PALATIN TECHNOLOGIES, INC. EQUITY DISTRIBUTION AGREEMENT
Exhibit 1.1
PALATIN TECHNOLOGIES, INC.
$40,000,000
June
21, 2019
Canaccord
Genuity LLC
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Ladies
and Gentlemen:
Palatin
Technologies, Inc., a Delaware corporation (the “Company”), confirms its
agreement (this “Agreement”) with
Canaccord Genuity LLC (“Canaccord”), as of the
date first written above, as follows:
1. Issuance
and Sale of Shares. The Company
agrees that, from time to time during the term of this Agreement,
on the terms and subject to the conditions set forth herein, it
will issue and sell through Canaccord, acting as sales agent,
shares of common stock, $0.01 par value per share (the
“Common
Shares”), of the Company (the “Shares”) having an
aggregate offering price of up to $40,000,000. The Shares will be
sold on the terms set forth herein at such times and in such
amounts as the Company and Canaccord shall agree from time to time.
The issuance and sale of the Shares through Canaccord will be
effected pursuant to the Registration Statement (as defined in
Section 6(a))
filed by the Company and declared effective by the United States
Securities and Exchange Commission (the “Commission”).
2. Placements.
(a)
Placement Notice. Each time
that the Company wishes to issue and sell Shares hereunder (each, a
“Placement”), it will
notify Canaccord by e-mail notice (or other method mutually agreed
to in writing by the parties) containing the parameters within
which it desires to sell the Shares, which shall at a minimum
include the number of Shares (“Placement Shares”) to be
issued, the time period during which sales are requested to be
made, any limitation on the number of Shares that may be sold in
any one Trading Day (as defined in Section 3) and any minimum
price below which sales may not be made (a “Placement Notice”), a
form of which shall be mutually agreed upon by the Company and
Canaccord. The Placement Notice shall originate from any of the
individuals (each an “Authorized
Representative”) from the Company set forth on
Schedule 1 (with a
copy to each of the other individuals from the Company listed on
such schedule), and shall be addressed to each of the individuals
from Canaccord set forth on Schedule 1 attached hereto, as
such Schedule 1
may be amended from time to time. The Placement Notice shall be
effective upon confirmation by Canaccord unless and until (i)
Canaccord declines to accept the terms contained therein for any
reason, in its sole discretion, in accordance with the notice
requirements set forth in Section 4, (ii) the
entire amount of the Placement Shares have been sold, (iii) the
Company suspends or terminates the Placement Notice in accordance
with the notice requirements set forth in Section 4, (iv) the Company
issues a subsequent Placement Notice with parameters superseding
those on the earlier dated Placement Notice, or (v) the Agreement
has been terminated under the provisions of Section 12.
(i)
Placement Fee. The amount of
compensation to be paid by the Company to Canaccord with respect to
each Placement (in addition to any expense reimbursement pursuant
to Section
7(i)(ii)) shall be equal to 3.0% of gross proceeds from each
Placement.
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(ii)
No Obligation. It is expressly
acknowledged and agreed that neither the Company nor Canaccord will
have any obligation whatsoever with respect to a Placement or any
Placement Shares unless and until the Company delivers a Placement
Notice to Canaccord, and then only upon the terms specified therein
and herein. It is also expressly acknowledged that Canaccord will
be under no obligation to purchase Shares on a principal basis.
Unless otherwise provided herein, in the event of a conflict
between the terms of this Agreement and the terms of a Placement
Notice, the terms of the Placement Notice control.
3. Sale
of Placement Shares by Canaccord. Subject to the
terms and conditions of this Agreement, upon the Company’s
issuance of a Placement Notice, and unless the sale of the
Placement Shares described therein has been declined, suspended, or
otherwise terminated in accordance with the terms of this
Agreement, Canaccord will use its commercially reasonable efforts
consistent with its normal trading and sales practices to sell on
behalf of the Company and as agent, such Placement Shares up to the
amount specified, and otherwise in accordance with the terms of
such Placement Notice. The Company acknowledges that Canaccord will
conduct the sale of Placement Shares in compliance with applicable
law, rules and regulations including, without limitation,
Regulation M under the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”), and the NYSE American LLC and that such
compliance may include a delay in commencement of sales efforts
after receipt of a Placement Notice. Canaccord will provide written
confirmation to the Company, as provided in Section 13, no later than the
opening of the Trading Day (as defined below) next following the
Trading Day on which they have made sales of Placement Shares
hereunder setting forth the number of Placement Shares sold on such
day, the compensation payable by the Company to Canaccord with
respect to such sales, and the Net Proceeds (as defined below)
payable to the Company. Canaccord may sell Placement Shares by any
method permitted by law deemed to be an “at the market”
offering under Rule 415 of the Securities Act of 1933, as amended
(the “Securities
Act”), including without limitation sales made
directly on the NYSE American, on any other existing trading market
for the Common Shares or to or through a market maker in a
transaction consummated other than on an exchange, or in negotiated
transactions at market prices prevailing at the time of sale or at
prices related to such prevailing market prices. Notwithstanding
anything to the contrary set forth in this Agreement or a Placement
Notice, the Company acknowledges and agrees that (i) there can be
no assurance that Canaccord will be successful in selling any
Placement Shares or as to the price at which any Placement Shares
are sold, if at all, and (ii) Canaccord will incur no liability or
obligation to the Company or any other person or entity if they do
not sell Placement Shares for any reason other than a failure by
Canaccord to use its commercially reasonable efforts consistent
with its normal trading and sales practices to sell on behalf of
the Company and as agent such Placement Shares as provided under
this Section 3.
For the purposes hereof, “Trading Day” means any
day on which the NYSE American is open for trading.
4. Suspension
of Sales.
(a)
The Company or
Canaccord may, upon notice to the other party in writing, by
telephone (confirmed immediately by verifiable facsimile
transmission or e-mail) or by e-mail notice (or other method
mutually agreed to in writing by the parties), suspend any sale of
Placement Shares; provided, however, that such suspension shall not
affect or impair either party’s obligations with respect to
any Placement Shares sold hereunder prior to the receipt of such
notice. The Company agrees that no such notice shall be effective
against Canaccord unless it is made to one of the individuals named
on Schedule 1
hereto, as such Schedule may be amended from time to
time.
(b)
Notwithstanding
any other provision of this Agreement, during any period in which
the Company is in possession of material non-public information,
the Company and Canaccord (provided Canaccord has been given prior
written notice of such by the Company, which notice Canaccord
agrees to treat confidentially) agree that no sale of Placement
Shares will take place.
5. Settlement.
(a)
Settlement of Placement
Shares. Unless otherwise specified in the applicable
Placement Notice, settlement for sales of Placement Shares will
occur on the second (2nd) Business Day (or such earlier day as is
agreed by the parties to be industry practice for regular-way
trading) following the date on which such sales are made (each a
“Settlement
Date”). The amount of proceeds to be delivered to the
Company on a Settlement Date against the receipt of the Placement
Shares sold (“Net
Proceeds”) will be equal to the aggregate sales price
at which such Placement Shares were sold, after deduction for (i)
the commission or other compensation for such sales payable by the
Company to Canaccord, as the case may be, pursuant to Section 2 hereof, (ii) any
other amounts due and payable by the Company to Canaccord hereunder
pursuant to Section
7(i) hereof, and (iii) any transaction fees imposed by any
governmental or self-regulatory organization in respect of such
sales.
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(b)
Delivery of Shares. On each
Settlement Date, the Company will, or will cause its transfer agent
to, electronically transfer the Placement Shares being sold by
crediting Canaccord’s accounts or its designee’s
account at The Depository Trust Company through its Deposit
Withdrawal Agent Commission System or by such other means of
delivery as may be mutually agreed upon by the parties hereto and,
upon receipt of such Placement Shares, which in all cases shall be
freely tradeable, transferable, registered shares in good
deliverable form, Canaccord will, on each Settlement Date, deliver
the related Net Proceeds in same day funds delivered to an account
designated by the Company prior to the Settlement Date. If the
Company defaults in its obligation to deliver Placement Shares on a
Settlement Date, the Company agrees that in addition to and in no
way limiting the rights and obligations set forth in Section 10 hereto, it will (i)
hold Canaccord 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 to Canaccord any commission, discount, or other
compensation to which it would otherwise have been entitled absent
such default; provided, however, that without limiting Section 10 herein, the Company
shall not be obligated to pay Canaccord any commission, discount or
other compensation on any Placement Shares that it is not possible
to settle due to: (i) a suspension or material limitation in
trading in securities generally on the NYSE American; or (ii) a
material disruption in securities settlement or clearance services
in the United States.
6. Representations
and Warranties of the Company. The Company
represents and warrants to, and agrees with, Canaccord
that:
(a)
Registration Statement and
Prospectus. The Common Shares are registered pursuant to
Section 12(b) of the Exchange Act, and the Company has filed all
reports, schedules, forms, statements and other documents required
to be filed by it with the Commission (the “Commission Documents”)
since the Company has been subject to the requirements of Section
12 of the Exchange Act, and all of such filings required to be
filed within the last 12 months have been made on a timely basis.
The Common Shares are currently quoted on the NYSE American under
the trading symbol “PTN”. The Company and the
transactions contemplated hereby meet the requirements for use of
Form S-3 under the Securities Act and the rules and regulations
thereunder or the interpretations thereof by the Commission
(“Rules and
Regulations”), including but not limited to the
transaction requirements for an offering made by the issuer set
forth in Instruction I.B.1 to Form S-3. The Company has prepared
and filed with the Commission a registration statement on Form S-3
(File No. 333-226905) with respect to the Shares to be offered and
sold by the Company pursuant to this Agreement. Such registration
statement, at any given time, including the amendments thereto at
such time, the exhibits and any schedules thereto at such time, the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act at such time and the documents
otherwise deemed to be a part thereof or included therein by the
rules and regulations under the Securities Act, is herein called
the “Registration
Statement.” The Registration Statement, including the
base prospectus contained therein (the “Base Prospectus”) was
prepared by the Company in conformity with the requirements of the
Securities Act and all applicable Rules and Regulations. One or
more prospectus supplements relating to the Placement Shares (the
“Prospectus
Supplements,” and together with the Base Prospectus
and any amendment thereto and all documents incorporated therein by
reference, the “Prospectus”) have been
or will be prepared by the Company in conformity with the
requirements of the Securities Act and all applicable Rules and
Regulations and have been or will be filed with the Commission in
the manner and time frame required by the Securities Act and the
Rules and Regulations. Any amendment or supplement to the
Registration Statement or Prospectus required by this Agreement
will be so prepared and filed by the Company and, as applicable,
the Company will use commercially reasonable efforts to cause it to
become effective as soon as reasonably practicable. No stop order
suspending the effectiveness of the Registration Statement has been
issued, and no proceeding for that purpose has been instituted or,
to the knowledge of the Company, threatened by the Commission. No
order preventing or suspending the use of the Base Prospectus, the
Prospectus Supplement, the Prospectus or any Issuer Free Writing
Prospectus has been issued by the Commission. Copies of all filings
made by the Company under the Securities Act and all Commission
Documents that were filed with the Commission have either been
delivered to Canaccord or made available to Canaccord on the
Commission’s Electronic Data Gathering, Analysis, and
Retrieval system (“▇▇▇▇▇”). Any reference
herein to the Registration Statement, the Prospectus, or any
amendment or supplement thereto shall be deemed to refer to and
include the documents incorporated (or deemed to be incorporated)
by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, and any reference herein to the terms
“amend,” “amendment” or
“supplement” with respect to the Registration Statement
or Prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission
deemed to be incorporated by reference therein. For the purposes of
this Agreement, the “Applicable Time” means,
with respect to any Shares, the time of sale of such Shares
pursuant to this Agreement.
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(b)
No Misstatement or Omission.
Each part of the Registration Statement, when such part became or
becomes effective, at any deemed effective date pursuant to Rule
430B(f)(2) on the date of filing thereof with the Commission and at
each Applicable Time and Settlement Date, and the Prospectus, on
the date of filing thereof with the Commission and at each
Applicable Time and Settlement Date, conformed or will conform in
all material respects with the requirements of the Securities Act
and the Rules and Regulations; each part of the Registration
Statement, when such part became or becomes effective, did not or
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; and the Prospectus, on
the date of filing thereof with the Commission, and the Prospectus
and the applicable Issuer Free Writing Prospectus(es) issued at or
prior to such Applicable Time, taken together (collectively, and
with respect to any Shares, together with the public offering price
of such Shares, the “Disclosure Package”) and
at each Applicable Time and Settlement Date, did not or will not
include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
except that the foregoing shall not apply to statements or
omissions in any such document made in reliance on information
furnished in writing to the Company by Canaccord intended for use
in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or in any Issuer Free Writing
Prospectus(es).
(c)
Conformity with Securities Act and
Exchange Act. The documents incorporated by reference in the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, when they became effective under the Securities
Act or were filed with the Commission under the Exchange Act, as
the case may be, conformed in all material respects with the
requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Registration Statement or the
Prospectus or any further amendment or supplement thereto, when
such documents become effective or are filed with the Commission,
as the case may be, will conform to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder 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; provided however, that this
representation and warranty shall not apply to any statements or
omissions (a) that have been corrected in a filing that has been
incorporated by reference in the Prospectus not less than 24 hours
prior to the relevant Applicable Time or (b) made in reliance on
information furnished in writing to the Company by Canaccord
intended for use in any such document.
(d)
Financial Statements; Non-GAAP
Financial Measures. The financial statements included in the
Registration Statement, the Disclosure Package and the Prospectus,
together with the related schedules and notes, present fairly, in
all material respects, the financial position of the Company as of
the dates indicated and the results of their operations and the
changes in their cash flows for the periods specified; such
financial statements have been prepared in conformity with
generally accepted accounting principles in the United States
applied on a consistent basis throughout the periods covered
thereby (except as otherwise stated therein and subject in the case
of unaudited financial statements to the absence of footnotes and
normal year end adjustments), and any supporting schedules included
or incorporated by reference in each of the Registration Statement
present fairly, in all material respects, the information required
to be stated therein; and the other financial information regarding
the Company included or incorporated by reference in the
Registration Statement, the Disclosure Package and the Prospectus
has been derived from the accounting records of the Company and
presents fairly, in all material respects, the information shown
thereby.
(e)
Subsidiaries. The Company does
not own or control, directly or indirectly, any corporation,
association or other entity other than the subsidiary listed in
Schedule 2 hereto
(the “Subsidiary”). Except as
described in the Prospectus, all of the assets described in the
Prospectus as owned by the Subsidiary of the Company are owned
directly by the Subsidiary.
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(f)
Organization and Good
Standing. The Company is duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority necessary to hold its
properties and conduct its business where it is engaged, except
where the failure to be so qualified or in good standing or have
such power or authority would not have a material adverse effect on
the business, properties, management, financial position,
shareholders’ equity, results of operations or prospects of
the Company or on the performance by the Company of its obligations
under this Agreement (a “Material Adverse
Effect”). The Company does not own, directly or
indirectly, any shares of stock or any other equity interests or
long-term debt securities of any corporation, firm, partnership,
joint venture, association or other entity other than RhoMed
Incorporated.
(g)
Title to Real and Personal
Property. Except as described in the Registration Statement,
the Disclosure Package or the Prospectus, the Company has good and
marketable title in fee simple (in the case of real property) to,
or has valid and marketable rights to lease or otherwise use, all
items of real and personal property and assets that are material to
the business of the Company, in each case free and clear of all
liens, encumbrances, claims and defects and imperfections of title
except those that (i) do not materially interfere with the use made
and proposed to be made of such property by the Company or (ii)
could not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect.
(h)
No Unlawful Payments. Neither
the Company nor, to the knowledge of the Company, any director,
officer, employee, agent, affiliate or other person acting on
behalf of the Company has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of
1977, as amended, the ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ of the United Kingdom, or
any other applicable anti-bribery or anti-corruption laws; or (iv)
taken an act in furtherance of any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment. The Company has
instituted and maintains and will continue to maintain policies and
procedures designed to promote and ensure compliance with all
applicable anti-bribery and anti-corruption laws. For purposes of
this Agreement, except where otherwise expressly provided, the term
“affiliate” has the meaning set forth in Rule 405 under
the Securities Act.
(i)
Investment Company Act.
Neither the Company nor the Subsidiaries, is now or, after giving
effect to the offering and sale of the Shares, will be required to
register as an “investment company” or an entity
“controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment Company
Act”).
(j)
Capitalization. The Company
has authorized and outstanding capitalization as set forth in the
Registration Statement and the Prospectus, and all of the issued
capital shares of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable and have been
issued in compliance with all applicable United States federal and
state and, to the knowledge of the Company, all other applicable
foreign securities laws; and all of the issued capital shares of
the Subsidiaries of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and the
shares of such Subsidiaries are owned directly or indirectly by the
Company and, except as set forth in the Registration Statement, the
Disclosure Package and the Prospectus, are held free and clear of
all Encumbrances. Except as set forth in the Registration Statement
and the Prospectus, and except with respect to equity awards issued
under the Company’s equity incentive plans, there are no
outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital
shares of the Company.
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(k)
The Shares. The Shares have
been duly authorized and, when issued, delivered and paid for
pursuant to this Agreement, will be validly issued, fully paid and
non-assessable, free and clear of all Encumbrances and will be
issued in compliance with all applicable United States federal and
state and all other applicable foreign securities laws; the capital
shares of the Company, including the Common Shares, conform in all
material respects to the description thereof contained in the
Registration Statement and the Common Shares, including the
Placement Shares, will conform to the description thereof contained
in the Prospectus as amended or supplemented. Neither the
shareholders of the Company, nor any other person or entity have
any preemptive rights or rights of first refusal with respect to
the Placement Shares or other rights to purchase or receive any of
the Placement Shares or any other securities or assets of the
Company, and no person has the right, contractual or otherwise, to
cause the Company to issue to it, or register pursuant to the
Securities Act, shares or other securities or assets of the Company
upon the issuance or sale of the Placement Shares.
(l)
No Material Changes.
Subsequent to the respective dates as of which information is given
in the Registration Statement, the Prospectus and the Disclosure
Package, and except as may be otherwise stated or incorporated by
reference in the Registration Statement, the Prospectus and the
Disclosure Package, (i) neither the Company nor the Subsidiaries
has sustained any material loss or interference with the business
of the Company and its Subsidiaries, taken as a whole, including
without limitation, from fire, explosion, flood or other calamity
or damage to any asset, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or
decree; (ii) there have been no transactions entered into by the
Company or the Subsidiaries which are material to the Company and
its Subsidiaries, considered as a whole, (iii) there has not been
any change, development, or event that has caused, or could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and (iv) since the date of the latest
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus there has not been any
material change, on a consolidated basis, in the authorized capital
shares of the Company and its Subsidiaries, any material increase
in the short-term debt or long-term debt of the Company and its
Subsidiaries, on a consolidated basis, or any dividend or
distribution of any kind declared, set aside for payment, paid or
made by the Company on any class of capital shares, or any Material
Adverse Effect, or any development reasonably likely to cause or
result in a Material Adverse Effect.
(m)
Legal Proceedings. Except as
described in the Registration Statement, the Disclosure Package and
the Prospectus, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the
Company is or may reasonably be expected to become a party or to
which any property of the Company is or may reasonably be expected
to become the subject that, individually or in the aggregate, if
determined adversely to the Company, could reasonably be expected
to have a Material Adverse Effect; to the knowledge of the Company,
no such investigations, actions, suits or proceedings are
threatened or, contemplated by any governmental or regulatory
authority or threatened by others; and (i) there are no current or
pending legal, governmental or regulatory actions, suits or
proceedings that are required under the Securities Act to be
described in the Registration Statement, the Disclosure Package or
the Prospectus that are not so described in the Registration
Statement, the Disclosure Package and the Prospectus and (ii) there
are no statutes, regulations or contracts or other documents that
are required under the Securities Act to be filed as exhibits to
the Registration Statement or described in the Registration
Statement, the Disclosure Package or the Prospectus that are not so
filed as exhibits to the Registration Statement (or the documents
incorporated by reference therein) or described in the Registration
Statement, the Disclosure Package and the Prospectus.
(n)
Authorization;
Enforceability.
(i)
The Company has
full right, power and authority to execute and deliver this
Agreement; and all action required to be taken for the due and
proper authorization, execution and delivery by it of this
Agreement and the consummation by it of the transactions
contemplated hereby has been duly and validly taken. This Agreement
has been duly authorized, executed and delivered by the
Company.
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(ii)
The execution,
delivery and performance by the Company of this Agreement, the
issuance and sale of the Shares by the Company and the consummation
by the Company of the transactions contemplated by this Agreement
will not (i) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which
the Company is bound or to which any of the property or assets of
the Company is subject, (ii) result in any violation of the
provisions of the charter or by-laws of the Company or (iii) result
in the violation of any law or statute or any judgment, order, rule
or regulation of any court or arbitrator or governmental or
regulatory authority, except, in the case of clauses (i) and (iii)
above, for any such conflict, breach, violation or default that
would not, individually or in the aggregate, have a Material
Adverse Effect.
(o)
No Violations or Default. The
Company is not (i) in violation of its charter or by-laws; (ii) in
default, and no event has occurred that, with notice or lapse of
time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company is a party or
by which the Company is bound or to which any of the property or
assets of the Company is subject; or (iii) in violation of any law
or statute or any judgment, order, rule or regulation of any court
or arbitrator or governmental or regulatory authority, except, in
the case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(p)
Compliance with Laws. The
Company has not violated and is in compliance with all material
laws, statutes, ordinances, regulations, rules and orders of each
foreign, federal, state or local government and any other
governmental department or agency having jurisdiction over the
Company, and any judgment, decision, decree or order of any court
or governmental agency, department or authority having jurisdiction
over the Company, except for such violations or noncompliance
which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
(q)
Consents and Permits. The
Company possesses all licenses, certificates, permits and other
authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the
ownership or lease of its properties or the conduct of its business
as described in the Registration Statement, the Disclosure Package
and the Prospectus, except where the failure to possess or make the
same would not, individually or in the aggregate, have a Material
Adverse Effect; and except as described in the Registration
Statement, the Disclosure Package and the Prospectus, the Company
has not received notice of any revocation or modification of any
such license, certificate, permit or authorization or has any
reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course. 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 (i) where the failure to obtain any
such consent, approval, authorization, order, registration or
qualification would not, individually or in the aggregate, affect
the Company's ability to consummate the transactions contemplated
by this Agreement, and (ii) the registration of the Units under the
Securities Act and such consents, approvals, authorizations, orders
and registrations or qualifications as may be required by the
Financial Industry Regulatory Authority, Inc. (“FINRA”), the NYSE
American, or under applicable state securities laws in connection
with the transactions contemplated by this Agreement.
(r)
Insurance. Other than as set
forth in the Prospectus, the Company has insurance covering its
properties, operations, personnel and businesses which insurance is
in amounts and insures against such losses and risks that the
Company believes are prudent and customary for a company of its
size and in the business in which it is engaged, and adequate to
protect the Company and its business; the Company has not (i)
received notice from any insurer or agent of such insurer that
capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or (ii)
any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to
obtain similar coverage at reasonable cost from similar insurers as
may be necessary to continue its business.
7
(s)
Environmental Laws. Other than
as set forth in the Prospectus, the Company and its Subsidiaries
have obtained all environmental permits, licenses and other
authorizations required by federal, state, foreign and local law
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“Environmental Laws”), in
order to conduct their businesses as described in the Prospectus
except where the failure to obtain a particular environmental
permit, license, or authorization, has not or would not reasonably
be expected to, either individually or in the aggregate, result in
a Material Adverse Effect; the Company and the Subsidiaries are
conducting their businesses in compliance in all material respects
with such permits, licenses and authorizations and with applicable
environmental laws; and, except as described in the Prospectus, the
Company is not in violation of any federal, state, foreign or local
law or regulation relating to the storage, handling, disposal,
release or transportation of hazardous or toxic materials except
for such violations or noncompliance which, individually or in the
aggregate, would not have a Material Adverse Effect.
(t)
Independent Public
Accountants. KPMG LLP, which has certified certain financial
statements of the Company, is an independent registered public
accounting firm with respect to the Company within the applicable
rules and regulations adopted by the Commission and the Public
Company Accounting Oversight Board (United States) and as required
by the Securities Act.
(u)
Forward-Looking Statements. No
forward looking statement within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act contained in the
Commission Documents, the Registration Statement or the Prospectus,
has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
(v)
Intellectual Property. The
Company owns or possess adequate rights to use all material
patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service ▇▇▇▇ registrations,
copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of
its business as currently conducted or as described in the
Registration Statement, the Disclosure Package or the Prospectus to
be conducted. The conduct of its business will not conflict in any
material respect with any such rights of others. The Company has
not received any notice of any claim of infringement,
misappropriation or conflict with any such rights of others in
connection with its patents, patent rights, licenses, inventions,
trademarks, service marks, trade names, copyrights and
know-how.
(w)
Taxes. The Company was not,
for the immediately preceding taxable year, treated as, will not,
for the current taxable year, be treated as, and does not
anticipate that, for any subsequent taxable year, it will be
treated as a “passive foreign investment company,” a
“foreign investment company” or a “foreign
personal holding company” for United States federal income
tax purposes.
(i)
The Company has
filed all United States federal and state and all other applicable
local and foreign income tax returns which have been required to be
filed, except in any case in which the failure to so file would not
have a Material Adverse Effect.
(ii)
The Company has
paid all federal, state and local and other foreign taxes required
to be paid and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing would otherwise be
delinquent, except, in all cases, for any such tax, assessment,
fine or penalty that is being contested in good faith and except in
any case in which the failure to so pay would not result in a
Material Adverse Effect.
(iii)
No stamp or other
issuance or transfer taxes or duties and no capital gains, income,
withholding or other taxes are payable by or on behalf of Canaccord
to any political subdivision or taxing authority in connection with
the sale and delivery by the Company of the Placement Shares to or
for the account of Canaccord or the sale and delivery by Canaccord
of the Placement Shares to the purchasers thereof.
8
(x)
Disclosure
Controls.
(i)
The Company has
established and maintains disclosure controls and procedures (as
such term is defined in Rule 13a-15 under the Exchange Act), which
(a) are designed to ensure that material information relating to
the Company, including its consolidated Subsidiaries, is made known
to the Company’s principal executive officer and its
principal financial officer by others within those entities,
particularly during the preparation of the Registration Statement;
(b) have been evaluated for effectiveness as of the date of the
filing of the Registration Statement with the Commission; and (c)
are effective in all material respects to perform the functions for
which they were established.
(ii)
The Company (a)
makes and keeps accurate books and records and (b) maintains
internal accounting controls which provide reasonable assurance
that (1) transactions are executed in accordance with
management’s authorization, (2) transactions are recorded as
necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (3) access to its assets is
permitted only in accordance with management’s authorization
and (4) the reported accountability for its assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(y)
Accounting Controls. There is
no (i) significant deficiency or material weakness in the design or
operation of internal controls over financial reporting; or (ii)
fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal controls over financial reporting.
(z)
Certain Market Activities. The
Company has not taken, directly or indirectly, without giving
effect to activities by Canaccord, any action designed to, or that
might be reasonably expected to, cause or result in stabilization
or manipulation of the price of the Common Shares.
(aa)
Broker/Dealer Relationships.
Neither the Company nor the Subsidiaries or any related entities
(i) is required to register as a “broker” or
“dealer” in accordance with the provisions of the
Exchange Act or (ii) directly or indirectly through one or more
intermediaries, controls or is a “person associated with a
FINRA member” or “associated person of a FINRA
member” (within the meaning of Article I of the Bylaws of the
FINRA).
(bb)
▇▇▇▇▇▇▇▇-▇▇▇▇▇. There is and
has been no failure on the part of the Company or, to the knowledge
of the Company, any of the Company’s directors or officers,
in their capacities as such, to comply with any provision of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations
promulgated in connection therewith (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”),
including Section 402 related to loans and Sections 302 and 906
related to certifications.
(cc)
Finder’s Fees. Neither
the Company nor the Subsidiaries has incurred any liability for any
brokerage commission, finder’s fees or similar payments in
connection with the transactions herein contemplated, except as may
otherwise exist with respect to Canaccord pursuant to this
Agreement.
(dd)
Labor Disputes. There are no
existing or, to the knowledge of the Company, threatened labor
disputes with the employees of the Company or its Subsidiaries
which would reasonably be expected to have a Material Adverse
Effect.
(ee)
Canaccord Purchases. The
Company acknowledges and agrees that Canaccord has informed the
Company that Canaccord may, to the extent permitted under the
Securities Act and the Exchange Act, purchase and sell Common
Shares for Canaccord’s own account and for the account of its
clients at the same time as sales of Placement Shares occur
pursuant to this Agreement.
9
(ff)
No Registration Rights. Except
as may be described in the Prospectus, neither the Company nor its
Subsidiaries is party to any agreement that provides any person
with the right to require the Company or its Subsidiaries to
register any securities for sale under the Securities Act by reason
of the filing of the Registration Statement with the Commission or
the issuance and sale of the Placement Shares.
(gg)
Prospectus Disclosure. The
statements set forth in the Registration Statement and the
Prospectus under the caption “Description of the Securities
That May Be Offered” insofar as they purport to constitute a
summary of the terms of the Shares, and under the caption
“Plan of Distribution,” insofar as they purport to
describe the provisions of the laws and documents referred to
therein, are accurate and complete in all material
respects.
(hh)
No Conflicts with Sanctions
Laws. Neither the Company, nor, to the knowledge of the
Company, any of its directors, officers, employees, agents, or
affiliates, is currently the subject or the target of any sanctions
administered or enforced by the U.S. Government, (including,
without limitation, the Office of Foreign Assets Control of the
U.S. Department of the Treasury or the U.S. Department of State),
the United Nations Security Council, the European Union, Her
Majesty’s Treasury, or other relevant sanctions authority
(collectively, “Sanctions”), nor is the
Company located, organized or resident in a country or territory
that is the subject or the target of Sanctions; and the Company
will not directly or indirectly use the proceeds of the offering of
the Shares hereunder, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other person or entity (i) to fund or facilitate any activities of
or business with any person, or in any country or territory, that,
at the time of such funding or facilitation, is the subject or the
target of Sanctions, or (ii) in any other manner that will result
in a violation by any person (including any person participating in
the transaction, whether as underwriter, advisor, investor or
otherwise) of Sanctions.
(ii)
Compliance with Money Laundering
Laws. The operations of the Company are and have been
conducted at all times in material compliance with applicable
financial record keeping and reporting requirements, including
those of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the applicable money laundering statutes of all
jurisdictions where the Company conducts business, the rules and
regulations thereunder and any related or similar rules,
regulations or guidelines issued, administered or enforced by any
governmental agency (collectively, the “Anti-Money Laundering
Laws”) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company with respect to the Anti-Money
Laundering Laws is pending or, to the knowledge of the Company,
threatened.
(jj)
Off-Balance Sheet
Arrangements. There are no transactions, arrangements and
other relationships between and/or among the Company, and/or, to
the knowledge of the Company, any of its affiliates and any
unconsolidated entity, including, but not limited to, any
structural finance, special purpose or limited purpose entity
(each, an “Off
Balance Sheet Transaction”) that could reasonably be
expected to affect materially the Company’s liquidity or the
availability of or requirements for its capital resources,
including those Off Balance Sheet Transactions described in the
Commission’s Statement about Management’s Discussion
and Analysis of Financial Conditions and Results of Operations
(Release Nos. 33-8056; 34-45321; FR-61), required to be described
in the Prospectus which have not been described as
required.
(kk)
ERISA. Each material employee
benefit plan, within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended
(“ERISA”), that is
maintained, administered or contributed to by the Company or any of
its affiliates for employees or former employees of the Company and
its Subsidiaries has been maintained in material compliance with
its terms and the requirements of any applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended (the “Code”); no prohibited
transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred which would result in a material
liability to the Company with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative
exemption; and for each such plan that is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, no
“accumulated funding deficiency” as defined in Section
412 of the Code has been incurred, whether or not waived, and the
fair market value of the assets of each such plan (excluding for
these purposes accrued but unpaid contributions) exceeds the
present value of all benefits accrued under such plan determined
using reasonable actuarial assumptions.
10
(ll)
No Misstatement or Omission in an
Issuer Free Writing Prospectus. Each issuer free writing
prospectus, as defined in Rule 405 under the Securities Act (an
“Issuer Free
Writing Prospectus”), as of the Applicable Time did
not or 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, in light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty with
respect to any statement contained in any Issuer Free Writing
Prospectus in reliance upon and in conformity with written
information furnished to the Company by and through Canaccord
intended for use therein.
(mm)
Conformity of Issuer Free Writing
Prospectus. Each Issuer Free Writing Prospectus conformed or
will conform in all material respects with the requirements of the
Securities Act on the date of first use, and the Company has
complied or will comply with any filing requirements applicable to
such Issuer Free Writing Prospectus pursuant to the Securities Act.
Each Issuer Free Writing Prospectus, as of its issue date and at
all subsequent times through the completion of the public offer and
sale of the Placement Shares, did not, does not and will not
include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement or the
Prospectus, including any document incorporated by reference
therein that has not been superseded or modified. The Company has
not made any offer relating to the Shares that would constitute an
Issuer Free Writing Prospectus without the prior written consent of
Canaccord. The Company has retained in accordance with the
Securities Act all Issuer Free Writing Prospectuses that were not
required to be filed pursuant to the Securities Act.
(nn)
FINRA. The Company satisfies
the pre-1992 eligibility requirements for the use of a registration
statement on Form S-3 in connection with the offering and sale of
the Shares contemplated hereby (the pre-1992 eligibility
requirements for the use of the registration statement on Form S-3
include (i) having a non-affiliate, public common equity float of
at least $100 million and annual trading volume of at least three
million shares and (ii) having been subject to the Exchange Act
reporting requirements for a period of 36 months).
(oo)
Food and Drug Administration.
Except in each case as otherwise disclosed in the Registration
Statement, the Disclosure Package and the Prospectus, the Company
has not been advised, and has no reason to believe, that it is not
conducting business in compliance with all applicable laws, rules
and regulations of the jurisdictions in which it is conducting
business, and the Company: (i) is and at all times has been in
material compliance with all federal, state and local statutes,
rules or regulations applicable to the ownership, testing,
development, manufacture, packaging, processing, use, distribution,
marketing, labeling, promotion, sale, offer for sale, storage,
import, export or disposal of any product under development,
manufactured or distributed by the Company (“Applicable Laws”); (ii)
has not received any correspondence or notice from the U.S. Food
and Drug Administration (the “FDA”) or any other
federal, state, local or foreign governmental or regulatory
authority alleging or asserting material noncompliance with any
Applicable Laws or any licenses, certificates, approvals,
clearances, authorizations, permits and supplements or amendments
thereto required by any such Applicable Laws (“Authorizations”); (iii)
possesses all material Authorizations and such Authorizations are
valid and in full force and effect and the Company is not in
material violation of any term of any such Authorizations; (iv) has
not received notice of any claim, action, suit, proceeding,
hearing, enforcement, investigation, arbitration or other action
from the FDA or any other federal, state, local or foreign
governmental or regulatory authority or third party alleging that
any product operation or activity is in material violation of
Section 361 of the Public Health Services Act, any Applicable Laws
or Authorizations and has no knowledge that the FDA or any other
federal, state, local or foreign governmental or regulatory
authority or third party is considering any such claim, litigation,
arbitration, action, suit, investigation or proceeding; (v) has not
received notice that the FDA or any other federal, state, local or
foreign governmental or regulatory authority has taken, is taking
or intends to take action to limit, suspend, modify or revoke any
material Authorizations and has no knowledge that the FDA or any
other federal, state, local or foreign governmental or regulatory
authority is considering such action; (vi) has filed, obtained,
maintained or submitted all material reports, documents, forms,
notices, applications, records, claims, submissions and supplements
or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments were
materially complete and correct on the date filed (or were
corrected or supplemented by a subsequent submission); and (vii)
has not, either voluntarily or involuntarily, initiated, conducted,
or issued or caused to be initiated, conducted or issued, any
recall, market withdrawal or replacement, safety alert, “dear
doctor” letter, or other notice or action relating to the
alleged lack of safety or efficacy of any product or any alleged
product defect or violation and, to the Company’s knowledge,
no third party has initiated, conducted or intends to initiate any
such notice or action.
11
(pp)
Preclinical and Clinical
Trials. The studies, tests and preclinical and clinical
trials conducted by, or on behalf of the Company were and, if still
pending, are, being conducted in all material respects in
accordance with clinical protocols, procedures and controls
pursuant to accepted professional scientific standards and all
Applicable Laws and Authorizations, including, without limitation,
the Federal Food, Drug and Cosmetic Act and the rules and
regulations promulgated thereunder (collectively,
“FFDCA”). The
descriptions of the results of such studies, tests and trials
contained in the Registration Statement and the Prospectus are
accurate and complete in all material respects and fairly present
the data derived from such studies, tests and trials. The Company
is not aware of any studies, tests or trials, the results of which
the Company believes reasonably call into question the study, test,
or trial results described or referred to in the Registration
Statement and the Prospectus when viewed in the context in which
such results are described and the clinical state of development.
The Company has not received any notices or correspondence from the
FDA or any other federal, state, local or foreign governmental or
regulatory authority requiring the termination, suspension or
material modification of any studies, tests or preclinical or
clinical trials conducted by or on behalf of the
Company.
7. Covenants
of the Company. The Company
covenants and agrees with Canaccord that:
(a)
Registration Statement
Amendments. After the date of this Agreement and during the
period in which a prospectus relating to the Placement Shares is
required to be delivered by Canaccord under the Securities Act
(including in circumstances where such requirement may be satisfied
pursuant to Rule 172 or Rule 173(a) under the Securities Act), (i)
the Company will notify Canaccord promptly of the time when any
subsequent amendment to the Registration Statement has been filed
with the Commission and has become effective (each, a
“Registration
Statement Amendment Date”) or any subsequent
supplement to the Prospectus has been filed and of any request by
the Commission for any amendment or supplement to the Registration
Statement or Prospectus or for additional information; (ii) the
Company will file promptly all other material required to be filed
by it with the Commission pursuant to Rule 433(d) under the
Securities Act; (iii) it will prepare and file with the Commission,
promptly upon Canaccord’s request, any amendments or
supplements to the Registration Statement or Prospectus that, in
Canaccord’s reasonable opinion, may be necessary or advisable
in connection with the distribution of the Placement Shares by
Canaccord (provided, however, that the failure of Canaccord to make
such request shall not relieve the Company of any obligation or
liability hereunder, or affect Canaccord’s right to rely on
the representations and warranties made by the Company in this
Agreement); and (iv) the Company will submit to Canaccord a copy of
any amendment or supplement to the Registration Statement or
Prospectus a reasonable period of time before the filing thereof
and will afford Canaccord and Canaccord’s counsel a
reasonable opportunity to comment on any such proposed filing prior
to such proposed filing; and the Company will cause each amendment
or supplement to the Prospectus to be filed with the Commission as
required pursuant to the applicable paragraph of Rule 424 (b) of
the Rules and Regulations or, in the case of any document to be
incorporated therein by reference, to be filed with the Commission
as required pursuant to the Exchange Act, within the time period
prescribed.
(b)
Notice of Commission Stop
Orders. The Company will advise Canaccord, promptly after it
receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of the
Prospectus or other prospectus in respect of the Shares, of any
notice of objection of the Commission to the use of the form of the
Registration Statement or any post-effective amendment thereto
pursuant to Rule 401(g)(2) under the Securities Act, 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 form of the
Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any such stop
order or of any such order preventing or suspending the use of the
Prospectus in respect of the Shares or suspending any such
qualification, to promptly use its commercially reasonable efforts
to obtain the withdrawal of such order; and in the event of any
such issuance of a notice of objection, promptly to take such
reasonable steps as may be necessary to permit offers and sales of
the Placement Shares by Canaccord, which may include, without
limitation, amending the Registration Statement or filing a new
registration statement, at the Company’s expense (references
herein to the Registration Statement shall include any such
amendment or new registration statement).
12
(c)
Delivery of Prospectus; Subsequent
Changes. Within the time during which a prospectus relating
to the Shares is required to be delivered by Canaccord under the
Securities Act (including in circumstances where such requirement
may be satisfied pursuant to Rule 172 or Rule 173(a) under the
Securities Act), the Company will comply with all requirements
imposed upon it by the Securities Act and by the Rules and
Regulations, as from time to time in force, and will file on or
before their respective due dates all reports required to be filed
by it with the Commission pursuant to Sections 13(a), 13(c), 15(d),
if applicable, or any other provision of or under the Exchange Act.
If during such period any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such
period it is necessary to amend or supplement the Registration
Statement or Prospectus to comply with the Securities Act, the
Company will immediately notify Canaccord to suspend the offering
of Shares during such period and the Company will promptly amend or
supplement the Registration Statement or Prospectus (at the expense
of the Company) so as to correct such statement or omission or
effect such compliance.
(d)
NYSE American Filings. In
connection with the offering and sale of the Placement Shares, the
Company will file with the NYSE American all documents and notices,
and make all certifications, required by the NYSE American of
companies that have securities that are listed on the NYSE
American.
(e)
Listing of Placement Shares.
The Company will use commercially reasonable efforts to cause the
Placement Shares to be listed on the NYSE American and to qualify
the Placement Shares for sale under the securities laws of such
jurisdictions as Canaccord designates and to continue such
qualifications in effect so long as required for the distribution
of the Placement Shares; provided that the Company shall not be
required in connection therewith to qualify as a foreign
corporation or to file a general consent to service of process in
any jurisdiction.
(f)
Delivery of Registration Statement
and Prospectus. The Company will furnish to Canaccord and
its counsel (at the expense of the Company) copies of the
Registration Statement, the Prospectus (including all documents
incorporated by reference therein) and all amendments and
supplements to the Registration Statement or Prospectus that are
filed with the Commission during the period in which a prospectus
relating to the Shares is required to be delivered under the
Securities Act (including all documents filed with the Commission
during such period that are deemed to be incorporated by reference
therein), in each case as soon as reasonably practicable and in
such quantities as Canaccord may from time to time reasonably
request and, at Canaccord’s request, will also furnish copies
of the Prospectus to each exchange or market on which sales of
Placement Shares may be made.
(g)
[Intentionally
Omitted].
(h)
Earnings Statement. The
Company will make generally available to its security holders as
soon as reasonably practicable, but in any event not later than 15
months after the end of the Company’s current fiscal quarter,
an earnings statement covering a 12-month period that satisfies the
provisions of Section 11(a) of the Securities Act and Rule 158 of
the Rules and Regulations.
(i)
Expenses.
(i)
The Company,
whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, will pay or cause to
be paid all expenses incident to the performance of its obligations
hereunder, including but not limited to (i) the preparation,
printing and filing of the Registration Statement and each
amendment and supplement thereto, of each Prospectus and of each
amendment and supplement thereto and each Issuer Free Writing
Prospectus (as defined in Section 8 of this Agreement),
(ii) the preparation, issuance and delivery of the Placement
Shares, (iii) all fees and disbursements of the Company’s
counsel, accountants and other advisors, (iv) the qualification of
the Placement Shares under securities laws in accordance with the
provisions of Section
7(e) of this Agreement, including filing fees in connection
therewith, (v) the printing and delivery to Canaccord of copies of
the Prospectus and any amendments or supplements thereto, and of
this Agreement, (vi) the fees and expenses incurred in connection
with the listing or qualification of the Placement Shares for
trading on the NYSE American, and (vii) any filing fees related to
the Commission and FINRA.
13
(ii)
Notwithstanding
the foregoing, the Company shall reimburse Canaccord for all of its
reasonable and documented expenses, up to a maximum reimbursement
of $25,000, arising out of this Agreement (including travel and
related expenses, the costs of document preparation, production and
distribution, third party research and database services and the
reasonable and documented fees and disbursements of counsel to
Canaccord) within ten (10) days of the presentation by Canaccord to
the Company of a reasonably detailed statement
therefor.
(j)
Use of Proceeds. The Company
will use the net proceeds as described in the
Prospectus.
(k)
Other Sales. Without the prior
written consent of Canaccord (which consent shall not be
unreasonably withheld, conditioned or delayed), the Company will
not (A) directly or indirectly, offer to sell, sell, announce the
intention to sell, contract to sell, pledge, lend, grant or sell
any option, right or warrant to sell or any contract to purchase,
purchase any contract or option to sell or otherwise transfer or
dispose of any Common Shares (other than the Shares offered
pursuant to the provisions of this Agreement) or securities
convertible into or exchangeable for Common Shares, warrants or any
rights to purchase or acquire, Common Shares or file any
registration statement under the Securities Act with respect to any
of the foregoing (other than a registration statement on Form S-8),
or (B) enter into any swap or other agreement or any transaction
that transfers in whole or in part, directly or indirectly, any of
the economic consequence of ownership of the Common Shares, or any
securities convertible into or exchangeable or exercisable for or
repayable with Common Shares, whether any such swap or transaction
described in clause (A) or (B) above is to be settled by delivery
of Common Shares or such other securities, in cash or otherwise,
during the period beginning on the fifth (5th) Business Day
immediately prior to the date on which any Placement Notice is
delivered by the Company hereunder and ending on the fifth (5th)
Business Day immediately following the final Settlement Date with
respect to Placement Shares sold pursuant to such Placement Notice.
The foregoing sentence shall not apply to (i) Common Shares,
options to purchase Common Shares or Common Shares issuable upon
the exercise of options, restricted share awards, restricted share
unit awards, Common Shares issuable upon vesting of restricted
share unit awards, or other equity awards or Common Shares issuable
upon exercise or vesting of equity awards, pursuant to any employee
or director (x) equity award or benefits plan or otherwise approved
by the Company’s Board of Directors, (y) share ownership or
share purchase plan or (z) dividend reinvestment plan (but not
shares subject to a waiver to exceed plan limits in its dividend
reinvestment plan) of the Company whether now in effect or
hereafter implemented, and (ii) Common Shares issuable upon
conversion of securities or the exercise of warrants, options or
other rights in effect or outstanding on the date
hereof.
(l)
Change of Circumstances. The
Company will, at any time a Placement Notice is outstanding, advise
Canaccord immediately after it shall have received notice or
obtained knowledge thereof, of any information or fact that would
alter or affect any opinion, certificate, letter or other document
provided to Canaccord in connection with such Placement Notice; and
without the prior written consent of Canaccord (which consent shall
not be unreasonably withheld), the Company will not directly or
indirectly in any other “at the market” or continuous
equity transaction offer to sell, sell, contract to sell, grant any
option to sell or otherwise dispose of any Common Shares (other
than the Placement Shares offered pursuant to the provisions of
this Agreement) or securities convertible into or exchangeable for
Common Shares, warrants or any rights to purchase or acquire,
Common Shares prior to the later of the termination of this
Agreement and the tenth (10th) day immediately following the final
Settlement Date with respect to Placement Shares sold pursuant to
such Placement Notice; provided, however, that such restrictions
will not be applicable to the Company’s issuance or sale of
(i) Common Shares, options to purchase Common Shares or Common
Shares issuable upon the exercise of options, restricted share
awards, restricted share unit awards, Common Shares issuable upon
vesting of restricted share unit awards, or other equity awards or
Common Shares issuable upon exercise or vesting of equity awards,
pursuant to any employee or director (x) equity award or benefits
plan or otherwise approved by the Company’s Board of
Directors, (y) share ownership or share purchase plan or (z)
dividend reinvestment plan (but not shares subject to a waiver to
exceed plan limits in its dividend reinvestment plan) of the
Company whether now in effect or hereafter implemented, and (ii)
Common Shares issuable upon conversion of securities or the
exercise of warrants, options or other rights in effect or
outstanding on the date hereof.
14
(m)
Due Diligence Cooperation. The
Company will cooperate with any reasonable due diligence review
conducted by Canaccord or its agents, including, without
limitation, providing information and making available documents
and the Company’s senior corporate officers, as Canaccord may
reasonably request; provided, however, that the Company shall be
required to make available senior corporate officers only (i) by
telephone or at the Company’s principal offices and (ii)
during the Company’s ordinary business hours.
(n)
Affirmation of Representations,
Warranties, Covenants and Other Agreements. Upon
commencement of the offering of the Placement Shares under this
Agreement (and upon the recommencement of the offering of the
Placement Shares under this Agreement following any termination of
a suspension of sales hereunder), and at each Applicable Time, the
Company shall be deemed to have affirmed each representation,
warranty, covenant and other agreement contained in this
Agreement.
(o)
Required Filings Relating to
Placement of Placement Shares. In each Annual Report on Form
10-K or Quarterly Report on Form 10-Q filed by the Company in
respect of any quarter in which sales of Placement Shares were made
by Canaccord under this Agreement (each date on which any such
document is filed, and any date on which an amendment to any such
document is filed, a “Company Periodic Report
Date”), the Company shall set forth with regard to
such quarter the number of Shares sold through the Canaccord under
this Agreement, the Net Proceeds received by the Company and the
compensation paid by the Company to Canaccord with respect to sales
of Placement Shares pursuant to this Agreement.
(p)
Representation Dates;
Certificate. During the term of this Agreement, on the date
of each Placement Notice given hereunder, promptly upon each
request of Canaccord, and each time the Company (i) files the
Prospectus relating to the Placement Shares or amends or
supplements(other than a prospectus supplement relating solely to
an offering of securities other than the Placement Shares) the
Registration Statement or the Prospectus relating to the Placement
Shares by means of a post-effective amendment, sticker, or
supplement but not by means of incorporation of document(s) by
reference to the Registration Statement or the Prospectus relating
to the Placement Shares; (ii) files an annual report on Form 10-K
under the Exchange Act; (iii) files its quarterly reports on Form
10-Q under the Exchange Act; or (iv) files a report on Form 8-K
containing amended financial information (other than an earnings
release, to “furnish” information pursuant to Items
2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to Item
8.01 of Form 8-K relating to the reclassifications of certain
properties as discontinued operations in accordance with Statement
of Financial Accounting Standards No. 144) under the Exchange Act
(each date of filing of one or more of the documents referred to in
clauses (i) through (iv) shall be a “Representation Date”);
the Company shall furnish Canaccord (but in the case of clause (iv)
above only if Canaccord reasonably determines that the financial
information contained in such Form 8-K is material) with a
certificate, in the form attached hereto as Exhibit A. The requirement to
provide a certificate under this Section 7(p) shall be waived
for any Representation Date occurring at a time at which no
Placement Notice is pending, which waiver shall continue until the
earlier to occur of the date the Company delivers a Placement
Notice hereunder (which for such calendar quarter shall be
considered a Representation Date) and the next occurring
Representation Date following the delivery of such Placement
Notice; provided, however, that such waiver shall not apply for any
Representation Date on which the Company files its annual report on
Form 10-K.
Notwithstanding the
foregoing, if the Company subsequently decides to sell Placement
Shares following a Representation Date when the Company relied on
such waiver and did not provide Canaccord with a certificate under
this Section 7(p),
then before the Company delivers the Placement Notice or Canaccord
sells any Placement Shares, the Company shall provide Canaccord
with a certificate, in the form attached hereto as Exhibit A, dated the date of
the Placement Notice.
15
(q)
Legal Opinions. Upon execution
of this Agreement, upon the commencement of the offering of the
Placement Shares under this Agreement (and upon the recommencement
of the offering of the Placement Shares under this Agreement
following any termination of a suspension of sales hereunder), and
as promptly as reasonably practicable following each Representation
Date with respect to which the Company is obligated to deliver a
certificate in the form attached hereto as Exhibit A for which no waiver
is applicable, the Company will furnish or cause to be furnished to
Canaccord the written opinion letter and negative assurance of
▇▇▇▇▇▇▇▇ ▇▇▇▇ LLP, counsel to the Company, dated the date the
opinion or letter is required to be delivered, as the case may be,
in a form and substance reasonably satisfactory to Canaccord and
its counsel, or, in lieu of such opinion and negative assurance,
counsel last furnishing such opinion and negative assurance to
Canaccord shall furnish Canaccord with a letter substantially to
the effect that Canaccord may rely on such last opinion and
negative assurance to the same extent as though each were dated the
date of such letter authorizing reliance (except that statements in
such last opinion and negative assurance shall be deemed to relate
to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such letter authorizing
reliance).
(r)
Comfort Letters. Upon
execution of this Agreement, upon the commencement of the offering
of the Placement Shares under this Agreement (and upon the
recommencement of the offering of the Placement Shares under this
Agreement following any termination of a suspension of sales
hereunder), and within two (2) trading days of each Representation
Date with respect to which the Company is obligated to deliver a
certificate in the form attached hereto as Exhibit A for which no waiver
is applicable, the Company shall cause KPMG LLP to furnish
Canaccord a letter dated the date of this Agreement or the date of
such commencement or recommencement or the date of such
Representation Date (but in the case of clauses (i) and (iv) of
Section 7(p) above, only if Canaccord reasonably determines that
the information contained in such filings with the Commission
contains a material change in the financial disclosure of the
Company), as the case may be (the “Comfort Letters”), in
form and substance satisfactory to Canaccord, (i) confirming that
they are registered independent public accountants within the
meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission,
(ii) stating, as of such date, the conclusions and findings of the
firm with respect to the financial information and other matters
included in or incorporated by reference in the Registration
Statement as ordinarily covered by accountants’
“comfort letters” to underwriters in connection with
registered public offerings (the first such letter, the
“Initial Comfort
Letter”) and (iii) updating the Initial Comfort Letter
with any information which would have been included in the Initial
Comfort Letter had it been given on such date and modified as
necessary to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such
letters.
(s)
Market Activities. The Company
will not, directly or indirectly (without giving effect to the
activities of Canaccord), (i) take any action designed to cause or
result in, or that constitutes or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares or (ii) sell, bid for, or purchase the Shares, or pay anyone
any compensation for soliciting purchases of the Shares other than
Canaccord.
(t)
Insurance. The Company and its
Subsidiary shall maintain, or cause to be maintained, insurance in
such amounts and covering such risks as is reasonable and customary
for companies engaged in similar businesses in similar
industries.
(u)
Compliance with Laws. The
Company and its Subsidiary shall comply with all applicable
federal, state and local or foreign law, rule, regulation,
ordinance, order or decree, except where failure to so comply would
not reasonably be expected to have a Material Adverse Effect.
Furthermore, the Company and its Subsidiary shall maintain, or
cause to be maintained, all material environmental permits,
licenses and other material authorizations required by federal,
state and local law in order to conduct their businesses as
described in the Prospectus, and the Company and its Subsidiary
shall conduct their businesses, or cause their businesses to be
conducted, in substantial compliance with such material permits,
licenses and authorizations and with applicable environmental laws,
except where the failure to maintain or be in compliance with such
permits, licenses and authorizations would not reasonably be
expected to have a Material Adverse Effect.
16
(v)
Investment Company Act. The
Company will conduct its affairs in such a manner so as to
reasonably ensure that it will not be or become, at any time prior
to the termination of this Agreement, an “investment
company,” as such term is defined in the Investment Company
Act, assuming no change in the Commission’s current
interpretation as to entities that are not considered an investment
company.
(w)
Securities Act and Exchange
Act. The Company will use commercially reasonable efforts to
comply with all requirements imposed upon it by the Securities Act
and the Exchange Act as from time to time in force, so far as
necessary to permit the continuance of sales of, or dealings in,
the Shares as contemplated by the provisions hereof and the
Prospectus.
(x)
No Offer to Sell. Other than a
free writing prospectus (as defined in Rule 405 under the
Securities Act) approved in advance by the Company and Canaccord in
its capacity as principal or agent hereunder, neither Canaccord nor
the Company (including its agents and representatives, other than
Canaccord in its capacity as such) will make, use, prepare,
authorize, approve or refer to any written communication (as
defined in Rule 405 under the Securities Act), required to be filed
by it with the Commission, that constitutes an offer to sell or
solicitation of an offer to buy Common Shares
hereunder.
(y)
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The
Company will use its commercially reasonable efforts to comply with
all effective applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act.
(z)
Consent to Canaccord Trading.
The Company consents to Canaccord trading in the Common Shares of
the Company for Canaccord’s own account and for the account
of its clients at the same time as sales of Placement Shares occur
pursuant to this Agreement.
(aa)
Actively Traded Security. If,
at the time of execution of this Agreement, the Company’s
Common Shares is not an “actively traded security”
exempted from the requirements of Rule 101 of Regulation M under
the Exchange Act by subsection (c)(1) of such rule, the Company
shall notify Canaccord at the time the Common Shares become an
“actively traded security” under such rule.
Furthermore, the Company shall notify Canaccord immediately if the
Common Shares, having once qualified for such exemption, cease to
so qualify.
8. Additional
Representations and Covenants of the Company.
(a)
Issuer Free Writing
Prospectuses.
(i)
The Company
represents that it has not made, and covenants that, unless it
obtains the prior written consent of Canaccord, it will not make
any offer relating to the Shares that would constitute an Issuer
Free Writing Prospectus required to be filed by it with the
Commission or retained by the Company under Rule 433 of the
Securities Act; except as set forth in a Placement Notice, no use
of any Issuer Free Writing Prospectus has been consented to by
Canaccord. The Company agrees that it will comply with the
requirements of Rules 164 and 433 of the Securities Act applicable
to any Issuer Free Writing Prospectus, including timely filing with
the Commission or retention where required and
legending.
(ii)
The Company agrees
that no Issuer Free Writing Prospectus, if any, will include any
information that conflicts with the information contained in the
Registration Statement, including any document incorporated by
reference therein that has not been superseded or modified, or the
Prospectus. In addition, no Issuer Free Writing Prospectus, if any,
will include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading; provided however, the foregoing shall not apply to any
statements or omissions in any Issuer Free Writing Prospectus made
in reliance on information furnished in writing to the Company by
Canaccord intended for use therein.
17
(iii)
The Company agrees
that if at any time following issuance of an Issuer Free Writing
Prospectus any event occurred or occurs as a result of which such
Issuer Free Writing Prospectus would conflict with the information
in the Registration Statement, including any document incorporated
by reference therein that has not been superseded or modified, or
the Prospectus or would include an untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading, the Company will give prompt notice
thereof to Canaccord and, if requested by Canaccord, will prepare
and furnish without charge to Canaccord an Issuer Free Writing
Prospectus or other document which will correct such conflict,
statement or omission; provided, however, the foregoing shall not
apply to any statements or omissions in any Issuer Free Writing
Prospectus made in reliance on information furnished in writing to
the Company by Canaccord intended for use therein.
(b)
Non-Issuer Free Writing
Prospectus. The Company consents to the use by Canaccord of
a free writing prospectus that (a) is not an “Issuer Free
Writing Prospectus” as defined in Rule 433 under the
Securities Act, and (b) contains only information describing the
preliminary terms of the Shares or their offering, or information
permitted under Rule 134 under the Securities Act; provided that
Canaccord 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 Canaccord that
otherwise would not be required to be filed by the Company
thereunder, but for the action of Canaccord and the Company shall
have consented to the form and substance of such free writing
prospectus prior to its use by Canaccord.
(c)
Distribution of Offering
Materials. The Company has not distributed and will not
distribute, during the term of this Agreement, any offering
materials in connection with the offering and sale of the Placement
Shares other than the Registration Statement, Prospectus or any
Issuer Free Writing Prospectus reviewed and consented to by
Canaccord and included in a Placement Notice (as described in
clause (a)(i) above).
9. Conditions
to Canaccord’s Obligations. The obligations
of Canaccord hereunder with respect to a Placement will be subject
to the continuing accuracy and completeness of the representations
and warranties made by the Company herein and in the applicable
Placement Notices, to the due performance by the Company of its
obligations hereunder, to the completion by Canaccord of a due
diligence review satisfactory to Canaccord in its reasonable
judgment, and to the continuing satisfaction (or waiver by
Canaccord in its sole discretion) of the following additional
conditions:
(a)
Registration Statement
Effective. The Registration Statement shall have become
effective and shall be available for the sale of (i) all Placement
Shares issued pursuant to all prior Placements and not yet sold by
Canaccord and (ii) all Placement Shares contemplated to be issued
by the Placement Notice relating to such Placement.
(b)
No Material Notices. None of
the following events shall have occurred and be continuing: (i)
receipt by the Company of any request for additional information
from the Commission or any other federal or state or foreign or
other governmental, administrative or self-regulatory authority
during the period of effectiveness of the Registration Statement,
the response to which might reasonably require any amendments or
supplements to the Registration Statement or the Prospectus; (ii)
the issuance by the Commission or any other federal or state or
foreign or other governmental authority of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt by
the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the
Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) the occurrence
of any event that makes any statement made in the Registration
Statement or the Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material
respect or that requires the making of any changes in the
Registration Statement, related prospectus or documents so that, in
the case of the Registration Statement, it will 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 in the case of the
Prospectus, it will 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;
and (v) the Company’s reasonable determination that a
post-effective amendment to the Registration Statement would be
appropriate.
18
(c)
No Misstatement or Material
Omission. Canaccord shall not have advised the Company that
the Registration Statement or Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact that in
Canaccord’s opinion is material, or omits to state a fact
that in Canaccord’s opinion is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
(d)
Material Changes. Except as
contemplated and appropriately disclosed in the Prospectus, or
disclosed in the Company’s reports filed with the Commission,
in each case at the time the applicable Placement Notice is
delivered, there shall not have been any material change, on a
consolidated basis, in the authorized capital shares of the Company
and its Subsidiary, or any Material Adverse Effect, or any
development that may reasonably be expected to cause a Material
Adverse Effect, or a downgrading in or withdrawal of the rating
assigned to any of the Company’s securities by any rating
organization or a public announcement by any rating organization
that it has under surveillance or review its rating of any of the
Company’s securities, the effect of which, in the sole
judgment of Canaccord (without relieving the Company of any
obligation or liability it may otherwise have), is so material as
to make it impracticable or inadvisable to proceed with the
offering of the Placement Shares on the terms and in the manner
contemplated in the Prospectus.
(e)
Certificate. Canaccord shall
have received the certificate required to be delivered pursuant to
Section 7(p) on or before the date on which delivery of such
certificate is required pursuant to Section 7(p).
(f)
Legal Opinions. Canaccord
shall have received the opinion and letter of counsel to the
Company required to be delivered pursuant Section 7(q) on or before
the date on which such delivery of such opinion and letter are
required pursuant to Section 7(q). In addition, Canaccord shall
have received a negative assurance letter of ▇▇▇▇▇▇▇ Procter LLP,
counsel to Canaccord, on such dates and with respect to such
matters as Canaccord may reasonably request.
(g)
Comfort Letters. Canaccord
shall have received the Comfort Letters required to be delivered
pursuant Section 7(r) on or before the date on which such delivery
of such letters are required pursuant to Section 7(r).
(h)
Approval for Listing; No
Suspension. The Placement Shares shall have either been (i)
approved for listing, subject to notice of issuance, on the NYSE
American, or (ii) the Company shall have filed an application for
listing of the Placement Shares on the NYSE American at or prior to
the issuance of the Placement Notice. Trading in the Common Shares
shall not have been suspended on the NYSE American.
(i)
Other Materials. On each date
on which the Company is required to deliver a certificate pursuant
to Section 7(p), the Company shall have furnished to Canaccord such
appropriate further information, certificates, opinions and
documents as Canaccord may reasonably request. All such opinions,
certificates, letters and other documents will be in compliance
with the provisions hereof. The Company will furnish Canaccord with
such conformed copies of such opinions, certificates, letters and
other documents as Canaccord shall reasonably request.
(j)
Securities Act Filings Made.
All filings with the Commission required by Rule 424 under the
Securities Act to have been filed prior to the issuance of any
Placement Notice hereunder shall have been made within the
applicable time period prescribed for such filing by Rule
424.
(k)
No Termination Event. There
shall not have occurred any event that would permit Canaccord to
terminate this Agreement pursuant to Section 12(a).
19
10. Indemnification
and Contribution.
(a)
Company Indemnification. The
Company will indemnify and hold harmless Canaccord and each person,
if any, who controls Canaccord against any losses, claims, damages
or liabilities, joint or several, to which Canaccord or controlling
person may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained
in the Registration Statement, the Prospectus, the Disclosure
Package, or any Issuer Free Writing Prospectus or any “issuer
information” filed or required to be filed pursuant to Rule
433(d) under the Securities Act, or any amendment or supplement to
the Registration Statement, the Prospectus or the Disclosure
Package, or in any application or other document executed by or on
behalf of the Company or based on written information furnished by
or on behalf of the Company filed in any jurisdiction in order to
qualify the Placement Shares under the securities laws thereof or
filed with the Commission, or arise out of or are based upon the
omission or alleged omission to state in the Registration
Statement, the Prospectus, the Disclosure Package, or any Issuer
Free Writing Prospectus or any “issuer information”
filed or required to be filed pursuant to Rule 433(d) under the
Securities Act, or any amendment or supplement to the Registration
Statement, the Prospectus, or the Disclosure Package or in any
application or other document executed by or on behalf of the
Company or based on written information furnished by or on behalf
of the Company filed in any jurisdiction in order to qualify the
Placement Shares under the securities laws thereof or filed with
the Commission a material fact required to be stated in it or
necessary to make the statements in it not misleading, and will
reimburse Canaccord for any reasonable and documented legal
expenses of counsel for Canaccord and one set of local counsel in
each applicable jurisdiction for Canaccord, and for other expenses
reasonably incurred by Canaccord in connection with investigating
or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Prospectus or the Disclosure
Package, or any such amendment or supplement thereto, in reliance
upon and in conformity with written information furnished to the
Company by and through Canaccord expressly for use
therein.
(b)
Canaccord Indemnification.
Canaccord will indemnify and hold harmless the Company, its
directors, its officers who signed the Registration Statement and
each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any losses, claims, damages or liabilities to which the
Company may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained
in the Registration Statement (or any amendments thereto), the
Prospectus (or any amendment or supplement thereto), the Disclosure
Package, any Issuer Free Writing Prospectus or any non-Issuer Free
Writing Prospectus used pursuant to Section 8(b), or arise out of
or are based upon the omission or alleged omission to state therein
a material fact, in the case of the Registration Statement or any
amendment thereto, required to be stated therein or necessary to
make the statements therein not misleading and, in the case of the
Prospectus or any supplement thereto, the Disclosure Package, the
Issuer Free Writing Prospectus or any non-Issuer Free Writing
Prospectus, necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, in each
case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement (or any amendments
thereto), the Prospectus (or any amendment or supplement thereto),
the Disclosure Package, any Issuer Free Writing Prospectus, or any
non-Issuer Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Company by and
through Canaccord expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such
action or claim as such expenses are incurred.
20
(c)
Procedure. Promptly after
receipt by an indemnified party under subsection (a) or (b) above
of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, promptly notify such
indemnifying party in writing of the institution of such action and
such indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided,
however, that the failure to so notify such indemnifying party
shall not relieve such indemnifying party from any liability which
such indemnifying party may have to any indemnified party or
otherwise. (The indemnified party or parties shall have the right
to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel
shall have been authorized in writing by the indemnifying party in
connection with the defense of such action or the indemnifying
party shall not have, within a reasonable period of time in light
of the circumstances, employed counsel to defend such action or
such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are
different from, additional to or in conflict with those available
to such indemnifying party (in which case such indemnifying party
shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by such indemnifying party
and paid as incurred (it being understood, however, that such
indemnifying party shall not be liable to the expenses of more than
one separate counsel (in addition to any local counsel) in any one
action or series of related actions in the same jurisdiction
representing the indemnified parties who are parties to such
action). No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of,
or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or
not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or
a failure to act, by or on behalf of any indemnified party. No
indemnifying party shall be liable for any settlement of any action
or claim affected without its written consent, which consent shall
not be unreasonably withheld.
(d)
Contribution. If the
indemnification provided for in this Section 10 is unavailable to
or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (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, claims, damages or liabilities (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
Canaccord on the other from the offering of the Placement Shares.
If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c)
above, 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 Canaccord on the
other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (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 Canaccord on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company, bear to the
total underwriting discounts, commissions and other fees received
by Canaccord. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the
one hand or Canaccord on the other and the parties’ relative
intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and Canaccord
agree that it would not be just and equitable if contributions
pursuant to this subsection (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
subsection (d). The amount paid or payable by an indemnified party
as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection
(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 subsection (d), Canaccord
shall not be required to contribute any amount in excess of the
amount by which the total price at which the Placement Shares
distributed to the public by it were offered to the public exceeds
the amount of any damages which Canaccord has otherwise been
required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent
misrepresentation.
21
(e)
Obligations. The obligations
of the Company under this Section 10 shall be in
addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person,
if any, who controls Canaccord within the meaning of the Securities
Act; and the obligations of Canaccord under this Section 10 shall be in
addition to any liability which Canaccord may otherwise have and
shall extend, upon the same terms and conditions, to each officer
and director of the Company and to each person, if any, who
controls the Company within the meaning of the Securities
Act.
11. Representations
and Agreements to Survive Delivery. All
representations and warranties of the Company herein or in
certificates delivered pursuant hereto shall remain operative and
in full force and effect regardless of (i) any investigation made
by or on behalf of Canaccord, any controlling persons, or the
Company (or any of their respective officers, directors or
controlling persons), (ii) delivery and acceptance of the Placement
Shares and payment therefor or (iii) any termination of this
Agreement.
12. Termination.
(a)
Canaccord shall
have the right to terminate this Agreement at any time by giving
notice as hereinafter specified if (i) any Material Adverse Effect
has occurred, or any development that is reasonably expected to
cause a Material Adverse Effect has occurred or any other event has
occurred which, in the sole judgment of Canaccord, may materially
impair Canaccord’s ability to proceed with the offering to
sell the Shares, (ii) the Company shall have failed, refused or
been unable, at or prior to any Settlement Date, to perform any
material agreement on its part to be performed hereunder, (iii) any
other condition of Canaccord’s obligations hereunder is not
fulfilled, or (iv) any suspension or limitation of trading in the
Common Shares of the Company on the NYSE American shall have
occurred. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 7(i) (Expenses),
Section 10
(Indemnification), Section 11 (Survival of
Representations), Section
12(f) (Termination), Section 17 (Applicable Law;
Consent to Jurisdiction) and Section 18 (Waiver of Jury
Trial) hereof shall remain in full force and effect notwithstanding
such termination. If Canaccord elects to terminate this Agreement
as provided in this Section 12(a), Canaccord shall
provide the required notice as specified in Section 13
(Notices).
(b)
The Company shall
have the right to terminate this Agreement in its sole discretion
at any time by giving ten (10) days’ notice as hereinafter
specified. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 7(i), Section 10, Section 11, Section 12(f), Section 17 and Section 18 hereof shall remain
in full force and effect notwithstanding such
termination.
(c)
In addition to, and
without limiting Canaccord’s rights under Section 12(a), Canaccord shall
have the right to terminate this Agreement in its sole discretion
at any time after the date of this Agreement by giving ten (10)
days’ notice as hereinafter specified. Any such termination
shall be without liability of any party to any other party except
that the provisions of Section 7(i), Section 10, Section 11, Section 12(f), Section 17 and Section 18 hereof shall remain
in full force and effect notwithstanding such
termination.
(d)
This Agreement
shall remain in full force and effect unless terminated pursuant to
Sections 12(a),
12(b) or
12(c) above or
otherwise by mutual agreement of the parties; provided that any
such termination by mutual agreement shall in all cases be deemed
to provide that Section
7(i), Section
10, Section
11, Section
12(f), Section
17 and Section
18 shall remain in full force and effect.
(e)
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 Canaccord or the Company, as the case may be. If
such termination shall occur prior to the Settlement Date for any
sale of Placement Shares, such Placement Shares shall settle in
accordance with the provisions of this Agreement.
22
(f)
In the event that
the Company terminates this Agreement, as permitted under
Section 12(b), the
Company shall be under no continuing obligation pursuant to this
Agreement to utilize the services of Canaccord in connection with
any sale of securities of the Company or to pay any compensation to
Canaccord other than compensation with respect to sales of
Placement Shares subscribed on or before the termination date and
the Company shall be free to engage other placement agents and
underwriters from and after the termination date with no continuing
obligation to Canaccord.
13. Notices.
All notices or other communications required or permitted to be
given by any party to any other party pursuant to the terms of this
Agreement shall be in writing and if sent to Canaccord, shall be
delivered to:
Canaccord Genuity
LLC
▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ECM,
General Counsel
E-mail:
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇;
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
With a
copy to:
▇▇▇▇▇▇▇ Procter
LLP
The New
York Times Building
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq.
E-mail:
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
or if
sent to the Company, shall be delivered to:
Palatin
Technologies, Inc.
▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Cedar
Brook Corporate center
▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief
Executive Officer
E-mail:
▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
With a
copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇
LLP
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq.
E-mail:
▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Each
party to this Agreement may change such address for notices by
sending to the other party to this Agreement written notice of a
new address for such purpose. Each such notice or other
communication shall be deemed given (i) when delivered personally
or by verifiable facsimile transmission (with an original to
follow) on or before 4:30 p.m., eastern time, on a Business Day or,
if such day is not a Business Day, on the next succeeding Business
Day, (ii) on the next Business Day after timely delivery to a
nationally-recognized overnight courier, (iii) on the Business Day
actually received if deposited in the U.S. mail (certified or
registered mail, return receipt requested, postage prepaid), and
(iv) if sent by email, on the Business Day on which receipt is
confirmed by the individual to whom the notice is sent, other than
via auto-reply. For purposes of this Agreement, “Business Day” shall mean
any day other than a day on which banks are permitted or required
to be closed in New York City.
23
14. Successors
and Assigns. This Agreement
shall inure to the benefit of and be binding upon the Company and
Canaccord and their respective successors and the affiliates,
controlling persons, officers and directors referred to in
Section 10 hereof.
References to any of either of the parties contained in this
Agreement shall be deemed to include the successors and permitted
assigns of such party. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the
parties hereto or their respective successors and permitted assigns
any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.
Neither party may assign its rights or obligations under this
Agreement without the prior written consent of the other party,
provided, however, that Canaccord may assign its rights and
obligations hereunder to an affiliate of Canaccord without
obtaining the Company’s consent.
15. Adjustments
for Share Splits. The parties
acknowledge and agree that all share-related numbers contained in
this Agreement shall be adjusted to take into account any share
split, share dividend or similar event effected with respect to the
Shares.
16. Entire
Agreement; Amendment; Severability. This Agreement
(including all schedules and exhibits attached hereto and Placement
Notices issued pursuant hereto) constitutes the entire agreement
and supersedes all other prior and contemporaneous agreements and
undertakings, both written and oral, among the parties hereto with
regard to the subject matter hereof. Neither this Agreement nor any
term hereof may be amended except pursuant to a written instrument
executed by the Company and Canaccord. In the event that any one or
more of the provisions contained herein, or the application thereof
in any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
17. 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 the City of New York, borough of Manhattan, for
the adjudication of any dispute hereunder or in connection with any
transaction contemplated hereby, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof
(certified or registered mail, return receipt requested) to such
party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.
18. Waiver
of Jury Trial. The Company and
Canaccord hereby irrevocably waive any right either may have to a
trial by jury in respect of any claim based upon or arising out of
this agreement or any transaction contemplated hereby.
19. Absence
of Fiduciary Duties. The parties
acknowledge that they are sophisticated in business and financial
matters and that each of them is solely responsible for making its
own independent investigation and analysis of the transactions
contemplated by this Agreement. They further acknowledge that
Canaccord has not been engaged by the Company to provide, and has
not provided, financial advisory services in connection with the
terms of the offering and sale of the Shares nor has Canaccord
assumed at any time a fiduciary relationship to the Company in
connection with such offering and sale. The parties also
acknowledge that the provisions of this Agreement fairly allocate
the risks of the transactions contemplated hereby among them in
light of their respective knowledge of the Company and their
respective abilities to investigate its affairs and business in
order to assure that full and adequate disclosure has been made in
the Registration Statement and the Prospectus (and any amendments
and supplements thereto). The Company hereby waives, to the fullest
extent permitted by law, any claims it may have against Canaccord
for breach of fiduciary duty or alleged breach of fiduciary duty
and agrees Canaccord shall have no liability (whether direct or
indirect) to the Company in respect of such a fiduciary duty claim
or to any person asserting a fiduciary duty claim on behalf of or
in right of the Company, including shareholders, employees or
creditors of Company.
20. Persons
Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and the officers and
directors and any controlling persons referred to in Section 10
hereof. Nothing in this Agreement is intended or shall be construed
to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision
contained herein. No purchaser of Shares shall be deemed to be a
successor merely by reason of such purchase.
24
21. Amendments
or Waivers. No amendment or
waiver of any provision of this Agreement, nor any consent to or
approval of any departure therefrom, shall in any event be
effective unless the same shall be in writing and signed by the
parties hereto.
22. Headings.
The headings herein are included for convenience of reference only
and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
23. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Delivery of an executed
Agreement by one party to the other may be made by facsimile or
email transmission.
25
If the
foregoing accurately reflects your understanding and agreement with
respect to the matters described herein please indicate your
agreement by countersigning this Agreement in the space provided
below.
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Very
truly yours,
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PALATIN TECHNOLOGIES, INC.
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By: /s/
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title:
CFO, COO and EVP
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ACCEPTED
as of
the date first-above written:
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CANACCORD GENUITY LLC
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By: /s/
▇▇▇▇▇▇▇▇
▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title:
Sr. Managing Director
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26
SCHEDULE 1
The
Authorized Representatives of the Company are as
follows:
|
Name
and Office / Title
|
E-mail
Address
|
Telephone
Numbers
|
Fax
Number
|
|
▇▇▇▇
▇▇▇▇▇,
President
& CEO
|
▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
|
Office:
(▇▇▇) ▇▇▇-▇▇▇▇
Cell:
(▇▇▇) ▇▇▇-▇▇▇▇
|
(▇▇▇)
▇▇▇-▇▇▇▇
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▇▇▇▇▇▇▇
▇▇▇▇▇,
Executive
Vice President, Chief Financial Officer and Chief Operating
Officer
|
▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
|
Office:
(▇▇▇) ▇▇▇-▇▇▇▇
Cell:
(▇▇▇) ▇▇▇-▇▇▇▇
|
(▇▇▇)
▇▇▇-▇▇▇▇
|
The
Authorized Representatives of Canaccord are as
follows:
|
Name
and Office / Title
|
E-mail
Address
|
Telephone
Numbers
|
Fax
Number
|
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇ /Head of U.S. Equity Capital Markets
|
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
AND ▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
|
Office:
▇▇▇-▇▇▇-▇▇▇▇
Cell:
▇▇▇-▇▇▇-▇▇▇▇
|
N/A
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27
SCHEDULE 2
SUBSIDIARIES
RhoMed
Incorporated, a New Mexico corporation
28
EXHIBIT A
OFFICER’S CERTIFICATE
I,
[name of
executive officer], the [title of executive
officer] of Palatin Technologies, Inc., a Delaware
corporation (the “Company”), do hereby
certify in such capacity and on behalf of the Company pursuant to
Section 7(p) of the Equity Distribution Agreement, dated June [_],
2019 (the “Distribution
Agreement”), between the Company and Canaccord Genuity
LLC, to the best of my knowledge that:
(i) The
representations and warranties of the Company in Section 6 of the
Distribution Agreement (A) to the extent such representations and
warranties are subject to qualifications and exceptions contained
therein relating to materiality or Material Adverse Effect, are
true and correct on and as of the date hereof with the same force
and effect as if expressly made on and as of the date hereof,
except for those representations and warranties that speak solely
as of a specific date and which were true and correct as of such
date, and (B) to the extent such representations and warranties are
not subject to any qualifications or exceptions, are true and
correct in all material respects as of the date hereof as if made
on and as of the date hereof with the same force and effect as if
expressly made on and as of the date hereof except for those
representations and warranties that speak solely as of a specific
date and which were true and correct as of such date;
and
(ii) The
Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the
Distribution Agreement at or prior to the date hereof.
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Date:
___________________
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By:
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Name:
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Title:
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29