Document:

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of June 3, 2015 between Oncosec Medical Incorporated, a Nevada corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.

 

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

 

ARTICLE I.
 DEFINITIONS

 

1.1                               Definitions.  In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

 

“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.

 

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.

 

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

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.

 

“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the third Trading Day following the date hereof.

 

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

 

“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

 

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

“Company Counsel” means Morrison & Foerster LLP, with offices located at 12531 High Bluff Drive, Suite 100, San Diego, CA 92130.

 

“EGS” means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.

 

“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(r).

 

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

 

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, advisors, consultants, independent contractors (provided that issuances to advisors, consultants and independent contractors shall not exceed an aggregate of 2,000,000 shares (subject to adjustment for reverse and forward stock splits and the like after the date hereof) in any 12 month period), officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities, and (c) securities issued pursuant to acquisitions, asset purchases, license or collaboration agreements, or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

 

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

 

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“FDA” shall have the meaning ascribed to such term in Section 3.1(gg).

 

“FDCA” shall have the meaning ascribed to such term in Section 3.1(gg).

 

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(z).

 

“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).

 

“Liens” means a material lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

“Material Permits” shall have the meaning ascribed to such term in Section 3.1(m).

 

“Per Share Purchase Price” equals $5.50, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement and before the Closing.

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Pharmaceutical Product” shall have the meaning ascribed to such term in Section 3.1(gg).

 

“Placement Agent” means H. C. Wainwright & Co., LLC

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus” means the final prospectus filed for the Registration Statement.

 

“Prospectus Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with the Commission and delivered by the Company to each Purchaser at the Closing.

 

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.

 

“Registration Statement” means the effective registration statement with Commission file No. 333-195387 which registers the sale of the Shares to the Purchasers (including amendments, exhibits and any schedules thereto, the documents incorporated by reference therein and the documents and information otherwise deemed to be a part thereof or included therein).

 

 

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“Regulation FD” means Regulation FD promulgated by the Commission pursuant to the Exchange Act, as such Regulation may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Regulation.

 

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

 

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Securities” means the Shares.

 

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

 

“Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

 

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.

 

“Subsidiary” means any subsidiary of the Company as set forth in the Prospectus and Registration Statement, and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 

“Trading Day” means a day on which the principal Trading Market is open for trading.

 

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“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTCQB (or any successors to any of the foregoing).

 

“Transaction Documents” means this Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer Agent” means Nevada Agency and Transfer Company, the current transfer agent of the Company, with a mailing address of 50 West Liberty Street, Suite 880, Reno, Nevada, 89501 and a facsimile number of (775) 322-5623, and any successor transfer agent of the Company.

 

ARTICLE II.
 PURCHASE AND SALE

 

2.1                               Closing.  On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of $13,580,000.50 of Shares. Each Purchaser shall deliver to the clearing account designated by the Placement Agent, immediately available funds equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser and the Company shall deliver to each Purchaser its respective Shares, and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing.  Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of EGS or such other location as the parties shall mutually agree.  Unless otherwise directed by the Placement Agent, settlement of the Shares shall occur via “Delivery Versus Payment” (“DVP”) (i.e., on the Closing Date, the Company shall issue the Shares registered in the Purchasers’ names and addresses and released by the Transfer Agent directly to the account(s) at the Placement Agent identified by each Purchaser; upon receipt of such Shares, the Placement Agent shall promptly electronically deliver such Shares to the applicable Purchaser, and payment therefor shall promptly be made by the Placement Agent (or its clearing firm) by wire transfer to the Company).

 

2.2                               Deliveries.

 

(a)                                 On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:

 

(i)                                     this Agreement duly executed by the Company;

 

(ii)                                  a legal opinion of Company Counsel;

 

(iii)                               subject to the last sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) Shares equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser; and

 

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(iv)                              the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).

 

(b)                                 On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company or the Placement Agent’s clearing account, as applicable, the following:

 

(i)                                     this Agreement duly executed by such Purchaser; and

 

(ii)                                  to the Placement Agent’s clearing account, such Purchaser’s Subscription Amount by wire transfer to the account specified by the Placement Agent, which Subscription Amount the Placement Agent shall promptly deliver or cause to be delivered to the Company by wire transfer.

 

2.3                               Closing Conditions.

 

(a)                                 The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)                                     the accuracy in all material respects on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

 

(ii)                                  all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed; and

 

(iii)                               the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.

 

(b)                                 The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)                                     the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

 

(ii)                                  all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;

 

(iii)                               the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

 

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(iv)                              there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and

 

(v)                                 from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.

 

ARTICLE III.
 REPRESENTATIONS AND WARRANTIES

 

3.1                               Representations and Warranties of the Company.  Except as set forth in the Prospectus and Registration Statement, which such Prospectus and Registration Statement shall qualify any representations or warranties otherwise made herein, the Company hereby makes the following representations and warranties to each Purchaser:

 

(a)                                 Subsidiaries.  The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

 

(b)                                 Organization and Qualification.  The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

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(c)                                  Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals.  This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(d)                                 No Conflicts.  The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(e)                                  Filings, Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the

 

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Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) application(s) to each applicable Trading Market for the listing of the Shares for trading thereon in the time and manner required thereby and (iv) such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

 

(f)                                   Issuance of the Securities; Registration.  The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company.  The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on May 12, 2014 (the “Effective Date”), including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement.  The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission.  The Company, if required by the rules and regulations of the Commission, proposes to file the Prospectus, with the Commission pursuant to Rule 424(b).  At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act; and the Prospectus and any amendments or supplements thereto, at time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and, taken together as a whole, did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

(g)                                  Capitalization.  The Company has not issued any capital stock since its most recently filed current report or periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees and consultants pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed current report or periodic report under the Exchange Act.  Other than (i) the Common Stock purchase warrants issued to investors pursuant to that certain Securities Purchase Agreement, dated June 21, 2011, by and between the Company and the investors signatory thereto, (ii) the Common Stock purchase warrants issued to investors pursuant to that certain Securities Purchase Agreement, dated March 23, 2012, by and between the Company and the investors signatory thereto, (iii) the Common Stock purchase warrants issued to investors pursuant to that certain Securities Purchase Agreement, dated December 11, 2012, by and between the Company and the investors

 

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signatory thereto, (iv) the Common Stock purchase warrants issued to investors pursuant to that certain Securities Purchase Agreement, dated September 18, 2013, by and between the Company and the investors signatory thereto, (v) the Common Stock purchase warrants issued to investors pursuant to that certain Securities Purchase Agreement, dated June 3, 2014, by and between the Company and the investors signatory thereto, (vi) the Common Stock purchase warrants issued to Inovio Biomedical Corp., (vii) grants of stock options under the Company’s stock option plans, and (viii) as otherwise disclosed in the Company’s SEC Reports: (a) no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents; (b) except as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents; and (c) the issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.  All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities.  There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

 

(h)                                 SEC Reports; Financial Statements.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the one year preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such

 

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financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

(i)            Material Changes; Undisclosed Events, Liabilities or Developments.  Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans.  The Company does not have pending before the Commission any request for confidential treatment of information.  Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

 

(j)            Litigation.  There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company.  The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

 

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(k)           Labor Relations.  No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect.  None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good.  To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters.  The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(l)            Compliance.  Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(m)          Regulatory Permits.  The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

(n)           Title to Assets.  The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of

 

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the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

 

(o)           Intellectual Property.  To the Company’s knowledge, the Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).  None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within one (1) year from the date of this Agreement.  Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect.  To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights.  The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(p)           Insurance.  The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to five million dollars.  Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

(q)           Transactions With Affiliates and Employees.  Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing

 

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of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

 

(r)            Sarbanes-Oxley; Internal Accounting Controls.  The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).  The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially adversely affected, or is reasonably likely to materially adversely affect, the internal control over financial reporting of the Company and its Subsidiaries.

 

(s)            Certain Fees.  Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.  The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

 

(t)            Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.

 

(u)           Registration Rights.  Other than as described in the Registration Statement and Prospectus, no Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

 

(v)           Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no

 

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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 Commission is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. 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.

 

(w)          Application of Takeover Protections.  The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

 

(x)           Disclosure.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed in the Prospectus Supplement.   The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

 

(y)           No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, 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 any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

 

(z)           Solvency.  Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds

 

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from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.  The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).  The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date.  The SEC Reports set forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.  For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.  Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

(aa)         Tax Status.  Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

 

(bb)         Foreign Corrupt Practices.  Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic

 

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government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA.

 

(cc)         Accountants.  To the knowledge and belief of the Company, the Company’s accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ended July 31, 2015.

 

(dd)         Acknowledgment Regarding Purchasers’ Purchase of Securities.  The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.  The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities.  The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(ee)         Acknowledgement Regarding Purchaser’s Trading Activity.  Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction.  The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

 

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(ff)          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, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement of the Securities.

 

(gg)         FDA.  As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect.  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 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, and which, either individually or in the aggregate, would have a Material Adverse Effect.  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.

 

(hh)         Office of Foreign Assets Control.  Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company  or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

 

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(ii)           U.S. Real Property Holding Corporation.  The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.

 

(jj)           Bank Holding Company Act.  Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).  Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.  Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

(kk)         Money Laundering.  The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

 

3.2          Representations and Warranties of the Purchasers.  Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein):

 

(a)           Organization; Authority.  Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser.  Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

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(b)           Understandings or Arrangements.  Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws); provided that this warranty shall not apply to the Placement Agent if the Placement Agent is a Purchaser.  Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.

 

(c)           Purchaser Status.  At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.  Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act; provided that this warranty shall not apply to the Placement Agent if the Placement Agent is a Purchaser.

 

(d)           Experience of Such Purchaser.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

(e)           Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and, subject to Regulation FD, has been afforded, (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.  Such Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired.  Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to it.  In connection with the issuance of the Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.

 

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(f)            Certain Transactions and Confidentiality.  Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.  Other than to other Persons party to this Agreement, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

 

The Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transaction contemplated hereby.

 

ARTICLE IV.
 OTHER AGREEMENTS OF THE PARTIES

 

4.1          [Reserved].

 

4.2          Furnishing of Information.  For a period of one year after the Closing Date, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

 

4.3          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 for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

 

4.4          Securities Laws Disclosure; Publicity.  The Company shall (a) by 9:00 a.m. (New York City time) on the Trading Day immediately following the date hereof, issue a press release

 

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disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act.  From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents.  The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).

 

4.5          Shareholder Rights Plan.  No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.

 

4.6          Non-Public Information.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Purchaser shall have entered into a written agreement with the Company regarding the confidentiality and use of such information.  The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

4.7          Use of Proceeds.  The Company shall use the net proceeds from the sale of the Securities hereunder for the purposes described in the Prospectus and Prospectus Supplement.

 

4.8          Indemnification of Purchasers.   Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and

 

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Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct or malfeasance).  If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.  The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

 

4.9          [Reserved].

 

4.10        Listing of Common Stock. For a period of one year after the Closing Date, the Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares on such Trading Market and promptly secure the listing of all of the Shares on such Trading Market.  The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then

 

23

 

include in such application all of the Shares, and will take such other action as is necessary to cause all of the Shares to be listed or quoted on such other Trading Market as promptly as possible.  The Company will then take all action reasonably necessary to continue the listing or quotation and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market.

 

4.11        [Reserved].

 

4.12        Subsequent Equity Sales.

 

(a)           Subsequent Equity Sales. From the date hereof until 120 days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents.

 

(b)           From the date hereof until one year after the Closing Date, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction or issuing any Common Stock or Common Stock Equivalents in an “at the market” offering.  “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price.  Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

 

(c)           Notwithstanding the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance.

 

4.13        Equal Treatment of Purchasers.  No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of the parties to this Agreement.  For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

 

24

 

4.14        Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction.  Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.

 

ARTICLE V.
 MISCELLANEOUS

 

5.1          Termination.  This Agreement may be terminated by any Purchaser or by the Company with respect to any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before June 5, 2015; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).

 

5.2          Fees and Expenses.  Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.

 

25

 

5.3          Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.4          Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail at the facsimile number or e-mail address set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as set forth on the signature pages attached hereto.

 

5.5          Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers holding at least a majority in interest of the Shares based on the initial Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

5.6          Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

 

5.7          Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger).  Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”

 

5.8          No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8.

 

26

 

5.9          Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  If either party shall commence an action, suit or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

5.10        Survival.  The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

 

5.11        Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

5.12        Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

27

 

5.13        Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

5.14        Replacement of Securities.  If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction.  The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

 

5.15        Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

5.16        Payment Set Aside.  To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

5.17        Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document.  Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations

 

28

 

or the transactions contemplated by the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.  Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents.  For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through EGS.  EGS does not represent any of the Purchasers and only represents H.C. Wainwright & Co., LLC, the placement agent.  The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers.  It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.

 

5.18        Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

 

5.19        Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

 

5.20        WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

(Signature Pages Follow)

 

29

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

	
ONCOSEC   MEDICAL INCORPORATED
    	
Address   for Notice:
    
	
 
    	
OncoSec   Medical Incorporated
    
	
 
    	
Attn:
    
	
 
    	
9810   Summers Ridge Road, Suite 110
    
	
 
    	
San   Diego, CA 92121
    
	
By:
    	
 
    	
 
    	
Email:
    
	
 
    	
Name:
    	
Fax:
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
With a copy to (which shall not constitute   notice):
    	
Morrison &   Foerster LLP
    
	
 
    	
 
    	
Attn:
    
	
 
    	
 
    	
12531   High Bluff Drive, Suite 100
    
	
 
    	
 
    	
San   Diego, CA 92130
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Solely   with respect to delivery of the Shares and the Subscription Amounts via DVP:
    	
 
    
	
 
    	
 
    	
 
    
	
H. C. WAINWRIGHT &   CO., LLC
    	
 
    
	
 
    	
 
    	
Address for Notice:
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Fax:
    
	
 
    	
Title:
    	
 
    

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

30

 

[PURCHASER SIGNATURE PAGES TO ONCS SECURITIES PURCHASE AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

	
Name   of Purchaser:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature   of Authorized Signatory of Purchaser:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name   of Authorized Signatory:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Title   of Authorized Signatory:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Email   Address of Authorized Signatory:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Facsimile   Number of Authorized Signatory:
    	
 
    	
 
    
								

 

Address for Notice to Purchaser:

 

Address for Delivery of Securities to Purchaser (if not same as address for notice):

 

Subscription Amount: $

 

Shares:

 

EIN Number:

 

[SIGNATURE PAGES CONTINUE]

 

31EX-10.1

 Exhibit 10.1 

LYONDELLBASELL 
 EXECUTIVE SEVERANCE PLAN 

Amended and Restated, Effective as of June 1, 2015 

LyondellBasell Executive Severance Plan 

 LYONDELLBASELL 

EXECUTIVE SEVERANCE PLAN 

(Amended and Restated, Effective as of June 1, 2015) 

1. Purpose. This LyondellBasell Executive Severance Plan (the “Plan”) is intended to assure that Lyondell Chemical
Company (the “Company”) and its affiliates will have the continued dedication of specified executives, who are members of a select group of management and highly compensated employees, by providing for certain severance benefit payments to
those executives on an involuntary termination of employment or resignation for Good Reason. 
 2. Definitions. The terms set
forth below have the following meanings: 
 “Base Salary” means the annualized rate of regular base salary determined as of
the last day of the Participant’s employment. 
 “Cause” means: (i) the Participant’s continued failure
(except where due to physical or mental incapacity) to substantially perform his or her duties; (ii) the Participant’s intentional misconduct or gross neglect in the performance of his or her duties; (iii) the Participant’s
conviction of, or plea of guilty or nolo contendere to, a felony; (iv) the commission by the Participant of an act of fraud or embezzlement against the Company or any affiliate; (v) the Participant’s breach of fiduciary duty,
(vi) a Participant’s violation of the Code of Conduct of the LyondellBasell Group or (vii) the Participant’s willful breach of any material provision of any employment or other written agreement between the Participant and the
Company or an affiliate (as determined in good faith by the Committee) which is not remedied within fifteen (15) days after written notice is received from the Company or affiliate specifying such breach. Any determination of whether Cause
exists shall be made by the Committee in its sole discretion. 
 “Chief Executive Officer” means the Chief Executive
Officer of the LyondellBasell Group. 
 “Code” means the United States Internal Revenue Code of 1986, as amended from time
to time. 
 “Committee” means the Compensation Committee of the Supervisory Board of LyondellBasell Industries N.V. (the
“Board”) or its delegate. 
 “Company” means Lyondell Chemical Company and any successor entity. 

“Disability” means a permanent and total disability as defined in the employer-sponsored long-term disability plan applicable
to the Participant. 
 “Effective Date of Restatement” means June 1, 2015. 

“Employee” means an individual employed by the Company. 

“Employer” means the employer of a Participant. 

  
 -1- 

 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 “Good Reason” means the occurrence, without the Participant’s express written consent, of: 

(i) a material diminution in the Participant’s duties, responsibilities or authority; 

(ii) any material diminution of the Participant’s Base Salary; or 

(iii) the involuntary relocation of the Participant’s principal place of employment by more than fifty miles from the Participant’s
principal place of employment immediately prior to the relocation. 
 Notwithstanding the foregoing, any assertion by a Participant of a
termination of employment for “Good Reason” shall not be effective unless all of the following conditions are satisfied: (1) the Participant must provide written notice to the Company of the condition constituting Good Reason within
forty-five days of the initial existence of the condition; (2) the condition specified in such notice must remain uncorrected for thirty days after receipt of the such notice by the Company; and (3) the date of the Participant’s
termination of employment on account of the condition specified in such notice must occur within ninety days after the initial existence of such condition. 

“Key Employee” means a Participant who at any time during the prior calendar year was identified as (i) an officer of
the Company with annual compensation greater than $170,000, as adjusted, (ii) a five percent (5%) owner of the Company, or (iii) a one percent (1%) owner of the Company with annual compensation from the Company of more than
$150,000, as adjusted, as determined according to the requirements of Code Sections 409A and 416(i) (applied without regard to Code Section 416(i)(5)). For Plan distribution purposes, an Employee identified as a Key Employee during a year
ending on the identification date shall be considered a Key Employee for a twelve month period beginning on the following April 1. December 31 of the prior calendar year shall be used as the identification date to identify Key Employees
under Code Section 409A. 
 “LyondellBasell Group” means LyondellBasell Industries N.V. and its affiliates. 

“Participant” means an Employee eligible for a Plan benefit under Section 3. 

“Participation Agreement” means the form agreement presented to each eligible Employee selected for participation following
the Effective Date of Restatement by the Committee or its delegate prior to his or her entry into this Plan that shall evidence the Employee’s agreement to participate in this Plan and to comply with the terms, conditions, and restrictions
within this Plan, including without limitation the confidentiality and covenant provisions of Section 7 of this Plan and of the Participation Agreement. 

“Plan” means the LyondellBasell Executive Severance Plan, as amended from time to time. 

“Target Annual Bonus” means the Participant’s “Target STI Award” as such term is defined in the LyondellBasell
Industries Short-Term Incentive Plan. 

  
 -2- 

 3. Administration and Eligibility. 

(a) Administration. The Plan shall be administered by the Committee, which shall have full and exclusive power to interpret this Plan
and to adopt rules, regulations and guidelines to carry out this Plan as it deems necessary or appropriate. The Committee, in its discretion, may retain the services of an outside administrator to perform any of its Plan functions or may delegate
any of its duties under the Plan to such agents as it may appoint from time to time, provided that the Committee may not delegate its duties where such delegation would violate state or foreign corporate law. Any Committee decision in interpreting
and administering this Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. 

(b) Eligibility to Participate. The Committee in its sole discretion shall designate each Employee who is eligible to be a Participant
under this Plan; provided, however, that any such Employee so designated as a Participant must also satisfy the following additional requirements in order to remain a Participant entitled to severance benefits pursuant to Section 3(c) below:
(i) the Employee must be a full-time salaried U.S.-based Employee holding a position of an executive officer with the title of Executive Vice President, Senior Vice President, or Vice President as of the date the Employee is selected to
participate in the Plan, (ii) the Employee must have accepted the designation as a Participant (as evidenced, for any Employee who is designated as eligible to be a Participant by the Committee on or after the Effective Date of Restatement, by
execution of a Participation Agreement within 30 days of notification of such designation), and (iii) the Employee must not be ineligible to qualify as a Participant due to (A) the Employee having waived coverage under this Plan,
(B) the Employee being covered by an employment, severance or separation agreement or other arrangement with an Employer under which he or she is entitled to severance pay or salary continuation upon or after termination of employment, or
(C) the Employee being covered by an employment, severance, or separation agreement or other arrangement with an Employer which states that he or she is not to receive benefits under this Plan. The Committee may at any time terminate any such
designation, and the affected Employee shall not be eligible to receive benefits under the Plan after the effective date of such termination; provided, however, that no such termination shall adversely affect any claims to benefits incurred by the
Employee prior to the effective date of the termination. The Chief Executive Officer shall provide written notice of any such termination of eligibility to the affected Employee with a copy sent to the Committee. 

(c) Eligibility for Severance Benefits. If a Participant’s employment is terminated (i) by the Participant for Good Reason,
or (ii) by the Employer for reasons other than (A) Cause or (B) the Participants’ death or Disability, then the Company will provide or cause to be provided to the Participant the rights and benefits described in Section 4.
A Participant’s employment shall not be considered terminated for purposes of this Plan merely because of a transfer of employment to another entity within the LyondellBasell Group. 

For all purposes under the Plan, a Participant shall be considered to have terminated from employment when the Participant incurs a
“separation from service” with the Company within the meaning of Code Section 409A(a)(2)(A)(i) and applicable guidance issued thereunder. 

  
 -3- 

 4. Severance Benefits. If a Participant is eligible for severance benefits under
Section 3(c), then the Company shall provide or cause to be provided to the Participant the following benefits and rights: 
 (a)
Salary and Other Payment at Termination. Subject to Section 7 and subject to the Participant’s delivery, within 45 days after his or her termination from employment, and non-revocation of an executed release and waiver described in
Section 7(c), the Company shall: (i) pay to the Participant a lump sum cash payment in an amount equal to the sum of (A) the Participant’s Base Salary, (B) the Participant’s Target Annual Bonus amount for the year
immediately preceding the year of the Participant’s termination (or, if the Participant did not have a Target Annual Bonus opportunity for such preceding year, the Target Annual Bonus amount for the year of the Participant’s termination),
and (C) an amount equal to the cost of 18 months of continuation coverage premiums for medical coverage for the Participant and his or her eligible dependents (to the extent such dependents are covered under the Company’s group health plan
immediately prior to the date of termination) under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, at the subsidized rates that active employees pay to effectuate similar coverage; (ii) continue to provide subsidized
coverage at active employee rates under the Company’s life insurance plan for 18 months following the date of termination, but only to the extent such continued coverage is permissible under such programs and is in compliance with all
applicable provisions of the Code; and (iii) provide outplacement assistance through the last day of the second calendar year following the calendar year in which the termination of employment occurred, not to exceed $20,000. 

(b) No Duty to Mitigate; Offsets. A Participant’s entitlement to severance benefits under the Plan shall not be governed by any
duty to mitigate the Participant’s damages by seeking further employment nor offset by any compensation which the Participant may receive from future employment. However, a Participant’s payment under Section 4(a) shall be reduced by
any payment required by law, regulation, custom, contract, agreement or other Company or Employer severance plan related to the Participant’s employment termination, including but not limited to, any salary continuation during any notice period
required by law (other than the notice period applicable to a Participant’s termination for Good Reason), except to the extent any such reduction or offset results in a violation of Section 409A of the Code. 

(c) Time of Payments. The cash payment under Section 4(a)(i) shall be paid to a Participant in a single lump sum sixty
(60) days after the Participant’s employment termination. Any reimbursements payable under Section 4(a)(iii) shall be paid no later than the end of the third year following the year in which the termination of employment occurred.
Notwithstanding the foregoing, if a Participant is a Key Employee, to the extent that any amount payable to the Participant under this Plan would be subject to additional taxes and interest under Code Section 409A if not delayed as provided in
Code Section 409A(a)(2)(B)(i), the payment will be paid to the Participant on the earlier of (i) the date that is six (6) month after the date of the Participant’s termination of employment or (ii) the Participant’s
death. Such delayed payment will not be adjusted for interest. 
 5. Company Benefit Plans. The specific arrangements referred
to in this Plan are not intended (i) to exclude or limit a Participant’s participation in other benefit plans or programs in which the Participant currently participates or may participate including, without limit, retiree benefits, or
benefits which are available to executive personnel generally in the same class or category as the Participant or (ii) to preclude or limit other compensation or benefits as may be authorized by the Company from time to time. If not otherwise
paid or provided, the Company shall timely pay or provide to the Participants and/or the Participant’s dependents any other amounts or benefits required to be paid 

  
 -4- 

 
or provided or which the Participant or the Participant’s dependents are eligible to receive under this Plan and under any plan, program, policy, practice, contract or agreement of the
Company as in effect and applicable generally to executive personnel in the same class or category of a Participant. 
 6. Payment
Adjustments. The Company may reduce the benefit payable to a Participant under the Plan by the amount of any advances, loans or other monies the Participant owes the Company. If Plan benefits are paid to a person who is not entitled to Plan
benefits because of an administrative error or intentional or accidental misstatement or information, it shall be the person’s responsibility and obligation to repay the amount of any payment to the Plan. If the payment is not repaid within
thirty (30) days, the Plan may recover the overpayment by withholding up to the amount of payment owed from any future benefits or compensation otherwise payable under any Company plan, including payments from any other Company welfare plan
payable to or on behalf of the Participant. 
 7. Confidentiality, Covenants, and Cooperation. 

(a) Confidentiality and Covenants. A Participant’s entitlement to Plan benefits shall be further conditioned upon the
Participant’s compliance with this Section 7(a), in addition to the provisions of any separate Participation Agreement (including any covenants contained therein) executed by the Participant in accordance with Section 3(b). During the
course of the Participant’s employment with the Company and its affiliates, the Participant has obtained or will obtain private or confidential information, trade secrets, and proprietary data relating to the Company and its affiliates which is
not readily available to the public (collectively, “Confidential Information”). In exchange for participation in the Plan, the Participant shall not, either directly or indirectly, knowingly or purposely disclose or use Confidential
Information acquired during his or her relationship with the Company and its affiliates except in connection with his or her duties or unless compelled to do so by law Furthermore, the Participant, if compelled by law to disclose Confidential
Information, shall, unless prohibited by law, provide the Company prior written notice to permit the Company to seek a protective order or other protective measure. The Participant shall provide notice as soon as reasonably practicable and with all
due diligence, recognizing that disclosure of Confidential Information could be harmful to the Company or its affiliates. In the event that a Participant fails to comply with this Section 7(a), such Participant shall repay to the Company any
payments received under Section 4(a), and no further benefits shall be payable under the Plan. Notwithstanding the foregoing, nothing herein will prohibit a Participant from: (i) disclosing Confidential Information when compelled to do so
by law; (ii) making a good faith report of possible violations of applicable law to any governmental agency or entity; or (iii) making disclosures that are protected under the whistleblower provisions of applicable law. 

(b) Cooperation. A Participant’s entitlement to Plan benefits shall be further conditioned upon the Participant’s compliance
with this Section 7(b) and the provisions of any applicable Participation Agreement. For a period of two years following termination, Participants will furnish information and render assistance and cooperation as reasonably requested in
connection with any litigation or legal proceedings concerning the Company, any of its affiliates (other than any legal proceedings arising out of or concerning Participant’s employment or Participant’s termination). The Company will pay
or reimburse Participants for reasonable expenses in connection with this cooperation. In the event that a Participant fails to comply with this Section 7(b) or the provisions of any applicable Participation Agreement, such Participant shall
repay to the Company any payments received under Section 4(a), and no further benefits shall be payable under the Plan. 

  
 -5- 

 (c) Release of Liability. Each Participant, as a further eligibility condition for Plan
benefits under Section 4, must execute and deliver to the Company, in a form acceptable to the Company, a separate release and waiver (the “Release”), which, without limiting the generality of the foregoing, shall include a release
and discharge of the Company, its affiliates, and its and their directors, board of directors, officers, employees, owners, agents, successors and assigns from any and all suits, causes of action, demands, claims, charges, complaints, liabilities,
costs, losses, damages, injuries, bonds, judgments, attorneys’ fees and expenses, in any form whatsoever, in law or in equity, whether known or unknown, whether suspect or unsuspected, arising out of the Participant’s employment with
Company or any affiliate through his or her termination. In the event that the Participant breaches any provision of the Release, the Participant shall repay to the Company any payments received under Section 4(a), and no further benefits shall
be payable under the Plan. 
 8. Amendment. The Committee may amend, substitute, revoke or terminate the Plan at any
time; provided, however, that no amendment, substitution, revocation or termination shall adversely affect claims for Plan benefits incurred prior to the effective date of such action. Notwithstanding the foregoing, if any Plan provision would
result in an additional tax under Code Section 409A, that provision may be reformed in accordance with Code Section 409A to avoid the additional tax, and no action taken to comply with Code Section 409A shall be deemed to adversely
affect a Participant’s benefits. 
 9. Notices. All notices, requests, demands and other communications required or
permitted to be given under this Plan (“notices”) shall be in writing and shall be deemed to have been given if delivered by-hand, given by facsimile or telegram, or mailed via certified or registered U.S. mail, to the party to receive the
notice at the party’s address set forth below; provided that either party may change its address for notice by giving the other party written notice of that change. 

If to the Company, Attn: Chief Legal Officer: 

Lyondell Chemical Company 
 1221
McKinney, Suite 700 
 Houston, TX 77010 

or by facsimile at (713) 309-4631 

If to a Participant: 
 Last
address on the books of the Employer. 
 Any notice given under this Plan shall be deemed received (i) when delivered if delivered by
hand or mailed and; (ii) 24 hours after sending, if sent by facsimile or telegram. 

  
 -6- 

 10. Claims Procedure. If a Participant or his or her authorized representative
(“claimant”) makes a written request alleging a right to receive Plan benefits or alleging a right to receive an adjustment in Plan benefits being paid, the Committee shall treat it as a benefit claim. All benefit claims under the Plan
shall be sent to the Committee and must be received within thirty (30) days after employment termination. The decision will be made within ninety (90) days after the Committee receives the claim unless the Committee determines additional
time due to special circumstances is needed. If the Committee determines that an extension to process a claim is required, the final decision may be deferred up to one hundred eight (180) days after the claim is received, if the claimant is
notified in writing of the need for the extension, the circumstances necessitating the extension of time, and the anticipated date of a final decision before the end of the initial ninety (90) day period. 

If the Committee decides that any individual who has claimed a right to receive benefits, or different benefits, under the Plan is not
entitled to receive all or any part of the benefits claimed, it will inform the claimant in writing, in terms calculated to be understood by the claimant, of the specific reasons for the denial, the Plan provisions on which the denial is based, a
description of additional material of information necessary to perfect the claim and an explanation of why the material or information is needed, and an explanation of the Plan’s claim review procedures and the time limits applicable to such
procedures, including a statement of the claimant’s right to bring a civil action pursuant to Section 502(a) of ERISA following a claim denial on review. In order to exhaust the Plan’s claims procedures following an initial claim
denial, a claimant must file an appeal with the Committee in accordance with the paragraph below. 
 The claimant must file a written
request for review with the Committee, setting forth the grounds for the request and any supporting facts, comments or arguments he or she wishes to make, within sixty (60) days after notice. If a written request for review is not received
within this sixty (60) day period, the denial will be final. Upon a timely request for review, the claimant is entitled to a full and fair review of the initial denied claim. The claimant shall have, upon request and free of charge, reasonable
access to all relevant documents pertaining to the claim and shall have the opportunity to submit written comments, documents, records, and other information relating to the claim. 

The Committee or the persons responsible to conduct the review on the Committee’s behalf shall conduct a full review of the claim and
shall take into account all information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial denial. Unless special circumstances require an extension of the review
period, the Committee will render its decision no later than the date of its next regularly scheduled meeting unless the request is filed less than thirty (30) days before that meeting. If the request is filed less than thirty (30) days
before a regularly scheduled meeting, the Committee will render its decision no later than the date of the second regularly scheduled meeting after it receives the request. However, if special circumstances require an extension of the review period,
a final decision shall be rendered no later than the third regularly scheduled meeting after it receives the request for review, if the claimant is notified in writing of the special circumstances and the date of the expected decision, before the
time is extended due to special circumstances. Committee decisions shall be in writing and provided no later than five (5) days after the decision is made. The decision shall include specific reasons for the action taken, including the specific
Plan provisions on which the decision is based. The claimant shall also be notified of the right to reasonable access, on request, to relevant documents or other information without charge and of his or her right to bring an action under
Section 502(a) of ERISA. 

  
 -7- 

 If the Committee determines that a claimant is entitled to a benefit hereunder, payment of such
benefit will be made to such claimant (or commence, as applicable) as soon as administratively practicable after the date the Committee determines that such claimant is entitled to such benefit, subject to Section 4(c). 

Timely completion of the claims procedures described in this Section 10 is a condition precedent to the commencement of any legal or
equitable action in connection with a claim for benefits under the Plan by a claimant. Any such action must be filed no later than one year after the date of the Committee’s denial of the appeal. 

11. Miscellaneous. 

(a) Assignment. No right, benefit or interest hereunder shall be subject to assignment, anticipation, alienation, sale, encumbrance,
charge, pledge, hypothecation or set-off for any claim, debt or obligation, or subject to execution, attachment, levy or similar process; but a Participant may assign any right, benefit or interest if the assignment is permitted under the terms of
any plan or insurance policy, or annuity contract governing that right, benefit or interest. 
 (b) Construction. Nothing in this
Plan shall be construed to amend any provision of any plan or policy of the Company or any affiliate except as otherwise expressly noted herein. This Plan is not, and shall not, be deemed to create any commitment by the Company or any affiliate to
continue a Participant’s employment. The captions of this Plan are not part of the provisions and shall have no force or effect. Whenever the context requires, the masculine gender includes the feminine gender, and words used in the singular or
plural will include the other. 
 (c) Successors. A Participant’s rights under this Plan are personal to the Participant and
shall not be assignable by a Participant other than by will or the laws of descent and distribution without the Company’s prior written consent. This Plan shall inure to the benefit of and be enforceable by a Participant’s legal
representatives. 
 This Plan shall be binding upon and inure to the benefit of the Company and any successor organization or organizations
which shall succeed to substantially all of the Company’s business and/or assets (whether directly or indirectly by merger, consolidation, acquisition of substantially all the Company’s assets or otherwise, including by operation of law).

 (d) Taxes. Any payment or delivery required under this Plan shall be subject to all legal requirements regarding tax withholding,
filing, reporting and other obligations. 
 (e) Governing Law. TO THE EXTENT THIS PLAN IS NOT GOVERNED BY FEDERAL LAW, THIS PLAN
SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW PRINCIPLES. 

(f) Clawback. To the extent required by (i) applicable law, including, without limitation, the requirements of the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010, any Securities Exchange Commission rule or any applicable securities exchange listing standards, (ii) any 

  
 -8- 

 
policy that may be adopted by the Board, or (iii) the provisions of any Participation Agreement executed by a Participant, amounts and benefits paid, payable, provided, or to be provided
pursuant to the Plan shall be subject to clawback to the extent necessary to comply with such law(s), policy, and/or Participation Agreement, which clawback may include forfeiture and/or recoupment of such amounts or benefits. 

(g) Severability. In case any provision of the Plan is held to be illegal, invalid, or unenforceable for any reason, such illegal,
invalid, or unenforceable provision will not affect the remaining provisions of the Plan, but the Plan will be construed and enforced as if such illegal, invalid, or unenforceable provision had not been included therein. 

LYONDELL CHEMICAL COMPANY 

  
 -9- 

 LYONDELLBASELL EXECUTIVE SEVERANCE PLAN 

PARTICIPATION AGREEMENT 

This Executive Severance Plan Participation Agreement (the “Participation Agreement”) is entered into effective as of
            , 2015 (the “Participation Date”), by and between Lyondell Chemical Company (the “Company”) and you (the “Participant”), pursuant to the
LyondellBasell Executive Severance Plan (the “Plan” or “LYB Executive Severance Plan”). The Participant agrees that the terms and conditions of this Agreement and the Plan will govern the Participant’s rights with respect to
the severance benefits provided under the Plan (the “Severance Benefits”), notwithstanding any contrary provision in any employment agreement or other severance plan. The Participant and the Company agree to execute such further
instruments and to take such further action as may reasonably be necessary to carry out the intent of this Participation Agreement. Except as defined in this Participation Agreement (including Exhibit A attached hereto), capitalized terms have the
same meanings ascribed to them in the Plan. 
 The Participant and the Company have entered into this Participation Agreement and have
agreed to the terms and conditions included in Exhibit A as an express incentive for the Participant and the Company to enter into the Participation Agreement and in consideration for the Company or any of its affiliates providing (i) the
consideration set forth in the Participation Agreement and (ii) Confidential Information to the Participant, to further protect the trade secrets and Confidential Information disclosed or entrusted to the Participant, to protect the business
goodwill of the Company and its affiliates, to protect the business opportunities disclosed or entrusted to the Participant, and to protect the other legitimate business interests of the Company and its affiliates. In executing this Participation
Agreement, the Participant expressly acknowledges and agrees that (a) the Participation Agreement aligns the Participant’s interests with the Company’s and its affiliates’ long-term business interests and creates a further
incentive for the Participant to build the Company’s and its affiliates’ goodwill, and (b) the provisions contained in Exhibit A are reasonably related to the Company’s and its affiliates’ legitimate interests in protecting
their goodwill. [Include the following for new employees: The Participant understands that the Company has hereby promised to provide to the Participant Confidential Information during the Participant’s employment with the
Company.] [Include the following for promoted employees: The Participant understands that the Company has hereby promised to provide to the Participant new Confidential Information following the Participant’s promotion to the
position of                     .] [Include the following for employees without promotion: The Participant understands that the Company has
hereby promised to provide to the Participant new Confidential Information following the Participant’s designation of eligibility under the Plan and Participant’s acceptance of this Agreement.] 

The Participant and the Company also expressly agree that any long-term incentive awards that may hereafter be granted to the Participant
pursuant to the LyondellBasell Industries (“LYB”) 2010 Long-Term Incentive Plan (the “LTIP”) similarly aligns the Participant’s interests with LYB’s and the Company’s long-term business interests and creates a
further incentive for the Participant to build the Company’s and LYB’s goodwill, and that the provisions contained in Exhibit A and Section 2 of this Agreement as they relate to such LTIP awards are reasonably related to the
Company’s and LYB’s legitimate interest in protecting its goodwill. Accordingly, 

 
Section 2 of this Agreement (regarding recovery of payments) also applies to any awards made to the Participant under the LTIP to the extent such awards (1) are granted after the
Participant signs this Participation Agreement and (2) vest or become exercisable on account of termination of employment for any reason other than the Participant’s death or disability. 

The terms and conditions of this Participation Agreement as offered herein must be accepted by the Participant prior to
            , 20    . Failure to timely accept the terms by such time will result in immediate and irrevocable cancellation of the participation offered. 

1. Participation. In accordance with, and subject to, the terms and conditions of the Plan, the Company hereby allows the Participant to participate in
the LYB Executive Severance Plan. 
 2. Covenants; Recovery of Payments. If the Committee determines that the Participant has committed a breach of
any of the Covenants set forth in Exhibit A, upon notice from the Company, the Participant shall reimburse to the Company all or a portion of the Severance Benefits or LTIP payments, or both, subject to this Participation Agreement, as the Committee
deems appropriate under the circumstances. Such notice shall be provided within the earlier to occur of one year after discovery of the alleged breach or the second anniversary of the Participant’s date of termination. 

3. Interpretation and Construction. This Participation Agreement and the Plan shall be interpreted and construed to the fullest extent possible
consistent with the LTIP and any applicable grant letter or award agreement thereunder. In the event of a conflict between the terms of any such document and this Participation Agreement, this Participation Agreement shall control. For the avoidance
of doubt, LTIP awards are subject to the terms of this Participation Agreement only to the extent they (a) are granted after the Participant signs this Participation Agreement and (b) vest or become exercisable on account of termination of
employment for any reason other than the Participant’s death or disability. Incentive compensation awards issued by the Company or LYB pursuant to the LTIP or any other incentive program or arrangement shall remain subject to other provisions
of such other award agreements and incentive arrangements, which shall not be affected by this Participation Agreement. 
  

									
	LYONDELL CHEMICAL COMPANY						
					
	By:		  
				Date:		  

					
			[Insert Name and Title]						
				
	PARTICIPANT						
				
	  
				Date:		  

				
	[Insert Name]						

  
 2 

 EXHIBIT A 

TO LYONDELLBASELL EXECUTIVE SEVERANCE PLAN 

PARTICIPATION AGREEMENT 
 1. As used in
this Exhibit A, the following terms have the meanings set out below: 
 “Business” means the business in which the
Company and its affiliates are engaged and for which the Participant has direct or indirect responsibilities during the term of Participant’s employment with the Company or any affiliate. 

“Competitor” means any business or enterprise engaged in the Business. 

“Confidential Information” means any trade secret, proprietary or confidential information of the Company or its
affiliates. 
 “Restricted Area” means those locations for which the Participant had responsibility, at any time
during the twelve (12) months prior to termination of Participant’s employment with the Company, and including any geographical area in which the Company (a) conducts any portion of its Business and for which Participant had
responsibility, or (b) has plans to conduct any portion of its Business, where those plans are known to the Participant. 
 2. Subject to the
exceptions set forth in this Exhibit A, the Participant agrees and expressly promises that the Participant shall not, during the Participant’s employment with the Company or its affiliates and for a period of one (1) year after the
Participant’s termination of employment with the Company and all affiliates (the “Prohibited Period”), regardless of the reason for such termination, directly or indirectly, anywhere in the Restricted Area: 

(a) carry on or engage in the Business in competition with the Company, or 

(b) render services to, or be affiliated with, a Competitor. 

3. Nothing herein shall prevent the Participant during the Prohibited Period from rendering professional services to a Competitor (but not as an employee of a
Competitor) or being affiliated with a diversified entity, so long as the Participant’s affiliation with that Competitor or entity, as applicable, does not: 

(a) cause the Participant to use or disclose any Confidential Information, and 

(b) involve the Participant having direct or indirect responsibilities with respect to any aspect of the entity’s business that engages in
the Business. 
 4. The Participant agrees and expressly promises that, during the Prohibited Period, the Participant shall not directly or indirectly: 

(a) recruit, solicit or induce any employee, consultant, or independent contractor of the Company or any of its affiliates to terminate or
lessen such person’s employment or other relationship with the Company or any affiliate, or 
 (b) directly or indirectly solicit any
then-current customer or business partner of the Company or any affiliate to terminate, alter, or modify its relationship with the Company or any affiliate. 

 5. Notwithstanding the restrictions in this Exhibit A, nothing herein prohibits: 

(a) the Participant from making general advertisements for employment or engagement, so long as such advertisements are not specifically
targeted at any employees, consultants, or independent contractors of the Company or any affiliate, or 
 (b) any other person or entity from
hiring, inducing, or attempting to induce, solicit, or encourage any employee or other service provider of the Company or any of its affiliates to leave their employ or service, provided that the Participant does not directly or indirectly
participate in or direct the prohibited activity and provided further that this clause (b) of paragraph 5 shall not apply with respect to the solicitation of any employee of the Company who is at that time an executive officer of the Company or
an employee of the Company directly reporting to any such executive officer. 
 6. The Participant agrees that during the Prohibited Period, and at all
times thereafter, the Participant will not, in public or in private and whether orally or in writing, make (or encourage any other third party to make) any disparaging or defamatory comments regarding (or otherwise place in a false light or
criticize) the Company or any affiliate, or any of the Company’s or its affiliates’ business, products, policies, decisions, or current or former directors, officers, members, partners, or employees in any respect or make any comments
concerning any aspect of the Participant’s relationship with the Company or any affiliate or any conduct or events which precipitated any termination of the Participant’s employment with or service to the Company or any affiliate. However,
the Participant’s obligations under this Section 6 shall not prohibit the Participant from making a good faith report of possible violations of applicable law to any governmental agency or entity, from making disclosures that are
protected under the whistleblower provisions of applicable law, or from making any other truthful disclosures required by applicable law, regulation, or order of a court or governmental agency. 

7. The Participant acknowledges and agrees that: (a) the purpose of the covenants set forth in this Exhibit A (the “Covenants”)
is to protect the goodwill, trade secrets and other Confidential Information of the Company and its affiliates; (b) because of the nature of the business in which the Company and its affiliates is engaged and because of the nature of the
Confidential Information to which the Participant has or will have access, it would be impractical and excessively difficult to determine the actual damages of the Company and its affiliates in the event the Participant breached any such covenants;
and (c) remedies at law (such as monetary damages) for any breach of the Participant’s obligations under the Covenants would be inadequate. The Participant therefore agrees and consents that if the Participant commits any breach of a
Covenant, the Company shall have the right (in addition to, and not in lieu of, any other right or remedy that may be available to it) to temporary and permanent injunctive relief from a court of competent jurisdiction, without posting any bond or
other security and without the necessity of proof of actual damage. 

  
 2 

 The parties expressly represent that the Covenants are reasonable in all respects and are
necessary to protect the legitimate business interests of the Company and its affiliates. The parties further acknowledge and agree that the Company and its affiliates conduct the Business on a worldwide basis and the Participant will have
Confidential Information regarding the business conducted by the Company and its affiliates in each location where it is conducted and the Participant will be materially associated with the Company’s and its affiliates’ goodwill. The
Participant expressly acknowledges and agrees that any violation of the Covenants would inevitably cause the Participant to disclose Confidential Information of the Company and its affiliates. 

If any portion of the Covenants is hereafter determined to be invalid or unenforceable in any respect, such determination shall not affect the
remainder thereof, which shall be given the maximum effect possible and shall be fully enforced, without regard to the invalid portions. In particular, without limiting the generality of the foregoing, if the covenants set forth in this Exhibit A
are found by a court or an arbitrator to be unreasonable, the Participant and the Company agree that the maximum period, scope or geographical area that is found to be reasonable shall be substituted for the stated period, scope or area, and that
the court or arbitrator shall revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. If any of the Covenants are determined to be wholly or partially unenforceable in any jurisdiction, such
determination shall not be a bar to or in any way diminish the Company’s right to enforce any such covenant in any other jurisdiction. 
 8. This
Participation Agreement is governed by Texas law, without giving effect to its conflicts of law principles. The Participant consents to the jurisdiction of the Harris County District State Court in Houston, Texas, although the Company may choose to
seek enforcement of the Covenants in any jurisdiction where the Participant may be found. 
  

									
	PARTICIPANT
				
	  
				Date:		  

				
	[Insert Name]						
				
	LYONDELL CHEMICAL COMPANY						
					
	By:		  
				Date:		  

					
			[Insert Name and Title]						

  
 3

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