Exhibit 10.1

 

 

 

OPEN MARKET SALE AGREEMENTSM

 

June 15, 2020

 

JEFFERIES LLC
520 Madison Avenue

New York, New York 10022

 

Ladies and Gentlemen:

  

Hertz Global Holdings, Inc., a Delaware 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”), 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 (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 (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 New York Stock Exchange 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 up to three percent (3.0%) of the gross proceeds of
Shares sold pursuant to this Agreement, or such lesser amount as may be 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 Agent shall deliver to the Company the
Issuance Price received on such sales and the Company shall deliver to the Agent
the amount of Shares sold on such Trading Day.

 

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“Shares” shall mean 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.

 

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 and (5) as of each Time of Sale
(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. 333-231878) that
contains a base prospectus (the “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 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, deliver or make available (and all other references of like import)
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”).

 

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At the time the Original Registration Statement was or will be declared
effective and at the time the Company’s most recent annual report on Form 10-K
was filed with the Commission, 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 have been declared
effective by the Commission 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, to the best knowledge of the Company, are pending or 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. 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.

 

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(c)       Ineligible Issuer Status. As of the determination date referenced in
Rule 164(h) under the Securities Act and as of the date hereof, the Company was
and is 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, 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 Time of Sale (as defined below),
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)       Statistical and Market-Related Data. All statistical, demographic and
market-related data included in the Registration Statement or the Prospectus are
based on or derived from sources that the Company believes, after reasonable
inquiry, to be reliable and accurate. To the extent required, the Company has
obtained the written consent for the use of such data from such sources.

 

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(g)       Disclosure Controls and Procedures; Deficiencies in or Changes to
Internal Control Over Financial Reporting. The Company has established and
maintains disclosure controls and procedures (as defined in Rules 13a-15 and
15d-15 under the Exchange Act), which (i) are designed to ensure that material
information relating to the Company, including its consolidated subsidiaries, is
made known to the Company’s principal executive officer and its principal
financial officer by others within those entities, particularly during the
periods in which the periodic reports required under the Exchange Act are being
prepared; (ii) have been evaluated by management of the Company for
effectiveness as of the end of the Company’s most recent fiscal quarter; and
(iii) are effective in all material respects to perform the functions for which
they were established. Since the end of the Company’s most recent audited fiscal
year, there have been no significant deficiencies or material weaknesses in the
Company’s internal control over financial reporting (whether or not remediated)
and no change in the Company’s internal control over financial reporting that
has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting. The Company is not aware of
any change in its internal control over financial reporting that has occurred
during its most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting.

 

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

 

(i)       Authorization of the Shares. The Shares have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and delivered by
the Company against payment therefor pursuant to this Agreement, will be validly
issued, fully paid and nonassessable, and the issuance and sale of the Shares is
not subject to any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase the Shares.

 

(j)       No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by this Agreement, except for such rights as have been
duly waived.

 

(k)       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
reasonably be expected to result in a material adverse change, in (A) the
condition, financial or otherwise, or in the earnings, business, properties,
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) the Company and its subsidiaries, considered as one
entity, have not incurred any material liability or obligation, indirect, direct
or contingent, including without limitation any losses or interference with
their business from fire, explosion, flood, earthquakes, accident or other
calamity, whether or not covered by insurance, or from any strike, labor dispute
or court or governmental action, order or decree, that are material,
individually or in the aggregate, to the Company and its subsidiaries,
considered as one entity, and have not entered into any transactions not in the
ordinary course of business; and (iii) there has not been any material decrease
in the capital stock or any material increase in any short-term or long-term
indebtedness of the Company or its subsidiaries and there has been no dividend
or distribution of any kind declared, paid or made by the Company or, except for
dividends paid to the Company or other subsidiaries, by any of the Company’s
subsidiaries on any class of capital stock, or any repurchase or redemption by
the Company or any of its subsidiaries of any class of capital stock.

 

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(l)       Independent Accountants. PricewaterhouseCoopers LLP, which has
expressed its opinion with respect to the financial statements (which term as
used in this Agreement includes the related notes thereto) and supporting
schedules filed with the Commission as a part of the Registration Statement and
the Prospectus, is (i) an independent registered public accounting firm as
required by the Securities Act , the Exchange Act, and the rules of the Public
Company Accounting Oversight Board (“PCAOB”), (ii) in compliance with the
applicable requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X under the Securities Act and (iii) a registered public
accounting firm as defined by the PCAOB whose registration has not been
suspended or revoked and who has not requested such registration to be
withdrawn. Ernst & Young LLP, the Company’s current independent auditor, which
has expressed its opinion with respect to the financial statements (which term
as used in this Agreement includes the related notes thereto) and supporting
schedules filed with the Commission as a part of the Registration Statement and
the Prospectus, is (i) an independent registered public accounting firm as
required by the Securities Act, the Exchange Act, and the rules of the PCAOB,
(ii) in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X under the
Securities Act and (iii) a registered public accounting firm as defined by the
PCAOB whose registration has not been suspended or revoked and who has not
requested such registration to be withdrawn.

 

(m)       Financial Statements. The financial statements filed with the
Commission as a part of the Registration Statement and the Prospectus present
fairly in all material respects the consolidated financial position of the
Company and its subsidiaries as of the dates indicated and the results of their
operations, changes in stockholders’ equity and cash flows for the periods
specified. The supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. Such financial
statements and supporting schedules have been prepared in conformity with
generally accepted accounting principles as applied in the United States applied
on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. The interactive data in
eXtensible Business Reporting Language included or incorporated by reference in
the Registration Statement 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. No other financial statements or
supporting schedules are required to be included in the Registration Statement
or the Prospectus. The financial data set forth in each of the Registration
Statement and the Prospectus under the captions “Selected Financial Data” fairly
present the information set forth therein on a basis consistent with that of the
audited financial statements contained in the Registration Statement and the
Prospectus. All disclosures contained in the Registration Statement and the
Prospectus that constitute non-GAAP financial measures (as defined by the rules
and regulations under the Securities Act and the Exchange Act) comply with
Regulation G under the Exchange Act and Item 10 of Regulation S-K under the
Securities Act, as applicable. 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.

 

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(n)       Company’s Accounting System. The Company and each of its subsidiaries
make and keep books, records and accounts, which in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of
the Company and its subsidiaries and maintain a system of internal accounting
controls sufficient to provide reasonable assurance that: (i) transactions are
executed in accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences; and (v) the interactive data in
eXtensible Business Reporting Language included or incorporated by reference in
the Registration Statement and the Prospectus fairly presents the information
called for in all material respects and is prepared in accordance with the
Commission's rules and guidelines applicable thereto.

 

(o)       Incorporation and Good Standing of the Company. The Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has the corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus and to
enter into and perform its obligations under this Agreement. The Company is duly
qualified as a foreign corporation to transact business and is in good standing
in the State of Delaware and each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or the
conduct of business except where the failure to so qualify or to be in good
standing would not reasonably be expected, individually or in the aggregate, to
have a material adverse effect on the condition (financial or otherwise),
earnings, business, properties, operations, operating results, assets,
liabilities or prospects of the Company and its subsidiaries, considered as one
entity (a “Material Adverse Effect”).

 

(p)       Subsidiaries. Each of the Company’s “subsidiaries” (for purposes of
this Agreement, as defined in Rule 405 under the Securities Act) has been duly
incorporated or organized, as the case may be, and is validly existing as a
corporation, partnership or limited liability company, as applicable, in good
standing under the laws of the jurisdiction of its incorporation or organization
and has the power and authority (corporate or other) to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectus. Each of the Company’s subsidiaries is duly
qualified as a foreign corporation, partnership or limited liability company, as
applicable, to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business except where the failure to so
qualify or to be in good standing would not reasonably be expected, individually
or in the aggregate to have a Material Adverse Effect. 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 (i) the subsidiaries listed in Exhibit 21.1 to the
Company’s most recent Annual Report on Form 10-K and (ii) such other entities
omitted from Exhibit 21 which, when such omitted entities are considered in the
aggregate as a single subsidiary, would not constitute a “significant
subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X.

 

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(q)       Capitalization and Other Capital Stock Matters. The authorized, issued
and outstanding capital stock of the Company is as set forth in the Registration
Statement and the Prospectus (other than for subsequent issuances, if any,
pursuant to employee benefit plans or upon the exercise of outstanding options
or warrants, in each case described in the Registration Statement and the
Prospectus). The Common Shares (including the Shares) conform in all material
respects to the description thereof contained in the Prospectus. All of the
issued and outstanding Common Shares have been duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance with
all federal and state securities laws. None of the outstanding Common Shares was
issued in violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company. There are
no authorized or outstanding options, warrants, preemptive rights, rights of
first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of the
Company or any of its subsidiaries other than those described in the
Registration Statement and the Prospectus. 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 the information required to be
shown with respect to such plans, arrangements, options and rights.

 

(r)       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, except for the impact of the Company’s filings under chapter 11 of
title 11 of the United States Code (the “Chapter 11 Proceedings”), 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, except for the Delisting (as defined
below). To the Company’s knowledge, it is in compliance with all applicable
listing requirements of the Principal Market, provided, however, that the
Company has received a notice from the Principal Market that it intends to
commence proceedings to delist the Common Shares as a result of the Chapter 11
Proceedings (the “Delisting”).

 

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(s)       Non-Contravention of Existing Instruments; No Further Authorizations
or Approvals Required. Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws, partnership agreement or operating
agreement or similar organizational documents, as applicable, or is in default
(or, with the giving of notice or lapse of time, would be in default)
(“Default”) under any indenture, loan, credit agreement, note, lease, license
agreement, contract, franchise or other instrument (including, without
limitation, any pledge agreement, security agreement, mortgage or other
instrument or agreement evidencing, guaranteeing, securing or relating to
indebtedness) to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of their respective
properties or assets are subject (each, an “Existing Instrument”), except for
such Defaults arising as a result of or in connection with the Company’s Chapter
11 Proceedings and such Defaults as would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Change. The
Company’s execution, delivery and performance of this Agreement, consummation of
the transactions contemplated hereby and by the Registration Statement and the
Prospectus and the issuance and sale of the Shares (including the use of
proceeds from the sale of the Shares as described in the Registration Statement
and the Prospectus under the caption “Use of Proceeds”) (i) have been duly
authorized by all necessary corporate action and will not result in any
violation of the provisions of the charter or by-laws, partnership agreement or
operating agreement or similar organizational documents, as applicable, of the
Company or any subsidiary (ii) will not conflict with or constitute a breach of,
or Default or a Debt Repayment Triggering Event (as defined below) 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, or
require the consent of any other party to, any Existing Instrument and
(iii) will not result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any of its
subsidiaries except for such conflicts, breaches, Defaults, Debt Repayment
Triggering Events or violations specified in subsections (ii) and (iii) above
that would not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect. No consent, approval, authorization or
other order of, or registration or filing with, any court or other governmental
or regulatory authority or agency, is required for the Company’s execution,
delivery and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Registration Statement and the Prospectus, except
such as have been obtained or made by the Company and are in full force and
effect under the Securities Act and such as may be required under applicable
state securities or blue sky laws or FINRA (as defined below). As used herein, a
“Debt Repayment Triggering Event” means any event or condition which gives, or
with the giving of notice or lapse of time would give, the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any of its subsidiaries.

  

(t)       No Material Actions or Proceedings. Except as otherwise disclosed in
the Prospectus, there is no action, suit, proceeding, inquiry or investigation
brought by or before any legal or governmental entity now pending or, to the
knowledge of the Company, threatened, against or affecting the Company or any of
its subsidiaries, which would reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Change. No material labor dispute
with the employees of the Company or any of its subsidiaries, or with the
employees of any principal supplier, manufacturer, customer or contractor of the
Company, exists or, to the knowledge of the Company, is threatened or imminent.

 

(u)       Intellectual Property Rights. The Company and its subsidiaries own,
possess or license adequate rights to use any patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses and know-how including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) reasonably necessary for the conduct of their respective
businesses as described in the Prospectus, except where the failure to own or
possess such rights would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; and the conduct of their
respective businesses will not conflict with any such rights of others, except
which would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect; and the Company and its subsidiaries have not
received any notice of any claim of infringement of or conflict with any such
rights of others, which infringement or conflict, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected to have a
Material Adverse Effect.

 

 10 

 

 

(v)       All Necessary Permits, etc. Except as otherwise disclosed in the
Prospectus, the Company and each subsidiary possess such valid and current
certificates, authorizations or permits required by state, federal or foreign
regulatory agencies or bodies to conduct their respective businesses as
currently conducted and as described in the Registration Statement or the
Prospectus (“Permits”). Neither the Company nor any of its subsidiaries is in
violation of, or in default under, any of the Permits or has received any notice
of proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
reasonably be expected to have a Material Adverse Effect..

 

(w)       Title to Properties. Except as otherwise disclosed in the Prospectus,
the Company and its subsidiaries has good and marketable title to all of the
real and personal property and other assets reflected as owned in the financial
statements referred to in ‎Section 2(m) above (or elsewhere in the Registration
Statement or the Prospectus), in each case free and clear of any security
interests, mortgages, liens, encumbrances, equities, adverse claims and other
defects, except for such security interests, mortgages, liens, encumbrances,
equities, adverse claims and other defects as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. The real
property, improvements, equipment and personal property held under lease by the
Company or of its subsidiary are held under valid and enforceable leases, with
such exceptions as are not material and do not materially interfere with the use
made or proposed to be made of such real property, improvements, equipment or
personal property by the Company or such subsidiary.

 

(x)       Tax Law Compliance. The Company and its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns or have
properly requested extensions thereof (except in any case in which the failure
to so file would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect) through the date hereof and have paid all
taxes required to be paid by any of them and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them except as may be
being contested in good faith and by appropriate proceedings. The Company has
made adequate charges, accruals and reserves in the applicable financial
statements referred to in ‎Section 2(m) above in respect of all federal, state
and foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any of its subsidiaries has not been finally
determined.

 

(y)       Company Not an “Investment Company.” The Company is not, and will not
be, either after receipt of payment for the Shares or after the application of
the proceeds therefrom as described under “Use of Proceeds” in the Registration
Statement or the Prospectus, required to register as an “investment company”
under the Investment Company Act of 1940, as amended (the “Investment Company
Act”).

 

 11 

 

 

(z)       Insurance. Except as otherwise disclosed in the Prospectus, each of
the Company and its subsidiaries are insured by recognized, financially sound
and reputable institutions with policies in such amounts and with such
deductibles and covering such risks as are generally deemed adequate and
customary for their businesses including, but not limited to, policies covering
real and personal property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism and earthquakes and
policies covering the Company and its subsidiaries for product liability claims.
The Company has no reason to believe that it or any of its subsidiaries will not
be able (i) to renew its existing insurance coverage as and when such policies
expire or (ii) to obtain comparable coverage from similar institutions as may be
necessary or appropriate to conduct its business as now conducted and at a cost
that would not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Change. Neither the Company nor any of its
subsidiaries has been denied any insurance coverage which it has sought or for
which it has applied.

 

(aa)     No Price Stabilization or Manipulation; Compliance with Regulation M.
Neither the Company nor any of its subsidiaries has taken, directly or
indirectly, without giving effect to activities by the Agent, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Shares or of any
“reference security” (as defined in Rule 100 of Regulation M under the Exchange
Act (“Regulation M”)) with respect to the Common Shares, whether to facilitate
the sale or resale of the Shares or otherwise, and has taken no action which
would directly or indirectly violate Regulation M.

 

(bb)     Related Party Transactions. There are no business relationships or
related-party transactions involving the Company or any of its subsidiaries or
any other person required to be described in the Registration Statement or the
Prospectus which have not been described as required.

 

(cc)     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 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 Financial Industry Regulatory Authority,
Inc.’s (“FINRA”) rules and any letters, filings or other supplemental
information provided to FINRA pursuant to FINRA Rules or NASD Conduct 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).

 

(dd)     No Unlawful Contributions or Other Payments. Except as otherwise
disclosed in the Prospectus, neither the Company nor any of its subsidiaries
nor, to the best of the Company’s knowledge, any employee or agent of the
Company or any subsidiary, has made any contribution or other payment to any
official of, or candidate for, any federal, state or foreign office in violation
of any law or of the character required to be disclosed in the Registration
Statement and the Prospectus.

 

 12 

 

 

(ee)     Compliance with Environmental Laws. Except as described in the
Prospectus and except as would not reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Change; (i) neither the Company
nor any of its subsidiaries is in violation of any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, “Hazardous Materials”) or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, “Environmental Laws”), (ii) the
Company and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance with
their requirements, (iii) there are no pending or, to the Company’s knowledge,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (iv) there are no events or circumstances
that might reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.

 

(ff)      ERISA Compliance. Except as otherwise disclosed in the Prospectus, the
Company and its subsidiaries and any “employee benefit plan” (as defined under
the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively, “ERISA”))
established or maintained by the Company, its subsidiaries or their “ERISA
Affiliates” (as defined below) are in compliance in all respects with ERISA,
except as would not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect. “ERISA Affiliate” means, with respect to
the Company or any of its subsidiaries, any member of any group of organizations
described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of
1986, as amended, and the regulations and published interpretations thereunder
(the “Code”) of which the Company or such subsidiary is a member. No “reportable
event” (as defined under ERISA) has occurred or is reasonably expected to occur
with respect to any “employee benefit plan” established or maintained by the
Company, its subsidiaries or any of their ERISA Affiliates that would reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect. Except as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, no “employee benefit plan”
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates, if such “employee benefit plan” were terminated, would have any
“amount of unfunded benefit liabilities” (as defined under ERISA). Neither the
Company, its subsidiaries nor any of their ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any “employee benefit plan” or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan”
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that is intended to be qualified under Section 401(a) of the Code is
so qualified and nothing has occurred, whether by action or failure to act,
which would cause the loss of such qualification.

 

 13 

 

 

(gg)    Brokers. Except as otherwise disclosed in the Prospectus, there is no
broker, finder or other party that is entitled to receive from the Company any
brokerage or finder’s fee or other fee or commission as a result of any
transactions contemplated by this Agreement.

 

(hh)     No Outstanding Loans or Other Extensions of Credit. The Company does
not have any outstanding extension of credit, in the form of a personal loan, to
or for any director or executive officer (or equivalent thereof) of the Company
except for such extensions of credit as are expressly permitted by Section 13(k)
of the Exchange Act.

 

(ii)       Compliance with Laws. The Company and its subsidiaries have been and
are in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, except where failure to be so
in compliance could not be expected, individually or in the aggregate, to result
in a Material Adverse Change.

 

(jj)       Dividend Restrictions. Except as disclosed in the Prospectus, and
except as otherwise prohibited or restricted as a result of the Chapter 11
Proceedings, no subsidiary of the Company is prohibited or restricted, directly
or indirectly, from paying dividends to the Company, or from making any other
distribution with respect to such subsidiary’s equity securities or from
repaying to the Company or any other subsidiary of the Company any amounts that
may from time to time become due under any loans or advances to such subsidiary
from the Company or from transferring any property or assets to the Company or
to any other subsidiary.

 

(kk)     Anti-Corruption and Anti-Bribery Laws. Neither the Company nor any of
its subsidiaries nor, to the knowledge of the Company, any director, officer,
employee, agent, affiliate or other person acting on behalf of the Company or
any of its subsidiaries has, in the course of its actions for, or on behalf of,
the Company or any of its subsidiaries (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 public international organization, or
any political party, 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,
rebate, payoff, influence payment, kickback or other unlawful 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 and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.

 

(ll)       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 of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all applicable jurisdictions, the rules and regulations thereunder
and any related or similar applicable rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering Laws is pending
or, to the best knowledge of the Company, threatened.

 

 14 

 

 

(mm)   [Reserved.]

 

(nn)    Sanctions. Neither the Company nor any of its subsidiaries, directors,
officers, or employees, nor, to the knowledge of the Company, after due inquiry,
any agent, affiliate or other person 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 (“OFAC”) 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; and the Company
will not directly or indirectly use the proceeds of this offering, 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, advisor,
investor or otherwise) of applicable 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.

 

(oo)     Sarbanes-Oxley. The Company is in compliance, in all material respects,
with all applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules
and regulations promulgated thereunder.

 

(pp)     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.

 

(qq)     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, 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; (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.

 

 15 

 

 

(rr)       Compliance with Data Privacy Laws. The Company and its subsidiaries
are, and at all prior times 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 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 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.

 

(ss)     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.

 

(tt)     Forward-Looking Statement. No forward-looking statement (within the
meaning of Section 27A of the Act and Section 21E of the Exchange Act) included
in any of the Registration Statement or the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith.

 

 16 

 

 

(uu)    No Labor Dispute. No labor disturbance by or dispute with employees of
the Company or any of the Company’s subsidiaries exists or, to the best
knowledge (without having undertaken any independent inquiry) of the Company, is
contemplated or to the best knowledge of the Company, is threatened and the
Company is not aware of any existing or imminent labor disturbance by, or
dispute with, the employees of any of the Company’s or any of the Company’s
subsidiaries’ principal suppliers, contractors or customers, except as would not
have a Material Adverse Effect.

 

(vv)    Franchise Agreements. Except as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect: (i) each of
the franchise agreements entered into by the Company or any of its subsidiaries
and described or referred to in the Registration Statement or the Prospectus
(collectively, the “Franchise Agreements”) is in full force and effect; (ii) to
the Company’s knowledge, none of the persons or entities (the “Franchise
Owners”) holding franchise rights from the Company or any of its subsidiary is
in breach or violation of, or in default under (nor has any event occurred which
with notice, lapse of time, or both would result in any breach or violation of,
or constitute a default under) any such Franchise Agreement; (iii) no event or
circumstance has occurred which, with notice, lapse of time or both, would
create a right to terminate any Franchise Agreement prior to the termination of
its stated term; and (iv) neither the Company nor any Subsidiary has received,
or been threatened with, a termination notice from any Franchise Owner or any
other party with respect to a Franchise Agreement, nor is the Company aware that
any person or entity intends to furnish such a notice.

 

(ww)   Franchise Owners and Franchises. To the Company’s knowledge: (i) each of
the Franchise Owners and the franchises (collectively, the “Franchises”)
operated by any of the Franchise Owners has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings
required under any federal, state, local or foreign law, regulation or rule, and
has obtained all necessary licenses, authorizations, consents and approvals from
other persons, in order to conduct its business, except where the failure to
obtain any such licenses, authorizations, consents or approvals or make any such
filings could not be expected, individually or in the aggregate, to result in a
Material Adverse Change; (ii) none of the Franchise Owners is in violation of,
or in default under, or has received notice of any proceedings relating to
revocation or modification of, any such license, authorization, consent or
approval or any federal, state, local or foreign law, regulation or rule
(including those federal, state, foreign or local laws, regulations or rules
applicable to reimbursement for healthcare or any related services) or any
decree, order or judgment applicable to such Franchise Owner or the business
conducted thereby, except where such violation, default, revocation or
modification could not, individually or in the aggregate, be expected to result
in a Material Adverse Change; and (iii) there are no actions, suits, claims,
investigations or proceedings pending or threatened or contemplated to which any
of the Franchise Owners is or would be a party or of which any of their
respective properties is or would be subject at law or in equity, before or by
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency, or before or by any self-regulatory
organization or other non-governmental regulatory authority, except any such
action, suit, claim, investigation or proceeding which could not result in a
judgment, decree or order resulting, individually or in the aggregate, in a
Material Adverse Change.

 

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.

 

 17 

 

 

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 and hereby consents to such reliance.

 

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
negotiated transactions with the consent of the Company or (B) 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 block transactions, 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 clause (A) above) the method
of placement of any Shares by the Agent shall be at the Agent’s discretion.

 

 18 

 

 

(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 next 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.

 

(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 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.

 

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(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.

 

(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 (as defined below) 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 fees and disbursements of the Agent’s counsel, including the
reasonable 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) 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 (x) the fees and expenses associated with
listing the Shares on the Principal Market. The fees and disbursements of
Agent’s counsel pursuant to subsections (vi) and (vii) above shall not exceed an
aggregate of $200,000 in connection with the execution of this Agreement and the
first Issuance Notice.

 

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:

 

 20 

 

 

(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 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 (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)).

 

(b)       Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Agent in writing (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, 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
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 received in a timely manner by 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 Section 4(d) and
4(f)) to promptly prepare, file with the Commission and furnish at its own
expense to the Agent, 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, 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 will 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 interest not to file such amendment or supplement.

 

 21 

 

 

(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, 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.

 

(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, such consent not to be unreasonably withheld. 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, such consent not to be unreasonably withheld.

 

 22 

 

 

(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 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 best efforts to obtain the
withdrawal thereof as soon as practicable.

 

 23 

 

 

(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. (The Company has filed an appeal with
the Principal Market with respect to the Delisting. 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;

 

(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

 

 24 

 

 

(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 Opinion. 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 White & Case LLP, counsel to
the Company, each dated the date of delivery, in form and substance reasonably
satisfactory to 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. 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).

 

(q)       Comfort Letters. 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
have 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 letters 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 from each
independent registered public accounting firm hereunder per each filing of an
annual report on Form 10-K or a quarterly report on Form 10-Q.

 

 25 

 

 

(r)       Secretary’s Certificate. On or prior to the date of the first Issuance
Notice and on or prior to each Triggering Event Date, 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.

 

(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.

 

 26 

 

 

(v)       Notice of Other Sale. Without the written consent of the Agent, the
Company will not, directly or indirectly, offer to sell, sell, contract to sell,
grant any option to sell or otherwise dispose of any Common Shares or securities
convertible into or exchangeable for Common Shares (other than Shares
hereunder), warrants or any rights to purchase or acquire Common Shares, or
effect a reverse stock split, recapitalization, share consolidation,
reclassification or similar transaction affecting the outstanding 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; and will not directly or
indirectly 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 or Common Shares issuable upon the
exercise of options or other equity awards 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, and (iii) modification of any outstanding options, warrants
of any rights to purchase or acquire Common Shares.

 

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.

 

 27 

 

 

(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 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.

 

(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
either 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 the 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 (which certificate shall not be required if the
foregoing representations shall be set forth in the Issuance Notice).

 

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(c)       No Misstatement or Material Omission. Agent shall not have advised the
Company that the Registration Statement, the Prospectus or the Times 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.

 

(d)       Agent Counsel Legal Opinion. Agent shall have received from Cooley
LLP, counsel for Agent, such opinion or opinions, on or before the date on which
the delivery of the Company counsel legal opinion is required pursuant to
Section 4(p), with respect to such matters as Agent may reasonably require, and
the Company shall have furnished to such counsel such documents as they request
for enabling them to pass upon such matters.

 

Section 6. INDEMNIFICATION AND CONTRIBUTION

 

(a)       Indemnification of the Agent. The Company agrees to indemnify, save
and hold harmless the Agent, its affiliates, officers, directors, shareholders,
managers, members, employees and agents, and each person, if any, who controls
the Agent within the meaning of the Securities Act or the Exchange Act from and
against any and all loss, claim, damage, liability or expense whatsoever (or
actions in respect thereof), as incurred, to which the Agent or such affiliate,
officer, director, shareholder, manager, member, employee, agent 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 (i) based upon 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) based upon 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; or (iii) based upon or otherwise related to or arising out of or in
connection with the Agent’s participation, services or performance (whether
occurring before, at or after the date hereof) under this Agreement or the sale
of Shares or the offering contemplated hereby, provided that the Company shall
not be liable under this clause (iii) to the extent that a court of competent
jurisdiction shall have determined by a final judgment that such loss, claim,
damage, liability or action resulted directly from any act or failure to act
undertaken or omitted to be taken by the Agent’s gross negligence or willful
misconduct (other than an action or failure to act undertaken at the request or
with the consent of the Company), and to reimburse the Agent and each such
officer, employee and controlling person for any and all expenses whatsoever
(including the fees and disbursements of counsel chosen by the Agent) as such
expenses are reasonably incurred by the Agent or such affiliate, officer,
director, shareholder, manager, member, employee, agent or controlling person in
connection with investigating, preparing, 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 described in subsection (b) below. The indemnity agreement set forth
in this ‎Section 6(a) shall be in addition to any liabilities that the Company
may otherwise have.

  

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(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), 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 information set forth in the first sentence of the
ninth paragraph under the caption “Plan of Distribution” in the Prospectus, and
to reimburse the Company and each such director, officer and controlling person
for any and all expenses (including the fees and disbursements of one counsel
chosen by the Company) as such expenses are reasonably incurred 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 or the
Company may otherwise have.

 

(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 so to 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 so to assume the defense of such
action and approval by the indemnified party of counsel (not to be unreasonable
withheld, delayed or conditional), 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.

 

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(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.

 

 31 

 

 

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 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(e); 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.

 

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(e), 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.

 

 32 

 

 

(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 3(d), 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.

 

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 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 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.

 

 33 

 

 

(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.

 

(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:
Attention: General Counsel

 

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

Cooley LLP

55 Hudson Yards

New York, NY 10001

Attention: Daniel I. Goldberg, Esq.

Facsimile: (212) 479-6275

 

If to the Company:

Hertz Global Holding, Inc.
8501 Williams Road
Estero, FL 33928
Attention: M. David Galainena

 

 34 

 

 

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

White & Case LLP
1221 Avenue of the America
New York, NY 10020-1095
Attention: Gregory Pryor and Colin J. Diamond

 

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. Any successor of the Company shall assume the Company's
obligations under this Agreement. 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.

 

(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.

 

 35 

 

 

(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]

 36 

 

 

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,       HERTZ GLOBAL HOLDINGS, INC.       By:  /s/ Jamere
Jackson     Name:Jamere Jackson
Title: Executive Vice President and 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/ Michael A. Bauer   Name:Michael A. Bauer
Title: Managing Director

 

 

 

[Signature Page – Sale Agreement]

 

 

 

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 Hertz Global
Holdings, Inc. (the “Company”) and Jefferies LLC (the “Agent”) dated as of June
[●], 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

 

M. David Galainena

Jamere Jackson

Vincent J. Intrieri

SungHwan Cho

Henry R. Keizer

Kevin M. Sheehan

 

The Agent

 

Andrew Whittaker

Michael Bauer

Donald Lynaugh

Michael Magarro