Document:

Exhibit 10.1 

 

GRANT
AGREEMENT

 

Made
this 24th day of July, 2018 by and between the TOWN OF CANANDAIGUA, a New York municipal corporation having its principal offices
at 5440 Routes 5 and 20 West, Canandaigua, New York 14424 (hereinafter called the “Grantor”), and AKOUSTIS TECHNOLOGIES,
INC. and AKOUSTIS, INC., each a Delaware corporation having its principal offices at 9805 Northcross Center Court, Suite A, Huntersville,
North Carolina 28078 (collectively hereinafter called the “Grantee”).

 

W
I T N E S S E T H:

 

WHEREAS,
the Grantor has received Community Development Block Grant funding for the purpose of providing financing to Grantee to support
Grantee’s purchase and installation of new machinery and equipment to allow it to commence semiconductor manufacturing at
a 120,000 square foot facility located at 5450 Campus Drive, in the Town of Canandaigua, New York, and

 

WHEREAS,
pursuant to this Agreement Grantor will utilize such funding for the purpose of making a grant or grants to Grantee.

 

NOW,
THEREFORE, the parties do hereby agree as follows:

 

SECTION
1.          DEFINITIONS

 

Unless
specifically provided otherwise or the context otherwise requires, when used in this Agreement:

 

1.01
“Application” means the application submitted to the Office of Community Renewal by Grantor dated May 12, 2017 for funding
under the Community Development Block Grant program and any additional submittals by Grantee to support the Application; such
Application and submittals being incorporated herein by reference and made a part hereof.

 

1.02
“CDBG” means Community Development Block Grant, a program of the United States Department of Housing and Urban Development.

 

1.03
“CDBG Funds” means Community Development Block Grant funds, including funds in the form of grants under 24 CFR Part
570, Subpart I and Program Income as defined at 24 CFR 570.489(e).

 

1.04        “Labor
Market Area” shall have the meaning defined at 24 CFR 570.482(h)(2)(ii).

 

1.05
       “HTFC” means the New York State Housing Trust Fund Corporation.

 

1.06
       “HUD” means the United States Department of Housing and Urban Development.

 

1.07
       “OCR” means the Office of Community Renewal, an office of New York Homes
and Community Renewal.

 

1.08
       “OCR Grant” means the award of CDBG funds to Grantor by HTFC as represented
by OCR and as evidenced by Grant Agreement #166ED884-17 between Grantor and HTFC dated June 27, 2017, such Grant Agreement being
incorporated herein by reference and made a part hereof.

 

     

     

    

 

1.11
       “Project” means the activities described in the Application that are to be
undertaken by Grantee and generally consisting of the purchase and installation of new machinery and equipment to allow for the
design and manufacture of single-band and multi-band BAW RF filter solutions at its facility located at 5450 Campus Drive, in
the Town of Canandaigua, New York.

 

SECTION
2.          THE GRANT

 

2.01  The Commitment. Subject to the terms and conditions of this Agreement, Grantor agrees to make a grant to Grantee in an
aggregate principal amount up to, but not exceeding the sum of seven hundred thirty-four thousand dollars ($734,000.00) (hereinafter
the “Grant”). The Grant shall be in consideration of Grantee completing the Project in a manner consistent with the
Application, complying with the employment and reporting requirements of Section 6 of this Agreement, and complying with all other
terms and conditions of this Agreement.

 

2.02  Use of Proceeds. Grant proceeds may be used by Grantee to finance the purchase of machinery and equipment from third-party
vendors made on or after June 27, 2017.

 

2.03  Disbursement of Proceeds. The Grant proceeds shall be disbursed in the following manner:

 

(a) Grantor shall not be obligated to disburse any Grant proceeds until each of the following has occurred:

 

(i)
Grantee shall have executed this Agreement and any other documents evidencing the Grant; and

 

(ii)
Grantee shall have presented evidence satisfactory to Grantor that the Project as described in the Application either (A) has
been completed, or (B) is being implemented and will be completed within a reasonable period of time as determined by Grantor;

 

(b) Grantee’s request to receive Grant proceeds shall be made in writing to Grantor and shall include the following:

 

(i)
A schedule detailing the total amount being requested and a reasonable breakdown of the amount by line item; and

 

(ii)
Evidence satisfactory to Grantor that the requested Grant proceeds represent paid or accrued expenses of Grantee which are eligible
Project costs pursuant to Section 2.02 hereof and which were incurred on or after June 27, 2017.

 

(c) Grantor shall not be obligated to disburse Grant proceeds that exceed an aggregate amount equal to ten and twenty-five hundredths
percent (.1025) of total documented Project Costs expended as of the date of the Grant disbursement.

 

     

     

    

 

(d) Grantor shall have the right, at its sole option, to disburse all or any portion of the Grant proceeds by making payment directly
to a contractor, subcontractor, or vendor to pay accrued expenses of Grantee which represent eligible Project costs, where such
costs have not been paid by Grantee.

 

(e) Notwithstanding any other provision of this Agreement, Grantor shall not be obligated to disburse Grant proceeds to Grantee that
are requested after June 27, 2019.

 

SECTION
3.          REPRESENTATIONS AND WARRANTIES

 

In
order to induce Grantor to enter into this Agreement and to make the Grant herein provided for, Grantee hereby represents and
warrants to Grantor that:

 

3.01 Legal Existence. Grantee is duly organized, validly existing and in good standing under the laws of the State of Delaware,
is authorized to do business in the State of New York and has the legal power to own its assets and to transact the business in
which it is presently engaged.

 

3.02 Power and Authorization. Grantee has the power, authority and legal right to make, deliver and perform this Agreement and
to accept the Grant hereunder and has taken all necessary action of its directors to authorize receipt of the Grant on the terms
and conditions of this Agreement. No consent of any other party and no consent, license, approval or authorization of, or registration
or declaration with, any governmental authority, bureau or agency is required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement.

 

3.03 No Legal Bar to Grants. The execution, delivery and performance of this Agreement will not, to Grantee’s knowledge,
violate any provision of any existing law or regulation or of any order or decree of any court or governmental instrumentality,
or any mortgage, indenture, contract or other agreement to which Grantee is a party or by which Grantee and any of its property
or assets may be bound, and will not result in the creation or imposition of any lien, charge or encumbrance on, or security interest
in, any of its properties pursuant to the provisions of any such mortgage, indenture, contract or other agreement.

 

3.04 No Material Litigation. No litigation or administrative proceedings of or before any court, tribunal or governmental body
is presently pending, or, to the knowledge of Grantee, threatened against Grantee or any subsidiary or any of its or their properties
or with respect to this Agreement which, if adversely determined, would, in the opinion of Grantee, have material adverse effect
on the business, assets or financial condition of Grantee or such subsidiary.

 

3.05 Financial Condition. There have been no material adverse changes in the financial condition or operations of Grantee since
the closing date of the latest financial statement furnished by Grantee to Grantor.

 

3.06 No Default. Grantee is not in default in the payment of any municipal, state or federal tax.

 

3.07 Ownership of Properties; Liens. Grantee has good and marketable title to all of its properties and assets, real and personal,
and none of such properties and assets are subject to any mortgage, lien, pledge, charge, encumbrance, security interest or title
retention or other security agreement or arrangement of any nature whatsoever except as disclosed in (i) the Application, (ii)
in financial statements filed by Grantee with Grantor, (iii) in the Current Report on Form 8-K filed by Grantee on March 5, 2018
(“March 2018 Form 8-K”), or (iv) security interests created by one or more indentures, mortgages and security agreements
to secure $15,000,000 of convertible senior secured notes as disclosed in the Current Report on Form 8-K filed by Grantee on May
10, 2018 (“May 2018 Form 8-K”). As disclosed in the March 2018 Form 8-K, certain of Grantee’s real estate, building
and equipment are subject to a lease-leaseback arrangement with the Ontario County Industrial Development Agency. As disclosed
in the May 2018 Form 8-K, Grantor is expected close on or about May 14, 2018 on the sale of certain convertible senior secured
notes which will be secured by substantially all of Grantor’s assets.

 

     

     

    

 

3.08 Filing of Statements and Reports. Grantee has filed copies of all statements and reports which, to the knowledge of Grantee,
are required to be filed with any governmental authority, agency, commission, board, or bureau.

 

3.09 Job Relocation Statement. The Project will not result in the relocation of any industrial or commercial plant, facility,
or operation from one Labor Market Area to another.

 

SECTION
4.          CONDITIONS OF GRANTING

 

The
obligation of Grantor to make advances of the Grant is subject to the following precedent to each advance unless waived by Grantor:

 

4.01
Compliance with this Agreement. At the time of the making of the Grant and any advances hereunder, Grantee shall have complied,
and then be in compliance, with all the terms, conditions, covenants, representations and warranties herein set forth, as set
forth in the Application and as set forth in all documents evidencing the Grant.

 

4.02
Corporate Action. Grantor shall, at the time of the making of the Grant, have received copies of all papers evidencing
all action of the board of directors of Grantee taken in connection with the Grant, and all legal matters incident to the Grant
shall be satisfactory to the counsel for Grantor.

 

4.03
Certifications. Grantor shall, at the time of the making of the Grant, have received a certification by a duly authorized
officer of Grantee that no material adverse change in the financial condition or operations, if any, of Grantee has occurred since
the closing date of the latest financial statement, if any, furnished by Grantee to Grantor; and that no suits or proceedings
have been instituted against Grantee which in the opinion of Grantee will adversely affect the financial condition or operations
of Grantee.

 

4.04
Opinion of Grantee’s Counsel. Counsel for Grantee shall have delivered to Grantor, in form and substance satisfactory to
Grantor and its counsel, an opinion that Grantee has the power to execute and deliver the documents required under this Agreement
and that all action of the Grantee has been properly authorized.

 

4.05
Grant Documents. All documents required by this Agreement and required by Grantor’s counsel which evidence and secure the
Grant shall have been executed and delivered to Grantor.

 

     

     

    

 

4.06
Title Insurance. Not applicable.

 

4.07
Municipal Compliance. Not applicable.

 

4.08
Flood Hazard. Not applicable.

 

4.09
Insurance. Grantee shall have delivered to Grantor evidence of real property, personal property, and liability insurance
relating to the operations at the Project site, such evidence to be in form and content acceptable to Grantor.

 

4.10
Other. Such other information and documentation as Grantor may reasonably require.

 

4.11
Legal Fees. Grantee shall pay Grantor’s attorney’s fees associated with the closing of the Grant transaction.

 

SECTION
5.          AFFIRMATIVE COVENANTS

 

Grantee
hereby covenants that so long as this Agreement is in effect, Grantee will, unless otherwise consented to in writing by Grantor:

 

5.01
Financial Statements. Not applicable.

 

5.02
Payment of Obligations. Not applicable.

 

5.03
Maintenance of Properties; Insurance. Keep all properties useful and necessary in the business of Grantee in good working
order and condition; maintain, with financially sound and reputable insurance companies, insurance on all of its properties (both
real and personal) in an amount not less than full replacement value, against such risks as are usually insured against in the
same general area and by companies engaged in the same or a similar business.

 

5.04
Taxes. Pay and discharge all taxes, assessments and governmental charges or levies imposed upon it or on its income or
profits or on any of its property prior to the date on which any penalties attach thereto, provided that Grantee shall not be
required by this to pay any such tax, assessment, charge or levy, the payment of which is being contested in good faith and by
proper proceedings.

 

5.05
Existence. Maintain its existence as a Delaware corporation and its authority to do business in New York State.

 

5.06
Records Retention. Retain all records and books of account that are directly pertinent to this Agreement for three (3)
years after the OCR Grant and all other pending matters have closed.

 

5.07
Inspection of Property, Books and Records. Permit Grantor, OCR, HUD, or any agents or representatives thereof, at any reasonable
time and as often as may be reasonably desired, to examine and to make copies and abstracts of Grantee’s records and books of
accounts pertaining only to the covenants and conditions of this Grant Agreement and solely for the purpose of determining or
verifying information pertinent to the covenants and conditions of this Grant Agreement.

 

     

     

    

 

5.08
Compliance With Federal Statutes. Comply with all of the following requirements as applicable:

 

(a)
Title VI of the Civil Rights Act of 1964 {42 U.S.C. 2000d et seq.}, which provides that no person in the United States
shall on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected
to discrimination under any program or activity receiving Federal financial assistance.

 

(b)
Section 109 of the Housing and Community Development Act of 1974 (the “Act”), as amended, and the implementing regulations
at 24 CFR 570.602, which require that no person in the United States shall on the ground of race, color, national origin or sex,
be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any program or activity
funded in whole or in part with community development funds made available pursuant to the Act. Section 109 of the Act, and the
implementing regulations at 24 CFR Part 146 and 24 CFR Part 8 further provide for the prohibition of discrimination on the basis
of age under the Age Discrimination Act of 1975 {42 U.S.C. 6101 et seq.}, or with respect to an otherwise qualified handicapped
person as provided in section 504 of the Rehabilitation Act of 1973 {29 U.S.C. 794}.

 

(c)
The Housing and Community Development Act of 1974, as amended, and the implementing regulations at 24 CFR Part 570.

 

(d)
If Grant proceeds are used for construction in excess of $2,000.00, Section 110 of the Housing and Community Development Act of
1974 (the “Act”), as amended, which requires that all laborers and mechanics employed by contractors or subcontractors
on construction work financed in whole or in part with assistance received under the Act shall be paid wages at rates not less
than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon
Act, as amended (40 U.S.C. 276a to a-5), and which further requires compliance with the Contract Work House and Safety Standards
Act (40 U.S.C. 327 et seq.).

 

(e)
If Grant proceeds are used for construction, the Copeland “Anti-Kickback” Act (17 U.S.C. 874) as supplemented in Department
of Labor regulations (29 CFR Part 3).

 

(f)
The flood insurance purchase requirements of Section 102(a) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4021a).

 

(g)
Executive Order 11246, as amended by Executive Order 12086, and the regulations issued pursuant thereto (41 CFR Chapter 60) which
provided that no person shall be discriminated against on the basis of race, color, religion, sex, or national origin in all phases
of employment during the performance of Federal or federally assisted construction contracts. The Grantee’s compliance shall
include causing all contractors and subcontractors providing labor services to be paid from Grant proceeds to comply with the
provisions of Executive Order 11246, as amended by Executive Order 12086.

 

(h)
The requirements of the Americans with Disabilities Act of 1990, as amended.

 

(i)
The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4801 et seq.),and the implementing regulations contained in 24 CFR 570.608,
respecting prohibition against the use of lead-based paint, notification of hazards of lead-based paint poisoning, and elimination
of lead-based paint hazards.

 

     

     

    

 

5.09
Additional Federal Requirements. Comply with the provisions attached hereto as Exhibit A, “Federal Contract Provisions”.

 

5.10
Completion of Project. Undertake and complete the Project in accordance with the Application and this Grant Agreement.
Grantee acknowledges that the Grant is funded with monies provided through the CDBG program and is made available under a grant
from OCR to the Grantor and agrees to complete the Project as approved by OCR in a manner consistent with the laws, regulations
and policies of the CDBG program.

 

5.11
Project Cost Documentation. In the manner prescribed by the OCR, provide to Grantor an accounting of all Project costs
and documentation that such costs have been incurred by Grantee and have been paid.

 

SECTION
6.          EMPLOYMENT

 

6.01
Definitions. Unless specifically provided otherwise or the context otherwise requires, when used in this Section:

 

(a)
“Covered Jobs” means any and all employment positions created on or after June 27, 2017 and as a direct result of the
Project, notwithstanding any estimates of covered jobs provided by Grantee as part of the Application.

 

(b)
“Employment and Reporting System” means those forms and instructions, in written and/or electronic format, provided
to Grantee by Grantor for the purpose of reporting data and information required pursuant to this Section 6.

 

(c)
“Family” means all persons residing in the same housing unit who are related by birth, marriage or adoption.

 

(d)
“Household” means all persons who reside in a common housing unit.

 

(e)
“HUD” means the United States Department of Housing and Urban Development.

 

(f)
“Low- and Moderate-Income Person” means a member of a family having an income equal to or less than the applicable Section
8 lower income limit established by HUD. Unrelated individuals shall be considered as one-person families for this purpose.

 

(g)
“Project” means the activities to be accomplished by Grantee as described in the Application.

 

6.02
Compliance with Federal Requirements. Grantee acknowledges that the Grant evidenced by this Agreement is subject to the
requirements of Federal statute and regulation relative to the use of Community Development Block Grant funds, and that Grantee’s
agreement to accept the Grant funds pursuant to this Agreement requires Grantee’s compliance with regulations set forth in 24
CFR Part 570, and policies and procedures implemented thereunder by HUD, the United States Department of Labor, OCR, and such
other Federal and State agencies as are or may in the future be charged with the responsibility of monitoring both Grantee’s and
Grantor’s compliance with low- and moderate-income benefit requirements.

 

     

     

    

 

6.03
Employment Undertaking. Grantee agrees to make a minimum of 51% of the Covered Jobs available to Low- and Moderate-Income
Persons. For the purpose of this Agreement, a Covered Job will be considered to be available to Low- and Moderate-Income Persons
if all of the following apply:

 

(a)
The Covered Job does not require special skills that can only be acquired with substantial training, work experience, or education
beyond high school (unless Grantee agrees to provide appropriate training to unqualified persons);

 

(b)
Grantee uses a hiring practice that encourages Low- and Moderate-Income Persons to be applicants; and

 

(c)
Grantee gives first consideration in hiring to qualified Low- and Moderate-Income Persons.

 

6.04
Job Calculation. In calculating Covered Jobs and the availability of Covered Jobs to Low- and Moderate-Income Persons,
the following will apply:

 

(a)
Only permanent jobs will be counted; temporary and construction jobs will not be counted.

 

(b)
Jobs of 35 or more hours per week will be considered as one full-time job. Part-time permanent jobs of less than 35 hours per
week will be converted to full-time equivalent jobs by dividing the number of part-time hours by 40.

 

(c)
Seasonal jobs will be considered to be permanent jobs if the duration of the working period is long enough to classify the job
as the employee’s principal occupation.

 

6.05
Employment and Reporting System. Consistent with the instructions and forms that comprise the Employment and Reporting
System, Grantee agrees to:

 

(a)
Maintain data for each applicant for a Covered Job including:

 

(i)
The applicant’s name and address;

 

(ii)
The applicant’s family size, family income, race, ethnicity, gender, handicapped status, female-headed household status, elderly
status, and unemployment status;

 

(iii)
The applicant’s status with respect to hiring for a Covered Job; and

 

(iv)
If applicable, the reason(s) that an applicant who is a Low- and Moderate-Income Person was not hired for a Covered Job.

 

(b)
Maintain data for each Covered Job which is created and filled including:

 

(i)
The job title and its availability to Low- and Moderate-Income Persons;

 

     

     

    

 

(ii)
Whether a Low- and Moderate-Income Person was hired for the job;

 

(iii)
The salary or wage for the job and whether health benefits are offered for the job; and

 

(iv)
A description of the hiring process for the job.

 

(c)
Submit quarterly reports of the applicants and Covered Job data to Grantor covering the calendar quarters ending March 31st,
June 30th, September 30th, and December 31st, to be provided no later than the 15th
day of the month following the end of each calendar quarter.

 

6.06
Expected Schedule of Employment Positions. Grantee represents that the employment positions created as a result of the
Project are expected to be created no later than June 26, 2019 and are expected to be the following:

 

	#
of

        Jobs
	Job
Title
	Required
Skills, Education, and Experience
	Estimated

Salary/Wage
	Hours

Per

Week

	40	Cleanroom/ 

        Production 
	HS
    req.; Assoc. preferred; will train	$54,000/yr	40
	8	Cleanroom/ 

        Production 
	Assoc.
    or higher; some experience	$54,000/yr	40
	4	Quality
    Inspector	Assoc.
    or higher; some experience	$60,000/yr	40
	4	Quality
    Inspector	HS
    req.; Assoc. preferred; will train	$60,000/yr	40
	14	Tech/Engineer	BA/BS
    + experience	$101,000/yr	40
	4	Mgt.
    Supervisor	BA;
    management experience	$95,000/yr	40

 

6.07
Right of Inspection. Grantee shall maintain in its files adequate documentation to support the data specified at Section
6.05 of this Agreement. Grantor and any duly authorized representative of OCR and HUD shall, at all reasonable times and upon
prior written notice, have access to and the right to inspect and copy all such documentation.

 

6.08
Job Relocation Certification. Grantee hereby certifies to Grantor that neither Grantee nor any of its subsidiaries has
plans to relocate jobs as a result of the Project that would result in a significant job loss (as such term is defined at 24 CFR
570.482(h)(2)(iv)) in a Labor Market Area other than the Labor Market Area in which the Project is located.

 

     

     

    

 

Section
7.              REIMBURSEMENT OF GRANT FUNDS

 

7.01
In the event that (i) OCR shall make a finding regarding the implementation or administration of the Project that requires Grantor
to pay to OCR, or requires Grantor to reimburse to Grantor’s CDBG account from non-CDBG Funds, any amount of the OCR Grant
funds, and (ii) it is expressly stated by OCR that such OCR finding resulted in whole or in part from Grantee’s failure
to meet its obligations pursuant to this Agreement in a manner acceptable to OCR; then Grantor shall have the right to receive
from Grantee, and Grantee shall have the obligation to pay to Grantor, the lesser of (i) a sum equal to the amount Grantor is
required by the OCR finding to pay to OCR or to reimburse to Grantor’s CDBG account, or (ii) the amount of CDBG Funds disbursed
to Grantee by Grantor pursuant to this Agreement. Grantor shall exercise such right of receipt by written notification to Grantee
which includes an assertion of such right, the amount of Grantee’s obligation, and written evidence of the applicable OCR
finding. Grantee shall effect such payment to Grantor within twenty-one (21) calendar days of its receipt of such notification.

 

7.02
The obligations of Grantee with respect to Section 7.01 of this Agreement shall terminate at such time as OCR issues a written
closeout of the OCR Grant to Grantor. To the extent that such closeout is dependent upon actions to be taken by Grantor, Grantor
shall make its best efforts to take such actions in a timely manner. Grantee acknowledges and agrees that OCR’s issuance
of a written closeout of the OCR Grant will require Grantee’s compliance with the terms and conditions of this Agreement.

 

7.03
Notwithstanding any other provision of this Agreement, in the event that Grantee ceases its operations in the Town of Canandaigua,
New York for a continuous period of ninety (90) days, then Grantor shall have the right to receive from Grantee, and Grantee shall
have the obligation to pay to Grantor the amount of CDBG Funds disbursed to Grantee by Grantor pursuant to this Agreement. Grantor
shall exercise such right of receipt by written notification to Grantee which includes an assertion of such right and the amount
of Grantee’s obligation. Grantee shall effect such payment to Grantor within twenty-one (21) calendar days of its receipt
of such notification. The provisions of this Section 7.03 shall terminate the earlier of (i) the effective date of a written closeout
of the OCR Grant issued to the Grantor by the OCR, or (ii) June 30, 2020.

 

7.04
Notwithstanding any other provision of this Agreement, in the event that Grantee shall have relocated jobs as a result of the
Project that resulted in a significant job loss (as such term is defined at 24 CFR 570.482(h)(2)(iv)) in a Labor Market Area other
than the Labor Market Area in which the Project is located, then Grantor shall have the right to receive from Grantee, and Grantee
shall have the obligation to pay to Grantor, the amount of CDBG Funds disbursed to Grantee by Grantor pursuant to this Agreement.
Grantor shall exercise such right of receipt by written notification to Grantee which includes an assertion of such right and
the amount of Grantee’s obligation. Grantee shall effect such payment to Grantor within twenty-one (21) calendar days of
its receipt of such notification.

 

SECTION
8.           MISCELLANEOUS

 

8.01
Notices. All notices, requests and demands to or upon the respective parties hereto shall be deemed to have been given
or made three days after having been deposited in the mail, postage prepaid, return receipt requested, or one day after having
been delivered to an overnight delivery service, addressed as set forth below or to such other address as may be hereafter designated
in writing by the respective parties hereto:

 

		Grantee:	Akoustis
                                         Technologies, Inc. and Akoustis, Inc.

9805
Northcross Center Court, Suite A 

Huntersville,
North Carolina 28078

 

     

     

    

 

		Grantor:	Supervisor,
Town of Canandaigua

5440
Routes 5 and 20 West 

Canandaigua,
New York 14424

 

8.02
Captions. The captions of the various sections and subsections of this Agreement have been inserted only for the purpose
of convenience, and shall not be deemed in any manner to modify, explain, enlarge or restrict any of the provisions of this Agreement.

 

8.03
Exhibits. Exhibits, if any, shall constitute an integral part of this Agreement.

 

8.04
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of Grantee and Grantor and their
respective successors and assigns, except that Grantee may not transfer or assign any of its rights or interests hereunder without
the prior written consent of Grantor.

 

8.05
Construction. This Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed
and interpreted in accordance with the laws of the State of New York. If any of the provisions of this Agreement shall be or become
illegal or unenforceable under any law, the other provisions shall remain in full forth and effect.

 

8.06
Prior Agreements Superseded. This Agreement shall completely supersede all other prior understandings or agreements, both
written and oral, between Grantor and Grantee relating to the Grant.

 

8.07
Amendments. This Agreement may be amended only with the written consent of Grantor and Grantee or their duly authorized
agents in writing.

 

8.08
Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of New York.
The Grantee agrees that any action or proceeding to enforce the provisions of this Agreement may be commenced by the Grantor in
New York State Supreme Court in any county, or in the District Court of the United States in any district, in which the Grantor
has an office, and the Grantee waives personal service of process and agrees that a summons and complaint commencing an action
or proceeding in any such court shall be properly served and shall confer personal jurisdiction if served by registered mail to
the Grantee at the Grantee’s address or to such other individual and/or address as provided in written notice from the Grantee
to the Grantor, or as otherwise provided by the Laws of the State of New York or the United States. The Grantee agrees to waive
any and all rights to change the venue of any action or proceeding brought to enforce the Agreement and waives any right to assert
any counterclaim or set-off or any defense based upon statute of limitations or claims of laches in any such action or proceeding.

 

8.09
Assignment By Grantor. Grantor, in consideration of the CDBG Funds awarded to it by HTFC, assigns all of its rights and
remedies under this Agreement to HTFC. In the event (i) the CDBG Agreement entered into between the Grantor and HTFC is terminated
for any reason, or (ii) HTFC, in its sole and absolute discretion, finds deficient performance or inadequate management capacity
on the part of the Grantor, HTFC shall have the right to notify Grantee that HTFC has asserted its rights to enforce any and all
obligations of Grantee under this Agreement or any other Grant instrument executed in connection herewith. Until such time as
HTFC elects to exercise such rights by mailing to the Grantor and Grantee written notice thereof, Grantor is authorized to enforce
all rights under this Agreement.

 

     

     

    

 

8.10
Waiver Of Jury Trial. Grantor and Grantee hereby waive their respective rights to a trial by jury in connection with any
action or proceeding brought to determine any claim or controversy involving this Agreement.

 

8.11
Indemnification. Grantee shall defend, indemnify, and hold harmless Grantor and HTFC and their respective agents and employees
from and against any and all claims, actions, damages, losses, expenses, and costs of every nature and kind, including reasonable
attorney’s fees, incurred by or asserted or imposed against Grantor or HTFC arising out of the Project or Grantee’s
actions with respect to this Agreement.

 

SECTION
9.          TERM OF AGREEMENT

 

9.01
This Agreement shall become effective as of the date first above written.

 

9.02
This Agreement shall terminate at such time as each of the following events shall have occurred:

 

(a)
OCR shall have issued a written closeout of the OCR Grant to Grantor. To the extent that such closeout is dependent upon actions
to be taken by Grantor, Grantor shall make its best efforts to take such actions in a timely manner. Grantee acknowledges and
agrees that OCR’s issuance of a written closeout of the OCR Grant will require Grantee’s compliance with the terms
and conditions of this Agreement; and

 

(b)
Any amounts owing to Grantor pursuant to the grant reimbursement requirements at Section 7 of this Agreement shall have been paid
by Grantee.

 

9.03
Notwithstanding any other provision of this Agreement, Grantor may immediately terminate this Agreement in writing in the event
Grantee fails to comply with the provisions hereof.

 

[Remainder
of Page Intentionally Left Blank]

 

     

     

    

 

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

 

TOWN
OF CANANDAIGUA

 

	By:	/s/
                                         Gregory R. Westbrook	
	 	Gregory
                                         R. Westbrook, Supervisor	

  

AKOUSTIS
TECHNOLOGIES, INC.

 

	By:	/s/
John T. Kurtzweil	
	 	John
T. Kurtzweil, Chief Financial Officer	

 

AKOUSTIS,
INC.

 

	By:	/s/
John T. Kurtzweil	
	 	John
T. Kurtzweil, Chief Financial Officer	

  

     

     

    

 

Exhibit
A

 

Federal
Contract Provisions

 

To
the extent applicable, the Grantee shall comply with the following requirements:

 

		1.	Equal
                                         Employment Opportunity - All construction contracts awarded in excess of $10,000 shall
                                         contain a provision requiring compliance with E.O. 11246, “Equal Employment Opportunity,”
                                         as amended by E.O. 11375, “Amending Executive Order 11246 Relating to Equal Employment
                                         Opportunity,” and as supplemented by regulations at 41 CFR part 60, “Office
                                         of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of
                                         Labor.”

 

		2.	Copeland
                                         “Anti-Kickback” Act (18 U.S.C. 874 and 40 U.S.C. 276c) - All contracts and
                                         subgrants in excess of $2000 for construction or repair shall include a provision for
                                         compliance with the Copeland “Anti-Kickback” Act (18 U.S.C. 874), as supplemented
                                         by Department of Labor regulations (29 CFR part 3, “Contractors and Subcontractors
                                         on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from
                                         the United States”). The Act provides that each contractor or subrecipient shall
                                         be prohibited from inducing, by any means, any person employed in the construction, completion,
                                         or repair of public work, to give up any part of the compensation to which he is otherwise
                                         entitled. All suspected or reported violations shall be reported to the Federal awarding
                                         agency.

 

		3.	Davis-Bacon
                                         Act, as amended (40 U.S.C. 276a to a-7) - When required by Federal grant program legislation,
                                         all construction contracts awarded by Recipients and subrecipients of more than $2000
                                         shall include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 276a to
                                         a-7) and as supplemented by Department of Labor regulations (29 CFR part 5, “Labor
                                         Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted
                                         Construction”). Under this Act, contractors shall be required to pay wages to laborers
                                         and mechanics at a rate not less than the minimum wages specified in a wage determination
                                         made by the Secretary of Labor. In addition, contractors shall be required to pay wages
                                         not less than once a week. The Recipient shall place a copy of the current prevailing
                                         wage determination issued by the Department of Labor in each solicitation and the award
                                         of a contract shall be conditioned upon the acceptance of the wage determination. All
                                         suspected or reported violations shall be reported to the Federal awarding agency.

 

		4.	Contract
                                         Work Hours and Safety Standards Act (40 U.S.C. 327-330) - Where applicable, all construction
                                         contracts awarded in excess of $100,000. Contracts that involve the employment of mechanics
                                         or laborers shall include a provision for compliance with Sections 103 and 107 of the
                                         Contract Work Hours and Safety Standards Act (40 U.S.C. 327-330), as supplemented by
                                         Department of Labor regulations (29 CFR part 5). Under Section 102 of the Act, each contractor
                                         shall be required to compute the wages of every mechanic and laborer on the basis of
                                         a standard work week of 40 hours. Work in excess of the standard work week is permissible
                                         provided that the worker is compensated at a rate of not less than 11⁄2 times the
                                         basic rate of pay for all hours worked in excess of 40 hours in the work week. Section
                                         107 of the Act is applicable to construction work and provides that no laborer or mechanic
                                         shall be required to work in surroundings or under working conditions which are unsanitary,
                                         hazardous or dangerous on federal and federally financed and assisted construction projects.
                                         These requirements do not apply to the purchases of supplies or materials or articles
                                         ordinarily available on the open market, or contracts for transportation or transmission
                                         of intelligence.

 

     

     

    

 

		5.	Patent
                                         Rights to Inventions Made Under a Contract or Agreement - Contract agreements for the
                                         performance of experimental, developmental, or research work shall provide for the patent
                                         rights of the Federal Government and the Recipient in any resulting invention in accordance
                                         with 37 CFR part 401, “Rights to Inventions Made by Nonprofit Organizations and
                                         Small Business Firms Under Government Grants, Contracts and Cooperative Agreements,”
                                         and any implementing regulations issued by the awarding agency.

 

		6.	Clean
                                         Air Act (42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act (33 U.S.C.
                                         1251 et sea.), as amended - Contracts and subgrants of amounts in excess of $100,000
                                         shall contain a provision that requires compliance with all applicable standards, orders
                                         or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401 et seq.) and the
                                         Federal Water Pollution Control Act as amended (33 U.S.C. 1251 et seq,). Violations shall
                                         be reported to the Federal awarding agency and the Regional Office of the Environmental
                                         Protection Agency (EPA).

 

		7.	Section
                                         3 12 U.S.C. 1701u of The Housing and Community Development Act of 1968, as amended -
                                         All contracts subject to Section 3 shall include the clause set forth at 24 CFR 135.38
                                         as provided in the Section 3 Rider.

 

8.       The
following provisions shall also be included in all contracts as applicable:

 

		a.	Contracts
                                         in excess of the small purchase threshold shall contain contractual provisions or conditions
                                         that allow for administrative, contractual, or legal remedies in instances by which a
                                         contractor violates or breaches the contract terms, and provides for such remedial actions
                                         as may be appropriate.

 

		b.	All
                                         contracts in excess of $10,000 shall contain suitable provisions for termination by the
                                         Recipient, including the manner by which such termination shall be effected and the basis
                                         for settlement.

 

		c.	Except
                                         as otherwise required by statute, an award that requires the contracting (or subcontracting)
                                         for construction or facility improvements shall provide for the Recipient to follow its
                                         own requirements relating to bid guarantees, performance bonds, and payment bonds unless
                                         the construction contract or subcontract exceeds $100,000. For those contracts or subcontracts
                                         exceeding $100,000, the OCR may accept the bonding policy and requirements of the Recipient,
                                         provided the OCR has made a determination that the Federal Government’s interest
                                         is adequately protected. If such a determination has not been made, the minimum requirements
                                         shall be as follows:

 

		(i)	A
                                         bid guarantee from each bidder equivalent to five percent of the bid price. The “bid
                                         guarantee” shall consist of a firm commitment such as a bid bond, certified check,
                                         or other negotiable instrument accompanying a bid as assurance that the bidder shall,
                                         upon acceptance of this bid, execute such contractual documents as may be required within
                                         the time specified.

 

     

     

    

 

		(ii)	A
                                         performance bond on the part of the contractor for 100 percent of the contract price.
                                         A “performance bond” is one executed in connection with a contract to secure
                                         fulfillment of all the contractor’s obligations under such contract.

 

		(iii)	A
                                         payment bond on the part of the contractor for 100 percent of the contract price. A “payment
                                         bond” is one executed in connection with a contract to assure payment as required
                                         by statute of all persons supplying labor and material in the execution of the work provided
                                         for in the contract.

 

		(iv)	Where
                                         bonds are required in the situations described herein, the bonds shall be obtained from
                                         companies holding certificates of authority as acceptable sureties pursuant to 31 CFR
                                         part 223, “Surety Companies Doing Business with the United States.”

 

		d.	All
                                         negotiated contracts awarded by Recipients or subrecipients shall include a provision
                                         to the effect that the Recipient or subrecipient, the OCR, the Comptroller General of
                                         the United States, or any of their duly authorized representatives, shall have access
                                         to any books, documents, papers and records of the contractor which are directly pertinent
                                         to a specific program for the purpose of making audits, examinations, excerpts and transcriptions.

 

		e.	All
                                         contracts shall contain a provision indemnifying the Housing Trust Fund Corporation,
                                         its agents and employees, from and against any and all claims, actions, damages, losses,
                                         expenses and costs of every nature and, including reasonable attorney’s fees, incurred
                                         by or assessed or imposed against the Housing Trust Fund Corporation, to the fullest
                                         extent permitted by law, arising out of the project being funded with NYS CDBG funds.

 

		f.	All
                                         contracts shall contain a provision acknowledging that all parties shall be bound by,
                                         and comply with all applicable Federal, State, and local laws and regulations, including,
                                         but not limited to 2 CFR Part 200 and 24 CFR Part 570.Exhibit 10.1

Dova Pharmaceuticals, Inc.

 

Common Stock
 ($0.001 par value per share)

 

AT-THE-MARKET EQUITY OFFERING SALES AGREEMENT

 

July 27, 2018

 

STIFEL, NICOLAUS & COMPANY, INCORPORATED

787 7th Avenue, 11th Floor

New York, NY 10019

 

Ladies and Gentlemen:

 

Dova Pharmaceuticals, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell from time to time to or through Stifel, Nicolaus & Company, Incorporated (“Stifel Nicolaus”), as sales agent and/or principal (“Agent”), shares (the “Shares”) of the Company’s common stock, $0.001 par value per share (the “Common Stock”), having an aggregate offering price of up to $100,000,000 on the terms set forth in Section 2 of this At-The-Market Equity Offering Sales Agreement (the “Agreement”).  The Company agrees that whenever it determines to sell Shares directly to the Agent as principal, it will enter into a separate agreement (each, a “Terms Agreement”) in substantially the form of Annex I hereto, relating to such sale in accordance with Section 3 of this Agreement.

 

Section 1.  Representations and Warranties.  Except as disclosed in the Registration Statement (as defined below) and the Prospectus (as defined below), the Company represents and warrants to the Agent that as of the date of this Agreement, any applicable Registration Statement Amendment Date (as defined in Section 3 below), each Company Periodic Report Date (as defined in Section 3 below), each Applicable Time (as defined in Section 1(a) below) and each Settlement Date (as defined in Section 2 below):

 

(a)                                 Compliance with Registration Requirements.  The Company shall file with the Securities and Exchange Commission (the “Commission”) a registration statement under the Securities Act of 1933, as amended (the “1933 Act”), on Form S-3, in respect of the Company’s Common Stock (including the Shares) (collectively, the “Securities”); such registration statement, and any post-effective amendment thereto, shall have become effective; and no stop order suspending the effectiveness of such registration statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or, to the knowledge of the Company, threatened by the Commission (the base prospectus filed as part of such registration statement, and relating to the Shares, is hereinafter called the “Basic Prospectus”; the various parts of such registration statement, including all exhibits thereto and any prospectus supplement (including the prospectus supplement included within the Registration Statement at the time it is filed) relating to the Shares that is filed with the Commission and deemed by virtue of Rule 430B to be part of such registration statement, each as amended at the time such part of the registration statement became effective, including any post effective amendments thereto, are hereinafter collectively called the “Registration Statement”; any prospectus supplement to the prospectus specifically relating to the Shares (including the prospectus supplement included within the Registration Statement at the time it is filed) prepared and filed with the Commission pursuant to Rule 424(b) under the 1933 Act is hereinafter called the “Prospectus Supplement”; the Basic Prospectus, as amended and supplemented by the Prospectus Supplement, is hereinafter called the “Prospectus”; any reference herein to the Basic Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act; any reference to any amendment or supplement to the Basic Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to refer to and include any post-effective amendment to the Registration Statement, any prospectus supplement relating to the Shares filed with the Commission pursuant to Rule 424(b) under the 1933 Act and any documents filed under the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the rules and regulations of the Commission thereunder (the “1934 Act Regulations”), and incorporated therein, in each case after the date of the Basic Prospectus, the Prospectus Supplement or the

 

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Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; and any “issuer free writing prospectus” as defined in Rule 433 under the 1933 Act relating to the Shares is hereinafter called an “Issuer Free Writing Prospectus”).

 

No order preventing or suspending the use of the Basic Prospectus, the Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission, and the Basic Prospectus and the Prospectus Supplement, at the time of filing thereof, conformed in all material respects to the requirements of the 1933 Act and the rules and regulations of the Commission thereunder (the “1933 Act Regulations”) and did not contain an 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 the light of the circumstances under which they were made, not misleading.

 

For the purposes of this Agreement, the “Applicable Time” means, with respect to any Shares, the time of sale of such Shares pursuant to this Agreement; the Prospectus and the applicable Issuer Free Writing Prospectus(es) issued at or prior to such Applicable Time, taken together (collectively, and, with respect to any Shares, together with the public offering price of such Shares, the “General Disclosure Package”) as of each Applicable Time and each Settlement Date, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each applicable Issuer Free Writing Prospectus will not conflict with the information contained in the Registration Statement, the Prospectus Supplement or the Prospectus and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the General Disclosure Package as of such Applicable Time, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(b)                                 Incorporation of Documents by Reference.  The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus, when they became effective or were filed with the Commission, as the case may be, complied in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, and, when read together with the other information in the Prospectus, (a) at the time the Registration Statement became effective, did not contain an 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 not misleading, and (b) at the time the Prospectus was issued and on the date of this Agreement, the Prospectus did not contain an 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 under which they were made, not misleading.

 

(c)                                  Independent Accountants.  The accountants who certified the financial statements and supporting schedules included in the Registration Statement are independent public accountants as required by the 1933 Act and the 1933 Act Regulations.

 

(d)                                 Financial Statements.  The financial statements included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related schedules and notes, present fairly, in all material respects, the financial position of the Company and its consolidated Subsidiaries (as defined below) at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company and its consolidated Subsidiaries for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis throughout the periods involved, except that unaudited financial statements may not contain footnotes required by GAAP.  The supporting schedules, if any, present fairly, in all material respects, in accordance with GAAP the information required to be stated therein.  The selected financial data and the summary financial information included in the Prospectus present fairly, in all material respects, the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included or incorporated by reference in the Registration Statement.

 

(e)                                  No Material Adverse Change in Business.  Since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, except as otherwise stated therein, (A) there has been no material adverse change, or any development that could reasonably be expected to

 

2

 

result in a material adverse change, in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its Subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a “Material Adverse Effect”), (B) there have been no transactions entered into by the Company or any of its Subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its Subsidiaries considered as one enterprise, and (C) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.

 

(f)                                   Good Standing of the Company.  The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its organization and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect.

 

(g)                                  Good Standing of Subsidiaries.  Each subsidiary listed on Schedule 1 hereto (each a “Subsidiary” and, collectively, the “Subsidiaries”) has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect; except as otherwise disclosed in the Registration Statement or as would not result in a Material Adverse Effect, all of the issued and outstanding capital stock of each such Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary except where such failure would not result in a Material Adverse Effect.  The only subsidiaries, direct and indirect, of the Company are the subsidiaries listed on Schedule 1 hereto.

 

(h)                                 Capitalization.  The shares of issued and outstanding Common Stock have been duly authorized and validly issued and are fully paid and non-assessable; none of the outstanding shares of capital stock was issued in violation of the preemptive or other similar rights of any securityholder of the Company.  The Company’s Common Stock has been registered pursuant to Section 12(b) of the 1934 Act and is listed on the Nasdaq Global Market (“Nasdaq”), and the Company has taken no action designed to, or likely to have the effect of, terminating the registration or listing of the Common Stock from the Nasdaq, nor has the Company received any notification that the Commission or the Nasdaq is contemplating terminating such registration or listing.

 

(i)                                     Authorization of Agreements.  This Agreement and any Terms Agreement have been duly authorized by the Company.  This Agreement has been, and any Terms Agreement will be, executed and delivered by the Company.

 

(j)                                    Authorization and Description of Securities.  The Shares have been duly authorized and reserved for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement or any Terms Agreement against payment of the consideration set forth herein, will be validly issued and fully paid and non-assessable; the Common Stock conforms to all statements relating thereto contained in the Prospectus and such description conforms to the rights set forth in the instruments defining the same; no holder of the Shares will be subject to personal liability by reason of being such a holder; and the issuance of the Shares is not subject to the preemptive or other similar rights of any securityholder of the Company.

 

(k)                                 Absence of Defaults and Conflicts.  (a) Neither the Company nor any of its Subsidiaries is (i) in violation of its charter or by-laws or (ii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any Subsidiary is subject (collectively, “Agreements and Instruments”), except for such violations and defaults in the case of this clause (a)(ii)

 

3

 

as would not have a Material Adverse Effect; (b)(i) and the execution, delivery and performance of this Agreement or of any Terms Agreement and the consummation of the transactions contemplated herein or in any Terms Agreement and in the Registration Statement (including the issuance and sale of the Shares and the use of the proceeds from the sale of the Shares as described in the Prospectus under the caption “Use of Proceeds”) and compliance by the Company with its obligations hereunder have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary pursuant to, the Agreements and Instruments, (ii) nor will such action result in any violation of the provisions of the charter or by-laws of the Company or any Subsidiary, (iii) nor will such action result in any violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any Subsidiary or any of their assets, properties or operations, except for such conflicts, breaches, violations and defaults in the case of clauses (b)(i) and (iii) as would not have a Material Adverse Effect.  As used herein, a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any Subsidiary.

 

(l)                                     Absence of Labor Dispute.  No labor disturbance by or dispute with employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is contemplated or threatened, and the Company is not aware of any existing or imminent labor disturbance by, or dispute with, the employees of any of its or its Subsidiaries’ principal suppliers, contractors or customers, except as would not reasonably be expected to have a Material Adverse Effect.

 

(m)                             Absence of Proceedings.  There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened, against or affecting the Company or any Subsidiary, which is required to be disclosed in the Registration Statement or the Prospectus (other than as disclosed therein), or which would reasonably be expected to result in a Material Adverse Effect, or which might materially and adversely affect the properties or assets thereof or the consummation of the transactions contemplated in this Agreement or any Terms Agreement or the performance by the Company of its obligations hereunder or thereunder; the aggregate of all pending legal or governmental proceedings to which the Company or any Subsidiary is a party or of which any of their respective property or assets is the subject which are not described in the Registration Statement or the Prospectus, including ordinary routine litigation incidental to the business, would not reasonably be expected to result in a Material Adverse Effect.

 

(n)                                 Accuracy of Exhibits.  There are no contracts or documents which are required to be described in the Registration Statement or the Prospectus or the documents incorporated by reference therein or to be filed as exhibits thereto which have not been so described and filed as required.

 

(o)                                 Intellectual Property.  Except as described in the Registration Statement, General Disclosure Package and Prospectus or except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (i) the Company and its Subsidiaries own, license or have other valid and enforceable rights to use all patents, trademarks, service marks, trade names, domain names and other source indicators, copyrights and copyrightable works, know-how, trade secrets, systems, procedures, proprietary or confidential information and all other worldwide intellectual property, industrial property and proprietary rights (and all registrations and applications for registration of, and all goodwill associated with, the foregoing) (collectively, “Intellectual Property”) used or held for use in, or necessary for, the conduct of their respective businesses as currently conducted and as proposed to be conducted in the Registration Statement, General Disclosure Package and Prospectus; (ii) to the knowledge of the Company, there is no Intellectual Property of any third party that is or would be infringed, misappropriated or otherwise violated by the conduct of the business of the Company or any of its Subsidiaries, or by the development, manufacture, use, importation or sale of any of the Company’s or any of its Subsidiaries’ products or product candidates; (iii) to the knowledge of the Company, no third party has infringed, misappropriated or otherwise violated any Intellectual Property of the Company or any of its Subsidiaries; (iv) there is no legal, governmental or regulatory investigations, actions, demands, claims, suits, arbitrations, inquiries or proceedings (“Actions”) pending against, or, to the knowledge of the Company, threatened against or affecting, the

 

4

 

Company or any of its Subsidiaries (A) challenging any rights of the Company or any of its subsidiaries in any of their Intellectual Property or the validity, enforceability or scope of any such Intellectual Property or (B) alleging that the Company or any of its Subsidiaries have infringed, misappropriated or otherwise violated any Intellectual Property of any third party; and (v) to the knowledge of the Company, all Intellectual Property owned by the Company and its Subsidiaries is valid and enforceable.

 

(p)                                 Absence of Further Requirements.  Except where the failure thereof would not result in a Material Adverse Effect, no filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement or any Terms Agreement, except such as have been already obtained or as may be required under the 1933 Act or the 1933 Act Regulations or state securities laws.

 

(q)                                 Absence of Manipulation.   Neither the Company nor, to the Company’s knowledge, any affiliate of the Company has taken, nor will the Company take, directly or indirectly, any action which is designed to or which has constituted or which would reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.

 

(r)                                    Possession of Licenses and Permits.  The Company and its Subsidiaries possess all licenses, sub-licenses, certificates, permits, approvals, consents and other authorizations  (collectively, “Government Licenses”) issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are required and necessary for the ownership or lease of their respective properties or the conduct of their respective businesses and operations as described in each of the Registration Statement, General Disclosure Package and the Prospectus, except where the failure to possess or make the same would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and except as described in each of the Registration Statement, General Disclosure Package and the Prospectus, neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any Government Licenses or has any reason to believe that any such Government License will not be renewed in the ordinary course.

 

(s)                                   Title to Property.  The Company and its Subsidiaries do not own any real property. The Company and its Subsidiaries have valid rights to lease or otherwise use, all items of real and personal property that are material to the respective businesses of the Company and its Subsidiaries, taken as a whole in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries or (ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

 

(t)                                    Investment Company Act.  The Company is not required, and upon the issuance and sale of the Shares as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus will not be required, to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “1940 Act”).

 

(u)                                 Environmental Laws. (i) The Company and its Subsidiaries (x) are in compliance with all, and have not violated any, applicable federal, state, local and foreign laws (including common law), rules, regulations, requirements, decisions, judgments, decrees, orders and other legally enforceable requirements relating to pollution or the protection of human health or safety, the environment, natural resources, hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (y) have received and are in compliance with, and have not violated any, permits, licenses, certificates or other authorizations or approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (z) have not received notice of any actual or potential liability under or relating to, or any actual or potential violation of, any Environmental Laws, including for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, and have no knowledge of any event or condition that would reasonably be expected to result in any such notice, and (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the Company or its Subsidiaries, except in the case of each of (i) and (ii) above, for any such matter as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (iii) except as described in each of the General Disclosure Package and Prospectus, (x) there are no proceedings that are pending,

 

5

 

or to the knowledge of the Company that contemplated, against the Company or its Subsidiaries under any Environmental Laws in which a governmental entity is also a party, other than such proceeding regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed, (y) the Company and its Subsidiaries are not aware of any facts or issues regarding compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws or concerning hazardous or toxic substances or wastes, pollutants or contaminants, that could reasonably be expected to have a material effect on the capital expenditures, earnings or competitive position of the Company and its Subsidiaries, and (z) none of the Company or its Subsidiaries anticipates material capital expenditures relating to any Environmental Laws.

 

(v)                                 Registration Rights.  Except as described in the Registration Statement, General Disclosure Package and the Prospectus, as applicable, to the extent that any person has the right to require the Company or any of its Subsidiaries to register any securities for sale under the 1933 Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Shares, those rights have been validly waived as of the date of this Agreement with respect to such filing or issuance and sale of Shares pursuant to this Agreement.

 

(w)                               Accounting Controls and Disclosure Controls.  The Company and its Subsidiaries maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the 1934 Act) that comply with the requirements of the 1934 Act applicable to the Company and its Subsidiaries and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.  The Company and its Subsidiaries maintain internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences and (v) interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement, General Disclosure Package and the Prospectus fairly presents the information called for in all material respects and is prepared in accordance with the Commission’s rules and guidelines applicable thereto.  Based on the Company’s most recent evaluation of its internal controls over financial reporting pursuant to Rule 13a-15(c) of the 1934 Act, except as disclosed in the Registration Statement, General Disclosure Package and the Prospectus, no material weaknesses in the Company’s internal controls have been identified by the Company or the auditors.  The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of:  (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which have adversely affected or are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.

 

The Company and its Subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the 1934 Act) that complies with the requirements of the 1934 Act applicable to the Company and its Subsidiaries and designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. The Company and its Subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the 1934 Act.

 

(x)                                 S-3 Eligibility.  (A)(i) At the time of filing the Registration Statement, the Company will meet the applicable requirements for use of Form S-3 under the 1933 Act and (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the 1934 Act or form of prospectus), the Company met the then applicable requirements for use of Form S-3 under the 1933 Act and (B) at the earliest time after the filing of the Registration Statement that the Company or another offering participant makes a bona fide offer (within the meaning of Rule 164(h)(2) under the 1933 Act) of the Shares, the Company will not be an “ineligible issuer” as defined in Rule 405 under the 1933 Act.

 

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(y)                                 No Commissions.  Neither the Company nor any of its Subsidiaries is a party to any contract, agreement or understanding with any person (other than as contemplated by this Agreement or any Terms Agreement) that would give rise to a valid claim against the Company or any of its Subsidiaries or the Agent for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Shares.

 

(z)                                  Deemed Representation.  Any certificate signed by any officer of the Company delivered to the Agent or to counsel for the Agent pursuant to or in connection with this Agreement or any Terms Agreement shall be deemed a representation and warranty by the Company to the Agent as to the matters covered thereby as of the date or dates indicated in such certificate.

 

(aa)                          Compliance with the Sarbanes-Oxley Act.  There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply in all material respects with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications.

 

(bb)                          [Reserved.]

 

(cc)                            Payment of Taxes.  The Company and its Subsidiaries have paid all federal, state, local and non-U.S. taxes and filed all tax returns required to be paid or filed through the date hereof; and except as otherwise disclosed in each of the Registration Statement, General Disclosure Package and the Prospectus, there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its Subsidiaries or any of their respective properties or assets that would reasonably be expected to have a Material Adverse Effect.

 

(dd)                          Insurance.  The Company and its Subsidiaries have insurance covering their respective properties, operations, personnel and businesses, which insurance is in amounts and insures against such losses and risks as the Company reasonably believes are adequate to protect the Company and its Subsidiaries and their respective businesses; and neither the Company nor any of its Subsidiaries has (i) received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business in all material respects.

 

(ee)                            Statistical and Market-Related Data.  Nothing has come to the attention of the Company that has caused the Company to believe that any statistical and market-related data included in the Registration Statement, the General Disclosure Package and the Prospectus is not based on or derived from sources that the Company believes to be reliable and accurate in all material respects.

 

(ff)                              Foreign Corrupt Practices Act.  Neither the Company nor any of its Subsidiaries, any director, officer nor, to the knowledge of the Company, any employee of the Company or any of its Subsidiaries nor, to the knowledge of the Company, any agent, affiliate or other person associated with or acting on behalf of the Company or any of its Subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit.  The Company and its Subsidiaries have instituted and will maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws.

 

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(gg)                            Money Laundering Laws.  The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all jurisdictions where the Company or any of its Subsidiaries conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

(hh)                          No Conflicts with Sanctions Laws.  Neither the Company nor any of its Subsidiaries, any director, officer nor, to the knowledge of the Company, any employee, agent,  affiliate or other person associated with or acting on behalf of the Company or any of its Subsidiaries is currently the subject or the target of any sanctions administered or enforced by the U.S. government, (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council (“UNSC”), the European Union, Her Majesty’s Treasury (“HMT”) or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company or any of its Subsidiaries located, organized or resident in a country or territory that is the subject or target of Sanctions, including, without limitation, Cuba, Iran, North Korea, Syria and Crimea (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that would reasonably be expected to result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.  For the past five years, the Company and its Subsidiaries have not knowingly engaged in and are not now knowingly engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Country.

 

(ii)                                  Compliance with ERISA.  (i) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for which the Company or any member of its “Controlled Group” (defined as any entity, whether or not incorporated, that is under common control with the Company within the meaning of Section 4001(a)(14) of ERISA or any entity that would be regarded as a single employer with the Company under Section 414(b), (c),(m) or (o) of the Code (as defined below)) would have any liability (each, a “Plan”) has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan, excluding transactions effected pursuant to a statutory or administrative exemption; (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no Plan has failed (whether or not waived), or is reasonably expected to fail, to satisfy the minimum funding standards (within the meaning of Section 302 of ERISA or Section 412 of the Code) applicable to such Plan; (iv) no Plan is, or is reasonably expected to be, in “at risk status” (within the meaning of Section 303(i) of ERISA) and no Plan that is a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA is in “endangered status” or “critical status” (within the meaning of Sections 304 and 305 of ERISA) (v) the fair market value of the assets of each Plan exceeds the present value of all benefits accrued under such Plan (determined based on those assumptions used to fund such Plan); (vi) no “reportable event” (within the meaning of Section 4043(c) of ERISA and the regulations promulgated thereunder) has occurred or is reasonably expected to occur; (vii) each Plan that is intended to be qualified under Section 401(a) of the Code is so qualified, and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification; (viii) neither the Company nor any member of the Controlled Group has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the Pension Benefit Guarantee Corporation, in the ordinary course and without default) in respect of a Plan (including a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA); and (ix) none of the following events has occurred or is reasonably likely to occur: (A) a material increase in the aggregate amount of contributions required to be made to all Plans by the Company or its Controlled Group affiliates in the current fiscal year of the Company and its Controlled Group affiliates compared to the amount of such contributions made in the Company’s and its Controlled Group affiliates’ most

 

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recently completed fiscal year; or (B) a material increase in the Company and its subsidiaries’ “accumulated post-retirement benefit obligations” (within the meaning of Accounting Standards Codification Topic 715-60) compared to the amount of such obligations in the Company and its subsidiaries’ most recently completed fiscal year, except in each case with respect to the events or conditions set forth in (i) through (ix) hereof, as would not, individually or in the aggregate, have a Material Adverse Effect.

 

(jj)                                Pre-Clinical Studies and Clinical Trials.    (i) The pre-clinical studies and clinical trials conducted by or on behalf of or sponsored by the Company or its Subsidiaries or in which the Company or its Subsidiaries have participated, that are described in the Registration Statement, the General Disclosure Package and the Prospectus, or the results of which are referred to in the Registration Statement, the General Disclosure Package and the Prospectus, as applicable, were, and if still pending are, being conducted in accordance with standard medical and scientific research standards and procedures and in material compliance with all applicable statutes and all applicable rules and regulations of the U.S. Food and Drug Administration (the “FDA”) and other applicable regulatory authorities (including, without limitation, any foreign, federal, state or local governmental or regulatory authority performing functions similar to those performed by the FDA) (collectively, the “Regulatory Authorities”) and current Good Clinical Practices and Good Laboratory Practices; (ii) the descriptions in the Registration Statement, the General Disclosure Package and the Prospectus of the results of such studies and trials are accurate and complete and fairly present the data derived therefrom; (iii) the Company has no knowledge of any other studies or trials not described in the Registration Statement, the General Disclosure Package and the Prospectus, the results of which are inconsistent with or call into question the results described or referred to in the Registration Statement, the General Disclosure Package and the Prospectus;  (iv) the Company and its Subsidiaries have operated at all times and are currently in material compliance with all applicable statutes, rules and regulations of the Regulatory Authorities; and (v) neither the Company nor any of its Subsidiaries have received any written notices, correspondence or other communications from the Regulatory Authorities or any other governmental agency requiring or threatening the termination, modification or suspension of any pre-clinical studies or clinical trials that are described in the Registration Statement, the General Disclosure Package and the Prospectus or the results of which are referred to in the Registration Statement, the General Disclosure Package and the Prospectus, other than ordinary course communications with respect to modifications in connection with the design and implementation of such studies or trials, and, to the Company’s best knowledge, there are no reasonable grounds for the same.

 

(kk)                          Regulatory Filings.    The Company has not failed to file with the Regulatory Authorities any required filing, declaration, listing, registration, report or submission with respect to the Company’s product candidates that are described or referred to in the Registration Statement, the General Disclosure Package and the Prospectus; all such filings, declarations, listings, registrations, reports or submissions were in material compliance with applicable laws when filed; and no deficiencies regarding compliance with applicable law have been asserted by any applicable regulatory authority with respect to any such filings, declarations, listings, registrations, reports or submissions.

 

(ll)                                  No Restrictions on Subsidiaries.    No Subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such Subsidiary’s capital stock or similar ownership interest, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary’s properties or assets to the Company or any other Subsidiary of the Company.

 

(mm)                  No Undisclosed Relationships.    No relationship, direct or indirect, exists between or among the Company or any of its Subsidiaries, on the one hand, and the directors, officers, stockholders, customers, suppliers or other affiliates of the Company or any of its Subsidiaries, on the other, that is required by the 1933 Act to be described in each of the Registration Statement and the Prospectus and that is not so described in such documents and in the General Disclosure Package.

 

Section 2.  Sale and Delivery of Shares.

 

(a)                                 Subject to the terms and conditions set forth herein, the Company agrees to issue and sell exclusively through the Agent acting as sales agent or directly to the Agent acting as principal from time to time, and the Agent agrees to use its commercially reasonable efforts to sell as sales agent for the Company, the Shares.  Sales of the Shares, if any, through the Agent acting as sales agent or directly to the Agent acting as principal may

 

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be made in negotiated transactions or transactions that are deemed to be “at-the-market offerings” as defined in Rule 415 under the 1933 Act, including sales made directly on the Nasdaq, or sales made to or through a market maker other than on an exchange or through an electronic communications network.

 

(b)                                 The Shares are to be sold on a daily basis or otherwise as shall be agreed to by the Company and the Agent on that trading day (other than a day on which the Nasdaq is scheduled to close prior to its regular weekday closing time, each, a “Trading Day”) that the Company has satisfied its obligations under Section 6 of this Agreement and that the Company has instructed the Agent to make such sales.  For the avoidance of doubt, the foregoing limitation shall not apply to sales solely to employees or security holders of the Company or its Subsidiaries, or to a trustee or other person acquiring such securities for the accounts of such persons in which Stifel Nicolaus is acting for the Company in a capacity other than as Agent under this Agreement.  On any Trading Day, the Company may instruct the Agent by telephone (confirmed promptly by telecopy or email, which confirmation will be promptly acknowledged by the Agent) as to the maximum number of Shares to be sold by the Agent on such day (in any event not in excess of the number available for issuance under the Prospectus and the currently effective Registration Statement) and the minimum price per Share at which such Shares may be sold.  Subject to the terms and conditions hereof, the Agent shall use its commercially reasonable efforts to sell as sales agent all of the Shares so designated by the Company.  The Company and the Agent each acknowledge and agree that (A) there can be no assurance that the Agent will be successful in selling the Shares, (B) the Agent will incur no liability or obligation to the Company or any other person or entity if they do not sell Shares for any reason other than a failure by the Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Shares as required by this Agreement, and (C) the Agent shall be under no obligation to purchase Shares on a principal basis except as otherwise specifically agreed by each of the Agent and the Company pursuant to a Terms Agreement.  In the event of a conflict between the terms of this Agreement and the terms of a Terms Agreement, the terms of such Terms Agreement will control.

 

(c)                                  Notwithstanding the foregoing, the Company shall not authorize the issuance and sale of, and the Agent as sales agent shall not be obligated to use its commercially reasonable efforts to sell, any Shares (i) at a price lower than the minimum price therefor authorized from time to time, or (ii) in a number in excess of the number of Shares authorized from time to time to be issued and sold under this Agreement, in each case, by the Company’s board of directors, or a duly authorized committee thereof, and notified to the Agent in writing.  In addition, the Company may, upon notice to the Agent, suspend the offering of the Shares or the Agent may, upon notice to the Company, suspend the offering of the Shares with respect to which the Agent is acting as sales agent for any reason and at any time; provided, however, that such suspension or termination shall not affect or impair the parties’ respective obligations with respect to the Shares sold hereunder prior to the giving of such notice.  Any notice given pursuant to the preceding sentence may be given by telephone (confirmed promptly by telecopy or email, which confirmation will be promptly acknowledged).

 

(d)                                 The gross sales price of any Shares sold pursuant to this Agreement by the Agent acting as sales agent of the Company shall be the market price prevailing at the time of sale for shares of the Company’s Common Stock sold by the Agent on the Nasdaq or otherwise, at prices relating to prevailing market prices or at negotiated prices.  The compensation payable to the Agent for sales of Shares with respect to which the Agent acts as sales agent shall be up to 3.0% of the gross sales price of the Shares for amounts of Shares sold pursuant to this Agreement.  The Company may sell Shares to the Agent, acting as principal, at a price agreed upon with the Agent at the relevant Applicable Time and pursuant to a separate Terms Agreement.  The remaining proceeds, after further deduction for any transaction fees imposed by any governmental, regulatory or self-regulatory organization in respect of such sales, shall constitute the net proceeds to the Company for such Shares (the “Net Proceeds”).  The Agent shall notify the Company as promptly as practicable if any deduction referenced in the preceding sentence will be required.

 

(e)                                  If acting as a sales agent hereunder, the Agent shall provide written confirmation to the Company following the close of trading on the Nasdaq, each day in which Shares are sold under this Agreement setting forth the number of Shares sold on such day, the aggregate gross sales proceeds of the Shares, the Net Proceeds to the Company and the compensation payable by the Company to such Agent with respect to such sales.

 

(f)                                   Under no circumstances shall the aggregate offering price or number, as the case may be, of Shares sold pursuant to this Agreement and any Terms Agreement exceed the aggregate offering price or number, as

 

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the case may be, of Shares of Common Stock (i) set forth in the preamble paragraph of this Agreement, (ii) available for issuance under the Prospectus and the then currently effective Registration Statement or (iii) authorized from time to time to be issued and sold under this Agreement or any Terms Agreement by the Company’s board of directors, or a duly authorized committee thereof, and notified to the Agent in writing. In addition, under no circumstances shall any Shares with respect to which the Agent acts as sales agent be sold at a price lower than the minimum price therefor authorized from time to time by the Company’s board of directors, or a duly authorized committee thereof, and notified to the Agent in writing.

 

(g)                                  Settlement for sales of Shares pursuant to this Section 2 will occur on the second business day that is also a Trading Day following the trade date on which such sales are made, unless another date shall be agreed to by the Company and the Agent (each such day, a “Settlement Date”).  On each Settlement Date, the Shares sold through the Agent for settlement on such date shall be delivered by the Company to the Agent against payment of the Net Proceeds from the sale of such Shares.  Settlement for all Shares shall be effected by book-entry delivery of Shares to the Agent’s account at The Depository Trust Company against payments by the Agent of the Net Proceeds from the sale of such Shares in same day funds delivered to an account designated by the Company.  If the Company shall default on its obligation to deliver Shares on any Settlement Date, the Company shall (i) indemnify and hold the Agent harmless against any loss, claim or damage arising from or as a result of such default by the Company and (ii) pay the Agent any commission to which it would otherwise be entitled absent such default.

 

(h)                                 Notwithstanding any other provision of this Agreement, the Company and the Agent agree that no sales of Shares shall take place, and the Company shall not request the sale of any Shares that would be sold, and the Agent shall not be obligated to sell, during any period in which the Company’s insider trading policy, as it exists on the date of the Agreement, would prohibit the purchases or sales of the Company’s Common Stock by its officers or directors, or during any other period in which the Company is, or could be deemed to be, in possession of material non-public information; provided that, unless otherwise agreed between the Company and the Agent, for purposes of this paragraph (i) such period shall be deemed to end on the date on which the Company’s next subsequent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, is filed with the Commission.

 

(i)                                     At each Applicable Time, Settlement Date, Registration Statement Amendment Date and each Company Periodic Report Date, the Company shall be deemed to have affirmed each representation and warranty contained in this Agreement.  Any obligation of the Agent to use its commercially reasonable efforts to sell the Shares on behalf of the Company as sales agent shall be subject to the continuing accuracy of the representations and warranties of the Company herein, to the performance by the Company of its obligations hereunder and to the continuing satisfaction of the additional conditions specified in Section 6 of this Agreement.

 

Section 3.  Covenants.   The Company agrees with the Agent:

 

(a)                                 During any period when the delivery of a prospectus is required in connection with the offering or sale of Shares (whether physically or through compliance with Rule 153 or 172, or in lieu thereof, a notice referred to in Rule 173(a) under the 1933 Act), (i) to make no further amendment or any supplement to the Registration Statement or the Prospectus prior to any Settlement Date which shall be disapproved by the Agent promptly after reasonable notice thereof and to advise the Agent, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any amendment or supplement to the Prospectus has been filed and to furnish the Agent with copies thereof, (ii) to file promptly all other material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the 1933 Act, (iii) to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act, (iv) to advise the Agent, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of the Prospectus or other prospectus in respect of the Shares, of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the form of the Registration Statement or the Prospectus or for additional information, and (v) in the event of the issuance of any such stop order or of any such order preventing or suspending the use of the Prospectus in respect of the Shares or suspending any such qualification, to promptly use its commercially reasonable efforts to obtain the withdrawal of such order; and in the event of any such issuance of a notice of objection, promptly to take such reasonable steps as

 

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may be necessary to permit offers and sales of the Shares by the Agent, which may include, without limitation, amending the Registration Statement or filing a new registration statement, at the Company’s expense (references herein to the Registration Statement shall include any such amendment or new registration statement). Notwithstanding the foregoing, the Company shall not be obligated to furnish copies of any report or statement filed with the Commission to the extent it is available on the Commission’s Electronic Data Gathering, Analysis, and Retrieval System (“EDGAR”).

 

(b)                                 Promptly from time to time to take such action as the Agent may reasonably request to qualify the Shares for offering and sale under the securities laws of such jurisdictions as the Agent may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the sale of the Shares, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; and to promptly advise the Agent of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for offer or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.

 

(c)                                  During any period when the delivery of a prospectus is required (whether physically or through compliance with Rules 153 or 172, or in lieu thereof, a notice referred to in Rule 173(a) under the 1933 Act) in connection with the offering or sale of Shares, the Company will make available to the Agent, as soon as practicable after the execution of this Agreement, and thereafter from time to time furnish to the Agent, copies of the most recent Prospectus in such quantities and at such locations as the Agent may reasonably request for the purposes contemplated by the 1933 Act.  During any period when the delivery of a prospectus is required (whether physically or through compliance with Rules 153 or 172, or in lieu thereof, a notice referred to in Rule 173(a) under the 1933 Act) in connection with the offering or sale of Shares, and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the 1934 Act any document incorporated by reference in the Prospectus in order to comply with the 1933 Act or the 1934 Act, to notify the Agent and to file such document and to prepare and furnish without charge to the Agent as many written and electronic copies as the Agent may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance. Notwithstanding the foregoing, the Company shall not be required to furnish any document to the extent such document is available on EDGAR.

 

(d)                                 To make generally available to its securityholders as soon as practicable, but in any event not later than sixteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the 1933 Act), an earnings statement of the Company and its Subsidiaries (which need not be audited) complying with Section 11(a) of the 1933 Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158).

 

(e)                                  To pay the required Commission filing fees relating to the Shares within the time required by Rule 456(b)(1) under the 1933 Act without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) under the 1933 Act.

 

(f)                                   To use the Net Proceeds received by it from the sale of the Shares pursuant to this Agreement and any Terms Agreement in the manner specified in the General Disclosure Package.

 

(g)                                  In connection with the offering and sale of the Shares, the Company will file with the Nasdaq all documents and notices, and make all certifications, required by the Nasdaq of companies that have securities that are listed or quoted on the Nasdaq and will maintain such listings or quotations.

 

(h)                                 To not take, directly or indirectly, and to cause its affiliates to refrain from taking, any action designed to cause or result in, or that has constituted or might reasonably be expected to constitute, under the 1934 Act or otherwise, the stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Shares.

 

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(i)                                     At each Applicable Time, each Settlement Date, each Registration Statement Amendment Date (as defined below), each Company Periodic Report Date (as defined below) and each date on which Shares are delivered to the Agent pursuant to a Terms Agreement, the Company shall be deemed to have affirmed each representation, warranty, covenant and other agreement contained in this Agreement or any Terms Agreement.  In each Annual Report on Form 10-K or Quarterly Report on Form 10-Q filed by the Company in respect of any quarter in which sales of Shares were made by or through the Agent under this Agreement or any Terms Agreement (each date on which any such document is filed, and any date on which an amendment to any such document is filed, a “Company Periodic Report Date”), the Company shall set forth with regard to such quarter the number of Shares sold through the Agent under this Agreement or any Terms Agreement and the Net Proceeds received by the Company with respect to sales of Shares pursuant to this Agreement or any Terms Agreement.

 

(j)                                    Upon commencement of the offering of Shares under this Agreement and each time the Shares are delivered to the Agent as principal on a Settlement Date and promptly after each (i) date the Registration Statement or the Prospectus shall be amended or supplemented (other than (1) by an amendment or supplement providing solely for the determination of the terms of the Shares, (2) in connection with the filing of a prospectus supplement that contains solely the information set forth in Section 3(i), (3) in connection with the filing of any current reports on Form 8-K (other than any current reports on Form 8-K which contain financial statements, supporting schedules or other financial data, including any current report on Form 8-K under Item 2.02 of such form that is considered “filed” under the 1934 Act) or (4) by a prospectus supplement relating to the offering of other securities (including, without limitation, other shares of Common Stock)) (each such date, a “Registration Statement Amendment Date”) and  (ii) Company Periodic Report Date, the Company will furnish or cause to be furnished forthwith to the Agent a certificate dated the date of effectiveness of such amendment or the date of filing with the Commission of such supplement or other document, as the case may be, in a form reasonably satisfactory to the Agent to the effect that the statements contained in the certificates referred to in Section 6(f) and (g) of this Agreement which were last furnished to the Agent are true and correct at the time of such amendment, supplement or filing, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement, the General Disclosure Package and the Prospectus as amended and supplemented to such time) or, in lieu of such certificate, certificates of the same tenor as the certificates referred to in said Section 6(f) and (g), but modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented, or to the document incorporated by reference into the Prospectus, to the time of delivery of such certificate. As used in this paragraph, to the extent there shall be an Applicable Time on or following the date referred to in clause (i) or (ii) above, promptly shall be deemed to be on or prior to the next succeeding Applicable Time. Notwithstanding the foregoing, the Company shall not be required to deliver any such certificates if it has notified the Agent that it does not then presently intend to make sales of Shares under this Agreement; provided, however, that such certificates shall then be required to be delivered to the Agent prior to any further sales of Shares under this Agreement covering the period which would most recently have been required but for such notice.

 

(k)                                 Upon commencement of the offering of Shares under this Agreement and each time the Shares are delivered to the Agent as principal on a Settlement Date, and promptly after each (i) Registration Statement Amendment Date and (ii) Company Periodic Report Date, the Company will furnish or cause to be furnished to the Agent and to counsel to the Agent the written opinion and letter of each Company counsel or other counsel reasonably satisfactory to the Agent, dated the date of effectiveness of such amendment or the date of filing with the Commission of such supplement or other document, as the case may be, in a form and substance reasonably satisfactory to the Agent and its counsel, of the same tenor as the opinions and letters referred to in Section 6(c) of this Agreement, but modified as necessary to relate to the Registration Statement, the General Disclosure Package and the Prospectus as amended and supplemented, or to the document incorporated by reference into the Prospectus, to the time of delivery of such opinion and letter or, in lieu of such opinion and letter, counsel last furnishing such letter to the Agent shall furnish such Agent with a letter substantially to the effect that the Agent may rely on such last opinion and letter to the same extent as though each were dated the date of such letter authorizing reliance (except that statements in such last letter shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such letter authorizing reliance). As used in this paragraph, to the extent there shall be an Applicable Time on or following the date referred to in clause (i) or (ii) above, promptly shall be deemed to be on or prior to the next succeeding Applicable Time. Notwithstanding the foregoing, the Company shall not be required to deliver any such opinion or letter if it has notified the Agent that it does not then presently intend to make sales of Shares under this Agreement; provided, however, that such an opinion or

 

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letter shall then be required to be delivered to the Agent prior to any further sales of Shares under this Agreement covering the period which would most recently have been required but for such notice.

 

(l)                                     Upon commencement of the offering of Shares under this Agreement, the Company will furnish or cause to be furnished to the Agent and to counsel to the Agent the written opinion of each Intellectual Property counsel or other counsel reasonably satisfactory to the Agent, dated the date of the commencement of the offering of Shares under this Agreement, related to the Intellectual Property of the Company in a form and substance reasonably satisfactory to the Agent and its counsel, of the same tenor as the opinions referred to in Section 6(d) of this Agreement

 

(m)                             Upon commencement of the offering of Shares under this Agreement and each time the Shares are delivered to the Agent as principal on a Settlement Date, and promptly after each (i) Registration Statement Amendment Date and (ii) Company Periodic Report Date, the Company will cause each of KPMG LLP and Ernst & Young LLP, as applicable, or other independent accountants reasonably satisfactory to the Agent, to furnish to the Agent letters, dated the date of effectiveness of such amendment or the date of filing of such supplement or other document with the Commission, as the case may be, in form reasonably satisfactory to the Agent and its counsel, of the same tenor as the letter referred to in Section 6(e) hereof, but modified as necessary to relate to the Registration Statement, the General Disclosure Package and the Prospectus, as amended and supplemented, or to the document incorporated by reference into the Prospectus, to the date of such letter. As used in this paragraph, to the extent there shall be an Applicable Time on or following the date referred to in clause (i) or (ii) above, promptly shall be deemed to be on or prior to the next succeeding Applicable Time. Notwithstanding the foregoing, the Company shall not be required to deliver any such letter if it has notified the Agent that it does not then presently intend to make sales of Shares under this Agreement; provided, however, that such letter shall then be required to be delivered to the Agent prior to any further sales of Shares under this Agreement covering the period which would most recently have been required but for such notice.

 

(n)                                 The Company consents to Stifel Nicolaus trading in the Company’s Common Stock for Stifel Nicolaus’ own account and for the account of its clients at the same time as sales of Shares occur pursuant to this Agreement or any Terms Agreement.

 

(o)                                 If, to the knowledge of the Company, all filings required by Rule 424 in connection with this offering shall not have been made or the representations in Section 1(a) shall not be true and correct on the applicable Settlement Date, the Company will offer to any person who has agreed to purchase Shares from the Company as the result of an offer to purchase solicited by the Agent the right to refuse to purchase and pay for such Shares.

 

(p)                                 The Company will cooperate timely with any reasonable due diligence review conducted by the Agent or its counsel from time to time in connection with the transactions contemplated hereby or in any Terms Agreement, including, without limitation, and upon reasonable notice providing information and making available documents and appropriate corporate officers, during regular business hours and at the Company’s principal offices, as the Agent may reasonably request.

 

(q)                                 During a period when the Company has instructed the Agent to sell Shares pursuant to this Agreement, the Company will not, without (i) giving the Agent at least three business days’ prior written notice specifying the nature of the proposed sale and the date of such proposed sale and (ii) the Agent suspending activity under this program for such period of time as requested by the Company or as deemed appropriate by the Agent in light of the proposed sale, (A) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, lend or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or securities convertible into or exchangeable or exercisable for or repayable with Common Stock, or file any registration statement under the 1933 Act with respect to any of the foregoing (other than a shelf registration statement under Rule 415 under the 1933 Act, a registration statement on Form S-8 or post-effective amendment to the Registration Statement) or (B) enter into any swap or other agreement or any transaction that transfers in whole or in part, directly or indirectly, any of the economic consequence of ownership of the Common Stock, or any securities convertible into or exchangeable or exercisable for or repayable with Common Stock, whether any such swap or transaction described in clause (A) or (B) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing

 

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sentence shall not apply to (x) any securities issuable upon the exercise or conversion of warrants, options, convertible securities or other rights either in existence prior to the date of this Agreement or issued thereafter in compliance with this Section 3(q), (y) the Shares to be offered and sold through the Agent pursuant to this Agreement or any Terms Agreement and (z) equity incentive awards approved by the board of directors of the Company or the compensation committee thereof or the issuance of Common Stock upon exercise thereof.

 

Section 4.  Free Writing Prospectus.

 

(a)                                 (i)                                     The Company represents and agrees that without the prior consent of the Agent, it has not made and will not make any offer relating to the Shares that would constitute a “free writing prospectus” as defined in Rule 405 under the 1933 Act; and

 

(ii)                                  the Agent represents and agrees that, without the prior consent of the Company, it  has not made and will not make any offer relating to the Shares that would constitute a free writing prospectus required to be filed with the Commission.

 

(b)                                 The Company has complied and will comply with the requirements of Rule 433 under the 1933 Act applicable to any Issuer Free Writing Prospectus (including any free writing prospectus identified in Section 4(a) hereof), including timely filing with the Commission or retention where required and legending.

 

Section 5.  Payment of Expenses.

 

(a)                                 The Company covenants and agrees with the Agent that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the registration of the Shares under the 1933 Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, the Basic Prospectus, Prospectus Supplement, any Issuer Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Agent; (ii) the cost of printing or producing this Agreement or any Terms Agreement, any Blue Sky and Legal Investment Memoranda, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws as provided in Section 3(b) hereof, including the reasonable fees and disbursements of counsel for the Agent in connection with such qualification and in connection with the Blue Sky and Legal Investment Surveys; (iv) any filing fees incident to, and the reasonable fees and disbursements of counsel for the Agent in connection with, any required review by the Financial Industry Regulatory Authority, Inc. (“FINRA”) of the terms of the sale of the Shares; (v) all fees and expenses in connection with listing or quoting the Shares on the Nasdaq; (vi) the cost of preparing the Shares; (vii) the costs and charges of any transfer agent or registrar or any dividend distribution agent; (viii) the reasonable fees and disbursements of counsel to the Agent in an aggregate amount not to exceed $50,000 (which amount shall include all fees and disbursements of such counsel described in clauses (iii) and (iv) above), provided, however, in no event shall the total compensation paid to the Agent, including the reimbursement of fees set forth in this clause  (viii), exceed 8.0% of the gross proceeds to the Company from the sale of the Shares; and (ix) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Section 7 hereof, the Agent will pay all of its own costs and expenses, including the fees of its counsel, transfer taxes on resale of any of the Shares by it, and any advertising expenses connected with any offers it may make.

 

Section 6.  Conditions of Agent’s Obligation.  The obligations of the Agent hereunder shall be subject, in its discretion, to the condition that all representations and warranties and other statements of the Company herein or in certificates of any officer of the Company delivered pursuant to the provisions hereof are true and correct as of the time of the execution of this Agreement, the date of any executed Terms Agreement and as of each Registration Statement Amendment Date, Company Periodic Report Date, Applicable Time and Settlement Date, to the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

 

(a)                                 The Prospectus Supplement shall have been filed with the Commission pursuant to Rule 424(b) under the 1933 Act on or prior to the date hereof and in accordance with Section 3(a) hereof, any other material

 

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required to be filed by the Company pursuant to Rule 433(d) under the 1933 Act shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; no stop order suspending or preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the reasonable satisfaction of the Agent.

 

(b)                                 On every date specified in Section 3(k) hereof and on such other dates as reasonably requested by Agent, Goodwin Procter LLP, counsel for the Agent, shall have furnished to the Agent such written opinion or opinions, dated as of such date, with respect to such matters as the Agent may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters.

 

(c)                                  On every date specified in Section 3(k) hereof and on such other dates as reasonably requested by Agent, Cooley LLP, counsel for the Company, shall have furnished to the Agent written opinion or opinions, dated as of such date, in form and substance reasonably satisfactory to the Agent.

 

(d)                                 On every date specified in Section 3(l) hereof and on such other dates as reasonably requested by Agent, Cooley LLP, Intellectual Property counsel for the Company, shall have furnished to the Agent written opinion or opinions, dated as of such date, in form and substance reasonably satisfactory to the Agent.

 

(e)                                  At the dates specified in Section 3(m) hereof and on such other dates as reasonably requested by Agent, the independent accountants of the Company who have certified the financial statements of the Company and its Subsidiaries included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus shall have furnished to the Agent a letter dated as of the date of delivery thereof and addressed to the Agent in form and substance reasonably satisfactory to the Agent and its counsel, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements of the Company and its Subsidiaries included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus.

 

(f)                                   Prior to commencement of the offering of Shares under this Agreement, the Agent shall have received a certificate, signed on behalf of the Company by its corporate Secretary, in form and substance reasonably satisfactory to the Agent and its counsel.

 

(g)                                  (i) Upon commencement of the offering of Shares under this Agreement and on such other dates as reasonably requested by Agent, the Company will furnish or cause to be furnished promptly to the Agent a certificate of an officer in a form satisfactory to the Agent stating the minimum price for the sale of such Shares pursuant to this Agreement and the maximum number of Shares that may be issued and sold pursuant to this Agreement or, alternatively, maximum gross proceeds from such sales, as authorized from time to time by the Company’s board of directors or a duly authorized committee thereof or, in connection with any amendment, revision or modification of such minimum price or maximum Share number or amount, a new certificate with respect thereto and (ii) on each date specified in Section 3(j) and on such other dates as reasonably requested by Agent, the Agent shall have received a certificate of executive officers of the Company, one of whom shall be the Chief Financial Officer, Chief Accounting Officer, Treasurer, or Executive Vice President in the area of capital markets and investments, dated as of the date thereof, to the effect that (A) there has been no Material Adverse Effect since the date as of which information is given in the General Disclosure Package and the Prospectus as then amended or supplemented, (B) the representations and warranties in Section 1 hereof are true and correct as of such date and (C) the Company has complied with all of the agreements entered into in connection with the transaction contemplated herein and satisfied all conditions on its part to be performed or satisfied.

 

(h)                                 Since the date of the latest audited financial statements then included or incorporated by reference in the General Disclosure Package and the Prospectus, no Material Adverse Effect shall have occurred.

 

(i)                                     The Company shall have complied with the provisions of Section 3(c) hereof with respect to the timely furnishing of prospectuses.

 

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(j)                                    On such dates as reasonably requested by the Agent, the Company shall have conducted due diligence sessions, in form and substance reasonably satisfactory to the Agent.

 

(k)                                 All filings with the Commission required by Rule 424 under the 1933 Act to have been filed by each Applicable Time or related Settlement Date shall have been made within the applicable time period prescribed for such filing by Rule 424 (without reliance on Rule 424(b)(8)).

 

(l)                                     The Shares shall have received approval for listing or quotation on the Nasdaq prior to the first Settlement Date.

 

(m)                             Prior to any Settlement Date, the Company shall have furnished to the Agent such further information, documents or certificates as the Agent may reasonably request.

 

Section 7.  Indemnification.

 

(a)                                 The Company will indemnify and hold harmless the Agent against any losses, claims, damages or liabilities, joint or several, to which the Agent may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the 1933 Act, or arise out of or are based upon 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, and will reimburse the Agent for any legal or other expenses reasonably incurred by the Agent in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in strict conformity with written information furnished to the Company by the Agent expressly for use therein.

 

(b)                                 The Agent will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or are based upon 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, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus, or any such amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in strict conformity with written information furnished to the Company by the Agent expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred.

 

(c)                                  Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection except and then only to the extent such indemnifying party is materially prejudiced thereby. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying

 

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party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 7 for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

 

(d)                                 If the indemnification provided for in this Section 7 is unavailable to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Agent on the other from the offering of the Shares to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Agent on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total commissions received by the Agent.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Agent on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Company and the Agent agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this subsection (d), the Agent shall not be required to contribute any amount in excess of the amount by which the total compensation received by the Agent with respect to sales of the Shares sold by it to the public exceeds the amount of any damages which the Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

(e)                                  The obligations of the Company under this Section 7 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to the directors, officers, employees, attorneys and agents of the Agent and to each person, if any, who controls the Agent within the meaning of the 1933 Act and each broker dealer affiliate of the Agent; and the obligations of the Agent under this Section 7 shall be in addition to any liability which the Agent may otherwise have and shall extend, upon the same terms and conditions, to each director, officer, employee, attorney and agent of the Company and to each person, if any, who controls the Company within the meaning of the 1933 Act.

 

Section 8.  Representations, Warranties and Agreements to Survive Delivery.  The respective indemnities, agreements, representations, warranties and other statements of the Company and the Agent, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of the Agent or any controlling person of the Agent, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Shares.

 

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Section 9.  No Advisory or Fiduciary Relationship.  The Company acknowledges and agrees that (i) the Agent is acting solely in the capacity of an arm’s length contractual counterparty to the Company with respect to the offering of Shares contemplated hereby (including in connection with determining the terms of such offering) and (ii) the Agent has not assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether the Agent has advised or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement and (iii) the Company has consulted its own legal and financial advisors to the extent it deemed appropriate. The Company agrees that it will not claim that the Agent has rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.

 

Section 10. Termination.

 

(a)                                 The Company shall have the right, by giving written notice as hereinafter specified, to terminate this Agreement in its sole discretion at any time.  Any such termination shall be without liability of any party to any other party, except that (i) with respect to any pending sale through the Agent for the Company, the obligations of the Company, including in respect of compensation of the Agent, shall remain in full force and effect notwithstanding such termination; and (ii) the provisions of Section 1, Section 5, Section 7,  Section 8, Section 14 and Section 15 of this Agreement shall remain in full force and effect notwithstanding such termination.

 

(b)                                 The Agent shall have the right, by giving written notice as hereinafter specified, to terminate this Agreement in its sole discretion at any time.  Any such termination shall be without liability of any party to any other party except that (i) with respect to any pending sale through the Agent for the Company, the obligations of the Agent shall remain in full force and effect through the completion of the sale notwithstanding such termination and (ii) the provisions of Section 1, Section 5, Section 7, Section 8, Section 14 and Section 15 of this Agreement shall remain in full force and effect notwithstanding such termination.

 

(c)                                  Unless earlier terminated pursuant to this Section 10, this Agreement shall automatically terminate upon the issuance and sale of all of the Shares by Stifel Nicolaus on the terms and subject to the conditions set forth herein except any termination pursuant to this clause (c) shall in all cases be deemed to provide that Section 1, Section 5, Section 7, Section 8, Section 14 and Section 15 of this Agreement shall remain in full force and effect.

 

(d)                                 This Agreement shall remain in full force and effect until and unless terminated pursuant to Section 10(a),  (b) or (c) above or otherwise by mutual agreement of the parties; provided that any such termination by mutual agreement or pursuant to this clause (c) shall in all cases be deemed to provide that Section 1, Section 5, Section 7, Section 8, Section 14 and Section 15  of this Agreement shall remain in full force and effect.

 

(e)                                  Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided that such termination shall not be effective until the close of business on the date of receipt of such notice by the Agent or the Company, as the case may be.  If such termination shall occur prior to the Settlement Date for any sale of Shares, such sale shall settle in accordance with the provisions of Section 2(h) hereof.

 

(f)                                   In the case of any purchase by the Agent pursuant to a Terms Agreement, the Agent may terminate this Agreement, at any time at or prior to the Settlement Date (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the General Disclosure Package or the Prospectus, any Material Adverse Effect, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Agent, impracticable or inadvisable to market the Shares or to enforce contracts for the sale of Shares, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or the Nasdaq, or if trading generally on the NYSE, NYSE American or Nasdaq has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, FINRA or any other governmental authority, or (iv) a material disruption has occurred in commercial banking or securities settlement or clearance

 

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services in the United States, or (v) if a banking moratorium has been declared by either Federal or New York authorities.

 

Section 11.  Notices.  All statements, requests, notices and agreements hereunder shall be in writing, and if to Stifel Nicolaus shall be delivered or sent by mail, electronic mail, telex or facsimile transmission to:

 

Stifel, Nicolaus & Company, Incorporated
 787 7th Avenue, 11th Floor
 New York, NY 10019
 Attention: Syndicate Department

 

With a copy to:

 

Goodwin Procter LLP

620 Eighth Avenue

New York, NY 10018

Attention: Thomas Levato

Email: tlevato@goodwinprocter.com

 

and if to the Company to:

 

Dova Pharmaceuticals, Inc.

240 Leigh Farm Road, Suite 245

Durham, NC 27707

Attention: Alex Sapir, President and Chief Executive Officer

Email: asapir@dova.com

 

With a copy to:

 

Cooley LLP

19951 Freedom Drive

Reston, VA 20190-5656

Attention: Darren DeStefano

Email: ddestefano@cooley.com

 

Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

 

Section 12.  Parties.  This Agreement shall be binding upon, and inure solely to the benefit of, the Agent and the Company and, to the extent provided in Sections 7 and 8 hereof, the officers, directors, employees, attorneys and agents of the Company and the Agent and each person who controls the Company or the Agent, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement.  No purchaser of Shares through the Agent shall be deemed a successor or assign by reason merely of such purchase.

 

Section 13.  Time of the Essence.  Time shall be of the essence of this Agreement.  As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

 

Section 14.  Waiver of Jury Trial.  The Company and the Agent hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to jury trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

Section 15.  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS PRINCIPLES OF CONFLICTS OF LAW.

 

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Section 16.  Counterparts.  This Agreement and any Terms Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.  This Agreement and any Terms Agreement may be delivered by any party by facsimile, electronic mail or other electronic transmission.

 

Section 17.   Severability.  The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof.  If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

 

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Agent and the Company in accordance with its terms.

 

21

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
DOVA PHARMACEUTICALS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Mark Hahn
    
	
 
    	
 
    	
Name: 
    	
Mark Hahn
    
	
 
    	
 
    	
Title: 
    	
CFO
    
	
 
    	
 
    
	
Accepted as of the date hereof:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
STIFEL, NICOLAUS &   COMPANY, INCORPORATED
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Daniel J. Covatta
    	
 
    
	
 
    	
Name: Daniel J. Covatta
    	
 
    
	
 
    	
Title: Managing Director
    	
 
    

 

22

 

Schedule 1

 

Subsidiaries

 

AkaRx, Inc

Dova Pharmaceuticals Ireland Limited

 

23

 

Annex 1

 

DOVA PHARMACEUTICALS, INC.

 

Common Stock
 ($0.001 par value per share)

 

TERMS AGREEMENT

 

STIFEL, NICOLAUS & COMPANY, INCORPORATED

One South Street, 15th Floor

Baltimore, MD 21202

Attn: Syndicate Department

 

Ladies and Gentlemen:

 

Dova Pharmaceuticals, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein and in the At-the-Market Equity Offering Sales Agreement, dated July 27, 2018 (the “Sales Agreement”), between the Company and Stifel, Nicolaus & Company, Incorporated (the “Agent”), to issue and sell to the Agent the securities specified in the Schedule hereto (the “Purchased Securities”).

 

Each of the provisions of the Sales Agreement not specifically related to the solicitation by the Agent, as agent of the Company, of offers to purchase securities is incorporated herein by reference in its entirety, and shall be deemed to be part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Terms Agreement and the Applicable Time, except that each representation and warranty in Section 1 of the Sales Agreement which makes reference to the Prospectus (as therein defined) shall be deemed to be a representation and warranty as of the date of the Sales Agreement in relation to the Prospectus, and also a representation and warranty as of the date of this Terms Agreement and the Settlement Date in relation to the Prospectus as amended and supplemented to relate to the Purchased Securities.

 

An amendment to the Registration Statement (as defined in the Sales Agreement), or a supplement to the Prospectus, as the case may be, relating to the Purchased Securities, in the form heretofore delivered to the Agent is now proposed to be filed with the Securities and Exchange Commission.

 

Subject to the terms and conditions set forth herein and in the Sales Agreement which are incorporated herein by reference, the Company agrees to issue and sell to the Agent and the latter agrees to purchase from the Company the number of shares of the Purchased Securities at the time and place and at the purchase price set forth in the Schedule hereto.

 

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Agent and the Company in accordance with its terms.

 

24

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
DOVA PHARMACEUTICALS, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Accepted as of the date   hereof:
    	
 
    
	
 
    	
 
    
	
STIFEL,   NICOLAUS & COMPANY, INCORPORATED
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
						

 

25

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