Exhibit 10.1

Execution Version

PURCHASE AGREEMENT

 

PURCHASE AGREEMENT (the “Agreement”), dated as of September 28, 2017, by and
between VIKING THERAPEUTICS, INC., a Delaware corporation (the “Company”), and
LINCOLN PARK CAPITAL FUND, LLC, an Illinois limited liability company (the
“Investor”).  

 

WHEREAS:

 

Subject to the terms and conditions set forth in this Agreement, the Company
wishes to sell to the Investor, and the Investor wishes to buy from the Company,
701,282 shares (the “Purchase Shares”) of the Company's common stock, $0.00001
par value per share (the “Common Stock”), for a total purchase price of One
Million Two Hundred Fifty Thousand Dollars ($1,250,000).

 

NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Investor hereby
agree as follows:

 

1.CERTAIN DEFINITIONS.  

 

For purposes of this Agreement, the following terms shall have the following
meanings:

 

(a)“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state
law for the relief of debtors.

 

(b)“Base Prospectus” means the Company’s final base prospectus, dated July 26,
2016, a preliminary form of which is included in the Registration Statement,
including the documents incorporated by reference therein.

 

(c)“Business Day” means any day on which the Principal Market is open for
trading, including any day on which the Principal Market is open for trading for
a period of time less than the customary time.

 

(d)“Confidential Information” means any information disclosed by either party to
the other party, either directly or indirectly, in writing, orally or by
inspection of tangible objects (including, without limitation, documents,
prototypes, samples, plant and equipment), which is designated as
"Confidential," "Proprietary" or some similar designation. Information
communicated orally shall be considered Confidential Information if such
information is confirmed in writing as being Confidential Information within ten
(10) Business Days after the initial disclosure. Confidential Information may
also include information disclosed to a disclosing party by third parties.
Confidential Information shall not, however, include any information which (i)
was publicly known and made generally available in the public domain prior to
the time of disclosure by the disclosing party; (ii) becomes publicly known and
made generally available after disclosure by the disclosing party to the
receiving party through no action or inaction of the receiving party; (iii) is
already in the possession of the receiving party without confidential
restriction at the time of disclosure by the disclosing party as shown by the
receiving party’s files and records immediately prior to the time of disclosure;
(iv) is obtained by the receiving party from a third party without a breach of
such third party’s obligations of confidentiality; (v) is independently
developed by the receiving party without use of or reference to the disclosing
party’s Confidential Information, as shown by documents and other competent
evidence in the receiving party’s possession; or (vi) is required by law to be
disclosed by the receiving party, provided that the receiving party gives the

 

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disclosing party prompt written notice of such requirement prior to such
disclosure and assistance in obtaining an order protecting the information from
public disclosure.

 

(e)“Custodian” means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.

 

(f) “DTC” means The Depository Trust Company, or any successor performing
substantially the same function for the Company.

 

(g)“DWAC Shares” means shares of Common Stock that are (i) issued in electronic
form, (ii) freely tradable and transferable and without restriction on resale
and (iii) timely credited by the Company to the Investor or its designee’s
specified Deposit/Withdrawal at Custodian (DWAC) account with DTC under its Fast
Automated Securities Transfer (FAST) Program or any similar program hereafter
adopted by DTC performing substantially the same function.

 

(h) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

 

(i)“Initial Prospectus Supplement” means the prospectus supplement of the
Company dated September 28, 2017 relating to the Purchase Shares, including the
accompanying Base Prospectus, to be prepared and filed by the Company with the
SEC pursuant to Rule 424(b)(5) under the Securities Act and in accordance with
Section 5(a) hereof, together with all documents and information incorporated
therein by reference.

 

(j)“Material Adverse Effect” means any material adverse effect on (i) the
enforceability of any Transaction Document, (ii) the results of operations,
assets, business or financial condition of the Company, other than any material
adverse effect that resulted primarily from (A) any change in the United States
or foreign economies or securities or financial markets in general that does not
have a disproportionate effect on the Company, (B) any change that generally
affects the industry in which the Company operates that does not have a
disproportionate effect on the Company, (C) any change arising in connection
with earthquakes, hostilities, acts of war, sabotage or terrorism or military
actions or any escalation or material worsening of any such hostilities, acts of
war, sabotage or terrorism or military actions existing as of the date hereof,
(D) any action taken by the Investor, its affiliates or its successors and
assigns with respect to the transactions contemplated by this Agreement, (E) the
effect of any change in applicable laws or accounting rules that does not have a
disproportionate effect on the Company, or (F) any change resulting from
compliance with terms of this Agreement or the consummation of the transactions
contemplated by this Agreement, or (iii) the Company’s ability to perform in any
material respect on a timely basis its obligations under any Transaction
Document to be performed as of the date of determination.

 

(k)“Person” means an individual or entity including but not limited to any
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof.

 

(l)“Principal Market” means The NASDAQ Capital Market (or any nationally
recognized successor thereto); provided however, that in the event the Company’s
Common Stock is ever listed or traded on The NASDAQ Global Market, The NASDAQ
Global Select Market, the New York Stock Exchange, the NYSE American, the NYSE
Arca or the OTC Bulletin Board (it being understood that as used herein “OTC
Bulletin Board” shall also mean any successor or comparable market quotation
system or exchange to the OTC Bulletin Board such as the OTCQB operated by the
OTC Markets Group, Inc.),

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then the “Principal Market” shall mean such other market or exchange on which
the Company’s Common Stock is then listed or traded or any successor thereto.

 

(m)“Prior Agreement” means that certain Purchase Agreement, dated as of
September 28, 2017, by and between the Company and the Investor, providing for
the sale by the Company to the Investor of up to Fifteen Million Dollars
($15,000,000) worth of Common Stock from time to time during the term thereof,
subject to the terms and conditions set forth therein.

 

(n)“Prospectus” means the Base Prospectus, as supplemented by any Prospectus
Supplement (including the Initial Prospectus Supplement), including the
documents and information incorporated by reference therein.

 

(o)“Prospectus Supplement” means any prospectus supplement to the Base
Prospectus (including the Initial Prospectus Supplement) filed with the SEC
pursuant to Rule 424(b) under the Securities Act in connection with the
transactions contemplated by this Agreement, including the documents and
information incorporated by reference therein.

 

(p)“Registration Statement” means the effective registration statement on Form
S-3 (Commission File No. 333-212134) filed by the Company with the SEC pursuant
to the Securities Act for the registration of shares of its Common Stock,
including the Purchase Shares, and certain other securities, as such
Registration Statement has been or may be amended and supplemented from time to
time, including all documents filed as part thereof or incorporated by reference
therein, and including all information deemed to be a part thereof at the time
of effectiveness pursuant to Rule 430B of the Securities Act, including any
comparable successor registration statement filed by the Company with the SEC
pursuant to the Securities Act for the registration of shares of its Common
Stock, including the Purchase Shares.

 

(q)“SEC” means the U.S. Securities and Exchange Commission.

 

(r)“Securities Act” means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

 

(s)“Subsidiary” means any Person the Company wholly-owns or controls, or in
which the Company, directly or indirectly, owns a majority of the voting stock
or similar voting interest, in each case that would be disclosable pursuant to
Item 601(b)(21) of Regulation S-K promulgated under the Securities Act.

 

(t)“Transaction Documents” means, collectively, this Agreement and the schedules
and exhibits hereto, and each of the other agreements, documents, certificates
and instruments entered into or furnished by the parties hereto in connection
with the transactions contemplated hereby and thereby.

 

(u)        “Transfer Agent” means American Stock Transfer & Trust Company, LLC,
or such other Person who is then serving as the transfer agent for the Company
in respect of the Common Stock.

 

2.PURCHASE OF COMMON STOCK.

 

Subject to the terms and conditions set forth in this Agreement, the Company
desires to sell to the Investor, and the Investor desires to purchase from the
Company, the Purchase Shares as follows:

 

(a)Purchase of Common Stock.  Upon the satisfaction of the conditions set forth
in Sections 7 and 8 hereof (the “Closing” and the date of satisfaction of such
conditions the “Closing Date”),

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the Investor shall purchase from the Company, and the Company shall issue or
cause to be issued and sell to the Investor, 701,282 Purchase Shares for a total
purchase price of One Million Two Hundred Fifty Thousand Dollars ($1,250,000)
(the “Purchase Price”).

 

(b)Payment of Purchase Price.   The Investor shall pay the Purchase Price to the
Company as full payment for all of the Purchase Shares to be purchased by it
hereunder by wire transfer of immediately available funds on the same Business
Day that the Investor receives all of the Purchase Shares as DWAC Shares, if all
of the Purchase Shares are so received by the Investor before 1:00 p.m., Eastern
time, or, if any of the Purchase Shares are received by the Investor after 1:00
p.m., Eastern time, the next Business Day. All payments made under this
Agreement shall be made in lawful money of the United States of America or wire
transfer of immediately available funds to the account designated by the Company
by written notice to the Investor prior to the date of this Agreement.

 

(c)Compliance with Registration Statement Eligibility Requirements and Rules of
Principal Market.  The Company hereby confirms that the issuance of the Purchase
Shares to the Investor pursuant to this Agreement shall not result in (i) the
issuance of a number of shares of Common Stock that would exceed the maximum
number of shares of Common Stock that the Company may issue pursuant to this
Agreement (taking into account all shares of Common Stock issued or issuable
pursuant to any transaction or series of transactions that may be aggregated
with the transactions contemplated by this Agreement under applicable rules of
The NASDAQ Stock Market, including, without limitation, shares of Common Stock
issued or issuable pursuant to the Prior Agreement) without (A) breaching the
Company’s obligations under the applicable rules of The NASDAQ Stock Market or
(B) obtaining stockholder approval under the applicable rules of The NASDAQ
Stock Market, or (ii) the issuance of a number or dollar amount of securities of
the Company, including the Purchase Shares, that would exceed the maximum amount
of securities of the Company permitted to be offered and sold by the Company
under General Instruction I.B.6. of Form S-3 (the lesser of clause (i) and (ii),
the “Maximum Share Cap”).

 

(d)Beneficial Ownership Limitation.  Notwithstanding anything to the contrary
contained in this Agreement, the Company shall not issue or sell, and the
Investor shall not purchase or acquire, any shares of Common Stock under this
Agreement which, when aggregated with all other shares of Common Stock then
beneficially owned by the Investor and its affiliates (as calculated pursuant to
Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder) would
result in the beneficial ownership by the Investor of more than 4.99% of the
then issued and outstanding shares of Common Stock (the “Beneficial Ownership
Limitation”).

 

3.INVESTOR’S REPRESENTATIONS AND WARRANTIES.

 

The Investor represents and warrants to the Company that as of the date hereof
and as of the Closing Date:

 

(a)Organization, Authority. Investor is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, with the requisite power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder and thereunder.

(c)Accredited Investor Status.  The Investor is an “accredited investor” as that
term is defined in Rule 501(a)(3) of Regulation D promulgated under the
Securities Act.

 

(d)Information.  The Investor understands that its investment in the Purchase
Shares involves a high degree of risk.  The Investor (i) is able to bear the
economic risk of an investment in the Purchase Shares including a total loss
thereof, (ii) has such knowledge and experience in financial and

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business matters that it is capable of evaluating the merits and risks of the
proposed investment in the Purchase Shares and (iii) has had an opportunity to
ask questions of and receive answers from the officers of the Company concerning
the financial condition and business of the Company and others matters related
to an investment in the Purchase Shares.  Neither such inquiries nor any other
due diligence investigations conducted by the Investor or its representatives
shall modify, amend or affect the Investor's right to rely on the Company's
representations and warranties contained in Section 4 below. The Investor has
sought such accounting, legal and tax advice from its own independent advisors
as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Purchase Shares and is not relying on any
accounting, legal, tax or other advice from the Company or its officers,
employees, representatives or advisors. The Investor acknowledges and agrees
that the Company neither makes nor has made any representations or warranties
with respect to the transactions contemplated hereby other than those
specifically set forth in Section 4 hereof.

 

(e)No Governmental Review.  The Investor understands that no U.S. federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Purchase Shares or the fairness or
suitability of an investment in the Purchase Shares nor have such authorities
passed upon or endorsed the merits of the offering of the Purchase Shares.

 

(f)Validity; Enforcement.  This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Investor and is a valid and binding
agreement of the Investor enforceable against the Investor in accordance with
its terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.

 

(g)Residency.  The Investor is a resident of the State of Illinois.

 

(h)Confidentiality. The Investor has maintained the confidentiality of all
disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).

 

(i)No Short Selling.  The Investor represents and warrants to the Company that
at no time prior to the date of this Agreement has the Investor or any of its
agents, representatives or affiliates engaged in or effected, in any manner
whatsoever, directly or indirectly, any (i) "short sale" (as such term is
defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock
or (ii) hedging transaction, which establishes a net short position with respect
to the Common Stock.

 

4.REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents and warrants to the Investor that, except as set forth in
the disclosure schedules attached hereto, which exceptions shall be deemed to be
a part of the representations and warranties made hereunder, as of the date
hereof and as of the Closing Date:

 

(a)Organization and Qualification. The Company is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with the requisite corporate
power and authority to own and use its properties and assets and to carry on its
business as currently conducted.  The Company is not in violation or default of
any of the provisions of its certificate of incorporation or bylaws.  The
Company is duly qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not reasonably be expected to have a Material Adverse
Effect and no proceeding has been instituted in any such jurisdiction

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revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.  The Company has no Subsidiaries.

 

(b)Authorization; Enforcement; Validity.  (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement and each of the other Transaction Documents, including without
limitation, the reservation for issuance and the issuance of the Purchase Shares
in accordance with the terms hereof and thereof, (ii) the execution and delivery
of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including without limitation, the
issuance of the Purchase Shares, have been duly authorized by the Company's
Board of Directors (or a duly authorized committee thereof) and no further
consent or authorization is required by the Company, its Board of Directors (or
a duly authorized committee thereof) or its stockholders, (iii) this Agreement
has been, and each other Transaction Document shall be on the Closing Date, duly
executed and delivered by the Company and (iv) this Agreement constitutes, and
each other Transaction Document upon its execution on behalf of the Company,
shall constitute, the valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors' rights and
remedies. The Board of Directors of the Company (or a duly authorized committee
thereof) has approved the resolutions (the “Signing Resolutions”) substantially
in the form provided to the Investor to authorize this Agreement, the other
Transaction Documents and the transactions contemplated hereby and thereby.  The
Signing Resolutions are valid, in full force and effect and have not been
materially modified or supplemented in any respect.  The Company has delivered
to the Investor a true and correct copy of a unanimous written consent adopting
the Signing Resolutions, which have been approved by the members of the Board of
Directors of the Company (or a duly authorized committee thereof) at a duly
authorized meeting or by unanimous written consent.  Except as set forth in this
Agreement, no other approvals or consents of the Company’s Board of Directors
(or a duly authorized committee thereof) and/or stockholders (except as provided
in this Agreement) is necessary under applicable laws and the Company’s
Certificate of Incorporation and/or Bylaws to authorize the execution and
delivery of this Agreement, the other Transaction Documents or any of the
transactions contemplated hereby or thereby, including, but not limited to, the
issuance of the Purchase Shares.

 

(c)Capitalization.  As of the date hereof, the authorized capital stock of the
Company is set forth in the Company’s Quarterly Report on Form 10-Q for its
fiscal quarter ended June 30, 2017.  Except as disclosed in the SEC Documents
(as defined below), (i) no shares of the Company's capital stock are subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company, (ii) there are no outstanding debt
securities, (iii) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company, or contracts, commitments, understandings or arrangements by which the
Company is or may become bound to issue additional shares of capital stock of
the Company or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company , (iv) there are no
agreements or arrangements under which the Company is obligated to register the
sale of any of its securities under the Securities Act, (v) there are no
outstanding securities or instruments of the Company which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
redeem a security of the Company, (vi) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Purchase Shares as described in this Agreement, and (vii) the
Company does not have any stock appreciation rights or "phantom stock" plans or
agreements or any similar plan or agreement.  The Company has furnished to the
Investor true and correct copies of the Company's Certificate of

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Incorporation, as amended and as in effect on the date hereof (the "Certificate
of Incorporation"), and the Company's Bylaws, as amended and as in effect on the
date hereof (the "Bylaws"), and summaries of the material terms of all
securities convertible into or exercisable for Common Stock, if any, and copies
of any documents containing the material rights of the holders thereof in
respect thereto that are not disclosed in the SEC Documents.

 

(d)Issuance of Purchase Shares.  Upon issuance and payment therefor in
accordance with the terms and conditions of this Agreement, the Purchase Shares
shall be duly authorized, validly issued, fully paid and nonassessable and free
from all taxes, liens, charges, restrictions, rights of first refusal and
preemptive rights with respect to the issue thereof, and will be issued in
compliance with all federal and state securities laws, with the holders being
entitled to all rights accorded to a holder of shares of Common Stock. The
Purchase Shares are being issued pursuant to the Registration Statement and the
issuance of the Purchase Shares has been registered by the Company pursuant to
the Securities Act.  Upon receipt of the Purchase Shares, the Investor will have
good and marketable title to such Purchase Shares and such Purchase Shares will
be immediately freely tradable.

 

(e)No Conflicts.  The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of
the Purchase Shares) will not (i) result in a violation of the Certificate of
Incorporation, any Certificate of Designations, Preferences and Rights of any
outstanding series of preferred stock of the Company or the Bylaws or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company is a party, or result in a
violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations and the rules and regulations
of the Principal Market applicable to the Company) or by which any property or
asset of the Company is bound or affected, except in the case of conflicts,
defaults, terminations, amendments, accelerations, cancellations and violations
under clause (ii), which could not reasonably be expected to have a Material
Adverse Effect.  The Company is not in violation of any term of or in default
under its Certificate of Incorporation, any Certificate of Designation,
Preferences and Rights of any outstanding series of preferred stock of the
Company or Bylaws or its organizational charter or Bylaws.  The Company is not
in violation of any term of or is in default under any material contract,
agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or
order or any statute, rule or regulation applicable to the Company, except for
possible conflicts, defaults, terminations or amendments that could not
reasonably be expected to have a Material Adverse Effect.  The business of the
Company is not being conducted, and shall not be conducted, in violation of any
law, ordinance or regulation of any governmental entity, except for possible
violations, the sanctions for which either individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect.  Except as
specifically contemplated by this Agreement and as required under the Securities
Act or applicable state securities laws and the rules and regulations of the
Principal Market, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self-regulatory agency in order for it
to execute, deliver or perform any of its obligations under or contemplated by
the Transaction Documents in accordance with the terms hereof or
thereof.  Except as set forth elsewhere in this Agreement, all consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence shall be obtained or effected on or
prior to the Closing Date.  

 

(f)SEC Documents; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof
(or such shorter period as the Company was required by law or regulation to file
such

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material) (the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the
“SEC Documents”) on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Documents prior to the expiration of
any such extension.  As of their respective dates and to the Company’s
knowledge, the SEC Documents complied in all material respects with the
requirements of the Securities Act and the Exchange Act, as applicable.   None
of the SEC Documents, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents comply in all material
respects with applicable accounting requirements and the rules and regulations
of the SEC with respect thereto as in effect at the time of filing.  Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.  Except as set forth in the SEC Documents, the
Company has received no notices or correspondence from the SEC for the one year
preceding the date hereof.  To the Company’s knowledge, the SEC has not
commenced any enforcement proceedings against the Company.

 

(g)Absence of Certain Changes.  Except as disclosed in the SEC Documents, since
December 31, 2016, there has been no material adverse change in the business,
properties, operations, financial condition or results of operations of the
Company.  The Company has not taken any steps, and does not currently expect to
take any steps, to seek protection pursuant to any Bankruptcy Law nor does the
Company have any knowledge or reason to believe that its creditors intend to
initiate involuntary bankruptcy or insolvency proceedings. The Company is
financially solvent and is generally able to pay its debts as they become due.

 

(h)Absence of Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the
Company, threatened against or affecting the Company, the Common Stock or any of
the Company's officers or directors in their capacities as such, which could
reasonably be expected to have a Material Adverse Effect.  

 

(i)Acknowledgment Regarding Investor’s Status.  The Company acknowledges and
agrees that the Investor is acting solely in the capacity of an arm's length
purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby.  The Company further acknowledges that the
Investor is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and any advice given by the
Investor or any of its representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to the Investor's purchase of the Purchase Shares. The Company
further represents to the Investor that the Company's decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives and advisors.

 

(j)No Integrated Offering.  Neither the Company, nor any of its affiliates, nor
any Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would cause this offering of the Purchase Shares to be
integrated with prior offerings by the Company in a manner that would require
stockholder approval pursuant to the rules and regulations of the Principal
Market on which any of the securities of the

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Company are listed or designated. The issuance and sale of the Purchase Shares
hereunder does not contravene the rules and regulations of the Principal Market.

 

(k)Intellectual Property Rights.  The Company owns or possesses adequate rights
or licenses to use all material trademarks, trade names, service marks, service
mark registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and
rights necessary to conduct its business as now conducted.  None of the
Company's material trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, government authorizations, trade secrets or other
intellectual property rights have expired or terminated, or, by the terms and
conditions thereof, could expire or terminate within two years from the date of
this Agreement, except as could not reasonably be expected to have a Material
Adverse Effect.  The Company does not have any knowledge of any infringement by
the Company of any material trademark, trade name rights, patents, patent
rights, copyrights, inventions, licenses, service names, service marks, service
mark registrations, trade secret or other similar rights of others, or of any
such development of similar or identical trade secrets or technical information
by others, and there is no claim, action or proceeding that has been made or
brought against, or to the Company's knowledge, being threatened against, the
Company regarding trademark, trade name, patents, patent rights, invention,
copyright, license, service names, service marks, service mark registrations,
trade secret or other infringement, which could reasonably be expected to have a
Material Adverse Effect.

 

(l)Environmental Laws.  The Company (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii)
has received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and (iii) is in compliance
with all terms and conditions of any such permit, license or approval, except
where, in each of the three foregoing clauses, the failure to so comply could
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

(m)Title.  The Company has good and marketable title in fee simple to all real
property owned by it and good and marketable title in all personal property
owned by it that is material to the business of the Company, in each case free
and clear of all liens, encumbrances and defects (“Liens”) and, except for Liens
as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and Liens for the payment of federal, state or other taxes, the payment
of which is neither delinquent nor subject to penalties.  Any real property and
facilities held under lease by the Company is held by it under valid, subsisting
and enforceable leases with which the Company is in compliance with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company.

 

(n)Insurance.  The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as management
of the Company believes to be prudent and customary in the business in which the
Company is engaged.  The Company has not been refused any insurance coverage
sought or applied for and the Company does not have any reason to believe that
it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company.

 

(o)Regulatory Permits.  The Company possesses all material certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct its

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business as currently conducted, and the Company has not received any notice of
proceedings relating to the revocation or modification of any such material
certificate, authorization or permit, except, in the case of each of the two
foregoing clauses, as could not reasonably be expected to have a Material
Adverse Effect.

 

(p)Tax Status.  The Company has made or filed all federal and state income and
all other material tax returns, reports and declarations required by any
jurisdiction to which it is subject (unless and only to the extent that the
Company has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply, and except as
could not reasonably be expected to have a Material Adverse Effect.  To the
Company’s knowledge, there are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

 

(q)Transactions With Affiliates.   Except as set forth in the SEC Documents,
none of the officers or directors of the Company and, to the knowledge of the
Company, none of the employees of the Company is presently a party to any
transaction with the Company (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of $120,000
other than for (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii)
other employee benefits, including stock option agreements under any stock
option plan of the Company.

 

(r)Application of Takeover Protections.  The Company and its board of directors
have taken or will take prior to the Closing Date all necessary action, if any,
in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation
or the laws of the state of its incorporation which is or could become
applicable to the Investor as a result of the transactions contemplated by this
Agreement, including, without limitation, the Company's issuance of the Purchase
Shares and the Investor's ownership of the Purchase Shares.

 

(s) Disclosure.  Except with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents that will be timely
publicly disclosed by the Company, the Company confirms that neither it nor any
other Person acting on its behalf has provided the Investor or its agents or
counsel with any information that it believes constitutes or might constitute
material, non-public information which is not otherwise disclosed in the
Registration Statement or any Prospectus Supplements thereto.  The Company
understands and confirms that the Investor will rely on the foregoing
representation in effecting purchases and sales of securities of the
Company.  All of the disclosure furnished by or on behalf of the Company to the
Investor regarding the Company, its business and the transactions contemplated
hereby, including the disclosure schedules to this Agreement, is true and
correct in all material respects and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The press releases disseminated by the Company during the
twelve months preceding the date of this Agreement taken as a whole did not as
of their issue date contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or

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necessary in order to make the statements therein, in light of the circumstances
under which they were made and when made, not misleading.  The Company
acknowledges and agrees that the Investor has not made and does not make any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3 hereof.

 

(t)Foreign Corrupt Practices.   Neither the Company, nor to the knowledge of the
Company, any agent or other Person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any Person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

 

(u)Registration Statement.  The Company has prepared and filed with the SEC in
accordance with the provisions of the Securities Act the Registration Statement.
The Registration Statement was declared effective by order of the SEC on July
26, 2016. The Registration Statement is effective pursuant to the Securities Act
and available for the issuance of the Purchase Shares thereunder, and the
Company has not received any written notice that the SEC has issued or intends
to issue a stop order or other similar order with respect to the Registration
Statement or the Prospectus or that the SEC otherwise has (i) suspended or
withdrawn the effectiveness of the Registration Statement or (ii) issued any
order preventing or suspending the use of the Prospectus or any Prospectus
Supplement, in either case, either temporarily or permanently or intends or has
threatened in writing to do so. The “Plan of Distribution” section of the
Prospectus permits the issuance of the Purchase Shares under the terms of this
Agreement. At the time the Registration Statement and any amendments thereto
became effective, at the date of this Agreement and at each deemed effective
date thereof pursuant to Rule 430B(f)(2) of the Securities Act, the Registration
Statement and any amendments thereto complied and will comply in all material
respects with the requirements of the Securities Act and did not and will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading; and the Base Prospectus and any Prospectus Supplement thereto,
at the time such Base Prospectus or such Prospectus Supplement thereto was
issued and on the Closing Date, complied and will comply in all material
respects with the requirements of the Securities Act and did not and will not
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided that this representation
and warranty does not apply to statements in or omissions from any Prospectus
Supplement made in reliance upon and in conformity with information relating to
the Investor furnished to the Company in writing by or on behalf of the Investor
expressly for use therein. The Company meets all of the requirements for the use
of a registration statement on Form S-3 pursuant to the Securities Act for the
offering and sale of the Purchase Shares contemplated by this Agreement in
reliance on General Instruction I.B.6. of Form S-3, and the SEC has not notified
the Company of any objection to the use of the form of the Registration
Statement pursuant to Rule 401(g)(1) of the Securities Act. The Company hereby
confirms that the issuance of the Purchase Shares to the Investor pursuant to
this Agreement would not result in non-compliance with General Instruction
I.B.6. of Form S-3. The Registration Statement, as of its effective date, meets
the requirements set forth in Rule 415(a)(1)(x) pursuant to the Securities Act.
At the earliest time after the filing of the Registration Statement that the
Company or another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2) of the Securities Act) relating to any of the Purchase
Shares, the Company was not and is not an Ineligible Issuer (as defined in Rule
405 of the Securities Act).  The Company has not distributed any offering
material in connection with the offering and sale of any of the Purchase Shares,
and, until the Investor does not hold any of the Purchase Shares, shall not
distribute any offering material in connection with the offering and sale of any
of the Purchase Shares, to or by the Investor, in each case, other than the

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Registration Statement or any amendment thereto, the Prospectus or any
Prospectus Supplement required pursuant to applicable law or the Transaction
Documents. The Company has not made, and agrees that unless it obtains the prior
written consent of the Investor it will not make, an offer relating to the
Purchase Shares that would constitute a “free writing prospectus” as defined in
Rule 405 under the Securities Act. The Company shall comply with the
requirements of Rules 164 and 433 under the Securities Act applicable to any
such free writing prospectus consented to by the Investor, including in respect
of timely filing with the SEC, legending and record keeping.

 

(v)DTC Eligibility.  The Company, through the Transfer Agent, currently
participates in the DTC Fast Automated Securities Transfer (FAST) Program and
the Common Stock can be transferred electronically to third parties via the DTC
Fast Automated Securities Transfer (FAST) Program.

 

(w) Sarbanes-Oxley. The Company is in compliance with all provisions of the
Sarbanes-Oxley Act of 2002, as amended, which are applicable to it as of the
date hereof, except where the failure to be in compliance could not reasonably
be expected to have a Material Adverse Effect.

(x)Certain Fees. No brokerage or finder’s fees or commissions are or will be
payable by the Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. The Investor shall not
have any obligation with respect to any fees or with respect to any claims made
by or on behalf of other Persons for fees of a type contemplated in this Section
4(x) that may be due in connection with the transactions contemplated by the
Transaction Documents.

(y)Investment Company. The Company is not required to be registered as, and
immediately after receipt of payment for the Purchase Shares will not be
required to be registered as, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

(z)Listing and Maintenance Requirements. The Common Stock is registered pursuant
to Section 12(b) of the Exchange Act, and the Company has taken no action
designed to, or which to its knowledge is likely to have the effect of,
terminating the registration of the Common Stock pursuant to the Exchange Act
nor has the Company received any notification that the SEC is currently
contemplating terminating such registration. The Company has not, in the twelve
(12) months preceding the date hereof, received any notice from any Person to
the effect that the Company is not in compliance with the listing or maintenance
requirements of the Principal Market. The Principal Market has not commenced any
delisting proceedings against the Company.

(aa)Accountants.  The Company’s accountants are set forth in the SEC Documents
and, to the knowledge of the Company, such accountants are an independent
registered public accounting firm as required by the Securities Act.

(bb)No Market Manipulation. The Company has not, and to its knowledge no Person
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the Purchase
Shares, (ii) sold, bid for, purchased, or, paid any compensation for soliciting
purchases of, any of the Purchase Shares, or (iii) paid or agreed to pay to any
Person any compensation for soliciting another to purchase any other securities
of the Company.

(cc)Shell Company Status. The Company is not currently, and has never been, an
issuer identified in Rule 144(i)(1) under the Securities Act.

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5.COVENANTS.

 

(a)Filing of Current Report and Initial Prospectus Supplement.  The Company
agrees that it shall, within the time required under the Exchange Act, file with
the SEC a report on Form 8-K relating to the transactions contemplated by, and
describing the material terms and conditions of, the Transaction Documents (the
“Current Report”). The Company further agrees that it shall, within the time
required under Rule 424(b) under the Securities Act, file with the SEC the
Initial Prospectus Supplement pursuant to Rule 424(b)(5) under the Securities
Act, which Initial Prospectus Supplement shall specifically relate to the
Purchase Shares and shall describe the material terms and conditions of the
Transaction Documents, contain information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430B under the
Securities Act, and disclose all information relating to the Purchase Shares and
the transactions contemplated by the Transaction Documents required to be
disclosed in the Registration Statement and the Prospectus as of the date of the
Initial Prospectus Supplement, including, without limitation, information
required to be disclosed in the section captioned “Plan of Distribution” in the
Prospectus. The Company shall permit the Investor to review and comment upon the
final pre-filing draft versions of the Current Report and the Initial Prospectus
Supplement at least two (2) Business Days prior to their filing with the SEC and
the Company shall give reasonable consideration to all such comments. The
Investor shall use its reasonable best efforts to comment upon the final
pre-filing draft versions of the Current Report and the Initial Prospectus
Supplement within one (1) Business Day from the date the Investor receives them
from the Company. The Investor shall furnish to the Company such information
regarding itself, the Purchase Shares beneficially owned by it and the intended
method of distribution thereof, including any arrangement between the Investor
and any other Person relating to the sale or distribution of the Purchase
Shares, as shall be reasonably requested by the Company in connection with the
preparation and filing of the Current Report and the Initial Prospectus
Supplement, and shall otherwise cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Current Report and the Initial Prospectus Supplement with the SEC.

 

(b)Blue Sky. The Company shall take all such action, if any, as is reasonably
necessary in order to obtain an exemption for or to register or qualify (i) the
issuance of the Purchase Shares to the Investor under this Agreement and (ii)
any subsequent resale of all Purchase Shares by the Investor, in each case,
under applicable securities or “Blue Sky” laws of the states of the United
States in such states as is reasonably requested by the Investor from time to
time, and shall provide evidence of any such action so taken to the Investor.

 

(c)Listing/DTC.  To the extent applicable, the Company shall promptly secure the
listing of all of the Purchase Shares to be issued to the Investor under this
Agreement on the Principal Market (subject to official notice of issuance) and
upon each other national securities exchange or automated quotation system, if
any, upon which the Common Stock is then listed, and shall use commercially
reasonable efforts to maintain, so long as any shares of Common Stock shall be
so listed, such listing of all such Purchase issued under this Agreement. The
Company shall use commercially reasonable efforts to maintain the listing of the
Common Stock, including the Purchase Shares, on the Principal Market and shall
comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules and regulations of the Principal Market.
The Company shall not take any action that would reasonably be expected to
result in the delisting or suspension of the Common Stock, including the
Purchase Shares, on the Principal Market.  The Company shall promptly, and in no
event later than the following Business Day, provide to the Investor copies of
any notices it receives from the Principal Market regarding the continued
eligibility of the Common Stock for listing on the Principal Market; provided,
however, that the Company shall not be required to provide the Investor copies
of any such notice that the Company reasonably believes constitutes material
non-public information and the Company would not be required to publicly
disclose such notice in any report or statement filed with the

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SEC under the Exchange Act (including on Form 8-K) or the Securities Act. The
Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 5(c).  The Company shall take all action
necessary to ensure that its Common Stock, including the Purchase Shares, can be
transferred electronically as DWAC Shares.

 

(d)Prohibition of Short Sales and Hedging Transactions.  During the term of this
Agreement, neither the Investor nor any of its agents, representatives or
affiliates shall in any manner whatsoever enter into or effect, directly or
indirectly, any (i) “short sale” (as such term is defined in Rule 200 of
Regulation SHO of the Exchange Act) of the Common Stock or (ii) hedging
transaction, which establishes a net short position with respect to the Common
Stock.  

 

(e)Reserved.  

 

(f)Non-Public Information.  Each party hereto agrees not to disclose any
Confidential Information of the other party to any third party and shall not use
the Confidential Information for any purpose other than in connection with, or
in furtherance of, the transactions contemplated hereby.  Each party hereto
acknowledges that the Confidential Information shall remain the property of the
disclosing party and agrees that it shall take all reasonable measures to
protect the secrecy of any Confidential Information disclosed by the other
party. The receiving party may disclose Confidential Information to the extent
such information is required to be disclosed by law, regulation or order of a
court of competent jurisdiction or regulatory authority, provided that the
receiving party shall promptly notify the disclosing party when such requirement
to disclose arises, and shall cooperate with the disclosing party so as to
enable the disclosing party to: (i) seek an appropriate protective order; and
(ii) make any applicable claim of confidentiality in respect of such
Confidential Information; and provided, further, that the receiving party shall
disclose Confidential Information only to the extent required by the protective
order or other similar order, if such an order is obtained, and, if no such
order is obtained, the receiving party shall disclose only the minimum amount of
such Confidential Information required to be disclosed in order to comply with
the applicable law, regulation or order. In addition, any such Confidential
Information disclosed pursuant to this section shall continue to be deemed
Confidential Information. Notwithstanding anything in this Agreement to the
contrary, the Company confirms that neither it nor any other Person acting on
its behalf shall provide the Investor or its agents or counsel with any
information that constitutes or may reasonably be considered to constitute
material, non-public information, unless a simultaneous public announcement
thereof is made by the Company in the manner contemplated by Regulation FD. In
the event of a breach of the foregoing covenant by the Company or any Person
acting on its behalf after the date of this Agreement (as determined in the
reasonable good faith judgment of the Investor) in addition to any other remedy
provided herein or in the other Transaction Documents, if the Investor is
holding Purchase Shares at the time of the disclosure of such material,
non-public information, the Investor shall have the right to make a public
disclosure, in the form of a press release, public advertisement or otherwise,
of such material, non-public information without the prior approval by the
Company; provided the Investor shall have first provided notice to the Company
that it believes it has received information that constitutes material,
non-public information, the Company shall have at least 48 hours to publicly
disclose such material, non-public information prior to any such disclosure by
the Investor or demonstrate to the Investor in writing why such information does
not constitute material, non-public information, and (assuming the Investor and
its counsel disagree with the Company’s determination) the Company shall have
failed to publicly disclose such material, non-public information within such
time period. The Investor shall not have any liability to the Company or any of
its directors, officers, employees, stockholders or agents, for any such
disclosure. The Company understands and confirms that the Investor shall be
relying on the foregoing covenants in effecting transactions in securities of
the Company.

 

(g)Reserved.  

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(h)Taxes.   The Company shall pay any and all transfer, stamp or similar taxes
that may be payable with respect to the issuance and delivery of any shares of
Common Stock to the Investor made under this Agreement.  

 

(i)Securities Law Compliance. The Company shall use its reasonable best efforts
to keep the Registration Statement effective pursuant to Rule 415 promulgated
under the Securities Act, and to keep the Registration Statement and the
Prospectus current and available for issuances and sales of all of the Purchase
Shares by the Company to the Investor, and for the resale of all the Purchase
Shares by the Investor, at all times until the date on which the Investor shall
have sold all the Purchase Shares (the "Registration Period"). Without limiting
the generality of the foregoing, during the Registration Period, the Company
shall (a) take all action necessary to cause the Common Stock to continue to be
registered as a class of securities under Sections 12(b) of the Exchange Act,
shall comply with its reporting and filing obligations under the Exchange Act,
and shall not take any action or file any document (whether or not permitted by
the Exchange Act) to terminate or suspend such registration or to terminate or
suspend its reporting and filing obligations under the Exchange Act, and (b)
prepare and file with the SEC, at the Company’s expense, such amendments
(including, without limitation, post-effective amendments) to the Registration
Statement and such Prospectus Supplements pursuant to Rule 424(b) under the
Securities Act, in each case, as may be necessary to keep the Registration
Statement effective pursuant to Rule 415 promulgated under the Securities Act,
and to keep the Registration Statement and the Prospectus current and available
for issuances and sales of all of the Purchase Shares by the Company to the
Investor, and for the resale of all of the Purchase Shares by the Investor, at
all times during the Registration Period (it being hereby acknowledged and
agreed that the Company shall prepare and file with the SEC, at the Company’s
expense, immediately prior to the third anniversary of the initial effective
date of the Registration Statement (the “Renewal Date”), a new Registration
Statement relating to the Purchase Shares, in a form satisfactory to the
Investor and its counsel, and the Company shall use its reasonable best efforts
to cause such Registration Statement to be declared effective within 180 days
after the Renewal Date). The Investor shall furnish to the Company such
information regarding itself, its affiliates, the Purchase Shares beneficially
owned by it and the intended method of distribution thereof as shall be
reasonably requested by the Company in connection with the preparation and
filing of any such amendment to the Registration Statement (or new Registration
Statement) or any such Prospectus Supplement, and shall otherwise cooperate with
the Company as reasonably requested by the Company in connection with the
preparation and filing of any such amendment to the Registration Statement (or
new Registration Statement) or any such Prospectus Supplement. The Company shall
comply with all applicable federal, state and foreign securities laws in
connection with the offer, issuance and sale by the Company of the Purchase
Shares contemplated by the Transaction Documents. Without limiting the
generality of the foregoing, neither the Company nor any of its officers,
directors or affiliates will take, directly or indirectly, any action designed
or intended to stabilize or manipulate the price of any security of the Company,
or which would reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.

 

(j)Stop Orders.  The Company shall advise the Investor promptly (but in no event
later than 24 hours) and shall confirm such advice in writing: (i) of the
Company’s receipt of notice of any request by the SEC for amendment of or a
supplement to the Registration Statement, the Prospectus, any Prospectus
Supplement or for any additional information; (ii) of the Company’s receipt of
notice of the issuance by the SEC of any stop order suspending the effectiveness
of the Registration Statement or prohibiting or suspending the use of the
Prospectus or any Prospectus Supplement, or of the Company’s receipt of any
notification of the suspension of qualification of the Purchase Shares for
offering or sale in any jurisdiction or the initiation or contemplated
initiation of any proceeding for such purpose; and (iii) of the Company becoming
aware of the happening of any event, which makes any statement of a material
fact made in the Registration Statement, the Prospectus or any Prospectus
Supplement untrue or which requires the making of any additions to or changes to
the statements then made in the Registration

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Statement, the Prospectus or any Prospectus Supplement in order to state a
material fact required by the Securities Act to be stated therein or necessary
in order to make the statements then made therein (in the case of the Prospectus
or any Prospectus Supplement, in light of the circumstances under which they
were made) not misleading, or of the necessity to amend the Registration
Statement or supplement the Prospectus or any Prospectus Supplement to comply
with the Securities Act or any other law. The Company shall not be required to
disclose to the Investor the substance or specific reasons of any of the events
set forth in clauses (i) through (iii) of the immediately preceding sentence,
but rather, shall only be required to disclose that the event has occurred. If
at any time the SEC shall issue any stop order suspending the effectiveness of
the Registration Statement or prohibiting or suspending the use of the
Prospectus or any Prospectus Supplement, the Company shall use its reasonable
best efforts to obtain the withdrawal of such order at the earliest possible
time. The Company shall furnish to the Investor, without charge, a copy of any
correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to the Registration Statement or the Prospectus, as the
case may be.

 

(k)Amendments to Registration Statement; Prospectus Supplements. Except as
provided in this Agreement and other than periodic and current reports required
to be filed pursuant to the Exchange Act, the Company shall not file with the
SEC any amendment to the Registration Statement or any supplement to the Base
Prospectus that refers to the Investor, the Purchase Shares, the Transaction
Documents or the transactions contemplated thereby (including, without
limitation, any Prospectus Supplement filed in connection with the transactions
contemplated by the Transaction Documents), in each case with respect to which
(a) the Investor shall not previously have been advised and afforded the
opportunity to review and comment thereon at least two (2) Business Days prior
to filing with the SEC, as the case may be, (b) the Company shall not have given
due consideration to any comments thereon received from the Investor or its
counsel, or (c) the Investor shall reasonably object, unless the Company
reasonably has determined that it is necessary to amend the Registration
Statement or make any supplement to the Prospectus to comply with the Securities
Act or any other applicable law or regulation, in which case the Company shall
promptly (but in no event later than 24 hours) so inform the Investor, the
Investor shall be provided with a reasonable opportunity to review and comment
upon any disclosure referring to the Investor, the Transaction Documents or the
transactions contemplated thereby, as applicable, and the Company shall
expeditiously furnish to the Investor a copy thereof. In addition, for so long
as, in the reasonable opinion of counsel for the Investor, a Prospectus is
required to be delivered in connection with any acquisition or sale of Purchase
Shares by the Investor, the Company shall not file any Prospectus Supplement
with respect to the Purchase Shares without furnishing to the Investor as many
copies of such Prospectus Supplement, together with the Prospectus, as the
Investor may reasonably request.

 

(l)Prospectus Delivery.  The Company consents to the use of the Prospectus (and
of each Prospectus Supplement thereto) in accordance with the provisions of the
Securities Act and with the securities or “blue sky” laws of the jurisdictions
in which the Purchase Shares may be sold by the Investor, in connection with the
offering and sale of the Purchase Shares and for such period of time thereafter
as a Prospectus is required by the Securities Act to be delivered in connection
with sales of the Purchase Shares. The Company will make available to the
Investor upon request, and thereafter from time to time will furnish to the
Investor, as many copies of the Prospectus (and each Prospectus Supplement
thereto) as the Investor may reasonably request for the purposes contemplated by
the Securities Act within the time during which the Prospectus is required by
the Securities Act to be delivered in connection with sales of the Purchase
Shares. If during such period of time any event shall occur that in the
reasonable judgment of the Company and its counsel, or in the reasonable
judgment of the Investor and its counsel, is required to be set forth in the
Registration Statement, the Prospectus or any Prospectus Supplement or should be
set forth therein in order to make the statements made therein (in the case of
the Prospectus or any Prospectus Supplement, in light of the circumstances under
which they were made) not misleading, or if in the reasonable judgment of the
Company and its counsel, or in the reasonable

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judgment of the Investor and its counsel, it is otherwise necessary to amend the
Registration Statement or supplement the Prospectus or any Prospectus Supplement
to comply with the Securities Act or any other applicable law or regulation, the
Company shall forthwith prepare and, subject to Section 5(k) above, file with
the SEC an appropriate amendment to the Registration Statement or an appropriate
Prospectus Supplement and in each case shall expeditiously furnish to the
Investor, at the Company’s expense, such amendment to the Registration Statement
or such Prospectus Supplement, as applicable, as may be necessary to reflect any
such change or to effect such compliance. The Company shall have no obligation
to separately advise the Investor of, or deliver copies to the Investor of, the
SEC Documents, all of which the Investor shall be deemed to have notice of.

 

(m)Integration. From and after the date of this Agreement, neither the Company,
nor any of its affiliates will, and the Company shall use its reasonable best
efforts to ensure that no Person acting on any of their behalf will, directly or
indirectly, make any offers or sales of any security or solicit any offers to
buy any security, under circumstances that would cause this offering of the
Purchase Shares to be integrated with other offerings of securities by the
Company in a manner that would require stockholder approval pursuant to the
rules and regulations of the Principal Market on which any of the securities of
the Company are listed or designated, unless stockholder approval is obtained
before the closing of such subsequent transaction in accordance with the rules
of such Principal Market.

 

(n)Use of Proceeds. The Company will use the net proceeds from the offering of
the Purchase Shares as described in the Prospectus.

(o)Other Transactions. The Company shall not enter into, announce or recommend
to its stockholders any agreement, plan, arrangement or transaction in or of
which the terms thereof would restrict, materially delay, conflict with or
impair the ability or right of the Company to perform its obligations under any
of the Transaction Documents to which it is a party, including, without
limitation, the obligation of the Company to deliver the Purchase Shares to the
Investor in accordance with the terms of this Agreement.

6.TRANSFER AGENT INSTRUCTIONS.

 

On the Closing Date, the Company shall issue to the Transfer Agent (and any
subsequent transfer agent) irrevocable instructions, in the form heretofore
furnished to the Company, to issue the Purchase Shares in accordance with the
terms of this Agreement (the “Irrevocable Transfer Agent Instructions”). All
Purchase Shares to be issued to or for the benefit of the Investor pursuant to
this Agreement shall be issued as DWAC Shares. The Company represents and
warrants to the Investor that no instruction other than the Irrevocable Transfer
Agent Instructions referred to in this Section 6 will be given by the Company to
the Transfer Agent with respect to the Purchase Shares, and the Purchase Shares
shall otherwise be freely transferable on the books and records of the Company.
Certificates and any other instruments evidencing the Purchase Shares shall not
bear any restrictive or other legend.  If the Investor effects a sale,
assignment or transfer of the Purchase Shares, the Company shall permit the
transfer and shall promptly instruct the Transfer Agent (and any subsequent
transfer agent) to issue DWAC Shares in such name and in such denominations as
specified by the Investor to effect such sale, transfer or assignment. The
Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Investor. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 6 will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 6, that the Investor shall be
entitled, in addition to all other available remedies, to an order and/or
injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required. The Company shall cause its counsel to issue the legal
opinion referred to in the Irrevocable Transfer Agent Instructions to the
Transfer Agent (and any subsequent transfer agent) to

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the extent required or requested by the Transfer Agent (or any subsequent
transfer agent). Any fees (with respect to the Transfer Agent, counsel to the
Company or otherwise) associated with the issuance of such opinion shall be
borne by the Company.

 

7.CONDITIONS TO THE COMPANY’S OBLIGATION TO ISSUE AND SELL THE PURCHASE SHARES.

 

The obligation of the Company hereunder to issue and sell the Purchase Shares to
the Investor on the Closing Date is subject to the satisfaction or, where
legally permissible, the waiver of each of the following conditions:

 

(a)The Investor shall have executed this Agreement and delivered the same to the
Company;

 

(b)No stop order with respect to the Registration Statement shall be pending or
threatened by the SEC; and

 

(c)The representations and warranties of the Investor shall be true and correct
in all material respects as of the date hereof and as of the Closing Date as
though made at that time.

 

8.CONDITIONS TO THE INVESTOR’S OBLIGATION TO PURCHASE THE PURCHASE SHARES.

 

The obligation of the Investor to purchase the Purchase Shares under this
Agreement is subject to the satisfaction or, where legally permissible, the
waiver of each of the following conditions:

 

(a)The Company shall have executed each of the Transaction Documents to which it
is a party and delivered the same to the Investor;

 

(b)The Common Stock shall be listed or quoted on the Principal Market, trading
in the Common Stock shall not have been within the last 365 days suspended by
the SEC or the Principal Market, and all Purchase Shares to be issued by the
Company to the Investor pursuant to this Agreement shall have been, if
applicable, approved for listing or quotation on the Principal Market in
accordance with the applicable rules and regulations of the Principal Market,
subject only to official notice of issuance;

 

(c)The Investor shall have received the opinions of the Company's legal counsel
dated as of the Closing Date substantially in the form heretofore agreed by the
parties hereto;

 

(d)The representations and warranties of the Company shall be true and correct
in all material respects (except to the extent that any of such representations
and warranties is already qualified as to materiality in Section 4 above, in
which case, the portion of such representations and warranties so qualified
shall be true and correct without further qualification) as of the date hereof
and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date, which shall be
true and correct as of such date) and the Company shall have performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied
or complied with by the Company at or prior to the Closing Date.  The Investor
shall have received a certificate, executed by the CEO, President or CFO of the
Company, dated as of the Closing Date, to the foregoing effect in the form
attached hereto as Exhibit A;

 

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(e)The Board of Directors of the Company shall have adopted resolutions in
substantially the form previously provided to the Investor, which shall be in
full force and effect without any amendment or supplement thereto as of the
Closing Date;  

 

(f)The Irrevocable Transfer Agent Instructions shall have been delivered to and
acknowledged in writing by the Company and the Company's Transfer Agent;

 

(g)The Company shall have delivered to the Investor a certificate evidencing the
incorporation and good standing of the Company in the State of Delaware issued
by the Secretary of State of the State of Delaware as of a date within ten (10)
Business Days of the Closing Date;

 

(h)The Company shall have delivered to the Investor a certified copy of the
Certificate of Incorporation as certified by the Secretary of State of the State
of Delaware within ten (10) Business Days of the Closing Date;

 

(i)The Company shall have delivered to the Investor a secretary's certificate
executed by the Secretary of the Company, dated as of the Closing Date, in the
form attached hereto as Exhibit B;

 

(j)The Registration Statement shall be effective and no stop order with respect
to the Registration Statement shall be pending or threatened by the SEC. The
Company shall have a maximum dollar amount certain of securities, including the
Purchase Shares, registered under the Registration Statement which is sufficient
to issue to the Investor not less than all of the Purchase Shares to be
purchased under the Purchase Agreement. The Current Report and the Initial
Prospectus Supplement each shall have been filed with the SEC, as required
pursuant to Section 5(a), and copies of the Prospectus shall have been delivered
to the Investor in accordance with Section 5(l) hereof. The Prospectus shall be
current and available for the issuance and sale of all of the Purchase Shares by
the Company to the Investor, and for the resale of all of the Purchase Shares by
the Investor. Any other Prospectus Supplements required to have been filed by
the Company with the SEC under the Securities Act at or prior to the Closing
Date shall have been filed with the SEC within the applicable time periods
prescribed for such filings under the Securities Act. All reports, schedules,
registrations, forms, statements, information and other documents required to
have been filed by the Company with the SEC at or during the 12-month period
immediately preceding the Closing Date pursuant to the reporting requirements of
the Exchange Act shall have been filed with the SEC within the applicable time
periods prescribed for such filings under the Exchange Act, including any
applicable extension periods contemplated by the Exchange Act;

 

(k)The Company shall be eligible to transfer its Common Stock, including all of
the Purchase Shares, electronically as DWAC Shares;

 

(l)All federal, state and local governmental laws, rules and regulations
applicable to the transactions contemplated by the Transaction Documents and
necessary for the execution, delivery and performance of the Transaction
Documents and the consummation of the transactions contemplated thereby in
accordance with the terms thereof shall have been complied with, and all
consents, authorizations and orders of, and all filings and registrations with,
all federal, state and local courts or governmental agencies and all federal,
state and local regulatory or self-regulatory agencies necessary for the
execution, delivery and performance of the Transaction Documents and the
consummation of the transactions contemplated thereby in accordance with the
terms thereof shall have been obtained or made, including, without limitation,
in each case those required under the Securities Act, the Exchange Act,
applicable state securities or “Blue Sky” laws or applicable rules and
regulations of the Principal Market, or otherwise required by the SEC, the
Principal Market or any state securities regulators;

 

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(m)No statute, regulation, order, decree, writ, ruling or injunction shall have
been enacted, entered, promulgated, threatened or endorsed by any federal,
state, local or foreign court or governmental authority of competent
jurisdiction which prohibits the consummation of or which would materially
modify or delay any of the transactions contemplated by the Transaction
Documents;

 

(n)No action, suit or proceeding before any federal, state, local or foreign
arbitrator or any court or governmental authority of competent jurisdiction
shall have been commenced or threatened, and no inquiry or investigation by any
federal, state, local or foreign governmental authority of competent
jurisdiction shall have been commenced or threatened, against the Company, or
any of the officers, directors or affiliates of the Company, seeking to
restrain, prevent or change the transactions contemplated by the Transaction
Documents, or seeking material damages in connection with such transactions;

 

(o)No Person shall have commenced a proceeding against the Company pursuant to
or within the meaning of any Bankruptcy Law;

 

(p)The Company, pursuant to or within the meaning of any Bankruptcy Law, shall
not have (i) commenced a voluntary case, (ii) consented to the entry of an order
for relief against it in an involuntary case, (iii) consented to the appointment
of a Custodian of it or for all or substantially all of its property, or (iv)
made a general assignment for the benefit of its creditors or is generally
unable to pay its debts as the same become due;

 

(q)A court of competent jurisdiction shall not have entered an order or decree
under any Bankruptcy Law that (i) is for relief against the Company in an
involuntary case, (ii) appoints a Custodian of the Company or for all or
substantially all of its property, or (iii) orders the liquidation of the
Company or any Subsidiary; and

 

(r)The issuance of all of the Purchase Shares by the Company hereunder shall not
cause the Company to exceed the Maximum Share Cap.

 

 

9.INDEMNIFICATION.  

 

In consideration of the Investor’s execution and delivery of this Agreement and
acquiring the Purchase Shares, and in addition to all of the Company's other
obligations under the Transaction Documents to which it is a party, the Company
shall defend, protect, indemnify and hold harmless the Investor and all of its
affiliates, stockholders, officers, directors and employees and any of the
foregoing Person's agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
the Transaction Documents) (collectively, the “Indemnitees”) from and against
any and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as
a result of, or arising out of, or relating to: (a) any misrepresentation or
breach of any representation or warranty made by the Company in any of the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (b) any breach of any covenant, agreement or
obligation of the Company contained in any of the Transaction Documents or any
other certificate, instrument or document contemplated hereby or thereby, (c)
any cause of action, suit or claim brought or made against such Indemnitee and
arising out of or resulting from the execution, delivery, performance or
enforcement of any of the Transaction Documents or any other certificate,
instrument or  document contemplated hereby or thereby, (d) any violation of the
Securities Act, the Exchange Act, state securities or “Blue Sky” laws,

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or the rules and regulations of the Principal Market in connection with the
transactions contemplated by the Transaction Documents by the Company or any of
its affiliates, officers, directors or employees, (e) any untrue statement or
alleged untrue statement of a material fact contained, or incorporated by
reference, in the Registration Statement or any amendment thereto or any
omission or alleged omission to state therein, or in any document incorporated
by reference therein, a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (f) any untrue statement or
alleged untrue statement of a material fact contained, or incorporated by
reference, in the Prospectus, or any omission or alleged omission to state
therein, or in any document incorporated by reference therein, a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that (I) the indemnity contained in clause (c) of this Section 9 shall
not apply to any Indemnified Liabilities which directly and primarily result
from the fraud, gross negligence or willful misconduct of an Indemnitee, (II)
the indemnity contained in clauses (d), (e) and (f) of this Section 9 shall not
apply to any Indemnified Liabilities 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 or on behalf of the Investor
expressly for use in any Prospectus Supplement (it being hereby acknowledged and
agreed that the written information set forth on Exhibit C attached hereto is
the only written information furnished to the Company by or on behalf of the
Investor expressly for use in the Initial Prospectus Supplement), if the
Prospectus was timely made available by the Company to the Investor pursuant to
Section 5(l), (III) the indemnity contained in clauses (d), (e) and (f) of this
Section 9 shall not inure to the benefit of the Investor to the extent such
Indemnified Liabilities are based on a failure of the Investor to deliver or to
cause to be delivered the Prospectus made available by the Company, if such
Prospectus was timely made available by the Company pursuant to Section 5(l),
and if delivery of the Prospectus by the Investor was required under the
Securities Act with respect to the Purchase Shares and such delivery by the
Investor would have cured the defect giving rise to such Indemnified
Liabilities, and (IV) the indemnity in this Section 9 shall not apply to amounts
paid in settlement of any claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably
withheld, conditioned or delayed. To the extent that the foregoing undertaking
by the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.  Any required
indemnification payment for any particular claim shall be made within thirty
(30) days from the date the Investor makes a written request for it; provided,
however, that the Indemnitee must undertake to repay any amounts paid to it
hereunder if it is ultimately determined, by a final and non-appealable order of
a court of competent jurisdiction, that the Indemnitee is not entitled to be
indemnified against such Indemnified Liabilities by the Company pursuant to this
Agreement. A certificate containing reasonable detail as to the amount of such
indemnification submitted to the Company by the Investor shall be conclusive
evidence, absent manifest error, of the amount due from the Company to the
Investor. If any action shall be brought against any Indemnitee in respect of
which indemnity may be sought pursuant to this Agreement, such Indemnitee shall
promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Indemnitee. Any Indemnitee shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnitee, except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company has failed
after a reasonable period of time to assume such defense and to employ counsel
or (iii) in such action there is, in the reasonable opinion of such separate
counsel, a material conflict on any material issue between the position of the
Company and the position of such Indemnitee, in which case the Company shall be
responsible for the reasonable fees and expenses of no more than one such
separate counsel.

 

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10.RESERVED.  

 

11.TERMINATION

 

This Agreement may be terminated only as follows:

 

(a)If pursuant to or within the meaning of any Bankruptcy Law, the Company
commences a voluntary case or any Person commences a proceeding against the
Company, a Custodian is appointed for the Company or for all or substantially
all of its property, or the Company makes a general assignment for the benefit
of its creditors, this Agreement shall automatically terminate without any
liability or payment to the Company (except as set forth below) without further
action or notice by any Person.  

 

(b)In the event that the Closing shall not have occurred on or before October
15, 2017, due to the failure to satisfy the conditions set forth in Sections 7
and 8 above with respect to the Closing, either the Company, on the one hand, or
the Investor, on the other hand, shall have the option to terminate this
Agreement at the close of business on such date or thereafter without liability
of any party to any other party (except as set forth below); provided, however,
that the right to terminate this Agreement under this Section 11(b) shall not be
available to any party if such party is then in breach of any covenant or
agreement contained in this Agreement or any representation or warranty of such
party contained in this Agreement fails to be true and correct such that the
conditions set forth in Section 7(c) or Section 8(d), as applicable, could not
then be satisfied. Any termination of this Agreement pursuant to this Section
11(b) shall be effected by written notice from the Company to the Investor, or
the Investor to the Company, as the case may be, setting forth the basis for the
termination hereof.  

 

The representations and warranties and covenants of the Company and the Investor
contained in Sections 3, 4, 5, and 6 hereof, the indemnification provisions set
forth in Section 9 hereof and the agreements and covenants set forth in Sections
10, 11 and 12, shall survive the Closing and any termination of this
Agreement.  No termination of this Agreement shall be deemed to release the
Company or the Investor from any liability for intentional misrepresentation or
willful breach of any of the Transaction Documents to which it is a party.

 

12.MISCELLANEOUS.

 

(a)Governing Law; Jurisdiction; Jury Trial.  The corporate laws of the State of
Delaware shall govern all issues concerning the relative rights of the Company
and its stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the other Transaction
Documents shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New
York.  Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the State of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or under the other
Transaction Documents or in connection herewith or therewith, or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and the other
Transaction Documents and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT

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MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY OF THE OTHER TRANSACTION DOCUMENTS OR ANY TRANSACTION CONTEMPLATED HEREBY OR
THEREBY.

 

(b)Counterparts.  This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature or signature
delivered by e-mail in a “.pdf” format data file shall be considered due
execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original signature.

 

(c)Headings.  The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.

 

(d)Severability.  If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

 

(e)Entire Agreement; Amendment.  This Agreement and the other Transaction
Documents supersede all other prior oral or written agreements among the
Investor, the Company, their respective affiliates and Persons acting on their
behalf with respect to the subject matter hereof, and this Agreement, the other
Transaction Documents and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor the Investor makes any representation, warranty, covenant or
undertaking with respect to such matters.  The Company acknowledges and agrees
that is has not relied on, in any manner whatsoever, any representations or
statements, written or oral, other than as expressly set forth in the
Transaction Documents. No provision of this Agreement or the other Transaction
Documents may be amended other than by a written instrument signed by both
parties hereto.

 

(f)Notices.  Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt when delivered
personally; (ii) upon receipt when sent by facsimile or email (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses for such
communications shall be:

 

If to the Company:

Viking Therapeutics, Inc.

12340 El Camino Real, Suite 250

San Diego, California 92130

Telephone:(858) 704-4660

E-mail:blian@vikingtherapeutics.com

Attention:  Brian Lian, Ph.D.

 

With a copy to (which shall not constitute notice or service of process):

Paul Hastings LLP

1117 S. California Avenue

Palo Alto, California 94304

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Telephone:(650) 320-1800

Facsimile:(650) 320-1904

E-mail:jeffhartlin@paulhastings.com

Attention:Jeffrey T. Hartlin, Esq.

 

If to the Investor:

Lincoln Park Capital Fund, LLC

440 North Wells, Suite 410

Chicago, IL 60654

Telephone:312-822-9300

Facsimile:312-822-9301

E-mail:jscheinfeld@lpcfunds.com/jcope@lpcfunds.com

Attention:Josh Scheinfeld/Jonathan Cope

 

With a copy to (which shall not constitute notice or service of process):

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

666 Third Avenue

New York, NY 10017

Telephone:(212) 692-6267

Facsimile: (212) 983-3115

E-mail:             ajmarsico@mintz.com

Attention:Anthony J. Marsico, Esq.

 

If to the Transfer Agent:

American Stock Transfer & Trust Company, LLC

16633 N. Dallas Parkway, Suite 600

Dallas, TX 75001

Telephone:(972) 684-5308

Facsimile:(718) 765-8763

Attention: Bill Torre, Senior Relationship Manager

 

or at such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party three (3) Business Days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine or email account
containing the time, date, and recipient facsimile number or email address, as
applicable, and an image of the first page of such transmission or (C) provided
by a nationally recognized overnight delivery service, shall be rebuttable
evidence of personal service, receipt by facsimile or email or receipt from a
nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.

 

(g)Successors and Assigns.  This Agreement shall be binding upon and inure to
the benefit of the parties and any permitted successors and assigns of the
Company.  The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Investor,
including by merger or consolidation.  The Investor may not assign its rights or
obligations under this Agreement.

 

(h)No Third Party Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and any permitted successors and assigns of the Company and,
except as set forth in Section 9, is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.

 

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(i)Publicity.  The Company shall afford the Investor and its counsel with the
opportunity to review and comment upon the form and substance of, and shall give
reasonable consideration to all such comments from the Investor or its counsel
on, any press release, SEC filing or any other public disclosure by or on behalf
of the Company relating to the Investor, its purchases hereunder or any aspect
of the Purchase Shares, any of the Transaction Documents or the transactions
contemplated thereby, not less than 24 hours prior to the issuance, filing or
public disclosure thereof. The Investor must be provided with a final version of
any such press release, SEC filing or other public disclosure at least six (6)
hours prior to any release, filing or use by the Company thereof. The Company
agrees and acknowledges that its failure to fully comply with this provision
constitutes a Material Adverse Effect.  

 

(j)Further Assurances.  Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

(k)No Financial Advisor, Placement Agent, Broker or Finder.    The Company
represents and warrants to the Investor that it has not engaged any financial
advisor, placement agent, broker or finder in connection with the transactions
contemplated hereby.  The Investor represents and warrants to the Company that
it has not engaged any financial advisor, placement agent, broker or finder in
connection with the transactions contemplated hereby.  The Company shall be
responsible for the payment of any fees or commissions, if any, of any financial
advisor, placement agent, broker or finder relating to or arising out of the
transactions contemplated hereby.  The Company shall pay, and hold the Investor
harmless against, any liability, loss or expense (including, without limitation,
reasonable attorneys' fees and out of pocket expenses) arising in connection
with any such claim.

 

(l)No Strict Construction.  The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

 

(m)Remedies, Other Obligations, Breaches and Injunctive Relief.  The Investor’s
remedies provided in this Agreement, including, without limitation, the
Investor’s remedies provided in Section 9, shall be cumulative and in addition
to all other remedies available to the Investor under this Agreement, at law or
in equity (including a decree of specific performance and/or other injunctive
relief), no remedy of the Investor contained herein shall be deemed a waiver of
compliance with the provisions giving rise to such remedy and nothing herein
shall limit the Investor's right to pursue actual damages for any failure by the
Company to comply with the terms of this Agreement.  The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to
the Investor and that the remedy at law for any such breach may be
inadequate.  The Company therefore agrees that, in the event of any such breach
or threatened breach, the Investor shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.

 

(n)Enforcement Costs.  If: (i) this Agreement or any other Transaction Document
is placed by the Investor in the hands of an attorney for enforcement or is
enforced by the Investor through any legal proceeding; (ii) an attorney is
retained to represent the Investor in any bankruptcy, reorganization,
receivership or other proceedings affecting creditors' rights and involving a
claim under this Agreement or any other Transaction Document; or (iii) an
attorney is retained to represent the Investor in any other proceedings
whatsoever in connection with this Agreement or any other Transaction Document,
then the Company shall pay to the Investor, as incurred by the Investor, all
reasonable, actual and documented costs and expenses including reasonable
attorneys' fees incurred in connection therewith, in addition to all

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other amounts due hereunder. If this Agreement is placed by the Company in the
hands of an attorney for enforcement or is enforced by the Company through any
legal proceeding, then the Investor shall pay to the Company, as incurred by the
Company, all reasonable, actual and documented costs and expenses including
reasonable attorneys’ fees incurred in connection therewith, in addition to all
other amounts due hereunder. It is understood and agreed that any and all
enforcement costs paid by a party to the other party pursuant to this section
shall be promptly reimbursed by the receiving party if a court of competent
jurisdiction determines in a final, non-appealable order that the paying party
is not in breach of this Agreement.

 

(o)Waivers.  No provision of this Agreement may be waived other than in a
written instrument signed by the party against whom enforcement of such waiver
is sought.  No failure or delay in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.

 

 

 

 

 

 

*     *     *     *     *

-26-

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IN WITNESS WHEREOF, the Investor and the Company have caused this Agreement to
be duly executed as of the date first written above.

 

 

 

 

 

THE COMPANY:

 

 

 

VIKING THERAPEUTICS, INC.

 

 

 

By: /s/ Brian Lian, Ph.D.

 

Name: Brian Lian, Ph.D.

 

Title: President & Chief Executive Officer

 

 

 

 

 

BUYER:

 

 

 

LINCOLN PARK CAPITAL FUND, LLC

 

BY: LINCOLN PARK CAPITAL, LLC

 

BY: ROCKLEDGE CAPITAL CORPORATION

 

 

 

By: /s/ Josh Scheinfeld

 

Name: Josh Scheinfeld

 

Title: President

 

 

 

 

-27-

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EXHIBITS

 

Exhibit A

Form of Officer’s Certificate

Exhibit B

Form of Secretary’s Certificate

Exhibit C

Information About the Investor Furnished to the Company

 

 

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EXHIBIT A

 

FORM OF OFFICER’S CERTIFICATE

 

This Officer’s Certificate (“Certificate”) is being delivered pursuant to
Section 8(d) of that certain Purchase Agreement dated as of September 28, 2017,
(“Purchase Agreement”), by and between VIKING THERAPEUTICS, INC., a Delaware
corporation (the “Company”), and LINCOLN PARK CAPITAL FUND, LLC (the
“Investor”).  Terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Purchase Agreement.

 

The undersigned, Brian Lian, Ph.D., President, Chief Executive Officer and
Secretary of the Company, hereby certifies, on behalf of the Company and not in
his individual capacity, as follows:

 

1.I am the President, Chief Executive Officer and Secretary of the Company and
make the statements contained in this Certificate;

 

2.The representations and warranties of the Company in the Purchase Agreement
are true and correct in all material respects (except to the extent that any of
such representations and warranties is already qualified as to materiality in
Section 4 of the Purchase Agreement, in which case, such representations and
warranties are true and correct without further qualification) as of the date
when made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date, in which case
such representations and warranties are true and correct as of such date);

 

3.The Company has performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Company at or prior
to the Closing Date.

 

4. The Company has not taken any steps, and does not currently expect to take
any steps, to seek protection pursuant to any Bankruptcy Law nor does the
Company or any of its Subsidiaries have any knowledge or reason to believe that
its creditors intend to initiate involuntary bankruptcy or insolvency
proceedings. The Company is financially solvent and is generally able to pay its
debts as they become due.

 

IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of
___________.

 

 

 

 

Name: Brian Lian, Ph.D.

 

Title: President, Chief Executive Officer and Secretary

 

 

The undersigned as Chief Financial Officer of the Company hereby certifies,
solely on behalf of the Company and not in his individual capacity that Brian
Lian, Ph.D. is the duly elected, appointed, qualified and acting President,
Chief Executive Officer and Secretary of the Company and that the signature
appearing above is his genuine signature.

 

--------------------------------------------------------------------------------

 

 

 

 

Michael Morneau

 

Chief Financial Officer

 

 

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EXHIBIT B

 

FORM OF SECRETARY’S CERTIFICATE

 

This Secretary’s Certificate (“Certificate”) is being delivered pursuant to
Section 8(i) of that certain Purchase Agreement dated as of September 28, 2017,
(“Purchase Agreement”), by and between VIKING THERAPEUTICS, INC., a Delaware
corporation (the “Company”), LINCOLN PARK CAPITAL FUND, LLC (the “Investor”),
pursuant to which the Company may sell to the Investor 701,282 shares (the
“Purchase Shares”) of the Company's common stock, $0.00001 par value per share
(the “Common Stock”), for a total purchase price of One Million Two Hundred
Fifty Thousand Dollars ($1,250,000).  Terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Purchase Agreement.

 

The undersigned, Brian Lian, Ph.D., Secretary of the Company, hereby certifies,
on behalf of the Company and not in his individual capacity, as follows:

 

1.I am the Secretary of the Company and make the statements contained in this
Secretary’s Certificate.

 

2.Attached hereto as Exhibit A and Exhibit B are true, correct and complete
copies of the Company’s bylaws (“Bylaws”) and Certificate of Incorporation
(“Charter”), in each case, as amended or restated through the date hereof, and
no action has been taken by the Company, its directors, officers or
stockholders, in contemplation of the filing of any further amendment relating
to or affecting the Bylaws or Charter.

 

3.Attached hereto as Exhibit C are true, correct and complete copies of the
resolutions duly adopted by the Board of Directors of the Company (or a duly
authorized committee thereof) on September 28, 2017, at which a quorum was
present and acting throughout.  Such resolutions have not been materially
amended, modified or rescinded and remain in full force and effect and such
resolutions are the only resolutions adopted by the Company’s Board of Directors
(or a duly authorized committee thereof) or the stockholders of the Company
relating to or affecting (i) the entering into and performance of the Purchase
Agreement, or the issuance, offering and sale of the Purchase Shares and (ii)
and the performance of the Company of its obligation under the Transaction
Documents as contemplated therein.

 

4.As of the date hereof, the authorized, issued and reserved capital stock of
the Company is as set forth on Exhibit D hereto.

 

IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of
____________.

 

 

 

Brian Lian, Ph.D.

 

Secretary

 

--------------------------------------------------------------------------------

 

 

The undersigned as Chief Financial Officer of the Company hereby certifies,
solely on behalf of the Company and not in his individual capacity that Brian
Lian, Ph.D. is the duly elected, appointed and qualified Secretary of the
Company, and that the signature appearing above is his genuine signature.

 

 

 

 

Michael Morneau

 

Chief Financial Officer

 

 

 

 

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EXHIBIT C

 

 

Information About the Investor Furnished To The Company By the Investor

Expressly For Use In Connection With The Initial Prospectus Supplement

 

 

Information With Respect to Lincoln Park Capital

 

As of the date of the Purchase Agreement, Lincoln Park Capital Fund, LLC,
beneficially owned [________________] shares of our common stock.  Josh
Scheinfeld and Jonathan Cope, the Managing Members of Lincoln Park Capital, LLC,
the manager of Lincoln Park Capital Fund, LLC, are deemed to be beneficial
owners of all of the shares of common stock owned by Lincoln Park Capital Fund,
LLC. Messrs. Cope and Scheinfeld have shared voting and investment power over
the shares being offered under the prospectus supplement filed with the SEC in
connection with the transactions contemplated under the Purchase Agreement.
Lincoln Park Capital, LLC is not a licensed broker dealer or an affiliate of a
licensed broker dealer.