Document:

Exhibit 10.2

 

EXHIBIT 10.2

ESCROW AGREEMENT

among

AASTROM BIOSCIENCES, INC.,

BMO CAPITAL MARKETS CORP.

and

THE BANK OF NEW YORK

Dated as of October 15, 2007

ACCOUNT NUMBER(S):

SHORT TITLE OF ACCOUNT: Aastrom Biosciences, Inc./BMO Capital

 

 

ESCROW AGREEMENT

               This
Escrow Agreement (the “Agreement”) is dated as of October 15, 2007, among Aastrom
Biosciences, Inc., a Michigan corporation with its principal office at 24 Frank Lloyd Wright
Drive, P.O. Box 376, Ann Arbor, Michigan 48106 (the “Company”), BMO Capital Markets Corp., as
placement agent (the “Placement Agent”), and The Bank of New York, a New York banking corporation
with its principal corporate trust office at 101 Barclay Street, 8th Floor West, New
York, New York 10286 (the “Escrow Agent”).

               WHEREAS,
the Company proposes to sell an aggregate of up to 11,842,105 shares of its common
stock, no par value per share (the “Shares”) and
warrants to purchase up to 5,921,053 Shares (the
“Warrants”) for an aggregate of up to $13,500,000, all as described in the Company’s effective
registration statement on Form S-3 (Registration No. 333-123570) as supplemented by a prospectus
supplement dated the date hereof (which, together with all amendments or supplements thereto is
referred to herein as the “Registration Statement”);

          WHEREAS, the Shares and the Warrants, which will be sold in units with each unit consisting of
one Share and a Warrant to purchase Shares (the “Units”), are being offered by the Company to
subscribers identified by the Placement Agent, pursuant to the terms of the Placement Agency
Agreement, dated as of the date hereof (the “Placement Agency Agreement”), by and between the
Company and the Placement Agent, and the Purchase Agreements executed by the investors (the
“Purchase Agreements”). The Escrow Agent has not (i) received a copy of, (ii) has not reviewed,
(iii) is not a party to and (iv) will not be held responsible for the terms of the Registration
Statement, Placement Agency Agreement or the Purchase Agreements;

          WHEREAS, with respect to all subscription payments received from investors (the “Investors”),
the Company and the Placement Agent propose to establish an escrow account with the Escrow Agent in
the name of the Company; and

          WHEREAS, the Escrow Agent is willing to receive and disburse the funds from the Investors in
payment for their Units (the “Escrowed Funds”) in accordance herewith.

          NOW, THEREFORE, it is agreed as follows:

               Section 1. Establishment of Escrow Account; Deposits.

                    (a) The Escrow Agent shall promptly (and, in any case, on or prior to the commencement of the
offering of the Units) cause to be opened a fully segregated non interest-bearing escrow account,
which escrow account shall be entitled Aastrom Biosciences, Inc./BMO Capital — Escrow Account (the
“Escrow Account”) for the purpose of holding in trust all Escrowed Funds for the Company and the
Investors. The Placement Agent shall, as to each Investor, instruct each Investor to remit the
purchase price in the form wire transfers to the Escrow Agent as promptly as possible with respect
to the Escrowed Funds in payment for their respective Units. Wire transfers to the Escrow Account shall be made in Federal Funds
transferred as follows:

 

 

Bk of NYC

ABA No.  _______________________________

GLA  ___________________________________

Cust A/C #  ____________________________

A/C Name- Aastrom Biosciences, Inc./BMO Capital

                    (b) On the terms and conditions of this Agreement, the Escrow Agent shall deposit the Escrowed
Funds in the Escrow Account. Upon receipt of the Escrowed Funds, the Escrow Agent shall
acknowledge such receipt in writing (which may be by means of electronic mail) to the Company and
Placement Agent and shall hold and disburse the same pursuant to the terms and conditions of this
Agreement. The Escrow Agent shall have no duty to verify whether the amounts and property
delivered comport with the requirements of any other agreement.

                    (c) The Placement Agent is hereby directed by the Company to furnish or cause to be furnished
to the Escrow Agent, at the time of each deposit of funds pursuant to Section 1(a), a list,
substantially in the form of Exhibit A hereto, containing the name of, the address of
record, the number of Units subscribed for by, the subscription amount delivered to the Escrow
Agent on behalf of, and the social security or taxpayer identification number, if applicable, of
each subscriber whose funds are being deposited. The Escrow Agent shall notify the Placement Agent
and the Company of any discrepancy between the subscription amounts set forth on any list delivered
pursuant to this Section 1(b) and the subscription amounts received by the Escrow Agent. The Escrow
Agent is authorized, with the consent of the Company, not to be unreasonably withheld, to revise
such list to reflect the actual subscription amounts received and the release of any subscription
amounts pursuant to Section 3.

                    (d) Except as and to the extent provided herein, the Escrow Agent shall not be obligated nor,
without the consent of the Company and the Placement Agent, is it authorized to accept instructions
under this Agreement directly from any Investor.

               Section 2. Acceptance or Rejection of Subscription.

               As soon as practicable following receipt of each subscription, the Company will determine
whether or not the subscription is to be accepted or rejected in whole or in part.

               With respect to each subscription which is to be accepted, the Company is not required to
notify the Escrow Agent of such acceptance and the Escrow Agent shall have the right to assume that
the Company has accepted the subscription by the Investor unless the Company has delivered a
Subscription Termination Notice (as defined below). With respect to each subscription which is to
be rejected (in whole or in part), the Company will notify the Escrow Agent of such rejection in
writing (a “Subscription Termination Notice”), and upon receipt of such Subscription Termination
Notice, the Escrow Agent will promptly as practicable
transfer the Escrowed Funds represented by such subscription reflected in part only) and issue
a check in the amount of the rejected Investor’s subscription directly to the rejected Investor.

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               Section 3. Disbursements from the Escrow Account.

                    (a) If the Company elects to terminate the offering of the Units, upon written instruction by
the Company of such election to terminate (the “Termination Date”), the Escrow Agent shall
terminate the Escrow Account and return by check the amount of unreleased subscription funds to
each Investor as reflected in the list held by the Escrow Agent and delivered by the Placement
Agent pursuant to Section 1(c). The Escrow Agent shall notify the Company and the Placement Agent
of the distribution of such funds to the Investors as provided in Section 4(c).

                    (b) If Units have been subscribed for and funds in respect thereof have been deposited in the
Escrow Account and accepted by the Company on or before the Termination Date, pursuant to the joint
instructions of the Placement Agent and the Company identifying the Investors whose subscriptions
are to be accepted, the Escrow Agent shall on the date designated by the Placement Agent and the
Company in such joint instructions (the “Closing Date”), which date shall be at any time on or
after the giving of such notice, release to the Company (or to any other Person designated by the
Company, including the Placement Agent and its counsel, if applicable) all or a specified portion
of the Escrowed Funds held by the Escrow Agent in the Escrow Account in the manner described in
Section 4(a).

               Section 4. Procedure for Disbursement from the Escrow Account.

               The Escrowed Funds held in the Escrow Account shall be subject to, and distributed in
accordance with, the following provisions:

                    (a) On the Closing Date, upon satisfaction of the applicable requirements of Section 3 hereof,
the Escrow Agent shall transfer immediately available funds by wire to an account designated by the
Company (or to the account of any other Person designated by the Company, including the Placement
Agent and its counsel, if applicable) the Escrowed Funds requested to be transferred on such date
in the notice jointly executed by the Company and the Placement Agent.

                    (b) On the Closing Date, the Escrow Agent shall transfer by check the Escrowed Funds of any
Investors whose subscriptions were obtained by the Placement Agent but rejected by the Company
since the commencement of the offering of the Units and prior to the Closing Date. The Escrow
Agent shall notify the Company and the Placement Agent of the distribution of such funds to such
Investors.

                    (c) As soon as practicable after the Termination Date (but in no event later than the 30th day
following the Termination Date), all Escrowed Funds received by the Escrow Agent (other than
Escrowed Funds previously disbursed or to be distributed by the Escrow Agent pursuant to Section
4(a) or Section 4(b) shall be returned by check directly to the Investor having provided such
Escrowed Funds, without deduction, penalty or expense to the
Investor. The Escrow Agent shall notify the Company and the Placement Agent of the
distribution of such funds to the Investors.

                    (d) For the purposes of this Section 4, any check that the Escrow Agent shall be required to
send to any Investor or the Company shall be sent to such Investor or

3

 

the Company by first class mail, postage prepaid, at the Investor’s address furnished to the Escrow Agent pursuant to Section
1(c) or the Company’s address as set forth in Section 7(e).

                    (e) The Escrow Agent does not have any interest in the Escrowed Funds deposited hereunder but
is serving as escrow holder only and having only possession thereof. The Company shall pay or
reimburse the Escrow Agent upon request for any transfer taxes or other taxes relating to the
Escrowed Funds incurred in connection herewith and shall indemnify and hold harmless the Escrow
Agent any amounts that it is obligated to pay in the way of such taxes. Any payments of income
from this Escrow Account shall be subject to withholding regulations then in force with respect to
United States taxes. The parties hereto will provide the Escrow Agent with appropriate W-9 forms
for tax I.D., number certifications, or W-8 forms for non-resident alien certifications. It is
understood that the Escrow Agent shall be responsible for income reporting only with respect to
income earned on investment of funds which are a part of the Escrowed Funds and is not responsible
for any other reporting. This paragraph and Section 8 shall survive notwithstanding any
termination of this Agreement or the resignation of the Escrow Agent.

               Section 5. Termination of Escrow.

               In the event of the release of all Escrowed Funds in accordance with Section 3 and Section 4
of this Agreement, this Agreement shall terminate and the Escrow Agent shall be relieved of all
responsibilities in connection with the escrow deposits provided for in this Agreement, except
claims which are occasioned by its negligence, bad faith or willful misconduct.

               Section 6. Compensation of Escrow Agent.

                    (a) At the time of execution of this Agreement the Company shall pay the Escrow Agent an
administration fee of $6,000 for any and all services rendered by Escrow Agent hereunder.

                    (b) The Company shall reimburse the Escrow Agent upon request for all expenses, disbursements,
and advances incurred or made by the Escrow Agent in implementing any of the provisions of this
Agreement, including reasonable compensation, expenses and disbursements of its counsel, except any
such expense, disbursement, or advance as may arise from its gross negligence or willful
misconduct.

               Section 7. Responsibilities of Escrow Agent; Notices.

                    (a) The Escrow Agent shall be under no duty to enforce payment of any subscription which is to
be paid to and held by it;

                    (b) The Escrow Agent shall be under no duty to accept funds, checks, drafts or instruments for
the payment of money from anyone other than the Investors, the Company, the Placement Agent or to
give any receipt therefor except to the Company;

4

 

                    (c) The Escrow Agent shall be obligated to perform only such duties as are expressly set forth
in this Agreement. No implied covenants or obligations shall be inferred from this Agreement
against the Escrow Agent, nor shall the Escrow Agent be bound by the provisions of any agreement
among the Company or Placement Agent beyond the specific terms hereof.

                    (d) The Escrow Agent shall not be liable hereunder except for its own gross negligence or
willful misconduct and the Company agrees to indemnify the Escrow Agent for and hold it harmless as
to any loss, liability, or expense, including reasonable attorney’s fees and expenses, incurred
without gross negligence or willful misconduct on the part of the Escrow Agent and arising out of
or in connection with the Escrow Agent’s duties under this Agreement.

                    (e) The Escrow Agent shall be entitled to rely upon any order, judgment, certification,
instruction, notice, opinion or other writing delivered to it in compliance with the provisions of
this Agreement without being required to determine the authenticity or the correctness of any fact
stated therein or the propriety or validity of service thereof. The Escrow Agent may act in
reliance upon any instrument comporting with the provisions of this Agreement or signature believed
by it to be genuine and may assume that any person purporting to give notice or receipt or advice
or make any statement or execute any document in connection with the provisions hereof has been
duly authorized to do so.

               At any time the Escrow Agent may request in writing an instruction in writing from the
Company, and may at its own option include in such request the course of action it proposes to take
and the date on which it proposes to act, regarding any matter arising in connection with its
duties and obligations hereunder. The Escrow Agent shall not be liable for acting without the
Company’s consent in accordance with such a proposal on or after the date specified therein,
provided that the specified date shall be at least five (5) business days after the Company
receives the Escrow Agent’s request for instructions and its proposed course of action, and
provided that, prior to so acting, the Escrow Agent has not received the written instructions
requested.

                    (f) The Escrow Agent may act pursuant to the advice of counsel chosen by it with respect to
any matter relating to this Agreement and shall not be liable for any action taken or omitted in
good faith and in accordance with such advice.

                    (g) The Escrow Agent makes no representation as to the validity, value, genuineness or
collectability of any security or other document or instrument held by or delivered to it.

                    (h) The Escrow Agent shall not be called upon to advise any party as to selling or retaining,
or taking or refraining from taking any action with respect to, any securities or other property
deposited hereunder.

                    (i) No provision of this Agreement shall require the Escrow Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder.

5

 

                    (j) The Escrow Agent shall be deemed conclusively to have given and delivered any notice
required to be given or delivered if it is in writing, signed by any one of its authorized officers
and mailed, by express, registered or certified mail addressed to:

The Company at:

Aastrom Biosciences, Inc.

Domino’s Farms,

Lobby K

24 Frank Lloyd Wright Dr.

Ann Arbor, MI 48105

Attention: Gerald D. Brennan, Jr.,

Telephone: (754) 930-5561

Facsimile: (754) 930-5546

With copies to:

Seyfarth Shaw LLP

131 South Dearborn Street, Suite 2400

Chicago, IL 60603-5577

Attention: Allan J. Reich, Esq.

Telephone: (312) 460-5000

Facsimile: (312) 460-7650

                    (k) The Escrow Agent shall be deemed conclusively to have received any notice required to be
given or delivered to the Escrow Agent if it is in writing, signed by any one of the authorized
officers of the Placement Agent or the Company, mailed, by express, registered or certified mail
addressed to and actually received by:

The Escrow Agent at:

The Bank of New York

101 Barclay St, 8th Floor West

New York, NY 10286

Attention: Matthew Louis

Telephone: (212) 815-3219

Facsimile: (212) 815-5877

                    (l) The provisions of Sections 6, 7 and 10 shall survive termination of this Agreement and/or
the resignation or removal of the Escrow Agent.

               Section 8. Resignation of Escrow Agent; Successor.

               Notwithstanding anything to the contrary herein, the Escrow Agent may resign at any time by
giving at least 15 days’ prior written notice thereof. The Company may remove the Escrow Agent at
any time (with or without cause) by giving at least 15 days’ prior written notice thereof. Within
10 days after receiving such notice, the Company and the Placement Agent shall

6

 

jointly agree on and
appoint a successor escrow agent at which time the Escrow Agent shall either distribute the funds
held in the Escrow Account, less its fees, costs and expenses or other obligations owed to the
Escrow Agent as directed by the instructions of the Company and the Placement Agent or hold such
funds, pending distribution, until such fees, costs and expenses or other obligations are paid. If
a successor escrow agent has not been appointed or has not accepted such appointment by the end of
the 25-day period, the Escrow Agent may apply to a court of competent jurisdiction for the
appointment of a successor escrow agent, or for other appropriate relief and the costs, expenses
and reasonable attorneys fees which the Escrow Agent incurs in connection with such a proceeding
shall be paid by the Company.

          Section 9. Dispute Resolution.

          In the event of any dispute between or conflicting claims by or among the Company or the
Placement Agent and/or any Investor with respect to any Escrowed Funds held in the Escrow Account,
the Escrow Agent shall be entitled, at its sole discretion, to refuse to comply with any and all
claims, demands or instructions with respect to only such Escrowed Funds in controversy so long as
such dispute or conflict shall continue, and the Escrow Agent shall not be or become liable in any
way to the Company, the Placement Agent and/or any Investor for the Escrow Agent’s failure or
refusal to comply with such conflicting claims, demands or instructions, except to the extent under
the circumstances such failure would constitute gross negligence, bad faith or willful misconduct
on the part of the Escrow Agent. The Escrow Agent shall be entitled to refuse to act until either
such conflicting or adverse claims or demands shall have been finally determined in a court of
competent jurisdiction or settled by agreement between the conflicting parties as evidenced in
writing, satisfactory to the Escrow Agent, or the Escrow Agent shall have received security or an
indemnity satisfactory to the Escrow Agent sufficient to save the Escrow Agent harmless from and
against any and all loss, liability or expense which the Escrow Agent may incur by reason of the
Escrow Agent’s acting. If a proceeding for such determination is not begun and diligently
continued, the Escrow Agent may elect, at its sole discretion, to commence an interpleader action
or seek other judicial relief or orders as the Escrow Agent may deem reasonably necessary.

          Section 10. Extraordinary Expense.

          It is understood that fees and usual charges agreed upon for the Escrow Agent’s services shall
be considered compensation for its services as contemplated by this Agreement, and if the Escrow
Agent renders any service not provided for in this Agreement, or if there is any assignment of any
interest in the subject matter of this Agreement by the Company or the Placement Agent or any
modification of this Agreement, or if any controversy arises under this Escrow Agreement or the
Escrow Agent is made a party to any litigation pertaining to this Agreement or the subject matter
of this Agreement, the Escrow Agent shall be reasonably
compensated for those extraordinary services and reimbursed for all reasonable costs and
expenses occasioned by such services, controversy or litigation and the Company hereby promises to
pay such sums upon demand.

          Section 11. Governing Law; Counterparts.

7

 

          This Agreement shall be governed and construed in accordance with the laws of the State of New
York without reference to the principles thereof respecting conflicts of laws. This Agreement may
be executed in counterparts, each of which so executed shall be deemed an original, and said
counterparts together shall constitute one and the same instrument.

          Section 12. Maintenance of Record.

          The Escrow Agent shall maintain accurate records of all transactions hereunder. Promptly
after the termination of this Agreement, and as may from time to time be reasonably requested by
the Company before such termination, the Escrow Agent shall provide the Company with a copy of such
records, certified by the Escrow Agent to be a complete and accurate account of all transactions
hereunder. The authorized representatives of the Company and the Placement Agent shall also have
access to the Escrow Agent’s books and records to the extent relating to its duties hereunder,
during normal business hours upon reasonable notice to the Escrow Agent.

          Section 13. Miscellaneous.

                         (a) Nothing in this Agreement is intended or shall confer upon anyone other than the parties
any legal or equitable right, remedy or claim.

                         (b) The invalidity of any portion of this Agreement shall not affect the validity of the
remainder hereof.

                         (c) This Agreement is the final integration of the agreement of the parties with respect to
the matters covered by it and supersedes any prior understanding or agreement, oral or written,
with respect thereto.

                         (d) The rights and obligations of each party hereto may not be assigned or delegated to any
other person without the written consent of the other parties hereto. Subject to the foregoing,
the terms and provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.

                         (e) No printed or other material in any language, including prospectuses, notices, reports,
and promotional material which mentions “The Bank of New York” by name or the rights, powers, or
duties of the Escrow Agent under this Agreement shall be issued by any other parties hereto, or on
such party’s behalf, without the prior written consent of Escrow Agent.

[Signature Page Follows.]

	 	 	 	 	 
	 	AASTROM BIOSCIENCES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

8

 

	 	 	 	 	 

	 	 	 	 	 
	 	BMO CAPITAL MARKETS CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	THE BANK OF NEW YORK,

as Escrow Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

9Exhibit 10.3

 

EXHIBIT 10.3

October                     , 2007

Aastrom Biosciences, Inc.

Domino’s Farms, Lobby K,

24 Frank Lloyd Wright Dr.,

Ann Arbor, MI 48105

Ladies and Gentlemen:

     The undersigned (the “Investor”), hereby confirms and agrees with you as follows:

     1. This Purchase Agreement (the “Agreement”) is made as the date hereof between Aastrom
Biosciences, Inc., a Michigan corporation (the “Company”), and the Investor that is a signatory to
this Agreement.

     2. The
Company has authorized the sale and issuance of up to an aggregate of
11,842,105 units
(the “Units”), each consisting of one share of common stock, no par value per share (the “Common
Stock”), and one warrant to purchase 0.5 shares of the Company’s common stock (the “Warrants”), to
certain investors (the “Offering”), as more fully described in that certain Placement Agency
Agreement (the “Placement Agency Agreement”) dated the date hereof by and between the Company and
BMO Capital Markets Corp. (the “Placement Agent”). The form of Warrant is attached hereto as Annex
I. All defined terms used herein and not otherwise defined shall have the same meanings ascribed
to such terms in the Placement Agency Agreement.

     3. Subject to execution by the Company and the Placement Agent of the Placement Agency
Agreement and delivery of the free writing prospectus (as that term is defined in Rule 405 of the
Act) dated the date hereof and the base prospectus and the prospectus supplement relating to the
shares, the Company and the Investor agree that the Investor will purchase from the Company and the
Company will issue and sell to the Investor [
                    
] Units at a purchase price of $1.14 per Unit
pursuant to the Terms and Conditions for Purchase of Units attached hereto as Annex II and
incorporated herein by reference as if fully set forth herein. The Investor acknowledges that the
Offering is not being underwritten by the Placement Agent and that there is no minimum offering
amount. The shares of Common Stock and Warrants are immediately separable and will be issued
separately to the Investor. Shares of Common Stock will be credited to the Investor using
customary book-entry procedures.

     4.
The Investor confirms that it has had access and the opportunity
to review all filings made by the Company with the
Securities and Exchange Commission, including the registration statement relating to
the shares of Common Stock and the Warrants, and that it was able to read, review, download
and print each such filing.

 

 

     5. No offer by the Investor to buy Units will be accepted and no part of the purchase price
will be delivered to the Company until the Company has accepted such offer by countersigning a copy
of this Agreement, and any such offer may be withdrawn or revoked, without obligation or commitment
of any kind, at any time prior to the Company (or the Placement Agents on behalf of the Company)
sending (orally, in writing or by electronic mail) notice of its acceptance of such offer. An
indication of interest will involve no obligation or commitment of any kind until this Agreement is
accepted and countersigned by or on behalf of the Company.

 

 

     Please confirm that the foregoing correctly sets forth the agreement between us by signing in
the space provided below for that purpose.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	AGREED AND ACCEPTED:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name of Investor:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

Name
	 	 
	 

	 	 
	 	 	 	 
	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 	 	 	 	Address:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	DWAC Number:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	AASTROM BIOSCIENCES, INC.	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 

 

 

ANNEX I

FORM OF WARRANT

 

 

ANNEX II

TERMS AND CONDITIONS FOR PURCHASE OF UNITS

     1. Agreement to Sell and Purchase the Units; Subscription Date.

     1.1 Upon the terms and subject to the conditions hereinafter set forth, at the Closing (as
defined in Section 2 below), the Company will sell to the Investor, and the Investor will purchase
from the Company, [     ] Units at
the purchase price of $1.14 per Unit for a total purchase
price of $[     ].

     1.2 The Company may enter into agreements similar to this Agreement with certain other
investors (the “Other Investors”) and expects to complete sales of Units to them. (The Investor and
the Other Investors hereinafter collectively are referred to as the “Investors,” and this Agreement
and the agreements executed by the Other Investors are hereinafter collectively referred to as the
“Agreements”). The Company may accept or reject any one or more Agreements in its sole discretion.

     1.3 The Investor acknowledges that the Company has agreed to pay BMO Capital Markets Corp.
(the “Placement Agent”) a fee (the “Placement Fee”) in respect of the sale of Units to the
Investor.

     1.4 The Company has entered into a Placement Agency Agreement, dated the date hereof (the
“Placement Agreement”), with the Placement Agent that contains certain representations, warranties,
covenants and agreements of the Company.

     2. Delivery of the Units at Closing. The completion of the purchase and sale of the
Units (the “Closing”) shall take place as provided in Section 2 of the Placement Agency Agreement.

          The Company’s obligation to issue and sell the Units to the Investor shall be subject to the
accuracy of the representations and warranties made by the Investor, the fulfillment of those
undertakings of the Investor to be fulfilled prior to the Closing and payment of the purchase
price.

          The Investor’s obligation to purchase the Units will be subject to the condition that the
Placement Agent shall not have: (a) terminated the Placement Agency Agreement pursuant to the terms
thereof or (b) determined that the conditions to the closing in the Placement Agency Agreement have
not been satisfied. The Investor’s obligations are expressly not conditioned on the purchase by
any or all of the Other Investors of the Units that they have agreed to purchase from the Company.

     3. Representations, Warranties and Covenants of the Company. The Company hereby
represents and warrants to, and covenants with, the Investor, as follows:

 

 

     3.1
The Company acknowledges and agrees that the Investor may rely on the representations,
warranties, covenants and agreements made by it to the Placement Agent in the Placement Agency Agreement to the
same extent as if such representations, warranties, covenants and
agreements had been incorporated in full herein and made
directly to or with the Investor.

     3.2 This Agreement constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’
and contracting parties’ rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law).

     3.3 The Company shall use its commercially reasonable best efforts to maintain the
effectiveness of the Registration Statement until the expiration of the Warrants.

     3.4 To the Company’s knowledge, all material information provided to the Investor by the
Company has been publicly disclosed.

     3.5 The Company covenants to issue a press release setting forth the material terms of the
Offering promptly after entering into the Agreements with the Investors.

     3.6
The Company has not entered into any other Agreement with any Other
Investor in connection with this Offering which contains any material
terms or conditions different from those provided to the Investor
pursuant to this Agreement.

     4. Representations, Warranties and Covenants of each Investor.

     4.1 The Investor represents and warrants that it has received the Company’s base prospectus
relating to the Units and the free writing prospectus dated the date hereof.

     4.2 The Investor further represents and warrants to, and covenants with, the Company that (i)
the Investor has full right, power, authority and capacity to enter into this Agreement and to
consummate the transactions contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (ii) this Agreement constitutes a valid
and binding obligation of the Investor enforceable against the Investor in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights
generally and except as enforceability may be subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law).

     4.3 The Investor represents and warrants to, and covenants with, the Company that: (i) the
Investor is knowledgeable, sophisticated and experienced in making, and is qualified to make,
decisions with respect to investments in shares representing investment decisions similar to the
decision to purchase the Units, including investments in securities issued by comparable companies;
and (ii) the Investor has, in connection with its decision to purchase the Units pursuant to the
Agreement, relied solely upon the Registration Statement, the Prospectus, and any amendments or
supplements thereto and has not relied upon any information provided by BMO Capital Markets Corp.
in its capacity as placement agent for the Company.

 

 

     4.4 The Investor understands that nothing in the Prospectus and any supplement thereto, this
Agreement or any other materials presented to the Investor in connection with the purchase and sale
of the Units constitutes legal, tax or investment advice. The Investor has consulted such legal,
tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of Units.

     4.5 From and after obtaining knowledge of the sale of the Units contemplated hereby, the
Investor has not taken, and prior to the public announcement of the transaction the Investor shall
not take, any action that has caused or will cause the Investor to have, directly or indirectly,
purchased or agreed to purchase (other than pursuant to this Agreement) sold or agreed to sell any
Common Stock, effected any Short Sale, with respect to the Common Stock, or with respect to any
security that includes, relates to or derives any significant part of its value from the Common
Stock, whether or not, directly or indirectly, in order to hedge its position in the Units. The
Investor agrees that it will not use any of the Units acquired pursuant to this Agreement to cover
any short position in the Common Stock if doing so would be in violation of applicable securities
laws. For purposes hereof, “Short Sales” include, without limitation, all “short sales” as defined
in Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not against the
box, and all types of direct and indirect stock pledges, forward sales contracts, options, puts,
calls, short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the
Exchange Act) and similar arrangements (including on a total return basis), and sales and other
transactions through non-US broker dealers or foreign regulated brokers.

     4.6 The Investor represents that it has had no position, office or other material relationship
within the past three years with the Company or persons known to it to be affiliates of the
Company.

     5. Survival of Representations, Warranties and Agreements. Notwithstanding any
investigation made by any party to this Agreement, all covenants, agreements, representations and
warranties made by the Company and the Investor herein shall survive the execution of this
Agreement, the delivery to the Investor of the Units being purchased and the payment therefor.

     6. Notices. All notices, requests, consents and other communications hereunder shall
be in writing, shall be mailed (A) if within domestic United States by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage prepaid, or by
facsimile, or (B) if delivered from outside the United States, by International Federal Express or
facsimile, and shall be deemed given (i) if delivered by first-class registered or certified mail
domestic, three business days after so mailed, (ii) if delivered by a nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by International Federal
Express, two business days after so mailed, (iv) if delivered by facsimile, upon electronic
confirmation of receipt and shall be delivered as addressed as follows: (a) if to the Company, then
as provided in Section 11 of the Placement Agency Agreement; and (b) if to the Investor, at its
address on the signature page hereto, or at such other address or addresses as may have been
furnished to the Company in writing.

 

 

     7. Changes. This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Investor.

     8. Headings. The headings of the various sections of this Agreement have been inserted
for convenience or reference only and shall not be deemed to be part of this Agreement.

     9. Severability. In case any provision contained in this Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby.

     10. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York, without giving effect to the principles of
conflicts of law.

     11. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original, but all of which, when taken together, shall constitute one
instrument, and shall become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties.

     12. Confirmation of Sale. The Investor acknowledges and agrees that the Investor’s
receipt of the Company’s counterpart to this Agreement, together with the Prospectus Supplement (or
the filing by the Company of an electronic version thereof with the Commission), shall constitute
written confirmation of the Company’s sale of Units to the Investor.

     13. WAIVER
OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY AND FOR ANY
COUNTERCLAIM RELATING THERETO.

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