Document:

ex_10-2.htm

Securities Purchase Agreement

This Securities Purchase Agreement (this “Agreement”), dated as of April 14, 2015, is entered into by and between ULURU Inc., a Nevada corporation (“Company”), and Inter-Mountain Capital Corp., a Delaware corporation, its successors and/or assigns (“Investor”).

 

A.           Company and Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”).

 

B.           Investor desires to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement (i) a Convertible Promissory Note, in the form attached hereto as Exhibit A, in the original principal amount of $550,000.00 (the “Note”), convertible into shares of common stock, $0.001 par value per share, of Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note, and (ii) a Warrant to Purchase Shares of Common Stock, in the form attached hereto as Exhibit B (the “Warrant”).

 

C.           This Agreement, the Note, the Warrant, and all other certificates, documents, agreements, resolutions and instruments delivered to any party under or in connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the “Transaction Documents”.

 

D.           For purposes of this Agreement: “Conversion Shares” means all shares of Common Stock issuable upon conversion of all or any portion of the Note; “Warrant Shares” means all shares of Common Stock issuable upon the exercise of or pursuant to the Warrant; and “Securities” means the Note, the Conversion Shares, the Warrant and the Warrant Shares.

 

NOW, THEREFORE, Company and Investor hereby agree as follows:

 

1. Purchase and Sale of Securities.

 

1.1. Purchase of Securities. Company shall issue and sell to Investor and Investor agrees to purchase from Company the Note and the Warrant. In consideration thereof, Investor shall pay the Purchase Price to Company. For the avoidance of doubt, the Purchase Price constitutes payment in full for the Warrant and the Note.

 

1.2. Form of Payment. On the Closing Date, Investor shall pay the Purchase Price to Company against delivery of the Note and the Warrant.

 

1.3. Closing Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 below, the date and time of the issuance and sale of the Securities pursuant to this Agreement (the “Closing Date”) shall be 5:00 p.m., Eastern Time on or about the date first set forth above, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date by means of the exchange by express courier and .pdf of documents and by wire transfer of funds, but shall be deemed to have occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.

 

1.4. Collateral for the Note. The Note is not secured.

 

1.5. Original Issue Discount; Transaction Expenses. The Note carries an original issue discount of $50,000.00 (the “OID”). The “Purchase Price”, therefore, shall be $500,000.00, computed as follows: $550,000.00 original principal balance, less the OID.

 

2. Investor’s Representations and Warranties. Investor represents and warrants to Company that: (i) this Agreement has been duly and validly authorized; (ii) this Agreement constitutes a valid and binding agreement of Investor enforceable in accordance with its terms; and (iii) Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D of the 1933 Act.

 

3. Representations and Warranties of Company. Company represents and warrants to Investor that: (i) Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has the requisite corporate power to own its properties and to carry on its business as now being conducted; (ii) Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified would not have a material adverse effect; (iii) Company has registered its Common Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and is obligated to file reports pursuant to Section 13 or Section 15(d) of the 1934 Act; (iv) each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and validly authorized by Company; (v) this Agreement, the Note, the Warrant, and the other Transaction Documents have been duly executed and delivered by Company and constitute the valid and binding obligations of Company enforceable in accordance with their terms, subject as to enforceability only to general principles of equity and to bankruptcy, insolvency, moratorium, and other similar laws affecting the enforcement of creditors’ rights generally; (vi) except as has been waived by the appropriate parties or lapsed, the execution and delivery of the Transaction Documents by Company, the issuance of Securities in accordance with the terms hereof, and the consummation by Company of the other transactions contemplated by the Transaction Documents do not and will not conflict with or result in a breach by Company of any of the terms or provisions of, or constitute a default under (a) Company’s formation documents or bylaws, each as currently in effect, (b) any indenture, mortgage, deed of trust, or other material agreement or instrument to which Company is a party or by which it or any of its properties or assets are bound, including any listing agreement for the Common Stock, or (c) to Company’s knowledge, any existing applicable law, rule, or regulation or any applicable decree, judgment, or order of any court, United States federal or state regulatory body, administrative agency, or other governmental body having jurisdiction over Company or any of Company’s properties or assets; (vii) no further authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock exchange or market or the stockholders or any lender of Company is required to be obtained by Company for the issuance of the Securities to Investor; (viii) none of Company’s filings with the SEC since February 1, 2014 contained, at the time they were filed (other than as modified by subsequent amendments), any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; (ix) Company has filed all reports, schedules, forms, statements and other documents required to be filed by Company with the SEC under the 1934 Act on a timely basis or has received a valid extension of such time of filing and has filed any such report, schedule, form, statement or other document prior to the expiration of any such extension; (x) Company is not, nor has it been in the past three (3) years, a “Shell Company,” as such type of “issuer” is described in Rule 144(i)(1) under the 1933 Act; (xi) Company has taken no action which would give rise to any claim by any person or entity for a brokerage commission, placement agent or finder’s fees or similar payments by Investor relating to the Note or the transactions contemplated hereby; (xii) except for such fees arising as a result of any agreement or arrangement entered into by Investor without the knowledge of Company (an “Investor’s Fee”), Investor shall have no obligation with respect to such fees or with respect to any claims made by or on behalf of other persons for fees of a type contemplated in this subsection that may be due in connection with the transactions contemplated hereby and Company shall indemnify and hold harmless each of Investor, Investor’s employees, officers, directors, stockholders, managers, agents, and partners, and their respective affiliates, from and against all claims, losses, damages, costs (including the costs of preparation and attorneys’ fees) and expenses suffered in respect of any such claimed or existing fees (other than an Investor’s Fee, if any), and (xiii) when issued, the Conversion Shares and the Warrant Shares will be validly issued, fully paid for and non-assessable, free and clear of all liens, claims, charges and encumbrances; and (ix) Company has performed due diligence and background research on Investor and its affiliates including, without limitation, John M. Fife, and, to its satisfaction, has made inquiries with respect to all matters Company may consider relevant to the undertakings and relationships contemplated by the Transaction Documents including, among other things, the following: http://investing.businessweek.com/research/stocks/people/person.asp?personId=7505107&ticker=UAHC; SEC Civil Case No. 07-C-0347 (N.D. Ill.); SEC Civil Action No. 07-CV-347 (N.D. Ill.); and FINRA Case #2011029203701. Company, being aware of the foregoing matters, acknowledges and agrees that such matters, or any similar matters, have no bearing on the transactions contemplated by the Transaction Documents and covenants and agrees it will not use any such information as a defense to performance of its obligations under the Transaction Documents or in any attempt to avoid, modify or reduce such obligations.

 

4. Company Covenants. Until all of Company’s obligations hereunder are paid and performed in full, or within the timeframes otherwise specifically set forth below, Company shall comply with the following covenants: (i) from the date hereof until the date that is six (6) months after all the Conversion Shares and the Warrant Shares either have been sold by Investor, or may permanently be sold by Investor without any restrictions pursuant to Rule 144, Company shall timely make all filings required to be made by it under the 1933 Act, the 1934 Act, Rule 144 or any United States securities laws and regulations thereof applicable to Company or by the rules and regulations of its principal trading market, and such filings shall conform to the requirements of applicable laws, regulations and government agencies, and, unless such filings are publicly available on the SEC’s EDGAR system (via the SEC’s web site at no additional charge), Company shall provide a copy thereof to Investor promptly after such filings; (ii) except following a Fundamental Transaction (as defined in the Note) in which the Note is paid off in full, so long as the Note remains outstanding or Investor beneficially owns any of the Securities and for at least twenty (20) Trading Days (as defined in the Note) thereafter, Company shall file all reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and shall take all reasonable action under its control to ensure that adequate current public information with respect to Company, as required in accordance with Rule 144, is publicly available, and shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would permit such termination; (iii) the Common Stock shall be listed or quoted for trading on any of (a) the NYSE Amex, (b) the New York Stock Exchange, (c) the Nasdaq Global Market, (d) the Nasdaq Capital Market, (e) the OTC Bulletin Board, (f) the OTCQX, or (g) the OTCQB; (iv) when issued, each of the Securities (including, without limitation, the Conversion Shares and the Warrant Shares), will be validly issued, fully paid for and non-assessable, free and clear of all liens, claims, charges and encumbrances, and (v) Company shall use the net proceeds received hereunder for working capital and general corporate purposes only; provided, however, Company will not use such proceeds to pay fees payable (A) to any broker or finder relating to the offer and sale of the Securities unless such broker, finder, or other party is a registered investment adviser or registered broker-dealer and such fees are paid in full compliance with all applicable laws and regulations, or (B) to any other party relating to any financing transaction effected prior to the date hereof.

 

5. Conditions to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Securities to Investor at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions:

 

5.1. Investor shall have executed this Agreement and delivered the same to Company.

 

5.2. Investor shall have delivered the Purchase Price to Company in accordance with Section 1.2 above.

 

6. Conditions to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Securities at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for Investor’s sole benefit and may be waived by Investor at any time in its sole discretion:

 

6.1. Company shall have executed this Agreement and delivered the same to Investor.

 

6.2. Company shall have delivered to Investor the duly executed Note and Warrant in accordance with Section 1.2 above.

 

6.3. Company shall have delivered to Investor a fully executed Irrevocable Letter of Instructions to Transfer Agent substantially in the form attached hereto as Exhibit C acknowledged in writing by Company’s transfer agent (the “Transfer Agent”).

 

6.4. Company shall have delivered to Investor a fully executed Secretary’s Certificate substantially in the form attached hereto as Exhibit D evidencing Company’s approval of the Transaction Documents.

 

6.5. Company shall have delivered to Investor a fully executed Share Issuance Resolution substantially in the form attached hereto as Exhibit E to be delivered to the Transfer Agent.

 

6.6. Company shall have delivered to Investor fully executed copies of the Registration Rights Agreement in the form attached hereto as Exhibit F (the “Registration Rights Agreement”).

 

6.7. Company shall have delivered to Investor all other Transaction Documents required to be executed by Company herein or therein.

 

7. Reservation of Shares. At all times during which the Note is convertible or the Warrant is exercisable, Company will reserve from its authorized and unissued Common Stock to provide for the issuance of Common Stock upon the full conversion of the Note and full exercise of the Warrant. Company will at all times reserve at least (i) two (2) times the Outstanding Balance divided by the Market Price (as defined in and determined pursuant to the Note) as of the date of determination, plus (ii) two (2) times the number of Warrant Shares (as determined pursuant to the Warrant) deliverable upon full exercise of the Warrant (the “Share Reserve”), but in any event not less than 2,500,000 shares of Common Stock shall be reserved at all times for such purpose (the “Transfer Agent Reserve”). Company further agrees that it will cause the Transfer Agent to immediately add shares of Common Stock to the Transfer Agent Reserve in increments of 200,000 shares as and when requested by Investor in writing from time to time, provided that such incremental increases do not cause the Transfer Agent Reserve to exceed the Share Reserve. In furtherance thereof, from and after the date hereof and until such time that the Note has been paid in full and the Warrant exercised in full, Company shall require the Transfer Agent to reserve for the purpose of issuance of Conversion Shares under the Note and Warrant Shares under the Warrant, a number of shares of Common Stock equal to the Transfer Agent Reserve. Company shall further require the Transfer Agent to hold such shares of Common Stock exclusively for the benefit of Investor and to issue such shares to Investor promptly upon Investor’s delivery of a conversion notice under the Note or a Notice of Exercise under the Warrant. Finally, Company shall require the Transfer Agent to issue shares of Common Stock pursuant to the Note and the Warrant to Investor out of its authorized and unissued shares, and not the Transfer Agent Reserve, to the extent shares of Common Stock have been authorized, but not issued, and are not included in the Transfer Agent Reserve. The Transfer Agent shall only issue shares out of the Transfer Agent Reserve to the extent there are no other authorized shares available for issuance and then only with Investor’s written consent.

 

8. Investor’s Consent Right to New Issuances.  From and after the date hereof and until all of Company’s obligations hereunder and the Note are paid and performed in full, Company shall not enter into any transaction pursuant to Section 3(a)(9) or Section 3(a)(10) of the 1933 Act without first obtaining Investor’s written consent to such Variable Security Issuance.

 

9. Registration Rights Agreement. Company hereby covenants and agrees to use its best efforts to prepare and file with the SEC on or before May 11, 2015 a Registration Statement, registering for resale by Investor of all of the Conversion Shares and the Warrant Shares upon the terms and conditions set forth in that certain Registration Rights Agreement attached hereto as Exhibit F.

 

10. Restrictions on Sales of Shares. Investor agrees that, with respect to any shares of Common Stock issued to Investor by the Company pursuant to the Note or the Warrant (collectively, the “Investor Shares”), in any given calendar week its Net Sales (as defined below) of such Investor Shares shall not exceed the greater of (a) ten percent (10%) of Company’s weekly dollar trading volume in such week (which, for purposes hereof, means the number of shares traded during such calendar week multiplied by the volume weighted average price per share for such week), and (b) $25,000. For purposes of this Agreement, the term “Net Sales” means (y) the gross proceeds from sales of the Investor Shares sold in a calendar week, minus (z) the purchase price paid for any shares of Company’s Common Stock purchased in the open market in such week up to a maximum of $7,500 (with shares of the Company’s Common Stock purchased in the open market in excess of $7,500 not being subtracted from the gross proceeds under subsection (y)). Company’s sole remedy for a breach of this this restriction is that Investor will owe Company twice the amount of the overage for such week. By way of example only, if the Net Sales of a portion of the Investor Shares were $27,000 for a given week, then Investor would owe Company $4,000 (2 x ($27,000 - $25,000)) under this Section.

 

11. Miscellaneous. The provisions set forth in this Section 9 shall apply to this Agreement, as well as all other Transaction Documents as if these terms were fully set forth therein.

 

11.1. Original Signature Pages. Each party agrees to deliver its original signature pages to the Transaction Documents to the other party within five (5) Trading Days of the date hereof. Notwithstanding the foregoing, the Transaction Documents shall be fully effective upon exchange of electronic signature pages by the parties and payment of the Purchase Price by Investor. For the avoidance of doubt, the failure by either party to deliver its original signature pages to the other party shall not affect in any way the validity or effectiveness of any of the Transaction Documents, provided that such failure to deliver original signatures shall be a breach of the party’s obligations hereunder.

 

11.2. Cross Default. Any Event of Default (as defined in the Note) by Company under the Note shall be deemed a default under this Agreement, and any default by Company under this Agreement will be deemed an Event of Default under the Note.

 

11.3. Governing Law; Venue. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Utah for contracts to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws. Each party consents to and expressly agrees that exclusive venue for Arbitration (as defined in Exhibit G) of any dispute arising out of or relating to any Transaction Document or the relationship of the parties or their affiliates shall be in Salt Lake County or Utah County, Utah. Without modifying the parties obligations to resolve disputes hereunder pursuant to the Arbitration Provisions (as defined below), for any litigation arising in connection with any of the Transaction Documents, each party hereto hereby (a) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in Salt Lake County, Utah, (b) expressly submits to the exclusive venue of any such court for the purposes hereof, and (c) waives any claim of improper venue and any claim or objection that such courts are an inconvenient forum or any other claim or objection to the bringing of any such proceeding in such jurisdictions or to any claim that such venue of the suit, action or proceeding is improper. Nothing in this subsection shall affect or limit any right to serve process in any other manner permitted by law.  THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

11.4. Arbitration of Claims. The parties shall submit all Claims (as defined in Exhibit G) arising under this Agreement or any other Transaction Document or other agreements between the parties and their affiliates to binding arbitration pursuant to the arbitration provisions set forth in Exhibit G attached hereto (the “Arbitration Provisions”). The parties hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding on the parties hereto and are severable from all other provisions of this Agreement. Any capitalized term not defined in the Arbitration Provisions shall have the meaning set forth in this Agreement. By executing this Agreement, Company represents, warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing representations. Company acknowledges and agrees that Investor may rely upon the foregoing representations and covenants of Company regarding the Arbitration Provisions.

 

11.5. Calculation Disputes. Certain arithmetic calculations are required under the Transaction Documents, including without limitation, calculating the Outstanding Balance, Warrant Shares, Exercise Shares (as defined in the Warrant), Delivery Shares (as defined in the Warrant), Installment Conversion Price (as defined in the Note), Installment Conversion Shares (as defined in the Note) to be delivered, Market Price, Conversion Shares, or the VWAP (as defined in the Note) (collectively, “Calculations”). Notwithstanding the Arbitration Provisions, if a party disputes a Calculation made by the other party, then the party disputing the Calculation shall submit the disputed determinations or arithmetic calculations (as the case may be) via email or facsimile to the other party (a) within two (2) Trading Days after receipt of the applicable notice giving rise to such disputed Calculation, or (b) if no notice gave rise to such dispute, at any time after Investor learns of the circumstances giving rise to such dispute. If Investor and Company are unable to agree upon such determination or calculation within two (2) Trading Days after such disputed determination or arithmetic calculation (as the case may be) is submitted to the other party, then Investor shall, within two (2) Trading Days, submit via email or facsimile the disputed Calculation to Unkar Systems Inc. (“Unkar Systems”). Company shall cause Unkar Systems to perform the determinations or calculations (as the case may be) and notify Company and Investor of the results no later than ten (10) Trading Days from the time it receives such disputed determinations or calculations (as the case may be). Unkar Systems’ determination of the disputed Calculation shall be binding upon all parties absent demonstrable error. Unkar Systems’ fee for performing such Calculation shall be paid by the incorrect party, or if both parties are incorrect, by the party whose Calculation is furthest from the correct Calculation as determined by Unkar Systems. In the event Company is the losing party, no extension of the Delivery Date shall be granted and Company shall incur all effects for failing to deliver the applicable shares in a timely manner as set forth in the Transaction Documents. Notwithstanding the foregoing, Investor may, in its sole discretion, designate an independent, reputable investment bank or accounting firm other than Unkar Systems to resolve any such dispute and in such event, all references to “Unkar Systems” herein will be replaced with references to such independent, reputable investment bank or accounting firm so designated by Investor.

 

11.6. Counterparts. Each Transaction Document may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. The parties hereto confirm that any electronic copy of another party’s executed counterpart of a Transaction Document (or such party’s signature page thereof) will be deemed to be an executed original thereof.

 

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

 

11.8. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

 

11.9. Entire Agreement; Amendments. This Agreement and the instruments and exhibits referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Company nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the parties hereto.

 

11.10. Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the earliest of: (a) the date delivered, if delivered by personal delivery as against written receipt therefor or by email to an executive officer, or by facsimile (with successful transmission confirmation), (b) the earlier of the date delivered or the third Trading Day after deposit, postage prepaid, in the United States Postal Service by certified mail, or (c) the earlier of the date delivered or the third Trading Day after mailing by express courier, with delivery costs and fees prepaid, in each case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by five (5) calendar days’ advance written notice similarly given to each of the other parties hereto):

 

If to Company:

ULURU Inc.

Attn: Kerry P. Gray

4452 Beltway Drive

Addison, Texas 75001

If to Investor:

Inter-Mountain Capital Corp.

Attn: John Fife

303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601

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

Hansen Black Anderson Ashcraft PLLC

Attn: Jonathan K. Hansen

3051 West Maple Loop, Suite 325

Lehi, Utah 84043

11.11. Successors and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by Investor hereunder may be assigned by Investor to a third party, including its financing sources, in whole or in part, without the need to obtain Company’s consent thereto. Company may not assign its rights or obligations under this Agreement or delegate its duties hereunder without the prior written consent of Investor.

 

11.12. Survival. The representations and warranties of Company and the agreements and covenants set forth in this Agreement shall survive the Closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of Investor. Company agrees to indemnify and hold harmless Investor and all its officers, directors, employees, attorneys, and agents for loss or damage arising as a result of or related to any third party claim brought against any such individual or entity related to any breach or alleged breach by Company of any of its representations or warranties set forth in this Agreement.

 

11.13. Publicity. Company and Investor shall have the right to review a reasonable period of time before issuance of any press releases by the other party with respect to the transactions contemplated hereby.

 

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

 

11.15. Investor’s Rights and Remedies Cumulative; Liquidated Damages. All rights, remedies, and powers conferred in this Agreement and the Transaction Documents are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other right, power, and remedy that Investor or the Company may have, whether specifically granted in this Agreement or any other Transaction Document, or existing at law, in equity, or by statute, and any and all such rights and remedies may be exercised from time to time and as often and in such order as Investor  of the Company may deem expedient. The parties acknowledge and agree that the harm to Investor caused by Company’s failure to comply with any of the terms of the Transaction Documents is incapable of accurate estimation. Such harm may include, without limitation, the loss of profitable business opportunities; Investor’s increased risk; adverse changes in interest rates, future share prices, and trading volumes; and inability of Investor to fulfill its contractual obligations to third parties, and resulting damage to Investor’s goodwill. Accordingly, any fees, balance adjustments, default interest, or other charges assessed under the Transaction Documents are not penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages (under Company’s and Investor’s expectations that any such liquidated damages will tack back to the Closing Date for purposes of determining the holding period under Rule 144).  The parties acknowledge and agree that under the circumstances existing at the time this Agreement is entered into, such liquidated damages are a reasonable forecast of just compensation for the harm to Investor for Company’s failure to comply with any of the terms of the Transaction Documents. All fees, balance adjustments, default interest, or other charges provided for in the Transaction Documents are agreed to by the parties to be based upon the obligations and the risks assumed by the parties as of the Closing Date and are consistent with investments of this type. The liquidated damages provisions of the Transaction Documents shall not limit or preclude a party from pursuing any other remedy available at law or in equity; provided, however, that the liquidated damages provided for in the Transaction Documents are intended to be in lieu of actual damages.

 

11.16. Ownership Limitation. Notwithstanding anything to the contrary contained in this Agreement or the other Transaction Documents, if at any time Investor shall or would be issued shares of Common Stock under any of the Transaction Documents, but such issuance would cause Investor (together with its affiliates) to beneficially own a number of shares exceeding the Maximum Percentage (as defined in the Note), then Company must not issue to Investor the shares that would cause Investor to exceed the Maximum Percentage. In furtherance of the foregoing, with each Installment Notice (as defined in the Note) delivered to Investor, Company agrees to notify Investor of the number of shares of Common Stock then outstanding and in the event that an issuance would cause the number of shares beneficially owned by Investor to exceed the Maximum Percentage, Investor shall notify Company of the number of shares that would cause Investor to exceed the Maximum Percentage. The shares of Common Stock issuable to Investor that would cause the Maximum Percentage to be exceeded are referred to herein as the “Ownership Limitation Shares”. Company will reserve the Ownership Limitation Shares not yet issued for the exclusive benefit of Investor. From time to time, Investor may notify Company in writing of the number of the Ownership Limitation Shares that may be issued to Investor without causing Investor to exceed the Maximum Percentage. Upon receipt of such notice, Company shall be unconditionally obligated to immediately issue such designated shares to Investor, with a corresponding reduction in the number of the Ownership Limitation Shares. For purposes of this Section, beneficial ownership of Common Stock will be determined under Section 13(d) of the 1934 Act.

 

11.17. Attorneys’ Fees and Cost of Collection. In the event of any arbitration or action at law or in equity to enforce or interpret the terms of this Agreement or any of the other Transaction Documents, the parties agree that the prevailing party shall be entitled to such party’s reasonable attorneys’ fees and related costs.

 

11.18. Waiver. No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.

 

11.19. Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.

 

11.20. Time of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement and the other Transaction Documents.

 

[Remainder of page intentionally left blank; signature page follows]

  

  

  

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

 

SUBSCRIPTION AMOUNT:

Principal Amount of Note:                                                                                 $550,000.00

Purchase Price:                                                                                 $500,000.00

INVESTOR:

Inter-Mountain Capital Corp.

By: _/s/ John M. Fife  _______________________

       John M. Fife, President

COMPANY:

ULURU Inc.

By:           s/ Kerry P. Gray 

 

Printed Name: Kerry P. Gray                                                                           

 

Title:           President and Chief Executive Officer                                                                

ATTACHED EXHIBITS:

	
Exhibit A  

	
Note

	
Exhibit B  

	
Warrant

	
Exhibit C  

	
Irrevocable Transfer Agent Instructions

	
Exhibit D  

	
Secretary’s Certificate

	
Exhibit E  

	
Share Issuance Resolution

	
Exhibit F  

	
Registration Rights Agreement

	
Exhibit G  

	
Arbitration Provisions

[Signature page to Securities Purchase Agreement]

  

  

  

EXHIBIT A

NOTE

[attached]

  

  

  

EXHIBIT B

WARRANT

[attached]

  

  

  

EXHIBIT C

IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

[attached]

  

  

  

EXHIBIT D

SECRETARY’S CERTIFICATE

[attached]

  

  

  

EXHIBIT E

SHARE ISSUANCE RESOLUTION

[attached]

  

  

  

EXHIBIT F

REGISTRATION RIGHTS AGREEMENT

[attached]

  

  

  

EXHIBIT G

ARBITRATION PROVISIONS

1.      Dispute Resolution. For purposes of this Exhibit G, the term “Claims” means any disputes, claims, demands, causes of action, liabilities, damages, losses, or controversies whatsoever arising from related to or connected with the transactions contemplated in the Transaction Documents and any communications between the parties related thereto, including without limitation any claims of mutual mistake, mistake, fraud, misrepresentation, failure of formation, failure of consideration, promissory estoppel, unconscionability, failure of condition precedent, rescission, and any statutory claims, tort claims, contract claims, or claims to void, invalidate or terminate the Agreement or any of the other Transaction Documents. The term “Claims” specifically excludes a dispute over Calculations (as defined in the Agreement). The parties hereby agree that the arbitration provisions set forth in this Exhibit G (“Arbitration Provisions”) are binding on the parties hereto and are severable from all other provisions in the Transaction Documents. As a result, any attempt to rescind the Agreement or declare the Agreement or any other Transaction Document invalid or unenforceable for any reason is subject to these Arbitration Provisions. These Arbitration Provisions shall also survive any termination or expiration of the Agreement.

 

2.      Arbitration. Except as otherwise provided herein, all Claims must be submitted to arbitration (“Arbitration”) to be conducted in Salt Lake County, Utah or Utah County, Utah and pursuant to the terms set forth in these Arbitration Provisions. The parties agree that the award of the arbitrator shall be final and binding upon the parties; shall be the sole and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented or pleaded to the arbitrator; and shall promptly be payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Any costs or fees, including without limitation attorneys’ fees, incident to enforcing the arbitrator’s award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement. The award shall include Default Interest (as defined in the Note) both before and after the award. Judgment upon the award of the arbitrator will be entered and enforced by a state court sitting in Salt Lake County, Utah. The parties hereby incorporate herein the provisions and procedures set forth in the Utah Uniform Arbitration Act, U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time, the “Arbitration Act”). Pursuant to Section 78B-11-105 of the Arbitration Act, in the event of conflict between the terms of these Arbitration Provisions and the provisions of the Arbitration Act, the terms of these Arbitration Provisions shall control.

 

3.      Arbitration Proceedings. Arbitration between the parties will be subject to the following procedures:

 

3.1         Pursuant to Section 110 of the Arbitration Act, the parties agree that a party may initiate Arbitration by giving written notice to the other party (“Arbitration Notice”) in the same manner that notice is permitted under Section 9.10 of the Agreement; provided, however, that the Arbitration Notice may not be given by email or fax. Arbitration will be deemed initiated as of the date that the Arbitration Notice is deemed delivered under Section 9.10 of the Agreement (the “Service Date”). After the Service Date, information may be delivered, and notices may be given, by email or fax pursuant to Section 9.10 of the Agreement or any other method permitted thereunder. The Arbitration Notice must describe the nature of the controversy, the remedies sought, and the election to commence Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded consistent with the Utah Rules of Civil Procedure.

 

3.2          Within ten (10) calendar days after the Service Date, Investor shall select and submit to Company the names of three arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such three designated persons hereunder are referred to herein as the “Proposed Arbitrators”). For the avoidance of doubt, each Proposed Arbitrator must be qualified as a “neutral” with Utah ADR Services. Within ten (10) calendar days after Investor has submitted to Company the names of the Proposed Arbitrators, Company must select, by written notice to Investor, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Company fails to select one of the Proposed Arbitrators in writing within such 10-day period, then Investor may select the arbitrator from the Proposed Arbitrators by providing written notice of such selection to Company. If Investor fails to identify the Proposed Arbitrators within the time period required above, then Company may at any time prior to Investor designating the Proposed Arbitrators, select the names of three arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Service by written notice to Investor. Investor may then, within ten (10) calendar days after Company has submitted notice of its selected arbitrators to Investor, select, by written notice to Company, one (1) of the selected arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Investor fails to select in writing and within such 10-day period one of the three arbitrators selected by Company, then Company may select the arbitrator from its three previously selected arbitrators by providing written notice of such selection to Investor. Subject to Paragraph 3.12 below, the cost of the arbitrator must be paid equally by both parties; provided, however, that if one party refuses or fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to the accrual of Default Interest thereupon), with such amount added to or subtracted from, as applicable, the award granted by the arbitrator. If Utah ADR Services ceases to exist or to provide a list of neutrals, then the arbitrator shall be selected under the then prevailing rules of the American Arbitration Association. The date that the selected arbitrator agrees in writing to serve as the arbitrator hereunder is referred to herein as the “Arbitration Commencement Date”.

 

3.3         An answer and any counterclaims to the Arbitration Notice, which must be pleaded consistent with the Utah Rules of Civil Procedure, shall be required to be delivered to the other party within thirty (30) calendar days after the Service Date. Upon request, the arbitrator is hereby instructed to render a default award, consistent with the relief requested in the Arbitration Notice, against a party that fails to submit an answer within such time period.

 

3.4         The party that delivers the Arbitration Notice to the other party shall have the option to also commence legal proceedings with any state court sitting in Salt Lake County, Utah (“Litigation Proceedings”), subject to the following: (i) the complaint in the Litigation Proceedings is to be substantially similar to the claims set forth in the Arbitration Notice, provided that an additional cause of action to compel arbitration will also be included therein, (ii) so long as the other party files an answer to the complaint in the Litigation Proceedings and an answer to the Arbitration Notice, the Litigation Proceedings will be stayed pending an award of the arbitrator hereunder, (iii) if the other party fails to file an answer in the Litigation Proceedings or an answer in the Arbitration Proceedings, then the party initiating Arbitration shall be entitled to a default judgment consistent with the relief requested, to be entered in the Litigation Proceedings, and (iv) any legal or procedural issue arising under the Arbitration Act that requires a decision of a court of competent jurisdiction may be determined in the Litigation Proceedings. Any award of the arbitrator may be entered in such Litigation Proceedings pursuant to the Arbitration Act.

 

3.5         Pursuant to Section 118(8) of the Arbitration Act, the parties agree that discovery shall be conducted in accordance with the Utah Rules of Civil Procedure; provided, however, that incorporation of such rules will in no event supersede the Arbitration Provisions set forth herein, including without limitation the time limitation set forth in Paragraph 3.9 below.

 

3.6         All discovery requests must be submitted in writing to the arbitrator before issuing or serving such discovery requests. In order to allow a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth in these Arbitration Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery request does not satisfy any of the standards set forth in these Arbitration Provisions or the Utah Rules of Civil Procedure, the arbitrator may modify such discovery request to satisfy the applicable standards, or strike such discovery request in whole or in part.  Discovery deadlines will be set forth in a scheduling order issued by the arbitrator. The parties hereby authorize and direct the arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for the arbitration proceedings to be efficient and expeditious.

 

3.7         Each party may submit expert reports (and rebuttals thereto), provided that such reports must be submitted by the deadlines established by the arbitrator. Expert reports must contain the following: (a) a summary of all opinions the expert will offer at trial and a summary of the basis and reasons for them; (b) the expert’s name and qualifications, including a list of all publications within the preceding 10 years, and a list of any other cases in which the expert has testified at trial or in a deposition or prepared a report within the preceding 10 years; and (c) the compensation to be paid for the expert’s study and testimony. The parties are entitled to depose any other party’s expert witness one time for no more than 4 hours per expert (in addition to any other depositions permitted hereunder). An expert may not testify in a party’s case-in-chief concerning any matter not fairly disclosed in the expert report or articulated in the deposition.

 

3.8         All information disclosed by either party during the Arbitration process (including without limitation information disclosed during the discovery process) shall be considered confidential in nature. Each party agrees not to disclose any confidential information received from the other party during the discovery process unless (i) prior to or after the time of disclosure such information becomes public knowledge or part of the public domain, not as a result of any inaction or action of the receiving party, (ii) such information is required by a court order, subpoena or similar legal duress to be disclosed if such receiving party has notified the other party thereof in writing and given it a reasonable opportunity to obtain a protective order from a court of competent jurisdiction prior to disclosure; or (iii) disclosed to the receiving party’s agents, representatives and legal counsel on a need to know basis who each agree in writing not to disclose such information to any third party. Pursuant to Section 118(5) of the Arbitration Act, the arbitrator is hereby authorized and directed to issue a protective order to prevent the disclosure of privileged information and confidential information upon the written request of either party.

 

3.9         The parties hereby authorize and direct the arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for the arbitration proceedings to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties hereby agree that an award of the arbitrator must be made within 270 days after the Arbitration Commencement Date. The arbitrator is hereby authorized and directed to hold a scheduling conference within ten (10) calendar days after the earlier to occur of (a) the filing of an Answer or (b) the due date for the filing of an Answer in order to establish a scheduling order with various binding deadlines for discovery, expert testimony, and the submission of documents by the parties to enable the arbitrator to render a decision prior to the end of such 270-day period. The Utah Rules of Evidence will apply to any final hearing before the arbitrator.

 

3.10         The arbitrator shall have the right to award or include in the arbitrator’s award any relief which the arbitrator deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the arbitrator may not award exemplary or punitive damages.

 

3.11         If any part of these Arbitration Provisions is found to violate applicable law or to be illegal, then such provision shall be modified to the minimum extent necessary to make such provision enforceable under applicable law.

 

3.12         The arbitrator is hereby directed to require the non-prevailing party to reimburse the prevailing party the reasonable attorneys’ fees and costs incurred by the prevailing party (excluding amounts paid to the arbitrator).

 

[End]

Arbitration Provisions, Pageex_10-3.htm

 

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”), dated as of April 14, 2015, is made by and between ULURU Inc., a Nevada corporation located at 4452 Beltway Drive, Addison, Texas 75001 (the “Company”), and Inter-Mountain Capital Corp., a Delaware corporation with offices at 303 East Wacker Drive, Suite 1040, Chicago, Illinois 60601 (the “Investor”).

 

A. Upon the terms and subject to the conditions of that certain Securities Purchase Agreement of even date herewith between the Investor and the Company (the “Purchase Agreement”, and together with each document entered into in connection therewith or pursuant thereto, the “Transaction Documents”), the Company has agreed to issue and sell to the Investor a Convertible Promissory Note in the face amount of $550,000.00 (including any promissory note(s) that replace(s) or is or are exchanged for such referenced promissory note, the “Note”) and a Warrant to Purchase Shares of Common Stock (the “Warrant”). For purposes hereof, “Common Stock” means the Company’s common stock, $0.001 par value per share.

 

B. The Note is convertible into shares of Common Stock (the “Conversion Shares”, which term, for purposes of this Agreement, and notwithstanding any other provision contained herein, shall include all shares of Common Stock issuable under the Note, including without limitation on any type of conversion of or in lieu of accrued interest or as payments of principal and interest under the Note, but without regard to any limitations on the issuance, conversion or payment of Common Stock under the Note) upon the terms and subject to the conditions contained in the Note.

 

C. The Warrant is exercisable for shares of Common Stock (the “Warrant Shares”, which term, for purposes of this Agreement, and notwithstanding any other provision contained herein, shall include all shares of Common Stock issuable upon any exercise of the Warrant, but without regard to any limitations on the issuance of Common Stock under, or exercise of, the Warrant) upon the terms and subject to the conditions contained in the Warrant.

 

D. In order to induce the Investor to execute and deliver the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), with respect to the Registrable Securities (as defined below).

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

 

1. Definitions.                      Unless otherwise defined below or indicated herein, capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement:

 

“Closing Date” means the date of the closing of the transactions contemplated by the Purchase Agreement.

 

“Effective Date” means the date the U.S. Securities and Exchange Commission (the “SEC”) declares effective a Registration Statement otherwise meeting the conditions contemplated hereby to be effective.

 

“Increased Conversion or Warrant Shares” means the Company’s good faith estimate of the number of shares of Common Stock, in addition to the Conversion Shares and Warrant Shares determined as of the date hereof, which the Company anticipates, as of the relevant date of determination, will be issuable to the Holder as a result of any adjustment to the number of Conversion Shares or Warrant Shares resulting from the application of any provision of the Note, Warrant or any of the other Transaction Documents subsequent to the date hereof.

 

“Investor” means the Investor and any permitted transferee or assignee who agrees to become bound by the provisions of this Agreement in accordance with Section 10 hereof and who holds the Note, the Warrant, or Registrable Securities.

 

“Permitted Suspension Period” means not more than two (2) periods during any consecutive 12-month period during which the Holder’s right to sell Registrable Securities under a Registration Statement is suspended, provided, however, that neither such period shall (i) be for more than twenty (20) days nor (ii) begin less than ten (10) Trading Days after the last day of the preceding suspension period (whether or not such last day was during or after a Permitted Suspension Period).

 

“Potential Material Event” means any of the following: (i) the possession by the Company of material information not ripe for disclosure in a Registration Statement, which shall be evidenced by determinations in good faith by the Board of Directors of the Company that disclosure of such information in such Registration Statement would be detrimental to the business and affairs of the Company; or (ii) any material engagement or activity by the Company which would, in the good faith determination of the Board of Directors of the Company, be adversely affected by disclosure in a Registration Statement at such time, which determination shall be accompanied by a good faith determination by the Board of Directors of the Company that such Registration Statement would be materially misleading absent the inclusion of such information.

 

“Register”, “Registered”, and “Registration” refer to a registration effected by preparing and filing a Registration Statement or Registration Statements in compliance with the Securities Act and pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities on a continuous basis, and the declaration or ordering of effectiveness of such Registration Statement(s) by the SEC.

 

“Registrable Securities” means, collectively, the Conversion Shares, the Warrant Shares, and the Increased Conversion or Warrant Shares.

 

“Registration Statement” means a registration statement of the Company under the Securities Act covering Registrable Securities on Form S-3, if the Company is then eligible to file using such form, and if not eligible, on Form S-1 or other appropriate form.

 

“Required Filing Date” means with respect to the Initial Registration Statement, May 11, 2015.

 

“Restricted Sale Date” means each date, other than a date during a Permitted Suspension Period or Update Delay (as defined in Section 5), on which the Investor is restricted from making sales of Registrable Securities covered by any previously effective Registration Statement.

 

2. Registration.

 

2.1. Mandatory Registration.

 

(a) The Company shall use its best efforts to prepare and file with the SEC, as soon as practicable after the Closing Date but no later than the Required Filing Date, a Registration Statement (the “Initial Registration Statement”) registering a number of Registrable Securities representing the Initial Number of Shares to Be Registered. The “Initial Number of Shares to Be Registered” equals 600,000 shares of Common Stock. Unless otherwise specifically agreed to in writing in advance by the Holder, the Initial Registration Statement (A) shall include the Initial Number of Shares to Be Registered, (B) shall include only Registrable Securities and any Piggyback Registrable Securities (as defined below) required to included therein and (C) shall also state that, in accordance with Rule 416 and 457 under the Securities Act, it also covers such indeterminate number of additional shares of Common Stock as may become issuable upon conversion of the Note, exercise of the Warrant or issuances of Increased Conversion or Warrant Shares covered by the Initial Registration Statement to prevent dilution resulting from stock splits, stock dividends or similar transactions.  “Piggyback Registrable Securities” shall be shares of Common Stock that the Company is required to include in the Initial Registration Statement pursuant to rights arising under the Registration Rights Agreement dated January 31, 2014 among the Company, Michael Sacks and The Punch Trust (the “Existing Registration Rights Agreement”), to the extent request by the holders of such rights.

 

(b) The Company will use its best efforts to cause the Initial Registration Statement to be declared effective on a date which is no later than the date that is one-hundred twenty (120) days after the Closing Date (the “Required Effective Date”) and to keep such Registration Statement effective for a period of no less than one hundred and eighty (180) days.

 

(c) If at any time the number of shares of Common Stock then registered under one or more Registration Statements (including the Initial Registration Statement) is less than the then-current Required Number of Registered Shares (the number of additional shares of Common Stock required to be registered in order for there to be an aggregate number of shares of Common Stock registered or sought to be registered in one or more Registration Statements (including the Initial Registration Statement) equal to the then-current Required Number of Registered Shares, the “Increased Number of Shares to Be Registered”), the Company shall, upon written request of the Investor (the “Request Date”), either amend any Registration Statement or file with the SEC an additional Registration Statement to register the number of shares of Common Stock equal to the Increased Number of Shares to Be Registered; provided, however, that for purposes of this provision, under no condition shall the Company be required to register any additional shares if such increase would cause the total number of shares subject to Registration Statements under this Agreement to be greater than the number of such shares which the SEC permits to be included in such Registration Statements.  The “Required Number of Registered Shares” shall mean the greater of (i) the amount by which all Registrable Securities exceeds the number of Registrable Securities that have not been sold by the Investor, and (ii) the Initial Number of Shares to be Registered. The Company shall file such amended Registration Statement or additional Registration Statement within thirty (30) days after the Request Date, and will use its best efforts to cause the amended Registration Statement or additional Registration Statement to be declared effective, (1) with respect to the Initial Registration Statement, the Required Effective Date, and (2) with respect to any other Registration Statement, on a date which is no later than the earlier of (A) five (5) days after notice by the SEC that such may be declared effective and (B) ninety (90) days after the Request Date.

 

2.2. Event of Default.

 

(a) If a Registration Statement is not filed with the SEC by the Required Filing Date as contemplated by this Agreement, an Event of Default (as defined in the Note) shall be deemed to have occurred under the Note, and, in addition to all other remedies set forth in the Note, a fee equal to $100 per day shall be added to the principal balance of the Note for so long as such Registration Statement remains unfiled.

 

(b) If a Registration Statement is not effective by the Required Effective Date (regardless of the reason or whether the Company has used its best efforts to accomplish such), or if there is a Restricted Sale Date, an Event of Default shall be deemed to have occurred under the Note and, in addition to all other remedies set forth in the Note, a fee equal to $100 per day shall be added to the principal balance of the Note for so long as such Registration Statement remains not yet effective and also for the occurrence of each Restricted Sale Date, as the case may be.

 

3. Obligations of the Company.  In connection with the registration of the Registrable Securities, the Company shall do each of the following:

 

3.1. Prepare promptly, and file with the SEC by the times required hereunder all Registration Statements (including amendments thereto) required hereunder, and thereafter use its best efforts to cause all such Registration Statements (and amendments, as applicable) to become effective by the times required hereunder and keep all such Registration Statements (as amended) effective at all times during the period (the “Registration Period”) continuing until the earlier of (i) the date when the Investor may sell all Registrable Securities under Rule 144 assuming net exercise of the Warrants without volume or other restrictions or limits and (ii) the date the Investor no longer owns any of the Registrable Securities, none of which such Registration Statements (including any amendments or supplements thereto and prospectuses contained therein) shall contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading.

 

3.2. Prepare and file with the SEC such amendments (including post-effective amendments) and supplements to each Registration Statement required hereunder and the prospectus used in connection with each such Registration Statement as may be necessary to keep each such Registration Statement effective at all times during the Registration Period, and, during the Registration Period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by each such Registration Statement until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in each such Registration Statement.

 

3.3. Permit a single firm of counsel designated by the Investor (which, until further notice, shall be deemed to be Hansen Black Anderson Ashcraft PLLC, Attn:  Jonathan K. Hansen, which firm has requested to receive such notification, “Investor’s Counsel”) to review all Registration Statements required hereunder and all amendments and supplements thereto within a reasonable period of time (but not less than three (3) Trading Days) prior to their filing with the SEC, and not file any document in a form to which Investor’s Counsel reasonably objects.

 

3.4. Notify the Investor and the Investor’s Counsel immediately (and, in the case of clause (i)(A) below, not less than three (3) Trading Days prior to such filing) and (if requested by any such person) confirm such notice in writing no later than one (1) Trading Day following the day (i)(A) when a prospectus or any prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; (B) whenever the SEC notifies the Company whether there will be a “review” of a Registration Statement; (C) whenever the Company receives (or a representative of the Company receives on its behalf) any oral or written comments from the SEC in respect of a Registration Statement (copies or, in the case of oral comments, summaries of such comments shall be promptly furnished by the Company to the Investor); and (D) with respect to a Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the SEC or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or prospectus or for additional information; (iii) of the issuance by the SEC of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for that purpose; (iv) if at any time any of the representations or warranties of the Company contained in any agreement (including any underwriting agreement) contemplated hereby ceases to be true and correct in all material respects; (v) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose; and (vi) of the occurrence of any event that to the best knowledge of the Company makes any statement made in a Registration Statement or prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, prospectus or other documents so that, in the case of such Registration Statement or the prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.  In addition, the Company shall communicate with the Investor’s Counsel with regard to its proposed written responses to the comments contemplated in clause (C) of this Section 3.4, so that, to the extent practicable, the Investor shall have the opportunity to comment thereon.

 

3.5. Furnish to the Investor and to Investor’s Counsel (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one (1) copy of each Registration Statement filed hereunder, each preliminary prospectus and prospectus, and each amendment or supplement thereto, and (ii) such number of copies of a prospectus, and all amendments and supplements thereto and such other documents, as the Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Investor.

 

3.6. As promptly as practicable after becoming aware thereof, notify the Investor of the happening of any event of which the Company has knowledge, as a result of which the prospectus included in any Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and use its best efforts promptly to prepare a supplement or amendment to each such Registration Statement or other appropriate filing with the SEC to correct such untrue statement or omission, and deliver a number of copies of such supplement or amendment to the Investor as the Investor may reasonably request.

 

3.7. As promptly as practicable after becoming aware thereof, notify the Investor of the issuance by the SEC of a Notice of Effectiveness or any notice of effectiveness or any stop order or other suspension of the effectiveness of any Registration Statement.

 

3.8. Comply with Regulation FD or any similar rule or regulation regarding the dissemination of information regarding the Company, and in furtherance of the foregoing, and not in limitation thereof, not disclose to the Investor any non-public material information regarding the Company.

 

3.9. Notwithstanding the foregoing, if at any time or from time to time after the date of effectiveness of a Registration Statement, the Company notifies the Investor in writing that the effectiveness of such Registration Statement is suspended for any reason or Registrable Securities cannot otherwise legally be sold thereunder, whether due to a Potential Material Event or otherwise, the Investor shall not offer or sell any Registrable Securities covered by such Registration Statement, or engage in any other transaction involving or relating to the Registrable Securities covered by such Registration Statement, from the time of the giving of such notice until the Investor receives written notice from the Company that the effectiveness of such Registration Statement has been restored, whether because the Potential Material Event has been disclosed to the public or it no longer constitutes a Potential Material Event or otherwise; provided, however, that the Company may not so suspend the rights of holders of Registrable Securities covered by any such Registration Statement during the periods such Registration Statement is required to be in effect, other than during a Permitted Suspension Period or Update Delay (and the applicable provisions of Section 2.2 shall apply with respect to any such suspension (other than during a Permitted Suspension Period or Update Delay)) or at any time during which the applicable Registrable Securities are eligible for an exemption from registration and freely tradeable under Rule 144 (defined below).

 

3.10. Use its reasonable efforts to secure and maintain the designation of all the Registrable Securities covered by one or more Registration Statements on the Principal Trading Market and the quotation of the Registrable Securities on the Principal Trading Market.

 

3.11. Provide a transfer agent (“Transfer Agent”) and registrar, which may be a single entity, for the Registrable Securities not later than the Effective Date for the Initial Registration Statement.

 

3.12. Cooperate with the Investor to facilitate the timely preparation and delivery of certificates for the Registrable Securities to be offered pursuant to each Registration Statement and enable such certificates for the Registrable Securities to be in such denominations or amounts as the case may be, as the Investor may reasonably request, and, no later than five (5) Trading Days after a Registration Statement is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the Transfer Agent for the Registrable Securities (with copies to the Investor) an appropriate instruction and opinion of such counsel, which shall include, without limitation, directions to the Transfer Agent to issue certificates of Registrable Securities (including certificates for Registrable Securities to be issued after the applicable Effective Date and replacement certificates for Registrable Securities previously issued) covered by the relevant Registration Statement without legends or other restrictions, subject to compliance with applicable law and other rules and regulations, including, without limitation, prospectus delivery requirements and provisions of this Agreement limiting or suspending the ability to sell Registrable Securities thereunder.

 

3.13. Take all other reasonable administrative steps and actions necessary to expedite and facilitate disposition by the Investor of the Registrable Securities pursuant to each Registration Statement; provided, however, that the foregoing does not require that the Company take any steps whatsoever regarding the identification or selection of a broker to sell the Registrable Securities, the identification of buyers of the Registrable Securities, or the negotiation of the sale terms of the Registrable Securities.

 

3.14. Not file any registration statement (other than the Initial Registration Statement and amendments thereto) during the period commencing on the Closing Date and ending on the Effective Date for the Initial Registration Statement; provided that the foregoing shall not prohibit the filing of a registration statement on Form S-8 related to a Company stock incentive plan.

 

4. Obligations of the Investor.  In connection with the registration of the Registrable Securities, the Investor shall have the following obligations:

 

4.1. The Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of each Registration Statement hereunder, unless the Investor has notified the Company in writing of the Investor’s election to exclude all of its Registrable Securities from any such Registration Statement; and

 

4.2. The Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.6, 3.7, or 3.9 above or Section 5 below, the Investor will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until the Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3.6, 3.7, 3.9 or 5, and, if so directed by the Company, the Investor shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in the Investor’s possession of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

 

5. Annual Update. Notwithstanding anything in this Agreement to the contrary, at any time (a) the Company is required to amend a Registration Statement pursuant to Section 10(a)(3) under the Securities Act, or (b) the Company is required to amend a Registration Statement to describe a fundamental change in the information set forth in the Registration Statement (including, without limitation, any transaction with respect to which the Company is required to update the Registration Statement to include financial statements and pro forma financial statements required by Rule 3-05 of Regulation S-X), the Company shall be allowed up to thirty (30) days from the date the amendment is required in order to file an amendment to the Registration Statement and until the sixtieth day following the date the amendment is required in order to cause the amended Registration Statement to be effective (such 60-day period, the “Update Delay”); provided, that the Company shall promptly after the occurrence of the event requiring amendment (x) notify the Investor in writing of the existence of (but in no event, without the prior written consent of the Investor, shall the Company disclose to such Investor any of the facts or circumstances regarding) such material non-public information giving rise to an Update Delay, (y) advise the Investor in writing to cease all sales under the Registration Statement until the end of the Update Delay and (z) use its reasonable efforts to cause the Update Delay to terminate as promptly as practicable.

 

6. Expenses of Registration.   All reasonable expenses (other than underwriting discounts and commissions of the Investor) incurred in connection with registrations, filings or qualifications pursuant to Section 3, but including, without limitation, all registration, listing, and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company shall be borne by the Company.  In addition, a fee equal to $2,000.00 for the review of each Registration Statement by Investor’s Counsel shall be borne by the Company.

 

7. Indemnification.  In the event any Registrable Securities are included in a Registration Statement under this Agreement:

 

7.1. To the extent permitted by law, the Company will indemnify and hold harmless the Investor, the directors, if any, of the Investor, and the officers, if any, of the Investor (each, an “Investor Indemnified Party”), against any losses, claims, damages, liabilities or expenses (joint or several) incurred (collectively, “Claims”) to which any of them may become subject under the Securities Act, Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise, insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any of the following statements, omissions or violations in any Registration Statement, or any post-effective amendment thereof, or any prospectus included therein: (i) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or any post-effective amendment thereof or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law (the matters in the foregoing clauses (i) through (iii) being, collectively referred to as “Violations”).  Subject to Section 6.2, the Company shall reimburse the Investor promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by the Investor in connection with investigating or defending any such Claim.  Notwithstanding anything to the contrary contained herein, the indemnification agreement contained above in this Section 7(a) shall not (I) apply to any Claim arising out of or based upon a Violation which occurs in reliance upon and in conformity with any legal opinion furnished by counsel to any Investor Indemnified Party or information furnished in writing to the Company by or on behalf of such Investor Indemnified Party expressly for use in connection with the preparation of the applicable Registration Statement, any such amendment thereof or supplement thereto or prospectus, if such prospectus (or supplement or amendment thereto) was timely made available by the Company pursuant to Section 3.2 hereof;  (II) be available to the extent such Claim is based on a failure of the Investor to deliver or cause to be delivered the prospectus made available by the Company or the amendment or supplement thereto made available by the Company; (III) be available to the extent such Claim is based on the delivery of a prospectus by the Investor after receiving notice from the Company under Section 3.6, 3.7 or 3.9 hereof (other than a notice regarding the effectiveness of a Registration Statement or any amendment or supplement thereto), or (IV) apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed.  The Investor will indemnify the Company and its officers, directors and agents (each, a “Company Indemnified Party”, and together with the Investor Indemnified Parties, each an “Indemnified Party”) against any Claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with in reliance upon and in conformity with any legal opinion furnished by counsel to any Investor Indemnified Party or information furnished in writing to the Company, by or on behalf of the Investor, expressly for use in connection with the preparation of a Registration Statement or the amendment or supplement thereto, except that such agreement to indemnify shall not apply to any Claim arising out of or based upon a Violation which occurs in reliance upon information furnished pursuant to any Transaction Document, or to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Investor, which consent shall not be unreasonably withheld or delayed.

 

7.2. Promptly after receipt by an Indemnified Party under this Section 6 of notice of the commencement of any action (including any governmental action) for which indemnification may be sought under this Section 6, such Indemnified Party shall, if a claim for indemnification in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel satisfactory to the indemnifying party (provided such counsel shall not have a conflict of interest with the Indemnified Party and provided that all defenses available to the Indemnified Party can be maintained without prejudicing the rights of the indemnifying party).  Subject to the provisions herein stated and after notice from the indemnifying party to such Indemnified Party of the indemnifying party’s election so to assume the defense thereof, the indemnifying party will not be liable to such Indemnified Party under this Section 6 for any legal or other reasonable out-of-pocket expenses subsequently incurred by such Indemnified Party in connection with the defense thereof other than reasonable costs of investigation, unless the indemnifying party shall not pursue the action to its final conclusion.  The Indemnified Party shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and reasonable out-of-pocket expenses of such counsel shall not be at the expense of the indemnifying party if the indemnifying party has assumed the defense of the action with counsel as provided above.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action by such delayed notice.  The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable; provided, however, that the Investor shall not be obligated to make any indemnification payment to the Company or any other Company Indemnified Party under this Section 6 unless and until there has been a final adjudication of liability on the part of the Investor.

 

8. Contribution.  To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that (a) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6; (b) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of such fraudulent misrepresentation; and (c) except where the seller has committed fraud (other than a fraud by reason of the information included or omitted from a Registration Statement as to which the Company has not given notice as contemplated under Section 3 hereof) or intentional misconduct, contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.

 

9. Reports under Securities Act and Exchange Act.  With a view to making available to Investor the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit Investor to sell securities of the Company to the public without Registration (“Rule 144”), the Company agrees to:

 

9.1. make and keep public information available, as those terms are understood and defined in Rule 144;

 

9.2. file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act;

 

9.3. furnish to the Investor so long as the Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) if not available on the SEC’s EDGAR system, a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investor to sell such securities pursuant to Rule 144 without Registration; and

 

9.4. at the request of the Investor, give its Transfer Agent instructions (supported by an opinion of the Investor’s counsel, if required or requested by the Transfer Agent) to the effect that, upon the Transfer Agent’s receipt from the Investor of

 

(a) a certificate (a “Rule 144 Certificate”) certifying (A) that the Investor’s holding period (as determined in accordance with the provisions of Rule 144) for the shares of Registrable Securities which the Investor proposes to sell (the “Securities Being Sold”) is not less than six months and (B) as to such other matters as may be appropriate in accordance with Rule 144 under the Securities Act, and

 

(b) an opinion of counsel acceptable to the Company (for which purposes it is agreed that the Investor’s Counsel shall be deemed acceptable) that, based on the Rule 144 Certificate, Securities Being Sold may be sold pursuant to the provisions of Rule 144, even in the absence of an effective Registration Statement,

 

the Transfer Agent is to effect the transfer of the Securities Being Sold and issue to the buyer(s) or transferee(s) thereof one or more stock certificates representing the transferred Securities Being Sold without any restrictive legend and without recording any restrictions on the transferability of such shares on the Transfer Agent’s  books and records (except to the extent any such legend or restriction results from facts other than the identity of the Investor, as the seller or transferor thereof, or the status, including any relevant legends or restrictions, of the shares of the Securities Being Sold while held by the Investor). If the Transfer Agent reasonably requires any additional documentation at the time of the transfer, the Company shall deliver or cause to be delivered all such reasonable additional documentation as may be necessary to effectuate the issuance of an unlegended certificate.

10. Piggyback Registrations. The Company shall notify the Investor in writing at least 15 business days prior to the filing of any registration statement under the Securities Act for purposes of a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company) and will afford the Investor an opportunity to include in each such registration statement all or part of the Registrable Securities the Investor holds, subject to any cutbacks required by any underwriter, position of the Securities and Exchange Commission and the Existing Registration Rights Agreement.  If the Investor desires to include in any such registration statement all or any part of the Registrable Securities held by the Investor, the Investor shall, within 15 business days after the above-described notice from the Company, so notify the Company in writing. Such notice shall state the intended method of disposition of the Registrable Securities by the Investor. In the event the Investor desires to include less than all of its Registrable Securities in any such registration statement it shall continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein.

 

11. Assignment of the Registration Rights.  The rights to have the Company register Registrable Securities pursuant to this Agreement shall be automatically assigned by the Investor to any transferee of the Registrable Securities (or all or any portion of the unconverted Note or any unexercised Warrant) only if the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, (b) the securities with respect to which such registration rights are being transferred or assigned, and (c) written evidence of the transferee’s assumption of the Investor’s obligations under this Agreement.

 

12. Amendment of Registration Rights.  Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor.  Any amendment or waiver effected in accordance with this Section 11 shall be binding upon the Investor and the Company.

 

13. Expiration of Registration Rights. The obligations of the Company under Sections 2, 3, 5, 8, 9, and 10 under this Agreement shall expire upon the earlier to occur of (i) the date the Outstanding Balance (as defined in the Note) under the Note has been paid or redeemed in full and the Warrant has been exercised in full (or is otherwise expired), and (ii) the date that all of the Registrable Securities can (assuming net exercise of the Warrant) be sold pursuant to Rule 144 without compliance with any volume, manner of sale, or public information provisions of Rule 144.

 

14. Miscellaneous.

 

14.1. A person or entity is deemed to be a holder of Registrable Securities whenever such person or entity owns of record such Registrable Securities.  If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities.

 

14.2. Notices required or permitted to be given hereunder shall be given in the manner contemplated by the Purchase Agreement, if to the Company or to the Investor, to their respective address contemplated by the Purchase Agreement, or at such other address as each such party furnishes by notice given in accordance with the Purchase Agreement.

 

14.3. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

 

14.4. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Utah for contracts to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws. Without modifying the parties obligations to resolve disputes hereunder pursuant to the Arbitration Provisions (as defined in the Purchase Agreement), for any litigation arising in connection with any of the Transaction Documents, each party hereto hereby (a) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in Salt Lake County, Utah, (b) expressly submits to the exclusive venue of any such court for the purposes hereof, and (c) waives any claim of improper venue and any claim or objection that such courts are an inconvenient forum or any other claim or objection to the bringing of any such proceeding in such jurisdictions or to any claim that such venue of the suit, action or proceeding is improper.

 

14.5. The Company and the Investor hereby waive a trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other in respect of any matter arising out of or in connection with this Agreement or any of the other Transaction Documents.

 

14.6. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such provision shall be modified to achieve the objective of the parties to the fullest extent permitted and such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other jurisdiction.

 

14.7. Subject to the requirements of Section 10 hereof, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto.

 

14.8. All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.

 

14.9. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning thereof.

 

14.10. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement.  This Agreement, once executed by a party, may be delivered to the other party hereto by telephone line facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

14.11. The Company acknowledges that any failure by the Company to perform its obligations under Section 3.1 hereof, or any delay in such performance could result in loss to the Investor, and the Company agrees that, in addition to any other liability the Company may have by reason of such failure or delay, the Company shall be liable for all direct damages caused by any such failure or delay, unless the same is the result of force majeure.  Neither party shall be liable for consequential damages.

 

14.12. This Agreement (including to the extent relevant the provisions of other Transaction Documents) constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein.

 

14.13. In the event of any action or preceding arising out of or related to this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees and related costs.

 

14.14. Time is expressly made of the essence of each and every provision of this Agreement.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

INVESTOR:

Inter-Mountain Capital Corp.

By: _/s/ John M. Fife________________________

       John M. Fife, President

COMPANY:

ULURU Inc.

By:           /s/ Kerry P. Gray 

 

Printed Name: Kerry P. Gray                                                                           

 

Title:           President and Chief Executive Officer                                                                

[Signature page to Registration Rights Agreement]

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