Exhibit 10.1

 

OPEN MARKET SALE AGREEMENTSM

 

September 25, 2020

 

JEFFERIES LLC
520 Madison Avenue

New York, New York 10022

 

Ladies and Gentlemen:

 

ImmunoGen, Inc., a Massachusetts corporation (the “Company”), proposes, subject
to the terms and conditions stated herein, to issue and sell from time to time
through Jefferies LLC, as sales agent and/or principal (the “Agent”), shares of
the Company’s common stock, par value $0.01 per share (the “Common Shares”),
having an aggregate offering price of up to $100,000,000 on the terms set forth
in this agreement (this “Agreement”).

 

Section 1. DEFINITIONS

 

(a)               Certain Definitions. For purposes of this Agreement,
capitalized terms used herein and not otherwise defined shall have the following
respective meanings:

 

“Affiliate” of a Person means another Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first- mentioned Person. The term “control” (including
the terms “controlling,” “controlled by” and “under common control with”) means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

 

“Agency Period” means the period commencing on the date of this Agreement and
expiring on the earliest to occur of (x) the date on which the Agent shall have
placed the Maximum Program Amount pursuant to this Agreement and (y) the date
this Agreement is terminated pursuant to ‎Section 7.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder.

 

“Floor Price” means the minimum price set by the Company in the Issuance Notice
below which the Agent shall not sell Shares during the applicable period set
forth in the Issuance Notice, which may be adjusted by the Company at any time
during the period set forth in the Issuance Notice by delivering written notice
of such change to the Agent and which in no event shall be less than $1.00
without the prior written consent of the Agent, which may be withheld in the
Agent’s sole discretion.

 

 

SM “Open Market Sale Agreement” is a service mark of Jefferies LLC

 

 

 

 

“Issuance Amount” means the aggregate Sales Price of the Shares to be sold by
the Agent pursuant to any Issuance Notice.

 

“Issuance Notice” means a written notice delivered to the Agent by the Company
in accordance with this Agreement in the form attached hereto as Exhibit A that
is executed by its Chief Executive Officer, President or Chief Financial
Officer.

 

“Issuance Notice Date” means any Trading Day during the Agency Period that an
Issuance Notice is delivered pursuant to ‎Section 3(b)(i).

 

“Issuance Price” means the Sales Price less the Selling Commission.

 

“Maximum Program Amount” means Common Shares with an aggregate Sales Price of
the lesser of (a) the number or dollar amount of Common Shares registered under
the effective Registration Statement (as defined below) pursuant to which the
offering is being made, (b) the number of authorized but unissued Common Shares
(less Common Shares issuable upon exercise, conversion or exchange of any
outstanding securities of the Company or otherwise reserved from the Company’s
authorized capital stock), (c) the number or dollar amount of Common Shares
permitted to be sold under Form S-3 (including General Instruction I.B.6
thereof, if applicable), or (d) the number or dollar amount of Common Shares for
which the Company has filed a Prospectus (as defined below).

 

“Person” means an individual or a corporation, partnership, limited liability
company, trust, incorporated or unincorporated association, joint venture, joint
stock company, governmental authority or other entity of any kind.

 

“Principal Market” means the Nasdaq Global Select Market or such other national
securities exchange on which the Common Shares, including any Shares, are then
listed.

 

“Sales Price” means the actual sale execution price of each Share placed by the
Agent pursuant to this Agreement.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder.

 

“Selling Commission” means three percent (3%) of the gross proceeds of Shares
sold pursuant to this Agreement, or as otherwise agreed between the Company and
the Agent with respect to any Shares sold pursuant to this Agreement.

 

“Settlement Date” means the second business day following each Trading Day
during the period set forth in the Issuance Notice on which Shares are sold
pursuant to this Agreement, when the Company shall deliver to the Agent the
amount of Shares sold on such Trading Day and the Agent shall deliver to the
Company the Issuance Price received on such sales.

 

“Shares” means the Company’s Common Shares issued or issuable pursuant to this
Agreement.

 

“Trading Day” means any day on which the Principal Market is open for trading.

 

2

 

 

Section 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to, and agrees with, the Agent that as of
(1) the date of this Agreement, (2) each Issuance Notice Date, (3) each
Settlement Date, (4) each Triggering Event Date (as defined below) with respect
to which the Company is required to deliver a certificate pursuant to Section
4(o) and (5) as of each Time of Sale (as defined below) (each of the times
referenced above is referred to herein as a “Representation Date”), except as
may be disclosed in the Prospectus (including any documents incorporated by
reference therein and any supplements thereto) on or before a Representation
Date:

 

(a)               Registration Statement. The Company has prepared and filed
with the Commission a shelf registration statement on Form S-3 (File
No. 333-223507) that contains a base prospectus. Such registration statement
registers the issuance and sale by the Company of the Shares under the
Securities Act. The Company may file one or more additional registration
statements from time to time that will contain a base prospectus and related
prospectus or prospectus supplement, if applicable, with respect to the Shares.
Except where the context otherwise requires, such registration statement(s),
including any information deemed to be a part thereof pursuant to Rule 430B
under the Securities Act, including all financial statements, exhibits and
schedules thereto and all documents incorporated or deemed to be incorporated
therein by reference pursuant to Item 12 of Form S-3 under the Securities Act as
from time to time amended or supplemented, is herein referred to as the
“Registration Statement,” and the prospectus constituting a part of such
registration statement(s), together with any prospectus supplement filed with
the Commission pursuant to Rule 424(b) under the Securities Act relating to a
particular issuance of the Shares, including all documents incorporated or
deemed to be incorporated therein by reference pursuant to Item 12 of Form S-3
under the Securities Act, in each case, as from time to time amended or
supplemented, is referred to herein as the “Prospectus,” except that if any
revised prospectus is provided to the Agent by the Company for use in connection
with the offering of the Shares that is not required to be filed by the Company
pursuant to Rule 424(b) under the Securities Act, the term “Prospectus” shall
refer to such revised prospectus from and after the time it is first provided to
the Agent for such use. The Registration Statement at the time it originally
became effective is herein called the “Original Registration Statement.” As used
in this Agreement, the terms “amendment” or “supplement” when applied to the
Registration Statement or the Prospectus shall be deemed to include the filing
by the Company with the Commission of any document under the Exchange Act after
the date hereof that is or is deemed to be incorporated therein by reference.

 

All references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in or “part of” the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in or otherwise deemed under the Securities Act to be a part of or
included in the Registration Statement or the Prospectus, as the case may be, as
of any specified date; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include, without limitation, the filing of any document under the
Exchange Act which is or is deemed to be incorporated by reference in or
otherwise deemed under the Securities Act to be a part of or included in the
Registration Statement or the Prospectus, as the case may be, as of any
specified date. The Company’s obligations under this Agreement to furnish,
provide or deliver or make available copies of any report or statement shall be
deemed satisfied if the same is filed with the Commission through its Electronic
Data Gathering, Analysis and Retrieval system (“EDGAR”).

 

3

 

 

At the time the Registration Statement became or will become originally
effective and at the time the Company’s most recent annual report on Form 10-K
was filed with the Commission, if later, the Company met the then-applicable
requirements for use of Form S-3 under the Securities Act. During the Agency
Period, each time the Company files an annual report on Form 10-K the Company
will meet the then-applicable requirements for use of Form S-3 under the
Securities Act.

 

(b)               Compliance with Registration Requirements. The Original
Registration Statement and any Rule 462(b) Registration Statement are effective
under the Securities Act. The Company has complied to the Commission’s
satisfaction with all requests of the Commission for additional or supplemental
information. No stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement is in effect and no
proceedings for such purpose have been instituted or are pending or, to the best
knowledge of the Company, are contemplated or threatened by the Commission.

 

The Prospectus when filed complied or will comply in all material respects with
the Securities Act and, if filed with the Commission through EDGAR (except as
may be permitted by Regulation S-T under the Securities Act), was identical to
the copy thereof delivered to the Agent for use in connection with the issuance
and sale of the Shares. Each of the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto, at the time it
became or becomes effective and at each Representation Date, complied and will
comply in all material respects with the Securities Act and did not and will not
contain any 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. As of the date of this Agreement, the Prospectus and any Free
Writing Prospectus (as defined below) considered together (collectively, the
“Time of Sale Information”) did not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
The Prospectus, as amended or supplemented, as of its date and at each
Representation Date, did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the three
immediately preceding sentences do not apply to statements in or omissions from
the Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with information
relating to the Agent furnished to the Company in writing by the Agent expressly
for use therein, it being understood and agreed that the only such information
furnished by the Agent to the Company consists of the information described in
‎Section 6 below defined as Agent Information. There are no contracts or other
documents required to be described in the Prospectus or to be filed as exhibits
to the Registration Statement which have not been described or filed as
required. The Registration Statement and the offer and sale of the Shares as
contemplated hereby meet the requirements of Rule 415 under the Securities Act
and comply in all material respects with said rule.

 

4

 

 

(c)               Ineligible Issuer Status. The Company is not an “ineligible
issuer” in connection with the offering of the Shares pursuant to Rules 164, 405
and 433 under the Securities Act. Any Free Writing Prospectus that the Company
is required to file pursuant to Rule 433(d) under the Securities Act has been,
or will be, filed with the Commission in accordance with the requirements of the
Securities Act. Each Free Writing Prospectus that the Company has filed, or is
required to file, pursuant to Rule 433(d) under the Securities Act or that was
prepared by or on behalf of or used or referred to by the Company complies or
will comply in all material respects with the requirements of Rule 433 under the
Securities Act including timely filing with the Commission or retention where
required and legending, and each such Free Writing Prospectus, as of its issue
date and at all subsequent times through the completion of the issuance and sale
of the Shares did not, does not and will not include any information that
conflicted, conflicts with or will conflict with the information contained in
the Registration Statement or the Prospectus, including any document
incorporated by reference therein. Except for the Free Writing Prospectuses, if
any, and electronic road shows, if any, furnished to the Agent before first use,
the Company has not prepared, used or referred to, and will not, without the
Agent’s prior consent, which consent shall not be unreasonably withheld,
conditioned or delayed, prepare, use or refer to, any Free Writing Prospectus.

 

(d)               Incorporated Documents. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were filed with the Commission, complied in all
material respects with the requirements of the Exchange Act, as applicable, and,
when read together with the other information in the Prospectus, do 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.

 

(e)               Exchange Act Compliance. The documents incorporated or deemed
to be incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, and any Free Writing Prospectus or
amendment or supplement thereto complied and will comply in all material
respects with the requirements of the Exchange Act, and, when read together with
the other information in the Prospectus, at the time the Registration Statement
and any amendments thereto become effective and at each Representation Date, as
the case may be, 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
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.

 

(f)                Financial Statements.  The financial statements (including
the related notes thereto) of the Company and its consolidated subsidiaries
included or incorporated by reference in the Registration Statement and the
Prospectus comply in all material respects with the applicable requirements of
the Securities Act and the Exchange Act, as applicable, and present fairly the
financial position of the Company and its consolidated subsidiaries as of the
dates indicated and the results of their operations and the changes in their
cash flows for the periods specified, it being understood that unaudited interim
financial statements are subject to normal year-end adjustments; 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 may be otherwise specified therein or to the
extent unaudited interim financial statements exclude footnotes or may be
condensed or summary statements, and any supporting schedules included or
incorporated by reference in the Registration Statement present fairly the
information required to be stated therein; and the other financial information
included or incorporated by reference in the Registration Statement and the
Prospectus has been derived from the accounting records of the Company and its
consolidated subsidiaries and presents fairly the information shown thereby. To
the Company’s knowledge, no person who has been suspended or barred from being
associated with a registered public accounting firm, or who has failed to comply
with any sanction pursuant to Rule 5300 promulgated by the PCAOB, has
participated in or otherwise aided the preparation of, or audited, the financial
statements, supporting schedules or other financial data filed with the
Commission as a part of the Registration Statement and the Prospectus.

 

5

 

 

(g)               No Material Adverse Change.  Except as otherwise disclosed in
the Registration Statement and the Prospectus, subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus: (i)  there has been no material adverse change, or any development
that would result in a material adverse change, in (A) the condition, financial
or otherwise, or in the shareholders’ equity, earnings, business, properties,
management, operations, operating results, assets, liabilities or prospects,
whether or not arising from transactions in the ordinary course of business, of
the Company and its subsidiaries, considered as one entity or (B) the ability of
the Company to consummate the transactions contemplated by this Agreement or
perform its obligations hereunder (any such change being referred to herein as a
“Material Adverse Change”); (ii) there has not been any change in the capital
stock (other than the issuance of Stock issued pursuant to the exercise of stock
options or vesting of deferred stock units or restricted stock units under the
Company Stock Plans (as defined below), the issuance of restricted stock under
the Company Stock Plans, or the issuance of sock under the Company’s existing
employee stock purchase plan), long-term debt, notes payable or current portion
of long-term debt of the Company or any of its subsidiaries, or any dividend or
distribution of any kind declared, set aside for payment, paid or made by the
Company on any class of capital stock; (iii) neither the Company nor any of its
subsidiaries has entered into any transaction or agreement that is material to
the Company and its subsidiaries taken as a whole or incurred any liability or
obligation, direct or contingent, that is material to the Company and its
subsidiaries taken as a whole; and (iv) neither the Company nor any of its
subsidiaries has sustained any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority.

 

(h)               Organization and Good Standing.  The Company and each of its
“subsidiaries” (for purposes of this Agreement, as defined in Rule 405 under the
Securities Act) have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each jurisdiction in
which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have the corporate and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified, in good standing or have such power or authority would not,
individually or in the aggregate, result in a Material Adverse Change.  All of
the issued and outstanding capital stock or other equity or ownership interests
of each of the Company’s subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable and are owned by the Company, directly
or through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or adverse claim. None of the outstanding capital
stock or equity interest in any subsidiary was issued in violation of preemptive
or similar rights of any security holder of such subsidiary. The constitutive or
organizational documents of each of the subsidiaries comply in all material
respects with the requirements of applicable laws of its jurisdiction of
incorporation or organization and are in full force and effect. The Company does
not own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Exhibit 21 to the Company’s
most recent Annual Report on Form 10-K.

 

6

 

 

(i)                 Capitalization.  The Company has an authorized
capitalization as set forth in the Registration Statement and the Prospectus;
all the outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable and are not
subject to any pre-emptive or similar rights; except as described in or
expressly contemplated by the Prospectus, there are no outstanding rights
(including, without limitation, pre-emptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of the
Company or any such subsidiary, any such convertible or exchangeable securities
or any such rights, warrants or options; the capital stock of the Company
conforms in all material respects to the description thereof contained in the
Registration Statement and the Prospectus; and all the outstanding shares of
capital stock or other equity interests of each subsidiary owned, directly or
indirectly, by the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third party. None of
the outstanding capital stock or equity interest in any subsidiary was issued in
violation of preemptive or similar rights of any security holder of such
subsidiary.

 

(j)                 Stock Options.  With respect to the stock options (the
“Stock Options”) granted pursuant to the stock-based compensation plans of the
Company and its subsidiaries (the “Company Stock Plans”), (i) each grant of a
Stock Option was duly authorized no later than the date on which the grant of
such Stock Option was by its terms to be effective (the “Grant Date”) by all
necessary corporate action, including, as applicable, approval by the board of
directors of the Company (or a duly constituted and authorized committee
thereof) and any required stockholder approval by the necessary number of votes
or written consents, and the award agreement governing such grant (if any) was
duly executed and delivered by each party thereto, (ii) each such grant was, in
all material respects, made in accordance with the terms of the Company Stock
Plans, the Exchange Act and all other applicable laws and regulatory rules or
requirements, including the Code, the rules of the Principal Market and any
other exchange on which Company securities are traded, and (iii) each such grant
was, in all material respects, properly accounted for in accordance with U.S.
generally accepted accounting principles in the financial statements (including
the related notes) of the Company and disclosed in the Company’s filings with
the Commission in accordance with the Exchange Act and all other applicable
laws. The Company has not knowingly granted, and there is no and has been no
policy or practice of the Company of granting, Stock Options prior to, or
otherwise coordinating the grant of Stock Options with, the release or other
public announcement of material information regarding the Company or its
subsidiaries or their results of operations or prospects. The descriptions of
the Company’s stock option, stock bonus and other stock plans or arrangements,
and the options or other rights granted thereunder, set forth in the
Registration Statement and the Prospectus accurately and fairly presents, in all
material respects, the information required to be shown with respect to such
plans, arrangements, options and rights.

 

7

 

 

(k)               Due Authorization.  The Company has full right, power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder; and all action required to be taken for the due and proper
authorization, execution and delivery by it of this Agreement and the
consummation of the transactions contemplated hereby has been duly and validly
taken.

 

(l)                 This Agreement.  This Agreement has been duly authorized,
executed and delivered by the Company.

 

(m)             The Shares.  The Shares to be issued and sold by the Company
hereunder have been duly authorized by the Company and, when issued and
delivered and paid for as provided herein, will be duly and validly issued and
will be fully paid and nonassessable and will conform to the descriptions
thereof in the Registration Statement and the Prospectus; and the issuance of
the Shares is not subject to any preemptive or similar rights, other than those
which were complied with by the Company.

 

(n)               Description of this Agreement.  This Agreement conforms in all
material respects to the description thereof contained in the Registration
Statement and the Prospectus.

 

(o)               No Violation or Default.  Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries 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, result in a Material
Adverse Change.

 

(p)               No Conflicts.  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 or the
Prospectus have been duly authorized by all necessary corporate action and 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 or any of its subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, (ii) result in any violation of the
provisions of the charter or by-laws or similar organizational documents of the
Company or any of its subsidiaries 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 or violation that would not, individually or
in the aggregate, result in a Material Adverse Change.

 

8

 

 

(q)               No Consents Required.  No consent, approval, authorization,
order, license, registration or qualification of or with any court or arbitrator
or governmental or regulatory authority is required for the execution, delivery
and performance by the Company of this Agreement, the issuance and sale of the
Shares and the consummation of the transactions contemplated by this Agreement,
except for the registration of the Shares under the Securities Act, as may be
required by the Financial Industry Regulatory Authority, Inc. (“FINRA”) and
under applicable state or foreign securities laws in connection with the
purchase and distribution of the Shares.

 

(r)                Legal Proceedings.  Except as described in the Registration
Statement and the Prospectus, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company or
any of its subsidiaries is or may be a party or to which any property of the
Company or any of its subsidiaries is or may be the subject that, individually
or in the aggregate, if determined adversely to the Company or any of its
subsidiaries, would reasonably be expected to result in a Material Adverse
Change; 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
or the Prospectus that are not so described in the Registration Statement 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 or the
Prospectus that are not so filed as exhibits to the Registration Statement or
described in the Registration Statement and the Prospectus.

 

(s)                Independent Accountants.  Ernst & Young LLP, who have
certified certain financial statements of the Company and its subsidiaries, is
an independent registered public accounting firm with respect to the Company and
its subsidiaries 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.

 

(t)                 Title to Real and Personal Property.  Except as described in
the Registration Statement and the Prospectus, the Company and its subsidiaries
have good and marketable title in fee simple (in the case of real property) to,
or have valid rights to lease or otherwise use, all items of real and personal
property that are material to the respective businesses of the Company and its
subsidiaries, 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 and its subsidiaries or (ii) would not reasonably be expected to,
individually or in the aggregate, result in a Material Adverse Change.

 

(u)               Title to Intellectual Property.  Except as described in the
Registration Statement and the Prospectus, the Company and its subsidiaries own,
or have obtained valid and enforceable licenses for, or other rights to use, the
inventions, patent applications, patents, trademarks (both registered and
unregistered), trade names, copyrights, trade secrets and other proprietary
information (collectively, the “Intellectual Property”) described in the
Registration Statement and the Prospectus as being owned or licensed by them; to
the Company’s knowledge and except as described in the Registration Statement
and the Prospectus, the Company and its subsidiaries own, or have obtained valid
and enforceable licenses for, or other rights to use, all Intellectual Property
used in, or necessary for the conduct of, their respective businesses as
described in the Registration Statement and the Prospectus, except as would not
reasonably be expected to result in a Material Adverse Change; to the Company’s
knowledge, there is no pending or threatened action, suit, proceeding or claim
by others that the Company infringes or otherwise violates any Intellectual
Property rights of others, except as would not reasonably be expected to result
in a Material Adverse Change, and the Company is unaware of any facts which
could form a reasonable basis for any such claim; and none of the technology
employed by the Company has been obtained or is being used by the Company in
violation of any contractual obligation binding on the Company or, to the
Company’s knowledge, upon any of its officers, directors or employees. To the
Company’s knowledge, there are no third parties who have or will be able to
establish rights to any Intellectual Property described in the Registration
Statement and the Prospectus as exclusively owned or exclusively licensed by the
Company, except as would not reasonably be expected to result in a Material
Adverse Change or except for licenses granted in writing by the Company or its
subsidiaries to any third-parties (“Exclusive Intellectual Property”); there is
no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others challenging the Company’s ownership or rights in or to any
Exclusive Intellectual Property, and the Company is unaware of any facts which
would form a reasonable basis for any such claim except as could not reasonably
be expected to result in a Material Adverse Change; there is no pending or, to
the Company’s knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any Exclusive Intellectual Property, and
the Company is unaware of any facts which would form a reasonable basis for any
such claim except as could not reasonably be expected to result in a Material
Adverse Change; to the Company’s knowledge, there is no patent or patent
application that contains claims that interfere with the issued or pending
claims of any of the Intellectual Property except as would not reasonably be
expected to result in a Material Adverse Change; and to the Company’s knowledge,
there is no prior art material to any patent or patent application of the
Exclusive Intellectual Property that has not been disclosed to the U.S. Patent
and Trademark Office, except as would not reasonably be expected to result in a
Material Adverse Change.

 

9

 

 

(v)               No Undisclosed Relationships.  No relationship, direct or
indirect, exists between or among the Company or any of its subsidiaries, on the
one hand, and the directors, officers, stockholders, customers or suppliers of
the Company or any of its subsidiaries, on the other, that is required by the
Securities Act to be described in the Registration Statement and the Prospectus
and that is not so described in such documents.

 

(w)             Investment Company Act.  The Company is not and, after giving
effect to the offering and sale of the Shares and the application of the
proceeds thereof as described in the Registration Statement and the Prospectus,
will not be required to register as an “investment company” or an entity
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder (collectively, the “Investment Company Act”).

 

10

 

 

(x)               Taxes.  The Company and its subsidiaries have paid all
federal, state, local and foreign taxes and filed all tax returns required to be
paid or filed through the date hereof; and except as otherwise disclosed in the
Registration Statement and the Prospectus, there is no tax deficiency that has
been, or could reasonably be expected to be, asserted against the Company or any
of its subsidiaries or any of their respective properties or assets; except in
each case where such failure to file or such tax deficiency would not result in
a Material Adverse Change.

 

(y)               Licenses and Permits.  Except as otherwise disclosed
Prospectus, the Company and its subsidiaries possess 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 their
respective properties or the conduct of their respective businesses as described
in the Registration Statement and the Prospectus, except where the failure to
possess or make the same would not, individually or in the aggregate, result in
a Material Adverse Change; and except as described in the Registration Statement
and the Prospectus, neither the Company nor any of its subsidiaries has 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.

 

(z)               No Labor Disputes.  No labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to the best
knowledge of the Company, is contemplated or threatened and the Company is not
aware of any existing or imminent labor disturbance by, or dispute with, the
employees of any of its or its subsidiaries’ principal suppliers, contractors or
customers, except as would not result in a Material Adverse Change.

 

(aa)            Compliance with and Liability under Environmental Laws;
Hazardous Materials. Except, in each case set forth in this Section 2(aa), as
described in the Registration Statement and the Prospectus, or as would not,
individually or in the aggregate, result in a Material Adverse Change, (i) the
Company and each of its subsidiaries and their respective properties, assets and
operations are in compliance with Environmental Laws (as defined below),
(ii) there are no past or present events, conditions, circumstances, activities,
practices, actions, omissions or plans that could reasonably be expected to give
rise to any costs or liabilities to the Company or any of its subsidiaries
under, or to interfere with or prevent compliance by the Company or any of its
subsidiaries with, Environmental Laws, (iii) none of the Company or any of its
subsidiaries (A) to the knowledge of the Company, is the subject of any
investigation, (B) has received any notice or claim, (C) is a party to any
pending or, to the Company’s knowledge, threatened action, suit or proceeding,
(D) is bound by any judgment, decree or order or (E) has entered into any
agreement, in each case relating to any alleged violation of any Environmental
Law or any actual or alleged release or threatened release or cleanup at any
location of any Hazardous Materials (as defined below) (as used herein,
“Environmental Law” means any federal, state, local or foreign law, statute,
ordinance, rule, regulation, order, decree, judgment, injunction, permit,
license, authorization or other binding requirement, or common law, relating to
human health or safety or the protection, cleanup or restoration of the
environment or natural resources, including those relating to the distribution,
processing, generation, treatment, storage, disposal, transportation, other
handling or release or threatened release of Hazardous Materials, and “Hazardous
Materials” means any material (including, without limitation, pollutants,
contaminants, hazardous or toxic substances or wastes) that is regulated by or
may give rise to liability under any Environmental Law).

 

11

 

 

(bb)           Compliance With ERISA.  (i) Each employee benefit plan, within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), for which the Company or any member of its
“Controlled Group” (defined as any organization which is a member of a
controlled group of corporations within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended (the “Code”)) would have any liability
(each, a “Plan”) 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 Code; (ii) no prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any Plan excluding transactions effected pursuant to a
statutory or administrative exemption; (iii) for each 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, whether
or not waived, has occurred or is reasonably expected to occur; (iv) either the
fair market value of the assets of each Plan, which is required to be funded
under the Code or ERISA, exceeds the present value of all benefits accrued under
such Plan (determined based on those assumptions used to fund such Plan) or each
such Plan is funded in accordance with ERISA or the Code; (v) no “reportable
event” (within the meaning of Section 4043(c) of ERISA) has occurred or is
reasonably expected to occur; (vi) neither the Company nor any member of the
Controlled Group has incurred, nor reasonably expects to incur, any liability
under Title IV of ERISA (other than contributions to the Plan or premiums to the
PBGC, in the ordinary course and without default) in respect of a Plan
(including a “multiemployer plan”, within the meaning of Section 4001(a)(3) of
ERISA); and (vii) there is no pending audit or investigation by the Internal
Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty
Corporation or any other governmental agency or any foreign regulatory agency
with respect to any Plan that could reasonably be expected to result in material
liability to the Company or its subsidiaries.

 

(cc)            Disclosure Controls.  The Company and its subsidiaries maintain
an effective system of “disclosure controls and procedures” (as defined in
Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the
Exchange Act and that has been designed to ensure that information required to
be disclosed by the Company in reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Commission’s rules and forms, including controls and
procedures designed to ensure that such information is accumulated and
communicated to the Company’s management as appropriate to allow timely
decisions regarding required disclosure.  The Company and its subsidiaries have
carried out evaluations of the effectiveness of their disclosure controls and
procedures as required by Rule 13a-15 of the Exchange Act.

 

(dd)           Accounting Controls.  The Company and its subsidiaries maintain
systems of “internal control over financial reporting” (as defined in
Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the
Exchange Act and have been designed by, or under the supervision of, the
Company’s principal executive and principal financial officers, or persons
performing similar functions, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles, including, but not limited to internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.  Except as disclosed in the Registration Statement and the
Prospectus, there are no material weaknesses in the Company’s internal
controls.  The Company’s auditors and the Audit Committee of the Board of
Directors of the Company have been advised of: (i) all significant deficiencies
and material weaknesses in the design or operation of internal controls over
financial reporting which are reasonably likely to adversely affect the
Company’s ability to record, process, summarize and report financial
information; and (ii) any 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.

 

12

 

 

(ee)            Insurance.  The Company and its subsidiaries have insurance
covering their respective properties, operations, personnel and businesses,
including business interruption insurance, which insurance is in amounts and
insures against such losses and risks as the Company considers to be in
accordance with customary industry practice for companies of comparable size,
market capitalization and stage of business and clinical development to protect
the Company and its subsidiaries and their respective businesses; and neither
the Company nor any of its subsidiaries has (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. Neither the Company nor any of its subsidiaries has been denied any
insurance coverage which it has sought or for which it has applied.

 

(ff)              No Unlawful Payments.  Neither the Company nor any of its
subsidiaries nor, to the knowledge of the Company, any director, officer,
employee, agent or other person associated with or acting on behalf of the
Company or any of its subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; (ii) made or taken any act in furtherance of an offer,
promise or authorization of any direct or indirect unlawful payment or benefit
to any foreign or domestic government official or employee, including of any
government-owned or controlled entity or of a public international organization,
or any person acting in an official capacity for or on behalf of any of the
foregoing, or any political party or party official or candidate for political
office; (iii) violated or is in violation of any provision of the U.S. Foreign
Corrupt Practices Act of 1977, as amended (the “FCPA”), the UK Bribery Act 2010,
or any other applicable anti-bribery or anti-corruption law; or (iv) made,
offered, authorized, requested or taken an act in furtherance of any unlawful
bribe or other unlawful benefit, including, without limitation, any rebate,
payoff, influence payment, kickback or other unlawful or improper payment or
benefit. The Company and its subsidiaries and, to the knowledge of the Company,
the Company’s Affiliates have conducted their respective businesses in
compliance with the FCPA and have instituted, maintain and enforce, and will
continue to maintain and enforce, policies and procedures designed to promote
and ensure, and which are reasonably expected to continue to promote and ensure,
compliance with all applicable anti-bribery and anti-corruption laws.

 

13

 

 

(gg)           Compliance with Money Laundering Laws.  The operations of the
Company and its subsidiaries are, and have been conducted at all times, in
compliance with applicable financial recordkeeping and reporting requirements,
including those of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, the money laundering statutes of all jurisdictions, 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 or any of its subsidiaries with respect to
the Anti-Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.

 

(hh)           Compliance with Sanctions Laws.  Neither the Company nor any of
its subsidiaries, nor, to the knowledge of the Company, after due inquiry, any
director, officer, employee, agent, Affiliate or other person associated with or
acting on behalf of the Company or any of its subsidiaries is currently the
subject or the target of any U.S. sanctions administered by 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 of the United Kingdom, or other relevant sanctions
authority (collectively, “Sanctions”); nor is the Company or any of its
subsidiaries located, organized or resident in a country or territory that is
the subject or the target of Sanctions, including, without limitation, Crimea,
Cuba, Iran, North Korea and Syria (each, a “Sanctioned Country”); and the
Company will not directly or indirectly use the proceeds of the offering of the
Shares, or lend, contribute or otherwise make available such proceeds to any
subsidiary, or any joint venture partner or other person or entity, for the
purpose of financing the activities of or business with any person, or in any
country or territory, that, at the time of such financing, is the subject or the
target of Sanctions or in any other manner that will result in a violation by
any person (including any person participating in the transaction, whether as
underwriter, initial purchaser, advisor, investor or otherwise) of Sanctions.
For the past five years, the Company and its subsidiaries have not knowingly
engaged in and are not now knowingly engaged in any dealings or transactions
with any person that at the time of the dealing or transaction is or was the
subject or the target of Sanctions or with any Sanctioned Country.

 

(ii)              Affiliations. To the Company’s knowledge, there are no
affiliations or associations between (i) the Agent and (ii) the Company or any
of the Company’s officers, directors or 5% or greater security holders or any
beneficial owner of the Company’s unregistered equity securities that were
acquired at any time on or after the 180th day immediately preceding the date
the Registration Statement was initially filed with the Commission, except as
disclosed in the Registration Statement and the Prospectus.

 

(jj)              No Restrictions on Subsidiaries.  Except as disclosed in the
Prospectus, no subsidiary of the Company is currently prohibited, directly or
indirectly, under any agreement or other instrument to which it is a party or is
subject, from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary’s properties or assets to the Company or any other
subsidiary of the Company.

 

(kk)           No Broker’s Fees.  Except as otherwise disclosed in the
Prospectus, neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person (other than this Agreement)
that would give rise to a valid claim against the Company or any of its
subsidiaries or the Agent for a brokerage commission, finder’s fee or like
payment in connection with the offering and sale of the Shares.

 

14

 

 

(ll)              No Registration Rights.  No person has the right to require
the Company or any of 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 Shares.

 

(mm)      No Stabilization.  The Company has not taken, directly or indirectly,
any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Common Shares.

 

(nn)           Business With Cuba.  The Company has complied with all provisions
of Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida, as
amended) relating to doing business with the Government of Cuba or with any
person or affiliate located in Cuba.

 

(oo)           Margin Rules.  The application of the proceeds received by the
Company from the issuance, sale and delivery of the Shares as described in the
Registration Statement and the Prospectus will not violate Regulation T, U or X
of the Board of Governors of the Federal Reserve System or any other regulation
of such Board of Governors.

 

(pp)           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 Registration Statement or the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith.

 

(qq)           Statistical and Market Data.  Nothing has come to the attention
of the Company that has caused the Company to believe that the statistical and
market-related data included in the Registration Statement and the Prospectus is
not based on or derived from sources that are reliable and accurate in all
material respects. To the extent required, the Company has obtained the written
consent for the use of such data from such sources.

 

(rr)              Sarbanes-Oxley Act.  There is and has been no failure on the
part of the Company or, to the knowledge of the Company, any of the Company’s
directors or officers, in their capacities as such, to comply with any provision
of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related
to loans and Sections 302 and 906 related to certifications.

 

15

 

 

(ss)             FDA Compliance.  Except as described in the Registration
Statement and the Prospectus, the Company:  (A) is and at all times has been in
material compliance with all statutes, rules or regulations of the U.S. Food and
Drug Administration (“FDA”) and other comparable federal, state, local or
foreign governmental or regulatory authority (“Governmental Authority”)
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”); (B) has not
received any FDA Form 483, notice of adverse finding, warning letter, untitled
letter or other correspondence or written notice from the FDA or any
Governmental Authority alleging or asserting material noncompliance with any
Applicable Laws or any licenses, certificates, approvals, clearances,
authorizations, permits and supplements or amendments thereto required by any
such Applicable Laws (“Authorizations”), which would, individually or in the
aggregate, result in a Material Adverse Change; (C) 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; (D) has not received written notice of any claim, action, suit,
proceeding, hearing, enforcement, investigation, arbitration or other action
from the FDA or any Governmental Authority or third party alleging that any
product operation or activity is in material violation of any Applicable Laws or
Authorizations and has no knowledge that the FDA or any Governmental Authority
or third party is considering any such claim, litigation, arbitration, action,
suit, investigation or proceeding; (E) has not received written notice that the
FDA or any Governmental 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 Governmental Authority is considering such action;
and (F) 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).

 

(tt)              Clinical Studies. The nonclinical studies and clinical trials
conducted by or, to the Company’s knowledge, on behalf of the Company were and,
if still ongoing, are being conducted in all material respects in accordance
with experimental 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; the descriptions of the results of
such nonclinical studies and clinical trials contained in the Registration
Statement and the Prospectus are, to the Company’s knowledge, accurate and
complete in all material respects and fairly present the data derived from such
nonclinical studies and clinical trials; except to the extent disclosed in the
Registration Statement and the Prospectus, the Company is not aware of any
nonclinical studies or clinical trials, the results of which the Company
believes reasonably call into question the study 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 stage of
development; and, except to the extent disclosed in the Registration Statement
or the Prospectus, the Company has not received any written notices or other
correspondence from the FDA or any Governmental Authority requiring the
termination, suspension or material modification of any nonclinical studies,
clinical trials conducted by or on behalf of the Company.

 

(uu)           Compliance with Health Care Laws. The Company is not a party to
or has any ongoing reporting obligations pursuant to any corporate integrity
agreements, deferred prosecution agreements, monitoring agreements, consent
decrees, settlement orders, plans of correction or similar agreements with or
imposed by any Governmental Authority. Additionally, neither the Company nor any
of its employees, officers or directors has been excluded, suspended or debarred
from participation in any government health care program or human clinical
research or, to the knowledge of the Company, is subject to a governmental
inquiry, investigation, proceeding, or other similar action that could
reasonably be expected to result in debarment, suspension, or exclusion.

 

16

 

 

(vv)           eXtensible Business Reporting Language. The interactive data in
eXtensible Business Reporting Language included or incorporated by reference in
the Prospectus fairly presents the information called for in all material
respects and has been prepared in accordance with the Commission’s rules and
guidelines applicable thereto.

 

(ww)       Cybersecurity. The Company and its subsidiaries’ information
technology assets and equipment, computers, systems, networks, hardware,
software, websites, applications, and databases (collectively, “IT Systems”) are
adequate for, and operate and perform in all material respects as required in
connection with the operation of the business of the Company and its
subsidiaries as currently conducted, and to the Company’s knowledge, free and
clear of all material bugs, errors, defects, Trojan horses, time bombs, malware
and other corruptants. The Company and its subsidiaries have implemented and
maintained commercially reasonable physical, technical and administrative
controls, policies, procedures, and safeguards to maintain and protect their
material confidential information and the integrity, continuous operation,
redundancy and security of all IT Systems and data, including “Personal Data,”
used in connection with their businesses. “Personal Data” means (i) a natural
person’s name, street address, telephone number, e-mail address, photograph,
social security number or tax identification number, driver’s license number,
passport number, credit card number, bank information, or customer or account
number; (ii) any information which would qualify as “personally identifying
information” under the Federal Trade Commission Act, as amended; (iii) “personal
data” as defined by GDPR (as defined below); (iv) any information which would
qualify as “protected health information” under the Health Insurance Portability
and Accountability Act of 1996, as amended by the Health Information Technology
for Economic and Clinical Health Act (collectively, “HIPAA”); and (v) any other
piece of information that allows the identification of such natural person, or
his or her family, or permits the collection or analysis of any data related to
an identified person’s health or sexual orientation. There have been no
breaches, violations, outages or unauthorized uses of or accesses to same,
except for those that have been remedied without material cost or liability or
the duty to notify any other person, nor any incidents under internal review or
investigations relating to the same. The Company and its subsidiaries are
presently in material compliance with all applicable laws or statutes and all
judgments, orders, rules and regulations of any court or arbitrator or
governmental or regulatory authority, internal policies and contractual
obligations relating to the privacy and security of IT Systems and Personal Data
and to the protection of such IT Systems and Personal Data from unauthorized
use, access, misappropriation or modification.

 

(xx)           Compliance with Data Privacy Laws. The Company and its
subsidiaries are, and at all prior times within the last five years were, in
material compliance with all applicable state and federal data privacy and
security laws and regulations, including without limitation HIPAA, and the
Company and its subsidiaries have taken commercially reasonable actions to
prepare to comply with, and since May 25, 2018, have been and currently are in
material compliance with, the European Union General Data Protection Regulation
(“GDPR”) (EU 2016/679) (collectively, the “Privacy Laws”). To ensure compliance
with the Privacy Laws, the Company and its subsidiaries have in place, comply
with, and take appropriate steps reasonably designed to ensure compliance in all
material respects with their policies and procedures relating to data privacy
and security and the collection, storage, use, disclosure, handling, and
analysis of Personal Data (the “Policies”). The Company and its subsidiaries
have at all times made all disclosures to users or customers required by
applicable laws and regulatory rules or requirements, and none of such
disclosures made or contained in any Policy have, to the knowledge of the
Company, been inaccurate or in violation of any applicable laws and regulatory
rules or requirements in any material respect. The Company further certifies
that neither it nor any subsidiary: (i) has received notice of any actual or
potential liability under or relating to, or actual or potential violation of,
any of the Privacy Laws, and has no knowledge of any event or condition that
would reasonably be expected to result in any such notice; (ii) is currently
conducting or paying for, in whole or in part, any investigation, remediation,
or other corrective action pursuant to any Privacy Law; or (iii) is a party to
any order, decree, or agreement that imposes any obligation or liability under
any Privacy Law.

 

17

 

 

(yy)           Stock Exchange Listing. The Common Shares are registered pursuant
to Section 12(b) or 12(g) of the Exchange Act and are listed on the Principal
Market, and the Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Shares under the Exchange
Act or delisting the Common Shares from the Principal Market, nor has the
Company received any notification that the Commission or the Principal Market is
contemplating terminating such registration or listing. To the Company’s
knowledge, it is in compliance with all applicable listing requirements of the
Principal Market.

 

(zz)            FINRA Matters. All of the information provided to the Agent or
to counsel for the Agent by the Company, its counsel, its officers and directors
and, to the knowledge of the Company, the holders of any securities (debt or
equity) or options to acquire any securities of the Company in connection with
the offering of the Shares is true, complete, correct and compliant with FINRA’s
rules and any letters, filings or other supplemental information provided to
FINRA pursuant to FINRA Rules is true, complete and correct. The Company meets
the requirements for use of Form S-3 under the Securities Act specified in FINRA
Rule 5110(b)(7)(C)(i).

 

(aaa)        Compliance with Laws. The Company and its subsidiaries have been
and are in compliance with all applicable laws, rules and regulations, except
where failure to be so in compliance would not, individually or in the
aggregate, result in a Material Adverse Change.

 

(bbb)       Duties, Transfer Taxes, Etc. No stamp or other issuance or transfer
taxes or duties and no capital gains, income, withholding or other taxes are
payable by the Agent in the United States or any political subdivision or taxing
authority thereof or therein in connection with the execution, delivery or
performance of this Agreement by the Company or the sale and delivery by the
Company of the Shares.

 

(ccc)        Other Underwriting Agreements. The Company is not a party to any
agreement with an agent or underwriter for any other “at the market” or
continuous equity transaction.

 

Any certificate signed by any officer or representative of the Company or any of
its subsidiaries and delivered to the Agent or counsel for the Agent in
connection with an issuance of Shares shall be deemed a representation and
warranty by the Company to the Agent as to the matters covered thereby on the
date of such certificate.

 

The Company acknowledges that the Agent and, for purposes of the opinions to be
delivered pursuant to ‎Section 4(o) hereof, counsel to the Company and counsel
to the Agent, will rely upon the accuracy and truthfulness of the foregoing
representations, including any officer’s certificate representations, and hereby
consents to such reliance.

 

18

 

 

Section 3. ISSUANCE AND SALE OF COMMON SHARES

 

(a)               Sale of Securities. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company and the Agent agree that the Company
may from time to time seek to sell Shares through the Agent, acting as sales
agent, or directly to the Agent, acting as principal, as follows, with an
aggregate Sales Price of up to the Maximum Program Amount, based on and in
accordance with Issuance Notices as the Company may deliver, during the Agency
Period.

 

(b)               Mechanics of Issuances.

 

(i) Issuance Notice. Upon the terms and subject to the conditions set forth
herein, on any Trading Day during the Agency Period on which the conditions set
forth in ‎Section 5(a) and ‎Section 5(b) shall have been satisfied, the Company
may exercise its right to request an issuance of Shares by delivering to the
Agent an Issuance Notice; provided, however, that (A) in no event may the
Company deliver an Issuance Notice to the extent that (I) the sum of (x) the
aggregate Sales Price of the requested Issuance Amount, plus (y) the aggregate
Sales Price of all Shares issued under all previous Issuance Notices effected
pursuant to this Agreement, would exceed the Maximum Program Amount; and (B)
prior to delivery of any Issuance Notice, the period set forth for any previous
Issuance Notice shall have expired or been terminated. An Issuance Notice shall
be considered delivered on the Trading Day that it is received by e-mail to the
persons set forth in Schedule A hereto and confirmed by the Company by telephone
(including a voicemail message to the persons so identified), with the
understanding that, with adequate prior written notice, the Agent may modify the
list of such persons from time to time.

 

(ii)       Agent Efforts. Upon the terms and subject to the conditions set forth
in this Agreement, upon the receipt of an Issuance Notice, the Agent will use
its commercially reasonable efforts consistent with its normal sales and trading
practices to place the Shares with respect to which the Agent has agreed to act
as sales agent, subject to, and in accordance with the information specified in,
the Issuance Notice, unless the sale of the Shares described therein has been
suspended, cancelled or otherwise terminated in accordance with the terms of
this Agreement. For the avoidance of doubt, the parties to this Agreement may
modify an Issuance Notice at any time provided they both agree in writing to any
such modification.

 

(iii)       Method of Offer and Sale. The Shares may be offered and sold (A) in
privately negotiated transactions with the consent of the Company; (B) as block
transactions; or (C) by any other method permitted by law deemed to be an “at
the market offering” as defined in Rule 415(a)(4) under the Securities Act,
including sales made directly on the Principal Market or sales made into any
other existing trading market of the Common Shares. Nothing in this Agreement
shall be deemed to require either party to agree to the method of offer and sale
specified in the preceding sentence, and (except as specified in clauses (A) and
(B) above) the method of placement of any Shares by the Agent shall be at the
Agent’s discretion.

 

(iv)       Confirmation to the Company. If acting as sales agent hereunder, the
Agent will provide written confirmation to the Company no later than the opening
of the Trading Day following the Trading Day on which it has placed Shares
hereunder setting forth the number of shares sold on such Trading Day, the
corresponding Sales Price and the Issuance Price payable to the Company in
respect thereof.

 

19

 

 

(v)       Settlement. Each issuance of Shares will be settled on the applicable
Settlement Date for such issuance of Shares and, subject to the provisions of
‎Section 5, on or before each Settlement Date, the Company will, or will cause
its transfer agent to, electronically transfer the Shares being sold by
crediting the Agent’s or its designee’s account at The Depository Trust Company
through its Deposit/Withdrawal At Custodian (DWAC) System, or by such other
means of delivery as may be mutually agreed upon by the parties hereto and, upon
receipt of such Shares, which in all cases shall be freely tradable,
transferable, registered shares in good deliverable form, the Agent will
deliver, by wire transfer of immediately available funds, the related Issuance
Price in same day funds delivered to an account designated by the Company prior
to the Settlement Date. The Company may sell Shares to the Agent as principal at
a price agreed upon at each relevant time Shares are sold pursuant to this
Agreement (each, a “Time of Sale”).

 

(vi)       Suspension or Termination of Sales. Consistent with standard market
settlement practices, the Company or the Agent may, upon notice to the other
party hereto in writing or by telephone (confirmed immediately by verifiable
email), suspend any sale of Shares, and the period set forth in an Issuance
Notice shall immediately terminate; provided, however, that (A) such suspension
and termination shall not affect or impair either party’s obligations with
respect to any Shares placed or sold hereunder prior to the receipt of such
notice; (B) if the Company suspends or terminates any sale of Shares after the
Agent confirms such sale to the Company, the Company shall still be obligated to
comply with ‎Section 3(b)(v) with respect to such Shares; and (C) if the Company
defaults in its obligation to deliver Shares on a Settlement Date, the Company
agrees that it will hold the Agent harmless against any loss, claim, damage or
expense (including, without limitation, penalties, interest and reasonable legal
fees and expenses), as incurred, arising out of or in connection with such
default by the Company. The parties hereto acknowledge and agree that, in
performing its obligations under this Agreement, the Agent may borrow Common
Shares from stock lenders in the event that the Company has not delivered Shares
to settle sales as required by subsection (v) above, and may use the Shares to
settle or close out such borrowings. The Company agrees that no such notice
shall be effective against the Agent unless it is made to the persons identified
in writing by the Agent pursuant to ‎Section 3(b)(i).

 

(vii)       No Guarantee of Placement, Etc. The Company acknowledges and agrees
that (A) there can be no assurance that the Agent will be successful in placing
Shares; (B) the Agent will incur no liability or obligation to the Company or
any other Person if it does not sell Shares; and (C) the Agent shall be under no
obligation to purchase Shares on a principal basis pursuant to this Agreement,
except as otherwise specifically agreed by the Agent and the Company.

 

(viii)       Material Non-Public Information. Notwithstanding any other
provision of this Agreement, the Company and the Agent agree that the Company
shall not deliver any Issuance Notice to the Agent, and the Agent shall not be
obligated to place any Shares, during any period in which the Company is in
possession of material non-public information.

 

(c)               Fees. As compensation for services rendered, the Company shall
pay to the Agent, on the applicable Settlement Date, the Selling Commission for
the applicable Issuance Amount (including with respect to any suspended or
terminated sale pursuant to Section 3(b)(vi)) by the Agent deducting the Selling
Commission from the applicable Issuance Amount.

 

20

 

 

(d)               Expenses. The Company agrees to pay all costs, fees and
expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Shares (including all printing and engraving costs); (ii) all fees and expenses
of the registrar and transfer agent of the Shares; (iii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of the
Shares; (iv) all fees and expenses of the Company’s counsel, independent public
or certified public accountants and other advisors; (v) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and
distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), the Prospectus, any
Free Writing Prospectus prepared by or on behalf of, used by, or referred to by
the Company, and all amendments and supplements thereto, and this Agreement;
(vi) all filing fees, attorneys’ fees and expenses incurred by the Company or
the Agent in connection with qualifying or registering (or obtaining exemptions
from the qualification or registration of) all or any part of the Shares for
offer and sale under the state securities or blue sky laws or the provincial
securities laws of Canada, and, if requested by the Agent, preparing and
printing a “Blue Sky Survey” or memorandum and a “Canadian wrapper,” and any
supplements thereto, advising the Agent of such qualifications, registrations,
determinations and exemptions; (vii) the reasonable and documented fees and
disbursements of the Agent’s counsel, including the reasonable and documented
fees and expenses of counsel for the Agent in connection with, FINRA review, if
any, and approval of the Agent’s participation in the offering and distribution
of the Shares; (viii) the filing fees incident to FINRA review, if any; (ix) all
fees, expenses and disbursements relating to background checks of the Company’s
directors, director nominees and executive officers; (x) the costs and expenses
of the Company relating to investor presentations on any “road show” undertaken
in connection with the marketing of the offering of the Shares, including,
without limitation, expenses associated with the preparation or dissemination of
any electronic road show, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the Company, travel
and lodging expenses of the representatives, employees and officers of the
Company and of the Agent and any such consultants, and the cost of any aircraft
chartered in connection with the road show; and (xi) the fees and expenses
associated with listing the Shares on the Principal Market. The fees and
disbursements of the Agent’s counsel pursuant to subsections (vi) and (vii)
above shall not exceed (A) $50,000 in connection with the entry into this
agreement and (B) $15,000 in connection with each Triggering Event Date (as
defined below) on which the Company is required to provide a certificate
pursuant to Section 4(o).

 

Section 4. ADDITIONAL COVENANTS

 

The Company covenants and agrees with the Agent as follows, in addition to any
other covenants and agreements made elsewhere in this Agreement:

 

(a)               Exchange Act Compliance. During the Agency Period, the Company
shall (i) file, on a timely basis, with the Commission all reports and documents
required to be filed under Section 13, 14 or 15 of the Exchange Act (taking into
account any extension available under the Exchange Act) in the manner and within
the time periods required by the Exchange Act; and (ii) either (A) include in
its quarterly reports on Form 10-Q and its annual reports on Form 10-K, a
summary detailing, for the relevant reporting period, (1) the number of Shares
sold through the Agent pursuant to this Agreement and (2) the net proceeds
received by the Company from such sales or, in the Company’s sole discretion,
(B) prepare a prospectus supplement containing, or include in such other filing
permitted by the Securities Act or Exchange Act (each an “Interim Prospectus
Supplement”), such summary information and, at least once a quarter and subject
to this Section 4, file such Interim Prospectus Supplement pursuant to Rule
424(b) under the Securities Act (and within the time periods required by Rule
424(b) and Rule 430B under the Securities Act); provided, however, that prior
notice is given to the Agent of any such filing of an Interim Prospectus
Supplement.

 

21

 

 

(b)               Securities Act Compliance. After the date of this Agreement,
the Company shall promptly advise the Agent in writing, in each case insofar as
it relates to the Shares or the transactions contemplated by this Agreement, (i)
of the receipt of any comments of, or requests for additional or supplemental
information from, the Commission; (ii) of the time and date of any filing of any
post-effective amendment to the Registration Statement, any Rule 462(b)
Registration Statement or any amendment or supplement to the Prospectus, or any
Free Writing Prospectus; (iii) of the time and date that any post-effective
amendment to the Registration Statement or any Rule 462(b) Registration
Statement becomes effective; and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto, any Rule 462(b) Registration Statement or any
amendment or supplement to the Prospectus or of any order preventing or
suspending the use of any Free Writing Prospectus or the Prospectus, or of any
proceedings to remove, suspend or terminate from listing or quotation the Common
Shares from any securities exchange upon which they are listed for trading or
included or designated for quotation, or of the threatening or initiation of any
proceedings for any of such purposes. If the Commission shall enter any such
stop order at any time, the Company will use its reasonable best efforts to
obtain the lifting of such order as soon as practicable. Additionally, the
Company agrees that it shall comply with the provisions of Rule 424(b) and Rule
433, as applicable, under the Securities Act and will use its reasonable efforts
to confirm that any filings made by the Company under such Rule 424(b) or Rule
433 were filed in a timely manner with the Commission.

 

(c)               Amendments and Supplements to the Prospectus and Other
Securities Act Matters. If any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Prospectus so that the
Prospectus does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if in the opinion of the Agent or counsel for the Agent it is
otherwise necessary to amend or supplement the Prospectus to comply with
applicable law, including the Securities Act, the Company agrees (subject to
Sections 4(d) and 4(f)) to promptly prepare, file with the Commission and
furnish at its own expense to the Agent, such amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser, not
be misleading or so that the Prospectus, as amended or supplemented, will comply
with applicable law including the Securities Act. Neither the Agent’s consent
to, or delivery of, any such amendment or supplement shall constitute a waiver
of any of the Company’s obligations under Sections 4(d) and 4(f).
Notwithstanding the foregoing, the Company shall not be required to file such
amendment or supplement if there is no pending Issuance Notice and the Company
believes that it is in its best interests not to file such amendment or
supplement.

 

22

 

 

(d)                Agent’s Review of Proposed Amendments and Supplements. Prior
to amending or supplementing the Registration Statement (including any
registration statement filed under Rule 462(b) under the Securities Act) or the
Prospectus (excluding any amendment or supplement through incorporation of any
report filed under the Exchange Act), the Company shall furnish to the Agent for
review, a reasonable amount of time prior to the proposed time of filing or use
thereof, a copy of each such proposed amendment or supplement, and the Company
shall not file or use any such proposed amendment or supplement without the
Agent’s prior consent, which consent shall not be unreasonably withheld,
conditioned or delayed, and to file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus required
to be filed pursuant to such Rule; provided, however, that the Company has no
obligation to provide the Agent any advance copy of such filing if the filing
does not name the Agent and does not relate to the Shares or the transactions
contemplated by this Agreement.

 

(e)               Use of Free Writing Prospectus. Neither the Company nor the
Agent has prepared, used, referred to or distributed, or will prepare, use,
refer to or distribute, without the other party’s prior written consent, any
“written communication” that constitutes a “free writing prospectus” as such
terms are defined in Rule 405 under the Securities Act with respect to the
offering contemplated by this Agreement (any such free writing prospectus being
referred to herein as a “Free Writing Prospectus”).

 

(f)                Free Writing Prospectuses. The Company shall furnish to the
Agent for review, a reasonable amount of time prior to the proposed time of
filing or use thereof, a copy of each proposed free writing prospectus or any
amendment or supplement thereto to be prepared by or on behalf of, used by, or
referred to by the Company and the Company shall not file, use or refer to any
proposed free writing prospectus or any amendment or supplement thereto without
the Agent’s consent, which consent shall not be unreasonably withheld,
conditioned or delayed. The Company shall furnish to the Agent, without charge,
as many copies of any free writing prospectus prepared by or on behalf of, or
used by the Company, as the Agent may reasonably request. If at any time when a
prospectus is required by the Securities Act (including, without limitation,
pursuant to Rule 173(d)) to be delivered in connection with sales of the Shares
(but in any event if at any time through and including the date of this
Agreement) there occurred or occurs an event or development as a result of which
any free writing prospectus prepared by or on behalf of, used by, or referred to
by the Company conflicted or would conflict with the information contained in
the Registration Statement or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, the Company shall promptly
amend or supplement such free writing prospectus to eliminate or correct such
conflict or so that the statements in such free writing prospectus as so amended
or supplemented will not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances prevailing at such subsequent time, not
misleading, as the case may be; provided, however, that prior to amending or
supplementing any such free writing prospectus, the Company shall furnish to the
Agent for review, a reasonable amount of time prior to the proposed time of
filing or use thereof, a copy of such proposed amended or supplemented free
writing prospectus and the Company shall not file, use or refer to any such
amended or supplemented free writing prospectus without the Agent’s consent,
which consent shall not be unreasonably withheld, conditioned or delayed.
Notwithstanding the foregoing, the Company has no obligation to provide the
Agent any advance copy of such filing if the filing does not name the Agent and
does not relate to the Shares or the transactions contemplated by this
Agreement.

 

23

 

 

(g)               Filing of Agent Free Writing Prospectuses. The Company shall
not take any action that would result in the Agent or the Company being required
to file with the Commission pursuant to Rule 433(d) under the Securities Act a
free writing prospectus prepared by or on behalf of the Agent that the Agent
otherwise would not have been required to file thereunder.

 

(h)               Copies of Registration Statement and Prospectus. After the
date of this Agreement through the last time that a prospectus is required by
the Securities Act (including, without limitation, pursuant to Rule 173(d)) to
be delivered in connection with sales of the Shares, the Company agrees to
furnish the Agent with copies (which may be electronic copies) of the
Registration Statement and each amendment thereto, and with copies (which may be
electronic copies) of the Prospectus and each amendment or supplement thereto in
the form in which it is filed with the Commission pursuant to the Securities Act
or Rule 424(b) under the Securities Act, both in such quantities as the Agent
may reasonably request from time to time; and, if the delivery of a prospectus
is required under the Securities Act or under the blue sky or securities laws of
any jurisdiction at any time on or prior to the applicable Settlement Date for
any period set forth in an Issuance Notice in connection with the offering or
sale of the Shares and if at such time any event has occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it is necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, to notify the Agent and to request that the
Agent suspend offers to sell Shares (and, if so notified, the Agent shall cease
such offers as soon as practicable); and if the Company decides to amend or
supplement the Registration Statement or the Prospectus as then amended or
supplemented, to advise the Agent promptly by telephone (with confirmation in
writing) and to prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or the Prospectus as then
amended or supplemented that will correct such statement or omission or effect
such compliance; provided, however, that if during such same period the Agent is
required to deliver a prospectus in respect of transactions in the Shares, the
Company shall promptly prepare and file with the Commission such an amendment or
supplement.

 

(i)                 Blue Sky Compliance. The Company shall cooperate with the
Agent and counsel for the Agent to qualify or register the Shares for sale under
(or obtain exemptions from the application of) the state securities or blue sky
laws or Canadian provincial securities laws of those jurisdictions designated by
the Agent, shall comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the distribution
of the Shares. The Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where it
would be subject to taxation as a foreign corporation. The Company will advise
the Agent promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Shares for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its reasonable best efforts to
obtain the withdrawal thereof as soon as practicable.

 

24

 

 

(j)                 Earnings Statement. As soon as practicable, the Company will
make generally available to its security holders and to the Agent an earnings
statement (which need not be audited) covering a period of at least twelve
months beginning with the first fiscal quarter of the Company occurring after
the date of this Agreement which shall satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 under the Securities Act.

 

(k)               Listing; Reservation of Shares. (a) The Company will use its
reasonable best efforts to maintain the listing of the Shares on the Principal
Market; and (b) the Company will reserve and keep available at all times, free
of preemptive rights, Shares for the purpose of enabling the Company to satisfy
its obligations under this Agreement.

 

(l)                 Transfer Agent. The Company shall engage and maintain, at
its expense, a registrar and transfer agent for the Shares.

 

(m)             Due Diligence. During the term of this Agreement, the Company
will reasonably cooperate with any reasonable due diligence review conducted by
the Agent in connection with the transactions contemplated hereby, including,
without limitation, providing information and making available documents and
senior corporate officers, during normal business hours and at the Company’s
principal offices, as the Agent may reasonably request from time to time.

 

(n)               Representations and Warranties. The Company acknowledges that
each delivery of an Issuance Notice and each delivery of Shares on a Settlement
Date shall be deemed to be (i) an affirmation to the Agent that the
representations and warranties of the Company contained in or made pursuant to
this Agreement are true and correct as of the date of such Issuance Notice or of
such Settlement Date, as the case may be, as though made at and as of each such
date, except as may be disclosed in the Prospectus (including any documents
incorporated by reference therein and any supplements thereto); and (ii) an
undertaking that the Company will advise the Agent if any of such
representations and warranties will not be true and correct as of the Settlement
Date for the Shares relating to such Issuance Notice, as though made at and as
of each such date (except that such representations and warranties shall be
deemed to relate to the Registration Statement and the Prospectus as amended and
supplemented relating to such Shares).

 

(o)               Deliverables at Triggering Event Dates; Certificates. The
Company agrees that on or prior to the date of the first Issuance Notice and,
during the term of this Agreement after the date of the first Issuance Notice,
upon:

 

(A)       the filing of the Prospectus or the amendment or supplement of any
Registration Statement or Prospectus (other than a prospectus supplement
relating solely to an offering of securities other than the Shares or a
prospectus filed pursuant to Section 4(a)(ii)(B)), by means of a post-effective
amendment, sticker or supplement, but not by means of incorporation of documents
by reference into the Registration Statement or Prospectus;

 

25

 

 

(B)       the filing with the Commission of an annual report on Form 10-K or a
quarterly report on Form 10-Q (including any Form 10-K/A or Form 10-Q/A
containing amended financial information or a material amendment to the
previously filed annual report on Form 10-K or quarterly report on Form 10-Q),
in each case, of the Company; or

 

(C)       the filing with the Commission of a current report on Form 8-K of the
Company containing amended financial information (other than information
“furnished” pursuant to Item 2.02 or 7.01 of Form 8-K or to provide disclosure
pursuant to Item 8.01 of Form 8-K relating to reclassification of certain
properties as discontinued operations in accordance with Statement of Financial
Accounting Standards No. 144) that is material to the offering of securities of
the Company in the Agent’s reasonable discretion;

 

(any such event, a “Triggering Event Date”), the Company shall furnish the Agent
(but in the case of clause (C) above only if the Agent reasonably determines
that the information contained in such current report on Form 8-K of the Company
is material) with a certificate as of the Triggering Event Date, in the form and
substance satisfactory to the Agent and its counsel, substantially similar to
the form previously provided to the Agent and its counsel, modified, as
necessary, to relate to the Registration Statement and the Prospectus as amended
or supplemented, (A) confirming that the representations and warranties of the
Company contained in this Agreement are true and correct, (B) confirming that
the Company has performed all of its obligations hereunder to be performed on or
prior to the date of such certificate and as to the matters set forth in
‎Section 5(a)(iii) hereof, and (C) containing any other certification that the
Agent shall reasonably request. The requirement to provide a certificate under
this Section 4(o) shall be waived for any Triggering Event Date occurring at a
time when no Issuance Notice is pending or a suspension is in effect, which
waiver shall continue until the earlier to occur of the date the Company
delivers instructions for the sale of Shares hereunder (which for such calendar
quarter shall be considered a Triggering Event Date) and the next occurring
Triggering Event Date. Notwithstanding the foregoing, if the Company
subsequently decides to sell Shares following a Triggering Event Date when a
suspension was in effect and did not provide the Agent with a certificate under
this Section 4(o), then before the Company delivers the instructions for the
sale of Shares or the Agent sells any Shares pursuant to such instructions, the
Company shall provide the Agent with a certificate in conformity with this
Section 4(o) dated as of the date that the instructions for the sale of Shares
are issued.

 

(p)               Legal Opinions. On or prior to the date of the first Issuance
Notice and on or prior to each Triggering Event Date with respect to which the
Company is obligated to deliver a certificate pursuant to Section 4(o) for which
no waiver is applicable and excluding the date of this Agreement, a negative
assurances letter and the written legal opinion of Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C., counsel to the Company, a negative assurances letter of
Latham & Watkins LLP, counsel to the Agent, and the written legal opinion of
each of Sterne, Kessler, Goldstein & Fox P.L.L.C. and McCarter & English, LLP,
intellectual property counsel to the Company, each dated the date of delivery,
shall be furnished to the Agent, each in form and substance reasonably
satisfactory to the Agent and its counsel, substantially similar to the form
previously provided to the Agent and its counsel, modified, as necessary, to
relate to the Registration Statement and the Prospectus as then amended or
supplemented; provided, however, that the Company shall be required to furnish
no more than one of each such opinion and negative assurance letter of Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C. hereunder in connection with the
filing of each of its annual reports on Form 10-K or Form 10-K/A and quarterly
reports on Form 10-Q or Form 10-Q/A. In lieu of such opinions for subsequent
periodic filings, in the discretion of the Agent, the Company may furnish a
reliance letter from such counsel to the Agent, permitting the Agent to rely on
a previously delivered opinion letter, modified as appropriate for any passage
of time or Triggering Event Date (except that statements in such prior opinion
shall be deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented as of such Triggering Event Date).

 

26

 

 

(q)               Comfort Letter. On or prior to the date of the first Issuance
Notice and on or prior to each Triggering Event Date with respect to which the
Company is obligated to deliver a certificate pursuant to Section 4(o) for which
no waiver is applicable and excluding the date of this Agreement, the Company
shall cause Ernst & Young LLP, the independent registered public accounting firm
who has audited the financial statements included or incorporated by reference
in the Registration Statement, to furnish the Agent a comfort letter, dated the
date of delivery, in form and substance reasonably satisfactory to the Agent and
its counsel, substantially similar to the form previously provided to the Agent
and its counsel; provided, however, that any such comfort letter will only be
required on the Triggering Event Date specified to the extent that it contains
financial statements filed with the Commission under the Exchange Act and
incorporated or deemed to be incorporated by reference into a Prospectus. If
requested by the Agent, the Company shall also cause a comfort letter to be
furnished to the Agent within ten (10) Trading Days of the date of occurrence of
any material transaction or event requiring the filing of a current report on
Form 8-K containing material amended financial information of the Company,
including the restatement of the Company’s financial statements. The Company
shall be required to furnish no more than one comfort letter hereunder per
annual report on Form 10-K or Form 10-K/A and quarterly report on Form 10-Q or
Form 10-Q/A filed by the Company.

 

(r) Secretary’s Certificate. On or prior to the date of the first Issuance
Notice and on or prior to each Triggering Event Date with respect to which the
Company is obligated to deliver a certificate pursuant to Section 4(o) for which
no waiver is applicable and excluding the date of this Agreement, the Company
shall furnish the Agent a certificate executed by the Secretary of the Company,
signing in such capacity, dated the date of delivery (i) certifying that
attached thereto are true and complete copies of the resolutions duly adopted by
the Board of Directors of the Company authorizing the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
(including, without limitation, the issuance of the Shares pursuant to this
Agreement), which authorization shall be in full force and effect on and as of
the date of such certificate, (ii) certifying and attesting to the office,
incumbency, due authority and specimen signatures of each Person who executed
this Agreement for or on behalf of the Company, and (iii) containing any other
certification that the Agent shall reasonably request.

 

(s)                Agent’s Own Account; Clients’ Account. The Company consents
to the Agent trading, in compliance with applicable law, in the Common Shares
for the Agent’s own account and for the account of its clients at the same time
as sales of the Shares occur pursuant to this Agreement.

 

27

 

 

(t)                 Investment Limitation. The Company shall not invest, or
otherwise use the proceeds received by the Company from its sale of the Shares
in such a manner as would require the Company or any of its subsidiaries to
register as an investment company under the Investment Company Act.

 

(u)               Market Activities. The Company will not take, directly or
indirectly, any action designed to or that might be reasonably expected to cause
or result in stabilization or manipulation of the price of the Shares or any
other reference security, whether to facilitate the sale or resale of the Shares
or otherwise, and the Company will, and shall cause each of its Affiliates to,
comply with all applicable provisions of Regulation M. If the limitations of
Rule 102 of Regulation M (“Rule 102”) do not apply with respect to the Shares or
any other reference security pursuant to any exception set forth in Section (d)
of Rule 102, then promptly upon notice from the Agent (or, if later, at the time
stated in the notice), the Company will, and shall cause each of its Affiliates
to, comply with Rule 102 as though such exception were not available but the
other provisions of Rule 102 (as interpreted by the Commission) did apply. The
Company shall promptly notify the Agent if it no longer meets the requirements
set forth in Section (d) of Rule 102.

 

(v)               Notice of Other Sale. Without the written consent of the
Agent, the Company will not, directly or indirectly, (i) offer to sell, sell,
contract to sell, grant any option to sell or otherwise dispose of any Common
Shares or securities convertible into or exchangeable for Common Shares (other
than Shares hereunder), warrants or any rights to purchase or acquire Common
Shares, during the period beginning on the third Trading Day immediately prior
to the date on which any Issuance Notice is delivered to the Agent hereunder and
ending on the third Trading Day immediately following the Settlement Date with
respect to Shares sold pursuant to such Issuance Notice; (ii) effect a reverse
stock split, recapitalization, share consolidation, reclassification or similar
transaction affecting the outstanding Common Shares; or (iii) enter into 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 Shares offered pursuant to this Agreement) or securities
convertible into or exchangeable for Common Shares, warrants or any rights to
purchase or acquire, Common Shares prior to the termination of this Agreement;
provided, however, that such restrictions will not be required in connection
with the Company’s (i) issuance or sale of Common Shares, options to purchase
Common Shares, Common Share-based awards, including restricted Common Shares,
deferred Common Share units, restricted Common Share units, or Common Shares
issuable upon the exercise of options or other equity awards, including
restricted Common Shares, deferred Common Share units, restricted Common Share
units, pursuant to any employee or director share option, incentive or benefit
plan, share purchase or ownership plan, long-term incentive plan, dividend
reinvestment plan, inducement award under Nasdaq rules or other compensation
plan of the Company or its subsidiaries, as in effect on the date of this
Agreement, (ii) issuance or sale of Common Shares issuable upon exchange,
conversion or redemption of securities or the exercise or vesting of warrants,
options or other equity awards outstanding at the date of this Agreement, (iii)
issuance or sale of Common Shares or securities convertible into or exchangeable
for Common Shares as consideration for mergers, acquisitions or other business
combinations, joint ventures, collaborations, licensing arrangements, strategic
alliances, or manufacturing, distribution, marketing, OEM, supply, sponsored
research, technology transfer or development, or third party service
arrangements occurring after the date of this Agreement which are not used
solely for capital raising purposes; provided, however, that the aggregate
number of Common Shares issued, or issuable pursuant to the conversion or
exchange of securities convertible into or exchangeable for Common Shares, under
this subsection (iii) does not exceed 10% of the aggregate number of Common
Shares outstanding immediately prior to giving effect to such issuance or sale,
and (iv) modification of any outstanding options, warrants of any rights to
purchase or acquire Common Shares.

 

28

 

 

Section 5. CONDITIONS TO DELIVERY OF ISSUANCE NOTICES AND TO SETTLEMENT

 

(a)               Conditions Precedent to the Right of the Company to Deliver an
Issuance Notice and the Obligation of the Agent to Sell Shares. The right of the
Company to deliver an Issuance Notice hereunder is subject to the satisfaction,
on the date of delivery of such Issuance Notice, and the obligation of the Agent
to use its commercially reasonable efforts to place Shares during the applicable
period set forth in the Issuance Notice is subject to the satisfaction, on each
Trading Day during the applicable period set forth in the Issuance Notice, of
each of the following conditions:

 

(i)Accuracy of the Company’s Representations and Warranties; Performance by the
Company. The Company shall have delivered the certificate required to be
delivered pursuant to Section 4(o) on or before the date on which delivery of
such certificate is required pursuant to Section 4(o). The Company shall have
performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to such date, including, but not limited to, the covenants
contained in ‎Section 4(p), Section 4(q) and Section 4(r).

 

(ii)No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby that
prohibits or directly and materially adversely affects any of the transactions
contemplated by this Agreement, and no proceeding shall have been commenced that
may have the effect of prohibiting or materially adversely affecting any of the
transactions contemplated by this Agreement.

 

(iii)Material Adverse Changes. Except as disclosed in the Prospectus and the
Time of Sale Information, (a) in the judgment of the Agent there shall not have
occurred any Material Adverse Change; and (b) there shall not have occurred any
downgrading, nor shall any public notice have been given of any intended or
potential downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded any
securities of the Company or any of its subsidiaries by any “nationally
recognized statistical rating organization” as such term is defined for purposes
of Section 3(a)(62) of the Exchange Act.

 

29

 

 

(iv)No Suspension of Trading in or Delisting of Common Shares; Other Events. The
trading of the Common Shares (including without limitation the Shares) shall not
have been suspended by the Commission, the Principal Market or FINRA and the
Common Shares (including without limitation the Shares) shall have been approved
for listing or quotation on and shall not have been delisted from the Nasdaq
Stock Market, the New York Stock Exchange or any of their constituent markets.
There shall not have occurred (and be continuing in the case of occurrences
under clauses (i) and (ii) below) any of the following: (i) trading or quotation
in any of the Company’s securities shall have been suspended or limited by the
Commission or by the Principal Market or trading in securities generally on the
Principal Market shall have been suspended or limited, or minimum or maximum
prices shall have been generally established on any of such stock exchanges by
the Commission or FINRA; (ii) a general banking moratorium shall have been
declared by any of federal or New York, authorities; or (iii) there shall have
occurred any outbreak or escalation of national or international hostilities or
any crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States’ or international political,
financial or economic conditions, as in the judgment of the Agent is material
and adverse and makes it impracticable to market the Shares in the manner and on
the terms described in the Prospectus or to enforce contracts for the sale of
securities.

 

(b)               Documents Required to be Delivered on each Issuance Notice
Date. The Agent’s obligation to use its commercially reasonable efforts to place
Shares hereunder shall additionally be conditioned upon the delivery to the
Agent on or before the Issuance Notice Date of a certificate in form and
substance reasonably satisfactory to the Agent, executed by the Chief Executive
Officer, President or Chief Financial Officer of the Company, to the effect that
all conditions to the delivery of such Issuance Notice shall have been satisfied
as at the date of such certificate as required to be delivered pursuant to
Section 4(o) (which certificate shall not be required if the foregoing
representations shall be set forth in the Issuance Notice).

 

(c)               No Misstatement or Material Omission. The Agent shall not have
advised the Company that the Registration Statement, the Prospectus or the Time
of Sale Information, or any amendment or supplement thereto, contains an untrue
statement of fact that in the Agent’s reasonable opinion is material, or omits
to state a fact that in the Agent’s reasonable opinion is material and is
required to be stated therein or is necessary to make the statements therein not
misleading.

 

Section 6. INDEMNIFICATION AND CONTRIBUTION

 

(a)               Indemnification of the Agent. The Company agrees to indemnify
and hold harmless the Agent, its officers and employees, and each person, if
any, who controls the Agent within the meaning of the Securities Act or the
Exchange Act against any loss, claim, damage, liability or expense, as incurred,
to which the Agent or such officer, employee or controlling person may become
subject, under the Securities Act, the Exchange Act, other federal or state
statutory law or regulation, or the laws or regulations of foreign jurisdictions
where Shares have been offered or sold or at common law or otherwise (including
in settlement of any litigation), insofar as such loss, claim, damage, liability
or expense (or actions in respect thereof as contemplated below) arises out of
or is based upon: (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430B
under the Securities Act, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading; or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any Free Writing Prospectus that the Company has
used, referred to or filed, or is required to file, pursuant to Rule 433(d) of
the Securities Act or the Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and to reimburse the Agent and each such
officer, employee and controlling person for any and all expenses (including the
reasonable and documented fees and disbursements of counsel chosen by the Agent)
as such expenses are reasonably incurred and documented by the Agent or such
officer, employee or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to
the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by the Agent expressly for use in the Registration Statement, any such
Free Writing Prospectus or the Prospectus (or any amendment or supplement
thereto), it being understood and agreed that the only such information
furnished by the Agent to the Company consists of the information set forth in
the first sentence of the ninth paragraph under the caption “Plan of
Distribution” in the Prospectus (the “Agent Information”). The indemnity
agreement set forth in this ‎Section 6(a) shall be in addition to any
liabilities that the Company may otherwise have.

 

30

 

 

(b)               Indemnification of the Company, its Directors and Officers.
The Agent agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act against any loss, claim, damage, liability or expense,
as incurred, to which the Company or any such director, officer or controlling
person may become subject, under the Securities Act, the Exchange Act, or other
federal or state statutory law or regulation, or the laws or regulations of
foreign jurisdictions where Shares have been offered or sold or at common law or
otherwise (including in settlement of any litigation), that arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430B
under the Securities Act, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading; or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any Free Writing Prospectus that the Company has
used, referred to or filed, or is required to file, pursuant to Rule 433(d) of
the Securities Act or the Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; but, for each of (i) and (ii) above, only
to the extent arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the Agent
expressly for use in the Registration Statement, any such Free Writing
Prospectus or the Prospectus (or any amendment or supplement thereto), it being
understood and agreed that the only such information furnished by the Agent to
the Company consists of the Agent Information, and to reimburse the Company and
each such director, officer and controlling person for any and all expenses
(including the reasonable and documented fees and disbursements of one counsel
chosen by the Company) as such expenses are reasonably incurred and documented
by the Company or such officer, director or controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. The indemnity agreement set forth
in this Section 6(b) shall be in addition to any liabilities that the Agent may
otherwise have.

 

31

 

 

(c)               Notifications and Other Indemnification Procedures. Promptly
after receipt by an indemnified party under this ‎Section 6 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this ‎Section 6,
notify the indemnifying party in writing of the commencement thereof, but the
omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this ‎Section 6 or to
the extent it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it shall elect, jointly with all other indemnifying parties similarly notified,
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party’s election to so assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this ‎Section 6 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the preceding sentence (it
being understood, however, that the indemnifying party shall not be liable for
the fees and expenses of more than one separate counsel (together with local
counsel), representing the indemnified parties who are parties to such action),
which counsel (together with any local counsel) for the indemnified parties
shall be selected by the indemnified party (in the case of counsel for the
indemnified parties referred to in ‎Section 6(a) and Section 6(b) above),
(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized in writing the employment of counsel for the indemnified party at the
expense of the indemnifying party, in each of which cases the fees and expenses
of counsel shall be at the expense of the indemnifying party and shall be paid
as they are incurred.

 

32

 

 

(d)               Settlements. The indemnifying party under this ‎Section 6
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by ‎Section 6(c) hereof, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request; and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.

 

(e)               Contribution. If the indemnification provided for in this
‎Section 6 is for any reason held to be unavailable to or otherwise insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the Agent, on
the other hand, from the offering of the Shares pursuant to this Agreement; or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Agent, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the Agent,
on the other hand, in connection with the offering of the Shares pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total gross proceeds from the offering of the Shares (before deducting expenses)
received by the Company bear to the total commissions received by the Agent. The
relative fault of the Company, on the one hand, and the Agent, on the other
hand, shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Agent, on the other hand, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

 

The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in ‎Section 6(c), any legal or other fees
or expenses reasonably incurred and documented by such party in connection with
investigating or defending any action or claim. The provisions set forth in
‎Section 6(c) with respect to notice of commencement of any action shall apply
if a claim for contribution is to be made under this ‎Section 6(c); provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under ‎Section 6(c) for purposes of
indemnification.

 

33

 

 

The Company and the Agent agree that it would not be just and equitable if
contribution pursuant to this ‎Section 6(e) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this ‎Section 6(e).

 

Notwithstanding the provisions of this ‎Section 6(e), the Agent shall not be
required to contribute any amount in excess of the Selling Commission received
by the Agent in connection with the offering contemplated hereby. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this ‎Section
6(d), each officer and employee of the Agent and each person, if any, who
controls the Agent within the meaning of the Securities Act or the Exchange Act
shall have the same rights to contribution as the Agent, and each director of
the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of the
Securities Act and the Exchange Act shall have the same rights to contribution
as the Company.

 

Section 7. TERMINATION & SURVIVAL

 

(a)               Term. Subject to the provisions of this ‎Section 7, the term
of this Agreement shall continue from the date of this Agreement until the end
of the Agency Period, unless earlier terminated by the parties to this Agreement
pursuant to this ‎Section 7.

 

(b)               Termination; Survival Following Termination.

 

(i)Either party may terminate this Agreement prior to the end of the Agency
Period, by giving written notice as required by this Agreement, upon ten (10)
Trading Days’ notice to the other party; provided that, (A) if the Company
terminates this Agreement after the Agent confirms to the Company any sale of
Shares, the Company shall remain obligated to comply with ‎Section 3(b)(v) with
respect to such Shares and (B) ‎Section 2, ‎Section 6, ‎Section 7 and ‎Section 8
shall survive termination of this Agreement. If termination shall occur prior to
the Settlement Date for any sale of Shares, such sale shall nevertheless settle
in accordance with the terms of this Agreement.

 

(ii) In addition to the survival provision of ‎Section 7(b)(i), the respective
indemnities, agreements, representations, warranties and other statements of the
Company, of its officers and of the Agent set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Agent or the Company or any of its or their
partners, officers or directors or any controlling person, as the case may be,
and, anything herein to the contrary notwithstanding, will survive delivery of
and payment for the Shares sold hereunder and any termination of this Agreement.

 

34

 

 

Section 8. MISCELLANEOUS

 

(a)               Press Releases and Disclosure. The Company may issue a press
release describing the material terms of the transactions contemplated hereby as
soon as practicable following the date of this Agreement, and may file with the
Commission a Current Report on Form 8-K, with this Agreement attached as an
exhibit thereto, describing the material terms of the transactions contemplated
hereby, and the Company shall consult with the Agent prior to making such
disclosures, and the parties hereto shall use all commercially reasonable
efforts, acting in good faith, to agree upon a text for such disclosures that is
reasonably satisfactory to all parties hereto. No party hereto shall issue
thereafter any press release or like public statement (including, without
limitation, any disclosure required in reports filed with the Commission
pursuant to the Exchange Act) related to this Agreement or any of the
transactions contemplated hereby without the prior written approval of the other
party hereto, except as may be necessary or appropriate in the reasonable
opinion of the party seeking to make disclosure to comply with the requirements
of applicable law or stock exchange rules. If any such press release or like
public statement is so required, the party making such disclosure shall consult
with the other party prior to making such disclosure, and the parties shall use
all commercially reasonable efforts, acting in good faith, to agree upon a text
for such disclosure that is reasonably satisfactory to all parties hereto.

 

(b)               No Advisory or Fiduciary Relationship. The Company
acknowledges and agrees that (i) the transactions contemplated by this
Agreement, including the determination of any fees, are arm’s-length commercial
transactions between the Company and the Agent, (ii) when acting as a principal
under this Agreement, the Agent is and has been acting solely as a principal and
is not the agent or fiduciary of the Company, or its stockholders, creditors,
employees or any other party, (iii) the Agent has not assumed nor will assume an
advisory or fiduciary responsibility in favor of the Company with respect to the
transactions contemplated hereby or the process leading thereto (irrespective of
whether the Agent has advised or is currently advising the Company on other
matters) and the Agent does not have any obligation to the Company with respect
to the transactions contemplated hereby except the obligations expressly set
forth in this Agreement, (iv) the Agent and its respective Affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of the Company, and (v) the Agent has not provided any legal, accounting,
regulatory or tax advice with respect to the transactions contemplated hereby
and the Company has consulted its own legal, accounting, regulatory and tax
advisors to the extent it deemed appropriate.

 

(c)               Research Analyst Independence. The Company acknowledges that
the Agent’s research analysts and research departments are required to and
should be independent from their respective investment banking divisions and are
subject to certain regulations and internal policies, and as such the Agent’s
research analysts may hold views and make statements or investment
recommendations and/or publish research reports with respect to the Company or
the offering that differ from the views of their respective investment banking
divisions. The Company understands that the Agent is a full service securities
firm and as such from time to time, subject to applicable securities laws, may
effect transactions for its own account or the account of its customers and hold
long or short positions in debt or equity securities of the companies that may
be the subject of the transactions contemplated by this Agreement.

 

35

 

 

(d)               Notices. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:

 

If to the Agent:

Jefferies LLC
520 Madison Avenue
New York, NY 10022
Facsimile: (646) 619-4437
Attention: General Counsel

 

with a copy (which shall not constitute notice) to:

Latham & Watkins LLP

12670 High Bluff Drive

San Diego, CA 92130

Facsimile: (858) 523-5450

Attention: Michael Sullivan.

 

If to the Company:

ImmunoGen, Inc.

830 Winter Street

Waltham, MA 02451

Facsimile: (781) 207-0265

Attention: Joseph Kenny

 

with a copy (which shall not constitute notice) to:

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Facsimile: (617) 542-2241
Attention: Daniel T. Kajunski.

 

Any party hereto may change the address for receipt of communications by giving
written notice to the others in accordance with this ‎Section 8(d).

 

(e)               Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, and to the benefit of the employees, officers
and directors and controlling persons referred to in ‎Section 6, and in each
case their respective successors, and no other person will have any right or
obligation hereunder. The term “successors” shall not include any purchaser of
the Shares as such from the Agent merely by reason of such purchase.

 

(f)                Partial Unenforceability. The invalidity or unenforceability
of any Article, Section, paragraph or provision of this Agreement shall not
affect the validity or enforceability of any other Article, Section, paragraph
or provision hereof. If any Article, Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there
shall be deemed to be made such minor changes (and only such minor changes) as
are necessary to make it valid and enforceable.

 

36

 

 

(g)               Governing Law Provisions. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed in such state. Any legal suit,
action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in the federal courts of the
United States of America located in the Borough of Manhattan in the City of New
York or the courts of the State of New York in each case located in the Borough
of Manhattan in the City of New York (collectively, the “Specified Courts”), and
each party irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any such
court, as to which such jurisdiction is non-exclusive) of such courts in any
such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party’s address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.

 

(h)               General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument,
and may be delivered by facsimile transmission or by electronic delivery of a
portable document format (PDF) file. This Agreement may not be amended or
modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom
the condition is meant to benefit. The Article and Section headings herein are
for the convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.

 

[Signature Page Immediately Follows]

 

37

 

 

If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms

 

 

  Very truly yours,       IMMUNOGEN, INC.       By: /s/ Susan Altschuller    
Name: Susan Altschuller

    Title:Chief Financial Officer

 

The foregoing Agreement is hereby confirmed and accepted by the Agent in New
York, New York as of the date first above written.

 

JEFFERIES LLC       By: /s/ Dustin Tyner     Name: Dustin Tyner    
Title:Managing Director  

 

 

 

 

EXHIBIT A

 

ISSUANCE NOTICE

 

[Date]

 

Jefferies LLC

520 Madison Avenue

New York, New York 10022

 

Attn: [__________]

 

Reference is made to the Open Market Sale Agreement between __________ (the
“Company”) and Jefferies LLC (the “Agent”) dated as of September 25, 2020. The
Company confirms that all conditions to the delivery of this Issuance Notice are
satisfied as of the date hereof.

 

Date of Delivery of Issuance Notice (determined pursuant to ‎Section 3(b)(i)):
_______________________

 

Issuance Amount (equal to the total Sales Price for such Shares):

 

  $           Number of days in selling period:           First date of selling
period:           Last date of selling period:           Settlement Date(s) if
other than standard T+2 settlement:        

 

 

 

Floor Price Limitation (in no event less than $1.00 without the prior written
consent of the Agent, which consent may be withheld in the Agent’s sole
discretion): $ ____ per share

 

Comments:     

 

 

          By:       Name:     Title:

 

A-1

 

 

Schedule A

 

Notice Parties

 

The Company

 

Mark Enyedy (Mark.Enyedy@immunogen.com)

Susan Altschuller (Susan.Altschuller@immunogen.com)

Joseph Kenny (Joseph.Kenny@immunogen.com)

 

The Agent

 

Dustin Tyner (dtyner@jefferies.com)

Donald Lynaugh (dlynaugh@jefferies.com)

Michael Magarro (mmagarro@jefferies.com)

Jack Fabbri (fabbri@jefferies.com)