the
requirements of the Exchange Act and has been designed by, or under
the supervision of, its principal executive and principal financial
officers, or persons performing similar functions, to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with GAAP. Except as described in the Registration Statement,
the General Disclosure Package or the Prospectus, since the
date of the latest audited financial statements included in or
incorporated by reference into the Registration Statement, the
General Disclosure Package or the Prospectus, (a) the Company has
not been advised of (1) any significant deficiencies in the design
or operation of internal controls over financial reporting that are
reasonably likely to materially affect the ability of the Company
to record, process, summarize and report financial information or
data, or any material weaknesses in internal controls over
financial reporting and (2) any fraud, whether or not material,
that involves management or other employees who have a significant
role in the internal controls over financial reporting of the
Company, and (b) since that date, there has been no change in the
Company’s internal controls over financial reporting that has
materially affected, or is reasonably likely to materially affect,
the Company’s internal controls over financial
reporting.
(jj) Open
Source Software. (i) The Company uses and has used any and
all software and other materials distributed under a
“free,” “open source,” or similar licensing
model (including but not limited to the MIT License, Apache
License, GNU General Public License, GNU Lesser General Public
License and GNU Affero General Public License) (“Open Source Software”) in
compliance with all license terms applicable to such Open Source
Software; and (ii) the Company has not used or distributed and does
not use or distribute any Open Source Software in any manner that
requires or has required (A) the Company to permit reverse
engineering of any software code or other technology owned by the
Company or (B) any software code or other technology owned by the
Company to be (1) disclosed or distributed in source code form, (2)
licensed for the purpose of making derivative works or (3)
redistributed at no charge.
(kk) Data
Security. (i) The Company has complied and is presently in
compliance with all internal and external privacy policies,
contractual obligations, industry standards, applicable laws,
statutes, judgments, orders, rules and regulations of any court or
arbitrator or other governmental or regulatory authority and any
other legal obligations, in each case, relating to the collection,
use, transfer, import, export, storage, protection, disposal and
disclosure by the Company of personal, personally identifiable,
household, sensitive, confidential or regulated data
(“Data Security
Obligations”, and such data, “Data”); (ii) the Company has not
received any notification of or complaint regarding and is not
aware of any other facts that, individually or in the aggregate,
would reasonably indicate non-compliance with any Data Security
Obligation; and (iii) there is no action, suit or proceeding by or
before any court or governmental agency, authority or body pending
or threatened alleging non-compliance with any Data Security
Obligation nor are there any incidents
under internal review or investigations relating to the
same.
(ll) Data
Protection; No Breaches. The
Company’s information technology assets and equipment,
computers, systems, networks, hardware, software, websites,
applications, and databases are adequate for, and operate and
perform in all material respects as required in connection with,
the operation of the business of the Company as currently
conducted, free and clear of all material bugs, errors, defects,
Trojan horses, time bombs, malware and other
corruptants. The
Company has taken all technical and organizational measures
necessary to protect the information technology systems and Data
used in connection with the operation of the Company’s
business. Without limiting the foregoing, the Company has used
reasonable efforts to establish and maintain, and has established,
maintained, implemented and complied with, reasonable information
technology, information security, cyber security and data
protection controls, policies and procedures, including oversight,
access controls, encryption, technological and physical safeguards
and business continuity/disaster recovery and security plans that
are designed to protect against and prevent breach, destruction,
loss, unauthorized distribution, use, access, disablement,
misappropriation or modification, or other compromise or misuse of
or relating to any information technology system or Data used in
connection with the operation of the Company’s business
(“Breach”). To
the Company’s knowledge, there has been no such Breach, and
the Company has not been notified of and has no knowledge of any
event or condition that would reasonably be expected to result in,
any such Breach.
(mm) Insurance.
The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which the Company is
engaged; the Company has not been refused any insurance coverage
sought or applied for; and the Company has no reason to believe
that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business
at a cost that would not have a Material Adverse Effect on the
Company.
6
(nn) No
Broker’s Fees. The Company is not a party to any
contract, agreement or understanding with any person that would
give rise to a valid claim against the Company or the Manager for a
brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Shares other than this
Agreement.
(oo) No
Registration Rights. Except as disclosed in the Registration
Statement, the General Disclosure Package or the Prospectus, and as
have been validly complied with or waived, there are no persons
with registration rights or other similar rights to have any
securities of the Company registered pursuant to the Registration
Statement or sold in the offering contemplated by this
Agreement.
(pp) No
Stabilization. The Company has not taken, directly or
indirectly, any action designed to or that would be reasonably
expected to cause or result in stabilization or manipulation of the
price of the Common Stock or any other “reference
security” (as defined in Rule 100 of Regulation M under the
Exchange Act (“Regulation
M”)) whether to facilitate the sale or resale of the
Shares or otherwise, and has taken no action which would directly
or indirectly violate Regulation M. The Company acknowledges that
the Manager may engage in passive market making transactions in the
Shares on the Exchange in accordance with Regulation
M.
(qq) Actively-Traded
Security. The Common Stock is an “actively-traded
security” excepted from the requirements of Rule 101 of
Regulation M by subsection (c)(1) of such rule.
(rr) Forward-Looking
Statements. Each “forward-looking statement”
(within the meaning of Section 27A of the Securities Act or
Section 21E of the Exchange Act) contained in the Registration
Statement, the General Disclosure Package or the Prospectus has
been made or reaffirmed with a reasonable basis and in good
faith.
(ss) Statistical
and Market Data. The statistical and market and
industry-related data included in the Registration Statement, the
General Disclosure Package and the Prospectus are based on or
derived from sources which the Company believes to be reliable and
accurate or represent the Company’s good faith estimates that
are made on the basis of data derived from such sources, and the
Company has obtained the written consent to the use of such data
from sources to the extent required.
(tt) ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act. There is and has been no failure on the part of the
Company or, to the Company’s knowledge, on the part of any of
the Company’s directors or officers, in their capacities as
such, to comply in all material respects with any provision of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended, and the rules and
regulations promulgated in connection therewith, including
Section 402 related to loans and Sections 302 and 906 related
to certifications.
(uu) Ineligible
Issuer. (i) At the earliest time after the filing of
the Registration Statement that the Company or another offering
participant made a bona fide offer (within the meaning of
Rule 164(h)(2)) of the Shares and (ii) as of the Time of
Sale and on each such time this representation is repeated or
deemed to be made (with such date being used as the determination
date for purposes of this clause (ii)), the Company was not and is
not an Ineligible Issuer (as defined in Rule 405 under the
Securities Act), without taking account of any determination by the
Commission pursuant to Rule 405 that it is not necessary that
the Company be considered an Ineligible Issuer.
(vv) No
Unlawful Payments. To the Company’s knowledge, neither
the Company nor any director, officer or employee of the Company
nor any agent, affiliate, representative or other person associated
with or acting on behalf of the Company has (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity. (ii) made or taken
an act in furtherance of an offer, payment, promise to pay or
authorization or approval of any unlawful payment or benefit,
giving or receipt of money, property, gifts or anything else of
value, directly or indirectly, to any foreign or domestic
government official or employee, including of any government-owned
or controlled entity or of a public international organization, or
any person acting in an official capacity for or on behalf of any
of the foregoing, or any political party or party official or
candidate for political office. (iii) violated or is in violation
of any provision of the Foreign Corrupt Practices Act of 1977, as
amended, or any applicable law or regulation implementing the OECD
Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions, or committed an offence under
the ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ of the United Kingdom or any other applicable
anti-bribery or anti-corruption law. or (iv) made, offered,
agreed, requested or taken an act in furtherance of any unlawful
bribe or other unlawful benefit, including, without limitation, any
rebate, payoff, influence payment, kickback or other unlawful or
improper payment or benefit. The Company has instituted, maintained
and enforced, and will continue to maintain and enforce policies
and procedures designed to promote and ensure compliance with all
applicable anti-bribery and anti-corruption laws and the
representations and warranties contained herein. The Company will
not use, directly or indirectly, the proceeds from the offering the
of Shares hereunder in furtherance of any offer, payment, promise
to pay or authorization or approval of any payment or benefit,
giving or receipt of money, property, gifts or anything else of
value, to any person in violation of any anti-corruption
laws.
(ww) Compliance
with Anti-Money Laundering Laws. The operations of the
Company are and have been conducted at all times in compliance with
all applicable financial recordkeeping and reporting requirements,
including those of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, the applicable money laundering statutes
of all jurisdictions where the Company conducts business, the rules
and regulations thereunder and any related or similar rules,
regulations or guidelines issued, administered or enforced by any
governmental agency (collectively, the “Anti-Money Laundering Laws”), and
no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company with respect to the Anti-Money Laundering Laws is
pending or, to the Company’s knowledge,
threatened.
7
(xx) No
Conflicts with Sanctions Laws. Neither the Company nor any
of its directors, officers or employees, nor any agent, affiliate,
representative or other person associated with or acting on behalf
of the Company (each, a “Person”) is, or is owned or
controlled by one or more persons that are, currently the subject
or the target of any sanctions administered or enforced by the U.S.
government, (including, without limitation, the Office of Foreign
Assets Control of the U.S. Department of the Treasury or the U.S.
Department of State and including, without limitation, the
designation as a “specially designated national” or
“blocked person”), the United Nations Security Council,
the European Union, Her Majesty’s Treasury or other relevant
sanctions authority (collectively, “Sanctions”), nor is the Company
located, organized or resident in a country or territory that is
the subject or target of Sanctions, including, without limitation,
the Balkans, Belarus, Burundi, the Central African Republic, Cuba,
the Democratic Republic of the Congo, Iran, Libya, North Korea,
Sudan, Syria and Venezuela (each, a “Sanctioned Country”). and the
Company will not directly or indirectly use the proceeds of the
offering of the Shares hereunder, or lend, contribute or otherwise
make available such proceeds to any joint venture partner or other
person or entity (i) to fund or facilitate any activities of or
business with any person that, at the time of such funding or
facilitation, is the subject or target of Sanctions, (ii) to fund
or facilitate any activities of or business in any Sanctioned
Country or (iii) in any other manner that will result in a
violation by any person (including any person participating in the
transaction, whether as underwriter, advisor, investor or
otherwise) of Sanctions. For the past five years, the Company has
not knowingly engaged in and is not now knowingly engaged in, and
will not engage in, any dealings or transactions with any Person
that at the time of the dealing or transaction is or was the
subject or the target of Sanctions or with any Sanctioned
Country.
Any
certificate signed by any officer of the Company delivered to the
Manager or to counsel for the Manager shall be deemed a
representation and warranty by the Company to the Manager as to the
matters covered thereby on the date of such
certificate.
The Company acknowledges that the Manager and, for
purposes of the opinions to be delivered pursuant to Section 6
hereof, counsel to the Company and counsel to the Manager, will
rely upon the accuracy and truthfulness of the foregoing
representations and warranties and hereby consents to such
reliance.
2. Sale of Securities. On the basis of the
representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company
and the Manager agree that the Company may from time to time seek
to sell Shares through the Manager, acting as sales agent as
follows:
(a) The Company may
submit its orders to the Manager by telephone or electronic mail
(including any price, time or size limits or other customary
parameters or conditions) to sell Shares on any Trading Day (as
defined herein), which order shall be confirmed by the Manager (and
accepted by the Company) by electronic mail using a form
substantially similar to that attached hereto as Exhibit A. As used herein,
“Trading Day”
shall mean any trading day on the Exchange, other than a day on
which the Exchange is scheduled to close prior to its regular
weekday closing time.
(b) Subject to the
terms and conditions hereof, the Manager shall use its commercially
reasonable efforts consistent with its normal sales and trading
practices to execute any Company order submitted to it hereunder to
sell Shares with respect to which the Manager has agreed to act as
sales agent. The Company acknowledges and agrees that
(i) there can be no assurance that the Manager will be
successful in selling the Shares, (ii) the Manager will incur
no liability or obligation to the Company or any other person or
entity if it does not sell Shares for any reason and (iii) the
Manager shall be under no obligation to purchase Shares on a
principal basis pursuant to this Agreement, except as otherwise
specifically agreed by the Manager and the Company.
(c) The Manager hereby
covenants and agrees not to make any sales of the Shares on behalf
of the Company other than (i) by any method permitted by law
deemed to be an “at the market” offering as defined in
Rule 415(a)(4) of the Securities Act, including block
transactions and by means of ordinary brokers’ transactions
between members of the Exchange that qualify for delivery of a
Prospectus to the Exchange in accordance with Rule 153 of the
Securities Act and (ii) such other sales of the Shares on
behalf of the Company in its capacity as agent of the Company as
shall be agreed by the Company and the Manager.
(d) The Company shall
not authorize the issuance and sale of, and the Manager shall not
sell, any Share at a price lower than the minimum price therefor
designated by the Company pursuant to Section 2(a) above. In addition, the Company or the
Manager may, upon notice to the other party hereto by telephone
(confirmed promptly by email), suspend an offering of the Shares
pursuant to this Agreement for a specified period (a
“Suspension
Period”); provided, however, that such suspension shall not
affect or impair the parties’ respective obligations with
respect to the Shares sold hereunder prior to the receipt or giving
of such notice, as applicable; and provided further, that there shall be
no obligations under Sections 6(l),
6(m), 6(n)
and 6(o) with respect to the delivery
of certificates, opinions or comfort letters to the Managers during
a Suspension Period and that such obligations shall recommence on
the termination of the Suspension Period.
(e) The Manager shall
provide written confirmation (which may be by email) to the Company
following the close of trading on the Exchange each day in which
Shares are sold under this Agreement setting forth (i) the
amount of Shares sold on such day, (ii) the price or prices at
which such Shares were sold on such day, (iii) the gross
offering proceeds received from such sale, (iv) the Net
Proceeds (as defined below) to the Company and (v) the
commission payable by the Company to the Manager with respect to
such sales.
(f) At each Time of
Sale, Settlement Date and Representation Date (as defined in
Section 6(l) below), the Company shall
be deemed to have affirmed each representation and warranty
contained in this Agreement. Any obligation of the Manager to use
its commercially reasonable efforts to sell the Shares on behalf of
the Company as sales agent shall be subject to the continuing
accuracy of the representations and warranties of the Company
herein, to the performance by the Company of its obligations
hereunder and to the continuing satisfaction of the additional
conditions specified in Section 5
of this Agreement.
(g) Notwithstanding any
other provision of this Agreement, the Company and the Manager
agree that no sales of Shares shall take place, the Company shall
not request the sales of any Shares that would be sold and the
Manager shall not be obligated to sell or offer to sell, during any
period in which the Company is, or could reasonably be deemed to
be, in possession of material non-public information.
8
(a) The compensation
to the Manager for sales of the Shares with respect to which the
Manager acts as sales agent hereunder shall be 3.0% of the gross
offering proceeds from the sale of the first $10,000,000 of the
Shares sold pursuant to this Agreement and 2.5% from the sales of
the Shares thereafter (the “Selling Commission”). For each
sale of Shares, the amount of sale proceeds remaining after payment
of the Selling Commission shall constitute the net proceeds to the
Company for such sale of Shares (the “Net Proceeds”). The Company shall
pay to the Manager, on the applicable Settlement Date, the Selling
Commission for the applicable Shares sold by the Manager (which
amount may be withheld by the Manager from the gross proceeds from
the sale of such Shares). For the avoidance of doubt, any expense
payment and reimbursement obligations of the Company set forth in
Section 6(i) below shall be separate
and independent obligations of the Company and shall not be deemed
a credit or otherwise act to offset the compensation to the Manager
pursuant to this Agreement.
(b) If this Agreement
is terminated by the Company in accordance with the provisions of
Section 10 the Company shall
reimburse the Manager for all of its reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of
counsel for the Manager incurred by it in connection with the
offering contemplated by this Agreement, provided that such
reimbursement shall not exceed the amounts actually incurred and
reimbursable pursuant to Section 6(i) hereof through the date of such
termination, without regard to any maximum reimbursement limits set
forth in Section 6.
4. Payment, Delivery and Other
Obligations. Settlement for sales of the Shares pursuant to
this Agreement will occur on the second Trading Day (or such
earlier day as is industry practice for regular-way trading)
following the date on which such sales are made (each such day, a
“Settlement
Date”). On each Settlement Date, the Shares sold
through the Manager for settlement on such date shall be issued and
delivered by the Company to the Manager against payment of the Net
Proceeds from the sale of such Shares. Settlement for all such
Shares shall be effected by free delivery of the Shares by the
Company or its transfer agent to the Manager’s or its
designee’s account (provided that the Manager shall have
given the Company written notice of such designee prior to the
applicable Settlement Date) at The Depository Trust Company or by
such other means of delivery as may be mutually agreed upon by the
parties hereto, which in all cases shall be freely tradable,
transferable, registered shares in good deliverable form, in return
for payment in same day funds delivered to the account designated
by the Company. If the Company, or its transfer agent (if
applicable), shall default on its obligation to deliver the Shares
on any Settlement Date, then the Company shall (i) hold the
Manager harmless against any loss, claim, damage, or expense
(including reasonable legal fees and expenses), as incurred,
arising out of or in connection with such default by the Company
and (ii) pay the Manager any commission, discount or other
compensation to which it would otherwise be entitled absent such
default.
5. Conditions to the Manager’s
Obligations. The obligations of the Manager are subject to
the following conditions:
(a) Since the later
of (A) the date of this Agreement and (B) the immediately
preceding Representation Date: (i) there shall not have
occurred any downgrading, nor shall any notice have been given of
any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the
possible change, in the rating accorded any of the securities of
the Company by any “nationally recognized statistical rating
organization”, as such term is defined in
Section 3(a)(62) of the Exchange Act; and (ii) there
shall not have occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in
the earnings, business or operations of the Company, taken as a
whole, from the respective dates of the Registration Statement, the
Prospectus and the General Disclosure Package that, in the
Manager’s sole judgment, is material and adverse and that
makes it, in the Manager’s sole judgment, impracticable to
market the Shares on the terms and in the manner contemplated in
the Prospectus.
(b) The Manager shall
have received on each date specified in Section 6(l) a certificate, dated such date and signed
by an executive officer of the Company, to the effect set forth in
Section 5(a)(i) above and to the
effect that (i) the representations and warranties of the
Company contained in this Agreement are true and correct as of such
date; (ii) the Company has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before such date; (iii) no stop
order suspending the effectiveness of the Registration Statement
has been issued under the Securities Act and no proceedings for
that purpose or pursuant to Section 8A of the Securities Act
have been instituted or are pending or, to the Company’s
knowledge, are contemplated by the Commission, and any request on
the part of the Commission for additional information has been
complied with; (iv) the Prospectus Supplement, any Interim
Prospectus Supplement and each Permitted Free Writing Prospectus
have been timely filed with the Commission under the Securities Act
(in the case of a Permitted Free Writing Prospectus, to the extent
required by Rule 433 under the Securities Act), and all
requests for additional information on the part of the Commission
have been complied with or otherwise satisfied; (v) as of such
date and as of each Time of Sale, if any, subsequent to the
immediately preceding Representation Date, the Registration
Statement did not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and
(vi) as of such date and as of each Time of Sale, if any,
subsequent to the immediately preceding Representation Date, the
General Disclosure Package did not contain any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided,
however, that no such
certificate shall apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by the Manager expressly for use in the
General Disclosure Package. The officer signing and delivering such
certificate may rely upon his or her knowledge as to proceedings
threatened.
(c) The Manager shall
have received on each date specified in Section 6(m) a certificate
of the Secretary of the Company, date such date, as described in
Section 6(m).
(d) (i) The
Manager shall have received on each date specified in
Section 6(m) an opinion and
negative assurance letter of ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLP, outside counsel for the Company, dated
such date, in form and substance reasonably satisfactory to the
Manager, which opinion and negative assurance letter shall be
rendered to the Manager at the request of the Company and shall so
state therein.
(ii) The
Manager shall have received on each date specified in
Section 6(m) an opinion and
negative assurance letter of MatterLight IP, intellectual property
counsel for the Company, dated such date, in form and substance
reasonably satisfactory to the Manager, which opinion and negative
assurance letter shall be rendered to the Manager at the request of
the Company and shall so state therein.
9
(e) The Manager shall
have received on each date specified in Section 6(n) an opinion and negative assurance letter
of Faegre Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the Manager,
dated such date, in form and substance reasonably satisfactory to
the Manager.
(f) The Manager shall
have received on each date specified in Section 6(o), letters dated such date in form and
substance satisfactory to the Manager, from Company Auditor,
current independent registered public accountant for the Company,
(A) confirming that as of the date of its respective audit
report(s), it was an independent registered public accounting firm
within the meaning of the Securities Act, the Exchange Act and the
Public Company Accounting Oversight Board, (B) stating, as of
such date, the conclusions and findings of such firm with respect
to the financial information and other matters ordinarily covered
by accountants’ “comfort letters” to underwriters
in connection with registered public offerings (the first such
letters from Company Auditor, the “Initial Comfort Letter”) and
(C) updating the Initial Comfort Letter with any information
that would have been included in the Initial Comfort Letter had it
been given on such date and modified as necessary to relate to the
Registration Statement, the Prospectus Supplement, the Prospectus
or any issuer free writing prospectus, as amended and supplemented
to the date of such letter.
(g) All filings with
the Commission required by Rule 424 under the Act to have been
filed by each Time of Sale or related Settlement Date shall have
been made within the applicable time period prescribed for such
filing by Rule 424 (without reliance on
Rule 424(b)(8)).
(h) The Shares shall
have been approved for listing on the Exchange, subject only to a
notice of issuance at or prior to the applicable Settlement
Date.
(i) The Common Stock
shall be an “actively-traded security” excepted from
the requirements of Rule 101 of Regulation M by
subsection (c)(1) of such rule.
(a) To furnish to the
Manager copies of the Registration Statement (excluding exhibits)
and copies of the Prospectus (or the Prospectus, as amended or
supplemented) in such quantities as the Manager may from time to
time reasonably request. In case the Manager is required to
deliver, under the Securities Act (whether physically or through
compliance with Rule 172 under the Securities Act or any
similar rule), a prospectus relating to the Shares after the
nine-month period referred to in Section 10(a)(3) of the
Securities Act, or after the time a post-effective amendment to the
Registration Statement is required pursuant to Item 512(a) of
Regulation S-K under the Securities Act, upon the request of
the Manager, and at its own expense, the Company shall prepare and
deliver to the Manager as many copies as the Manager may reasonably
request of an amended Registration Statement or amended or
supplemented prospectus complying with Item 512(a) of
Regulation S-K or Section 10(a)(3) of the Securities Act,
as the case may be.
(b) Before amending
or supplementing the Registration Statement or the Prospectus, to
furnish to the Manager a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or
supplement to which the Manager reasonably objects (other than any
prospectus supplement relating to the offering of Shelf Securities
other than the Shares). To furnish to the Manager a copy of each
proposed free writing prospectus to be prepared by or on behalf of,
used by, or referred to by the Company and not to use or refer to
any proposed free writing prospectus to which the Manager
reasonably objects. Not to take any action that would result in the
Manager or the Company being required to file with the Commission
pursuant to Rule 433(d) under the Securities Act a free
writing prospectus prepared by or on behalf of the Manager that the
Manager otherwise would not have been required to file
thereunder.
(c) To file, subject
to Section 6(b) above, promptly
all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus Supplement and for the
duration of the Delivery Period. For the duration of the Delivery
Period, to include in its quarterly reports on Form 10-Q and
in its annual reports on Form 10-K, a summary detailing, for
the relevant reporting period, (i) the number of Shares sold
through the Manager pursuant to this Agreement, (ii) the Net
Proceeds received by the Company from such sales and (iii) the
compensation paid by the Company to the Manager with respect to
such sales (or alternatively, to prepare a prospectus supplement
(each, an “Interim Prospectus
Supplement”) with such summary information and, at
least once a quarter and subject to Section 6(b) above, file such Interim Prospectus
Supplement pursuant to Rule 424(b) under the Securities Act
(and within the time periods required by Rule 424(b) and
Rules 430A, 430B or 430C under the Securities
Act)).
(d) To file any
Permitted Free Writing Prospectus to the extent required by
Rule 433 under the Securities Act and to provide copies of the
Prospectus and such Prospectus Supplement and each Permitted Free
Writing Prospectus (to the extent not previously delivered or filed
on ▇▇▇▇▇ or any successor system thereto) to the Manager via
electronic mail in “.pdf” format on such filing date to
an electronic mail account designated by the Manager and, at the
Manager’s request, to also furnish copies of the Prospectus
and such Prospectus Supplement to the Exchange and each other
exchange or market on which sales of the Shares were effected, in
each case, as may be required by the rules or regulations of the
Exchange or such other exchange or market.
(e) During the Delivery
Period to advise the Manager, promptly and no later than one
Trading Day after it receives notice thereof, of the issuance of
any stop order by the Commission, of the suspension of the
qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement, the
Prospectus Supplement, the Prospectus or any Permitted Free Writing
Prospectus or for additional information; and, in the event of the
issuance of any such stop order or of any order preventing or
suspending the use of any prospectus relating to the Shares or
suspending any such qualification, to promptly use its best efforts
to obtain its withdrawal.
10
(f) If, after the date
hereof and during the Delivery Period, either (i) any event
shall occur or condition exist as a result of which the Prospectus
would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, or (ii) for any other reason it shall be
necessary during such same period to amend or supplement the
Prospectus or to file any document in order to comply with the
Securities Act or the Exchange Act, to promptly advise the Manager
by telephone (with confirmation in writing or electronic mail) and
to promptly prepare and file, subject to Section 6(b) above, with the Commission an amendment or
supplement to the Registration Statement or the Prospectus which
will correct such statement or omission or effect such compliance
and to furnish to the Manager as many copies as the Manager may
reasonably request of such amendment or supplement.
(g) To endeavor to
qualify the Shares for offer and sale under the securities or Blue
Sky laws of such jurisdictions as the Manager shall reasonably
request and to continue such qualifications in effect so long as
necessary under such laws for the distribution of the Shares;
provided, however, that the Company shall not be
required to qualify as a foreign corporation or to consent to the
service of process under the laws of any such jurisdiction (except
service of process with respect to the offering and sale of the
Shares).
(h) To make generally
available to the Company’s security holders and to the
Manager as soon as practicable an earnings statement covering a
period of at least 12 months beginning with the first fiscal
quarter of the Company occurring after the date of this Agreement
which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 under the Securities Act.
(i) Whether or not
the transactions contemplated in this Agreement are consummated or
this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this
Agreement, including:
(A) the fees,
disbursements and expenses of the Company’s counsel and the
Company’s accountants in connection with the registration and
delivery of the Shares under the Securities Act and all other fees
or expenses in connection with the preparation and filing of the
Registration Statement, any Prospectus Supplement, the Prospectus,
any free writing prospectus prepared by or on behalf of, used by,
or referred to by the Company and amendments and supplements to any
of the foregoing, including the filing fees payable to the
Commission relating to the Shares (within the time required by
Rule 456(b)(1), if applicable), all printing costs associated
therewith, and the mailing and delivering of copies thereof to the
Manager, in the quantities hereinabove specified;
(B) all costs and
expenses related to the transfer and delivery of the Shares,
including any transfer or other taxes payable thereon;
(C) the cost of
printing or producing any Blue Sky or Legal Investment memorandum
in connection with the offer and sale of the Shares under state
securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state
securities laws as provided in Section 6(g) above, including filing fees and the
reasonable fees and disbursements of counsel for the Manager in
connection with such qualification and in connection with the Blue
Sky or Legal Investment memorandum;
(D) any Financial
Industry Regulatory Authority fees and expenses, including all
filing fees and the reasonable fees and disbursements of counsel to
the Manager incurred in connection with the offering contemplated
by this Agreement relating to any review and qualification by the
Financial Industry Regulatory Authority;
(E) all costs and
expenses incident to listing the Shares on the
Exchange;
(F) the costs and
charges of any transfer agent, registrar or
depositary;
(G) all
fees, expenses and disbursements relating to background checks of
the Company’s officers and directors;
(H) the reasonable fees
and disbursements of counsel to the Manager incurred in connection
with the offering contemplated by this Agreement other than as set
forth in this Section, provided that reimbursement pursuant to this
clause (H) shall not exceed $45,000 through the fourth
business day following execution of this Agreement and shall not
exceed $5,000 for each quarterly period thereafter;
and
(I) all other costs and
expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this
Section 6, Section 3 and Section 8, the Manager will pay all of its costs and
expenses, including any advertising expenses connected with any
offers the Manager may make.
(j) If the third
anniversary of the initial effective date of the Registration
Statement occurs before all the Shares have been sold, prior to
such third anniversary, to file, subject to Section 6(b), a new shelf registration statement and to
take any other action necessary to permit the public offering of
the Shares to continue without interruption (references herein to
the Registration Statement shall include the new registration
statement that is declared effective by, or becomes effective upon
filing with, the Commission).
(k) To use its
commercially reasonable efforts to cause the Shares to be listed
for trading on the Exchange and to maintain such
listing.
11
(l) Upon commencement
of the offering of the Shares under this Agreement (and upon the
recommencement of the offering of the Shares under this Agreement
following a Suspension Period), and each time that (i) the
Registration Statement or the Prospectus is amended or supplemented
(other than a prospectus supplement relating solely to the offering
of Shelf Securities other than the Shares) or (ii) there is
filed with the Commission any document incorporated by reference
into the Prospectus (other than a current report on Form 8-K,
unless the Manager shall otherwise reasonably request) (such
commencement date (and any such recommencement date, if applicable)
and each such date referred to in (i) and (ii) above, a
“Representation
Date”), to furnish or cause to be furnished to the
Manager forthwith a certificate dated and delivered as of such date
(except that, in the case of clause
(ii), the Company has up to two business days after the filing to
furnish the certificate), in form reasonably satisfactory to
the Manager, to the effect that the statements contained in the
certificate referred to in Section 5(b) of this Agreement are true and correct at
the time of such Representation Date, as though made at and as of
such time modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the
time of delivery of such certificate. The requirement to provide a
certificate under this Section shall be automatically waived for
any Representation Date occurring at a time at which no sale of
Shares through the Manager, acting as sales agent, is pending,
which waiver shall continue until the earlier to occur of the date
the Company submits an order to the Manager for the sale of Shares
hereunder pursuant to Section 2(a) (which, upon such occurrence,
shall be considered a Representation Date) and the next occurring
Representation Date. Notwithstanding the foregoing, if the Company
subsequently decides to sell Shares through the Manager, acting as
sales agent pursuant hereto following a Representation Date when
the Company relied on such waiver and did not provide Manager with
a certificate under this Section, then before the Company submits
an order to the Manger pursuant to Section 2(a) or Manager sells
any Shares pursuant to such transaction, the Company shall provide
Manager with the certificate referenced in this Section, dated the
date of the order submission.
(m) On each
Representation Date, the Company shall furnish the Manager, in form
and substance reasonably satisfactory to the Manager, a certificate
executed by the Secretary of the Company, signing in such capacity,
dated the date of delivery (i) certifying that attached thereto are
true and complete copies of the resolutions duly adopted by the
board of directors of the Company authorizing the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby (including, without limitation, the issuance of
the Shares pursuant to this Agreement), which authorization shall
be in full force and effect on and as of the date of such
certificate, (ii) certifying and attesting to the office,
incumbency, due authority and specimen signatures of each person
who executed this Agreement for or on behalf of the Company, and
(iii) containing any other certification that the Manager shall
reasonably request (except that, in the case of clause (ii) of
Section 6(l) above, the Company has up to two business days after
the filing to furnish the secretary certificate to the Manager).
The requirement to provide a certificate under this Section shall
be automatically waived for any Representation Date occurring at a
time at which no sale of Shares through the Manager, acting as
sales agent, is pending, which waiver shall continue until the
earlier to occur of the date the Company submits an order to the
Manager for the sale of Shares hereunder pursuant to Section 2(a)
(which, upon such occurrence, shall be considered a Representation
Date) and the next occurring Representation Date. Notwithstanding
the foregoing, if the Company subsequently decides to sell Shares
through the Manager, acting as sales agent pursuant hereto
following a Representation Date when the Company relied on such
waiver and did not provide Manager with a certificate under this
Section, then before the Company submits an order to the Manager
pursuant to Section 2(a) or Manager sells any Shares pursuant to
such transaction, the Company shall provide Manager with the
certificate referenced in this Section, dated the date of the order
submission.
(n) (i) On
each Representation Date, the Company shall cause to be furnished
to the Manager, dated as of such date, in form and substance
satisfactory to the Manager, the written opinion and negative
assurance letter of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, outside counsel for
the Company, as described in Section 5(d), modified as
necessary to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the time of delivery of
such opinion and negative assurance letter (except that, in the case of clause (ii) of
Section 6(l) above, the Company has up to two business days after
the filing to have the written opinions and negative assurance
letters furnished to the Manager). The requirement to
provide the written opinion and negative assurance letter under
this Section shall be automatically waived for any Representation
Date occurring at a time at which no sale of Shares through the
Manager, acting as sales agent, is pending, which waiver shall
continue until the earlier to occur of the date the Company submits
an order to the Manager for the sale of Shares hereunder pursuant
to Section 2(a) (which, upon such occurrence, shall be considered a
Representation Date) and the next occurring Representation Date.
Notwithstanding the foregoing, if the Company subsequently decides
to sell Shares through the Manager, acting as sales agent pursuant
hereto following a Representation Date when the Company relied on
such waiver and did not provide Manager with the written opinion
and negative assurance letter under this Section, then before the
Company submits an order to the Manager pursuant to Section 2(a) or
Manager sells any Shares pursuant to such transaction, the Company
shall provide Manager with the written opinions and negative
assurance letters referenced in this Section, dated the date of the
order submission.
(ii) On
each Representation Date, the Company shall cause to be furnished
to the Manager, dated as of such date, in form and substance
satisfactory to the Manager, the written opinion and negative
assurance letter of MatterLight IP, intellectual property counsel
for the Company, as described in Section 5(d), modified as
necessary to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the time of delivery of
such opinion and negative assurance letter (except that, in the case of clause (ii) of
Section 6(l) above, the Company has up to two business days after
the filing to have the written opinions and negative assurance
letters furnished to the Manager and such written opinions and
negative assurance letters shall only be provided if, in the
opinion of counsel to the Manager, they are
applicable).
(o) On each
Representation Date, Faegre Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel
to the Manager, shall furnish to the Manager a written opinion and
negative assurance letter, dated as of such date in form and
substance reasonably satisfactory to the Manager (except that, in the case of clause (ii) of
Section 6(l) above, Faegre Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP has up to
two business days after the filing to have the written opinions and
negative assurance letters furnished to the Manager). The
requirement to provide the written opinion and negative assurance
letter under this Section shall be automatically waived for any
Representation Date occurring at a time at which no sale of Shares
through the Manager, acting as sales agent, is pending, which
waiver shall continue until the earlier to occur of the date the
Company submits an order to the Manager for the sale of Shares
hereunder pursuant to Section 2(a) (which, upon such occurrence,
shall be considered a Representation Date) and the next occurring
Representation Date. Notwithstanding the foregoing, if the Company
subsequently decides to sell Shares through the Manager, acting as
sales agent pursuant hereto following a Representation Date when
the Company relied on such waiver and did not provide Manager with
the written opinion and negative assurance letter under this
Section, then before the Company submits an order to the Manager
pursuant to Section 2(a) or Manager sells any Shares pursuant to
such transaction, Faegre Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP shall
provide Manager with the written opinions and negative assurance
letters referenced in this Section, dated the date of the order
submission.
12
With
respect to Sections 6(n) and 6(o)
above, in lieu of delivering such an opinion for dates subsequent
to the commencement of the offering of the Shares under this
Agreement, such counsel may furnish the Manager with a letter (a
“Reliance
Letter”) to the effect that the Manager may rely on a
prior opinion delivered under Section 6(n) or Section 6(o), as the
case may be, to the same extent as if it were dated the date of
such letter (except that statements in such prior opinion shall be
deemed to relate to the Registration Statement and the Prospectus
as amended or supplemented as of such subsequent
date).
(p) Upon commencement
of the offering of the Shares under this Agreement (and upon the
recommencement of the offering of the Shares under this Agreement
following a Suspension Period) and each time that (i) the
Registration Statement or the Prospectus is amended or supplemented
to include additional financial information, (ii) the Company
files an annual report on Form 10-K or quarterly report on
Form 10-Q, (iii) there is furnished to the Commission by
the Company any document which contains additional or amended
financial information, including any earnings release or,
(iv) there is filed with the Commission any document (other
than an annual report on Form 10-K or quarterly report on
Form 10-Q) incorporated by reference into the Prospectus which
contains additional or amended financial information, Company
Auditor shall deliver to the Manager the comfort letter described
in Section 5(e) (except that, in
the case of clauses (iii) and (iv), the Company Auditor has up to
two business days after the filing to deliver the comfort letter).
The requirement to provide the comfort letters under this Section
shall be automatically waived for any Representation Date occurring
at a time at which no sale of Shares through the Manager, acting as
sales agent, is pending, which waiver shall continue until the
earlier to occur of the date the Company submits an order to the
Manager for the sale of Shares hereunder pursuant to Section 2(a)
(which, upon such occurrence, shall be considered a Representation
Date) and the next occurring Representation Date. Notwithstanding
the foregoing, if the Company subsequently decides to sell Shares
through the Manager, acting as sales agent pursuant hereto
following a Representation Date when the Company relied on such
waiver and did not provide Manager with the comfort letters under
this Section, then before the Company submits an order to the
Manager pursuant to Section 2(a) or Manager sells any Shares
pursuant to such transaction, the Company shall provide Manager
with the comfort letters referenced in this Section, dated the date
of the order submission.
(q) To comply with the
Due Diligence Protocol attached hereto on Schedule II and any
other due diligence review or call reasonably requested by the
Manager.
(r) The Company will
deliver to the Manager (or its agent), on the date of execution of
this Agreement, any requested certificates and related identifying
documentation, and the Company undertakes to provide such
additional supporting documentation as the Manager may reasonably
request in connection with the verification of compliance with
anti-money laundering requirements.
(s) To reserve and keep
available at all times, free of preemptive rights, Shares for the
purpose of enabling the Company to satisfy its obligations
hereunder.
(t) That it consents to
the Manager trading in the Common Stock for the Manager’s own
account and for the account of its clients at the same time as
sales of the Shares occur pursuant to this Agreement.
(u) That each
acceptance by the Company of an offer to purchase the Shares
hereunder shall be deemed to be an affirmation to the Manager that
the representations and warranties of the Company contained in or
made pursuant to this Agreement are true and correct as of the date
of such acceptance as though made at and as of such date, and an
undertaking that such representations and warranties will be true
and correct as of the Time of Sale and the Settlement Date for the
Shares relating to such acceptance as though made at and as of each
of such dates (except that such representations and warranties
shall be deemed to relate to the Registration Statement and the
Prospectus, as amended and supplemented, relating to such
Shares).
(v) Prior to
instructing the Manager pursuant to Section 2 hereof to make sales on any given day (or as
otherwise agreed between the Company and the Manager), the
Company’s board of directors or a committee thereof
authorized by either such board of directors or any authorized
committee thereof (the “Board”) (i) shall have
approved the minimum price and maximum number of Shares to be sold
on such day and (ii) shall have provided to the Company an
authorizing resolution, substantially in the form of Exhibit B,
approving such price and number. The instructions provided to the
Manager by the Company, pursuant to Section 2, on such day shall reflect the terms of such
authorizing resolution.
(w) Not to, or publicly
disclose an intention to, sell, offer to sell, contract or agree to
sell, hypothecate, pledge, grant any option to sell or otherwise
dispose of or agree to dispose of, directly or indirectly, any
shares of the Common Stock or securities convertible into or
exchangeable or exercisable for the Common Stock or warrants or
other rights to purchase the Common Stock or any other securities
of the Company that are substantially similar to the Common Stock
or permit the registration under the Securities Act of any shares
of the Common Stock, except for (i) the registration of the
Shares and the sales through the Manager pursuant to this
Agreement, (ii) any shares of Common Stock issued by the
Company upon the exercise of an option or warrant or the conversion
of a security outstanding on the date hereof and referred to in the
Prospectus, (iii) any shares of Common Stock issued or options
to purchase Common Stock granted pursuant to existing employee
benefit plans or long term incentive plan of the Company or
(iv) any shares of Common Stock issued pursuant to any stock
repurchase plan of the Company, during the Delivery Period, without
(A) giving the Manager at least three business days’
prior written notice specifying the nature of the proposed sale and
the date of such proposed sale and (B) the Manager suspending
activity under this program for such period of time as requested by
the Company.
7. Covenants of the Manager. The Manager
covenants with the Company not to take any action that would result
in the Company being required to file with the Commission under
Rule 433(d) under the Securities Act a free writing prospectus
prepared by or on behalf of the Manager that otherwise would not be
required to be filed by the Company thereunder, but for the action
of the Manager.
13
(a) Indemnification of the Manager. The
Company agrees to indemnify and hold harmless the Manager and each
person, if any, who controls the Manager within the meaning of
either Section 15 of the Securities Act or Section 20(a)
of the Exchange Act and each affiliate of the Manager within the
meaning of Rule 405 under the Securities Act from and against any
and all losses, liabilities, claims, damages and expenses
whatsoever as incurred (including without limitation, reasonable
attorneys’ fees and any and all reasonable expenses
whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim
or litigation in accordance with this Section), joint or several,
to which they or any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained
in the Registration Statement, the Prospectus, the Prospectus
Supplement (including any Interim Prospectus Supplement), the
General Disclosure Package, any Permitted Free Writing Prospectus
or other free writing prospectus that the Company has filed, or is
required to file, pursuant to Rule 433(d) under the Securities Act,
or in any supplement thereto or amendment thereof, or arising out
of or based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the Company will not be
liable in any such case to the extent that any such loss,
liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in strict
conformity with written information relating to the Manager
furnished to the Company in writing by or on behalf of the Manager
expressly for use therein.
(b) Indemnification of the Company. The
Manager agrees to indemnify and hold harmless the Company, each of
the directors of the Company, each of the officers of the Company
who signed the Registration Statement, and each other person, if
any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from
the Company to the Manager, but only with reference to information
relating to the Manager furnished to the Company in writing by the
Manager expressly for use in the Registration Statement, the
Prospectus, the Prospectus Supplement (including any Interim
Prospectus Supplement), the General Disclosure Package, any
Permitted Free Writing Prospectus or other free writing prospectus
that the Company has filed, or is required to file, pursuant to
Rule 433(d) under the Securities Act, or any amendment or
supplement thereto.
(c) Required Notices; Right to Counsel. In
case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 8(a) or 8(b), such
person (the “indemnified
party”) shall promptly notify the person against whom
such indemnity may be sought (the “indemnifying party”) in writing
(it being understood that the omission so to notify the
indemnifying party shall not relieve the indemnifying party from
any liability that it might have to any indemnified party otherwise
than under this Section 8 and from any liability that it may have
to any indemnified party under the foregoing provisions of this
Section 8 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the
indemnifying party), and the indemnifying party shall retain
counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying
party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any
such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties
to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in
writing by the Manager, in the case of parties indemnified pursuant
to Section 8(a), and by the Company, in
the case of parties indemnified pursuant to Section 8(b). The indemnifying party shall not be
liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by the
second and third sentences of this paragraph, the indemnifying
party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of
such proceeding.
(d) Contribution. If the indemnification
provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or
8(b) in respect of any losses,
liabilities, claims, damages or expenses (or actions in respect
thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party
as a result of such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the
Company on the one hand and the Manager on the other from the
offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law,
then each indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand and the Manager on
the other in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses
(or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the
Company, on the one hand, and the Manager, on the other hand, from
the offering of the Shares shall be deemed to be in the same
respective proportions as the gross proceeds from the offering
(before deducting expenses) received by the Company bear to the
total commissions received by the Manager. The relative fault shall
of the Company, on the one hand, and the Manager, on the other
hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Manager and
the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
14
The
Company and the Manager agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this Section 8(d). The amount paid or payable by an
indemnified party as a result of the losses, liabilities, claims,
damages or expenses (or actions in respect thereof) referred to
above in this Section 8(d) shall
be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d),
the Manager shall not be required to contribute any amount in
excess of the amount by which the total price at which the Shares
sold by it were offered to the public exceeds the amount of any
damages that the Manager has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission or any amount in
excess of the Selling Commission received by the Manager in
connection with the offering contemplated
hereby.
No
person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
For
purposes of this Section 8(d), each officer and employee of the
Manager and each person, if any, who controls the Manager within
the meaning of the Securities Act or the Exchange Act shall have
the same rights to contribution as the Manager, and each director
of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the
Company within the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as the
Company.
(e) Non-Exclusive Remedies. The obligations
of the parties to this Agreement contained in this Section 8
are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in
equity.
(f) Information Provided by
Manager. It is understood and
agreed that the only information furnished by the Manager to the
Company pursuant to Section 8(a) or 8(b)that is included in the
Registration Statement, the General Disclosure Package, the
Prospectus or any road show other material consists of the
information set forth in the final paragraph under the caption “Plan of
Distribution” immediately before the subcaption “Offer
restrictions outside the United States” in the Prospectus
Supplement.
(g) Survival. The indemnity and
contribution provisions contained in this Section 8 and the representations, warranties and other
statements of the Company contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by
or on behalf of the Manager, any person controlling the Manager or
any affiliate of the Manager or by or on behalf of the Company, its
officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the
Shares.
9. Effectiveness. This Agreement shall
become effective upon the execution and delivery hereof by the
parties hereto.
(a) The Company shall
have the right, by giving written notice as hereinafter specified,
to terminate this Agreement in its sole discretion at any time. Any
such termination shall be without liability of any party to any
other party, except that (i) with respect to any pending sale
through the Manager for the Company, the obligations of the
Company, including, but not limited to, its obligations under
Section 4 above, shall remain in
full force and effect notwithstanding such termination; and
(ii) the provisions of Section 1, Section 3(a) and Section 8 of this Agreement shall remain in full force
and effect notwithstanding such termination.
(b) The Manager shall
have the right, by giving written notice as hereinafter specified,
to terminate this Agreement in its sole discretion at any time. Any
such termination shall be without liability of any party to any
other party except that (i) with respect to any pending sale
through the Manager for the Company, the obligations of the
Company, including, but not limited to, its obligations under
Section 4 above, shall remain in
full force and effect notwithstanding such termination; and
(ii) the provisions of Section 1, Section 3 and Section 8 of this Agreement shall remain in full force
and effect notwithstanding such termination.
(c) This Agreement
shall remain in full force and effect until and unless terminated
pursuant to Section 10(a) or 10(b)
above or otherwise by mutual agreement of the parties; provided that any such termination by
mutual agreement or pursuant to this Section 10(c) shall in all cases be deemed to provide
that Section 1,
Section 3(a) and
Section 8 of this Agreement shall
remain in full force and effect.
(d) Any termination of
this Agreement shall be effective on the date specified in such
notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt
of such notice by the Manager or the Company, as the case may be.
If such termination shall occur prior to the applicable Settlement
Date for any sale of Shares, then such sale shall settle in
accordance with the provisions of Section 4.
11. Press Releases and
Disclosure. The Company may
issue a press release describing the material terms of the
transactions contemplated hereby as soon as practicable following
the date of this Agreement, and may file with the Commission a
Current Report on Form 8-K, with this Agreement attached as an
exhibit thereto, describing the material terms of the transactions
contemplated hereby, and the Company shall consult with the Manager
prior to making such disclosures, and the parties hereto shall use
all commercially reasonable efforts, acting in good faith, to agree
upon a text for such disclosures that is reasonably satisfactory to
all parties hereto. No party hereto shall issue thereafter any
press release or like public statement (including, without
limitation, any disclosure required in reports filed with the
Commission pursuant to the Exchange Act) related to this Agreement or any of the transactions contemplated hereby
without the prior written approval of the other party hereto,
except as may be necessary or appropriate in the reasonable opinion
of the party seeking to make disclosure to comply with the
requirements of applicable law or stock exchange rules and except
for the disclosure required pursuant to Section 6(c) of this
Agreement in the Company’s quarterly reports on Form 10-Q or
annual reports on Form 10-K. If any such press release or like
public statement is so required, the party making such disclosure
shall consult with the other party prior to making such disclosure,
and the parties shall use all commercially reasonable efforts,
acting in good faith, to agree upon a text for such disclosure that
is reasonably satisfactory to all parties
hereto.
15
12. Entire Agreement.
This
Agreement represents the entire agreement between the Company and
the Manager with respect to the preparation of any Registration
Statement, Prospectus Supplement or the Prospectus, the conduct of
the offering and the sale and distribution of the
Shares.
(a) The Company
acknowledges that in connection with the offering of the Shares:
(i) the Manager has acted and will act at arm’s length
and owes no fiduciary duties to, the Company or any other person,
(ii) the Manager owes the Company only those duties and
obligations set forth in this Agreement and prior written
agreements (to the extent not superseded by this Agreement), if
any, and (iii) the Manager may have interests that differ from
those of the Company. The Company waives to the full extent
permitted by applicable law any claims it may have against the
Manager arising from an alleged breach of fiduciary duty in
connection with the sale and distribution of the
Shares.
(b) This
Agreement may not be amended or modified unless in writing by all
of the parties hereto, and no condition herein (express or implied)
may be waived unless waived in writing by each party whom the
condition is meant to benefit.
13. Counterparts. This Agreement may be
signed in two or more counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and
hereto were upon the same instrument and may be delivered by facsimile transmission or
by electronic delivery of a portable document format (PDF) file or
via DocuSign electronic signature.
14. Applicable Law; Consent to
Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the
internal laws of the State of New York without regard to the
principles of conflicts of laws. Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the state and federal
courts sitting in Hennepin County, Minnesota, for the adjudication
of any dispute hereunder or in connection with any transaction
contemplated hereby, and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper.
Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof (certified or registered mail,
return receipt requested) to such party at the address in effect
for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by
law.
15. Headings. The headings of the sections
of this Agreement have been inserted for convenience of reference
only and shall not be deemed a part of this Agreement.
16
16. Notices.
All communications hereunder shall be in writing, effective only
upon receipt and shall be delivered, mailed, telecopied or sent by
email and confirmed to the parties hereto as follows, or in each
case to such other address as the
person to be notified may have requested in writing. Any party to
this Agreement may change such address for notices by sending to
the parties to this Agreement written notice as provided hereunder
of a new address for such purpose.
If to
the Manager, to:
▇▇▇▇▇-▇▇▇▇▇▇
Capital Group LLC
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
Head of Capital Markets and
▇▇▇▇_▇▇▇▇▇▇@▇▇▇▇▇-▇▇▇▇▇▇.▇▇▇
with a
copy to (which shall not constitute notice):
Faegre
Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
2200
▇▇▇▇▇ Fargo Center
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Attn:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
If to
the Company:
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Vice President of Finance and Chief
Financial Officer
with a
copy to (which shall not constitute notice):
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLP
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇▇▇▇▇▇
17
17. Successors.
This Agreement will inure to the benefit of and be binding upon the
parties hereto, and to the benefit persons referred to in Section
8(a) or 8(b), and in each case their respective successors, and no
other person will have any right or obligation hereunder. The term
“successors” shall not include any purchaser of the
Shares as such from the Manager merely by reason of such
purchase.
18. Partial
Unenforceability. The
invalidity or unenforceability of any article, section, paragraph
or provision of this Agreement shall not affect the validity or
enforceability of any other Article, Section, paragraph or
provision hereof. If any article, section, paragraph or provision
of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes
(and only such minor changes) as are necessary to make it valid and
enforceable.
19. Recognition of the U.S. Special Resolution
Regimes.
(a) In the event that
the Manager is a Covered Entity (as defined in this Section) and
becomes subject to a proceeding under a U.S. Special Resolution
Regime (as defined in this Section), the transfer from the Manager
of this Agreement, and any interest and obligation in or under this
Agreement, will be effective to the same extent as the transfer
would be effective under the U.S. Special Resolution Regime if this
Agreement, and any such interest and obligation, were governed by
the laws of the United States or a state of the United
States.
(b) In the event that
the Manager is a Covered Entity or a BHC Act Affiliate (as defined
in this Section) of the Manager becomes subject to a proceeding
under a U.S. Special Resolution Regime, Default Rights (as defined
in this Section) under this Agreement that may be exercised against
the Manager are permitted to be exercised to no greater extent than
such Default Rights could be exercised under the U.S. Special
Resolution Regime if this Agreement were governed by the laws of
the United States or a state of the United States.
(c) For purposes of
this Section: (i) a “BHC Act
Affiliate” has the meaning assigned to the term
“affiliate” in, and shall be interpreted in accordance
with, 12 U.S.C. § 1841(k); (ii) a “Covered Entity” means any of the
following: (A) a “covered entity” as that term is
defined in, and interpreted in accordance with, 12 C.F.R. §
252.82(b); (B) “covered bank” as that term is defined
in, and interpreted in accordance with, 12 C.F.R. § 47.3(b);
or (C) a “covered FSI” as that term is defined in, and
interpreted in accordance with, 12 C.F.R. § 382.2(b); (iii)
“Default Right”
has the meaning assigned to that term in, and shall be interpreted
in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1,
as applicable; and (iv) “U.S.
Special Resolution Regime” means each of (A) the
Federal Deposit Insurance Act and the regulations promulgated
thereunder and (B) Title II of the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform
and Consumer Protection Act and the regulations promulgated
thereunder.
[remainder of page left blank
intentionally - signature page follows]
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Very
truly yours,
By:
/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Chief Financial Officer
Accepted
as of the date first written above:
▇▇▇▇▇-▇▇▇▇▇▇ CAPITAL GROUP LLC
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By:
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/s/ ▇▇▇▇
▇▇▇▇▇▇▇▇
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Name
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▇▇▇▇
Harfiel
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Title
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Head of
Capital Markets
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Permitted Free Writing Prospectuses
None.
I-1
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US.134331905.06
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SCHEDULE II
Due Diligence Protocol
Set
forth below are guidelines for use by the Company and the Manager
in connection with the Manager’s continuous due diligence
efforts in connection with the sale and distribution of the Shares
pursuant to the Agreement. For the avoidance of doubt, the Company
has agreed that no sales under the Agreement will be requested or
made at any time the Company is, or could be deemed to be, in
possession of material non-public information with respect to the
Company.
1.
On or immediately
prior to each Representation Date, in addition to the documents
provided pursuant to Sections 6(l),
6(m), 6(n),
6(o) and 6(p) of the Agreement, the
Manager expects to conduct a due diligence call with the
appropriate business, financial and legal representatives of the
Company. The requirement to conduct a due diligence call hereunder
shall be automatically waived for any Representation Date occurring
at a time at which no sale of Shares through the Manager, acting as
sales agent, is pending, which waiver shall continue until the
earlier to occur of the date the Company submits an order to the
Manager for the sale of Shares hereunder pursuant to Section 2(a)
(which, upon such occurrence, shall be considered a Representation
Date) and the next occurring Representation Date.
2.
On the date of or
promptly after the Company’s management report becomes
available for a given month (but no later than the last business
day of the immediately succeeding month), the Manager expects to
conduct a due diligence call with the appropriate business,
financial, accounting and legal representatives of the Company and
that the Company shall provide the certificate referred to in
Section 5(b) and Section 5(c) of the Agreement.
3.
In the event that
the Company requests the Manager to sell on any one Trading Day an
amount of Shares that would be equal to or greater than 15% of the
average daily trading volume (calculated based on the most recent
three completed Trading Days) of the Company’s common stock,
the Manager expects to conduct a due diligence call with the
appropriate business, financial, accounting and legal
representatives of the Company and that the Company shall provide
the certificate referred to in Section 5(b) and Section 5(c) of the
Agreement.
The
foregoing is an expression of current intent only, and shall not in
any manner limit the Manager’s rights under the Agreement,
including the Manager’s right to require such additional due
diligence procedures as the Manager may reasonably request pursuant
to the Agreement.
II-1
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Exhibit
A
[▇▇▇▇▇-▇▇▇▇▇▇
Letterhead]
__________,
20_
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
VIA
ELECTRONIC MAIL
TRANSACTION CONFIRMATION
Dear
Ladies & Gentlemen:
This
Confirmation sets forth the terms of the agreement of ▇▇▇▇▇-▇▇▇▇▇▇
Capital Group LLC (the “Manager”) with AEHR Test Systems (the “Company”) relating to the sale of
up to $[__________] of shares of the Company’s common stock,
par value $0.01 per share, pursuant to the Equity Distribution
Agreement between the Company and the Manager, dated September 17,
2021 (the “Agreement”). Unless otherwise
defined below, capitalized terms defined in the Agreement shall
have the same meanings when used herein.
By
countersigning or otherwise indicating in writing the
Company’s acceptance of this Confirmation (an
“Acceptance”),
the Company shall have agreed with the Manager to engage in the
following transaction:
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[Aggregate Gross
Price of Shares to be sold]:
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Minimum
price at which Shares may be sold:
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Date(s)
on which Shares may be sold:
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Compensation to
Manager (if different than the Agreement):
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The
transaction set forth in this Confirmation will not be binding on
the Company or the Manager unless and until the Company delivers
its Acceptance; provided,
however, that neither the
Company nor the Manager will be bound by the terms of this
Confirmation unless the Company delivers its Acceptance by _____
[a.m.][p.m.] (New York time) on _______, 20__.
The
transaction, if it becomes binding on the parties, shall be subject
to all of the representations, warranties, covenants and other
terms and conditions of the Agreement, except to the extent amended
or modified hereby, all of which are expressly incorporated herein
by reference. Each of the representations and warranties set forth
in the Agreement shall be deemed to have been made at and as of
every Time of Sale, every Settlement Date and every Representation
Date.
If the
foregoing conforms to your understanding of our agreement, please
so indicate your Acceptance by signing below.
Very
truly yours,
▇▇▇▇▇-▇▇▇▇▇▇
CAPITAL GROUP LLC
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By:
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/s/
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Name
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Title
|
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ACCEPTED
as of the date
first
above written
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By:
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/s/
|
|
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Name
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Title
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A-1
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US.134331905.06
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Exhibit
B
Form of Authorizing Resolution
[TO BE CONFORMED TO THE COMPANY’S CORPORATE GOVERNANCE
DOCUMENTS]
[Special]
Meeting [of the Designated Subcommittee/Committee]
of the
Board of Directors
Upon
notice duly given or waived, a [special] meeting [of the Designated
Subcommittee/Committee (“Subcommittee”)] of the Board of
Directors (the “Board”) of AEHR Test Systems (the “Company”) was held [by conference
telephone] commencing at [_ ]:00 [a.m./p.m.], local
time, on [DATE]. [INSERT NAME(S) OF PARTICIPANTS] attended the
meeting [by conference telephone], constituting a quorum of the
[Subcommittee/Board]. [Mr./Ms. [INSERT NAME(S) OF ANY
NON-PARTICIPANTS], who was unable to participate in the meeting,
waived notice.] Also participating [on the call] at the invitation
of the [Subcommittee/Board] were [INSERT NAME(S) OF PARTICIPANTS],
from the Company and present at the Company’s offices.
Mr./Ms. [INSERT NAME] chaired the meeting and Mr./Ms. [INSERT NAME]
acted as secretary to the meeting.
Mr./Ms.
[INSERT NAME] called the meeting to order and confirmed the
presence of a quorum. After discussing recent developments in the
equity markets with respect to the Company’s common stock,
par value $0.001 (the “Common
Stock”), Mr./Ms. [INSERT NAME] approved the proposed
offering of shares of Common Stock on the date hereof pursuant to
the following resolutions:
RESOLVED that, on
the date of [_____], 20[__] only, the Company may offer and sell
pursuant to the Registration Statement on Form S-3
(No. 333-259317 ) up
to $[_________] of shares of Common Stock (the “Shares”) through ▇▇▇▇▇-▇▇▇▇▇▇
Capital Group LLC (the “Manager”), pursuant to the Equity
Distribution Agreement, dated as of September 17, 2021, between the
Manager and the Company, by means of ordinary brokers’
transactions on the stock exchanges on
which the Common Stock is traded at market prices; and
further
RESOLVED that the
appropriate officers of the Company be, and each of them hereby is,
authorized and directed to take such other actions, and to execute
and deliver such other documents and instruments, as they deem
necessary or advisable to carry out the purpose and intent of the
foregoing resolutions, the taking of any action or the execution of
any document or instrument to be conclusive evidence of the
approval thereof by the [Subcommittee/Board], and that all actions
heretofore taken by officers of the Company consistent with the
foregoing resolutions are hereby ratified and
confirmed.
There
being no further business, the meeting was adjourned.
B-1
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