Visium Technologies, Inc 8-K, filed Sep 29, 2021
Visium Technologies, Inc. (VISM)
8-K
2021-09-29
For: 2021-09-27
View Original
Added on
April 10, 2026
About this 8-K
Visium Technologies, Inc filed this 8-K on September 29, 2021, reporting on events of September 27, 2021.
Items reported
- Item 1.01: Entered into a material agreement
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 and Exchange Act
of 1934
Date of Report (Date of earliest event reported): September 27,
2021
VISIUM TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
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Florida
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000-25753
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87-04496677
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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4094 Majestic Lane, Suite 360
Fairfax, Virginia 22033
(Address of principal executive offices, including zip
code)
(703) 273-0383
(Registrant’s telephone number, including area
code)
Check
the appropriate box below if the 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant
under any of the following provisions:
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☐
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Written
communication pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c)).
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Securities
registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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N/A
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N/A
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N/A
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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
§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934
(17 CFR §240.12b-2).
Emerging
growth company ☐
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. ☐
Item 1.01. Entry into a Material
Definitive Agreement
On September 27, 2021, Visium Technologies, Inc., a Florida
corporation (the “Company”) entered into a securities
purchase agreement (the “Purchase Agreement”) with a
single institutional investor (the “Purchaser”)
resulting in the raise of $750,000 in gross proceeds to the
Company. Pursuant to the terms of the Purchase Agreement, the
Company agreed to sell, in a registered director offering, an
aggregate of 150,000,000 shares (the “Shares”) of the
Company’s common stock, par value $0.0001 per share (the
“Common Stock”) at a purchase price of $0.005 per Share
(the “Offering”). The Offering closed on September 27,
2021.
Network1 Financial Securities, Inc. acted as the sole placement
agent (the “Placement Agent”) for the Company in
connection with the Offering. Pursuant to that certain Placement
Agency Agreement, dated as of August 18, 2021, between the Company
and the Placement Agent (the “Placement Agency
Agreement”), the Placement Agent is entitled to a cash fee
equal to $52,500.
The Company estimates that net proceeds to the Company from the
Offering will be approximately $687,500 after deducting estimated
expenses payable by the Company. The Company intends to use the net
proceeds from this offering for fees and expenses associated with
application to the OTCQB Marketplace operated by OTC Markets Group
Inc. and working capital and general corporate
purposes.
The Shares will be issued to the Purchaser in a registered direct
offering pursuant to which the Shares will be registered under the
Securities Act of 1933, as amended, pursuant to a prospectus
supplement to the Company’s currently effective registration
statement on Form S-3 (File No. 333-255146), which was initially
filed with the Securities and Exchange Commission (the
“SEC”) on April 9, 2021, and was declared effective on
April 15, 2021 (the “Shelf Registration Statement”). A
Prospectus Supplement for the closing was filed on September 27,
2021 and is available on the SEC’s website
athttp://www.sec.gov.
The
foregoing descriptions of the Purchase Agreement and Placement
Agency Agreement do not purport to be complete and are qualified in
their entirety by reference to the Purchase Agreement and Placement
Agency Agreement, which are filed as Exhibit 10.1 and Exhibit 10.2,
respectively, to this Current Report on Form 8-K.
The
Company is filing the opinion of its counsel, Lucosky Brookman LLP,
relating to the legality of the issuance and sale of the Shares as
Exhibit 5.1 hereto. Exhibit 5.1 is incorporated herein by reference
and into the Shelf Registration Statement.
Item. 9.01. Financial Statements and Exhibits.
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Exhibit
No.:
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Description:
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5.1*
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Opinion
of Lucosky Brookman LLP
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10.1*
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Securities
Purchase Agreement
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10.2
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Placement
Agency Agreement (incorporated by reference to Exhibit 10.2 of the
Company’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on September 15,
2021)
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23.1
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Consent
of Lucosky Brookman LLP (contained in Exhibit 5.1
hereto)
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* filed herewith
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.
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VISIUM
TECHNOLOGIES, INC.
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Date:
September 27, 2021
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By:
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/s/ Mark Lucky
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Mark
Lucky
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Chief
Executive Officer
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Exhibit 5.1
September
27, 2021
Visium
Technologies, Inc.
4094
Majestic Lane
Suite
360
Fairfax,
VA 22033
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RE:
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Visium Technologies, Inc.’s Registration Statement on Form
S-3 (333-255146)
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Ladies
and Gentlemen:
We are
acting as counsel for Visium Technologies, Inc., a Florida
corporation (the “Company”), in connection
with the above-referenced registration statement (the
“Registration
Statement”) filed with the Securities and Exchange
Commission (“SEC”) pursuant to the
Securities Act of 1933, as amended (the “Securities Act”), the
base prospectus dated April 15, 2021 (the “Base Prospectus”) and the
prospectus supplement dated September 27, 2021 (the
“Prospectus
Supplement,” and together with the Base Prospectus,
the “Prospectus”), relating to
the offering by the Company of 150,000,000 shares (the
“Shares”) of the
Company’s common stock, par value $0.0001 per share
(“Common
Stock”). The Shares are covered by the Registration
Statement and we understand that the Shares are to be offered and
sold in the manner described in the Prospectus. This opinion is
being delivered at the request of the Company and in accordance
with the requirements of Item 601(b)(5) of Regulation S-K under the
Securities Act.
For
purposes of this opinion, we have examined such documents and
considered such legal matters as we have deemed necessary and
relevant as the basis for the opinion set forth below. With respect
to such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents
submitted to us as reproduced, certified or photostatic copies and
the authenticity of the originals of those latter documents. As to
facts material to the opinions, statements and assumptions
expressed herein, we have, with your consent, relied upon oral or
written statements and representations of officers and other
representatives of the Company and others. We have specifically
relied upon the certification of an officer of the Company signed
on even date herewith. In addition, we have obtained and relied
upon such certificates and assurances from public officials as we
have deemed necessary.
For
purposes of this opinion, we have assumed that proper proceedings
in connection with the authorization and issuance or sale of the
Shares will be timely and properly completed, in accordance with
all requirements of applicable federal laws and the Florida
Business Corporation Act, in the manner presently proposed. We have
assumed and have not verified the accuracy of the factual matters
of each document we have reviewed. We
are attorneys licensed to practice in the States of New York and
New Jersey and our opinions herein assume, and are limited to, the
laws of the State of Florida as applied here are the same as in
those jurisdictions. We express no opinion as to the effect of the
law of any other jurisdiction.
Based
upon the foregoing, it is our opinion that the Shares to be issued
by the Company have been duly authorized and are legally issued,
fully paid and nonassessable. The Shares are to be issued under the
Company’s current Articles of Incorporation (the
“Articles of
Incorporation”) in effect.
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1
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In our
capacity as your counsel in connection with such registration, we
have reviewed and are familiar with such documents, certificates
and other materials, including an examination of originals or
copies certified or otherwise identified to our satisfaction of the
Company’s Articles of Incorporation and Bylaws (the
“Bylaws”), each as current
in effect, and the Registration Statement, and have reviewed such
questions of law, as we have considered relevant or necessary as a
basis for this opinion.
The
opinions set forth above are subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to or
affecting the rights and remedies of creditors; (ii) the effect of
general principles of equity, including without limitation,
concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or
injunctive relief, regardless of whether enforcement is considered
in a proceeding in equity or at law, and the discretion of the
court before which any proceeding therefor may be brought; (iii)
the unenforceability under certain circumstances under law or court
decisions of provision providing for the indemnification of, or
contribution to, a party with respect to liability where such
indemnification or contribution is contrary to public
policy.
Our
opinion is rendered as of the date hereof, and we assume no
obligation to advise you of changes in law or fact (or the effect
thereof on the opinions expressed herein) that hereafter may come
to our attention.
We
hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm under the
caption “Legal Matters” in the Registration Statement.
In so doing, we do not admit that we are in the category of persons
whose consent is required under Section 7 of the Act and the rules
and regulations of the Commission promulgated
thereunder.
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Very
truly yours,
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/s/ Lucosky Brookman LLP
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Lucosky
Brookman LLP
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SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as
of September 27, 2021, between Visium Technologies, Inc., a Florida
corporation (the “Company”), and
Mercer Street Global Opportunity Fund
LLC (the “Purchaser”).
WHEREAS, subject to
the terms and conditions set forth in this Agreement, the Company
desires to issue and sell to the Purchaser, and the Purchaser
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 the Purchaser agree as follows:
DEFINITIONS
“Acquiring Person” shall
have the meaning ascribed to such term in Section 4.6.
“Action” shall have the
meaning ascribed to such term in Section 3.1(j).
“Affiliate” means any
Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under
Rule 405 under the Securities Act.
“Board of Directors” means
the board of directors of the Company.
“Closing”
means a closing of the purchase and sale of the Shares pursuant to
Section 2.1.
“Closing
Date” means the third Trading Day after which this
Agreement has been executed and delivered by the applicable parties
thereto (or such other date as the parties may agree), and all
conditions precedent to (i) the Purchaser’s obligations to
pay each Subscription Amount and (ii) the Company’s
obligations to deliver the Securities to be issued and sold, in
each case, have been satisfied or waived.
“Commission” means the
United States Securities and Exchange Commission.
“Common Stock” means the
common stock of the Company, $0.0001 par value per share, and any
other class of securities into which such securities may hereafter
be reclassified or changed.
“Common Stock Equivalents”
means any securities of the Company or the Subsidiaries which would
entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock.
“Company Counsel” means
Lucosky Brookman LLP.
“Disclosure
Schedules” means the Disclosure Schedules of the
Company delivered concurrently herewith.
“Evaluation Date” shall
have the meaning ascribed to such term in Section
3.1(s).
“Exchange Act” means the
Securities Exchange Act of 1934, and the rules and regulations
promulgated thereunder.
“FCPA” means the Foreign
Corrupt Practices Act of 1977, as amended.
“Federal Reserve” shall
have the meaning ascribed to such term in Section
3.1(jj).
“GAAP” shall have the
meaning ascribed to such term in Section 3.1(h).
“Indebtedness”
shall have the meaning ascribed to such term in Section
3.1(aa).
“Intellectual Property”
means all of the following in any jurisdiction throughout the
world: (a) all inventions (whether patentable or unpatentable and
whether or not reduced to practice), all improvements thereto, and
all U.S. and foreign patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations
thereof, (b) all trademarks, service marks, brand names,
certification marks, trade dress, logos, trade names, domain names,
assumed names and corporate names, together with all colorable
imitations thereof, and including all goodwill associated
therewith, and all applications, registrations, and renewals in
connection therewith, (c) all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all trade
secrets under applicable state laws and the common law and know-how
(including formulas, techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals), (e)
all computer software (including source code, object code,
diagrams, data and related documentation), and (f) all copies and
tangible embodiments of the foregoing (in whatever form or
medium).
“Licensed Intellectual Property
Agreement” means all licenses, sublicenses, agreements
and permissions (each as amended to date) that any third party owns
and that the Company uses, including off-the-shelf software
purchased or licensed by the Company.
“Liens” means a lien,
charge, pledge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
Material Adverse Effect”
shall have the meaning assigned to such term in Section
3.1(b).
“Per Share Purchase Price”
means $0.005 per share of
the Common Stock.
“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.
“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, 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).
“Purchaser Party” shall
have the meaning ascribed to such term in Section 4.8.
“Registration Statement”
means the effective S-3 registration statement with Commission File
No. 333- 255146 which registers the sale of the Shares to the
Purchaser.
“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.
“SEC Reports” shall have
the meaning ascribed to such term in Section 3.1(h).
“Securities
Act” means the Securities Act of 1933, and the rules
and regulations promulgated thereunder.
“Shares” means the Common
Stock being issued to the Purchaser pursuant to this
Agreement.
“Short
Sales” means all “short sales” as defined
in Rule 200 of Regulation SHO under the Exchange Act (but shall not
be deemed to include the location and/or reservation of borrowable
shares of Common Stock).
“Significant Subsidiary”
has the meaning given to such term in Rule 405 under the Securities
Act.
“Subscription
Amount” shall have the meaning ascribed to such term
in Section 2.1.
“Subsidiary” means with
respect to any entity at any date, any direct or indirect
corporation, limited or general partnership, limited liability
company, trust, estate, association, joint venture or other
business entity of which (A) more than 50% of (i) the outstanding
capital stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the Board of Directors or other
managing body of such entity, (ii) in the case of a partnership or
limited liability company, the interest in the capital or profits
of such partnership or limited liability company or (iii) in the
case of a trust, estate, association, joint venture or other
entity, the beneficial interest in such trust, estate, association
or other entity business is, at the time of determination, owned or
controlled directly or indirectly through one or more
intermediaries, by such entity, or (B) is under the actual control
of the Company.
“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 Common Stock is
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, the New York Stock Exchange, the
OTCQB, the OTCQX, or the OTC Pink Marketplace (or any successors to
any of the foregoing).
“Transaction Documents”
means this Agreement, and any other documents or agreements
executed in connection with the transactions contemplated
hereunder.
“Transfer Agent” means
Madison Stock Transfer, Inc., the current transfer agent of the
Company, with a mailing address of 2500 Coney Island Avenue,
Brooklyn, New York 11223 and a facsimile number of (718) 627-6341,
and any successor transfer agent of the Company.
PURCHASE
AND SALE
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 Purchaser agree to purchase, US$750,000 (“Subscription
Amount”) of Common Stock (or 150,000,000
shares) at the Per Share Purchase Price. The Company shall
deliver to the Purchaser the Shares, and the Company and each
Purchaser shall deliver the other items set forth in Section 2.2
deliverable at the Closing. Upon satisfaction of the covenants and
conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at such location as the parties shall mutually agree. Unless
otherwise agreed, settlement of the Shares shall occur either via
wire and DWAC (defined below) or via "Delivery Versus Payment"
(“DVP”)
(i.e., on the Closing Date, the Company shall issue the Shares
registered in the Purchaser’s name and address and released
by the Transfer Agent pursuant to instructions to the Transfer
Agent provided by the Purchaser, directly to the account(s)
identified by the Purchaser, and payment therefor shall be made by
the Purchaser by wire transfer to the Company). Notwithstanding
anything to the contrary herein and the Purchaser’s
Subscription Amount set forth on the signature pages attached
hereto, the number of Shares purchased by a Purchaser (and its
Affiliates) hereunder shall not, when aggregated with all other
shares of Common Stock owned by such Purchaser (and its Affiliates)
at such time, result in such Purchaser beneficially owning (as
determined in accordance with Section 13(d) of the Exchange Act) in
excess of 4.99% of the then issued and outstanding Common Stock
outstanding at the Closing (the “Beneficial Ownership
Maximum”), and such Purchaser’s Subscription
Amount, to the extent it would otherwise exceed the Beneficial
Ownership Maximum immediately prior to the Closing, shall be
conditioned upon the issuance of Shares at the Closing to the other
Purchasers signatory hereto. To the extent that a Purchaser’s
beneficial ownership of the Shares would otherwise be deemed to
exceed the Beneficial Ownership Maximum, such Purchasers’
Subscription Amount shall automatically be reduced as necessary in
order to comply with this paragraph.
Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to
be delivered to the Purchaser the following:
this
Agreement duly executed by the Company;
(ii) legal opinion of Company
Counsel, in form reasonably acceptable to the Purchaser;
(iii)
the Company shall have
provided the Purchaser with the Company’s wire instructions,
on Company letterhead and executed by the Chief Executive Officer
or Chief Financial Officer;
(iv)
subject to the last
sentence of Section 2.1, a copy of the irrevocable instructions to
the Transfer Agent instructing the Transfer Agent to deliver on an
expedited basis via The Depository Trust Company Deposit or
Withdrawal at Custodian system (“DWAC”) Shares equal to
the Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of the
Purchaser;
(v) the Prospectus and
Prospectus Supplement, in form and with disclosure reasonably
acceptable to the Purchaser;
(vi) Board resolutions
approving the issuance of the Shares and the execution of the
Transaction Documents on behalf of the Company; and
an
Officer’s Certificate in the form attached as Exhibit A.
(b) On or prior to the
Closing Date, the Purchaser shall deliver or cause to be delivered
to the Company the following:
(ii)
the Purchaser’s
Subscription Amount which shall be made available for "DVP"
settlement with the Company or its designee or via wire and
DWAC.
Closing Conditions. 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) on the applicable Closing Date of the representations and
warranties of the Purchaser 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 Purchaser required to be performed
at or prior to the Closing Date shall have been performed;
and
(iii)
the delivery by the
Purchaser of the items set forth in Section 2.4 of
thisAgreement.
The
respective obligations of the Purchaser hereunder in connection
with the Closing are subject to the following conditions being
met:
(i)
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 applicable 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 2.3 of
thisAgreement;
(iv)
there shall have
been no Material Adverse Effect with respect to the Company since
the date hereof; and
(v)
from the date hereof to
the Closing Date trading in the Common Stock shall not have been
suspended by the Commission or the Company’s principal
Trading Market, and, at any time prior to the Closing Date, trading
in securities generally as reported by Bloomberg L.P. shall not
have been suspended or limited, or minimum prices shall not have
been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium
have been declared either by the United States or New York State
authorities nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international
calamity of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the
reasonable judgment of the Purchaser, makes it impracticable or
inadvisable to purchase the Shares at the Closing.
REPRESENTATIONS
AND WARRANTIES
Representations and Warranties of the
Company. The Company hereby makes the following
representations and warranties to the Purchaser as of each Closing
Date:
(a) Subsidiaries. All of the direct
and indirect Significant Subsidiaries of the Company are set forth
in the SEC Reports. The Company owns, directly or indirectly, all
of the capital stock or other equity interests of each such
Subsidiary free and clear of any Liens, and all of the issued and
outstanding shares of capital stock of each such Subsidiary are
validly issued and are fully paid, non-assessable (to the extent
such concept applies under relevant law) and free of preemptive and
similar rights to subscribe for or purchase
securities.
(b) Organization and Qualification.
The Company and each of the Subsidiaries is an entity duly
incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use
its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation
nor default of any of the provisions of its respective certificate
or articles of incorporation, bylaws or other organizational or
charter documents. Each of the Company and the Subsidiaries is duly
qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the
nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not have
or reasonably be expected to result in: (i) a material adverse
effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results
of operations, assets, business, prospects 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 or the Company’s stockholders in connection
herewith or therewith other than in connection with the Required
Approvals. Subject to obtaining the Required Approvals, this
Agreement and each other Transaction Document to which it is a
party has been (or upon delivery will have been) duly executed by
the Company and, when delivered in accordance with the terms hereof
and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable
law.
(d) No Conflicts. Except as set
forth in Section 3(d) of the Disclosure Schedules, 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 Shares and the consummation by it of the
transactions contemplated
hereby
and thereby do not and will not (i) subject to the Required
Approvals, conflict with or violate any provision of the
Company’s or any Subsidiary’s Certificate or Articles
of Incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a
default) under, result in the creation of any Lien upon any of the
properties or assets of the Company or any Subsidiary, or give to
others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or
by which any property or asset of the Company or any Subsidiary is
bound or affected, or
(iii)
subject to the Required Approvals, conflict with or result in a
violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be
expected to result in a Material Adverse Effect.
(e) Filings, Consents and
Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than: (i) the filings
required pursuant to Section
3.5 of
this Agreement, blue sky filings or a Form D filing or (ii)
application to any applicable Trading Market for the listing of the
Shares, following registration of such shares under the Securities
Act, for trading thereon in the time and manner required thereby
(the “Required
Approvals”).
(f) Issuance of the Shares;
Registration. The 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
nonassessable, free and clear of all Liens imposed by the Company.
The Company has reserved from its duly authorized capital stock the
maximum number of shares of Common Stock issuable pursuant to this
Agreement. The Company has prepared and filed the Registration
Statement in conformity with the requirements of the Securities
Act, which became effective on April 15, 2021 (the
“Effective
Date”), including the Prospectus, and such amendments
and supplements thereto as may have been required to the date of
this Agreement. The Registration Statement is effective under the
Securities Act and no stop order preventing or suspending the
effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued by the
Commission and no proceedings for that purpose have been instituted
or, to the knowledge of the Company, are threatened by the
Commission. The Company, if required by the rules and regulations
of the Commission, shall file the Prospectus with the Commission
pursuant to Rule 424(b). At the time the Registration Statement and
any amendments thereto became effective, at the date of this
Agreement and at the Closing Date, the Registration Statement and
any amendments thereto conformed and will conform in all material
respects to the requirements of the Securities Act and 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
Prospectus or any amendment or supplement thereto was issued and at
the Closing Date, conformed and will conform in all material
respects to the requirements of the Securities Act and 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. The Company was at the time of the filing of
the Registration Statement eligible to use Form S-3 and the
issuance of the Shares will be free from any transfer restrictions
including any fixed price sales requirements. The Company is
eligible to use Form S-3 under the Securities Act and it meets the
transaction requirements with as set forth in General Instruction
I.B.1 of Form S-3.1
(g) Capitalization. The
capitalization of the Company is as set forth on Schedule 3.1(g). Except as set
forth in such schedule, the Company has not issued any capital
stock since its most recently filed periodic report under the
Exchange Act, other than pursuant to the exercise of employee stock
awards under the Company’s equity incentive plans, the
issuance of shares of Common Stock to employees pursuant to the
Company’s employee stock purchase plans and pursuant to the
conversion and/or exercise of Common Stock Equivalents outstanding
as of the date of the most recently filed 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) and
Schedule
3.1(r), as a result
of the purchase and sale of the Shares, 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
1
Company to provide calculations evidencing the $75M
float.
shares
of Common Stock or the 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 or Common Stock Equivalents or
capital stock of any Subsidiary. The issuance and sale of the
Shares will not obligate the Company or any Subsidiary to issue
shares of Common Stock or other securities to any Person (other
than the Purchaser) and will not result in a right of any holder of
Company securities to adjust the exercise, conversion, exchange or
reset price under any of such securities. 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 of such security or instrument upon an issuance of securities
by the Company or any Subsidiary. 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 stock appreciation rights or “phantom stock”
plans or agreements or any similar plan or agreement. All of the
outstanding shares of capital stock of the Company are duly
authorized, validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws,
and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase
securities. No further approval or authorization of any
stockholder, the Board of Directors or others is required for the
issuance and sale of the Shares. There are no stockholders
agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company
is a party or, to the knowledge of the Company, between or among
any of the Company’s stockholders.
(h) SEC Reports; Financial
Statements. The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company
was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to
herein as the “SEC
Reports”) on a timely basis or has received a valid
extension or waiver of such time of filing and has filed any such
SEC Reports prior to the expiration of any such extension. As of
their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the
Exchange Act, as applicable, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
Company has never been an issuer subject to Rule 144(i) under the
Securities Act. 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
United States generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”), , except as may
be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not
contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. The financial data set
forth in each of the SEC Reports fairly presents the information
set forth therein on a basis consistent with that of the audited
financial statements contained in the Company’s SEC
Reports.
(i) Material Changes; Undisclosed Events,
Liabilities or Developments. Since the date of the latest
financial statements included within the SEC Reports (i) there has
been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii)
the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or disclosed
in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared
or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the
Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company equity
incentive plans. The Company does not have pending before the
Commission any request for confidential treatment of information.
Other than as disclosed on other schedules to this Agreement and
except for the issuance of the Shares contemplated by this
Agreement, no event, liability, fact, circumstance, occurrence or
development has occurred or exists or is reasonably expected to
occur or exist with respect to the Company or its Subsidiaries or
their respective businesses, prospects, 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 Trading Day prior
to the date that this representation is made.
(j) Litigation. Except as disclosed
in the SEC Reports and/or Section 3(j) of the Disclosure Schedules,
there is no action, suit, inquiry, notice of violation, proceeding
or investigation, inquiry or other similar proceeding of any
federal or state government unit pending or, to the knowledge of
the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the issuance
of the Shares or (ii) could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse
Effect. The Company has no reason to believe that an Action will be
filed against it in the future. Neither the Company nor any
Subsidiary, nor any director or officer thereof, is or has been the
subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim for
fraud or breach of fiduciary duty. There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation or inquiry by the Commission involving the Company or
any current or former director or officer of the
Company.
(k) Labor Relations. No labor
dispute exists or, to the knowledge of the Company, is imminent
with respect to any of the employees of the Company, which could
reasonably be expected to result in a Material Adverse Effect. None
of the Company’s or its Subsidiaries’ employees is a
member of a union that relates to such employee’s
relationship with the Company or such Subsidiary, and neither the
Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the
knowledge of the Company, no effort is underway to unionize or
organize the employees of the Company or any Subsidiary. To the
knowledge of the Company, no executive officer of the Company or
any Subsidiary, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition
agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment
of each such executive officer does not subject the Company or any
of its Subsidiaries to any liability with respect to any of the
foregoing matters. The Company and its Subsidiaries are in
compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms
and conditions of employment and wages and hours, except where the
failure to be in compliance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. There is no workmen’s compensation liability matter,
employment-related charge, complaint, grievance, investigation,
inquiry or obligation of any kind pending, or to the
Company’s knowledge, threatened, relating to an alleged
violation or breach by the Company or its Subsidiaries of any law,
regulation or contract that could, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(l) Compliance. Neither the Company
nor any Subsidiary: (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company or
any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it
is in violation of, any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it
or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any judgment,
decree or order of any court, arbitrator or other governmental
authority or (iii) is or has been in violation of any statute,
rule, ordinance or regulation of any governmental authority,
including without limitation all foreign, federal, state and local
laws relating to taxes, environmental protection, occupational
health and safety, product quality and safety and employment and
labor matters, except in each case as could not have or reasonably
be expected to result in a Material Adverse Effect.
(m) 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 could be
reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect.
(n) Regulatory Permits. The Company
and each of its Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate regulatory
authorities necessary to conduct their respective businesses,
except where the failure to possess such certificates,
authorizations or permits would not have, individually or in the
aggregate, a Material Adverse Effect, and neither the Company nor
any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any such certificate,
authorization or permit. There is no agreement, commitment,
judgment, injunction, order or decree binding upon the Company or
any of its Subsidiaries or to which the Company or any of its
Subsidiaries is a party which has or would reasonably be expected
to have the effect of prohibiting or materially impairing any
business practice of the Company or any of its Subsidiaries, any
acquisition of property by the Company or any of its Subsidiaries
or the conduct of business by the Company or any of its
Subsidiaries as currently conducted other than such effects,
individually or in the aggregate, which have not had and would not
reasonably be expected to have a Material Adverse Effect on the
Company or any of its Subsidiaries.
(o) Title to Assets. Subject to the
Liens, the Company and the Subsidiaries have good and marketable
title in fee simple to all personal property owned by them that is
material to the business of the Company and the Subsidiaries. The
Company owns no real property. 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.
(p)
Intellectual
Property.
(i)
To the
Company’s knowledge, the Company owns or possesses or has the
right to use pursuant to a valid and enforceable written license,
sublicense, agreement, or permission all Intellectual Property
necessary for the operation of the business of the Company as
presently conducted.
(ii)
To the Company’s
knowledge, the Intellectual Property does not interfere with,
infringe upon, misappropriate, or otherwise come into conflict
with, any Intellectual Property rights of third parties, and the
Company has no knowledge that facts exist which indicate a
likelihood of the foregoing. The Company has not received any
charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or conflict
(including any claim that the Company must license or refrain from
using any Intellectual Property rights of any third party). To the
knowledge of the Company, no third party has interfered with,
infringed upon, misappropriated, or otherwise come into conflict
with, any Intellectual Property rights of the Company.
With
respect to each Licensed Intellectual Property
Agreement:
(A) The Licensed
Intellectual Property Agreement is legal, valid, binding,
enforceable, and in full force and effect;
(B) To the
Company’s knowledge, no party to the Licensed Intellectual
Property Agreement is in breach or default, and no event has
occurred that with notice or lapse of time would constitute a
breach or default or permit termination, modification, or
acceleration thereunder, which as to any such breach, default or
event could have a Material Adverse Effect on the
Company;
(C) No party to such
Licensed Intellectual Property Agreement has repudiated any
provision thereof;
(D) Except as set forth
in such Licensed Intellectual Property Agreement, the Company has
not received written or verbal notice or otherwise has knowledge
that the underlying item of Intellectual Property is subject to any
outstanding injunction, judgment, order, decree, ruling, or charge;
and
(E) Except as set forth
on Schedule
3.1(p)(iii), the Company has not granted any sublicense or
similar right with respect to the license, sublicense, agreement,
or permission.
(iv)
The Company has
complied with and is presently in compliance with all foreign,
federal, state, local, governmental (including, but not limited to,
the Federal Trade Commission and State Attorneys General),
administrative, or regulatory laws, regulations, guidelines, and
rules applicable to any personal identifiable
information.
(v) Each Person who participated
in the creation, conception, invention or development of the
Intellectual Property currently used in the business of the Company
(each, a “Developer”) which is not
licensed from third parties has executed one or more agreements
containing industry standard confidentiality, work for hire and
assignment provisions, whereby the Developer has assigned to the
Company all copyrights, patent rights, Intellectual Property rights
and other rights in the Intellectual Property, including all rights
in the Intellectual Property that existed prior to the assignment
of rights by such Person to the Company.
(vi)
Each Developer
has signed a perpetual non-disclosure agreement with the
Company.
(q) Insurance. Other than as
disclosed on Schedule
3.1(q), 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.
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 disclosed in the SEC Reports and
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 substantial interest or is an officer, director,
trustee, stockholder, member or partner, in each case in excess of
$120,000 other than for (i) payment of salary or consulting fees
for services rendered, (ii) reimbursement for expenses incurred on
behalf of the Company and (iii) other employee benefits, including
stock award agreements under any equity incentive plan of the
Company.
(s) Sarbanes-Oxley; Internal Accounting
Controls. The Company and the Subsidiaries are in compliance
with any and all applicable requirements of the Sarbanes-Oxley Act
of 2002 that are effective as of the date hereof, and any and all
applicable rules and regulations promulgated by the Commission
thereunder that are effective as of the date hereof and as of the
Closing Date. The Company and the Subsidiaries maintain a system of
internal accounting controls as set forth in the SEC Reports. The
Company’s certifying officers have evaluated the
effectiveness of the disclosure controls and procedures of the
Company and the Subsidiaries as of the end of the period covered by
the most recently filed periodic report under the Exchange Act
(such date, the “Evaluation Date”). The Company
presented in its most recently filed periodic report under the
Exchange Act the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on
their evaluations as of the Evaluation Date. Since the Evaluation
Date, there have been no changes in the internal control over
financial reporting (as such term is defined in the Exchange Act)
of the Company and its Subsidiaries that have materially affected,
or is reasonably likely to materially affect, the internal control
over financial reporting of the Company and its
Subsidiaries.
(t) Certain Fees. No brokerage or
finder’s fees or commissions are or will be payable by the
Company or any Subsidiary to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or
other Person with respect to the transactions contemplated by the
Transaction Documents. The Purchaser 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 by the Company 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 Shares,
will not be required to register as an “investment
company” under the Investment Company Act
|
10
|
of
1940, as amended. The Company shall conduct its business in a
manner so that it will not become an “investment
company” subject to registration under the Investment Company
Act of 1940, as amended.
(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 Common Stock is 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. The Company has not, in the 12 months preceding the
date hereof, received notice from any Trading Market on which the
Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is and has no
reason to believe that it will not in the foreseeable future
continue to be, in compliance with all such listing and maintenance
requirements. 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 and the Board of Directors have
taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become
applicable to the Purchaser as a result of the Purchaser 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 Shares and the
Purchaser’s ownership of the Shares.
(y) Disclosure. Except with respect
to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has
provided the Purchaser or its agent or counsel with any information
that it believes constitutes or might constitute material,
non-public information which has not otherwise been disclosed. The
Company understands and confirms that the Purchaser will rely on
the foregoing representation in effecting transactions in
securities of the Company. All of the disclosure furnished by or on
behalf of the Company to the Purchaser regarding the Company and
its Subsidiaries, their respective businesses and the transactions
contemplated hereby, including the Disclosure Schedules to this
Agreement, is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of
the circumstances under which they were made not misleading. The
press releases disseminated by the Company during the 12 months
preceding the date of this Agreement do not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made and when made, not misleading. The Company acknowledges
and agrees that the Purchaser has not made or makes any
representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this
Agreement.
(z) No Integrated Offering.
Assuming the accuracy of the Purchaser’s representations and
warranties, 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 Shares 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.
(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 Shares hereunder, (i) 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 (ii) 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 in excess of $50,000 (other than
trade accounts payable incurred in the ordinary course of
business), (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not
the same are or should be reflected in the Company’s
consolidated balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business; and (z) the present value of any lease payments in excess
of $50,000 due under leases required to be capitalized in
accordance with GAAP. Neither the Company nor any Subsidiary is in
default with respect to any Indebtedness.
(bb)
Tax Status. The
Company and each of its Subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed
and paid all taxes shown thereon through the date hereof, to the
extent that such taxes have become due and are not being contested
in good faith, except where the failure to so file or pay would not
have a Material Adverse Effect. No tax deficiency has been
determined adversely to the Company or any of its Subsidiaries
which has had, or would have, individually or in the aggregate, a
Material Adverse Effect. The Company has no knowledge of any
federal, state or other governmental tax deficiency, penalty or
assessment which has been or might be asserted or threatened
against it which would have a Material Adverse Effect
(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 or any Subsidiary, has (i)
directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign
or domestic political activity, (ii) made any unlawful payment to
foreign or domestic 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 any provision of FCPA.
(dd)
Accountants. The
Company’s accounting firm is set forth in the SEC Reports. To
the knowledge and belief of the Company, such accounting firm (i)
is a registered public accounting firm registered with the Public
Company Accounting Oversight Board as required by the Exchange Act
and (ii) will express its opinion with respect to the financial
statements included in the Company’s Annual Report for the
fiscal year ending June 30, 2020.
(ee)
Acknowledgment Regarding
Purchaser’s Purchase of Shares. The Company
acknowledges and agrees that the Purchaser 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 the Purchaser is not 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 the
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 Purchaser’s
purchase of the Shares. The Company further represents to the
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)
Acknowledgement Regarding
Purchaser’s Trading Activity. Notwithstanding anything
in this Agreement or elsewhere to the contrary (except for Sections
3.2(f) and 4.10 hereof), it is understood and acknowledged by the
Company that: (i) the Purchaser has not been asked by the Company
to agree, nor has the Purchaser agreed, to desist from purchasing
or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by
the Company or to hold the Shares for any specified term; (ii) past
or future open market or other transactions by the 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) the Purchaser, and counter-parties in
“derivative” transactions to which the Purchaser is a
party, directly or indirectly, presently may have a
“short” position in the Common Stock, and (iv) the
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) the Purchaser may engage in
hedging activities at various
times
during the period that the Shares are outstanding, including,
without limitation, during the periods that the value of the Shares
deliverable with respect to Shares are being determined, and (z)
such hedging activities (if any) could reduce the value of the
existing stockholders’ equity interests in the Company at and
after the time that the hedging activities are being conducted. The
Company acknowledges that such aforementioned hedging activities do
not constitute a breach of any of the Transaction
Documents.
(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, (ii) sold, bid
for, purchased, or, paid any compensation for soliciting purchases
of, any of the Shares, or (iii) paid or agreed to pay to any Person
any compensation for soliciting another to purchase any other
securities of the Company.
(hh)
Office of Foreign Assets
Control. Neither the Company nor any Subsidiary nor, to the
Company's knowledge, any director, officer, agent, employee or
affiliate of the Company or any Subsidiary is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”).
(ii)
U.S. Real Property Holding
Corporation. The Company is not and has never been
a
U.S.
real property holding corporation within the meaning of Section 897
of the Internal Revenue Code of 1986, as amended, and the Company
shall so certify upon Purchaser’s request.
(jj)
Bank Holding Company
Act. Neither the Company nor any of its Subsidiaries or
Affiliates is subject to the Bank Holding Company Act of 1956, as
amended (the “BHCA”) and to regulation
by the Board of Governors of the Federal Reserve System (the
“Federal
Reserve”). Neither the Company nor any of its
Subsidiaries or Affiliates owns or controls, directly or
indirectly, five percent (5%) or more of the outstanding shares of
any class of voting securities or twenty-five percent or more of
the total equity of a bank or any entity that is subject to the
BHCA and to regulation by the Federal Reserve. Neither the Company
nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity
that is subject to the BHCA and to regulation by the Federal
Reserve.
(kk)
Money Laundering.
The operations of the Company and its Subsidiaries are and have
been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations
thereunder (collectively, the “Money Laundering Laws”),
and no Action 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.
Representations and Warranties of the
Purchaser. The Purchaser hereby represents and warrants as
of the date hereof and as of the applicable Closing Date to the
Company as follows (unless as of a specific date
therein):
(a) Organization; Authority. The
Purchaser is either an individual or an entity duly incorporated or
formed, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of
this Agreement and performance by the Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all
necessary corporate, partnership, limited liability company or
similar action, as applicable, on the part of the Purchaser. Each
Transaction Document to which it is a party has been duly executed
by the Purchaser, and when delivered by the Purchaser in accordance
with the terms hereof, will constitute the valid and legally
binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
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(b) Understandings or Arrangements.
The Purchaser is acquiring the Shares 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 Shares (this representation and warranty not limiting the
Purchaser’s right to sell the Shares in compliance with
applicable U.S. federal and state securities laws). The Purchaser
is acquiring such Shares as principal for his, her or its own
account and not with a view to or for distributing or reselling
such Shares or any part thereof in violation of the Securities Act
or any applicable state securities law, has no present intention of
distributing any of such Shares in violation of the Securities Act
or any applicable state securities law and has no direct or
indirect arrangement or understandings with any other persons to
distribute or regarding the distribution of such Shares in
violation of the Securities Act or any applicable state securities
law (this representation and warranty not limiting the
Purchaser’s right to sell such Shares pursuant to a
registration statement or otherwise in compliance with applicable
federal and state securities laws).
(c) Purchaser Status. At the time
the Purchaser was offered the Shares, it was, and as of the date
hereof it is, outside the United States or an institutional
accredited investor within the meaning of Rule 501(a)(1), (2), (3)
or (7) under the Securities Act.
(d) Experience of the Purchaser.
The 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 Shares, and has so
evaluated the merits and risks of such investment. The Purchaser
can bear the economic risk of an investment in the Shares and, at
the present time, is able to afford a complete loss of such
investment.
(e) Access to Information. The
Purchaser acknowledges that it has had the opportunity to review
the Transaction Documents (including all exhibits and schedules
thereto) and of the SEC Reports.
(f) Certain Transactions and
Confidentiality. Other than consummating the transactions
contemplated hereunder, the Purchaser has not, nor has any Person
acting on behalf of or pursuant to any understanding with the
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 the Purchaser first received
a term sheet (written or oral) from the Company or any other Person
representing the Company setting forth the material terms of the
transactions contemplated hereunder and ending immediately prior to
the execution hereof. Notwithstanding the foregoing, in the case of
a Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of the
Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio
managers managing other portions of the 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 Shares covered by this
Agreement. Other than to other Persons party to this Agreement or
to the Purchaser’s representatives, including, without
limitation, its officers, directors, partners, legal and other
advisors, employees, agents and Affiliates, the Purchaser has
maintained the confidentiality of all disclosures made to it in
connection with this transaction (including the existence and terms
of this transaction). Notwithstanding the foregoing, for avoidance
of doubt, nothing contained herein shall constitute a
representation or warranty, or preclude any actions, with respect
to the identification of the availability of, or securing of,
available shares to borrow in order to effect Short Sales or
similar transactions in the future.
The
Company acknowledges and agrees that the representations contained
in this Agreement shall not modify, amend or affect the
Purchaser’s right to rely on the Company’s
representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction
Document or any other document or instrument executed and/or
delivered in connection with this Agreement or the consummation of
the transaction contemplated hereby.
OTHER
AGREEMENTS OF THE PARTIES
Furnishing of Information.
Until the Purchaser owns no Shares, the Company covenants to timely
file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act even if
the Company is not then subject to the reporting requirements of
the Exchange Act. At any time during the period commencing from the
six month anniversary of the date hereof and ending at such time as
the Shares are no longer held by the Purchaser,
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if the
Company (i) shall fail for any reason to satisfy the current public
information requirement under Rule 144(c) for a period of more than
30 consecutive days or (ii) has ever been an issuer described in
Rule 144(i)(1)(i) or becomes an issuer in the future, and the
Company shall fail to satisfy any condition set forth in Rule
144(i)(2) for a period of more than 30 consecutive days (a
“Public Information
Failure”) then, in addition to the Purchaser’s
other available remedies, the Company shall pay to the Purchaser,
in cash, as partial liquidated damages and not as a penalty, by
reason of any such delay in or reduction of its ability to sell the
Shares, an amount in cash equal to two percent of the aggregate
Subscription Amount of the Purchaser’s Shares (still then
held by the Purchaser) on the day of a Public Information Failure
and on every 30th day (pro-rated for
periods totaling less than thirty days) thereafter until the
earlier of (a) the date such Public Information Failure is cured
and (b) such time that such public information is no longer
required for the Purchasers to transfer the Shares pursuant to Rule
144. Public Information Failure payments shall be paid on the
earlier of (i) the last day of the calendar month during which such
Public Information Failure payments are incurred and (ii) the
second Trading Day after the event or failure giving rise to the
Public Information Failure payments is cured. In the event the
Company fails to make Public Information Failure payments in a
timely manner, such Public Information Failure payments shall bear
interest at the rate of one and one-half percent per month
(prorated for partial months) until paid in full. Nothing herein
shall limit the Purchaser’s right to pursue actual damages
for the Public Information Failure, and the Purchaser shall have
the right to pursue all remedies available to it at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief.
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(a)(1)
of the Securities Act) that would be integrated with the offer or
sale of the Shares 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.
Securities Laws Disclosure;
Publicity. The Company shall, by 5:30 p.m. (New York City
time) on the second trading date following the date of execution
hereof, file a Current Report on Form 8-K disclosing the material
terms of this Agreement, including the Transaction Documents as
exhibits thereto, with the Commission within the time required by
the Exchange Act. From and after the filing of the Form 8-K as
provided in the preceding sentence, the Company represents to the
Purchaser that it shall have publicly disclosed all material,
non-public information delivered to the Purchaser by the Company or
any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents. In addition, effective
upon the issuance of such Form 8-K, 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, agents, employees or Affiliates on the one hand, and the
Purchaser or any of their Affiliates on the other hand, shall
terminate. The Company and the Purchaser shall consult with each
other in issuing any press releases with respect to the
transactions contemplated hereby, and neither the Company nor the
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 the Purchaser, or without the
prior consent of the 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 the Purchaser, or include the name of the
Purchaser in any filing with the Commission or any regulatory
agency or Trading Market, without the prior written consent of the
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 Purchaser with prior notice of such disclosure
permitted under this clause (b).
Stockholder Rights Plan. No
claim will be made or enforced by the Company or, with the consent
of the Company, any other Person, that the 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 the Purchaser
could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Shares under the Transaction
Documents or under any other agreement between the Company and the
Purchaser.
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 this Section and except as permitted under
Section 4.11, the Company covenants and agrees that neither it, nor
any other Person acting on its behalf will provide the Purchaser or
its agents or counsel with any information that constitutes,
or
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the
Company reasonably believes constitutes, material non-public
information, unless prior thereto the Purchaser shall have
consented to the receipt of such information and agreed with the
Company to keep such information confidential. Prior to providing
the Purchaser with any material non-public information, the Company
shall provide the Purchaser with a consent substantially in the
form attached as Exhibit
C (“Consent”) which shall not
include any material non-public information. The Company shall not
provide the Purchaser with the material non- public information if
the Purchaser does not execute and return the Consent to the
Company. The Company understands and confirms that the Purchaser
shall be relying on the foregoing covenant in effecting
transactions in securities of the Company. To the extent that the
Company delivers any material, non-public information to a
Purchaser without the Purchaser’s consent, the Company hereby
covenants and agrees that the Purchaser shall not have any duty of
confidentiality to the Company, any of its Subsidiaries, or any of
their respective officers, directors, agents, 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 or any other communications made by the
Company, or information provided, to the Purchaser constitutes, or
contains, material, non-public information regarding the Company or
any Subsidiaries, the Company shall simultaneously file such notice
or other material information with the Commission pursuant to a
Current Report on Form 8-K. The Company understands and confirms
that the Purchaser shall be relying on the foregoing covenant in
effecting transactions in securities of the Company. In addition to
any other remedies provided by this Agreement or other Transaction
Documents, if the Company knowingly provides any material,
non-public information to the Purchaser without its prior written
consent, and it fails to immediately (no later than that Trading
Day) file a Form 8-K disclosing this material, non-public
information, it shall pay the Purchaser as partial liquidated
damages and not as a penalty $5,000 per day beginning with the day
the information is disclosed to the Purchaser and ending and
including the day the Form 8-K disclosing this information is
filed. By 9:00 am New York, NY time on the Trading Day following
the Closing Date, the Company shall file a Current Report on Form
8-K disclosing the purchase of the Shares.
Use of Proceeds. The Company
shall use the net proceeds from the sale of the Shares hereunder to
pay the initial application fee and annual fee for the OTCQB and
the remainder for working capital purposes, and shall not use such
proceeds: (a) for the satisfaction of any Indebtedness as in the
Transaction Documents, (b) for the redemption of any Common Stock
or Common Stock Equivalents, (c) in violation of FCPA or OFAC
regulations, or (d) to lend money, give credit, or make advances to
any officers, directors, employees or affiliates of the
Company.
Indemnification of Purchaser.
Subject to the provisions of this Section, the Company will
indemnify and hold the Purchaser and its directors, officers,
stockholders, members, partners, employees and agents (and any
other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any
other title), each Person who controls the 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 attorneys’ fees
and costs of investigation (including local counsel, if retained)
that any the 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, (b) any action
instituted against the Purchaser Parties in any capacity, or any of
them or their respective Affiliates, by any stockholder of the
Company who is not an Affiliate of the Purchaser Party, with
respect to any of the transactions contemplated by the Transaction
Documents (unless such action is solely based upon a breach of the
Purchaser Party’s representations, warranties or covenants
under the Transaction Documents or any agreements or understandings
the Purchaser Party may have with any such stockholder or any
violations by the Purchaser Party of state or federal securities
laws or any conduct by the Purchaser Party which constitutes fraud,
gross negligence, willful misconduct or malfeasance) or (c) any
untrue or alleged untrue statement of a material fact contained in
any registration statement, any prospectus or any form of
prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the
case of any prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading. If any
action shall be brought against the Purchaser Party in respect of
which indemnity may be sought pursuant to this Agreement, the
Purchaser Party shall promptly notify the Company in writing, and
the Company shall have the right to assume the defense thereof with
counsel of its own choosing reasonably acceptable to the Purchaser
Party. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense
of the Purchaser Party except to the extent that (i)
the
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employment thereof
has been specifically authorized by the Company in writing, (ii)
the Company has failed after a reasonable period of time to assume
such defense and to employ counsel or (iii) in such action there
is, in the reasonable opinion of counsel, a material conflict on
any material issue between the position of the Company and the
position of the Purchaser Party, in which case the Company shall be
responsible for the reasonable fees and expenses of no more than
one such separate counsel (in addition to local counsel, if
retained). The Company will not be liable to the Purchaser Party
under this Agreement (y) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which
shall not be unreasonably withheld or delayed; or (z) to the
extent, but only to the extent that a loss, claim, damage or
liability is attributable to the Purchaser Party’s breach of
any of the representations, warranties, covenants or agreements
made by the Purchaser Party in this Agreement or in the other
Transaction Documents. The Purchaser Parties shall have the right
to settle any action against any of them by the payment of money
provided that they cannot agree to any equitable relief and the
Company, its officers, directors and Affiliates receive
unconditional releases in customary form. The indemnification
required by this Section 4.7 shall be made by periodic payments of
the amount thereof during the investigation or defense, as and when
bills are received or are incurred. The indemnity agreements
contained herein shall be in addition to any cause of action or
similar right of the Purchaser Party against the Company or others
and any liabilities the Company may be subject to pursuant to
law.
Listing or quotation of Common
Stock. The Company hereby agrees to use best efforts to
maintain the listing or quotation of the Common Stock on the
Trading Market on which it is currently listed or quoted. 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 will take such other action
as is necessary to cause all of the Shares to be listed or quoted
on such other Trading Market as promptly as possible. The Company
will then take all action necessary to continue the listing or
quotation and trading of its Common Stock on a Trading Market and
will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the
Trading Market. The Company agrees 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.
Equal Treatment of Purchasers.
No consideration (including any modification of any Transaction
Document) shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of the
Transaction Documents unless the same consideration is also offered
to all of the parties to such Transaction Document. 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 Shares or
otherwise.
Certain Transactions and
Confidentiality. The Purchaser 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 press release as described in
Section 4.3 (the “Press Release”). The
Purchaser covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the
Company pursuant to the Press Release, the 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) the Purchaser does not make 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 Press Release, (ii) the
Purchaser shall not 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 Press Release and (iii) the Purchaser
shall not 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. Notwithstanding
the foregoing, in the case of a Purchaser, if applicable, that is a
multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of the Purchaser’s assets
and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other
portions of the 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 Shares covered by this Agreement.
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Maintenance of Property. The
Company shall keep all of its property necessary for the operations
of its business, which is necessary or useful to the conduct of its
business, in good working order and condition, ordinary wear and
tear excepted.
Preservation of Corporate
Existence. The Company shall preserve and maintain its
corporate existence, rights, privileges and franchises in the
jurisdiction of its incorporation, and qualify and remain
qualified, as a foreign corporation in each jurisdiction in which
such qualification is necessary in view of its business or
operations and where the failure to qualify or remain qualified
might reasonably have a Material Adverse Effect upon the financial
condition, business or operations of the Company taken as a
whole.
Subsequent Issuances. From a
period of 45 days from the date hereof, the Company shall
not
(i) issue or sell any
Common Stock or Common Stock Equivalent for cash at an effective
price per share that is lower than the Per Share Purchase Price,
nor (ii) issue any securities under the Registration
Statement.
MISCELLANEOUS
Termination. This Agreement may
be terminated by the Purchaser by written notice to the other
parties, if the Closing Date has not been consummated on or before
the fourth 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).
Fees and Expenses. Except as
expressly set forth below and 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
Purchaser. The Company shall pay the legal fees of the Purchaser up
to $10,000. The Purchaser may withhold this amount from its
Subscription Amount.
Entire Agreement. The
Transaction Documents, together with the exhibits and schedules
thereto, 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.
Notices. Any and all notices or
other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given
and effective on the earliest of: (a) the date of transmission, if
such notice or communication is delivered by 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 date of transmission, if
such notice or communication is delivered via 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 Trading Day
following the date of transmission, if sent by U.S. nationally
recognized overnight delivery 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, or
which failure to do so will subject the Company to the liquidated
damages provided for in Section 4.5.
Amendments; Waivers. Except as
provided in the last sentence of this Section 5.5, 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 Purchaser or, in the case of a waiver, by the
party against whom enforcement of any such waived provision is
sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of
any such right. Any amendment effected in accordance with
accordance with this Section 5.5 shall be binding upon the
Purchaser and holder of Securities and the Company.
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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.
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 the Purchaser. Each Purchaser
may assign any or all of its rights under this Agreement to any
Person to whom the 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 Purchaser.
No Third-Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto
and their respective successors and permitted assigns and is not
for the benefit of, nor may any provision hereof be enforced by,
any other Person, except as otherwise set forth in Section 4.7 and
this Section 5.8.
Governing Law; Exclusive Jurisdiction;
Attorneys’ Fees. 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 New York County, New York. Each
party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the New York County, New
York 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 Action or Proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such
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
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 any party shall
commence an Action or Proceeding to enforce any provisions of the
Transaction Documents, then, in addition to the obligations of the
Company elsewhere in this Agreement, the prevailing party in such
Action or Proceeding shall be reimbursed by the non-prevailing
party for its reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and
prosecution of such Action or Proceeding.
Survival. The representations
and warranties contained herein shall survive the Closing and the
delivery of the Shares.
Execution. This Agreement may
be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party
and delivered to each other party, it being understood that the
parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission or by e-mail
delivery of a “.pdf' format data file, such signature shall
create a valid and binding obligation of the party executing (or on
whose behalf such signature is executed) with the same force and
effect as if such facsimile or “.pdf' signature page were an
original thereof.
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.
Rescission and Withdrawal
Right. Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) any of the other
Transaction Documents, whenever the Purchaser
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exercises a right,
election, demand or option under a Transaction Document and the
Company does not timely perform its related obligations within the
periods therein provided, then that Purchaser may rescind or
withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and
rights.
Replacement
of Shares. If any certificate or instrument evidencing any
Shares is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and
upon cancellation thereof (in the case of mutilation), or in lieu
of and substitution therefor, a new certificate or instrument, but
only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction without requiring the
posting of any bond.
Remedies. In addition to being
entitled to exercise all rights provided herein or granted by law,
including recovery of damages, the Purchaser 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.
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.
Construction. The parties agree
that each of them and/or their respective counsel have reviewed and
had an opportunity to revise the Transaction Documents and,
therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not
be employed in the interpretation of the Transaction Documents or
any amendments thereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document
shall be subject to adjustment for reverse and forward stock
splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this
Agreement.
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 waive
forever trial by jury.
Non-Circumvention. The Company
hereby covenants and agrees that the Company will not, by amendment
of its constitution or through any reorganization, transfer of
assets, consolidation, merger, scheme of arrangement, 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 Agreement, and will at all times in good faith carry out
all of the provision of this Agreement and take all action as may
be required to protect the rights of all holders of the
Shares.
Liquidated Damages. The
Company’s obligations to pay any partial liquidated damages
or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until
all unpaid partial liquidated damages and other amounts have been
paid notwithstanding the fact that the instrument or security
pursuant to which such partial liquidated damages or other amounts
are due and payable shall have been canceled.
(Signature Pages
Follow)
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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.
VISIUM TECHNOLOGIES, INC.
Address for Notice:
4094 Majestic Ln Suite 360
Fairfax, VA
22033
By: /s/ Mark Lucky
Mark
Lucky
Chief
Executive Officer
Email:
_mlucky@visiumtechnologies.com
[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK SIGNATURE PAGE FOR PURCHASER
FOLLOWS]
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PURCHASER SIGNATURE
PAGE 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: Mercer
Street Global Opportunity Fund LLC
Signature of Authorized Signatory of
Purchaser:
Name of Authorized
Signatory:
Jonathan
Juchno
Title of Authorized
Signatory:
Email
Address of Authorized Signatory: jjuchno@mercerstcap.com Address
for Notice to Purchaser:
Address
for Delivery of Securities to Purchaser (if not same as address for
notice):
Subscription
Amount: US$750,000
US Employer
Identification Number (if any):
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Purchaser Signature
Page
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