Exhibit 10.1

 

Execution Copy

 

 

 

 

 

 

 

SECURITIES PURCHASE AGREEMENT

 

BY AND BETWEEN

 

Armata Pharmaceuticals, Inc.

 

AND

 

INNOVIVA, INC.

 

Dated as of January 27, 2020

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

Article I DEFINITIONS 1 Section 1.1 Definitions 1 Section 1.2 Construction 8    
  Article II PURCHASE AND SALE 10 Section 2.1 The Purchase and Sale 10 Section
2.2 First Closing 10 Section 2.3 Second Closing 11       Article III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY 12 Section 3.1 Organization and
Qualification 12 Section 3.2 Authorization; Enforcement; Validity 13 Section 3.3
Issuance of Securities 13 Section 3.4 No Conflicts 13 Section 3.5 Consents 14
Section 3.6 No General Solicitation; Agents’ Fees 14 Section 3.7 Application of
Takeover Protections; Rights Agreement 14 Section 3.8 SEC Documents; Financial
Statements 15 Section 3.9 Absence of Certain Changes 16 Section 3.10 Conduct of
Business; Regulatory Permits 17 Section 3.11 Certain Regulatory Matters 18
Section 3.12 Sarbanes-Oxley Act 19 Section 3.13 Transactions With Affiliates 19
Section 3.14 Capitalization 19 Section 3.15 Indebtedness 20 Section 3.16
Material Contracts 20 Section 3.17 Litigation 20 Section 3.18 Insurance 20
Section 3.19 Employee Relations 21 Section 3.20 Title 21 Section 3.21
Intellectual Property Rights 22 Section 3.22 Environmental Laws 23 Section 3.23
Tax Status 23 Section 3.24 Investment Company Status 24 Section 3.25 U.S. Real
Property Holding Corporation 24 Section 3.26 Registration Eligibility 24 Section
3.27 Transfer Taxes 24 Section 3.28 Shell Company Status 24 Section 3.29 ERISA
Compliance 24 Section 3.30 Management 25 Section 3.31 FDA 25 Section 3.32 Stock
Option Plans 26 Section 3.33 No Disqualification Events 26 Section 3.34 No
Integrated Offering 26 Section 3.35 Regulation M Compliance 27 Section 3.36
Disclosure 27

 

 i 

 

 

Section 3.37 Proxy Statement 27 Section 3.38 Disclaimer of Other Representations
and Warranties 27       Article IV REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER 28 Section 4.1 Organization 28 Section 4.2 Organizational Power and
Authority 28 Section 4.3 Execution and Delivery 28 Section 4.4 No Conflict 28
Section 4.5 Consents and Approvals 28 Section 4.6 No Registration 28 Section 4.7
Purchasing Intent 29 Section 4.8 Sophistication; Investigation 29 Section 4.9
Sufficient Funds 29 Section 4.10 Bad Actor 29       Article V ADDITIONAL
COVENANTS 29 Section 5.1 Covenants of the Company 29 Section 5.2 Pre-Closing
Exclusivity 32 Section 5.3 Post-Closing Books and Records 32 Section 5.4
Stockholder Approval 33 Section 5.5 A&R Registration Rights Agreement 34 Section
5.6 Integration 34 Section 5.7 Required Minimum 34 Section 5.8 Acknowledgment of
Dilution 35 Section 5.9 Expense Reimbursement 35 Section 5.10 Blue Sky Filings
35       Article VI CONDITIONS TO THE OBLIGATIONS OF THE PARTIES 35 Section 6.1
Conditions to the Obligations of the Purchaser at the First Closing 35 Section
6.2 Conditions to the Obligations of the Company at the First Closing 37 Section
6.3 Conditions to the Obligations of the Purchaser at the Second Closing 37
Section 6.4 Conditions to the Obligations of the Company at the Second Closing
38       Article VII INTENTIONALLY OMITTED 39       Article VIII TERMINATION 39
Section 8.1 Termination 39 Section 8.2 Effect of Termination 40 Section 8.3
Termination Fee 40 Section 8.4 Second Closing Abandonment 40       Article IX
GENERAL PROVISIONS 41 Section 9.1 Notices 41 Section 9.2 Assignment; Third Party
Beneficiaries 42 Section 9.3 Prior Negotiations; Entire Agreement 42 Section 9.4
Governing Law; Venue: Forum 42

 

 ii 

 

 

Section 9.5 Waiver of Jury Trial 42 Section 9.6 Counterparts 43 Section 9.7
Waivers and Amendments; Rights Cumulative; Consent; Severability 43 Section 9.8
Headings 43 Section 9.9 Specific Performance 43 Section 9.10 Publicity 44
Section 9.11 No Recourse 44 Section 9.12 Further Assurances 44 Section 9.13
Survival 44

 

EXHIBITS

 

Exhibit A Investor Rights Agreement Exhibit B Warrant Certificate Exhibit C
Voting Agreement

 

 

 

 

 

 

 iii 

 

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (together with all Exhibits and Schedules
hereto, as each may be amended, restated, amended and restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof, this
“Agreement”), dated as of January 27, 2020, is made by and between (i) Armata
Pharmaceuticals, Inc., a Washington corporation (the “Company”), and
(ii) Innoviva, Inc., (the “Purchaser”). The Company and the Purchaser are
referred to herein individually as a “Party”, and, collectively as the
“Parties.”

 

RECITALS

 

WHEREAS, subject to the terms and conditions contained in this Agreement, at the
Closing (as defined below), the Company intends to issue and sell to the
Purchaser (a) 8,710,800 shares of fully paid and non-assessable Common Stock
(the “Purchased Common Stock”) and (b) Warrants to purchase 8,710,800 shares of
Common Stock (as may be adjusted pursuant to Section 2.1(a)) (the “Purchased
Warrants”), and the Purchaser desires to purchase such Common Stock and Warrants
from the Company

 

WHEREAS, each share of Purchased Common Stock and each Purchased Warrant will be
issued and sold to the Purchaser as a unit at the First Closing and the Second
Closing, as applicable, for a per unit price of $2.87 (the “Per Unit Purchase
Price”) payable in accordance with the terms hereof; and

 

WHEREAS, the Board has unanimously determined that this Agreement and the
transactions contemplated hereby are advisable, fair and in the best interests
of the Company and its stockholders.

 

NOW, THEREFORE, in consideration of the mutual promises, agreements,
representations, warranties and covenants contained herein, the Company (on
behalf of itself and each of its direct and indirect Subsidiaries) and the
Purchaser agree as follows:

 

Article I

 

DEFINITIONS

 

Section 1.1     Definitions. Except as otherwise expressly provided in this
Agreement, whenever used in this Agreement (including any Exhibits and
Schedules hereto), the following terms shall have the respective meanings
specified therefor below:

 

“A&R Registration Rights Agreement” has the meaning set forth in Section 5.5.

 

“Acquisition Proposal” has the meaning set forth in Section 5.2.

 

“Action” means, any action, suit, claim, arbitration, mediation, litigation,
hearing, or other proceeding by or before any court, tribunal or arbitrator or
any Governmental Entity.

 

 1 

 

 

“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly, Controls or is Controlled by or is under common Control with such
Person; provided, however, that neither Purchaser nor any of its Affiliates
shall be deemed to be an Affiliate of the Company or any of its direct and
indirect Subsidiaries for purposes of this Agreement. “Affiliated” has a
correlative meaning.

 

“Agreement” has the meaning set forth in the Preamble.

 

“Board” means the Board of Directors of the Company.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks are required or permitted to be closed in the State of
California.

 

“Bylaws” means the Company’s bylaws, as amended through the date hereof.

 

“Capital Stock” means (a) any shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation; (b) any
ownership interests in a Person other than a corporation, including membership
interests, partnership interests, joint venture interests and beneficial
interests; and (c) any warrants, options, convertible or exchangeable
securities, subscriptions, rights (including any preemptive or similar rights),
calls or other rights to purchase or acquire any of the foregoing.

 

“Certificate of Incorporation” means the certificate of incorporation of the
Company, as amended through the date hereof.

 

“Common Stock” means the common stock, par value $0.01 per share, of the
Company, and any Capital Stock into which such Common Stock shall have been
converted, exchanged or reclassified following the date hereof.

 

“Company” has the meaning set forth in the Preamble.

 

“Company Organizational Documents” mean the Certificate of Incorporation and the
Bylaws.

 

“Company’s Knowledge,” “Knowledge of the Company” or “Knowledge” means the
actual knowledge of Brian Varnum, Todd R. Patrick and Steve R. Martin.

 

“Contract” means any agreement, contract or instrument, including any loan,
note, bond, mortgage, indenture, guarantee, deed of trust, license, franchise,
commitment, lease, franchise agreement, letter of intent, memorandum of
understanding or other obligation, and any amendments thereto, whether written
or oral.

 

“Control” means, with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or agency or otherwise. “Controlled” has a correlative meaning.

 

 2 

 

 

“Definitive Documents” means this Agreement, the A&R Registration Rights
Agreement, the Investor Rights Agreement, the Warrant Certificate and each of
the other agreements and instruments entered into and delivered by the Parties
hereto in connection with the transactions contemplated hereby.

 

“Environmental Laws” means all applicable federal, state, local or foreign Laws
relating to pollution or protection of human health or the environment
(including ambient air, surface water, groundwater, land surface or subsurface
strata), including Laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, demands or demand letters, licenses,
notices or notice letters, Orders, permits, plans or regulations issued,
entered, promulgated or approved thereunder.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations thereunder.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
together with the Company or any of its Subsidiaries is treated as a single
employer within the meaning of Section 414 of the Code or Section 4001 of ERISA.

 

“ERISA Event” means (1) a Reportable Event with respect to a Pension Plan; (2) a
withdrawal by the Company, any of its Subsidiaries or any of their respective
ERISA Affiliates from a Pension Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial employer (as defined in Section
4001(a)(2) of ERISA) or a cessation of operations that is treated as a
termination under Section 4062(e) of ERISA; (3) a complete or partial withdrawal
by the Company, any of its Subsidiaries or any of their respective ERISA
Affiliates from a Multiemployer Plan, written notification of any member of the
Consolidated Group or any of their respective ERISA Affiliates concerning the
imposition of Withdrawal Liability or written notification that a Multiemployer
Plan is in reorganization within the meaning of Title IV of ERISA or that a
Multiemployer Plan has been determined to be in “endangered” or critical status
(within the meaning of Section 432 of the Code or Section 305 of ERISA); (4) the
filing under Section 4041(c) of ERISA of a notice of intent to terminate a
Pension Plan, the treatment of a Pension Plan or Multiemployer Plan amendment as
a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (5)
the imposition of any liability under Title IV of ERISA, other than for the
payment of plan contributions or PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Company, any of its Subsidiaries or any of their
respective ERISA Affiliates, (6) the failure to satisfy the minimum funding
standards (within the meaning of Section 412 of the Code or Section 302 of
ERISA) with respect to any Pension Plan, (7) the application for a minimum
funding waiver under Section 302(c) of ERISA with respect to a Pension Plan, (8)
the imposition of a Lien under Section 303(k) of ERISA with respect to any
Pension Plan, (9) a determination that any Pension Plan is in “at risk” status
(within the meaning of Section 303 of ERISA), or (10) the Company, any of its
Subsidiaries or any of their respective ERISA Affiliates has engaged in a
transaction that is subject to Sections 4069 or 4212(c) of ERISA.

 

 3 

 

 

“Expense Reimbursement” means the reimbursement obligation contemplated by
Section 5.9.

 

“First Closing” has the meaning set forth in Section 2.2(a).

 

“First Closing Date” has the meaning set forth in Section 2.2(a).

 

“First Common Stock” means the maximum number of shares of Common Stock issuable
at the First Closing to Purchaser in compliance with any and all Laws and
without the requirement for the prior receipt of the Stockholder Approval under
the listing requirements of the NYSE American, assuming that Warrants to
purchase an equal number of shares of Common Stock are also issued to Purchaser
at the First Closing.

 

“First Purchase Price” means an amount in cash equal to the product of (i) the
number of shares of First Common Stock multiplied by (ii) the Per Unit Purchase
Price.

 

“First Warrants” means Warrants to purchase a number of shares of Common Stock
equal to the number of shares of First Common Stock.

 

“Fundamental Representations” has the meaning set forth in Section 9.13.

 

“GAAP” means United States generally accepted accounting principles,
consistently applied, as in effect from time to time.

 

“Governmental Entity” means any applicable nation, state, county, city, town,
village, district or other political jurisdiction of any nature, federal, state,
local, municipal, foreign, or other government, governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal), stock
exchange, multi-national organization or body, or body exercising, or entitled
to exercise, any administrative, executive, judicial, legislative, police,
regulatory, or Taxing authority or power of any nature or instrumentality of any
of the foregoing, including any entity or enterprise owned or controlled by a
government or a public international organization or any of the foregoing.

 

“Indebtedness” means (a) any indebtedness or other obligation for borrowed
money, whether current, short-term or long-term and whether secured or
unsecured; (b) any indebtedness evidenced by any note, bond, debenture or other
security or similar instrument; (c) any liabilities with respect to interest
rate or currency swaps, collars, caps and similar hedging obligations; (d) any
liabilities in respect of any lease of (or other arrangement conveying the right
to use) real or personal property, or a combination thereof, which liabilities
are required to be classified and accounted for under GAAP as capital leases;
(e) any liabilities under any performance bond or letter of credit or any bank
overdrafts and similar charges; (f) any accrued interest, premiums, penalties
and other obligations relating to the foregoing items in clauses (a) through
(e); and (g) any indebtedness referred to in clauses (a) through (f) above of
any Person that is either guaranteed (including under any “keep well” or similar
arrangement) by, or secured (including under any letter of credit, banker’s
acceptance or similar credit transaction) by any Lien upon any property or asset
owned by, the Company or any of its Subsidiaries.

 

 4 

 

 

“Insolvent” means, (i) with respect to the Company and its Subsidiaries, on a
consolidated basis, (A) the present fair saleable value of the Company’s and its
Subsidiaries’ assets is less than the amount required to pay the Company’s and
its Subsidiaries’ total Indebtedness, (B) the Company and its Subsidiaries are
unable to pay their debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured or (C) the
Company and its Subsidiaries intend to incur or believe that they will incur
debts that would be beyond their ability to pay as such debts mature; and (ii)
with respect to the Company and each Subsidiary, individually, (A) the present
fair saleable value of the Company’s or such Subsidiary’s (as the case may be)
assets is less than the amount required to pay its respective total
Indebtedness, (B) the Company or such Subsidiary (as the case may be) is unable
to pay its respective debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured or (C) the
Company or such Subsidiary (as the case may be) intends to incur or believes
that it will incur debts that would be beyond its respective ability to pay as
such debts mature.

 

“Investor Rights Agreement” means an Investor Rights Agreement to be entered
into by the Company, Purchaser and the other parties thereto in substantially
the form set forth on Exhibit A hereto.

 

“Law” means any law, statute, code, ordinance, regulation or rule of any
Governmental Entity.

 

“Lien” means any lien, adverse claim, charge, option, right of first refusal,
preemptive right, servitude, security interest, mortgage, pledge, deed of trust,
easement, encumbrance, restriction on transfer, Taxes, conditional sale or other
title retention agreement, defect in title or other restrictions of any kind;
provided that restrictions on transfer arising under applicable securities Laws
shall not be Liens.

 

“Material Adverse Effect” means any effect, change, event, development,
condition or occurrence that, individually or together with one or more effects,
changes, events, developments, conditions or occurrences, has had or would be
reasonably expected to have or result in a material adverse effect or material
adverse change on the business, assets, liabilities, properties, financial
condition or operating results of the Company and its Subsidiaries, taken as a
whole, or to the ability of the Company to consummate timely the transactions
contemplated by this Agreement.

 

“Material Contract” means any Contract that would be required to be filed by the
Company as a “material contract” pursuant to Item 601(b)(10) of Regulation S-K
under the Securities Act.

 

“Multiemployer Plan” means any multiemployer plan as defined in Section
4001(a)(3) of ERISA and subject to Title IV of ERISA, to which any member of the
Consolidated Group or any of their respective ERISA Affiliates makes or is
obligated to make contributions, or, during the preceding five (5) plan years,
has made or has been obligated to make contributions.

 

“NYSE American” means the NYSE American stock exchange maintained by the New
York Stock Exchange (NYSE).

 

 5 

 

 

“Order” means any judgment, order, award, injunction, writ, permit, license,
settlement or decree issued, promulgated, made, rendered or entered into by or
with any Governmental Entity or arbitrator of applicable jurisdiction (in each
case, whether temporary, preliminary or permanent).

 

“Party” or “Parties” has the meaning set forth in the Preamble.

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Company, any
of its Subsidiaries or any of their respective ERISA Affiliates or to which the
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
contributes or has an obligation to contribute or has made or has had an
obligation to make contributions at any time in the preceding five plan years.

 

“Person” means an individual, firm, corporation (including any non-profit
corporation), partnership, limited liability company, joint venture,
association, trust, Governmental Entity or other entity or organization.

 

“Plan” means any material “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Company or any of its Subsidiaries,
or, with respect to any such plan that is subject to Section 412 of the Code or
Title IV of ERISA, any of their respective ERISA Affiliates.

 

“Registration Rights Agreement” means that certain Amended and Restated
Registration Rights Agreement, dated as of May 9, 2019, as amended through the
date hereof.

 

“Related Party” means, with respect to any Person, (a) any former, current or
future director, officer, agent, Affiliate, employee, general or limited
partner, member, manager or stockholder of such Person and (b) any former,
current or future director, officer, agent, Affiliate, employee, general or
limited partner, member, manager or stockholder of any of the foregoing.

 

“Reportable Event” means, with respect to any Pension Plan, any of the events
set forth in Section 4043(c) of ERISA or the regulations issued thereunder,
other than events for which the thirty (30) day notice period has been waived.

 

“Representatives” means, with respect to any Person, such Person’s directors,
officers, members, partners, managers, employees, agents, investment bankers,
attorneys, accountants, advisors and other representatives.

 

“Required Minimum” means, as of any date, the maximum aggregate number of shares
of Common Stock then issued or potentially issuable in the future pursuant to
this Agreement, including the shares of Common Stock issuable upon exercise in
full of all Purchased Warrants.

 

“Sanctioned Country” means any country or region that is subject or target of a
comprehensive trade embargo under Sanctions.

 

 6 

 

 

“Sanctioned Person” means any individual or entity that is the subject or target
of Sanctions, including (i) any individual or entity listed on any
Sanctions-related restricted party list, including the U.S. Department of
Treasury, Office of Foreign Asset Control’s (“OFAC”) Specially Designated
Nationals and Blocked Persons List and the EU Consolidated List, (ii) any entity
that is owned, directly or indirectly, or otherwise controlled by a Person or
Persons described in clause (i) above, (iii) any national, resident, government,
agency, or instrumentality of a Sanctioned Country or (iv) any individual or
entity otherwise the subject or target of Sanctions.

 

“Sanctions” means all applicable Laws relating to economic, financial or trade
sanctions, including any such Laws administered or enforced by the U.S.
government (including by OFAC or the U.S. Department of State), the United
Nations Security Council, the European Union, the United Kingdom (include by Her
Majesty’s Treasury) or any other relevant Governmental Entity that administers
or enforces economic, financial or trade sanctions.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Second Closing” has the meaning set forth in Section 2.2(a).

 

“Second Closing Date” has the meaning set forth in Section 2.2(a).

 

“Second Common Stock” means an amount equal to (i) the aggregate number of
shares of Purchased Common Stock, minus (ii) the number of shares of First
Common Stock.

 

“Second Purchase Price” means an amount in cash equal to the product of (i) the
number of shares of Second Common Stock multiplied by (ii) the Per Unit Purchase
Price.

 

“Second Warrants” means Warrants to purchase a number of shares of Common Stock
equal to the number of shares of Second Common Stock.

 

“Securities” means the Purchased Common Stock and the Purchased Warrants
(including the shares of Common Stock issuable upon exercise of the Purchased
Warrants), in each case, that will be delivered to Purchaser pursuant to this
Agreement.

 

“Securities Act” means the Securities Act of 1933, and the rules and regulations
promulgated thereunder.

 

“Stockholder Approval” means such approval as may be required by the applicable
rules and regulations of NYSE American (or any successor entity) from the
stockholders of the Company with respect to the transactions contemplated by
this Agreement and the other Definitive Documents.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership,
joint venture or other legal entity as to which such Person (either alone or
through or together with any other subsidiary), (a) owns, directly or
indirectly, more than fifty percent (50%) of the stock or other equity
interests, (b) has the power to elect a majority of the board of directors or
similar governing body, or (c) has the power to direct the business and
policies.

 

 7 

 

 

“Tax Contest” means any audit, suit, conference, action, assessment,
investigation, claim, administrative or judicial proceeding, or other similar
interaction with a Governmental Entity with respect to any Tax.

 

“Tax Returns” means any and all reports, returns, declarations, claims for
refund, elections, disclosures, estimates, information reports or returns or
statements supplied or required to be supplied to a Governmental Entity in
connection with Taxes, including any schedule or attachment thereto or amendment
thereof.

 

“Taxes” means (i) all taxes, assessments, duties, levies or other similar
governmental charges paid or payable to a Governmental Entity, including all
federal, state, local, foreign and other income, franchise, profits, gross
receipts, capital gains, capital stock, transfer, property, sales, use,
value-added, occupation, excise, severance, windfall profits, stamp, payroll,
social security, withholding and other taxes, assessments, duties, levies
(whether payable directly or by withholding and whether or not requiring the
filing of a return), all estimated taxes, deficiency assessments, additions to
tax, penalties and interest thereon, (ii) any liability for such amounts
described in clause (i) as a result of being a member of a combined,
consolidated, unitary, or affiliated group and (iii) any and all liability for
the payment of any amounts described above in clauses (i) and (ii) as a result
of any express or implied obligation to indemnify any other person, or any
successor or transferee liability. “Taxing” and “Taxation” each have a
correlative meaning.

 

“Termination Date” has the meaning set forth in Section 8.1(b).

 

“Termination Fee” has the meaning set forth in Section 8.3.

 

“Voting Agreements” means the voting agreements to be entered into by the
Purchaser and certain stockholders of the Company holding at least a majority of
the outstanding shares of Common Stock as of the date hereof, in substantially
the form set forth on Exhibit C hereto.

 

“Warrant Certificate” means the certificate in substantially the form attached
hereto as Exhibit B.

 

“Warrants” means warrants to purchase shares of Common Stock, at an exercise
price of $2.87 per share, represented by and on the terms set forth herein and
in the Warrant Certificate.

 

“Withdrawal Liability” means the liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such term
is defined in Part I of Subtitle E of Title IV of ERISA.

 

Section 1.2     Construction. In this Agreement, unless the context otherwise
requires:

 

(a)       references to Articles, Sections, Exhibits and Schedules are
references to the articles and sections or subsections of, and the exhibits and
schedules attached to, this Agreement;

 

 8 

 

 

(b)       references in this Agreement to “writing” or comparable expressions
include a reference to a written document transmitted by means of electronic
mail in portable document format (pdf), facsimile transmission or comparable
means of communication;

 

(c)       words expressed in the singular number shall include the plural and
vice versa; words expressed in the masculine shall include the feminine and
neuter gender and vice versa;

 

(d)       the words “hereof,” “herein,” “hereto” and “hereunder,” and words of
similar import, when used in this Agreement, shall refer to this Agreement as a
whole, including all Exhibits and Schedules attached to this Agreement, and not
to any provision of this Agreement;

 

(e)       the term “this Agreement” shall be construed as a reference to this
Agreement as the same may have been, or may from time to time be, amended,
modified, varied, novated or supplemented;

 

(f)       “include,” “includes” and “including” are deemed to be followed by
“without limitation” whether or not they are in fact followed by such words;

 

(g)       references to “day” or “days” are to calendar days;

 

(h)       if the last day for the giving of any notice or the performance of any
act required or permitted under this Agreement is a day that is not a Business
Day, then the time for the giving of such notice or the performance of such
action shall be extended to the next succeeding Business Day;

 

(i)       references to “the date hereof” or “the date of the Agreement” means
the date of this Agreement;

 

(j)       references to “ordinary course of business” means the ordinary and
usual course of normal day-to-day operations of the Company, consistent with
past practices

 

(k)       the word “or” is disjunctive but not necessarily exclusive;

 

(l)       unless otherwise specified, references to any Law means such Law as
amended from time to time and includes any successor Law thereto and any rules
or regulations promulgated thereunder in effect from time to time; and

 

(m)       references to “dollars” or “$” refer to currency of the United States
of America, unless otherwise expressly provided.

 

 9 

 

 

Article II

 

PURCHASE AND SALE

 

Section 2.1     The Purchase and Sale.

 

(a)       On the terms and subject to the conditions set forth herein, at the
First Closing, the Purchaser hereby agrees to purchase (or cause certain of its
Subsidiaries to purchase), and the Company shall sell to Purchaser (or such
Subsidiaries) in exchange for the First Purchase Price, (i) the First Common
Stock, free and clear of all Liens and (ii) the First Warrants, free and clear
of all Liens; provided, that, if during the period from the date hereof until
and including the First Closing, the Company issues to any Person any shares of
Common Stock or Capital Stock or similar securities convertible into,
exchangeable for or having the right to subscribe for shares of Common Stock at
a price per share less than the Per Unit Purchase Price (other than shares of
Common Stock issued upon the exercise of options, warrants or similar securities
outstanding as of the date hereof), the number of Warrants issued to the
Purchaser at the First Closing will be proportionally and ratably increased such
that the Warrants issued to Purchaser will not be affected by any such dilution.

 

(b)        On the terms and subject to the conditions set forth herein, at the
Second Closing, the Purchaser hereby agrees to purchase (or cause certain of its
Subsidiaries to purchase), and the Company shall sell to Purchaser (or such
Subsidiaries) in exchange for the Second Purchase Price, (i) the Second Common
Stock, free and clear of all Liens and (ii) the Second Warrants, free and clear
of all Liens; provided, that, if during the period from the date hereof until
and including the Second Closing, the Company issues to any Person any shares of
Common Stock or Capital Stock or similar securities convertible into,
exchangeable for or having the right to subscribe for shares of Common Stock at
a price per share less than the Per Unit Purchase Price (other than shares of
Common Stock issued upon the exercise of options, warrants or similar securities
outstanding as of the date hereof), the number of Warrants issued to the
Purchaser at the Second Closing will be proportionally and ratably increased
such that the Warrants issued to Purchaser will not be affected by any such
dilution

 

(c)       The Parties agree that the Common Stock and Warrants to be purchased
by Purchaser hereunder shall be issued in reliance upon the exemption from
registration set forth in Section 4(a)(2) of the Securities Act.

 

Section 2.2     First Closing.

 

(a)       The closing of the purchase of the First Common Stock and First
Warrants (the “First Closing”) shall take place remotely via the electronic
exchange of documents and signatures, or at such other time and place as the
Parties may agree in writing, on the first (1st) Business Day after satisfaction
or waiver of the conditions set forth in Section 6.1 and Section 6.2 (other than
those conditions that by their terms are to be satisfied at the First Closing,
but subject to the satisfaction or waiver of those conditions). The date on
which the First Closing actually occurs shall be referred to herein as the
“First Closing Date.” At the First Closing, the Company shall issue the First
Common Stock and First Warrants to the Purchaser free and clear of all Liens
against payment by the Purchaser of the First Purchase Price.

 

 10 

 

 

(b)       At the First Closing, the Company shall:

 

(i)       deliver or cause to be delivered to the Purchaser:

 

(A)       a certificate of good standing of the Company as of a date no earlier
than two (2) Business Days prior to the First Closing Date;

 

(B)       the certificate contemplated by Section 6.1(f);

 

(C)       counterparts to Warrant Certificates representing the full number of
First Warrants (as may be adjusted pursuant to Section 2.1(a));

 

(D)       copies of the resolutions or written consents duly adopted by the
Board and certified by the Company’s secretary authorizing the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby, including the Charter Amendment; and

 

(E)       counterparts to the A&R Registration Rights Agreement, duly executed
by the Company and the other parties thereto; and

 

(F)       counterparts to the Investor Rights Agreement, duly executed by the
Company and the other parties thereto;

 

(ii)       deliver or cause to be delivered any other customary documents or
certificates reasonably requested by Purchaser which are reasonably necessary to
give effect to the Closing; and

 

(iii)       pay, or cause to be paid to Purchaser (which may be set off against
the First Purchase Price), any portion of the Expense Reimbursement then accrued
and unpaid.

 

Section 2.3     Second Closing.

 

(a)       The closing of the purchase of the Second Common Stock and Second
Warrants (the “Second Closing”) shall take place remotely via the electronic
exchange of documents and signatures, or at such other time and place as the
Parties may agree in writing, on the first (1st) Business Day after satisfaction
or waiver of the conditions set forth in Section 6.3 and Section 6.4 (other than
those conditions that by their terms are to be satisfied at the Second Closing,
but subject to the satisfaction or waiver of those conditions). The date on
which the Second Closing actually occurs shall be referred to herein as the
“Second Closing Date.” At the Second Closing, the Company shall issue the Second
Common Stock and Second Warrants to the Purchaser free and clear of all Liens
against payment by the Purchaser of the Second Purchase Price.

 

(b)       At the Second Closing, the Company shall:

 

(i)       deliver or cause to be delivered to the Purchaser:

 

 11 

 

 

(A)       a certificate of good standing of the Company as of a date no earlier
than two (2) Business Days prior to the Second Closing Date;

 

(B)       the certificate contemplated by Section 6.1(f); and

 

(C)       a certified copy of the Certificate of Incorporation, duly amended to
renounce, to the fullest extent permitted by applicable Law, any interest or
expectancy of the Company in, or in being offered an opportunity to participate
in, any business opportunities presented to the officers, directors or
stockholders of the Company (the “Charter Amendment”), or such other document or
instrument reasonably satisfactory to the Purchaser confirming that no such
interest or expectancy exists;

 

(D)       counterparts to Warrant Certificates representing the full number of
Second Warrants (as may be adjusted pursuant to Section 2.1(a));

 

(ii)       pay, or cause to be paid to Purchaser (which may be set off against
the Second Purchase Price), any portion of the Expense Reimbursement then
accrued and unpaid; and

 

(iii)       deliver or cause to be delivered any other customary documents or
certificates reasonably requested by Purchaser which are reasonably necessary to
give effect to the Closing.

 

Article III

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as set forth in the SEC Documents filed with the SEC prior to the date
hereof and publicly available on the SEC’s Electronic Data Gathering Analysis
and Retrieval system (but excluding any forward-looking disclosures set forth in
any “risk factors” section, any disclosures in any “forward-looking statements”
section and any other disclosures included therein to the extent they are
predictive or forward-looking in nature), the Company hereby represents and
warrants to the Purchaser as of the date hereof, as of the First Closing, and as
of the Second Closing, as follows:

 

Section 3.1     Organization and Qualification. Each of the Company and each of
its Subsidiaries are entities duly organized, validly existing and in good
standing under the Laws of the jurisdiction in which they are formed, and each
has the requisite power and authority to own its properties and to carry on its
business as now being conducted and as presently proposed to be conducted. Each
of the Company and each of its Subsidiaries is duly qualified as a foreign
entity to do business and is in good standing in every jurisdiction in which its
ownership of property or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not, individually or in the aggregate,
have a Material Adverse Effect. Other than the Persons set forth on Exhibit 21.1
to the Company’s Registration Statement on Form S-1, filed with the SEC on
December 20, 2019, as amended, the Company has no Subsidiaries and does not own
Capital Stock in any other Person.

 

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Section 3.2     Authorization; Enforcement; Validity. Subject to the Stockholder
Approval, the Company has the requisite power and authority to enter into and
perform its obligations under the Agreement and the other Definitive Documents,
to consummate the transaction contemplated hereby and thereby and to issue the
Securities in accordance with the terms hereof and thereof. The execution and
delivery of the Agreement and the other Definitive Documents by the Company, and
the consummation by the Company of the transactions contemplated hereby and
thereby (including the issuance of the Securities and the reservation for
issuance and issuance of Common Stock issuable upon the exercise of the Warrants
in accordance with, and pursuant to, the Warrant Certificate) have been duly
authorized by the Company, and such authorization has not been, and as of the
Closing will not have been, subsequently rescinded or modified in any way, and,
no further filing, consent or authorization is or will be required to be made by
or on behalf of the Company, its Subsidiaries and their respective boards of
directors, stockholders or other governing bodies in connection with the
transactions contemplated by the Definitive Documents. The Agreement has been,
and the other Definitive Documents to which the Company is a party will be,
prior to the First Closing or Second Closing, as applicable, duly executed and
delivered by the Company, and each constitutes the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective 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 applicable creditors’ rights and remedies and except as rights to
indemnification and to contribution may be limited by applicable federal or
state securities Law (the “General Enforceability Exceptions”).

 

Section 3.3     Issuance of Securities. The issuance of the Securities is duly
authorized, and upon issuance in accordance with the terms of the Definitive
Documents will be validly issued, fully paid and non-assessable (to the extent
such concepts are applicable) and free and clear of all Liens. The issuances of
the Securities in connection with the transactions contemplated by the
Definitive Documents are in compliance, in all respects, with all applicable
Laws, and the Securities are not subject to, and will not be issued in violation
of, any purchase options, call options, rights of first refusal, preemptive
rights, subscription rights or any similar rights under applicable Law, the
Company Organizational Documents or any Contract to which the Company or any of
its Subsidiaries is a party or by which it is bound. Subject to the accuracy of
the representations and warranties of the Purchaser set forth in Article IV, the
offer and issuance by the Company of the Securities is exempt from registration
under the Securities Act. As of the First Closing, the Company will have
reserved from its duly authorized Capital Stock the maximum number of shares of
Common Stock authorized under its Certificate of Incorporation that are
available after giving effect to shares of Common Stock reserved for issuance or
issuable upon the exercise of the Purchased Warrants. Upon the issuance of
Common Stock following an exercise of the Purchased Warrants in accordance with
the Warrant Certificate, such Common Stock, when issued, will be validly issued,
fully paid and non-assessable and free and clear of all Liens, with the holders
thereof being entitled to all rights accorded to a holder of Common Stock.

 

Section 3.4     No Conflicts. The execution, delivery and performance of this
Agreement and the other Definitive Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including
the issuance of the Securities and the reservation for issuance and issuance of
Common Stock issuable upon the exercise of the Purchased Warrants in accordance
with the Warrant Certificate) will not (i) result in a violation of the
Certificate of Incorporation, Bylaws, certificate of formation, memorandum of
association, articles of association, bylaws or other organizational documents
of the Company or any of its Subsidiaries (collectively, the “Group Companies
Organizational Documents”), (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) in any
respect under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any Contract that would be required to be filed
by the Company as a “material contract” pursuant to Item 601(b)(10) of
Regulation S-K under the Securities Act or other agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party, other
than (a) the acceleration of vesting of restricted stock awards set forth in the
SEC Documents and (b) the deemed exercise of warrants to purchase Common Stock
set forth in the SEC Documents, or (iii) result in a material violation of any
Law (including, for the avoidance of doubt, foreign, federal and state
securities Laws and the rules and regulations of the NYSE American) or Order
that would be material to the business of the Company and its Subsidiaries taken
as a whole.

 

 13 

 

 

Section 3.5     Consents. Neither the Company nor any Subsidiary is required to
obtain any consent from, authorization or order of, or make any filing or
registration with any Governmental Entity or any regulatory or self-regulatory
agency or any other Person in order for it to execute, deliver or perform any of
its respective obligations under or contemplated by this Agreement or the other
Definitive Documents, in each case, in accordance with the terms hereof and
thereof. To the Company’s Knowledge, no facts or circumstances exist which might
prevent the Company or any of its Subsidiaries from obtaining or effecting any
of the registrations, applications or filings contemplated by the Definitive
Documents. The Company is not in violation of the requirements of the NYSE
American and has no Knowledge of any facts or circumstances which could
reasonably lead to delisting or suspension of the Common Stock.

 

Section 3.6     No General Solicitation; Agents’ Fees. Neither the Company, nor
any of its Subsidiaries, Affiliates, Representatives or any other Person acting
on its or their behalf, has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with the
offer or sale of the Securities. Except for amounts payable to Ladenburg
Thalmann & Co. Inc. or any of its Affiliates, no placement agent’s fees,
financial advisory fees, or brokers’ commissions or fees or any similar fees are
or will be owed or payable to any Person in connection with transactions
contemplated by the Definitive Documents. Neither the Company nor any of its
Subsidiaries has engaged any placement agent or other agent in connection with
the offer or sale of the Securities. The Company further acknowledges that
Purchaser is not acting as a financial advisor or fiduciary of the Company or
any of its Subsidiaries (or in any similar capacity) with respect to the
Definitive Documents and the transactions contemplated thereby and that the
Company’s decision to enter into the Definitive Documents to which it is a party
has been based solely on the independent evaluation by the Company and its
Representatives.

 

Section 3.7     Application of Takeover Protections; Rights Agreement. Prior to
the First Closing, the Company and its board of directors will have taken all
necessary actions, if any, in order to comply with or obtain waivers in
connection with any control share acquisition, interested stockholder, business
combination, poison pill (including any distribution under a rights agreement),
stockholder rights plan or other similar anti-takeover provision under any of
the Group Companies Organizational Documents or the Laws of the jurisdiction of
its incorporation or otherwise which is or could become applicable to Purchaser
as a result of the transactions contemplated by the Definitive Documents,
including the Company’s issuance of the Securities and ownership by the
Purchaser of the Securities. The Company and the Board have taken all necessary
action, if any, in order to render inapplicable any stockholder rights plan or
similar arrangement relating to accumulations of beneficial ownership of shares
of Common Stock or a change in control of the Company or any of its
Subsidiaries.

 

 14 

 

 

Section 3.8     SEC Documents; Financial Statements.

 

(a)       The Company (including its predecessors) has timely filed all reports,
schedules, forms, proxy statements, statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements of the 1934
Act or the Securities Act (all of the foregoing filed since January 1, 2017 and
all exhibits and appendices included therein and financial statements, notes and
schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC Documents”). The Company has delivered or
has made available to Purchaser true, correct and complete copies of each of the
SEC Documents not available on the EDGAR system. As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the
1934 Act, the rules and regulations of the SEC promulgated thereunder and the
rules and regulations of the NYSE American, in each case, applicable to the SEC
Documents, and none of the SEC Documents contains 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. None of the Company’s
Subsidiaries is subject to the periodic reporting requirements of the 1934 Act.
There are no outstanding or unresolved comments in comment letters from the SEC
staff with respect to any of the SEC Documents. To the Company’s Knowledge, no
SEC Document is the subject of ongoing SEC review or outstanding SEC
investigation.

 

(b)       As of their respective dates, the audited and unaudited financial
statements of the Company and its predecessors included in the SEC Documents
(including, in each case, the notes thereto, the “Financial Statements”),
complied in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto as in effect
as of the time of filing. The Financial Statements have been prepared in
accordance with GAAP (except (i) as may be otherwise indicated in such Financial
Statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements), and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments which will not be
material, either individually or in the aggregate). The Company is not currently
contemplating to amend or restate any of the Financial Statements (including any
notes or any letter of the independent accountants of the Company with respect
thereto), nor, to the Company’s Knowledge, do there exist any facts or
circumstances which would require the Company to amend or restate any of the
Financial Statements, in each case, in order for any of the Financials
Statements to be in compliance with GAAP and the rules and regulations of the
SEC. The Company has not been informed by its independent accountants that they
recommend that the Company amend or restate any of the Financial Statements or
that there is any need for the Company to amend or restate any of the Financial
Statements.

 

 15 

 

 

(c)       The Company and each of its Subsidiaries maintains internal control
over financial reporting (as such term is defined in Rule 13a-15(f) under the
1934 Act) that are effective to provide reasonable assurances regarding the
reliability of the financial reporting and the preparation of financial
statements of the Company and its Subsidiaries for external purposes in
accordance with GAAP, and includes those policies and procedures that (i)
pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the Company,
(ii) transactions are recorded as necessary to permit preparation of financial
statements and (iii) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with
GAAP, and that receipts and expenditures of the Company are being made only in
accordance with authorizations of management and directors of the Company. The
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) under the 1934 Act) that are effective in ensuring that
information required to be disclosed by the Company in the reports that it files
or submits under the 1934 Act is recorded, processed, summarized and reported,
within the time periods specified in the rules and forms of the SEC, including
controls and procedures designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the 1934
Act is accumulated and communicated to the Company’s management, including its
principal executive officer or officers and its principal financial officer or
officers, as appropriate, to allow timely decisions regarding required
disclosure. Neither the Company nor any of its Subsidiaries has received any
notice or correspondence from any accountants, Governmental Entities or other
Person relating to (x) any potential material weakness or significant deficiency
in any part of the internal controls over financial reporting of the Company or
any of its Subsidiaries or (y) any fraud, whether or not material, that involves
(or involved) the management or other employees of the Company or its
Subsidiaries who have (or had) a significant role in the Company’s or its
Subsidiaries’ internal controls.

 

(d)       There is no transaction, arrangement, or other relationship between
the Company or any of its Subsidiaries and an unconsolidated or other off
balance sheet entity that is required to be disclosed by the Company in its 1934
Act filings and is not so disclosed or that otherwise would have a Material
Adverse Effect.

 

(e)       There are no material disagreements of any kind presently existing or,
to the Company’s Knowledge, reasonably anticipated to arise between the Company
and any of its Subsidiaries, on the one hand, and the accountants and lawyers
formerly or presently employed by the Company (including its predecessors) and
any of Subsidiaries thereof, on the other hand, and the Company and each of its
Subsidiaries is current with respect to any fees owed to its respective
accountants and lawyers which, the failure to pay could affect the Company’s
ability to perform any of its obligations under any of the Definitive Documents.

 

Section 3.9     Absence of Certain Changes. Since December 31, 2018 (the “10-K
Date”), there has been no material adverse change and no material adverse
development in the business, assets, liabilities, properties, operations
(including results thereof), condition (financial or otherwise) or prospects of
the Company or any of its Subsidiaries taken as a whole. Since the 10-K Date,
neither the Company nor any of its Subsidiaries has taken any action that if
taken after the date hereof would require the consent of the Purchaser pursuant
to Section 5.1(b). Neither the Company nor any of its Subsidiaries has taken any
steps to seek protection pursuant to any applicable Law relating to bankruptcy,
insolvency, reorganization, receivership, liquidation or winding up, nor does
the Company or any Subsidiary have any Knowledge or reason to believe that any
of their respective creditors intend to initiate involuntary bankruptcy
proceedings or any Knowledge of any fact which would reasonably lead a creditor
to do so. The Company and its Subsidiaries, individually and on a consolidated
basis, are not as of the date hereof, and, after giving effect to the
transactions contemplated by the Definitive Documents, will not be, Insolvent.
Neither the Company nor any of its Subsidiaries has engaged in any business or
in any transaction, and does not plan to engage in any business or in any
transaction, for which the Company’s or such Subsidiary’s remaining assets
constitute unreasonably small capital with which to conduct the business in
which it is engaged as such business is now conducted and is proposed to be
conducted.

 

 16 

 

 

Section 3.10     Conduct of Business; Regulatory Permits.

 

(a)       Neither the Company nor any of its Subsidiaries is in violation of any
term of or in default under the Group Companies Organizational Documents.
Neither the Company (including its predecessors) nor any Subsidiaries thereof
(i) is, or has been since January 1, 2017, in violation of any applicable Law or
Order applicable thereto or (ii) has received since January 1, 2017 a
notification or communication from any Governmental Entity asserting that it is
not or has not been in compliance with any applicable Law or Order. Without
limiting the generality of the foregoing, the Company is not in material
violation of any of the rules, regulations or requirements of the NYSE American,
and has no Knowledge of any facts or circumstances that could reasonably lead to
delisting or suspension of trading the Common Stock by the NYSE American. Since
January 1, 2017, (i) the Common Stock has been listed or designated for
quotation on the NYSE American, (ii) trading in the Common Stock has not been
suspended by the SEC or the NYSE American and (iii) the Company has received no
communication, written or oral, from the SEC or the NYSE American regarding the
suspension or delisting of the Common Stock from the NYSE American. The Company
and each of its Subsidiaries possess all licenses, certificates, authorizations
and permits issued by the appropriate Governmental Entity necessary to conduct
their respective businesses, and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such license, certificate, authorization or permit. There is no Contract or
Order binding upon the Company or any of its Subsidiaries or to which the
Company or any of its Subsidiaries is a party which, individually or together
with any other Contract or Order, has had or would reasonably be expected to
have the effect of prohibiting or materially impairing any business practice of
the Company or any of its Subsidiaries, any acquisition of property by the
Company or any of its Subsidiaries.

 

(b)       The Common Stock is registered pursuant to Section 12(b) or 12(g) 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 under the Exchange Act nor has the Company received any
notification that the SEC is contemplating terminating such registration. The
Company has not, since January 1, 2019, received notice from the NYSE American
to the effect that the Company is not in compliance with the listing or
maintenance requirements of the NYSE American. The Company is, and has no reason
to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements. The Common Stock
is currently eligible for electronic transfer through the Depository Trust
Company or another established clearing corporation and the Company is current
in payment of the fees to the Depository Trust Company (or such other
established clearing corporation) in connection with such electronic transfer.

 

 17 

 

 

Section 3.11     Certain Regulatory Matters.

 

(a)       None of the Company (including its predecessors), any Subsidiaries
thereof or any of their respective directors, officers, or other Representatives
(individually and collectively, a “Company Affiliate”) have violated the U.S.
Foreign Corrupt Practices Act (the “FCPA”) or any other applicable anti-bribery
or anti-corruption Law, nor has any Company Affiliate offered, paid, promised to
pay, or authorized the payment of, any money, or offered, given, promised to
give, or authorized the giving of, anything of value, to any officer, employee
or any other person acting in an official capacity for any Governmental Entity
or any political party or official thereof or to any candidate for political
office (individually and collectively, a “Government Official”) or to any Person
under circumstances in which such Company Affiliate knew or was aware of a high
probability that all or a portion of such money or thing of value would be
offered, given or promised, directly or indirectly, to any Government Official,
for the purpose of: (i) (A) influencing any act or decision of such Government
Official in his/her official capacity, (B) inducing such Government Official to
do or omit to do any act in violation of his/her lawful duty, (C) securing any
improper advantage, or (D) inducing such Government Official to influence or
affect any act or decision of any Governmental Entity; or (ii) assisting the
Company or its Subsidiaries in obtaining or retaining business for or with, or
directing business to, the Company or its Subsidiaries.

 

(b)       The Company has in place policies, procedures and controls that ensure
compliance with the (i) FCPA and (ii) other applicable anti-bribery or
anti-corruption laundering Laws in each foreign jurisdiction in which the
Company does business.

 

(c)       No Company Affiliates or any other business entity or enterprise with
which the Company or any Subsidiary is or has been Affiliated or associated,
has, directly or indirectly, made or authorized any payment, contribution or
gift of money, property, or services, whether or not in contravention of
applicable Law, (i) as a kickback, bribe gratuity, lobbying expenditure,
political contribution or contingent fee payment to any Person or (ii) to any
political organization, or to the holder of or any aspirant to any elective or
appointive public office except for personal political contributions not
involving the direct or indirect use of funds of the Company or any of its
Subsidiaries.

 

(d)       The Company and its Subsidiaries are in compliance with, and have not
previously violated, the USA Patriot Act of 2001 and all other applicable U.S.
and non-U.S. anti-money laundering Laws and regulations and Sanctions, including
the Laws, executive orders and sanctions programs administered by OFAC. No
Company Affiliates (x) is a Sanctioned Person or has any reason to believe that
it is acting on behalf of, or for the benefit of, any Sanctioned Person or (y)
has engaged in any dealings with or the benefit of any Sanctioned Person, or in
or involving any Sanctioned Country.

 

(e)       Since January 1, 2017, no allegations of sexual harassment have been
made to the Company (including its predecessors) or any Subsidiaries thereof
against any individual in his or her capacity as director or a managerial
employee, or to the Company’s Knowledge, any other employee, of the Company
(including its predecessors) or any Subsidiaries thereof.

 

 18 

 

 

Section 3.12     Sarbanes-Oxley Act. The Company and each of its Subsidiaries is
in material compliance with any and all applicable requirements of the
Sarbanes-Oxley Act of 2002, as amended, and any and all applicable rules and
regulations promulgated by the SEC thereunder.

 

Section 3.13     Transactions With Affiliates. There have not been any
transactions or Contracts or series of related transactions or Contracts
required to be disclosed under Item 404 of Regulation S-K under the 1934 Act.

 

Section 3.14     Capitalization

 

(a)       As of the date hereof, the authorized capital stock of the Company
consists of 217,000,000 shares of Common Stock, of which 9,921,895 are issued
and outstanding. No shares of Common Stock are held in the treasury of the
Company. Except for the foregoing Capital Stock, the Company has no other
Capital Stock authorized, reserved for issuance or outstanding.

 

(b)       All of the Company’s Capital Stock is duly authorized and validly
issued, fully paid and non-assessable (as such concepts are applicable). All the
outstanding shares of Capital Stock of each Subsidiary of the Company have been
validly issued and are fully paid and non-assessable (to the extent such
concepts are applicable) and are owned, directly or indirectly, by the Company
free and clear of all Liens.

 

(c)       (A) None of the Company’s or any of its Subsidiaries’ Capital Stock is
subject to preemptive rights or any other similar rights or restrictions or
Liens suffered or permitted by the Company or any Subsidiary; (B) 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, or exercisable or exchangeable for, any Capital Stock of the
Company or any of its Subsidiaries, or Contracts by which the Company or any of
its Subsidiaries is or may become bound to issue additional Capital Stock of the
Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any
Capital Stock of the Company or any of its Subsidiaries; (C) there are no
Contracts under which the Company or any of its Subsidiaries is obligated to
register the sale of any of their securities under the Securities Act; (D) there
are no outstanding securities or instruments of the Company or any of its
Subsidiaries which contain any redemption or similar provisions, and there are
no Contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem a security of the
Company or any of its Subsidiaries; (E) there are no securities or instruments
or Capital Stock containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities; (F) neither the Company nor any
Subsidiary has any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement; and (G) there are no stockholder
agreements, voting trusts or other agreements to which the Company or any of its
Subsidiaries is a party or by they are bound relating to the voting of any
shares, interests or capital stock of the Company or any of its Subsidiaries.

 

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(d)       True, correct and complete copies of the Company Organizational
Documents, and the terms of all convertible securities and the material rights
of the holders thereof in respect thereto, are set forth in, or filed as
exhibits to the SEC Documents.

 

Section 3.15     Indebtedness. Neither the Company nor any of its Subsidiaries
has any outstanding Indebtedness.

 

Section 3.16     Material Contracts. Neither the Company nor any of its
Subsidiaries is party to, and none of their respective properties or assets are
bound by, a Material Contract. Each Material Contract set forth in the SEC
Documents is in full force and effect, and is a legal, valid and binding
agreement of the Company or its Subsidiaries, as applicable, and, to the
Company’s Knowledge, the other parties thereto, subject only to the General
Enforceability Exceptions. There is no material default or breach by the Company
or any of its Subsidiaries, as applicable, with respect to any such Material
Contract or, to the Company’s Knowledge, any other party thereto, and no event
has occurred which, with notice or lapse of time or both, would constitute a
material breach or default or would permit termination, material modification or
acceleration thereof by any party to such Material Contract. Neither the Company
nor any of its Subsidiaries has waived any material rights under any such
Material Contract. Neither the Company nor any of its Subsidiaries has received
written notice of the intention of any third party under any such Material
Contract to cancel, terminate or materially modify the terms of any such
Material Contract, or accelerate the obligations of the Company or any of its
Subsidiaries, as applicable, thereunder. There are no current or pending
financing arrangements or assignments of proceeds with respect to any such
Material Contract.

 

Section 3.17     Litigation. Except as would not, individually or in the
aggregate, have a Material Adverse Effect, there is no, and since January 1,
2017 there has not been, any Action before or by the NYSE American, any court,
public board, other Governmental Entity, self-regulatory organization or body
pending or, to the Knowledge of the Company, threatened against or affecting the
Company (including its predecessors) or any of Subsidiaries thereof, the Capital
Stock thereof or any current or former officers, directors, managers or
employees thereof, whether of a civil or criminal nature or otherwise, in their
capacities as such. To the Knowledge of the Company, no current or former
director, officer, manager or employee of the Company (including its
predecessors) or any of its Subsidiaries has willfully violated 18 U.S.C. §1519
or engaged in spoliation in reasonable anticipation of litigation. Without
limitation of the foregoing, there has not been, and to the Knowledge of the
Company, there is not pending or contemplated, any investigation by the SEC
involving the Company (including its predecessors), any Subsidiaries thereof or
any current or former director, officer, manager of employee of the Company or
any of its Subsidiaries. The SEC has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
under the Securities Act or the 1934 Act. To the Company’s Knowledge, no fact
exists which might result in or form the basis for any such Action. Neither the
Company nor any of its Subsidiaries is subject to any Order.

 

Section 3.18     Insurance. The Company and each of its Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts, in each case, as is customary in the businesses in which
the Company and its Subsidiaries are engaged. All premiums due and payable in
respect of such insurance policies maintained by the Company and its
Subsidiaries have been paid in full. Neither the Company nor any of its
Subsidiaries have been refused any insurance coverage sought or applied for, and
neither the Company nor any such Subsidiary has any reason to believe that it
will be unable 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 on substantially the same terms as now in
effect. Excluding insurance policies that have expired and been replaced in the
ordinary course of business, no such insurance policy of the Company or any of
its Subsidiaries has been, or has been threatened to be, cancelled by the
applicable insurer since January 1, 2017, and neither the Company nor any of its
Subsidiaries has received any written notice of cancellation or non-renewal of
any such insurance policy.

 

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Section 3.19     Employee Relations. The Company and each of its Subsidiaries
maintains good relationships with their respective employees. No executive
officer (as defined in Rule 501(f) promulgated under the Securities Act) or
other key employee of the Company or any of its Subsidiaries has notified the
Company or the applicable Subsidiary that such executive officer or key employee
intends to terminate, or materially amend the terms of, its employment with the
Company or the applicable Subsidiary. To the Company’s Knowledge, no executive
officer or other key employee of the Company or any of its Subsidiaries is or
will be (with or without the passage of time, or both), in violation of any
material term of any employment Contract, confidentiality, disclosure or
proprietary information Contract, non-competition Contract or any other
Contract, or any restrictive covenant, and the continued employment of each such
executive officer or other key employee (as the case may be) does not subject
the Company or any of its Subsidiaries to any material liability with respect to
any of the foregoing matters. The Company and its Subsidiaries are in compliance
with all applicable federal, state, local and foreign Laws respecting labor,
employment and employment practices and benefits, terms and conditions of
employment and wages and hours, except where failure to be in compliance would
not, either individually or in the aggregate, result in a Material Adverse
Effect. There are no strikes or other labor disputes against the Company or any
of its Subsidiaries, and, to the Knowledge of the Company, there are no strikes
or other labor disputes threatened against the Company or any of its
Subsidiaries.

 

Section 3.20     Title.

 

(a)       The Company and each of its Subsidiaries holds good title to all real
property, leases in real property, facilities or other interests in real
property owned or held by the Company or any of its Subsidiaries, as applicable
(the “Real Property”). The Real Property is free and clear of all Liens and is
not subject to any rights of way, building use restrictions, exceptions,
variances, reservations, or limitations of any nature except for (a) Liens for
current Taxes not yet due for which adequate reserves (as determined in
accordance with the GAAP) have been established on the Financial Statements, (b)
zoning Laws and other land use restrictions that do not, and will not (with or
without the passage of time, or both) impair the present or anticipated use of
the Real Property subject thereto, and (c) mechanics’, carriers’, workmen’s,
warehousemen’s, repairmen’s or other statutory liens arising in the ordinary
course of business that would not reasonably be expected to have a Material
Adverse Effect. Each Real Property held under lease by the Company or any of its
Subsidiaries is held by the Company or its applicable Subsidiary under a valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the current and anticipated use made and proposed to be
made of such Real Property and buildings by the Company or any of its
Subsidiaries, as applicable.

 

 21 

 

 

(b)       Each of the Company and its Subsidiaries (as applicable) has good
title to, or a valid leasehold interest in, the tangible personal property,
equipment, improvements, fixtures, and other personal property and appurtenances
that are used by the Company or its Subsidiary in connection with the conduct of
its business (the “Fixtures and Equipment”). The Fixtures and Equipment are
structurally sound, are in good operating condition and repair, are adequate for
the uses to which they are being put, are not in need of maintenance or repairs,
except for routine maintenance and repairs in the ordinary course of business,
and are sufficient, in all material respects, for the conduct of the Company’s
and its Subsidiaries’ businesses as currently conducted. The Company and its
Subsidiaries collective own all of the Fixtures and Equipment free and clear of
all Liens except for (a) Liens for current Taxes not yet due for which adequate
reserves (as determined in accordance with GAAP) have been established on the
Financial Statements, (b) zoning Laws and other land use restrictions that do
not impair the present or anticipated use of the Fixtures and Equipment subject
thereto, (c) mechanics’, carriers’, workmen’s, warehousemen’s, repairmen’s or
other statutory liens arising in the ordinary course of business that would not
reasonably be expected to have a Material Adverse Effect and (d) minor liens
that have arisen in the ordinary course of business and that do not,
individually or in the aggregate, materially detract from the value of the
assets or properties subject thereto or materially impair the operations of the
Company or its any of Subsidiaries.

 

Section 3.21     Intellectual Property Rights.

 

(a)       The Company and its Subsidiaries collectively own or possess good and
marketable title to, or valid licenses to use, all trademarks, trade names,
service marks, service mark registrations, service names, original works of
authorship, patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and other intellectual property
rights and all applications and registrations therefor (“Intellectual Property
Rights”) necessary to conduct their respective businesses as now conducted and
presently proposed to be conducted in all material respects. None of the
Company’s material Intellectual Property Rights have expired or have been
terminated or abandoned, or are expected to expire, or to be terminated or
abandoned, in each case, within three (3) years from the date of the Agreement.
The Company does not have any Knowledge of any infringement, misappropriate or
violation by the Company or its Subsidiaries of Intellectual Property Rights of
others.

 

(b)       The Company is the exclusive owner of the entire right, title and
interest in and to AP-SA02, and is the exclusive owner of the entire right,
title and interest in and to, or has licensed or has the right to license all
Intellectual Property rights in, AP-PA02 (collectively, the “Products”), all
data associated therewith, and all Intellectual Property Rights covering or
relating to the Products, free and clear of all liens. To the Company’s
Knowledge, all patents owned or controlled by the Company that have been issued
or granted by the appropriate Patent Office are valid and enforceable.

 

(c)       There is no action which has been brought, or to the Knowledge of the
Company, being threatened, against the Company or any of its Subsidiaries
regarding its Intellectual Property Rights. To the Knowledge of the Company,
there are no facts or circumstances which might give rise to any actions
regarding the Company’s Intellectual Property Rights.

 

 22 

 

 

(d)       To the Company’s Knowledge, the manufacture, use, offer for sale, sale
and/or importation of any of the Products will not infringe and patent or other
Intellectual Property Rights of any third party. Neither Company nor any of its
Subsidiaries has received written or oral notice of any action, suit or
proceeding that claims, that the development, manufacture, use, marketing, sale,
offer for sale, importation or distribution of any Product would infringe on
Intellectual Property Rights of any third party.

 

(e)       The Company is in material compliance with all terms of and
obligations under its collaboration agreement with Merck and its grant
agreements with the National Institute of Health and the National Institute of
Allergy and Infectious Diseases, and has not breached and is not in default
under any provision of those agreements.

 

(f)       No event has occurred that would give Merck the right to unilaterally
terminate the collaboration agreement. The Company has not received any notice
of an intention by Merck to terminate the collaboration agreement, and the
Company has not agreed with Merck to terminate the collaboration agreement in
whole or in part.

 

(g)       The Company is in material compliance with all healthcare laws and
regulations, and with the codes of conduct published by the Pharmaceutical
Research and Manufacturers of America.

 

(h)       The Company and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their
Intellectual Property Rights. In the past five years, the Company and its
Subsidiaries have not (i) experienced any actual, alleged, or suspected data
breach or other security incident or (ii) been subject to or received any notice
of any audit, investigation, complaint, or other claim concerning the violation
of any data protection laws.

 

Section 3.22     Environmental Laws.

 

(a)       The Company (including its predecessors) and Subsidiaries thereof (A)
are, and since January 1, 2017 have been, in compliance with any and all
Environmental Laws (as defined below), and neither the Company nor any of its
Subsidiaries has received any written communication alleging that the Company is
in violation of, or has any liability under, any Environmental Law, (B) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (C) are
in compliance with all terms and conditions of any such permit, license or
approval where, in each of the foregoing clauses (A), (B) and (C), the failure
to so comply would not have, individually or in the aggregate, a Material
Adverse Effect.

 

(b)       No Hazardous Materials (i) have been disposed of or otherwise released
from any currently or formerly owned Real Property of the Company (including its
predecessors) or any Subsidiaries thereof in violation of any Environmental
Laws; and (ii) are, to the Company’s Knowledge, present on, over, beneath, in or
upon any Real Property or any portion thereof in quantities that would
constitute a violation of any Environmental Laws.

 

Section 3.23     Tax Status. The Company and each of its Subsidiaries (i) has
timely made or filed all Tax Returns required by any jurisdiction to which it is
subject, (ii) has timely paid all Taxes and other governmental assessments and
charges (including satisfying its withholding tax obligations) levied or imposed
on their properties, income or assets or otherwise due and payable, except those
being contested in good faith for which adequate reserves (as determined in
accordance with the GAAP) have been established on the Financial Statements and
(iii) has set aside on its books provision reasonably adequate for the payment
of all Taxes for periods subsequent to the periods to which such Tax Returns
apply. There are no unpaid Taxes claimed to be due and payable by the Taxing
authority of any jurisdiction, and, to Knowledge of the Company, no facts or
circumstances exist of that would be the basis for any such claim. The Company
is not operated in such a manner as to qualify as a passive foreign investment
company, as defined in Section 1297 of the Internal Revenue Code of 1986, as
amended (the “Code”).

 

 23 

 

 

Section 3.24     Investment Company Status. The Company is not, and upon
consummation of the sale of the Securities will not be, an “investment company,”
an affiliate of an “investment company,” a company controlled by an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for, an “investment company” as such terms are defined in the Investment Company
Act of 1940, as amended.

 

Section 3.25     U.S. Real Property Holding Corporation. The Company (including
its predecessors) and all Subsidiaries thereof is not, has not ever been, and,
for so long as any of the Securities are held by the Purchaser, shall not
become, a U.S. real property holding corporation within the meaning of Section
897 of the Code.

 

Section 3.26     Registration Eligibility. The Company is, and from and after
the First Closing will be, eligible to register the Registrable Securities (as
defined in the Registration Rights Agreement) for resale by the Purchaser using
Form S-1 promulgated under the 1933 Act.

 

Section 3.27     Transfer Taxes. On the Second Closing Date, all stock transfer
or other Taxes (other than income or similar Taxes) which are required to be
paid in connection with the issuance, sale and transfer of the Securities to be
sold to Purchaser pursuant to this Agreement will be, or will have been, fully
paid or provided for by the Company, and all Laws imposing such Taxes will be or
will have been complied with in all material respects.

 

Section 3.28     Shell Company Status. The Company is not an issuer identified
in, and subject to, Rule 144(i).

 

Section 3.29     ERISA Compliance.

 

(a)       Each Plan is in material compliance with the applicable provisions of
ERISA, the Code and other applicable federal or state Laws.

 

(b)       (i) No ERISA Event has occurred for which the Company, any of its
Subsidiaries or any of their respective ERISA Affiliates has any residual
liability; and (ii) no ERISA Event is expected to occur, except as would not
reasonably be expected, individually or in the aggregate, to result in a
material adverse effect on the Company and its Subsidiaries taken as a whole.

 

(c)       At no time during the past six (6) years has the Company (including
its predecessors) or any member of the “Controlled Group” thereof (defined as
any organization which is a member of a controlled group of organizations within
the meaning of Code Sections 414(b), (c), (m) or (o)) maintained, sponsored or
contributed to, or been obligated to contribute to (i) any retirement plan which
is subject to Title IV of ERISA or Section 412 of the Code or (ii) any
“multiemployer plan” as defined in Section 4001(a)(3) of ERISA

 

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Section 3.30     Management. Since January 1, 2017, no current or former officer
or director or, to the Knowledge of the Company, no current ten percent (10%) or
greater stockholder of the Company (including its predecessors) or any
Subsidiaries thereof has been the subject of:

 

(a)       a petition under applicable bankruptcy Laws or any other applicable
insolvency or moratorium Law or the appointment by a court of a receiver, fiscal
agent or similar officer for such Person, or any partnership in which such
person was a general partner, or any corporation or business association of
which such person was an executive officer;

 

(b)       a conviction in a criminal proceeding or a named subject of a pending
criminal proceeding (excluding traffic violations that do not relate to driving
while intoxicated or driving under the influence);

 

(c)       any Order that has not subsequently reversed, suspended or vacated,
permanently or temporarily enjoining any such person from, or otherwise
limiting, the following activities:

 

(i)       engaging in any particular type of business practice; or

 

(ii)       engaging in any activity in connection with the purchase or sale of
any security or commodity or in connection with any violation of securities Laws
or commodities Laws;

 

(d)       any Order that has not been subsequently reversed, suspended or
vacated, barring, suspending or otherwise limiting for more than sixty (60) days
the right of any such person to engage in any activity described in the
preceding sub paragraph, or to be associated with persons engaged in any such
activity;

 

(e)       a finding by a Governmental Entity in a civil Action or by the SEC or
other authority to have violated any securities Laws or decrees, and the
judgment in such civil Action or finding by the SEC or any other authority has
not been subsequently reversed, suspended or vacated; or

 

(f)       a finding by a Governmental Entity in a civil Action or by the
Commodity Futures Trading Commission to have violated any federal commodities
Laws, and the judgment in such civil Action or finding has not been subsequently
reversed, suspended or vacated.

 

Section 3.31     FDA. There is no pending, completed or, to the Company's
Knowledge, threatened, action (including any lawsuit, arbitration, or legal or
administrative or regulatory proceeding, charge, complaint, or investigation)
against the Company or any of its Subsidiaries, and none of the Company or any
of its Subsidiaries has received any notice, warning letter or other
communication from the U.S. Food and Drug Administration (“FDA”) or any other
governmental entity, which (i) contests the premarket clearance, licensure,
registration, or approval of, the uses of, the distribution of, the
manufacturing or packaging of, the testing of, the sale of, or the labeling and
promotion of any Pharmaceutical Product, (ii) withdraws its approval of,
requests the recall, suspension, or seizure of, or withdraws or orders the
withdrawal of advertising or sales promotional materials relating to, any
Pharmaceutical Product, (iii) imposes a clinical hold on any clinical
investigation by the Company or any of its Subsidiaries, (iv) enjoins production
at any facility of the Company or any of its Subsidiaries, (v) enters or
proposes to enter into a consent decree of permanent injunction with the Company
or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries. The properties,
business and operations of the Company have been and are being conducted in all
material respects in accordance with all applicable laws, rules and regulations
of the FDA. The Company has not been informed by the FDA that the FDA will
prohibit the marketing, sale, license or use in the United States of any product
proposed to be developed, produced or marketed by the Company nor has the FDA
expressed any concern as to approving or clearing for marketing any product
being developed or proposed to be developed by the Company.

 

 25 

 

 

Section 3.32     Stock Option Plans. Each stock option granted by the Company
was granted (i) in accordance with the terms of the applicable stock option plan
of the Company and (ii) with an exercise price at least equal to the fair market
value of the Common Stock on the date such stock option would be considered
granted under GAAP and applicable Law. No stock option granted under the
Company’s stock option plan has been backdated. The Company has not granted, and
there is no and has been any policy or practice of the Company to knowingly
grant, stock options prior to, or otherwise knowingly coordinate the grant of
stock options with, the release or other public announcement of material
information regarding the Company or its Subsidiaries or their financial results
or prospects.

 

Section 3.33     No Disqualification Events. With respect to Securities to be
offered and sold hereunder in reliance on Rule 506(b) under the Securities Act
(“Regulation D Securities”), none of the Company, any of its predecessors, any
Affiliated issuer, any director, executive officer, other officer of the Company
participating in the offering of the Securities contemplated by this Agreement,
or to the Company’s Knowledge, any beneficial owner of 20% or more of the
Company’s outstanding voting equity securities, calculated on the basis of
voting power, nor any promoter (as that term is defined in Rule 405 under the
Securities Act) connected with the Company in any capacity at the time of sale
(each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is
subject to any of the “Bad Actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The
Company has exercised reasonable care to determine whether any Issuer Covered
Person is subject to a Disqualification Event. The Company has complied, to the
extent applicable, with its disclosure obligations under Rule 506(e), and has
furnished to Purchaser a copy of any disclosures provided thereunder. The
Company is not aware of any Person that has been or will be paid (directly or
indirectly) remuneration for solicitation of Purchaser or other potential
purchasers in connection with the sale of the Securities contemplated by this
Agreement.

 

Section 3.34     No Integrated Offering. Assuming the accuracy of the
Purchasers’ representations and warranties set forth in this Agreement, 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 Securities to be integrated with prior offerings by the
Company for purposes of (i) the Securities Act which would require the
registration of any such securities under the Securities Act, or (ii) any
applicable stockholder approval provisions of the NYSE American.

 

 26 

 

 

Section 3.35     Regulation M Compliance. The Company has not, and to its
Knowledge no one 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 Securities, (ii) sold, bid for, purchased, or paid any compensation
for soliciting purchases of, any of the Securities, or (iii) paid or agreed to
pay to any Person any compensation for soliciting another to purchase any other
securities of the Company.

 

Section 3.36     Disclosure. The Company understands and confirms that Purchaser
will and is entitled to rely on the foregoing representations in effecting
transactions in securities of the Company. All disclosure provided to Purchaser
regarding the Company and its Subsidiaries, their businesses and the
transactions contemplated by the Definitive Documents furnished by or on behalf
of the Company or any of its Subsidiaries, 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 the light of the circumstances under which they
were made, not misleading. No event or circumstance has occurred and no
information exists with respect to the Company or any of its Subsidiaries or its
or their business, properties, liabilities, prospects, operations (including
results thereof) or conditions (financial or otherwise), which, under applicable
Law, requires public disclosure at or before the date hereof or announcement by
the Company but which has not been so publicly disclosed. All financial
projections and forecasts that have been prepared by or on behalf of the Company
or any of its Subsidiaries and made available to Purchaser have been prepared in
good faith based upon reasonable assumptions and represented, at the time each
such financial projection or forecast was delivered to Purchaser, the Company’s
best estimate of future financial performance (it being recognized that such
financial projections or forecasts are not to be viewed as facts and that the
actual results during the period or periods covered by any such financial
projections or forecasts may differ from the projected or forecasted results).

 

Section 3.37     Proxy Statement. None of the information in the Proxy Statement
to be sent to the stockholders of the Company in connection with the Company
Stockholders’ Meeting will, on the date it is filed, on the date it is first
mailed to the stockholders of the Company and at the time of the Company
Stockholders’ Meeting, contain any untrue statement of a material fact or omit
to state any 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 are made, not misleading. The Proxy Statement will, at the time of the
Company Stockholders’ Meeting, comply as to form in all material respects with
the requirements of the Exchange Act and the rules and regulations promulgated
thereunder.

 

Section 3.38     Disclaimer of Other Representations and Warranties. Except as
expressly set forth in this Article III or in any other Definitive Document, the
Company makes no representation or warranty, express or implied, at law or in
equity, including with respect to it or any of its Subsidiaries or any of their
respective assets, liabilities or operations, and any such other representations
and warranties are hereby expressly disclaimed.

 

 27 

 

 

Article IV

 

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

Purchaser hereby represents and warrants as of the date hereof, as of the First
Closing, and as of the Second Closing, as follows:

 

Section 4.1     Organization. Purchaser is a corporation duly incorporated,
validly existing and in good standing under the Laws of the State of Delaware.

 

Section 4.2     Organizational Power and Authority. Purchaser has the requisite
corporate power and authority to enter into, execute and deliver this Agreement
and to perform its obligations hereunder and has taken or will take all
necessary corporate action required for the due authorization, execution,
delivery and performance by it of this Agreement and the transactions
contemplated hereby.

 

Section 4.3     Execution and Delivery. This Agreement has been validly executed
and delivered by Purchaser, and, assuming due and valid execution and delivery
hereof by the Company, will constitute valid and legally binding obligations of
Purchaser, enforceable against Purchaser in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar Laws limiting creditors’ rights generally or by equitable remedies
(regardless of whether enforceability is considered in a proceeding at law or in
equity).

 

Section 4.4     No Conflict. The execution and delivery by Purchaser of this
Agreement and the consummation of the transactions contemplated hereby (a) will
not conflict with, or result in a breach, modification, termination or violation
of, any of the terms or provisions of, or constitute a default under (with or
without notice or lapse of time or both), or result in the acceleration of, or
the creation of any Lien under, any Contract to which Purchaser is party or is
bound or to which any of the property or assets of Purchaser are subject,
(b) will not result in any violation of the provisions of the certificate of
incorporation or bylaws of Purchaser, and (c) will not result in any material
violation of any Law or Order applicable to Purchaser or any of its properties,
except in each of the cases described in clauses (a) through (c), for any
conflict, breach, modification, termination, violation, default, acceleration or
Lien which would not reasonably be expected, individually or in the aggregate,
to prohibit or materially and adversely impact Purchaser’s performance of its
obligations under this Agreement.

 

Section 4.5     Consents and Approvals. No consent, approval, authorization,
Order, registration or qualification of or with any Governmental Entity having
jurisdiction over Purchaser or any of its properties is required for the
execution and delivery by Purchaser of this Agreement, the compliance by
Purchaser with the provisions hereof and the consummation of the transactions
contemplated hereby, except any consent, approval, authorization, Order,
registration or qualification which, if not made or obtained, would not
reasonably be expected, individually or in the aggregate, to prohibit or
materially and adversely impact Purchaser’s performance of its obligations under
this Agreement.

 

Section 4.6     No Registration. Purchaser understands that (a) the Purchased
Common Stock and Purchased Warrants (including any shares of Common Stock
issuable upon exercise thereof) have not been registered under the Securities
Act by reason of a specific exemption or exclusion from the registration
provisions of the Securities Act, the availability of which depends on, among
other things, the bona fide nature of the investment intent and the accuracy of
Purchaser’s representations as expressed herein or otherwise made pursuant
hereto and (b) the foregoing securities cannot be sold unless subsequently
registered under the Securities Act or an exemption or exclusion from
registration is available.

 

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Section 4.7     Purchasing Intent. Purchaser is acquiring the Purchased Common
Stock and Purchased Warrants (including any shares of Common Stock issuable upon
exercise thereof) for its own account or accounts or funds over which it or its
Affiliates hold voting or investment discretion, not otherwise as a nominee or
agent, and not otherwise with the view to, or for resale in connection with, any
distribution thereof not in compliance with applicable securities Laws, and
Purchaser has no present intention of selling, granting any other participation
in, or otherwise distributing the same, except in compliance with applicable
securities Laws.

 

Section 4.8     Sophistication; Investigation. Purchaser has such knowledge and
experience in financial and business matters such that it is capable of
evaluating the merits and risks of its investment in the Purchased Common Stock
and Purchased Warrants (including any shares of Common Stock issuable upon
exercise thereof). Purchaser is an “accredited investor” within the meaning of
Rule 501(a) of the Securities Act and an “institutional account” within the
meaning of Rule 4512 of the Financial Industry Regulatory Authority or a
“qualified institutional buyer” within the meaning of Rule 144A of the
Securities Act. Purchaser understands and is able to bear any economic risks
associated with such investment (including the necessity of holding such shares
for an indefinite period of time). Except for the representations and warranties
expressly set forth in this Agreement, Purchaser has independently evaluated the
merits and risks of its decision to enter into this Agreement and consummate the
transactions contemplated hereby.

 

Section 4.9     Sufficient Funds. Purchaser has, or at the applicable Closing
will have, sufficient assets and the financial capacity to perform all of its
obligations under this Agreement.

 

Section 4.10     Bad Actor. Neither the Purchaser nor any person or entity with
whom the Purchaser will share beneficial ownership of the Purchased Common Stock
is subject to any of the “Bad Actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act.

 

Article V

 

ADDITIONAL COVENANTS

 

Section 5.1     Covenants of the Company. During the period from the date hereof
until the earlier of the Second Closing and the termination of this Agreement in
accordance with Article VIII, the Company shall, and shall cause each of its
Subsidiaries to, comply with the following covenants:

 

(a)       Affirmative Covenants: Except (x) as otherwise expressly required by
this Agreement, (y) as required by applicable Law or (z) as consented to in
writing by the Purchaser, during the period from the date hereof until the
earliest of (i) the Second Closing, (ii) the Second Closing Abandonment and
(iii) the termination of this Agreement in accordance with Article VIII, the
Company shall, and shall cause each of its direct and indirect Subsidiaries to:

 

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(i)       preserve, in all material respects, its business operations,
organization and goodwill and its relationships with suppliers, customers,
lenders and others having business dealings with the Company and its
Subsidiaries;

 

(ii)       to the extent any legal or structural impediment arises that would
prevent, hinder, or delay the consummation of the transactions contemplated by
this Agreement, support and take all steps reasonably necessary and desirable to
address and resolve any such impediment;

 

(iii)      use good faith and commercially reasonable efforts to obtain all
required Governmental Entity and third-party approvals for the consummation of
the transactions contemplated by this Agreement;

 

(iv)       inform counsel to the Purchaser as soon as reasonably practicable
after becoming aware of: (A) any Material Adverse Effect, (B) any notice of any
commencement of any involuntary insolvency proceedings, legal suit for payment
of debt or securement of security from or by any person in respect of the
Company or any of its Subsidiaries, (C) a breach of this Agreement, and (D) any
representation or statement made or deemed to be made by the Company or any of
its Subsidiaries under this Agreement, which is or proves to have been
materially incorrect or misleading in any respect when made or deemed to be
made;

 

(v)       maintain the good standing of the Company and any Subsidiaries of the
Company under the Laws of the state or other jurisdiction in which they are
incorporated or organized;

 

(vi)       make all necessary registrations, declarations and filings with, and
notices to, Governmental Entities (including under the Securities Exchange Act
of 1934 (the “Exchange Act”)) (a) in the ordinary course of business and
(b) with respect to the transactions contemplated by this Agreement;

 

(vii)     operate their business in the ordinary course of business; and

 

(viii)     provide, and direct its Representatives to provide, to the Purchaser
and its Representatives (A) reasonable access to the Company and its
Subsidiaries’ books and records during normal business hours on reasonable
advance notice to the Company and its Subsidiaries’ Representatives,
(B) reasonable access to the Representatives of the Company and its Subsidiaries
on reasonable advance notice to such persons, and (C) such other information as
reasonably requested by the Purchaser and its Representatives.

 

(b)       Negative Covenants: Except (x) as otherwise expressly required by this
Agreement, (y) as required by applicable Law or (z) as consented to by the
Purchaser in writing, during the period from the date hereof until the earliest
of (i) the Second Closing, (ii) the Second Closing Abandonment and (iii)the
termination of this Agreement in accordance with Article VIII, the Company shall
not, and shall cause each of its direct and indirect Subsidiaries not to:

 

 30 

 

 

(i)       transfer any material property, asset or right of the Company or its
Subsidiaries or any material property, asset or right used in the business of
the Company and its Subsidiaries to any person or entity outside of the ordinary
course of business;

 

(ii)       engage in any material disposition, acquisition, leasing, investment
or other similar transaction (whether by merger, consolidation or otherwise)
outside of the ordinary course of business;

 

(iii)       incur, create, assume, guarantee or otherwise become liable for any
Indebtedness, other than trade indebtedness or contingent liabilities under
surety bonds, in each case, in the ordinary course of business;

 

(iv)       amend the Company’s or any of its Subsidiaries’ organizational
documents (whether by merger, consolidation or otherwise);

 

(v)       split, combine, reclassify, redeem, repurchase, acquire, issue or
deliver or amend the terms of any Capital Stock of the Company or any of its
Subsidiaries (whether by merger, consolidation or otherwise), other than the
transactions expressly contemplated by this Agreement;

 

(vi)       enter into any transactions with a Related Party;

 

(vii)       create or incur any Lien on any capital stock, assets or properties
of the Company or any of its Subsidiaries, other than (a) Liens related to
capital leases in place as of the date hereof or entered into after the date
hereof in the ordinary course of business or (b) immaterial Liens created or
incurred in the ordinary course of business;

 

(viii)      adopt, establish, enter into, amend, terminate or increase the
benefits under any of the Company’s or its Subsidiaries’ benefit plans, except
for approval and adoption of annual compensation programs in the ordinary course
of business;

 

(ix)       declare, set aside, make or pay any dividend or other distribution
(whether in stock, cash, other property or any combination thereof) with respect
to any Capital Stock of the Company and its Subsidiaries;

 

(x)       amend or terminate any Material Contracts of the Company or its
Subsidiaries, other than renewals, amendments, change orders and expirations of
such Material Contracts in the ordinary course of business;

 

(xi)       waive, release, assign, settle or compromise any material action,
suit, claim, cause of action, investigation, complaint, legal proceeding,
administrative enforcement proceeding, arbitration proceeding or other
proceeding or adjudicative matter by or before any Governmental Entity (other
than settlements of force majeure claims or actions in the ordinary course of
business);

 

 31 

 

 

(xii)      settle or compromise any material Tax Contest, consent to any
extension or waiver of any limitation period with respect to any material claim
or assessment for Taxes, make, change or revoke any material Tax election or
materially change any of the Company’s or its Subsidiaries’ accounting
principles and methodologies (other than as required by GAAP); or

 

(xiii)      agree, commit or offer to do any of the foregoing.

 

Section 5.2     Pre-Closing Exclusivity. From the date hereof until the earliest
of (i) the Second Closing, (ii) the Second Closing Abandonment and (iii) the
termination of this Agreement in accordance with Article VIII (provided, that,
with respect to any termination of this Agreement or the Second Closing
Abandonment, the primary cause of which is the material breach by the Company of
any of its covenants or other agreements contained in this Agreement, the
obligations under this Section 5.2 shall extend until 90 days following the
earlier of termination of this Agreement or the Second Closing Abandonment), (i)
the Company shall not, and shall instruct its Affiliates and Representatives not
to, directly or indirectly, initiate, solicit, facilitate, encourage, discuss,
negotiate, endorse, engage in, enter into or accept any discussions,
negotiations, proposals, inquiries, offers or agreements with any Person (other
than the Purchaser and its Representatives pursuant to this Agreement) relating
to the acquisition of the Company or its Subsidiaries, or greater than 20% of
their businesses (whether by merger, stock sale, asset sale, tender offer,
exchange offer or otherwise), or relating to the issuance of equity (other than
Common Stock as incentive compensation), (collectively, the matters described in
this Section 5.2(i), an “Acquisition Proposal” (ii) the Company shall, and shall
instruct its Affiliates and Representatives to, immediately cease and cause to
be terminated all existing discussions or negotiations with any third party
(other than the Purchaser and its Representatives relating to this Agreement)
conducted by or on behalf of the Company or any of its Subsidiaries on or prior
to the date hereof in connection with any other transaction relating to an
Acquisition Proposal and (iii) the Company shall promptly inform the Purchaser
in the event that the Company or any of its Affiliates or Representatives
receives any inquiry, proposal or offer that could reasonably be expected to
lead to an Acquisition Proposal.

 

Section 5.3     Post-Closing Books and Records. From and after the First
Closing, for so long as Purchaser has the right to designate a director to the
Board pursuant to the Investor Rights Agreement, the Company shall, and shall
cause its Subsidiaries to, afford to Purchaser and its Representatives
reasonable access, during normal business hours, in such manner as to not
interfere with the normal operation of the Company and its Subsidiaries, to
their respective properties, books, contracts, commitments, Tax Returns, records
and appropriate officers and employees of the Company and its Subsidiaries, and
shall furnish Purchaser and its Representatives with financial and operating
data and other information concerning the affairs of the Company and its
Subsidiaries, in each case, as Purchaser and its Representatives may reasonably
request; provided that such access shall only be upon reasonable advance notice.

 

 32 

 

 

Section 5.4     Stockholder Approval.

 

(a)       The Company shall use reasonable best efforts to cause the Voting
Agreements to be duly executed and delivered to the Purchaser as promptly as
practicable following the date hereof.

 

(b)       As promptly as practicable after the date hereof, the Company shall
take all action necessary under applicable Law to call, give notice of, convene
and hold a meeting of the stockholders of the Company for the purpose of
obtaining the Stockholder Approval (the “Company Stockholders’ Meeting”). The
Company will convene and hold the Company Stockholders’ Meeting no later than
the thirtieth (30th) day following the mailing of the Proxy Statement to the
Company’s stockholders. The Company shall take reasonable measures to ensure
that all proxies solicited in connection with the Company Stockholders’ Meeting
are solicited in compliance with all applicable Law. Notwithstanding anything to
the contrary contained herein, if on the date of the Company Stockholders’
Meeting, or a date preceding the date on which the Company Stockholders’ Meeting
is scheduled, the Company reasonably believes that (i) it will not receive
proxies sufficient to obtain the Company Stockholder Vote, whether or not a
quorum would be present or (ii) it will not have sufficient shares of Common
Stock represented (whether in person or by proxy) to constitute a quorum
necessary to conduct the business of the Company Stockholders’ Meeting, the
Company may postpone or adjourn, or make one or more successive postponements or
adjournments of, the Company Stockholders’ Meeting as long as the date of the
Company Stockholders’ Meeting is not postponed or adjourned more than an
aggregate of thirty (30) calendar days in connection with any postponements or
adjournments.

 

(c)       As promptly as reasonably practicable after the date hereof, the
Company shall prepare and file with the SEC a preliminary proxy statement (as
amended and supplemented, the “Proxy Statement”), relating to the Company
Stockholders’ Meeting. The Company shall include in the Proxy Statement the
recommendation of the Board that the stockholders of the Company vote in favor
of (i) the adoption and approval of this Agreement and the transactions
contemplated herein and in the other Definitive Documents and (ii) the Charter
Amendment (to the extent applicable). The Company shall use its reasonable best
efforts to obtain the Stockholder Approval, including using reasonable best
efforts to solicit proxies from the Company’s stockholders. The Company shall
cause the Proxy Statement to be distributed to the Company’s stockholders as
promptly as practicable after the date the SEC confirms it has no further
comments to the Proxy Statement. The Company will cause the Proxy Statement to
comply as to form in all material respects with the applicable requirements of
the Exchange Act and the rules of the SEC and NYSE American. The Company shall
not file the Proxy Statement without providing Purchaser a reasonable
opportunity to review and comment thereon (which comments shall be reasonably
considered by the Company). The Company shall resolve all SEC comments with
respect to the Proxy Statement as promptly as practicable after receipt thereof
and cause the Proxy Statement in definitive form to be cleared by the SEC and
mailed (if required by applicable Law) to the Company’s stockholders as promptly
as reasonably practicable following filing with the SEC. The Company, prior to
responding to SEC comments with respect to the Proxy Statement, will first
provide Purchaser and its Representatives a reasonable opportunity to review and
comment thereon, and the Company will give due consideration to all reasonable
additions, deletions or changes suggested thereto by Purchaser or its
Representatives.

 

 33 

 

 

(d)       Nothing contained in this Agreement shall prohibit the Company or the
Board from (i) complying with Rules 14d-9 and 14e-2(a) promulgated under the
Exchange Act, or (ii) issuing a “stop, look and listen” communication or similar
communication of the type contemplated by Section 14d-9(f) under the Exchange
Act or (iii) otherwise making any disclosure to the Company stockholders;
provided however, that in the case of the foregoing clause (iii) the Board
determines in good faith, after consultation with its outside legal counsel,
that failure to make such disclosure would be inconsistent with its fiduciary
duties under applicable Law.

 

Section 5.5     A&R Registration Rights Agreement. Simultaneously with the First
Closing, the Company shall cause the Registration Rights Agreement to be duly
amended and restated (the “A&R Registration Rights Agreement”), to name the
Purchaser as a “Holder” thereunder, to include the Purchased Common Stock and
the Warrant Shares as Registrable Securities and to provide for the  filing and
continuous effectiveness of a Shelf Registration Statement (as defined in the
Registration Rights Agreement)  covering  the Purchased Common Stock and the
Purchased Warrants consistent with the terms set forth in Section 2(a) of the
Registration Rights Agreement, with such filing to be made no later than 30 days
following the First Closing.

 

Section 5.6     Integration. The Company shall not sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities or that would be
integrated with the offer or sale of the Securities for purposes of the rules
and regulations of the NYSE American such that it would require stockholder
approval prior to the closing of such other transaction unless stockholder
approval is obtained before the closing of such subsequent transaction.

 

Section 5.7     Required Minimum.

 

(a)       The Company shall maintain a reserve of the Required Minimum from its
duly authorized shares of Common Stock for issuance pursuant to this Agreement
in such amount as may then be required to fulfill its obligations in full under
this Agreement, without regard to any conversion or exercise limits therein.

 

(b)       If, on any date, the number of authorized but unissued (and otherwise
unreserved) shares of Common Stock is less than 130% of (i) the Required Minimum
on such date, minus (ii) the number of shares of Common Stock previously issued
pursuant to this Agreement, then the Board of Directors shall use reasonable
best efforts to amend the Certificate of Incorporation to increase the number of
authorized but unissued shares of Common Stock to at least the Required Minimum
at such time (minus the number of shares of Common Stock previously issued
pursuant to the Transaction Documents), as soon as reasonably practicable and in
any event not later than the 30th day after such date, provided that the Company
will not be required at any time to authorize a number of shares of Common Stock
greater than the maximum remaining number of shares of Common Stock that could
possibly be issued after such time pursuant to this Agreement.

 

 34 

 

 

(c)       The Company shall (i) in the time and manner required by the NYSE
American, prepare and file with the NYSE American a Supplemental Listing
Application covering a number of shares of Common Stock at least equal to the
Required Minimum on the date of such application, (ii) take all steps necessary
to cause such shares of Common Stock to be approved for listing or quotation on
NYSE American as soon as possible thereafter, (iii) provide to the Purchaser
evidence of such listing or quotation and (iv) maintain the listing or quotation
of such Common Stock on any date at least equal to the Required Minimum on such
date on NYSE American. The Company agrees to maintain the eligibility of the
Common Stock for electronic transfer through the Depository Trust Company or
another established clearing corporation, including, without limitation, by
timely payment of fees to the Depository Trust Company or such other established
clearing corporation in connection with such electronic transfer.

 

Section 5.8     Acknowledgment of Dilution. The Company acknowledges that the
issuance of the Securities may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligations under the Definitive
Documents, including, without limitation, its obligation to issue the Securities
pursuant to this Agreement, are unconditional and absolute and not subject to
any right of set off, counterclaim, delay or reduction, regardless of the effect
of any such dilution or any claim the Company may have against Purchaser and
regardless of the dilutive effect that such issuance may have on the ownership
of the other stockholders of the Company.

 

Section 5.9     Expense Reimbursement. Upon (i) the termination of this
Agreement under circumstance in which the Termination Fee is payable in
accordance with Section 8.3 (and subject to the limitations set forth in Section
8.3) or (ii) either or both of the First Closing or the Second Closing, the
Company shall promptly, upon written request of the Purchaser, reimburse the
Purchaser for all reasonable and documented fees and expenses of the Purchaser
and its Affiliates and Representatives (including the fees and expenses of
counsel) incurred prior to, on or after the date hereof in connection with the
examination, review, due diligence investigation, documentation, negotiation,
closing and funding of the transactions contemplated by this Agreement.
Notwithstanding anything to the contrary herein, this Section 5.9 shall survive
the termination of this Agreement.

 

Section 5.10     Blue Sky Filings. The Company shall take such action as the
Company shall reasonably determine is necessary in order to obtain an exemption
for, or to qualify the Securities for, sale to the Purchaser at the First
Closing or Second Closing, as applicable, under applicable securities or “Blue
Sky” laws of the states of the United States, and shall provide evidence of such
actions promptly upon request of any Purchaser.

 

 

Article VI

 

CONDITIONS TO THE OBLIGATIONS OF THE PARTIES

 

Section 6.1     Conditions to the Obligations of the Purchaser at the First
Closing. The obligations of Purchaser to consummate the First Closing shall be
subject to (unless waived in writing by the Purchaser ) the satisfaction of the
following conditions prior to or at the First Closing:

 

 35 

 

 

(a)       Material Adverse Effect. Since the date of this Agreement, there shall
not have occurred a Material Adverse Effect.

 

(b)       Governmental Approvals. All authorizations, approvals, consents or
clearances under applicable Law required in connection with the transactions
contemplated by this Agreement shall have been obtained or filed.

 

(c)       No Legal Impediment to Issuance. No applicable Law will have been
enacted or made effective and no Order will have been issued, promulgated,
enforced or made that serves to restrain, enjoin, make illegal or prohibit the
timely consummation of the transactions contemplated by this Agreement, and no
action by a Governmental Entity will have been commenced and be continuing that
seeks to restrain, enjoin, make illegal or prohibit the timely consummation of
the transactions contemplated by this Agreement.

 

(d)       Accuracy of the Representations and Warranties. (i) The Fundamental
Representations shall be true and correct in all respects as of the date hereof
and as of the First Closing as though made at and as of the First Closing (other
than such representations and warranties as are made as of an earlier date,
which shall be so true and correct as of such earlier date) and (ii) the other
representations and warranties of the Company (A) that are qualified by
“materiality”, “Material Adverse Effect” or similar qualifier shall be true and
correct in all respects as of the date hereof and as of the First Closing as
though made at and as of the First Closing (other than such representations and
warranties as are made as of an earlier date, which shall be so true and correct
as of such earlier date) and (B) that are not qualified by “materiality”,
“Material Adverse Effect” or similar qualifier shall be true and correct in all
material respects as of the date hereof and as of the First Closing as though
made at and as of the First Closing (other than such representations and
warranties as are made as of an earlier date, which shall be so true and correct
as of such earlier date).

 

(e)       Compliance with Covenants. The Company shall have performed and
complied, in all material respects, with all of its covenants and agreements
contained in this Agreement that contemplate, by their terms, performance or
compliance prior to the First Closing.

 

(f)       Delivery of the Closing Certificate. The Company shall have delivered
to Purchaser a certificate duly executed by the Chief Executive Officer of the
Company certifying that the conditions set forth in clauses (a), (d) and (e) of
this Section 6.1 have been fully satisfied.

 

(g)       NYSE American Review. (i) The Company shall have timely provided
notice to NYSE American regarding the transactions contemplated by this
Agreement, (ii) NYSE American shall have satisfactorily completed its review of
the issuance of the Purchased Common Stock and the Purchased Warrants on the
terms and conditions contemplated herein and (iii) the Company shall have
received approval from NYSE American of an Additional Listing Application
covering the Purchased Common Stock and the Common Stock underlying the
Purchased Warrants.

 

(h)       Suspension. Since the date hereof, trading in the Common Stock shall
not have been suspended.

 

 36 

 

 

(i)       Voting Agreement. Voting Agreements shall have been executed and
delivered to the Purchaser by stockholders of the Company holding at least a
majority of the outstanding shares of Common Stock as of the date hereof (the
“Voting Agreement Condition”).

 

(j)       Other Deliverables and Actions. The Company shall have delivered or
caused to be delivered and shall have taken each of the actions contemplated by
Section 2.2(b).

 

Section 6.2     Conditions to the Obligations of the Company at the First
Closing. The obligations of the Company to consummate the First Closing shall be
subject to (unless waived in writing by the Company) the satisfaction of each of
the following conditions prior to or at the First Closing:

 

(a)       Governmental Approvals. All authorizations, approvals, consents or
clearances under applicable Law required in connection with the transactions
contemplated by this Agreement shall have been obtained or filed.

 

(b)       No Legal Impediment to Issuance. No applicable Law will have been
enacted or made effective and no Order will have been issued, promulgated,
enforced or made that serves to restrain, enjoin, make illegal or prohibit the
consummation of the transactions contemplated by this Agreement, and no action
by a Governmental Entity will have been commenced and be continuing that seeks
to restrain, enjoin, make illegal or prohibit the consummation of the
transactions contemplated by this Agreement.

 

(c)       Accuracy of the Representations and Warranties. The representations
and warranties of the Purchaser shall be true and correct in all respects as of
the date hereof and as of the First Closing as though made at and as of the
First Closing (other than such representations and warranties as are made as of
an earlier date, which shall be so true and correct as of such earlier date)
except, in each case, as would not reasonably be expected, individually or in
the aggregate, to prohibit or materially and adversely impact Purchaser’s
performance of its obligations under this Agreement.

 

Section 6.3     Conditions to the Obligations of the Purchaser at the Second
Closing. The obligations of Purchaser to consummate the Second Closing shall be
subject to (unless waived in writing by the Purchaser) the satisfaction of the
following conditions prior to or at the Second Closing:

 

(a)       Material Adverse Effect. Since the date of this Agreement, there shall
not have occurred a Material Adverse Effect.

 

(b)       Governmental Approvals. All authorizations, approvals, consents or
clearances under applicable Law required in connection with the transactions
contemplated by this Agreement shall have been obtained or filed.

 

(c)       No Legal Impediment to Issuance. No applicable Law will have been
enacted or made effective and no Order will have been issued, promulgated,
enforced or made that serves to restrain, enjoin, make illegal or prohibit the
timely consummation of the transactions contemplated by this Agreement, and no
action by a Governmental Entity will have been commenced and be continuing that
seeks to restrain, enjoin, make illegal or prohibit the timely consummation of
the transactions contemplated by this Agreement.

 

 37 

 

 

(d)       Accuracy of the Representations and Warranties. (i) The Fundamental
Representations shall be true and correct in all respects as of the date hereof
and as of the Second Closing as though made at and as of the Second Closing
(other than such representations and warranties as are made as of an earlier
date, which shall be so true and correct as of such earlier date) and (ii) the
other representations and warranties of the Company (A) that are qualified by
“materiality”, “Material Adverse Effect” or similar qualifier shall be true and
correct in all respects as of the date hereof and as of the Second Closing as
though made at and as of the Second Closing (other than such representations and
warranties as are made as of an earlier date, which shall be so true and correct
as of such earlier date) and (B) that are not qualified by “materiality”,
“Material Adverse Effect” or similar qualifier shall be true and correct in all
material respects as of the date hereof and as of the Second Closing as though
made at and as of the Second Closing (other than such representations and
warranties as are made as of an earlier date, which shall be so true and correct
as of such earlier date).

 

(e)       Compliance with Covenants. The Company shall have performed and
complied, in all material respects, with all of its covenants and agreements
contained in this Agreement that contemplate, by their terms, performance or
compliance prior to the Second Closing.

 

(f)       Delivery of the Closing Certificate. The Company shall have delivered
to Purchaser a certificate duly executed by the Chief Executive Officer of the
Company certifying that the conditions set forth in clauses (a), (d) and (e) of
this Section 6.1 have been fully satisfied.

 

(g)       Suspension. Since the date hereof, trading in the Common Stock shall
not have been suspended.

 

(h)       Stockholder Approval. The Stockholder Approval shall have been duly
received.

 

(i)       Other Deliverables and Actions. The Company shall have delivered or
caused to be delivered and shall have taken each of the actions contemplated by
Section 2.2(b).

 

Section 6.4     Conditions to the Obligations of the Company at the Second
Closing. The obligations of the Company to consummate the Second Closing shall
be subject to (unless waived in writing by the Company) the satisfaction of each
of the following conditions prior to or at the Second Closing:

 

(a)       Governmental Approvals. All authorizations, approvals, consents or
clearances under applicable Law required in connection with the transactions
contemplated by this Agreement shall have been obtained or filed.

 

(b)       No Legal Impediment to Issuance. No applicable Law will have been
enacted or made effective and no Order will have been issued, promulgated,
enforced or made that serves to restrain, enjoin, make illegal or prohibit the
consummation of the transactions contemplated by this Agreement, and no action
by a Governmental Entity will have been commenced and be continuing that seeks
to restrain, enjoin, make illegal or prohibit the consummation of the
transactions contemplated by this Agreement.

 

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(c)       Accuracy of the Representations and Warranties. The representations
and warranties of the Purchaser shall be true and correct in all respects as of
the date hereof and as of the Second Closing as though made at and as of the
Second Closing (other than such representations and warranties as are made as of
an earlier date, which shall be so true and correct as of such earlier date)
except, in each case, as would not reasonably be expected, individually or in
the aggregate, to prohibit or materially and adversely impact Purchaser’s
performance of its obligations under this Agreement.

 

Article VII

 

INTENTIONALLY OMITTED

 

Article VIII

 

TERMINATION

 

Section 8.1     Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, at any time prior to the
First Closing:

 

(a)       by mutual written consent of the Company and the Purchaser;

 

(b)       by the Purchaser or the Company, upon written notice to the other, if
the First Closing shall not have been consummated on or prior to 5:00 pm New
York Time on March 15, 2020 or such later date, if any, as the Company and the
Purchaser may mutually agree upon in writing (such date, the “Termination
Date”); provided, however, that the right to terminate this Agreement pursuant
to this Section 8.1(b) shall not available to a Party if such Party’s breach of
any representation, warranty, covenant or other agreement contained in this
Agreement is the primary cause of the failure of the First Closing to occur on
or prior to the Termination Date;

 

(c)       by the Company or the Purchaser, upon written notice to the other
Party, if a Governmental Entity of competent jurisdiction has issued an Order or
has taken any other action permanently enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement, and such Order
or action has become final and non-appealable; provided, however, that the right
to terminate this Agreement pursuant to this Section 8.1(c) shall not be
available to any Party whose breach of any representation, warranty, covenant or
other agreement contained in this Agreement is the primary cause of the failure
to avoid such Order or other action; or

 

(d)       by Purchaser, upon written notice to the Company, if:

 

(i)       (A) the Company has breached any representation, warranty, covenant or
other agreement made by the Company in this Agreement or such representation or
warranty shall have become inaccurate and such breach or inaccuracy would,
individually or in the aggregate, cause a condition to the First Closing or
Second Closing to not be able to be satisfied, (B) the Purchaser shall have
delivered written notice of such breach or inaccuracy to the Company and
(C) such breach or inaccuracy is not cured by the Company before the earlier of
(x) the 10th day following the delivery of such notice, and (y) the Termination
Date; or

 

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(ii)       the Company or any of its direct or indirect Subsidiaries
(A) voluntarily commences any case or files any petition seeking bankruptcy,
winding up, dissolution, liquidation, administration, moratorium, reorganization
or other relief under any federal, state or foreign bankruptcy, insolvency,
administrative receivership or similar law now or hereafter in effect;
(B) consents to the institution of, or fails to contest in a timely and
appropriate manner, any involuntary proceeding or petition described in the
preceding subsection (A); (C) applies for or consents to the appointment of a
receiver, administrator, administrative receiver, trustee, custodian,
sequestrator, conservator or similar official with respect to the Company or any
Affiliate or for a substantial part of the Company’s assets; (D) makes a general
assignment or arrangement for the benefit of creditors; or (E) takes any
corporate action for the purpose of authorizing any of the foregoing.

 

Section 8.2     Effect of Termination. Upon termination of this Agreement
pursuant to this Article VIII, this Agreement shall forthwith become void and
there shall be no further obligations or liabilities on the part of the Parties;
provided, that, Section 2.3(b)(ii), Section 5.9, Article VIII, Section 9.1,
Section 9.3 through Section 9.11 (except as otherwise set forth therein) and
Section 9.13 shall survive the termination of this Agreement; provided further
that nothing set forth in this Agreement shall relieve any Party from liability
for any breach of this Agreement occurring prior to such termination.

 

Section 8.3     Termination Fee. Without limiting any other rights or
obligations set forth in this Agreement, in the event that this Agreement is
terminated pursuant to Section 8.1(b) and if, as of such termination, the Voting
Agreement Condition shall not have been satisfied on or prior to prior to 5:00
pm New York Time on March 15, 2020, then the Company shall pay, or cause to be
paid, to the Purchaser, (x) an amount equal to $650,000 (such amount, the
“Termination Fee”) and (y) the reimbursement of expenses contemplated by Section
5.9; provided however that in the event this Agreement is terminated pursuant to
Section 8.1(b), the Company’s expense reimbursement obligation shall be limited
to $200,000. Payment of the Termination Fee or the reimbursement of expenses
shall be made by wire transfer of immediately available funds to such accounts
as directed by the Purchaser and shall be made within two (2) Business Days
following the termination of this Agreement.

 

Section 8.4     Second Closing Abandonment. In the event that the Second Closing
shall not have been consummated on or prior to 5:00 pm New York Time on May 15,
2020 or such later date, if any, as the Company and the Purchaser may mutually
agree (the “Abandonment Date”), either the Purchaser or the Company shall be
entitled to deliver written notice (a “Second Closing Abandonment Notice”) to
the other specifying that the noticing party has elected not to proceed with the
consummation of the Second Closing; provided, however, that the right to deliver
a Second Closing Abandonment Notice pursuant to this Section 8.1(c).4 shall not
be available to any Party whose breach of any representation, warranty, covenant
or other agreement contained in this Agreement is the primary cause of the
failure of the Second Closing to occur on or prior to the Abandonment Date. Upon
delivery of a Second Closing Abandonment Notice, the obligation of each party to
consummate the Second Closing shall terminate and no party shall thereafter be
required to take any action contemplated herein necessary to cause the Second
Closing to occur (the “Second Closing Abandonment”). For the avoidance of doubt,
(i) the occurrence of the Second Closing Abandonment shall not limit any
liability for a breach of this Agreement occurring prior to the Second Closing
Abandonment and (ii) following the Second Closing Abandonment, all other terms,
conditions and indemnities set forth herein shall continue in full effect in
accordance with their terms.

 

 40 

 

 

Article IX

 

GENERAL PROVISIONS

 

Section 9.1     Notices. All notices and other communications in connection with
this Agreement shall be in writing and shall be deemed given if delivered
personally, sent via electronic mail (with confirmation), mailed by registered
or certified mail (return receipt requested) or delivered by an express courier
(with confirmation) to the Parties at the following addresses (or at such other
address for a Party as may be specified by like notice):

 

(a)       If to the Company:

 

Armata Pharmaceuticals, Inc.

4503 Glencoe Avenue

Marina del Rey, CA

Attn: Chief Executive Officer

Tel: (310) 665-2928

Email: info@armatapharma.com

 

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

 

Thompson Hine LLP

335 Madison Avenue

12th Floor

New York, New York 10017-4611

Attn: Faith L. Charles

Tel: (212) 344-5680

Email: faith.charles@thompsonhine.com

 

 

(b)       If to the Purchaser:

 

1350 Old Bayshore Highway Suite 400
Burlingame, CA 94010
Attention: Chief Executive Officer
Email: Geoffrey.hulme@inva.com

 

 41 

 

 

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

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019

Attn: Russell Leaf

           Jared Fertman

Tel: (212) 728-8593

        (212) 728-8670

Email: rleaf@willkie.com

           jfertman@willkie.com

 

Section 9.2     Assignment; Third Party Beneficiaries. Neither this Agreement
nor any of the rights, interests or obligations under this Agreement shall be
assigned or transferred (in whole or in part) by any Party (whether by operation
of law or otherwise) without the prior written consent of the other Party;
provided that Purchaser shall be entitled to assign this Agreement in whole or
in part to any of its Subsidiaries or Affiliates. Any purported assignment or
transfer in violation of this Section 9.2 shall be null and void ab initio. This
Agreement (including the documents and instruments referred to in this
Agreement) is not intended to and does not confer upon any Person any rights or
remedies under this Agreement other than the Parties.

 

Section 9.3     Prior Negotiations; Entire Agreement. This Agreement (including
the agreements attached as Schedules and Exhibits to and the documents and
instruments referred to in this Agreement, including the Definitive Documents)
constitute the entire agreement of the Parties and supersede all prior
agreements, arrangements or understandings, whether written or oral, among the
Parties with respect to the subject matter of this Agreement.

 

Section 9.4     Governing Law; Venue: Forum. THIS AGREEMENT (AND ANY CLAIMS OR
CAUSE OF ACTION ARISING UNDER, OUT OF OR IN CONNECTION WITH THIS AGREEMENT,
WHETHER IN CONTRACT, TORT OR STATUTE) SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF. Each of the Parties irrevocably and unconditionally agrees
that, subject to the immediately following sentence of this Section 9.4, any
legal action, suit or proceeding against it with respect to any matter arising
under, out of or in connection with this Agreement or for recognition or
enforcement of any judgment rendered in any such action, suit or proceeding, may
be brought in the Delaware Chancery Court (or, if the Delaware Chancery Court
shall be unavailable, then any federal court of the United States of America
sitting in the State of Delaware), and by execution and delivery of this
Agreement, each of the Parties: (a) irrevocably submits itself to the
nonexclusive jurisdiction of such court, (b) waives any objection to laying
venue in any such action, suit or proceeding and (c) waives any objection that
such court is an inconvenient forum or does not have jurisdiction over such
Party.

 

Section 9.5     Waiver of Jury Trial. EACH PARTY IRREVOCABLY WAIVES ANY RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING UNDER, OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER IN
CONTRACT, TORT OR STATUTE).

 

 42 

 

 

Section 9.6     Counterparts. This Agreement may be executed in any number of
counterparts, all of which will be considered one and the same agreement and
will become effective when counterparts have been signed by each of the Parties
and delivered to each other Party (including via facsimile or other electronic
transmission), it being understood that each Party need not sign the same
counterpart.

 

Section 9.7     Waivers and Amendments; Rights Cumulative; Consent;
Severability.

 

(a)       This Agreement may be amended, restated, modified or changed only by a
written instrument signed by the Company and the Purchaser.

 

(b)       Unless otherwise expressly set forth herein, the terms and conditions
of this Agreement may be waived (i) by the Company only by a written instrument
executed by the Company and (ii) by the Purchaser only by a written instrument
executed by the Purchaser. No delay on the part of any Party in exercising any
right, power or privilege pursuant to this Agreement will operate as a waiver
thereof, nor will any waiver on the part of any Party of any right, power or
privilege pursuant to this Agreement, nor will any single or partial exercise of
any right, power or privilege pursuant to this Agreement, preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
pursuant to this Agreement.

 

(c)       In the event that any provision hereof would be invalid or
unenforceable in any respect under applicable Law, such provision shall be
construed by modifying or limiting it so as to be valid and enforceable to the
maximum extent compatible with, and possible under, applicable Law. The
provisions hereof are severable, and in the event any provision hereof should be
held invalid or unenforceable in any respect, it shall not invalidate, render
unenforceable or otherwise affect any other provision hereof.

 

Section 9.8     Headings; Interpretation. The headings in this Agreement are for
reference purposes only and will not in any way affect the meaning or
interpretation of this Agreement. Each Party participated in the drafting of
this Agreement and this Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting an instrument or causing any instrument to be drafted.

 

Section 9.9     Specific Performance. It is understood and agreed by the Parties
that irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the Parties shall be
entitled to an injunction or injunctions without the necessity of posting a bond
to prevent breaches of this Agreement or to enforce specifically the performance
of the terms and provisions hereof, in addition to any other remedy to which
they are entitled at law or in equity. Unless otherwise expressly stated in this
Agreement, no right or remedy described or provided in this Agreement is
intended to be exclusive or to preclude a Party from pursuing other rights and
remedies to the extent available under this Agreement, at law or in equity.

 

 43 

 

 

Section 9.10     Publicity. The Parties shall jointly issue a press release
disclosing the material terms of the transactions contemplated by this Agreement
and the other Definitive Documents in form and substance reasonably satisfactory
to each Party by 9:30 a.m. New York time on the Business Day immediately
following the date hereof. The Company shall file a Current Report on Form 8-K
with the SEC within the time required by the Exchange Act in form and substance
reasonably satisfactory to Purchaser. The Company shall consult with the
Purchaser in issuing any other press releases with respect to the transactions
contemplated hereby, and the Company shall not issue any such press release or
otherwise make any such public statement without the prior consent of the
Purchaser, except if such disclosure is required by Law, in which case the
Company shall promptly provide Purchaser with prior notice of such public
statement or communication. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of Purchaser, or include the name of Purchaser in any
filing with the SEC or any Governmental Entity, without the prior written
consent of Purchaser, except to the extent such disclosure is required by Law or
NYSE American regulations, in which case the Company shall provide the Purchaser
with prior notice of such disclosure.

 

Section 9.11     No Recourse. Notwithstanding anything that may be expressed or
implied in this Agreement, each Party covenants, agrees and acknowledges that no
recourse under this Agreement or any documents or instruments delivered in
connection with this Agreement shall be had against any Party’s Affiliates,
Related Parties or Representatives or any of such Party’s Affiliates’ or Related
Parties’ Affiliates or Representatives in each case other than the Parties to
this Agreement and each of their respective successors and permitted assigns
under this Agreement, whether by the enforcement of any assessment or by any
legal or equitable proceeding, or by virtue of any applicable Law, it being
expressly agreed and acknowledged that no personal liability whatsoever shall
attach to, be imposed on or otherwise be incurred by any of the Related Parties
or Representatives, as such, for any obligation or liability of any Party under
this Agreement or any documents or instruments delivered in connection herewith
for any claim based on, in respect of or by reason of such obligations or
liabilities or their creation; provided, however, that nothing in this
Section 9.11 shall relieve or otherwise limit the liability of any Party hereto
or any of their respective successors or permitted assigns for any breach or
violation of its obligations under this Agreement or such other documents or
instruments. For the avoidance of doubt, none of the Parties will have any
recourse, be entitled to commence any proceeding or make any claim under this
Agreement or in connection with the transactions contemplated hereby except
against any of the Parties or their respective successors and permitted assigns,
as applicable.

 

Section 9.12     Further Assurances. From and after the Second Closing Date,
upon the reasonable request of any Party hereto, any other Party hereto shall
execute, acknowledge, file and/or deliver all such additional instruments,
agreements and other documents, and shall do (or cause to be done) all such
additional acts and things, that are necessary, proper, advisable or desirable
to carry out, consummate and make effective any of the transactions contemplated
by this Agreement.

 

Section 9.13     Survival. All covenants and other agreements contained in this
Agreement which by their terms are to be performed following the Second Closing
shall survive the Second Closing until fully performed. The representations and
warranties made in this Agreement shall survive as follows: (a) the
representations and warranties set forth in Section 3.1 (Organization and
Qualification), Section 3.2 (Authorization; Enforcement Validity), Section 3.3
(Issuance of Securities), Section 3.13 (Transactions with Affiliates), Section
3.14 (Capitalization) and Section 3.36 (Disclosure) (collectively, the
“Fundamental Representations”) shall survive indefinitely, (b) the
representations and warranties in Section 3.19, (Employee Relations),
Section 3.23 (Tax Status) and Section 3.29 (ERISA Compliance) shall survive
until the expiration of the statute of limitations plus sixty (60) days and (c)
all other representations and warranties shall survive until the twelve
(12)-month anniversary of the Second Closing.

 

[Remainder of Page Intentionally Left Blank]

 

 44 

 

 

IN WITNESS WHEREOF, the undersigned Parties have duly executed this Agreement as
of the date first above written.

 

 

  Armata Pharmaceuticals, Inc.                   By: /s/ Todd R. Patrick      
Name: Todd R. Patrick       Title: Chief Executive Officer  

 

 

 

 

 

 

[Signature Page to Securities Purchase Agreement]

 

 

 

  INNOVIVA, INC.               By: /s/ Geoffrey Holme       Name: Geoffrey Holme
    Title: Interim Principal Executive Officer

 

 

 

 

 

 

 

 

[Signature Page to Securities Purchase Agreement]