false
0000925741
0000925741
2024-08-29
2024-08-29
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 29, 2024
BIOCARDIA, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-38999 23-2753988
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
320 Soquel Way
Sunnyvale
,
California
94085
(Address of principal executive offices and zip code)
Registrant
'
s telephone number, including area code: (
650
)
226-0120
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock BCDA The
, par value $0.001 Nasdaq
Capital Market
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 (17 CFR (s)230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR
(s)240.12b-2 of this chapter)
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
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Item 8.01 Other Events.
On August 29, 2024, BioCardia, Inc. (the "Company") entered into securities
purchase agreements (the "Purchase Agreements") with certain purchasers,
pursuant to which the Company agreed to issue, and sell and the purchasers, in
the aggregate to buy, in a public offering (the "Registered Offering") (i)
1,377,990 shares of the Company's common stock, $0.001 par value per share
(the "Common Stock"), and accompanying warrants to purchase up to 1,377,990
shares of Common Stock (the "Common Warrants"), at an offering price of $3.00
per share of Common Stock and accompanying Common Warrant, and (ii) pre-funded
warrants (the "Pre-Funded Warrants" and together with the Common Warrants the
"Warrants") to purchase up to 1,022,010 shares of Common Stock and
accompanying Common Warrants to purchase up to 1,022,010 shares of Common
Stock, at an offering price of $2.999 per Pre-Funded Warrant and accompanying
Common Warrant, which represents the same price per share of Common Stock and
accompanying Common Warrant less the $0.001 per share exercise price of the
Pre-Funded Warrants. Certain of the Company's directors and executive officers
purchased an aggregate of 211,000 shares of Common Stock and accompanying
Common Warrants. In addition, in connection with closing, the Company will
issue 988,333 shares of Common Stock upon the pre-closing exercise of
Pre-Funded Warrants, which will result in the Company having Pre-Funded
Warrants to purchase 33,677 shares of Common Stock outstanding immediately
following the closing. The expected net proceeds to the Company from the
Registered Offering were $6.3 million after deducting the Placement Agent's
(as defined below) fees and other offering expenses. Each Purchase Agreement
contains customary representations, warranties and agreements by the Company,
customary conditions to closing, indemnification obligations of the Company,
other obligations of the parties and termination provisions. The Company
expects to close the Registered Offering on September 3, 2024.
Each Common Warrant is exercisable at a price per share of $3.00, and each
Pre-Funded Warrant is exercisable at a price per share of $0.001. The Common
Warrants expire on September 3, 2029, and the Pre-Funded Warrants do not
expire until fully exercised. Each Warrant is immediately exercisable. The
exercise prices of the Warrants are subject to appropriate adjustment in the
event of stock dividends, stock splits, stock combinations, reorganizations or
similar events affecting the Common Stock. Subject to limited exceptions, a
holder of Warrants will not have the right to exercise any portion of its
Warrants if the holder (together with such holder's affiliates, and any
persons acting as a group together with such holder or any of such holder's
affiliates) would beneficially own a number of shares of common stock in
excess of 4.99% (or, upon election by a holder prior to the issuance of any
Warrants, 9.99%) of the shares of common stock then outstanding. At the
holder's option, upon notice to the Company, the holder may increase or
decrease this beneficial ownership limitation not to exceed 9.99% of the
shares of Common Stock then outstanding, with any such increase becoming
effective upon 61 days' prior notice to the Company.
The Registered Offering is being made pursuant to a Registration Statement
(No. 333-281448) on Form S-1, declared effective by the Securities and
Exchange Commission on August 29, 2024, and a Registration Statement on Form
S-1MEF (No. 333-281847) filed pursuant to Rule 462(b), effective upon filing
on August 29, 2024.
On August 29, 2024, in connection with the Registered Offering, the Company
entered into a placement agency agreement (the "Placement Agency Agreement")
with A.G.P./Alliance Global Partners (the "Placement Agent"), pursuant to
which, the Placement Agent agreed to use its reasonable best efforts to
arrange for the sale of the Securities in the Registered Offering. The Company
paid the Placement Agent a cash placement commission of approximately $0.3
million and reimbursed an aggregate of $60,000 of the Placement Agent's
expenses in connection with the Registered Offering pursuant to the Placement
Agency Agreement. The Placement Agency Agreement contains customary
representations, warranties and agreements by the Company, customary
conditions to closing, indemnification obligations of the Company and the
Placement Agent, including for liabilities under the Securities Act of 1933,
as amended, other obligations of the parties and termination provisions.
The forms of Placement Agency Agreement, Pre-Funded Warrant, Common Warrant,
and Purchase Agreement are filed as Exhibits 1.1, 4.1, 4.2, and 99.1,
respectively, to this Current Report on Form 8-K and are incorporated herein
by reference. The above descriptions of the terms of the Placement Agency
Agreement, Pre-Funded Warrants, Common Warrants, and Purchase Agreement are
qualified in their entirety by reference to such exhibits.
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Item 9.01 Exhibits.
(d) Exhibits
The following exhibits are filed as part of this report:
Exhibit No. Description
1.1# Placement Agency Agreement
dated August 29, 2024, between
BioCardia, Inc. and
A.G.P./Alliance Global Partners.
4.1 Form of Pre-Funded Warrant
4.2 Form of Common Warrant
99.1# Form of Securities Purchase Agreement
dated August 29, 2024, by and among
BioCardia, Inc. and the purchasers
identified on the signature pages thereto.
104 Cover Page Interactive Data File (embedded
within the Inline XBRL document)
# Certain of the exhibits and schedules to this exhibit have been
omitted in accordance with Regulation S-K Item 601(a)(5). The Company
agrees to furnish supplementally a copy of all omitted exhibits and
schedules to the Securities and Exchange Commission upon its request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BIOCARDIA, INC.
/s/ Peter Altman, Ph.D.
Peter Altman, Ph.D.
President and Chief Executive Officer
Date: September 3, 2024
Exhibit 1.1
A.G.P./Alliance Global Partners
590 Madison Avenue, 28th Floor
New York, NY 10022
August 29, 2024
BioCardia, Inc.
Attention: Peter Altman, Chief Executive Officer
320 Soquel Way Sunnyvale, CA 94085
Re:
Placement Agency Agreement
Dear Mr. Altman:
Subject to the terms and conditions of this letter agreement (the "
Agreement
") between A.G.P./Alliance Global Partners, as the sole placement agent ("
A.G.P.
") (A.G.P. is also referred to herein as the "
Placement
Agent
"), and BioCardia, Inc., a Delaware corporation (the "
Company
"), the parties hereby agree that the Placement Agent shall serve as the
placement agent for the Company, on a "reasonable best efforts" basis, in
connection with the proposed placement (the "
Placement
") of registered securities of the Company, consisting of: (i) shares of
common stock, par value $0.001 per share ("
Common Stock
"), (ii) pre-funded warrants to purchase Common Stock (the "
Pre-Funded Warrants
"), and (iii) warrants to purchase Common Stock (the "
Common Warrants
" and collectively with the Pre-Funded Warrants, the "
Warrants
"). The Common Stock and Warrants actually placed by the Placement Agent are
referred to herein as the "
Placement Agent Securities
." The Placement Agent Securities and shares of Common Stock issuable upon
the exercise of the Warrants shall be offered and sold under the Company's
registration statement on Form S-1 (File No. 333-281448), which was declared
effective by the Securities and Exchange Commission (the "
Commission
") on August 29, 2024. The documents executed and delivered by the Company
and the Purchasers (as defined below) in connection with the Placement,
including, without limitation, a securities purchase agreement (the "
Purchase
Agreement
"), shall be collectively referred to herein as the "
Transaction Documents
." The terms of the Placement shall be mutually agreed upon by the Company
and the purchasers listed in the Purchase Agreement (each, a "
Purchaser
" and collectively, the "
Purchasers
"), and nothing herein constitutes that the Placement Agent would have the
power or authority to bind the Company or any Purchaser, or an obligation for
the Company to issue any Placement Agent Securities or complete the Placement.
The Company expressly acknowledges and agrees that the Placement Agent's
obligations hereunder are on a reasonable best efforts basis only and that the
execution of this Agreement does not constitute a commitment by the Placement
Agent to purchase the Placement Agent Securities and does not ensure the
successful placement of the Placement Agent Securities or any portion thereof
or the success of the Placement Agent with respect to securing any other
financing on behalf of the Company. The Placement Agent may retain other
brokers or dealers to act as sub-agents or selected-dealers on its behalf in
connection with the Placement. Certain affiliates of the Placement Agent may
participate in the Placement by purchasing some of the Placement Agent
Securities. The sale of Placement Agent Securities to any Purchaser will be
evidenced by the Purchase Agreement between the Company and such Purchaser, in
a form reasonably acceptable to the Company and the Purchaser. Capitalized
terms that are not otherwise defined herein have the meanings given to such
terms in the Purchase Agreement. Prior to the signing of any Purchase
Agreement, officers of the Company will be available to answer inquiries from
prospective Purchasers. The Company retains the right, in its sole discretion,
to approve or reject any potential investor in the Placement and to approve or
disapprove, in its sole discretion, the final terms and conditions of the
placement.
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SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY; COVENANTS OF THE COMPANY.
A. Representations of the Company
. With respect to the Placement Agent Securities, each of the representations
and warranties (together with any related disclosure schedules thereto) and
covenants made by the Company to the Purchasers in the Purchase Agreement in
connection with the Placement, is hereby incorporated herein by reference into this
Agreement (as though fully restated herein) and is, as of the date of this Agreement
and as of the Closing Date, hereby made to, and in favor of, the Placement
Agent. In addition to the foregoing, the Company represents and warrants that
there are no affiliations with any Financial Industry Regulatory Authority ("
FINRA
") member firm participating
in the Placement
among the Company's officers or directors.
B. Covenants of the Company
. Furthermore, for sixty (60) days after the Closing Date, the Company shall not, without the prior written consent
of the Placement Agent, (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of
any shares of Common Stock or (ii) file any registration statement or amendment or supplement thereto, other than the
Preliminary Prospectus, the Prospectus or a registration statement on Form S-8 in connection with any employee benefit
plan; provided, however, such restrictions shall not apply with respect to an Exempt Issuance. In addition, for one
hundred and eighty (180) days after the Closing Date, other than as set forth in the Purchase Agreement, the Company
shall not effect or enter into an agreement to effect any issuance of Placement Agent Securities or shares of Common
Stock involving a Variable Rate Transaction except such restriction shall not apply with respect to an Exempt Issuance,
provided
,
however
, that, following the 90
th
day after the Closing Date (the "
ATM Carve Out Period
"), the Company may enter into and/or
issue shares of Common Stock in an "at
the market" offering. The ATM Carve Out
Period shall be adjusted from the 90
th
day after the Closing Date to the 60
th
day after the Closing Date
if the Company obtains the
prior written consent of a
majority of the Purchasers.
SECTION 2.
REPRESENTATIONS OF THE PLACEMENT AGENT
. The Placement Agent represents and warrants that it (i) is a member in good
standing of the FINRA, (ii) is registered as a broker/dealer under the
Securities Exchange Act of 1934, as amended (the "
Exchange Act
"), (iii) is licensed as a broker/dealer under the laws of the United States
of America, applicable to the offers and sales of the Placement Agent
Securities by the Placement Agent, (iv) is and will be a corporate body
validly existing under the laws of its place of incorporation, (v) has full
power and authority to enter into and perform its obligations under this
Agreement and (vi) has taken all reasonable and appropriate measures to ensure
that the Placement constitutes a "public offering" for purposes of Nasdaq Rule
5635 and will provide any documentation reasonably requested by the Company to
substantiate such determination. The Placement Agent will immediately notify
the Company in writing of any change in its status with respect to subsections
(i) through (vi) above. The Placement Agent covenants that it will use its
reasonable best efforts to conduct the Placement hereunder in compliance with
the provisions of this Agreement and the requirements of applicable law.
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SECTION 3.
COMPENSATION
. In consideration of the services to be provided for hereunder, the Company
shall pay to the Placement Agent and/or its respective designees a cash fee of
7.0% of the aggregate purchase price paid by any and all Purchasers at the
Closing (the "
Cash Fee
"); provided, however, (i) that the Placement Agent shall receive 3.50% of the
aggregate purchase price paid by any of the Company's executive officer or
director or their affiliates or those investors listed on Exhibit A hereto,
(ii) that the Cash Fee shall be 5.0% for the first $3,000,000 of any
Securities purchased by any of the persons pursuant to which the Company is
required to pay a tail fee to a prior placement agent (the "Tail Investors")
and (iii) that the Cash Fee shall be 4.0% for amounts invested in excess of
the first $3,000,000 of any Securities purchased by Tail Investors.
SECTION 4.
EXPENSES
. The Company agrees to pay all costs, fees and expenses incurred by the
Company in connection with the performance of its obligations hereunder and in
connection with the transactions contemplated hereby, including, without
limitation: (i) all expenses incident to the issuance, delivery and
qualification of the Placement Agent Securities (including all printing and
engraving costs); (ii) all fees and expenses of the transfer agent; (iii) all
necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Placement Agent Securities; (iv) all fees and
expenses of the Company's counsel, independent public or certified public
accountants and other advisors; (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution
of the Registration Statement (including financial statements, exhibits,
schedules, consents and certificates of experts), the Preliminary Prospectus
and the Prospectus, and all amendments and supplements thereto, and this
Agreement; (vi) all filing fees, reasonable attorneys' fees and expenses
incurred by the Company in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any
part of the Placement Agent Securities for offer and sale under the state
securities or blue sky laws or the securities laws of any other country; (vii)
the fees and expenses associated with including the Placement Agent Securities
on the Trading Market; (viii) up to $50,000 for accountable expenses related
to legal fees of counsel to the Placement Agent; and (ix) non-accountable
expenses, including IPREO software related expenses, background check
expenses, tombstones and marketing related expenses, including road show
expenses, and any other non-accountable expenses incurred by the Placement
Agent in connection with the Placement, provided, however, that such
reimbursement for non-accountable expenses shall not exceed $10,000.
SECTION 5. INDEMNIFICATION
.
A. To the extent permitted by law, with respect
to the Placement Agent
Securities, the Company
shall indemnify and hold
harmless the Placement
Agent and its affiliates,
agents, stockholders,
directors, officers, employees, members and
controlling persons (within
the meaning of Section
15 of the Securities Act
or Section 20 of the
Exchange Act) (each such
entity or person, an "
Indemnified Person
") from and against all claims,
actions, suits, proceedings (including
those of stockholders), damages, costs
and liabilities (collectively, "
Claims
"), and shall reimburse
each Indemnified Person
for all reasonable out-of-pocket fees and
expenses (including the reasonable fees and
expenses of counsel) (collectively, the "
Expenses
") as they are incurred by an Indemnified Person in investigating, preparing, pursuing or defending
any Claim, whether or not an Indemnified Person is a party thereto, that is caused by, arises out of,
or is based upon (i) any untrue statements made or any statements omitted to be made in the Registration
Statement, the Preliminary Prospectus or the Prospectus, or by any omission or alleged omission to
state therein a material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (other than untrue statements or alleged untrue statements
in, or omissions or alleged omissions from, information relating to an Indemnified Person furnished
in writing by or on behalf of an Indemnified Person expressly for use in the Registration Statement,
Preliminary Prospectus or any Prospectus) or (ii) any other actions taken or omitted to be taken by the
Company or any Indemnified Person in connection with this Agreement; provided, however, the Company
will not be responsible for any Claims or Expenses of any Indemnified Person that are judicially determined
to have resulted primarily from an Indemnified Person's (x) willful misconduct, violation of law
or gross negligence in connection with any of the action, inaction or the services described herein, or
(y) use of any offering materials or information concerning the Company in connection with the offer
or sale of the Placement Agent's Securities in the Placement, which were not authorized for such use
by the Company and which use constitutes gross negligence, violation of law or willful misconduct.
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B. Promptly after receipt by the Placement Agent of notice of any claim or the commencement
of any action or proceeding with respect to which any Indemnified Person is entitled to
indemnity hereunder, the Placement Agent will notify the Company in writing of such claim
or of the commencement of such action or proceeding, but failure to so notify the Company
shall not relieve the Company from any obligation it may have hereunder, except and
only to the extent such failure results in the forfeiture by the Company of substantial
rights and defenses. If the Company so elects or is requested by the Placement Agent,
the Company will assume the defense of such action or proceeding and will employ counsel
reasonably satisfactory to the Placement Agent and will pay the reasonable fees and
expenses of such counsel. Notwithstanding the preceding sentence, the Placement Agent will
be entitled to employ its own counsel separate from counsel for the Company and from any
other party in such action if counsel for the Placement Agent reasonably determines
that it would be inappropriate under the applicable rules of professional responsibility
for the same counsel to represent both the Company and the Placement Agent. In such
event, the reasonable out-of-pocket fees and disbursements of no more than one such separate
counsel will be paid by the Company, in addition to reasonable fees of local counsel.
C. The Company may not settle, compromise or consent to the entry of any
judgment in any pending or threatened Claim, in which indemnification
may be sought hereunder (whether or not any Indemnified Person is
an actual or potential party thereto), without the prior written
consent of the Placement Agent (which will not be unreasonably
delayed or withheld) unless such settlement, compromise or consent
provides for an unconditional and irrevocable release of each Indemnified
Person from any and all liability arising out of such Claim.
D. The Company agrees to notify the Placement Agent promptly of the assertion against it or any other person of any
Claim or the commencement of any action or proceeding relating to a transaction contemplated by this Agreement.
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E. If for any reason the foregoing indemnity is unavailable to the Placement Agent or insufficient to hold the Placement
Agent harmless, then the Company shall contribute to the amount paid or payable by the Placement Agent as a
result of such Claim or Expenses in such proportion as is appropriate to reflect (a) the relative benefits to the
Company on the one hand, and the Placement Agent on the other hand, in connection with the Placement, (b) the
relative fault of the parties, and (c) other equitable considerations; provided, however, that in no event shall
the amount to be contributed by the Placement Agent exceed the fees actually received by the Placement Agent under
this Agreement. Notwithstanding the immediately preceding sentence, to the extent the exception to indemnification
contemplated by Paragraph A of this Section applies with respect to the Placement Agent, the Company shall
contribute to the amount paid or payable by the Placement Agent as a result of such Claim or Expenses in such
proportion as is appropriate to reflect the relative fault of the Company, on the one hand, and the Placement Agent,
on the other hand, in connection with the matters contemplated by the Agreement; provided, however, that in no
event shall the amount to be contributed by Placement Agent exceed the fees actually received by Placement Agent
under the Agreement. The Company agrees that for the purposes of this paragraph the relative benefits to the
Company and the Placement Agent of the contemplated transaction (whether or not such transaction is consummated)
shall be deemed to be in the same proportion that the aggregate cash consideration payable (or contemplated to
be payable) in such transaction bears to the fees paid or payable to the Placement Agent under the Agreement.
F. These indemnification provisions shall remain in full force and effect
whether or not the transaction contemplated by this Agreement is completed,
survive the termination of this Agreement, and be in addition to any
liability that the Company might otherwise have to any Indemnified Person.
SECTION 6.
ENGAGEMENT TERM
. The Placement Agent's engagement hereunder will be until the earlier of the
Closing Date and August 25, 2024. The date of termination of this Agreement
is referred to herein as the "
Termination Date
." In the event, however, in the course of the Placement Agent's performance
of due diligence it deems, it necessary to terminate the engagement, the
Placement Agent may do so prior to the Termination Date. The Company may
elect to terminate the engagement hereunder for any reason prior to the
Termination Date but will remain responsible for fees pursuant to Section 3
hereof with respect to the Placement Agent Securities if sold in the
Placement. Notwithstanding anything to the contrary contained herein, the
provisions concerning confidentiality, indemnification and contribution
contained herein, as well as provisions in Sections 10 - 14 hereof will
survive any expiration or termination of this Agreement. If this Agreement is
terminated prior to the completion of the Placement, all fees and expenses due
to the Placement Agent as set forth in Section 3 and Section 4 (except for the
$10,000 non-accountable expense allowance) shall be paid by the Company to the
Placement Agent on or before the Termination Date (in the event such fees are
earned or owed as of the Termination Date). The Placement Agent agrees not to
use any confidential information concerning the Company provided to the
Placement Agent by the Company for any purposes other than those contemplated
under this Agreement.
SECTION 7.
PLACEMENT AGENT INFORMATION
. The Company agrees that any information or advice rendered by the Placement
Agent in connection with this engagement is for the confidential use of the
Company only in its evaluation of the Placement and, except as otherwise
required by law, the Company will not disclose or otherwise refer to the
advice or information in any manner without the Placement Agent's prior
written consent; provided, however, that the Company may disclose a copy of
this Agreement (i) to its employees, officers, managers and members and (ii)
to any investor or prospective investor in the Placement, any acquiror or
prospective acquiror of the Company or any underwriter or prospective
underwriter, in each case provided that the Company takes reasonable measures
to ensure that the recipient of such information treats such information as
confidential.
SECTION 8.
NO FIDUCIARY RELATIONSHIP
. This Agreement does not create, and shall not be construed as creating
rights enforceable by any person or entity not a party hereto, except those
entitled hereto by virtue of the indemnification provisions hereof. The
Company acknowledges and agrees that the Placement Agent is not and shall not
be construed as a fiduciary of the Company and shall have no duties or
liabilities to the equity holders or the creditors of the Company or any other
person by virtue of this Agreement or the retention of the Placement Agent
hereunder, all of which are hereby expressly waived.
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SECTION 9.
CLOSING
. The obligations of the Placement Agent, and the closing of the sale of the
Placement Agent Securities hereunder are subject to the accuracy in all
material respects (or, to the extent representations or warranties are
qualified by materiality or Material Adverse Effect, in all respects), of the
representations and warranties on the part of the Company contained herein and
in the Purchase Agreement (except to the extent a representation or warranty
speaks as of a specific date, in which case such representation or warranty
shall be accurate as of such date), to the performance by the Company of its
obligations hereunder, and to each of the following additional terms and
conditions, except as otherwise disclosed to and acknowledged and waived by
the Placement Agent:
A. All corporate proceedings and other legal matters incident to the authorization, form, execution,
delivery and validity of each of this Agreement, the Placement Agent Securities, and all other legal
matters relating to this Agreement and the transactions contemplated hereby with respect to the Placement
Agent Securities shall be reasonably satisfactory in all material respects to the Placement Agent.
B. The Placement Agent shall have received from the Company's counsel, Wilson Sonsini Goodrich
& Rosati LLP, such counsel's written opinion and negative assurance letter with respect
to the Placement Agent Securities, addressed to the Placement Agent and dated as of the
Closing Date, in form and substance reasonably satisfactory to the Placement Agent.
C. The Placement Agent shall have received an executed FINRA questionnaire from each of the Company and the Company's executive
officers and directors as well as executed Lock-Up Agreements from the Company's executive officers and directors.
D. Shares of Common Stock sold in the Placement, including shares of Common Stock issuable
upon the exercise of the Warrants, must be registered under the Exchange Act. The Company
shall have taken no action designed to terminate the registration of the Common Stock
under the Exchange Act or delisting or suspending from trading the Common Stock from the
Trading Market or other applicable U.S. national exchange, nor has the Company received any
information suggesting that the Commission or the Trading Market or other U.S. applicable
national exchange is contemplating terminating such registration or listing, except as
disclosed in the Registration Statement, the Preliminary Prospectus and the Prospectus.
E. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date, prevent the issuance or sale of the Placement Agent Securities.
F. The Company shall have entered into a Purchase Agreement with each of the
Purchasers of the Placement Agent Securities and such agreements shall be in
full force and effect and shall contain representations, warranties and
covenants of the Company as agreed upon between the Company and the Purchasers.
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G. FINRA shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this
Agreement. In addition, the Company shall, if requested by the Placement Agent, make or authorize Placement
Agent's counsel to make on the Company's behalf, any filing with the FINRA Corporate Financing Department pursuant
to FINRA Rule 5110 with respect to the Placement and pay all filing fees required in connection therewith.
H. [Reserved]
I. The Placement Agent shall have received customary certificates of the
Company's executive officers, as to the accuracy of the representations and
warranties contained in the Purchase Agreement, and a certificate of the
Company's secretary certifying (i) that the Company's charter documents
are true and complete, have not been modified and are in full force and
effect; (ii) that the resolutions of the Company's Board of Directors
relating to the Placement are in full force and effect and have not been
modified; and (iii) as to the incumbency of the officers of the Company.
If any of the conditions specified in this Section 9 shall not have been
fulfilled when and as required by this Agreement, all obligations of the
Placement Agent hereunder may be cancelled by the Placement Agent at, or at
any time prior to, the Closing Date. Notice of such cancellation shall be
given to the Company in writing or orally. Any such oral notice shall be
confirmed promptly thereafter in writing.
SECTION 10.
GOVERNING LAW
. This Agreement will be governed by, and construed in accordance with, the
laws of the State of New York applicable to agreements made and to be
performed entirely in such State, without regard to principles of conflicts of
law. This Agreement may not be assigned by either party without the prior
written consent of the other party. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, and their respective successors
and permitted assigns. Any right to trial by jury with respect to any dispute
arising under this Agreement or any transaction or conduct in connection
herewith is waived. Any dispute arising under this Agreement may be brought
into the courts of the State of New York or into the Federal Court located in
New York, New York and, by execution and delivery of this Agreement, the
Company hereby accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of aforesaid courts. Each party hereto
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by delivering a copy
thereof via overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.
SECTION 11.
ENTIRE AGREEMENT/MISCELLANEOUS
. This Agreement embodies the entire agreement and understanding between the
parties hereto, and supersedes all prior agreements and understandings,
relating to the subject matter hereof, including the terms of engagement,
dated June 26, 2024, by and between the Company and the Placement Agent, which
engagement letter shall be terminated and of no further effect upon the
execution of this agreement. If any provision of this Agreement is determined
to be invalid or unenforceable in any respect, such determination will not
affect such provision in any other respect or any other provision of this
Agreement, which will remain in full force and effect. This Agreement may not
be amended or otherwise modified or waived except by an instrument in writing
signed by both the Placement Agent and the Company. The representations,
warranties, agreements and covenants contained herein shall survive the
Closing Date of the Placement and delivery of the Placement Agent Securities
for the applicable statute of limitations. This Agreement may be executed in
two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have
been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event
that any signature is delivered by facsimile transmission or a .pdf format
file, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or .pdf signature page were an original
thereof.
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SECTION 12.
NOTICES
. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is sent to the email address specified on the
signature pages attached hereto prior to 6:30 p.m. (New York City time) on a
business day, (b) the next business day after the date of transmission, if
such notice or communication is sent to the email address on the signature
pages attached hereto on a day that is not a business day or later than 6:30
p.m. (New York City time) on any business day, (c) the third business day
following the date of mailing, if sent by an internationally recognized air
courier service, or (d) upon actual receipt by the party to whom such notice
is required to be given. The address for such notices and communications
shall be as set forth on the signature pages hereto.
SECTION 13.
PRESS ANNOUNCEMENTS
. The Company agrees that the Placement Agent shall, on and after the Closing
Date, have the right to reference the Placement and the Placement Agent's role
in connection therewith in the Placement Agent's marketing materials and on
its website and to place advertisements in financial and other newspapers and
journals, in each case at its own expense.
SECTION 14.
PAYMENTS
. All payments made or deemed to be made by the Company to the Placement
Agent, its affiliates, stockholders, directors, officers, employees, members
and controlling persons (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) (each, a "
Payee
"), if any, will be made without withholding or deduction for or on account of
any present or future taxes, duties, assessments or governmental charges of
whatever nature (other than taxes on net income or similar taxes) imposed or
levied by or on behalf of the United States or any political subdivision or
any taxing authority thereof or therein unless the Company is or becomes
required by law to withhold or deduct such taxes, duties, assessments or other
governmental charges. In such event, the Company will pay such additional
amounts as will result, after such withholding or deduction, in the receipt by
the Payee of the amounts that would otherwise have been receivable in respect
thereof. For the avoidance of doubt, all sums payable, paid or deemed payable
under this Agreement shall be considered exclusive of value added tax, sales
tax or other similar taxes which shall be borne by, paid, collected and
remitted by the Company in accordance with applicable law.
Please confirm that the foregoing correctly sets forth our agreement by
signing and returning to the Placement Agent the enclosed copy of this
Agreement.
[The remainder of this page has been intentionally left blank.]
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The foregoing Agreement is hereby accepted and agreed to as of the date first
written above.
A.G.P./ALLIANCE GLOBAL PARTNERS
By: /s/ Thomas J. Higgins
Name: Thomas J. Higgins
Title: Managing Director
Address for Notice:
590 Madison Avenue, 28
th
Floor
New York, NY 10022
Attn: Thomas J. Higgins
Email: thiggins@allianceg.com
Accepted and agreed to as of the date first written above:
BIOCARDIA,
INC.
By: /s/ Peter A. Altman
Name: Dr. Peter A. Altman, Ph.D
Title: Chief Executive Officer
Address for Notice
:
320 Soquel Way Sunnyvale, California 94085
Attn: Chief Financial Officer
Email:
CEO@BioCardia.com
CFO@BioCardia.com
dmcclung@biocardia.com
paltman@biocardia.com
[Signature Page to Placement Agency Agreement]
Exhibit 4.1
PRE-FUNDED WARRANT
TO PURCHASE SHARES OF COMMON STOCK
BIOCARDIA, INC.
Warrant Shares: Original Issuance Date: August [
], 2024
THIS PRE-FUNDED WARRANT TO PURCHASE SHARES OF COMMON STOCK (this "
Warrant
") certifies that, for value received,
or its assigns (the "
Holder
") is entitled, upon the terms and subject to the limitations on exercise and
the conditions hereinafter set forth, at any time on or after the date hereof
(the "
Initial Exercise Date
") until this Warrant is exercised in full (the "
Termination Date
") but not thereafter, to subscribe for and purchase from BioCardia, Inc., a
Delaware corporation (the "
Company
"), up to
shares of Common Stock, par value $0.001 per share (the "
Common Stock
"), of the Company (as subject to adjustment hereunder, the "
Warrant Shares
"). The purchase price of one Warrant Share under this Warrant shall be equal
to the Exercise Price, as defined in Section 2(b).
Section 1.
Definitions
. Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in that certain Securities Purchase Agreement (the "
Purchase Agreement
"), dated August [
], 2024, among the Company and the purchasers signatory thereto.
Section 2.
Exercise
.
(a)
Exercise of Warrant
. Exercise of the purchase rights represented by this Warrant may be made, in
whole or in part, at any time or times on or after the Initial Exercise Date
and on or before the Termination Date by delivery to the Company of a duly
executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of
Exercise in the form annexed hereto as
Exhibit A
(the "
Notice of Exercise
"). Within the earlier of (i) two (2) Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period (as defined in Section
2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall
deliver the aggregate Exercise Price for the Warrant Shares specified in the
applicable Notice of Exercise by wire transfer or cashier's check drawn on a
United States bank unless the cashless exercise procedure specified in Section
2(c) below is specified in the applicable Notice of Exercise. No ink-original
Notice of Exercise shall be required, nor shall any medallion guarantee (or
other type of guarantee or notarization) of any Notice of Exercise be
required. Notwithstanding anything herein to the contrary, the Holder shall
not be required to physically surrender this Warrant to the Company until the
Holder has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within three (3) Trading Days of
the date on which the final Notice of Exercise is delivered to the Company.
Partial exercises of this Warrant resulting in purchases of a portion of the
total number of Warrant Shares available hereunder are permitted,
provided however
that any such partial exercise must relate to a number of Warrant Shares equal
to the lesser of fifty thousand (50,000) and all of the Warrant Shares
available for purchase under this Warrant. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and the date
of such purchases. The Company shall deliver any objection to any Notice of
Exercise within one (1) Business Day of receipt of such notice. Notwithstanding
the foregoing, with respect to any Notice(s) of Exercise delivered on or
prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which
may be delivered at any time after the time of execution of the Purchase
Agreement, the Company agrees to deliver, or cause to be delivered, the
Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on
the Initial Exercise Date, and the Initial Exercise Date shall be the Warrant
Share Delivery Date (as defined below) for purposes hereunder, provided that
payment of the aggregate Exercise Price (other than in the case of a cashless
exercise) is received by such Warrant Share Delivery Date.
The Holder and any assignee, by acceptance of this Warrant, acknowledge and
agree that, by reason of the provisions of this paragraph, following the
purchase of a portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be less than the
amount stated on the face hereof.
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For the avoidance of doubt, at any time during which there is no effective
registration statement for the issuance of the Warrant Shares to the Holder,
but only if this Warrant is exercised for cash, the Company may settle the
exercise of the Warrant with unregistered shares of Common Stock.
(b)
Exercise Price
. The aggregate exercise price of this Warrant, except for a nominal exercise
price of $0.001 per Warrant Share, was pre-funded to the Company on or prior
to the Initial Exercise Date and, consequently, no additional consideration
(other than the nominal exercise price of $0.001 per Warrant Share) shall be
required to be paid by the Holder to any Person to effect any exercise of this
Warrant. The Holder shall not be entitled to the return or refund of all, or
any portion, of such pre-paid aggregate exercise price under any circumstance
or for any reason whatsoever, including in the event this Warrant shall not
have been exercised prior to the Termination Date. The remaining unpaid
exercise price per Warrant Share under this Warrant shall be $0.001, subject
to adjustment hereunder (the "
Exercise Price
").
(c) Cashless Exercise. Notwithstanding anything to the contrary
set forth herein, if at the time of exercise hereof there is no effective
registration statement registering the issuance of the Warrant Shares to the
Holder, or the prospectus contained therein is not available for the issuance
of the Warrant Shares to the Holder, then this Warrant may also be exercised,
in whole or in part otherwise in accordance with the terms of this Warrant, at
such time by means of a "cashless exercise" in which the Holder shall be
entitled to receive a number of Warrant Shares equal to the quotient obtained
by dividing [(A-B) (X)] by (A), where:
(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable
Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant
to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered
pursuant to Section 2(a) hereof on a Trading Day prior to the opening of "regular trading
hours" (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities
laws) on such Trading Day, (ii) at the option of the Holder, either (x) the VWAP on the
Trading Day immediately preceding the date of the applicable Notice of Exercise or (y) the Bid
Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. ("
Bloomberg
") as of the time of the Holder's execution of the applicable Notice of Exercise
if such Notice of Exercise is executed during "regular trading hours" on a
Trading Day and is delivered within two (2) hours thereafter (including until
two (2) hours after the close of "regular trading hours" on a Trading Day)
pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable
Notice of Exercise if the date of such Notice of Exercise is a Trading Day
and such Notice of Exercise is both executed and delivered pursuant to Section
2(a) hereof after the close of "regular trading hours" on such Trading Day;
2
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(B) = the Exercise Price, as adjusted hereunder; and
(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the
terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.
If Warrant Shares are issued in such a cashless exercise, the parties
acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics
of the Warrants being exercised. The Company agrees not to take any position
contrary to this Section 2(c).
"
Bid Price
" means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the bid price of the Common Stock for the time in question (or
the nearest preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg (based on a Trading Day from
9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if
OTCQB or OTCQX is not a Trading Market, the VWAP of the Common Stock for such
date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if
the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX
and if prices for the Common Stock are then reported on The Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of Common Stock so reported, or
(d) in all other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the
Purchasers of a majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of which shall be
paid by the Company.
"
VWAP
" means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock
for such date (or the nearest preceding date) on the Trading Market on which
the Common Stock is then listed or quoted as reported by Bloomberg (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding
date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported on The Pink Open Market (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid
price per share of Common Stock so reported, or (d) in all other cases, the
fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Purchasers of a majority in interest
of the Securities then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
3
-------------------------------------------------------------------------------
Notwithstanding anything herein to the contrary, on the Termination Date, this
Warrant shall be automatically exercised via cashless exercise pursuant to
this Section 2(c).
(d)
Mechanics of Exercise.
(i)
Delivery of Warrant Shares Upon Exercise
. The Company shall cause the Warrant Shares purchased hereunder to be
transmitted to the Holder by The Depository Trust Company through its Deposit
or Withdrawal at Custodian system ("
DWAC
") if the Company is then a participant in such system and either (A) there is
an effective registration statement permitting the issuance of the Warrant
Shares to, or resale of the Warrant Shares by, the Holder or (B) this Warrant
is being exercised via cashless exercise, and otherwise by physical delivery
of the Warrant Shares, registered in the Company's share register in the name
of the Holder or its designee, for the number of Warrant Shares to which the
Holder is entitled pursuant to such exercise to the address specified by the
Holder in the Notice of Exercise by the date that is the earliest of (i) two
(2) Trading Days after the delivery to the Company of the Notice of Exercise,
(ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the
Company, and (iii) the number of Trading Days comprising the Standard
Settlement Period after the delivery to the Company of the Notice of Exercise
(such date, the "
Warrant Share Delivery Date
"). Upon delivery of the Notice of Exercise, the Holder shall be deemed for
all corporate purposes to have become the holder of record of the Warrant
Shares with respect to which this Warrant has been exercised, irrespective of
the date of delivery of the Warrant Shares, provided that payment of the
aggregate Exercise Price (other than in the case of a cashless exercise) is
received within the earlier of (i) two (2) Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period following delivery of
the Notice of Exercise. If the Company fails for any reason to deliver to the
Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share
Delivery Date, without delivering an objection to the Notice of Exercise per
Section 2(a), the Company shall pay to the Holder, at the Holder's election
either (A) in cash, as liquidated damages and not as a penalty, for each
$1,000 of Warrant Shares subject to such exercise (based on the VWAP of the
Common Stock on the date of the applicable Notice of Exercise), $10 per
Trading Day (increasing to $20 per Trading Day on the third Trading Day after
the Warrant Share Delivery Date) for each Trading Day after such Warrant Share
Delivery Date until the earlier of such Warrant Shares being delivered or
Holder rescinds such exercise or (B) the amount pursuant to a Buy-In pursuant
to Section 2(d)(iv) hereof. The Company agrees to maintain a registrar (which
may be the Transfer Agent) that is a participant in the FAST program so long
as this Warrant remains outstanding and exercisable. As used herein, "
Standard Settlement Period
" means the standard settlement period, expressed in a number of Trading Days,
on the Company's primary Trading Market with respect to the Common Stock as in
effect on the date of delivery of the Notice of Exercise.
4
-------------------------------------------------------------------------------
(ii)
Delivery of New Warrants Upon Exercise
. If this Warrant shall have been exercised in part in accordance with the
limitations of Section 2(a), the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the
Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of
the Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.
(iii)
Rescission Rights
. If the Company fails to cause the Transfer Agent to transmit to the Holder
the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery
Date, then the Holder will have the right to rescind such exercise.
(iv)
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon
Exercise
. In addition to any other rights available to the Holder, if the Company
fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares
in accordance with the provisions of Section 2(d)(i) above pursuant to an
exercise on or before the Warrant Share Delivery Date, and if after such date
the Holder is required by its broker to purchase (in an open market
transaction or otherwise) or the Holder's brokerage firm otherwise purchases,
shares of Common Stock to deliver in satisfaction of a sale by the Holder of
the Warrant Shares which the Holder anticipated receiving upon such exercise
(a "
Buy-In
"), then the Company shall (A) pay in cash to the Holder the amount, if any,
by which (x) the Holder's total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y)
the amount obtained by multiplying (1) the number of Warrant Shares that the
Company was required to deliver to the Holder in connection with the exercise
at issue times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number of Warrant Shares
for which such exercise was not honored (in which case such exercise shall be
deemed rescinded) or deliver to the Holder the number of shares of Common
Stock that would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For example, if the Holder
purchases shares of Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of Warrants with an
aggregate sale price giving rise to such purchase obligation of $10,000, under
clause (A) of the immediately preceding sentence the Company shall be required
to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In and,
upon request of the Company, evidence of the amount of such loss. Nothing
herein shall limit a Holder's right to pursue any other remedies available to
it hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company's
failure to timely deliver shares of Common Stock upon exercise of the Warrant
as required pursuant to the terms hereof.
(v)
No Fractional Shares or Scrip
. No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. As to any fraction of a share which
the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of
such final fraction in an amount equal to such fraction multiplied by the
Exercise Price or round up to the next whole share of Common Stock.
5
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(vi)
Charges, Taxes and Expenses
. The issuance and delivery of Warrant Shares shall be made without charge to
the Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of such Warrant Shares, all of which taxes and
expenses shall be paid by the Company, and such Warrant Shares shall be issued
in the name of the Holder or in such name or names as may be directed by the
Holder; provided, however, that, in the event that Warrant Shares are to be
issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached
hereto as
Exhibit B
duly executed by the Holder and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto. The Company shall pay all Transfer Agent fees required
for same-day processing of any Notice of Exercise and all fees to the
Depository Trust Company (or another established clearing corporation
performing similar functions) required for same-day electronic delivery of the
Warrant Shares.
(vii)
Closing of Books
. The Company will not close its stockholder books or records in any manner
which prevents the timely exercise of this Warrant, pursuant to the terms
hereof.
6
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(e)
Holder
'
s Exercise Limitations
. The Company shall not effect any exercise of this Warrant, and a Holder
shall not have the right to exercise any portion of this Warrant, pursuant to
Section 2 or otherwise, to the extent that after giving effect to such
issuance after exercise as set forth on the applicable Notice of Exercise, the
Holder (together with (i) the Holder's Affiliates, (ii) any other Persons
acting as a group together with the Holder or any of the Holder's Affiliates,
and (iii) any other Persons whose beneficial ownership of shares of Common
Stock would or could be aggregated with the Holder's for the purposes of
Section 13(d) (such Persons, "
Attribution Parties
")), would beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the number of
shares of Common Stock beneficially owned by the Holder and its Affiliates and
Attribution Parties shall include the number of Warrant Shares issuable upon
exercise of this Warrant with respect to which such determination is being
made, but shall exclude the number of Warrant Shares which would be issuable
upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution
Parties and (ii) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without limitation,
any other Common Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially owned by
the Holder or any of its Affiliates or Attribution Parties. Except as set
forth in the preceding sentence, for purposes of this Section 2(e), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to the Holder
that such calculation is in compliance with Section 13(d) of the Exchange Act
and the Holder is solely responsible for any schedules required to be filed in
accordance therewith. To the extent that the limitation contained in this
Section 2(e) applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission
of a Notice of Exercise shall be deemed to be the Holder's determination of
whether this Warrant is exercisable (in relation to other securities owned by
the Holder together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the Beneficial
Ownership Limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination and shall have no liability for
exercises of the Warrant that are not in compliance with the Beneficial
Ownership Limitation, except to the extent the Holder relies on the number of
outstanding shares of Common Stock that was provided by the Company. In
addition, a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder, and the Company shall have no
obligation to verify or confirm the accuracy of such determination. For
purposes of this Section 2(e), in determining the number of outstanding shares
of Common Stock, a Holder may rely on the number of outstanding shares of
Common Stock as reflected in (A) the Company's most recent periodic or annual
report filed with the Securities and Exchange Commission (the "
Commission
"), as the case may be, (B) a more recent public announcement by the Company
or (C) a more recent written notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon the
written request of a Holder, the Company shall within one Trading Day confirm
in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock
shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder or its
Affiliates or Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The "
Beneficial Ownership Limitation
" shall be 4.99% (or, at the election of the Holder prior to the issuance of
this Warrant, 9.99%) of the number of shares of Common Stock outstanding
immediately after giving effect to the issuance of the Warrant Shares issuable
upon exercise of this Warrant. The Holder, upon notice to the Company, may
increase or decrease the Beneficial Ownership Limitation provisions of this
Section 2(e), provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of Common Stock outstanding immediately
after giving effect to the issuance of Warrant Shares upon exercise of this
Warrant held by the Holder and the provisions of this Section 2(e) shall
continue to apply. Any increase in the Beneficial Ownership Limitation will
not be effective until the 61st day after such notice is delivered to the
Company. The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section
2(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein
contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph
shall apply to a successor holder of this Warrant. If the Warrant is
unexercisable solely as a result of the Holder's Beneficial Ownership
Limitation, no alternate consideration is owing to the Holder.
7
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Section 3.
Certain Adjustments
.
(a)
Stock Dividends and Splits
. If the Company, at any time while this Warrant is outstanding: (i) pays a
stock dividend or otherwise makes a distribution or distributions on shares of
Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not include any
Warrant Shares issued by the Company upon exercise of this Warrant), (ii)
subdivides outstanding shares of Common Stock into a larger number of shares,
(iii) combines (including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of Common Stock any shares of capital stock of the Company, then in
each case the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event, and the number of shares issuable upon exercise
of this Warrant shall be proportionately adjusted such that the aggregate
Exercise Price of this Warrant remains unchanged. Any adjustment made
pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
(b)
[RESERVED]
(c)
Subsequent Rights Offerings
. In addition to any adjustments pursuant to Section 3(a) above, if at any
time the Company grants, issues or sells any Common Stock Equivalents or
rights to purchase stock, warrants, securities or other property pro rata to
the record holders of any class of Common Stock (the "
Purchase Rights
"), then the Holder will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which the Holder could
have acquired if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, that, to the extent that the Holder's right to participate
in any such Purchase Right would result in the Holder exceeding the Beneficial
Ownership Limitation, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such shares of
Common Stock as a result of such Purchase Right to such extent) and such
Purchase Right to such extent shall be held in abeyance for the Holder until
such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
(d) Pro Rata Distributions. During such time as this Warrant is
outstanding, if the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of
shares of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction)
(a Distribution), at any time after the issuance of this Warrant, then, in
each such case, the Holder shall be entitled to participate in such
Distribution to the same extent that the Holder would have participated
therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on
exercise hereof, including without limitation, the Beneficial Ownership
Limitation) immediately before the date of which a record is taken for such
Distribution, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, that, to the extent that the Holders
right to participate in any such Distribution would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such
Distribution to such extent) and the portion of such Distribution shall be
held in abeyance for the benefit of the Holder until such time, if ever, as
its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
8
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(e) [RESERVED]
(f)
Calculations
. All calculations under this Section 3 shall be made to the nearest cent or
the nearest 1/100th of a share of Common Stock, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall be the sum of the number of
shares of Common Stock (excluding treasury shares, if any) issued and
outstanding.
(g)
Notice to Holder
.
(i)
Adjustment to Exercise Price
. Whenever the Exercise Price is adjusted pursuant to any provision of this
Section 3, the Company shall promptly deliver to the Holder by email a notice
setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement
of the facts requiring such adjustment.
(ii)
Notice to Allow Exercise by Holder
. If, while the Warrant is outstanding, (A) the Company declares a dividend
(or any other distribution in whatever form) on the shares of Common Stock,
(B) the Company declares a cash dividend on, or a redemption of, the shares of
Common Stock, (C) the Company authorizes the granting to all holders of the
shares of Common Stock rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights, (D) the approval of any
stockholders of the Company is required in connection with a Fundamental
Transaction, or (E) the Company authorizes the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in
each case, the Company shall cause to be delivered by email to the Holder at
its last email address as it shall appear upon the Warrant Register of the
Company, at least 20 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution, redemption, rights
or warrants, or if a record is not to be taken, the date as of which the
holders of the shares of Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the shares of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the
failure to deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action required to be
specified in such notice. To the extent that any notice provided in this
Warrant constitutes, or contains, material, non-public information regarding
the Company or any of the Subsidiaries, the Company shall simultaneously file
such notice with the Commission pursuant to a Current Report on Form 8-K. The
Holder shall remain entitled to exercise this Warrant during the period
commencing on the date of such notice to the effective date of the event
triggering such notice except as may otherwise be expressly set forth herein.
9
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(h)
Voluntary Adjustment By Company
. Subject to the rules and regulations of the Trading Market, the Company may
at any time during the term of this Warrant reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the board
of directors of the Company.
Section 4.
Transfer of Warrant
.
(a)
Transferability
. This Warrant and all rights hereunder (including, without limitation, any
registration rights) are transferable, in whole or in part, upon surrender of
this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form
attached hereto as
Exhibit B
, duly executed by the Holder or its agent or attorney and funds sufficient to
pay any transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees, as
applicable, and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant to the
Company unless the Holder has assigned this Warrant in full, in which case,
the Holder shall surrender this Warrant to the Company within three (3)
Trading Days of the date on which the Holder delivers an assignment form to
the Company assigning this Warrant in full. The Warrant, if properly assigned
in accordance herewith, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.
(b)
New Warrants
. This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant
or Warrants in exchange for the Warrant or Warrants to be divided or combined
in accordance with such notice. All Warrants issued on transfers or exchanges
shall be dated the initial issuance date of this Warrant and shall be
identical with this Warrant except as to the number of Warrant Shares issuable
pursuant thereto.
(c)
Warrant Register
. The Company shall register this Warrant, upon records to be maintained by
the Company for that purpose (the "
Warrant Register
"), in the name of the record Holder hereof from time to time. The Company
may deem and treat the registered Holder of this Warrant as the absolute owner
hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.
10
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Section 5.
Miscellaneous
.
(a)
Currency
. All dollar amounts referred to in this Warrant are in United States Dollars
("
U.S. Dollars
"). All amounts owing under this Warrant shall be paid in U.S. Dollars. All
amounts denominated in other currencies shall be converted in the U.S. Dollar
equivalent amount in accordance with the Exchange Rate on the date of
calculation. "
Exchange Rate
" means, in relation to any amount of currency to be converted into U.S.
Dollars pursuant to this Warrant, the U.S. Dollar exchange rate as published
in the Wall Street Journal (NY edition) on the relevant date of calculation.
(b)
No Rights as Stockholder Until Exercise; No Settlement in Cash
. This Warrant does not entitle the Holder to any voting rights, dividends or
other rights as a stockholder of the Company prior to the exercise hereof as
set forth in Section 2(d)(i), except as expressly set forth in Section 3.
Without limiting any rights of a Holder to receive Warrant Shares on a
"cashless exercise" pursuant to Section 2(c) or to receive cash payments
pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the
Company be required to net cash settle an exercise of this Warrant.
(c)
Loss, Theft, Destruction or Mutilation of Warrant
. The Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate relating to the Warrant Shares, and in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not include the
posting of any bond), and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new
Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.
(d)
Saturdays, Sundays, Holidays, etc
. If the last or appointed day for the taking of any action or the expiration
of any right required or granted herein shall not be a Trading Day, then such
action may be taken or such right may be exercised on the next succeeding
Trading Day.
(e)
Authorized Shares
. The Company covenants that, during the period the Warrant is outstanding,
it will reserve from its authorized and unissued shares of Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares
underlying the Warrant upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of this Warrant
shall constitute full authority to its officers who are charged with the duty
of issuing the necessary Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued and
delivered, as provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which the Common
Stock may be listed. The Company covenants that all Warrant Shares underlying
this Warrant which may be issued and delivered upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of the
purchase rights represented by this Warrant and payment for such Warrant
Shares in accordance herewith, be duly authorized, validly issued, fully paid
and nonassessable and free from all taxes, liens and charges created by the
Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
11
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Except and to the extent as waived or consented to by the Holder, the Company
shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of Holder as
set forth in this Warrant against impairment. Without limiting the generality
of the foregoing, the Company will (i) not increase the par value of any
shares of Common Stock above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant and (iii) use commercially reasonable efforts to
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof, as may be, necessary to enable
the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.
(f)
Jurisdiction
. All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance with the
provisions of the Purchase Agreement.
(g)
Restrictions
. The Holder acknowledges that the Warrant Shares acquired upon the exercise
of this Warrant, if not registered, and if the Holder does not utilize
cashless exercise, will have restrictions upon resale imposed by state,
federal or foreign securities laws.
(h)
Nonwaiver and Expenses
. No course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such right or
otherwise prejudice the Holder's rights, powers or remedies. Without limiting
any other provision of this Warrant or the Purchase Agreement, if the Company
willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to
the Holder such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys' fees, including those of
appellate proceedings, incurred by the Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or
remedies hereunder.
(i)
Notices
. Any notice, request or other document required or permitted to be given or
delivered to the Holder by the Company shall be delivered in accordance with
the notice provisions of the Purchase Agreement.
(j)
Limitation of Liability
. No provision hereof, in the absence of any affirmative action by the Holder
to exercise this Warrant to purchase Warrant Shares, and no enumeration herein
of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any shares of Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
12
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(k)
Remedies
. The Holder, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, will be entitled to specific performance
of its rights under this Warrant. The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law
would be adequate.
(l)
Successors and Assigns
. Subject to applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be binding upon
the successors and permitted assigns of the Company and the successors and
permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
(m)
Amendment
. This Warrant may be modified or amended or the provisions hereof waived
with the written consent of the Company and the Holder.
(n)
Severability
. Wherever possible, each provision of this Warrant shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Warrant shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provisions or the
remaining provisions of this Warrant.
(o)
Headings
. The headings used in this Warrant are for the convenience of reference only
and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
13
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above indicated.
BIOCARDIA, INC.
By:
Name:
[
]
Title:
[
]
14
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EXHIBIT A
NOTICE OF EXERCISE
TO: BIOCARDIA, INC.
(1) The undersigned hereby elects to purchase
Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
in lawful money of the United States; or
if permitted the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection 2(c), to
exercise this Warrant with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise procedure set forth in
subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such
other name as is specified below:
The Warrant Shares shall be delivered to the following DWAC Account Number:
[SIGNATURE OF HOLDER]
Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity
:
Name of Authorized Signatory:
Title of Authorized Signatory:
Date:
A-1
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EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required
information.
Do not use this form to exercise the Warrant to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are
hereby assigned to
Name:
(Please Print)
Address:
(Please Print)
Phone Number:
Email Address:
Dated:
Holder's Signature:
Holder's Address:
B-1
Exhibit 4.2
WARRANT TO PURCHASE SHARES OF COMMON STOCK
BIOCARDIA, INC.
Warrant Shares: Original Issuance Date: August [
], 2024
THIS WARRANT TO PURCHASE SHARES OF COMMON STOCK (this "
Warrant
") certifies that, for value received,
or its assigns (the "
Holder
") is entitled, upon the terms and subject to the limitations on exercise and
the conditions hereinafter set forth, at any time on or after the date hereof
(the "
Initial Exercise Date
") and on or prior to 5:00 p.m. (New York City time) on August [
], 2029 (the "
Termination Date
"), but not thereafter, to subscribe for and purchase from BioCardia, Inc., a
Delaware corporation (the "
Company
"), up to
shares of Common Stock, par value $0.001 per share (the "
Common Stock
"), of the Company (as subject to adjustment hereunder, the "
Warrant Shares
"). The purchase price of one Warrant Share under this Warrant shall be equal
to the Exercise Price, as defined in Section 2(b).
Section 1.
Definitions
. Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in that certain Securities Purchase Agreement (the "
Purchase Agreement
"), dated August [__], 2024, among the Company and the purchasers signatory
thereto.
Section 2.
Exercise
.
(a)
Exercise of Warrant
. Exercise of the purchase rights represented by this Warrant may be made, in
whole or in part, at any time or times on or after the Initial Exercise Date
and, on or before the Termination Date by delivery to the Company of a duly
executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of
Exercise in the form annexed hereto as
Exhibit A
(the "
Notice of Exercise
"). Within the earlier of (i) two (2) Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period (as defined in Section
2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall
deliver the aggregate Exercise Price for the Warrant Shares specified in the
applicable Notice of Exercise by wire transfer or cashier's check drawn on a
United States bank unless the cashless exercise procedure specified in Section
2(c) below is specified in the applicable Notice of Exercise. No ink-original
Notice of Exercise shall be required, nor shall any medallion guarantee (or
other type of guarantee or notarization) of any Notice of Exercise be
required. Notwithstanding anything herein to the contrary, the Holder shall
not be required to physically surrender this Warrant to the Company until the
Holder has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within three (3) Trading Days of
the date on which the final Notice of Exercise is delivered to the Company.
Partial exercises of this Warrant resulting in purchases of a portion of the
total number of Warrant Shares available hereunder are permitted,
provided however
that any such partial exercise must relate to a number of Warrant Shares equal
to the lesser of fifty thousand (50,000) and all of the Warrant Shares
available for purchase under this Warrant. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and the date
of such purchases. The Company shall deliver any objection to any Notice of
Exercise within one (1) Business Day of receipt of such notice. Notwithstanding
the foregoing, with respect to any Notice(s) of Exercise delivered on or prior
to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be
delivered at any time after the time of execution of the Purchase Agreement,
the Company agrees to deliver, or cause to be delivered, the Warrant Shares
subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial
Exercise Date and the Initial Exercise Date shall be the Warrant Share
Delivery Date (as defined below) for purposes hereunder, provided that payment
of the aggregate Exercise Price (other than in the case of a cashless
exercise) is received by such Warrant Share Delivery Date.
The Holder and any assignee, by acceptance of this Warrant, acknowledge and
agree that, by reason of the provisions of this paragraph, following the
purchase of a portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be less than the
amount stated on the face hereof
.
1
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(b)
Exercise Price
. The exercise price under this Warrant shall be $[__] per share of Common
Stock, subject to adjustment hereunder (the "
Exercise Price
").
(c)
Cashless Exercise
. Notwithstanding anything to the contrary set forth herein, if at the time of
exercise hereof there is no effective registration statement registering the
issuance of the Warrant Shares to the Holder, or the prospectus contained
therein is not available for the issuance of the Warrant Shares to the Holder,
then this Warrant may also be exercised, in whole or in part, at such time by
means of a "cashless exercise" in which the Holder shall be entitled to
receive a number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:
(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the
applicable Notice of Exercise if such Notice of Exercise is (1) both executed and
delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both
executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the
opening of "regular trading hours" (as defined in Rule 600(b) of Regulation NMS
promulgated under the federal securities laws) on such Trading Day, (ii) at the option of
the Holder, either (x) the VWAP on the Trading Day immediately preceding the date of
the applicable Notice of Exercise or (y) the Bid Price of the Common Stock on the
principal Trading Market as reported by Bloomberg L.P. ("Bloomberg") as of the time of
the Holder's execution of the applicable Notice of Exercise if such Notice of Exercise
is executed during "regular trading hours" on a Trading Day and is delivered within
two (2) hours thereafter (including until two (2) hours after the close of "regular
trading hours" on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on
the date of the applicable Notice of Exercise if the date of such Notice of Exercise
is a Trading Day and such Notice of Exercise is both executed and delivered pursuant
to Section 2(a) hereof after the close of "regular trading hours" on such Trading Day;
(B) = the Exercise Price, as adjusted hereunder; and
(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the
terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.
If Warrant Shares are issued in such a cashless exercise, the parties
acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics
of the Warrants being exercised. The Company agrees not to take any position
contrary to this Section 2(c).
2
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"
Bid Price
" means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the bid price of the Common Stock for the time in question (or
the nearest preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg (based on a Trading Day from
9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if
OTCQB or OTCQX is not a Trading Market, the VWAP of the Common Stock for such
date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if
the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX
and if prices for the Common Stock are then reported on The Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of Common Stock so reported, or
(d) in all other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the
Purchasers of a majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of which shall be
paid by the Company.
"
VWAP
" means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock
for such date (or the nearest preceding date) on the Trading Market on which
the Common Stock is then listed or quoted as reported by Bloomberg (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding
date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported on The Pink Open Market (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid
price per share of Common Stock so reported, or (d) in all other cases, the
fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Purchasers of a majority in interest
of the Securities then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
(d)
Mechanics of Exercise
.
(i)
Delivery of Warrant Shares Upon Exercise
. The Company shall cause the Warrant Shares purchased hereunder to be
transmitted to the Holder by The Depository Trust Company through its Deposit
or Withdrawal at Custodian system ("
DWAC
") if the Company is then a participant in such system and either (A) there is
an effective registration statement permitting the issuance of the Warrant
Shares to, or resale of the Warrant Shares by, the Holder or (B) this Warrant
is being exercised via cashless exercise, and otherwise by physical delivery
of the Warrant Shares, registered in the Company's share register in the name
of the Holder or its designee, for the number of Warrant Shares to which the
Holder is entitled pursuant to such exercise to the address specified by the
Holder in the Notice of Exercise by the date that is the earliest of (i) two
(2) Trading Days after the delivery to the Company of the Notice of Exercise,
(ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the
Company and (iii) the number of Trading Days comprising the Standard
Settlement Period after the delivery to the Company of the Notice of Exercise
(such date, the "
Warrant Share Delivery Date
"). Upon delivery of the Notice of Exercise, the Holder shall be deemed for
all corporate purposes to have become the holder of record of the Warrant
Shares with respect to which this Warrant has been exercised, irrespective of
the date of delivery of the Warrant Shares, provided that payment of the
aggregate Exercise Price (other than in the case of a cashless exercise) is
received within the earlier of (i) two (2) Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period following delivery of
the Notice of Exercise. If the Company fails for any reason to deliver to the
Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share
Delivery Date, without delivering an objection to the Notice of Exercise per
Section 2(a), the Company shall pay to the Holder, at the Holder's election
either (A) in cash, as liquidated damages and not as a penalty, for each
$1,000 of Warrant Shares subject to such exercise (based on the VWAP of the
Common Stock on the date of the applicable Notice of Exercise), $10 per
Trading Day (increasing to $20 per Trading Day on the third Trading Day after
the Warrant Share Delivery Date) for each Trading Day after such Warrant Share
Delivery Date until the earlier of such Warrant Shares being delivered or
Holder rescinds such exercise or (B) the amount pursuant to a Buy-In pursuant
to Section 2(d)(iv) hereof. The Company agrees to maintain a registrar (which
may be the Transfer Agent) that is a participant in the FAST program so long
as this Warrant remains outstanding and exercisable. As used herein, "
Standard Settlement Period
" means the standard settlement period, expressed in a number of Trading Days,
on the Company's primary Trading Market with respect to the Common Stock as in
effect on the date of delivery of the Notice of Exercise.
3
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(ii)
Delivery of New Warrants Upon Exercise
. If this Warrant shall have been exercised in part in accordance with the
limitations of Section 2(a), the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the
Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of
the Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.
(iii)
Rescission Rights
. If the Company fails to cause the Transfer Agent to transmit to the Holder
the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery
Date, then the Holder will have the right to rescind such exercise.
(iv)
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon
Exercise
. In addition to any other rights available to the Holder, if the Company
fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares
in accordance with the provisions of Section 2(d)(i) above pursuant to an
exercise on or before the Warrant Share Delivery Date, and if after such date
the Holder is required by its broker to purchase (in an open market
transaction or otherwise) or the Holder's brokerage firm otherwise purchases,
shares of Common Stock to deliver in satisfaction of a sale by the Holder of
the Warrant Shares which the Holder anticipated receiving upon such exercise
(a "
Buy-In
"), then the Company shall (A) pay in cash to the Holder the amount, if any,
by which (x) the Holder's total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y)
the amount obtained by multiplying (1) the number of Warrant Shares that the
Company was required to deliver to the Holder in connection with the exercise
at issue times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number of Warrant Shares
for which such exercise was not honored (in which case such exercise shall be
deemed rescinded) or deliver to the Holder the number of shares of Common
Stock that would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For example, if the Holder
purchases shares of Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of Warrants with an
aggregate sale price giving rise to such purchase obligation of $10,000, under
clause (A) of the immediately preceding sentence the Company shall be required
to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In and,
upon request of the Company, evidence of the amount of such loss. Nothing
herein shall limit a Holder's right to pursue any other remedies available to
it hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company's
failure to timely deliver shares of Common Stock upon exercise of the Warrant
as required pursuant to the terms hereof.
4
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(v)
No Fractional Shares or Scrip
. No fractional shares or scrip representing fractional shares shall be issued
upon the exercise of this Warrant. As to any fraction of a share which the
Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the Exercise Price
or round up to the next whole share of Common Stock.
(vi)
Charges, Taxes and Expenses
. The issuance and delivery of Warrant Shares shall be made without charge to
the Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of such Warrant Shares, all of which taxes and
expenses shall be paid by the Company, and such Warrant Shares shall be issued
in the name of the Holder or in such name or names as may be directed by the
Holder;
provided
,
however
, that, in the event that Warrant Shares are to be issued in a name other than
the name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto as
Exhibit B
, duly executed by the Holder and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto. The Company shall pay all Transfer Agent fees required for
same-day processing of any Notice of Exercise and all fees to the Depository
Trust Company (or another established clearing corporation performing similar
functions) required for same-day electronic delivery of the Warrant Shares.
(vii)
Closing of Books
. The Company will not close its stockholder books or records in any manner
which prevents the timely exercise of this Warrant, pursuant to the terms
hereof.
5
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(e)
Holder
'
s Exercise Limitations
. The Company shall not effect any exercise of this Warrant, and a Holder
shall not have the right to exercise any portion of this Warrant, pursuant to
Section 2 or otherwise, to the extent that after giving effect to such
issuance after exercise as set forth on the applicable Notice of Exercise, the
Holder (together with (i) the Holder's Affiliates, (ii) any other Persons
acting as a group together with the Holder or any of the Holder's Affiliates,
and (iii) any other Persons whose beneficial ownership of shares of Common
Stock would or could be aggregated with the Holder's for the purposes of
Section 13(d) (such Persons, "
Attribution Parties
")), would beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the number of
shares of Common Stock beneficially owned by the Holder and its Affiliates and
Attribution Parties shall include the number of Warrant Shares issuable upon
exercise of this Warrant with respect to which such determination is being
made, but shall exclude the number of Warrant Shares which would be issuable
upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution
Parties and (ii) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without limitation,
any other Common Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially owned by
the Holder or any of its Affiliates or Attribution Parties. Except as set
forth in the preceding sentence, for purposes of this Section 2(e), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to the Holder
that such calculation is in compliance with Section 13(d) of the Exchange Act
and the Holder is solely responsible for any schedules required to be filed in
accordance therewith. To the extent that the limitation contained in this
Section 2(e) applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission
of a Notice of Exercise shall be deemed to be the Holder's determination of
whether this Warrant is exercisable (in relation to other securities owned by
the Holder together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the Beneficial
Ownership Limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination and shall have no liability for
exercises of the Warrant that are not in compliance with the Beneficial
Ownership Limitation, except to the extent the Holder relies on the number of
outstanding shares of Common Stock that was provided by the Company. In
addition, a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder, and the Company shall have no
obligation to verify or confirm the accuracy of such determination. For
purposes of this Section 2(e), in determining the number of outstanding shares
of Common Stock, a Holder may rely on the number of outstanding shares of
Common Stock as reflected in (A) the Company's most recent periodic or annual
report filed with the Securities and Exchange Commission (the "
Commission
"), as the case may be, (B) a more recent public announcement by the Company
or (C) a more recent written notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon the
written request of a Holder, the Company shall within one Trading Day confirm
in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock
shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder or its
Affiliates or Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The "
Beneficial Ownership Limitation
" shall be 4.99% (or, at the election of the Holder prior to the issuance of
this Warrant, 9.99%) of the number of shares of Common Stock outstanding
immediately after giving effect to the issuance of the Warrant Shares issuable
upon exercise of this Warrant. The Holder, upon notice to the Company, may
increase or decrease the Beneficial Ownership Limitation provisions of this
Section 2(e), provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of Common Stock outstanding immediately
after giving effect to the issuance of Warrant Shares upon exercise of this
Warrant held by the Holder and the provisions of this Section 2(e) shall
continue to apply. Any increase in the Beneficial Ownership Limitation will
not be effective until the 61st day after such notice is delivered to the
Company. The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section
2(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein
contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph
shall apply to a successor holder of this Warrant. If the Warrant is
unexercisable solely as a result of the Holder's Beneficial Ownership
Limitation, no alternate consideration is owing to the Holder.
Section 3.
Certain Adjustments
.
(a)
Stock Dividends and Splits
. If the Company, at any time while this Warrant is outstanding: (i) pays a
stock dividend or otherwise makes a distribution or distributions on shares of
Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not include any
Warrant Shares issued by the Company upon exercise of this Warrant), (ii)
subdivides outstanding shares of Common Stock into a larger number of shares,
(iii) combines (including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of Common Stock any shares of capital stock of the Company, then in
each case the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event, and the number of shares issuable upon exercise
of this Warrant shall be proportionately adjusted such that the aggregate
Exercise Price of this Warrant remains unchanged. Any adjustment made pursuant
to this Section 3(a) shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date
in the case of a subdivision, combination or reclassification.
6
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(b) [RESERVED]
(c)
Subsequent Rights Offerings
. In addition to any adjustments pursuant to Section 3(a) above, if at any
time the Company grants, issues or sells any Common Stock Equivalents or
rights to purchase stock, warrants, securities or other property pro rata to
the record holders of any class of Common Stock (the "
Purchase Rights
"), then the Holder will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which the Holder could
have acquired if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights (
provided
,
however
, that, to the extent that the Holder's right to participate in any such
Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such
Purchase Right to such extent (or beneficial ownership of such shares of
Common Stock as a result of such Purchase Right to such extent) and such
Purchase Right to such extent shall be held in abeyance for the Holder until
such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
(d)
Pro Rata Distributions
. During such time as this Warrant is outstanding, if the Company shall
declare or make any dividend or other distribution of its assets (or rights to
acquire its assets) to holders of shares of Common Stock, by way of return of
capital or otherwise (including, without limitation, any distribution of cash,
stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a "
Distribution
"), at any time after the issuance of this Warrant, then, in each such case,
the Holder shall be entitled to participate in such Distribution to the same
extent that the Holder would have participated therein if the Holder had held
the number of shares of Common Stock acquirable upon complete exercise of this
Warrant (without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation) immediately before
the date of which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares of Common
Stock are to be determined for the participation in such Distribution (
provided
,
however
, that, to the extent that the Holder's right to participate in any such
Distribution would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such
Distribution to such extent (or in the beneficial ownership of any shares of
Common Stock as a result of such Distribution to such extent) and the portion
of such Distribution shall be held in abeyance for the benefit of the Holder
until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
7
-------------------------------------------------------------------------------
(e)
Fundamental Transaction
. If, at any time while this Warrant is outstanding, (i) the Company, directly
or indirectly, in one or more related transactions effects any merger or
consolidation of the Company with or into another Person (other than a
reincorporation in a different state), (ii) the Company (and all of its
Subsidiaries, taken as a whole), directly or indirectly, effects any sale,
lease, license, assignment, transfer, conveyance or other disposition of all
or substantially all of the Company's (including its Subsidiaries, taken as a
whole) assets in one or a series of related transactions, (iii) any, direct or
indirect, purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders of 50% or
more of the outstanding shares of Common Stock or more than 50% of the voting
power of the common equity of the Company, (iv) the Company, directly or
indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of shares of Common Stock or any compulsory
share exchange pursuant to which the shares of Common Stock are effectively
converted into or exchanged for other securities, cash or property, or (v) the
Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off,
merger or scheme of arrangement) with another Person or group of Persons
whereby such other Person or group acquires more than 50% of the outstanding
shares of Common Stock or more than 50% of the voting power of the common
equity of the Company (each, a "
Fundamental Transaction
"), then, upon any subsequent exercise of this Warrant, the Holder shall have
the right to receive, for each Warrant Share that would have been issuable
upon such exercise immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any limitation in
Section 2(e) on the exercise of this Warrant), the number of shares of Common
Stock of the successor or acquiring corporation or of the Company, if it is
the surviving corporation, and any additional consideration (the "
Alternate Consideration
") receivable as a result of such Fundamental Transaction by a holder of the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such Fundamental Transaction (without regard to any
limitation in Section 2(e) on the exercise of this Warrant). For purposes of
any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental
Transaction. Notwithstanding anything to the contrary, in the event of a
Fundamental Transaction, the Company or any Successor Entity (as defined
below) shall, at the Holder's option, exercisable at any time concurrently
with, or within thirty (30) days after, the consummation of the Fundamental
Transaction (or, if later, the date of the public announcement of the
applicable Fundamental Transaction), purchase this Warrant from the Holder by
paying to the Holder, as described below, an amount of cash equal to the Black
Scholes Value (as defined below) of the remaining unexercised portion of this
Warrant on the date of the consummation of such Fundamental Transaction;
provided, however, that, if the Fundamental Transaction is not within the
Company's control, including not approved by the Company's Board of Directors,
the Holder shall only be entitled to receive from the Company or any Successor
Entity, the same type or form of consideration (and in the same proportion),
valued at the Black Scholes Value of the unexercised portion of this Warrant,
that is being offered and paid to the holders of Common Stock of the Company
in connection with the Fundamental Transaction, whether that consideration be
in the form of cash, stock or any combination thereof, or whether the holders
of Common Stock are given the choice to receive from among alternative forms
of consideration in connection with the Fundamental Transaction; provided
further, that if holders of Common Stock of the Company are not offered or
paid any consideration in such Fundamental Transaction, such cash payment
right shall not apply. "Black Scholes Value" means the value of this Warrant
based on the Black-Scholes Option Pricing Model obtained from the "OV"
function on Bloomberg determined as of the day of consummation of the
applicable Fundamental Transaction for pricing purposes and reflecting (A) a
risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the time between the date of the public announcement of the
applicable contemplated Fundamental Transaction and the Termination Date, (B)
an expected volatility equal to the 100 day volatility obtained from the HVT
function on Bloomberg (determined utilizing a 365-day annualization factor) as
of the Trading Day immediately following the public announcement of the
applicable contemplated Fundamental Transaction, (C) the underlying price per
share used in such calculation shall be the greater of (i) the sum of the
price per share being offered in cash, if any, plus the value of any non-cash
consideration, if any, being offered in such Fundamental Transaction and (ii)
the highest VWAP during the five (5) Trading Days immediately prior to such
Fundamental Transaction, (D) a remaining option time equal to the time between
the date of the public announcement of the applicable contemplated Fundamental
Transaction and the Termination Date and (E) a zero cost of borrow. The
payment of the Black Scholes Value will be made by wire transfer of
immediately available funds (or such other consideration) within the later of
(i) five Business Days of the Holder's election and (ii) the effective date of
consummation of the Fundamental Transaction. The Company shall cause, to the
extent the Fundamental Transaction with within the Company's control, any
successor entity in a Fundamental Transaction in which the Company is not the
survivor (the "
Successor Entity
") to assume in writing all of the obligations of the Company under this
Warrant and the other Transaction Documents in accordance with the provisions
of this Section 3(e) and shall, at the option of the Holder, deliver to the
Holder in exchange for this Warrant a security of the Successor Entity
evidenced by a written instrument substantially similar in form and substance
to this Warrant which is exercisable for a corresponding number of shares of
capital stock of such Successor Entity (or its parent entity) equivalent to
the shares of Common Stock acquirable and receivable upon exercise of this
Warrant (without regard to any limitations on the exercise of this Warrant)
prior to such Fundamental Transaction, and with an exercise price which
applies the exercise price hereunder to such shares of capital stock (but
taking into account the relative value of the shares of Common Stock pursuant
to such Fundamental Transaction and the value of such shares of capital stock,
such number of shares of capital stock and such exercise price being for the
purpose of protecting the economic value of this Warrant immediately prior to
the consummation of such Fundamental Transaction). Upon the occurrence of any
such Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant and the other Transaction
Documents referring to the "Company" shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall
assume all of the obligations of the Company under this Warrant and the other
Transaction Documents with the same effect as if such Successor Entity had
been named as the Company herein.
8
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(f)
[
RESERVED
]
(g)
Calculations
. All calculations under this Section 3 shall be made to the nearest cent or
the nearest 1/100th of a share of Common Stock, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall be the sum of the number of
shares of Common Stock (excluding treasury shares, if any) issued and
outstanding.
(h)
Notice to Holder
.
(i)
Adjustment to Exercise Price
. Whenever the Exercise Price is adjusted pursuant to any provision of this
Section 3, the Company shall promptly deliver to the Holder by email a notice
setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement
of the facts requiring such adjustment.
9
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(ii)
Notice to Allow Exercise by Holder
. If, while the Warrant is outstanding, (A) the Company declares a dividend
(or any other distribution in whatever form) on the shares of Common Stock,
(B) the Company declares a cash dividend on or a redemption of the shares of
Common Stock, (C) the Company authorizes the granting to all holders of the
shares of Common Stock rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights, (D) the approval of any
stockholders of the Company is required in connection with a Fundamental
Transaction, or (E) the Company authorizes the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in
each case, the Company shall cause to be delivered by email to the Holder at
its last email address as it shall appear upon the Warrant Register of the
Company, at least 20 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution, redemption, rights
or warrants, or if a record is not to be taken, the date as of which the
holders of the shares of Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the shares of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the
failure to deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action required to be
specified in such notice. To the extent that any notice provided in this
Warrant constitutes, or contains, material, non-public information regarding
the Company or any of the Subsidiaries, the Company shall simultaneously file
such notice with the Commission pursuant to a Current Report on Form 8-K. The
Holder shall remain entitled to exercise this Warrant during the period
commencing on the date of such notice to the effective date of the event
triggering such notice except as may otherwise be expressly set forth herein.
(iii)
Voluntary Adjustment By Company
. Subject to the rules and regulations of the Trading Market, the Company may
at any time during the term of this Warrant, reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the board
of directors of the Company.
Section 4.
Transfer of Warrant
.
(a)
Transferability
. This Warrant and all rights hereunder (including, without limitation, any
registration rights) are transferable, in whole or in part, upon surrender of
this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form
attached hereto as
Exhibit B
duly executed by the Holder or its agent or attorney and funds sufficient to
pay any transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees, as
applicable, and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant to the
Company unless the Holder has assigned this Warrant in full, in which case,
the Holder shall surrender this Warrant to the Company within three (3)
Trading Days of the date on which the Holder delivers an assignment form to
the Company assigning this Warrant in full. The Warrant, if properly assigned
in accordance herewith, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.
10
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(b)
New Warrants
. This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant
or Warrants in exchange for the Warrant or Warrants to be divided or combined
in accordance with such notice. All Warrants issued on transfers or exchanges
shall be dated the initial issuance date of this Warrant and shall be
identical with this Warrant except as to the number of Warrant Shares issuable
pursuant thereto.
(c)
Warrant Register
. The Company shall register this Warrant, upon records to be maintained by
the Company for that purpose (the "
Warrant Register
"), in the name of the record Holder hereof from time to time. The Company may
deem and treat the registered Holder of this Warrant as the absolute owner
hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.
Section 5.
Miscellaneous
.
(a)
Currency
. All dollar amounts referred to in this Warrant are in United States Dollars ("
U.S. Dollars
"). All amounts owing under this Warrant shall be paid in U.S. Dollars. All
amounts denominated in other currencies shall be converted in the U.S. Dollar
equivalent amount in accordance with the Exchange Rate on the date of
calculation. "
Exchange Rate
" means, in relation to any amount of currency to be converted into U.S.
Dollars pursuant to this Warrant, the U.S. Dollar exchange rate as published
in the Wall Street Journal (NY edition) on the relevant date of calculation.
(b)
No Rights as Stockholder Until Exercise; No Settlement in Cash
. This Warrant does not entitle the Holder to any voting rights, dividends or
other rights as a stockholder of the Company prior to the exercise hereof as
set forth in Section 2(d)(i), except as expressly set forth in Section 3.
Without limiting any rights of a Holder to receive Warrant Shares on a
"cashless exercise" pursuant to Section 2(c) or to receive cash payments
pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the
Company be required to net cash settle an exercise of this Warrant.
(c)
Loss, Theft, Destruction or Mutilation of Warrant
. The Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate relating to the Warrant Shares, and in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not include the
posting of any bond), and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new
Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.
11
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(d)
Saturdays, Sundays, Holidays, etc
. If the last or appointed day for the taking of any action or the expiration
of any right required or granted herein shall not be a Trading Day, then such
action may be taken or such right may be exercised on the next succeeding
Trading Day.
(e)
Authorized Shares
. The Company covenants that, during the period the Warrant is outstanding, it
will reserve from its authorized and unissued shares of Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares
underlying the Warrant upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
issuing the necessary Warrant Shares upon the exercise of the purchase rights
under this Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued and delivered, as
provided herein without violation of any applicable law or regulation, or of
any requirements of the Trading Market upon which the Common Stock may be
listed. The Company covenants that all Warrant Shares underlying this Warrant,
which may be issued and delivered upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges created by the Company in respect of
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company
shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of Holder as
set forth in this Warrant against impairment. Without limiting the generality
of the foregoing, the Company will (i) not increase the par value of any
shares of Common Stock above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant and (iii) use commercially reasonable efforts to
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof, as may be, necessary to enable
the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.
(f)
Jurisdiction
. All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance with the
provisions of the Purchase Agreement.
(g)
Restrictions
. The Holder acknowledges that the Warrant Shares acquired upon the exercise
of this Warrant, if not registered, and if the Holder does not utilize
cashless exercise, will have restrictions upon resale imposed by state,
federal or foreign securities laws.
12
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(h)
Nonwaiver and Expenses
. No course of dealing or any delay or failure to exercise any right hereunder
on the part of Holder shall operate as a waiver of such right or otherwise
prejudice the Holder's rights, powers or remedies. Without limiting any other
provision of this Warrant or the Purchase Agreement, if the Company willfully
and knowingly fails to comply with any provision of this Warrant, which
results in any material damages to the Holder, the Company shall pay to the
Holder such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys' fees, including those of
appellate proceedings, incurred by the Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or
remedies hereunder.
(i)
Notices
. Any notice, request or other document required or permitted to be given or
delivered to the Holder by the Company shall be delivered in accordance with
the notice provisions of the Purchase Agreement.
(j)
Limitation of Liability
. No provision hereof, in the absence of any affirmative action by the Holder
to exercise this Warrant to purchase Warrant Shares, and no enumeration herein
of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any shares of Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
(k)
Remedies
. The Holder, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, will be entitled to specific performance
of its rights under this Warrant. The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law
would be adequate.
(l)
Successors and Assigns
. Subject to applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be binding upon
the successors and permitted assigns of the Company and the successors and
permitted assigns of Holder. The provisions of this Warrant are intended to be
for the benefit of any Holder from time to time of this Warrant and shall be
enforceable by the Holder or holder of Warrant Shares.
(m)
Amendment
. This Warrant may be modified or amended or the provisions hereof waived with
the written consent of the Company and the Holder.
(n)
Severability
. Wherever possible, each provision of this Warrant shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Warrant shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provisions or the
remaining provisions of this Warrant.
(o)
Headings
. The headings used in this Warrant are for the convenience of reference only
and shall not, for any purpose, be deemed a part of this Warrant.
******************
(
Signature Page Follows
)
13
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above indicated.
BIOCARDIA, INC.
By:
Name: [__]
Title: [__]
14
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EXHIBIT A
NOTICE OF EXERCISE
TO: BIOCARDIA, INC.
(1) The undersigned hereby elects to purchase
Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
in lawful money of the United States; or
if permitted the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection 2(c), to
exercise this Warrant with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise procedure set forth in
subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such
other name as is specified below:
The Warrant Shares shall be delivered to the following DWAC Account Number:
[SIGNATURE OF HOLDER]
Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity
:
Name of Authorized Signatory:
Title of Authorized Signatory:
Date:
15
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EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required
information. Do not use this form to exercise the Warrant to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are
hereby assigned to
Name:
(Please Print)
Address:
(Please Print)
Phone Number:
Email Address:
Dated:
Holder's Signature:
Holder's Address:
16
Exhibit 99.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "
Agreement
") is dated as of August 29, 2024, between BioCardia, Inc., a Delaware
corporation (the "
Company
"), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a "
Purchaser
" and collectively the "
Purchasers
").
WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to an effective registration statement under the Securities Act (as
defined below) as to the Shares and the Warrants (and the Warrant Shares
underlying the Warrants), the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires to purchase
from the Company, securities of the Company as more fully described in this
Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser
agree as follows:
ARTICLE I.
DEFINITIONS
1.1
Definitions
. In addition to the terms defined elsewhere in this Agreement, for all
purposes of this Agreement, the following terms have the meanings set forth in
this Section 1.1:
"
Acquiring Person
" shall have the meaning ascribed to such term in Section 4.4.
"
Action
" shall have the meaning ascribed to such term in Section 3.1(j).
"
Affiliate
" means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 405 under the
Securities Act.
"
Auditor
" means PKF San Diego, LLP.
"
Board of Directors
" means the board of directors of the Company.
"
Business Day
" means any day other than Saturday, Sunday, or other day on which the Federal
Reserve Bank of New York is closed.
"
Closing
" means the closing of the purchase and sale of the Securities pursuant to
Section 2.1.
"
Closing Date
" means the Trading Day on which all of the Transaction Documents have been
executed and delivered by the applicable parties thereto, and all conditions
precedent to (i) the Purchasers' obligations to pay the Subscription Amount at
the Closing and (ii) the Company's obligations to deliver the Securities, in
each case, at the Closing have been satisfied or waived, but in no event later
than the first (1st) Trading Day following the date hereof.
"
Commission
" means the United States Securities and Exchange Commission.
-------------------------------------------------------------------------------
"
Common Stock
" means common stock of the Company, par value $0.001 per share.
"
Common Stock Equivalents
" means any securities of the Company or the Subsidiaries which would entitle
the holder thereof to acquire at any time Common Stock, including, without
limitation, any debt, preferred stock, right, option, warrant or other
instrument that is at any time convertible into or exercisable or exchangeable
for, or otherwise entitles the holder thereof to receive, Common Stock.
"
Common Warrants
" means, collectively, the Common Stock purchase warrants delivered to the
Purchasers at the Closing in accordance with Section 2.2(a) hereof, which
Common Warrants shall be exercisable immediately upon issuance and have a term
of exercise equal to five (5) years from the initial exercise date, in
substantially the form of Exhibit A attached hereto.
"
Company Counsel
" means Wilson Sonsini Goodrich & Rosati P.C. with offices located at 650 Page
Mill Road, Palo Alto, CA 94304.
"
Disclosure Schedules
" means the Disclosure Schedules of the Company delivered concurrently herewith.
"
Disclosure Time
" means, (i) if this Agreement is signed on a day that is not a Trading Day or
after 9:00 a.m. (New York City time) and before midnight (New York City time)
on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day
immediately following the date hereof, unless otherwise instructed as to an
earlier time by the Placement Agent, and (ii) if this Agreement is signed
between midnight (New York City time) and 9:00 a.m. (New York City time) on
any Trading Day, no later than 9:01 a.m. (New York City time) on the date
hereof, unless otherwise instructed as to an earlier time by the Placement
Agent.
"
DVP
" shall have the meaning ascribed to such term in Section 2.1.
"
Environmental Laws
" shall have the meaning ascribed to such term in Section 3.1(m).
"
Evaluation Date
" shall have the meaning ascribed to such term in Section 3.1(s)
"
Exchange Act
" means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
2
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"
Exempt Issuance
" means the issuance of (a) shares of Common Stock, restricted stock units,
options or other equity awards to employees, consultants, contractors,
advisors, officers, or directors of the Company pursuant to any stock or
option plan in existence as of the date hereof, provided that such issuances
to consultants, contractors or advisors are issued as "restricted securities"
(as defined in Rule 144) and carry no registration rights, (b) shares of
Common Stock upon the exercise or exchange of or conversion of any Securities
issued hereunder or securities exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the date of this
Agreement, provided that such securities have not been amended since the date
of this Agreement to increase the number of such securities or to decrease the
exercise price, exchange price or conversion price of such securities (other
than in connection with stock splits or combinations) or to extend the term of
such securities, (c) securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the
Company, provided that such securities are issued as "restricted securities"
(as defined in Rule 144) and carry no registration rights that require or
permit the filing of any registration statement in connection therewith during
the prohibition period in Section 4.9(a) herein, and provided that any such
issuance shall only be to a Person (or to the equity holders of a Person)
which is, itself or through its subsidiaries, an operating company or an owner
of an asset in a business synergistic with the business of the Company and
shall provide to the Company additional benefits in addition to the investment
of funds, but shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities, (d) shares of Common Stock issued
to consultants or vendors of the Company, provided that such securities are
issued as "restricted securities" (as defined in Rule 144) and carry no
registration rights, and (e) shares of Common Stock issued to existing holders
of the Company's securities in compliance with the terms of agreements entered
into with, or instruments issued to, such holders, provided that such
securities are issued as "restricted securities" (as defined in Rule 144) and
carry no registration rights that require or permit the filing of any
registration statement in connection therewith during the 60-day period
following the Closing Date provided that such agreements regarding such
securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise price, exchange
price or conversion price of such securities (other than in connection with
stock splits or combinations) or to extend the term of such securities, and
provided further that such securities are issued as "restricted securities"
(as defined in Rule 144) and carry no registration rights.
"
FCPA
" means the Foreign Corrupt Practices Act of 1977, as amended.
"
FINRA
" shall have the meaning ascribed to such term in Section 3.1(e).
"
GAAP
" means generally accepted accounting principles in the United States.
"
Hazardous Materials
" shall have the meaning ascribed to such term in Section 3.1(m).
"
Indebtedness
" shall have the meaning ascribed to such term in Section 3.1(aa).
"
Intellectual Property Rights
" shall have the meaning ascribed to such term in Section 3.1(p).
"
IT Systems and Data
" shall have the meaning ascribed to such term in Section 3.1(jj).
"
Liens
" means a lien, charge, pledge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
"
Lock-Up Agreements
" means the Lock-Up Agreements, dated as of the date hereof, by and among the
Company and each director and officer, in substantially the form of
Exhibit
C
attached hereto.
"
Material Adverse Effect
" shall have the meaning assigned to such term in Section 3.1(b).
"
Material Permits
" shall have the meaning ascribed to such term in Section 3.1(n).
3
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"
OFAC
" shall have the meaning ascribed to such term in Section 3.1(kk).
"
Per Share Purchase Price
" equals $3.00, subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of shares
of Common Stock that occur between the date hereof and the Closing Date.
"
Per Pre-Funded Warrant Purchase Price
" equals $2.999, subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions relating to
shares of Common Stock that occur after the date of this Agreement.
"
Person
" means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other
entity of any kind.
"
Placement Agent
" means A.G.P./Alliance Global Partners.
"
Placement Agent Counsel
" means Sullivan & Worcester LLP with offices located at 1251 Avenue of the
Americas, New York, NY 10020.
"
Pre-Funded Warrants
" means, collectively, the warrants delivered to the Purchasers at Closing in
accordance with Section 2.2(a) hereof, which Pre-Funded Warrants shall be
exercisable immediately upon issuance and shall expire in accordance with the
terms thereof, in substantially the form of
Exhibit
B
attached hereto.
"
Preliminary Prospectus
" means the preliminary prospectus included in the Registration Statement at
the time the Registration Statement is declared effective.
"
Proceeding
" means an action, claim, suit, investigation or proceeding (including,
without limitation, an informal investigation or partial proceeding, such as a
deposition), pending or, to the Company's knowledge, threatened in writing
against or affecting the Company.
"
Prospectus
" means the final prospectus filed pursuant to the Registration Statement.
"
Purchaser Party
" shall have the meaning ascribed to such term in Section 4.7.
"
Registration Statement
" means the effective registration statement with the Commission on Form S-1
(File No. 333-281448), which registers the sale of the Securities and includes
any Rule 462(b) Registration Statement.
"
Required Approvals
" shall have the meaning ascribed to such term in Section 3.1(e).
"
Rule 144
" means Rule 144 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended or interpreted from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially
the same purpose and effect as such Rule.
"
Rule 424
" means Rule 424 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended or interpreted from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially
the same purpose and effect as such Rule.
4
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"
Rule 462(b) Registration Statement
" means any registration statement prepared by the Company registering
additional Securities, which was filed with the Commission on or prior to the
date hereof and became automatically effective pursuant to Rule 462(b)
promulgated by the Commission pursuant to the Securities Act.
"
SEC Reports
" shall have the meaning ascribed to such term in Section 3.1(h).
"
Securities
" means the Shares, the Warrants, the Warrant Shares.
"
Securities Act
" means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
"
Shares
" means the shares of Common Stock issued or issuable to each Purchaser
pursuant to this Agreement.
"
Short Sales
" means all "short sales" as defined in Rule 200 of Regulation SHO under the
Exchange Act (but shall not be deemed to include locating and/or borrowing
shares of Common Stock).
"
Subscription Amount
" means, as to each Purchaser, the aggregate amount to be paid for Shares and
Warrants purchased hereunder as specified below such Purchaser's name on the
signature page of this Agreement and next to the heading "Subscription
Amount," in United States dollars and in immediately available funds.
"
Subsidiary
" means any subsidiary of the Company as set forth in the SEC Reports and
shall, where applicable, also include any direct or indirect subsidiary of the
Company formed or acquired after the date hereof.
"
Trading Day
" means a day on which the principal Trading Market is open for trading.
"
Trading Market
" means any of the following markets or exchanges on which the shares of
Common Stock are listed or quoted for trading on the date in question: the
NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, or the New York Stock Exchange (or any successors to any
of the foregoing).
"
Transaction Documents
" means this Agreement, the Warrants, the Lock-Up Agreements and all exhibits
and schedules thereto and hereto and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
"
Transfer Agent
" means Continental Stock Transfer & Trust Company,the current transfer agent
of the Company, with a mailing address at 1 State Street, 30
th
Floor, New York, NY 10004-1561, and an email address of hfarrell@continentalstoc
k.com and any successor transfer agent of the Company.
5
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"
Variable Rate Transaction
" shall have the meaning ascribed to such term in Section 4.9(b).
"
Warrants
" means the Common Warrants and the Pre-Funded Warrants.
"
Warrant Shares
" means the shares of Common Stock issuable upon exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1
Closing
. On the Closing Date, upon the terms and subject to the conditions set forth
herein, substantially concurrent with the execution and delivery of this
Agreement by the parties hereto, the Company agrees to sell, and the
Purchasers, severally and not jointly, agree to purchase, (i) the number of
shares of Common Stock set forth under the heading "Subscription Amount" on
the Purchaser's signature page hereto, at the Per Share Purchase Price, and
(ii) Common Warrants exercisable for shares of Common Stock as calculated
pursuant to Section 2.2(a); provided, however, that, to the extent that a
Purchaser determines, in its sole discretion, that such Purchaser (together
with such Purchaser's Affiliates, and any Person acting as a group together
with such Purchaser or any of such Purchaser's Affiliates) would beneficially
own in excess of the Beneficial Ownership Limitation, or as such Purchaser may
otherwise choose, in lieu of purchasing shares of Common Stock, such Purchaser
may elect to purchase Pre-Funded Warrants in lieu of shares of Common Stock in
such manner to result in the full Subscription Amount being paid by such
Purchaser to the Company. The "
Beneficial Ownership Limitation
" shall be 4.99% (or, at the election of the Purchaser prior to the issuance
of any Warrants, 9.99%) of the number of shares of Common Stock, in each case,
outstanding immediately after giving effect to the issuance of the Securities
on the Closing Date.
Each Purchaser's Subscription Amount as set forth on the signature page hereto
executed by such Purchaser shall be made available for Delivery Versus Payment
("
DVP
") settlement with the Company or its designees. The Company shall deliver to
each Purchaser its respective Shares and Warrants as determined pursuant to
Section 2.2(a), and the Company and each Purchaser shall deliver the other
items set forth in Section 2.2 at the Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of the Placement Agent or such other location as the
parties shall mutually agree. Unless otherwise directed by the Placement
Agent, settlement of the Shares shall occur via DVP (i.e., on the Closing
Date, the Company shall issue the Shares registered in the Purchasers' names
and addresses and released by the Transfer Agent directly to the account(s) at
the Placement Agent identified by each Purchaser; upon receipt of such Shares,
the Placement Agent shall promptly electronically deliver such Shares to the
applicable Purchaser, and payment therefor shall be made by the Placement
Agent (or its clearing firm) by wire transfer to the Company). Notwithstanding
anything herein to the contrary, if at any time on or after the time of
execution of this Agreement by the Company and an applicable Purchaser through
the Closing (the "
Pre-Settlement Period
"), such Purchaser sells to any Person all, or any portion, of any Shares to
be issued hereunder to such Purchaser at the Closing (collectively, the "
Pre-Settlement Shares
"), such Person shall, automatically hereunder (without any additional
required actions by such Purchaser or the Company), be deemed to be a
Purchaser under this Agreement unconditionally bound to purchase, and the
Company shall be deemed unconditionally bound to sell, such Pre-Settlement
Shares to such Person at the Closing; provided, that the Company shall not be
required to deliver any Pre-Settlement Shares to such Purchaser prior to the
Company's receipt of the Subscription Amount for such Pre-Settlement Shares
hereunder; provided, further, that the Company hereby acknowledges and agrees
that the forgoing shall not constitute a representation or covenant by such
Purchaser as to whether or not such Purchaser will elect to sell any
Pre-Settlement Shares during the Pre-Settlement Period. The decision to sell
any Shares will be made in the sole discretion of such Purchaser from time to
time, including during the Pre-Settlement Period. Notwithstanding the
foregoing, with respect to any Notice(s) of Exercise (as defined in the
Warrants) delivered on or prior to 12:00 p.m. (New York City time) on the
Closing Date, which may be delivered at any time after the time of execution
of this Agreement, the Company agrees to deliver the Warrant Shares subject to
such notice(s) by 4:00 p.m. (New York City time) on the Closing Date and the
Closing Date shall be the Warrant Share Delivery Date (as defined in the
Warrants) for purposes hereunder.
6
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2.2
Deliveries
.
(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i) this Agreement duly executed by the Company;
(ii) the Company's wire instructions, on Company letterhead and executed
by the Company's Chief Executive Officer or Chief Financial Officer;
(iii) subject to the sixth sentence in Section 2.1, a copy of the irrevocable instructions to the Transfer
Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository Trust Company
Deposit or Withdrawal at Custodian system shares of Common Stock equal to the portion of such Purchaser's
Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser;
(iv) for each Purchaser of Pre-Funded Warrants pursuant to Section 2.1, a Pre-Funded Warrant registered in the name
of such Purchaser to purchase up to a number of shares of Common Stock equal to the portion of such Purchaser's
Subscription Amount applicable to Pre-Funded Warrants divided by the sum of the Per Pre-Funded Warrant Purchase
Price plus the exercise price per Warrant Share underlying such Pre-Funded Warrants, subject to adjustment therein;
(v) the Preliminary Prospectus and the Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act);
(vi) a Common Warrant registered in the name of such Purchaser to purchase up
to a number of shares of Common Stock equal to 100% of such Purchaser's
shares of Common Stock and Pre-Funded Warrants, as applicable, with an
exercise price equal to $3.00 per share, subject to adjustment therein;
7
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(vii) the duly executed Lock-Up Agreements;
(viii) a certificate executed by the Chief Executive Officer and Chief Financial Officer of the Company, dated as of the
date of the Closing Date, in form and substance reasonably acceptable to the Purchasers and Placement Agent;
(ix) a certificate executed by the Secretary of the Company, dated as of the date of Closing,
in form and substance reasonable acceptable to the Purchasers and Placement Agent; and
(x) a legal opinion of Company Counsel, in form reasonably acceptable to the Placement Agent and the Purchasers.
(b) At the time this Agreement is executed, the Placement Agent shall
have received a cold comfort letter containing statements and
information of the type customarily included in accountants' comfort
letters with respect to the financial statements and certain
financial information contained in the Registration Statement,
the Preliminary Prospectus and the Prospectus, addressed to the
Representative and in form and substance satisfactory in all respects
to you and to the Auditor, dated as of the date of this Agreement.
(c) On the Closing Date, the Placement Agent shall have received from the Auditor a letter, dated as of the Closing Date,
to the effect that the Auditor reaffirms the statements made in the letter furnished pursuant to Section 2.2(b).
(d) On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company, the following:
(i) this Agreement duly executed by such Purchaser; and
(ii) such Purchaser's Subscription Amount with respect to the Securities purchased by such
Purchaser, which shall be made available for DVP settlement with the Company or its designees.
2.3
Closing Conditions
.
(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or warranties are
qualified by materiality or Material Adverse Effect, in all respects) when made and on the
Closing Date of the representations and warranties of the Purchasers contained herein (unless
as of a specific date therein in which case they shall be accurate as of such date);
(ii) all obligations, covenants and agreements of each Purchaser required to be
performed at or prior to the Closing Date shall have been performed; and
8
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(iii) the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) The respective obligations of the Purchasers hereunder in connection
with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or warranties are
qualified by materiality or Material Adverse Effect, in all respects) when made and on
the Closing Date of the representations and warranties of the Company contained herein
(unless as of a specific date therein in which case they shall be accurate as of such date);
(ii) all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;
(iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and
(v) from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission
or any Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by
Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities
whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been
declared either by the United States or New York State authorities nor shall there have occurred after the date of
this Agreement any material outbreak or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the
reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of the Company
. Except as set forth in the Disclosure Schedules, which Disclosure Schedules
shall be deemed a part hereof and shall qualify any representation made herein
to the extent of the disclosures contained in the corresponding section of the
Disclosure Schedules, the Company hereby makes the following representations
and warranties to each Purchaser:
(a) Subsidiaries
. All of the direct and indirect
subsidiaries of the Company are set forth on
Schedule 3.1(a)
. The Company owns, directly or indirectly, all of the capital
stock or other equity interests of each Subsidiary, free and
clear of any Liens, and all of the issued and outstanding shares
of capital stock of each Subsidiary are validly issued and are
fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities. If the Company has
no subsidiaries, all other references to the Subsidiaries or
any of them in the Transaction Documents shall be disregarded.
9
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(b) Organization and Qualification
. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing, and, if applicable under the laws of the jurisdiction in which they are formed, in
good standing under the laws of the jurisdiction of its incorporation or organization, with the
requisite power and authority to own and use its properties and assets and to carry on its business
as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any
of the provisions of its respective memorandum of association, articles of association, certificate
or articles of incorporation, bylaws, operating agreement, or other organizational or charter
documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, would not have or reasonably be
expected to result in: (i) a material adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material adverse effect on the results of operations, assets,
business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a
whole, or (iii) a material adverse effect on the Company's ability to perform in any material respect
on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a "
Material Adverse Effect
") and no Proceeding has been instituted in
any such jurisdiction revoking, limiting or
curtailing or seeking to
revoke, limit or curtail
such power and authority or qualification.
(c) Authorization; Enforcement
. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of
this Agreement and each of the other Transaction Documents by the Company and the consummation
by it of the transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company and no further action is required by the Company, the
Board of Directors, a committee of the Board of Directors or the Company's stockholders in connection
herewith or therewith other than in connection with the Required Approvals. This Agreement
and each other Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the terms hereof and
thereof, will constitute the valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be limited by applicable law.
10
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(d) No Conflicts
. Except as set forth in
Schedule
3.1(d)
, the execution, delivery and performance by the Company of this Agreement and the other Transaction Documents
to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions
contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company's
or any Subsidiary's memorandum of association, articles of association, certificate or articles of incorporation,
bylaws, operating agreement, or other organizational or charter documents, or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, result in
the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to
others any rights of termination, amendment, anti-dilution or similar adjustments acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected,
or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which
any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses
(ii) and (iii), such as would not have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings, Consents and Approvals
. The Company is not required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection with the execution, delivery
and performance by the Company of the Transaction Documents, other than: (i) the filings
required pursuant to Section 4.3 of this Agreement, (ii) the filing with the Commission of the
Prospectus, (iii) notices and/or application(s) to and approvals by each applicable Trading
Market for the listing of the applicable Securities for trading thereon in the time and manner
required thereby, and (iv) filings required by the Financial Industry Regulatory Authority ("
FINRA
") (collectively, the "
Required Approvals
") and (v) any such consents,
waivers, authorizations
that have been or prior to
the Closing Date will be,
obtained by the Company or as
would not have or reasonably
be expected to result in a
Material Adverse Effect.
11
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(f) Issuance of the Securities; Registration
. The Shares and Warrant Shares are duly authorized and, when issued and paid for in accordance with
the applicable Transaction Documents, will be duly and validly issued, fully paid and non-assessable,
free and clear of all Liens imposed by the Company. The Warrants, when issued and paid for in
accordance with the applicable Transaction Documents, will be valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except to the extent that
(i) enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally and by general equitable principles and (ii) the
indemnification provisions of certain agreements may be limited by federal or state securities laws or
public policy considerations in respect thereof. The Warrant Shares are duly authorized and, when issued
in accordance with this Agreement and the terms of the Warrants, will be duly and validly issued,
fully paid and non-assessable, and free and clear of all Liens imposed by the Company. Prior to or
in connection with the Closing, the Company will have reserved from its duly authorized capital
stock the maximum number of shares of Common Stock issuable pursuant to the Warrants. The Company
has prepared and filed the Registration Statement in conformity with the requirements of the
Securities Act, which Registration Statement became effective on August 29, 2024, including the
Prospectus, and such amendments and supplements thereto as may have been required to the date of this
Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing
or suspending the effectiveness of the Registration Statement or suspending or preventing the
use of the Preliminary Prospectus or the Prospectus has been issued by the Commission and no
proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened
by the Commission. The Company, if required by the rules and regulations of the Commission, shall file
the Prospectus with the Commission pursuant to Rule 424(b). At the time the Registration Statement
and any amendments thereto became effective as determined under the Securities Act, the Registration
Statement and any amendments thereto conformed and will conform in all material respects to
the requirements of the Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make
the statements therein not misleading; and the Prospectus and any amendments or supplements thereto,
at the time the Preliminary Prospectus, the Prospectus or any amendment or supplement thereto
was issued, in respect of the Prospectus, and at the Closing Date, conformed and will conform in all
material respects to the requirements of the Securities Act and did not and will not contain an
untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
12
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(g) Capitalization
. The capitalization of the Company as
of the date hereof is as set forth on
Schedule
3.1(g)
, which
Schedule 3.1(g)
shall also include the number
of shares of Common Stock
owned beneficially, and of
record, by Affiliates of the
Company as of the date hereof.
The Company has not issued
any shares since its most
recently filed periodic report
under the Exchange Act. No
Person has any right of first
refusal, preemptive right,
right of participation, or any
similar right to participate in
the transactions contemplated
by the Transaction Documents.
Except as set forth on
Schedule
3.1(g)
, there are no outstanding options, warrants, scrip rights to subscribe
to, calls or commitments of any character whatsoever relating to,
or securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe for
or acquire, any shares of Common Stock or capital stock of any
Subsidiary, or contracts, commitments, understandings or arrangements by
which the Company or any Subsidiary is or may become bound to issue
additional shares of Common Stock, Common Stock Equivalents or capital
stock of any Subsidiary. The issuance and sale of the Securities will
not obligate the Company or any Subsidiary to issue shares of Common
Stock or other securities to any Person (other than the Purchasers).
There are no outstanding securities or instruments of the Company
or any Subsidiary with any provision that adjusts the exercise,
conversion, exchange or reset price under any of such securities. There
are no outstanding securities or instruments of the Company or any
Subsidiary that contain any redemption or similar provisions, and
there are no contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to
redeem a security of the Company or such Subsidiary. The Company does
not have any share appreciation rights or "phantom share" plans or
agreements or any similar plan or agreement. All of the outstanding
shares of the Company are duly authorized, validly issued, fully paid and
non-assessable, have been issued in compliance with all federal and
state securities laws where applicable, and none of such outstanding
shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. Except for the Required
Approvals, no further approval or authorization of any stockholder,
the Board of Directors or others is required for the issuance and
sale of the Securities. There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company's
share capital to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company's stockholders.
(h) SEC Reports; Financial Statements
. The Company has filed all reports,
schedules, forms, statements and other
documents required to be filed by the
Company under the Securities Act
and the Exchange Act, including pursuant
to Section 13(a) or 15(d) thereof,
for the one year preceding the date
hereof (or such shorter period
as the Company was required by law or
regulation to file such materials)
(the foregoing materials, including
the exhibits thereto and documents
incorporated by reference therein,
together with the Preliminary Prospectus
and the Prospectus, being collectively
referred to herein as the "
SEC Reports
") on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to
the expiration of any such extension. Since January 1, 2023, as of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading. In addition, any further documents so filed and incorporated by reference to the Prospectus,
when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange
Act and the applicable rules and regulations, as applicable, and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which
they were made not misleading. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as
in effect at the time of filing. Such financial statements have been prepared in accordance with GAAP, except as may be
otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may
not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the
Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
13
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(i) Material Changes; Undisclosed
Events, Liabilities or Developments
. Since the date of the latest
audited financial statements
included within the SEC
Reports, except as set forth on
Schedule 3.1(i)
, (i) there has been no event, occurrence or development that has had or
that would reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in
the ordinary course of business consistent with past practice and strategic
acquisitions and (B) liabilities not required to be reflected in the
Company's financial statements pursuant to GAAP or disclosed in filings
made with the Commission, (iii) the Company has not altered its method
of accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any of its shares
and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company share option
plans. The Company does not have pending before the Commission any
request for confidential treatment of information. Except for the issuance
of the Securities contemplated by this Agreement or as set forth on
Schedule
3.1(i)
, no event, liability, fact,
circumstance, occurrence or development
has occurred or exists or is
reasonably expected to occur or exist
with respect to the Company or its
Subsidiaries or their respective
businesses, properties, operations,
assets or financial condition
that would be required to be
disclosed by the Company under
applicable securities laws at the
time this representation is made or
deemed made that has not been
publicly disclosed at least one (1)
Trading Day prior to the date
that this representation is made.
(j) Litigation
. Except as set forth on
Schedule 3.1(j)
, there is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or,
to the knowledge of the Company, threatened against
or affecting the Company, any Subsidiary or
any of their respective properties before or by any
court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an "
Action
"). None of the Actions set forth on
Schedule 3.1(j):
(i) adversely affects or challenges
the legality, validity or
enforceability of any of the Transaction
Documents; or (ii) would, if
there were an unfavorable decision,
have or reasonably be expected
to result in a Material Adverse
Effect. Except as set forth on
Schedule
3.1(j)
, neither the Company nor any
Subsidiary, nor any officer thereof,
is the subject of any Action
involving a claim of violation
of or liability under federal
or state securities laws or a
claim of breach of fiduciary
duty. Except as set forth on
Schedule
3.1(j)
, no director of the Company or any Subsidiary is the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty, which would result in a Material Adverse Effect.
There has not been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the Commission involving the Company or any current
or former director or officer of the Company. The Commission has not issued any
stop order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
14
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(k) Labor Relations
. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any
of the employees of the Company, which would reasonably be expected to result in a Material
Adverse Effect. None of the Company's or its Subsidiaries' employees is a member of a union
that relates to such employee's relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and
the Company and its Subsidiaries believe that their relationships with their employees are
good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary,
is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or non-competition agreement,
or any other contract or agreement or any restrictive covenant in favor of any third party, and
the continued employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing matters. The Company
and its Subsidiaries are in compliance with all applicable U.S. federal, state, local and foreign
laws and regulations relating to employment and employment practices, terms and conditions
of employment and wages and hours, except where the failure to be in compliance would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(l) Compliance
. Neither the Company nor any Subsidiary: (i) is in default under or in
violation of (and no event has occurred that has not been waived that,
with notice or lapse of time or both, would result in a default by the
Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is
in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been
waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or other governmental authority or (iii) is or has been
in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign, federal,
state and local laws relating to taxes, environmental protection,
occupational health and safety, product quality and safety and employment and
labor matters, except in each case of (i), (ii) and (iii) as would not
have or reasonably be expected to result in a Material Adverse Effect.
15
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(m) Environmental Laws
. The Company and its Subsidiaries (i) are in compliance with all federal, state,
local and foreign laws relating to pollution or protection of human health or the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata), including laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous
substances or wastes (collectively, "Hazardous Materials") into the environment,
or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands, or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations, issued,
entered, promulgated or approved thereunder ("Environmental Laws"); (ii) have
received all permits licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (iii) are in compliance
with all terms and conditions of any such permit, license or approval where
in each clause (i), (ii) and (iii), the failure to so comply would be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect.
(n) Regulatory Permits
. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective
businesses as described in the SEC Reports, except where the failure to possess such certificates,
authorizations or permits would not reasonably be expected to result in a Material Adverse Effect ("
Material Permits
"), and neither the Company nor any
Subsidiary has received any notice of
proceedings relating to the revocation
or modification of any Material Permit.
(o) Title to Assets
. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and
good and marketable title in all personal property owned by them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of
such property and do not materially interfere with the use made and proposed to be made of such property by the Company
and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have
been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties.
Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance in all material respects.
16
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(p) Intellectual Property
. The Company and the Subsidiaries
have, or have rights to
use, all patents, patent
applications, trademarks, trademark
applications, service marks,
trade names, trade secrets,
inventions, copyrights,
licenses and other intellectual
property rights and similar
rights necessary or required
for use in connection with
their respective businesses as
described in the SEC Reports and
which the failure to so have
would have a Material Adverse
Effect (collectively, the "
Intellectual Property Rights
"). Neither the Company nor any Subsidiary has received a notice (written or otherwise) that any
of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to
expire or terminate or be abandoned, within two (2) years from the date of this Agreement except
as would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any
Subsidiary has received, since the date of the latest audited financial statements included within
the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual
Property Rights violate or infringe upon the rights of any Person, except as would not have or
reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company,
all such Intellectual Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value of all of their
intellectual properties, except where failure to do so would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Company has no knowledge of any
facts that would preclude it from having valid license rights or clear title to the Intellectual
Property Rights. The Company has no knowledge that it lacks or will be unable to obtain any rights
or licenses to use all Intellectual Property Rights that are necessary to conduct its business.
(q) Insurance
. The Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent and
customary in the businesses in which the Company and the Subsidiaries are engaged,
including, but not limited to, directors and officers insurance coverage at least equal
to the aggregate Subscription Amount. Neither the Company nor any Subsidiary has any
reason to believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase in cost.
(r) Transactions with Affiliates and Employees
. Except as set forth on
Schedule
3.1(r)
, none of the officers or directors of the Company or any Subsidiary
and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction with
the Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, providing for the
borrowing of money from or lending of money to or otherwise requiring
payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director,
or any such employee has a material interest or is an officer, director,
trustee, stockholder, member or partner, in each case in excess of
$120,000 other than for (i) payment of salary or consulting fees for
services rendered, (ii) reimbursement for expenses incurred on behalf of
the Company or a Subsidiary and (iii) other employee benefits, including
share option agreements under any share option plan of the Company.
17
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(s) Sarbanes-Oxley; Internal Accounting Controls
. The Company and the Subsidiaries are in material compliance with any and all applicable requirements of the
Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and
regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the
Closing Date. The Company and the Subsidiaries maintain a system of 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, and (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. The Company and the Subsidiaries have established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed
such disclosure controls and procedures to ensure that information required to be disclosed by the Company in
the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission's rules and forms. The Company's certifying officers have
evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as
of the end of the period covered by the most recently filed Form 10-K under the Exchange Act (such date, the "
Evaluation Date
"). The Company presented in its
most recently filed Form 10-K under
the Exchange Act the conclusions
of the certifying officers about
the effectiveness of the disclosure
controls and procedures based on
their evaluations as of the Evaluation
Date. Except as set forth on
Schedule 3.1(s)
, since the Evaluation Date, there have
been no changes in the internal control
over financial reporting (as such term
is defined in the Exchange Act) that
have materially affected, or is reasonably
likely to materially affect, the
internal control over financial reporting
of the Company and its Subsidiaries.
(t) Certain Fees
. Except as set forth in the Preliminary Prospectus and Prospectus, no brokerage or finder's fees or
commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor
or consultant, finder, placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents (for the avoidance of doubt, the foregoing shall
not include any fees and/or commissions owed to the Transfer Agent). Other than for Persons engaged
by any Purchaser, if any, the Purchasers shall have no obligation with respect to any fees or with
respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by the Transaction Documents.
(u) Investment Company
. The Company is not, and immediately after receipt of payment for the Securities, will not be required to
register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended.
18
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(v) Registration Rights
. No Person has any right to cause the Company or any Subsidiary to effect the
registration under the Securities Act of any securities of the Company or any Subsidiary.
(w) Listing and Maintenance Requirements
. The shares of Common Stock are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and
the Company has taken no action designed to, or which to its knowledge is likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration. Except as set forth on
Schedule 3.1(w)
, the Company has not, in the 12 months preceding the date hereof, received
notice from any Trading Market on which the Common Stock is or has been listed
or quoted to the effect that the Company is not in compliance with the listing
or maintenance requirements of such Trading Market. Except as set forth on
Schedule 3.1(w),
the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with
all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through The
Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to
The Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
(x) Application of Takeover Protections
. The Company has taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision under
the Company's articles of incorporation or the laws of its state of incorporation
that is or would become applicable to the Purchasers as a result of the Purchasers
and the Company fulfilling their obligations or exercising their rights under
the Transaction Documents, including without limitation as a result of the Company's
issuance of the Securities and the Purchasers' ownership of the Securities.
(y) Disclosure
. Except with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company
confirms that it has not provided any of the Purchasers or their agents
or counsel with any information that it believes constitutes or might
constitute material, non-public information which is not otherwise
disclosed in the Preliminary Prospectus or the Prospectus. The Company
understands and confirms that the Purchasers will rely on the foregoing
representation in effecting transactions in securities of the Company.
(z) No Integrated Offering
. Assuming the accuracy of the Purchasers' representations and warranties
set forth in Section 3.2, neither the Company, nor any of its Affiliates,
nor any Person acting on its or their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy
any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes
of any applicable stockholder approval provisions of any Trading Market
on which any of the securities of the Company are listed or designated.
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(aa) Solvency
. Based on the consolidated financial condition of the Company as of the Closing Date, after giving
effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder,
(i) the fair saleable value of the Company's assets exceeds the amount that will be required to
be paid on or in respect of the Company's existing debts and other liabilities (including known
contingent liabilities) as they mature, (ii) the Company's assets do not constitute unreasonably
small capital to carry on its business as now conducted and as proposed to be conducted including
its capital needs taking into account the particular capital requirements of the business conducted
by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company
would receive, were it to liquidate all of its assets, after taking into account all anticipated
uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities
when such amounts are required to be paid. The Company does not intend to incur debts beyond
its ability to pay such debts as they mature (taking into account the timing and amounts of
cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or liquidation under
the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date.
Schedule
3.1(aa)
sets forth as of the date
hereof all outstanding secured
and unsecured Indebtedness
of the Company or any
Subsidiary, or for which the
Company or any Subsidiary
has commitments. For the
purposes of this Agreement, "
Indebtedness
" means (x) any liabilities for borrowed money or
amounts owed by the Company in excess of $50,000
(other than trade accounts payable incurred in the
ordinary course of business), (y) all guaranties,
endorsements and other contingent obligations in
respect of indebtedness of others to third parties,
whether or not the same are or should be reflected
in the Company's consolidated balance sheet
(or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary
course of business; and (z) the present value of
any lease payments in excess of $50,000 due under
leases required to be capitalized in accordance
with GAAP. Neither the Company nor any Subsidiary
is in default with respect to any Indebtedness.
(bb) Tax Compliance
. Except for matters that would not,
individually or in the aggregate, have or
reasonably be expected to result in a
Material Adverse Effect, or as set forth on
Schedule 3.1(bb)
, the Company and its Subsidiaries each (i) has made or filed all federal, state and local income and all foreign
income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges, fines or penalties that are material in
amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its
financial statements provision reasonably adequate for the payment of all material tax liability of which has not
been finally determined and all material taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.
20
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(cc) Foreign Corrupt Practices
. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any
agent or other person acting on behalf of the Company, has in the past five (5) years (i) directly
or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or domestic political parties
or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the
Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware)
which is in violation of law, or (iv) violated in any material respect any provision of FCPA.
(dd) Accountants
. The Company's independent registered public accounting firm is as set forth in the Preliminary Prospectus
and Prospectus. To the knowledge and belief of the Company, such accounting firm (i) is a registered public
accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the
financial statements to be included in the Company's Annual Report for the fiscal year ended December 31, 2024.
(ee) Acknowledgment Regarding Purchasers
'
Purchase of Securities
. The Company acknowledges and agrees that each of the Purchasers
is acting solely in the capacity of an arm's length purchaser
with respect to the Transaction Documents and the transactions
contemplated thereby. The Company further acknowledges
that no Purchaser is acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect
to the Transaction Documents and the transactions
contemplated thereby and any advice given by any Purchaser or
any of their respective representatives or agents in
connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchasers'
purchase of the Securities. The Company further represents to
each Purchaser that the Company's decision to enter into this
Agreement and the other Transaction Documents has been based
solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(ff) Acknowledgment Regarding Purchaser
'
s Trading Activity
. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f)
and 4.11 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been
asked by the Company to agree, nor has any Purchaser, other than any Purchaser who is a director or officer of
the Company, agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or
"derivative" securities based on securities issued by the Company or to hold the Shares for any specified
term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without
limitation, Short Sales or "derivative" transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company's publicly-traded securities; (iii) any
Purchaser, and counter-parties in "derivative" transactions to which any such Purchaser is a party, directly
or indirectly, presently may have a "short" position in the shares of Common Stock, and (iv) each Purchaser
shall not be deemed to have any affiliation with or control over any arm's length counter-party in any "derivative"
transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage
in hedging activities at various times during the period that the shares of Common Stock are outstanding, and
(z) such hedging activities (if any) would reduce the value of the existing stockholders' equity interests
in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges
that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
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(gg) Regulation M Compliance
. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken,
directly or indirectly, any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of
any of the shares of Common Stock, (ii) sold, bid for, purchased, or, paid any compensation
for soliciting purchases of, any of the shares of Common Stock, or (iii) paid or agreed to
pay to any Person any compensation for soliciting another to purchase any other securities
of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the
Company's placement agent in connection with the placement of the shares of Common Stock.
(hh) [RESERVED]
(ii) Stock Option Plans
. Each stock option granted by the Company under the Company's stock option plan was granted (i)
in accordance with the terms of the Company's stock option plan and (ii) with an exercise price
at least equal to the fair market value of the Common Stock on the date such stock option would be
considered granted under GAAP and applicable law. No outstanding stock option granted under the
Company's stock option plan has been backdated. The Company has not knowingly granted, and there
is no and has been no Company policy or practice to knowingly grant, stock options prior to, or
otherwise knowingly coordinate the grant of stock options with, the release or other public announcement
of material information regarding the Company or its Subsidiaries or their financial results.
(jj) Cybersecurity
. Except as would not, individually or in the aggregate, have a Material Adverse Effect,
(i) the Company and the Subsidiaries are presently in compliance with all applicable
laws or statutes and all judgments, orders, rules and regulations of any court or
arbitrator or governmental or regulatory authority, internal policies and contractual
obligations relating to the privacy and security of the Company's or any Subsidiary's
information technology and computer systems, networks, hardware, software, data (including
the data of its respective customers, employees, suppliers, vendors and any third party
data maintained by or on behalf of it), equipment or technology (collectively, "
IT Systems and Data
") and to the protection of such IT Systems and Data from unauthorized
use, access, misappropriation or modification,; (ii) the Company
and the Subsidiaries have implemented and maintained commercially
reasonable safeguards to maintain and protect its material confidential
information and the integrity, continuous operation, redundancy and
security of all IT Systems and Data; and (iii) the Company and the
Subsidiaries have implemented backup and disaster recovery technology
consistent with commercially reasonable industry standards and practices.
22
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(kk) Office of Foreign Assets Control
. Neither the Company nor any Subsidiary nor, to the Company's knowledge,
any director, officer, agent or employee of the Company or any
Subsidiary is currently subject to any U.S. sanctions administered by
the Office of Foreign Assets Control of the U.S. Treasury Department ("
OFAC
").
(ll) Money Laundering
. The operations of the Company and its Subsidiaries are and have been conducted at all
times in compliance with applicable financial record-keeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money
laundering statutes and applicable rules and regulations thereunder (collectively, the "
Money Laundering Laws
"), and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company or any Subsidiary, threatened.
(mm) Promotional Stock Activities
. Neither the Company nor any Subsidiary of the Company and none of their respective officers, directors, managers,
affiliates or agents have engaged in any stock promotional activity that would give rise to a complaint, inquiry, or trading
suspension by the SEC alleging (i) a violation of the anti-fraud provisions of the federal securities laws, (ii) violations
of the anti-touting provisions, (iii) improper "gun-jumping; or (iv) promotion without proper disclosure of compensation.
3.2
Representations and Warranties of the Purchasers
. Each Purchaser, for itself and for no other Purchaser, hereby represents and
warrants as of the date hereof and as of the Closing Date to the Company as
follows (unless as of a specific date therein, in which case they shall be
accurate as of such date):
(a) Organization; Authority
. Such Purchaser is either an individual or an entity duly incorporated or formed, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or formation
with full right, corporate, partnership limited liability company or similar power and authority
to enter into and to consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and
delivery of the Transaction Documents and performance by such Purchaser of the transactions
contemplated by the Transaction Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the part of such
Purchaser. Each Transaction Document to which it is a party has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Purchaser, enforceable against it in accordance
with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.
23
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(b) Understandings or Arrangements
. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding the distribution of such
Securities (this representation and warranty not limiting such Purchaser's right to sell the Securities pursuant
to the Registration Statement or otherwise in compliance with applicable federal and state securities laws).
(c) Purchaser Status
. At the time such Purchaser was offered the Securities, it was, and as of the date hereof
it is, it will be either (i) an "accredited investor" as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7), (a)(9), (a)(12) or (a)(13) under the Securities Act, or (ii) a
"qualified institutional buyer" as defined in Rule 144A(a) under the Securities Act.
(d) Experience of Such Purchaser
. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in
the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
(e) Access to Information
. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers from, representatives of
the Company concerning the terms and conditions of the offering of the Securities and the merits and
risks of investing in the Securities; (ii) access to information about the Company and its financial
condition, results of operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that is necessary to make
an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees
that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser
with any information or advice with respect to the Securities nor is such information or advice necessary
or desired. Neither the Placement Agent nor any Affiliate has made or makes any representation
as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have
acquired non-public information with respect to the Company which such Purchaser agrees need not be
provided to it. In connection with the issuance of the Securities to such Purchaser, neither the Placement
Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.
24
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(f) Certain Transactions and Confidentiality
. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting
on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or
sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such
Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company
setting forth the material terms, which terms include definitive pricing terms, of the transactions contemplated hereunder
and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser
that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such
Purchaser's assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser's assets, the representation set forth above shall only apply with
respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the
Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser's
representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees,
agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection
with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for
the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions,
with respect to locating or borrowing shares order to effect Short Sales or similar transactions in the future.
(g) No Voting Agreements
. The Purchaser is not a party to any agreement or arrangement, whether
written or oral, between the Purchaser and any other Purchaser
and any of the Company's stockholders as of the date hereof, regulating
the management of the Company, the stockholders' rights in the
Company, the transfer of shares in the Company, including any voting
agreements, stockholder agreements or any other similar agreement
even if its title is different or has any other relations or agreements
with any of the Company's stockholders, directors or officers.
(h) No Foreign Person
. Purchaser acknowledges that the Company must assess potential foreign
ownership, control, or influence related to potential investments
into the Company, and the Purchaser represents that it is not a "foreign
person" within the meaning of Treasury Regulations Section 1.1445-2.
25
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(i) Brokers
. Except as set forth on
Schedule
3.2(h)
or in the Preliminary Prospectus or Prospectus, no agent, broker, investment
banker, person or firm acting in a similar capacity on behalf of or under
the authority of the Purchaser is or will be entitled to any broker's or
finder's fee or any other commission or similar fee, directly or indirectly,
for which the Company or any of its Affiliates after the Closing could have
any liabilities in connection with this Agreement, any of the transactions
contemplated by this Agreement, or on account of any action taken by the
Purchaser in connection with the transactions contemplated by this Agreement.
(j) Independent Advice
. Each Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the
Company to the Purchaser in connection with the purchase of the Securities constitutes legal, tax or investment advice.
The Company acknowledges and agrees that the representations contained in this
Section 3.2 shall not modify, amend or affect such Purchaser's right to rely
on the Company's representations and warranties contained in this Agreement or
any representations and warranties contained in any other Transaction Document
or any other document or instrument executed and/or delivered in connection
with this Agreement or the consummation of the transactions contemplated
hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing
contained herein shall constitute a representation or warranty, or preclude
any actions, except as set forth in this Agreement, with respect to locating
or borrowing shares in order to effect Short Sales or similar transactions in
the future.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1
Legends
. The shares of Common Stock shall be issued free of legends.
4.2
Integration
. The Company shall not sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in Section 2 of the
Securities Act) that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of any Trading Market
such that it would require stockholder approval prior to the closing of such
other transaction unless stockholder approval is obtained before the closing
of such subsequent transaction.
4.3
Securities Laws Disclosure; Publicity
. The Company shall (a) by the Disclosure Time, issue a press release
disclosing the material terms of the transactions contemplated hereby, and (b)
file a Current Report on Form 8-K, including the Transaction Documents as
exhibits thereto, with the Commission within the time required by the Exchange
Act. From and after the issuance of such press release, the Company represents
to the Purchasers that it shall have publicly disclosed all material,
non-public information delivered to any of the Purchasers by the Company or
any of its Subsidiaries or Affiliates, or any of their respective officers,
directors or employees, in connection with the transactions contemplated by
the Transaction Documents. In addition, effective upon the issuance of such
press release, the Company acknowledges and agrees that any and all
confidentiality or similar obligations under any agreement, whether written or
oral, between the Company, any of its Subsidiaries or any of their respective
officers, directors, employees or Affiliates, on the one hand, and any of the
Purchasers or any of their Affiliates on the other hand, shall terminate and
be of no further force or effect. Other than the press release referred to in
the initial sentence of this Section 4.3, the Company and each Purchaser shall
consult with each other in issuing any other press releases with respect to
the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release nor otherwise make any such
public statement without the prior consent of the Company, with respect to any
press release of any Purchaser, or without the prior consent of each
Purchaser, with respect to any press release of the Company, which consent
shall not unreasonably be withheld or delayed, except if such disclosure is
required by law, in which case the disclosing party shall promptly provide the
other party with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the
name of any Purchaser who is not a director, officer or greater than 5%
stockholder of the Company, or include the name of any such Purchaser in any
filing with the Commission or any regulatory agency or Trading Market, without
the prior written consent of such Purchaser, except (a) as required by federal
securities law in connection with the filing of final Transaction Documents
with the Commission, and (b) to the extent such disclosure is required by law
or Trading Market regulations, in which case the Company shall provide the
Purchasers with prior notice of such disclosure permitted under this clause
(b).
26
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4.4
Stockholder Rights Plan
. No claim will be made or enforced by the Company or, with the consent of the
Company, any other Person, that any Purchaser is an "Acquiring Person" under
any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or similar anti-takeover plan or
arrangement in effect or hereafter adopted by the Company, or that any
Purchaser would be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchasers.
4.5
Non-Public Information
. Except with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, which shall be disclosed pursuant
to Section 4.3, the Company covenants and agrees that neither it, nor any of
its officers, directors or employees, will provide any Purchaser or its agents
or counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto such Purchaser shall have entered
into a written agreement with the Company regarding the confidentiality and
use of such information. The Company understands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of the Company. To the extent that the Company, any of its
Subsidiaries or any of their respective officers, directors, agents, employees
or Affiliates delivers any material, non-public information to a Purchaser in
connection with the transactions contemplated by the Transaction Documents
without such Purchaser's consent, the Company hereby covenants and agrees that
such Purchaser shall not have any duty of confidentiality to the Company, any
of its Subsidiaries, or any of their respective officers, directors, employees
or Affiliates, or a duty to the Company, and of its Subsidiaries or any of
their respective officers, directors, employees or Affiliates not to trade on
the basis of, such material, non-public information, provided that the
Purchaser shall remain subject to applicable law. To the extent that any
notice provided pursuant to any Transaction Document constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries,
the Company shall, as soon as practicable following delivery of such notice,
file or furnish such material non-public information with the Commission
pursuant to a Current Report on Form 8-K. The Company understands and confirms
that each Purchaser shall be relying on the foregoing covenant in effecting
transactions in securities of the Company.
27
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4.6
Use of Proceeds
. The Company shall use the net proceeds from the sale of the Securities
hereunder for working capital purposes and general corporate procedures,
including the purchase of any pending or future acquisitions, and shall not
use such proceeds: (a) for the satisfaction of any portion of the Company's
debt (other than payment of trade payables in the ordinary course of the
Company's business or repayment of obligations outstanding as of the date of
this Agreement consistent with prior practices), (b) for the redemption of any
shares of Common Stock or Common Stock Equivalents, (c) for the settlement of
any outstanding litigation or (d) in violation of FCPA or OFAC regulations or
similar applicable regulations.
4.7
Indemnification of Purchasers
. Subject to the provisions of this Section 4.7, the Company will indemnify
and hold each Purchaser and its directors, officers, stockholders, members,
partners, employees and Affiliates (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such
title or any other title), each Person who controls such Purchaser (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, stockholders, agents, members, partners or
employees (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other
title) of such controlling persons (each, a "
Purchaser Party
") harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable and documented out-of-pocket
attorneys' fees and costs of investigation that any such Purchaser Party may
suffer or incur as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the Company in
this Agreement or in the other Transaction Documents or (b) any action
instituted against a Purchaser Party in any capacity (including a Purchaser
Party's status as an investor), or any of them or their respective Affiliates,
by the Company or any stockholder of the Company who is not an Affiliate of
such Purchaser Party, arising out of or relating to any of the transactions
contemplated by the Transaction Documents. For the avoidance of doubt, the
indemnification provided herein is intended to, and shall also cover, direct
claims brought by the Company against the Purchaser Parties; provided,
however, that such indemnification shall not cover any loss, claim, damage or
liability to the extent it is finally judicially determined to be attributable
to any Purchaser Party's breach of any of the representations, warranties,
covenants or agreements made by such Purchaser Party in any Transaction
Document or any conduct by such Purchaser Party which is finally judicially
determined to constitute fraud, gross negligence or willful misconduct. If any
action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and, except with respect to direct
claims brought by the Company, the Company shall have the right to assume the
defense thereof with counsel of its own choosing reasonably acceptable to the
Purchaser Party. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Purchaser
Party except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company has failed
after a reasonable period of time to assume such defense and to employ counsel
or (iii) in such action there is, in the reasonable opinion of counsel to the
applicable Purchaser Party (which may be internal counsel), a material
conflict on any material issue between the position of the Company and the
position of such Purchaser Party, in which case the Company shall be
responsible for the reasonable fees and expenses of no more than one such
separate counsel. The Company will not be liable to any Purchaser Party under
this Agreement for any settlement by a Purchaser Party effected without the
Company's prior written consent, which shall not be unreasonably withheld or
delayed, or to the extent that a loss, claim, damage or liability is
attributable to any Purchaser Party's breach of any of the representations,
warranties, covenants or agreements made. The indemnification and other
payment obligations required by this Section 4.7 shall be made by periodic
payments of the amount thereof during the course of the investigation,
defense, collection, enforcement or action, as and when bills are received or
are incurred;
provided
, that if any Purchaser Party is finally judicially determined not to be
entitled to indemnification or payment under this Section 4.7, such Purchaser
Party shall promptly reimburse the Company for any payments that are advanced
under this sentence. The indemnity agreements contained herein shall be in
addition to any cause of action or similar right of any Purchaser Party
against the Company or others and any liabilities the Company may be subject
to pursuant to law.
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4.8
Listing of Common Stock
. The Company hereby agrees to use commercially reasonable efforts to maintain
the listing or quotation of the shares of Common Stock on each Trading Market
on which each is currently listed, and concurrently with the Closing, the
Company shall apply to list or quote all of the Shares and Warrant Shares on
such Trading Markets and promptly secure the listing of all of the Shares and
Warrant Shares on such Trading Markets. The Company further agrees, if the
Company applies to have the Common Stock traded on any other Trading Market,
it will then include in such application all of the Shares and Warrant Shares,
and will take such other action as is necessary to cause all of the Shares and
Warrant Shares to be listed or quoted on such other Trading Market as promptly
as possible. The Company will then take all action reasonably necessary to
continue the listing and trading of the Common Stock on a Trading Market and
will comply in all material respects with the Company's reporting, filing and
other obligations under the bylaws or rules of the Trading Market. For so long
as the Company maintains a listing or quotation of the Common Stock on a
Trading Market, the Company agrees to use commercially reasonable efforts to
maintain the eligibility of the Common Stock for electronic transfer through
the Depository Trust Company or another established clearing corporation,
including, without limitation, by timely payment of fees to the Depository
Trust Company or such other established clearing corporation in connection
with such electronic transfer.
4.9
Subsequent Equity Sales
.
(a) From the date hereof until sixty (60) days after the Closing Date, neither the Company nor any Subsidiary shall (i)
issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common
Stock or Common Stock Equivalents or (ii) file any registration statement or amendment or supplement thereto, other
than the Prospectus or filing a registration statement on Form S-8 in connection with any employee benefit plan.
29
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(b) From the date hereof until one hundred and
eighty (180) days after
the Closing Date, the
Company shall be prohibited from effecting
or entering into an agreement to effect any
issuance by the Company or
any of its Subsidiaries
of shares of Common Stock or Common Stock
Equivalents (or a combination
of units thereof)
involving a Variable Rate Transaction. "
Variable Rate Transaction
" means a transaction in which the Company (i) issues or sells any debt or
equity securities that are convertible into, exchangeable or exercisable
for, or include the right to receive additional shares of Common Stock
either (A) at a conversion price, exercise price or exchange rate or other
price that is based upon and/or varies with the trading prices of or
quotations for the Common Stock at any time after the initial issuance of
such debt or equity securities, or (B) with a conversion, exercise or
exchange price that is subject to being reset at some future date after the
initial issuance of such debt or equity security or upon the occurrence
of specified or contingent events directly or indirectly related to the
business of the Company or the market for shares of Common Stock or (ii)
enters into, or effects a transaction under, any agreement, including, but
not limited to, an equity line of credit or an "at-the-market offering",
whereby the Company may issue securities at a future determined price
regardless of whether shares pursuant to such agreement have actually been
issued and regardless of whether such agreement is subsequently canceled;
provided
,
however
, that, following the 90
th
day after the Closing Date (the "
ATM Carve Out Period
"), the entry into and/or issuance of shares
of Common Stock in an "at
the market" offering
shall not be deemed a
Variable Rate Transaction.
Any Purchaser shall be entitled to obtain
injunctive relief against
the Company to preclude
any such issuance, which remedy shall be in
addition to any right to
collect damages. The ATM
Carve Out Period shall
be adjusted from the 90
th
day after the Closing Date to the 60
th
day after the Closing Date
if the Company obtains the
prior written consent of a
majority of the Purchasers.
(c) Notwithstanding the foregoing, this Section 4.9 shall not apply in respect of an Exempt Issuance, except that no Variable
Rate Transaction shall be an Exempt Issuance other than as explicitly permitted in (i), (ii) or (iii) of Section 4.9(b).
4.10
Equal Treatment of Purchasers
. No consideration (including any modification of the Transaction Documents)
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of the Transaction Documents unless the same
consideration is also offered to all of the parties to the Transaction
Documents. For clarification purposes, this provision constitutes a separate
right granted to each Purchaser by the Company and negotiated separately by
each Purchaser, and is intended for the Company to treat the Purchasers as a
class and shall not in any way be construed as the Purchasers acting in
concert or as a group with respect to the purchase, disposition or voting of
the shares of Common Stock or otherwise.
4.11
Certain Transactions and Confidentiality
. Each Purchaser, severally and not jointly with the other Purchasers,
covenants that neither it nor any Affiliate acting on its behalf or pursuant
to any understanding with it will execute any purchases or sales, including
Short Sales of any of the Company's securities during the period commencing
with the execution of this Agreement and ending at such time that the
transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.3. Each
Purchaser, severally and not jointly with the other Purchasers, covenants that
until such time as the transactions contemplated by this Agreement are
publicly disclosed by the Company pursuant to the initial press release as
described in Section 4.3, such Purchaser will maintain the confidentiality of
the existence and terms of this transaction and the information included in
the Disclosure Schedules. Notwithstanding the foregoing, and notwithstanding
anything contained in this Agreement to the contrary, the Company expressly
acknowledges and agrees that (i) no Purchaser makes any representation,
warranty or covenant hereby that it will not engage in effecting transactions
in any securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced pursuant to the
initial press release as described in Section 4.3, (ii) no Purchaser shall be
restricted or prohibited from effecting any transactions in any securities of
the Company in accordance with applicable securities laws from and after the
time that the transactions contemplated by this Agreement are first publicly
announced pursuant to the initial press release as described in Section 4.3
and (iii) no Purchaser shall have any duty of confidentiality or duty not to
trade in the securities of the Company to the Company or its Subsidiaries
after the issuance of the initial press release as described in Section 4.3.
Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser's assets and the portfolio managers have
no direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser's assets, the covenant set forth
above shall only apply with respect to the portion of assets managed by the
portfolio manager that made the investment decision to purchase the Securities
covered by this Agreement.
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4.12
Exercise Procedures
. The form of Notice of Exercise included in the Warrants set forth the
totality of the procedures required of the Purchasers in order to exercise the
Warrants. No additional legal opinion, other information or instructions shall
be required of the Purchasers to exercise their Warrants. Without limiting the
preceding sentences, no ink-original Notice of Exercise shall be required, nor
shall any medallion guarantee (or other type of guarantee or notarization) of
any Notice of Exercise form be required in order to exercise the Warrants. The
Company shall honor exercises of the Warrants and shall deliver Warrant Shares
in accordance with the terms, conditions and time periods set forth in the
Transaction Documents.
4.13
Reservations of Shares
. As of the date hereof, the Company has reserved and the Company shall
continue to reserve and keep available at all times, free of preemptive
rights, a sufficient number of shares of Common Stock for the purpose of
enabling the Company to issue shares of Common Stock pursuant to this
Agreement and Warrant Shares pursuant to any exercise of the Warrants.
4.14
Lock-Up Agreements
. The Company shall not amend, modify, waive or terminate any provision of any
of the Lock-Up Agreements, except to extend the term of the lock-up period,
and shall enforce the provisions of each Lock-Up Agreement in accordance with
its terms. If any party to a Lock-Up Agreement breaches any provision of a
Lock-Up Agreement, the Company shall promptly use its commercially reasonable
efforts to seek specific performance of the terms of such Lock-Up Agreement.
ARTICLE V.
MISCELLANEOUS
5.1
Termination
. This Agreement may be terminated by any Purchaser, as to such Purchaser's
obligations hereunder only and without any effect whatsoever on the
obligations between the Company and the other Purchasers, by written notice to
the other parties, if the Closing has not been consummated on or before the
fifth (5th) Trading Day following the date hereof;
provided
,
however
, that no such termination will affect the right of any party to sue for any
breach by any other party (or parties).
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5.2
Fees and Expenses
. Except as expressly set forth in the Transaction Documents to the contrary,
each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all Transfer Agent fees
(including, without limitation, any fees required for same-day processing of
any instruction letter delivered by the Company and any exercise notice
delivered by a Purchaser), stamp taxes and other taxes and duties levied in
connection with the delivery of any Securities to the Purchasers.
5.3
Entire Agreement
. The Transaction Documents, together with the exhibits and schedules thereto,
the Preliminary Prospectus and the Prospectus, contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules.
5.4
Notices
. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of: (a) the time of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or
email attachment at the email address as set forth on the signature pages
attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading
Day, (b) the next Trading Day after the time of transmission, if such notice
or communication is delivered via facsimile at the facsimile number or email
attachment at the email address as set forth on the signature pages attached
hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York
City time) on any Trading Day, (c) the second (2nd) Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier
service or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
as set forth on the signature pages attached hereto. To the extent that any
notice provided pursuant to any Transaction Document constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K.
5.5
Amendments; Waivers
. No provision of this Agreement may be waived, modified, supplemented or
amended except in a written instrument signed, in the case of an amendment, by
the Company and the Purchasers who purchased at least 50.1% in interest of the
sum of (i) the Shares and (ii) the Pre-Funded Warrant Shares initially
issuable upon exercise of the Pre-Funded Warrants based on the initial
Subscription Amounts hereunder (or, prior to the Closing, the Company and each
Purchaser), or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought; provided, that if any amendment,
modification or waiver disproportionately and adversely impacts a Purchaser
(or multiple Purchasers), the consent of such disproportionately impacted
Purchaser (or 50.1% in interest of such Purchasers) shall also be required. No
waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such
right. Any proposed amendment or waiver that disproportionately, materially
and adversely affects the rights and obligations of any Purchaser relative to
the comparable rights and obligations of the other Purchasers shall require
the prior written consent of such adversely affected Purchaser. Any amendment
effected in accordance with this Section 5.5 shall be binding upon each
Purchaser and holder of Securities and the Company.
32
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5.6
Headings
. The headings herein are for convenience only, do not constitute a part of
this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.
5.7
Successors and Assigns
. This Agreement shall be binding upon and inure to the benefit of the parties
and their successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of each Purchaser (other than by merger). Any Purchaser may assign any
or all of its rights under this Agreement to any Person to whom such Purchaser
assigns or transfers any Securities, provided that such transferee agrees in
writing to be bound, with respect to the transferred Securities, by the
provisions of the Transaction Documents that apply to the "Purchasers."
5.8
No Third-Party Beneficiaries
. The Placement Agent shall be the third-party beneficiary of the
representations and warranties of the Company in Section 3.1 and the
representations and warranties of the Purchasers in Section 3.2. This
Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, except as otherwise
set forth in Section 4.7 and this Section 5.8.
5.9
Governing Law
. All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, stockholders, partners, members,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the
City of New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any
of the Transaction Documents), and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is improper or is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by law. If either party shall commence an action, suit or
proceeding to enforce any provisions of the Transaction Documents, then, in
addition to the obligations of the Company under Section 4.7, the prevailing
party in such action, suit or proceeding shall be reimbursed by the other
party for its reasonable attorneys' fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.
33
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5.10
Execution
. This Agreement may be executed in two or more counterparts, all of which
when taken together shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and
delivered to each other party, it being understood that the parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a ".pdf" format data file,
such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or ".pdf" signature page was an original
thereof.
5.11
Severability
. If any term, provision, covenant or restriction of this Agreement is held by
a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated, and the parties hereto shall
use their commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.
5.12
Remedies
. In addition to being entitled to exercise all rights provided herein or
granted by law, including recovery of damages, each of the Purchasers and the
Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to
assert in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.
5.13
Independent Nature of Purchasers
'
Obligations and Rights
. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser
shall be responsible in any way for the performance or non-performance of the
obligations of any other Purchaser under any Transaction Document. Nothing
contained herein or in any other Transaction Document, and no action taken by
any Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting
in concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents. Each Purchaser shall be entitled to
independently protect and enforce its rights including, without limitation,
the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Purchaser to be joined
as an additional party in any proceeding for such purpose. Each Purchaser has
been represented by its own separate legal counsel in its review and
negotiation of the Transaction Documents or has elected not to be represented
by counsel after having been advised of the desirability to engage such
counsel. For reasons of administrative convenience only, each Purchaser and
its respective counsel have chosen to communicate with the Company through
Placement Agent Counsel. Placement Agent Counsel does not represent any of the
Purchasers and only represents the Placement Agent. The Company has elected to
provide all Purchasers with the same terms and Transaction Documents for the
convenience of the Company and not because it was required or requested to do
so by any of the Purchasers. It is expressly understood and agreed that each
provision contained in this Agreement and in each other Transaction Document
is between the Company and a Purchaser, solely, and not between the Company
and the Purchasers collectively and not between and among the Purchasers.
34
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5.14
Saturdays, Sundays, Holidays, etc
. If the last or appointed day for the taking of any action or the expiration
of any right required or granted herein shall not be a Business Day, then such
action may be taken or such right may be exercised on the next succeeding
Business Day.
5.15
Construction
. The parties agree that each of them and/or their respective counsel have
reviewed and had an opportunity to revise the Transaction Documents and,
therefore, the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of the Transaction Documents or any amendments thereto. In
addition, each and every reference to share prices and shares of Common Stock
in any Transaction Document shall be subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other similar
transactions relating to shares of Common Stock that occur after the date of
this Agreement.
5.16
WAIVER OF JURY TRIAL.
IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY
AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE
GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
35
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
BIOCARDIA, INC. Address for Notice
:
320 Soquel Way
Sunnyvale, California 94085
By: Attn: Chief Financial Officer
Name: Dr. Peter A. Altman, Ph.D Email:
CEO@BioCardia.com
Title: Chief Executive Officer CFO@BioCardia.com
dmcclung@biocardia.com
paltman@biocardia.com
With a copy to (which shall not constitute notice):
Wilson Sonsini Goodrich & Rosati LLP
650 Page Mill Rd.
Palo Alto, CA 94304
Email:
mdanaher@wsgr.com
Attention: Michael Danaher
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
-------------------------------------------------------------------------------
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
Name of Purchaser:
Signature of Authorized Signatory of Purchaser
:
Name of Authorized Signatory:
Title of Authorized Signatory:
Email Address of Authorized Signatory:
Facsimile Number of Authorized Signatory:
Address for Notice to Purchaser:
Address for Delivery of Warrant Shares to the Purchaser (if not same address
for notice):
DWAC for Common Stock:
Subscription Amount: $___________________
Shares of Common Stock: ___________________
Shares of Common Stock underlying the Pre-Funded Warrants: ________
Beneficial Ownership Blocker o 4.99% or o 9.99%
Warrant Shares underlying the Common Warrants: ________
Beneficial Ownership Blocker o 4.99% or o 9.99%
EIN Number: ___________________
Notwithstanding anything contained in this Agreement to the contrary, by
checking this box (i) the obligations of the above-signed to purchase the
securities set forth in this Agreement to be purchased from the Company by the
above-signed, and the obligations of the Company to sell such securities to
the above-signed, shall be unconditional and all conditions to Closing shall
be disregarded, (ii) the Closing shall occur on the first (1st) Trading Day
following the date of this Agreement and (iii) any condition to Closing
contemplated by this Agreement (but prior to being disregarded by clause (i)
above) that required delivery by the Company or the above-signed of any
agreement, instrument, certificate or the like or purchase price (as
applicable) shall no longer be a condition and shall instead be an
unconditional obligation of the Company or the above-signed (as applicable) to
deliver such agreement, instrument, certificate or the like or purchase price
(as applicable) to such other party on the Closing Date.
{graphic omitted}
{graphic omitted}