Exhibit 10.1
SECURITIES
PURCHASE AGREEMENT
This Securities Purchase
Agreement (this “Agreement”) is dated as of September 11, 2018, between CASI Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively the “Purchasers”).
WHEREAS, subject to
the terms and conditions set forth in this Agreement, the Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE
I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:
“Action”
shall have the meaning ascribed to such term in Section 3.1(h).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than
the second Trading Day or such later date as the parties may agree following the date hereof.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
“Company
Counsel” means Arnold & Porter, with offices located at 601 Massachusetts Avenue, N.W., Washington, D.C. 20001.
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(m).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(f).
“Information”
shall have the meaning ascribed to such term in Section 3.2(i).
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(l).
“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).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(j).
“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), whether commenced or threatened.
“Prohibited
Purchaser” shall have the meaning ascribed to such term in Section 3.2(m).
“Registrable
Securities” shall have the meaning ascribed to such term in Section 4.1(a).
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Resale
Registration Statement” shall have the meaning ascribed to such term in Section 4.1(a).
“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(f).
“Securities”
means the Shares, the Warrants and the Warrant Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include locating and/or borrowing shares of Common Stock).
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares and Warrants purchased hereunder as specified
below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.
“Subsidiary”
means any subsidiary of the Company as set forth in the SEC Reports, and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
“Suspension”
shall have the meaning ascribed to such term in Section 4.1(e).
“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 or
the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Warrants, all exhibits and schedules thereto and hereto and any other documents
or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means American Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing address
of 6201 15th Avenue, Brooklyn, NY 11219 and a facsimile number of 718-765-8712, and any successor transfer agent of
the Company.
“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a)
hereof, which Warrants shall be exercisable 180 days following the issue date and have a term of exercise equal to three years
from the issue date, in the form of Exhibit A attached hereto.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
ARTICLE
II.
PURCHASE AND
SALE
2.1 Closing.
The Company will hold one or more closing (each such date, a “Closing Date”). On the Closing Date, upon the
terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, up to an aggregate of $[___________] of Shares and Warrants. The Shares and Warrants will be sold together.
Each one share of Common Stock shall entitle a Purchaser to purchase a Warrant to purchase 0.3 shares of Common Stock. Each Purchaser
shall deliver to the Company, via wire transfer of immediately available funds, the amount equal to the Subscription Amount as
set forth on the signature page hereto executed by such Purchaser and the Company shall deliver to such Purchaser its Shares and
a Warrant as determined pursuant to Sections 2.2(a)(ii), and the Company and such Purchaser shall deliver the other items set forth
in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3,
the Closing shall occur at the offices of Company Counsel or such other location as the parties shall mutually agree.
2.2 Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i) this
Agreement duly executed by the Company; and
(ii) a
Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 30% of such Purchaser’s
Shares, with an exercise price equal to $[____], subject to adjustment therein; and
(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:
(i) this
Agreement duly executed by such Purchaser;
(ii) a
fully completed and duly executed Selling Stockholder Questionnaire in the form attached as Annex A to this Agreement; and
(iii) such
Purchaser’s Subscription Amount by wire transfer to the account as specified in writing by the Company or by delivery of
immediately available funds.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as
of a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been
performed; and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being
met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein
(unless as of a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement; and
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as otherwise described in the Company’s SEC Reports, the Company hereby represents
and warrants to, and covenants with, the Purchasers as of the date hereof, as follows:
(a) Subsidiaries.
The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear
of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries,
all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
(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; Validity of the Shares. 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. The Shares to be issued to each Purchaser
under this Agreement will be validly issued, fully paid and non-assessable and will be free of Liens. This Agreement and each other
Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered
in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any
of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution
or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company
or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii)
subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal
and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected;
except in the case of each of clauses (ii) and (iii), such as 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)
such filings as are required to be made under applicable federal and state securities laws and (ii) application(s) to the applicable
Trading Market for the listing of the Shares and Warrant Shares for trading thereon in the time and manner required thereby (collectively,
the “Required Approvals”).
(f) 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 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.
(g) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as disclosed in 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, and (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. Except for the issuance of the Securities contemplated by
this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected
to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, 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 1 Trading Day prior to the date that this
representation is made.
(h) Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been,
and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company
or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities
Act.
(i) 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.
(j) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation
or modification of any Material Permit.
(k) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries, and (ii) Liens
for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP
and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by
the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance.
(l) Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports
and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual
Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2)
years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited
financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual
Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have
a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is
no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except
where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The
Company has no knowledge of any facts that would preclude it from having valid license rights or clear title to the Intellectual
Property Rights. The Company has no knowledge that it lacks or will be unable to obtain any rights or licenses to use all Intellectual
Property Rights that are necessary to conduct its business.
(m) 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 sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of
the period covered by the most recently filed 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.
(n) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will
not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as
amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject
to registration under the Investment Company Act of 1940, as amended.
(o) 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.
(p) 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.
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as
of the date hereof to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of
such date):
(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability
company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and
performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary
corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies, and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.
(b) Understandings
or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect
arrangement or understandings with any other Person to distribute or regarding the distribution of such Securities (this representation
and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise
in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary
course of its business.
(c) No
Registration. Purchaser understands that the Securities have not been registered under the Securities Act, by reason of a specific
exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Purchaser’s representations as expressed herein. Purchaser understands that
the Securities are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant
to these laws, Purchaser must hold the Securities indefinitely unless they are registered with the Commission and qualified by
state authorities, or an exemption from such registration and qualification requirements is available. Purchaser further acknowledges
that if an exemption from registration or qualification is available, it may be conditioned on various requirements including,
but not limited to, the time and manner of sale, the holding period for the Securities, and on requirements relating to the Company
which are outside of Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.
(d) No
Public Market. Purchaser understands that no public market now exists for the Warrants, and that the Company has made no assurances
that a public market will ever exist for the Warrants.
(e) Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on
which it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2),
(a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a)
under the Securities Act.
(f) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
(g) General
Solicitation. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or communication
regarding the Securities published in any newspaper, magaize or similar media or broadcast over television or radio or presented
at any seminar or any other general advertisement.
(h) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it
has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company
and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate
its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Such
Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with respect
to its acquisition of the Securities.
(i) Company
Reliance. Such Purchaser acknowledges that (i) the Company is relying on the Purchaser’s representations, warranties,
acknowledgments and agreements in this Agreement as a condition to proceeding with the transactions contemplated by this Agreement;
and (ii) without such representations, warranties and agreements, the Company would not enter into this Agreement or engage in
the transactions contemplated by this Agreement.
(j) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not,
nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any
purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that
such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting
forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Other
than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its
officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality
of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding
the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a
prohibition of, any actions with respect to the borrowing of, arrangement to borrow, identification of the availability of, and/or
securing of, securities of the Company in order for such Purchaser (or its broker or other financial representative) to effect
Short Sales or similar transactions in the future.
(k) Prohibited
Purchaser. Such Purchaser represents that neither it nor, to its knowledge, any person or entity controlling, controlled by
or under common control with it, nor any person having a beneficial interest in it, nor any person on whose behalf the Purchaser
is acting: (i) is a person listed in the Annex to Executive Order No. 13224 (2001) issued by the President of the United States
(Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism);
(ii) is named on the List of Specially Designated Nationals and Blocked Persons maintained by the U.S. Office of Foreign Assets
Control; (iii) is a non-U.S. shell bank or is providing banking services indirectly to a non-U.S. shell bank; (iv) is a senior
non-U.S. political figure or an immediate family member or close associate of such figure; or (v) is otherwise prohibited from
investing in the Company pursuant to applicable U.S. anti-money laundering, anti-terrorist and asset control laws, regulations,
rules or orders (categories (i) through (v), each a “Prohibited Purchaser”). Such Purchaser agrees to provide
the Company, promptly upon request, all information that the Company reasonably deems necessary or appropriate to comply with applicable
U.S. anti-money laundering, anti-terrorist and asset control laws, regulations, rules and orders. Such Purchaser consents to the
disclosure to U.S. regulators and law enforcement authorities by the Company and its Affiliates and agents of such information
about such Purchaser as the Company reasonably deems necessary or appropriate to comply with applicable U.S. antimony laundering,
anti-terrorist and asset control laws, regulations, rules and orders. If such Purchaser is a financial institution that is subject
to the USA Patriot Act, such Purchaser represents that it has met all of its obligations under the USA Patriot Act. Such Purchaser
acknowledges that if, following its investment in the Company, the Company reasonably believes that such Purchaser is a Prohibited
Purchaser, the Company has the right or may be obligated to prohibit additional investments, segregate the assets constituting
the investment in accordance with applicable regulations or immediately require such Purchaser to transfer the Shares. Such Purchaser
further acknowledges that such Purchaser will have no claim against the Company or any of its Affiliates or agents for any form
of damages as a result of any of the foregoing actions.
(l) Restrictive
Legends. Purchaser understands that the Securities issued upon exercise of the Warrants, may bear one or all of the following
legends (or substantially similar legends), unless and until the Shares and the Warrant Shares are registered under the Securities
Act pursuant to an effective registration statement:
| i. | “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.” |
| ii. | Any legend required by the securities laws of any state to the extent such laws are applicable
to the Securities represented by the certificate so legended. |
(m) No
Other Representations. Such Purchaser acknowledges and agrees that no party to this Agreement has made or makes any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Article III
and that, except as otherwise provided herein, such Purchaser has not relied on the accuracy or completeness of any information
not contained in the Transaction Documents.
ARTICLE
IV.
OTHER AGREEMENTS
OF THE PARTIES
4.1 Registration
Rights.
(a) Within
120 days after Closing, the Company shall prepare and file with the Commission a registration statement on Form S-3 (or such other
form if, at such time, the Company is not eligible to utilize such Form S-3) covering the resale of all of the Registrable Securities
from time to time on a continuous basis pursuant to Rule 415 of the Securities Act (the “Resale Registration Statement”).
For purposes of this Section 4.1, “Registrable Securities” shall mean the Securities and any shares of Common
Stock issuable with respect to the Securities by way of a stock dividend, stock split or other distribution, or in connection with
a combination of shares, recapitalization, merger, consolidation or other reorganization; provided that such Registrable
Securities shall cease to be Registrable Securities when (i) a registration statement covering such securities has been declared
effective by the Commission and such securities have been disposed of pursuant to such effective registration statement, (ii) such
securities have been sold under circumstances in which all of the applicable conditions of Rule 144 (or any similar provisions
then in force) under the Securities Act were met,(iii) such securities are otherwise transferred and such securities may be resold
without subsequent registration under the Securities Act, or (iv) such securities shall have ceased to be outstanding.
(b) Not
less than five (5) Trading Days prior to the initial filing of the Resale Registration Statement and not less than three (3) Trading
Days prior to the filing of any related prospectus or any amendment or supplement thereto, the Company shall (i) furnish to
the Purchaser copies of all such documents proposed to be filed, which documents will be subject to the review and reasonable comments
of the Purchaser, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to
any inquiries from the Purchaser and its advisors; provided, however, that no Purchaser shall have the right to review and
comment on any amendment or supplement that does not materially impact such Purchaser.
(c) At
least five (5) Trading Days prior to the anticipated filing date of the Registration Statement, the Company will notify each Purchaser
of the information the Company requires from that Purchaser other than the information contained in the Selling Stockholder Questionnaire,
if any, which shall be completed and delivered to the Company promptly upon request and, in any event, within one (1) Trading Day
prior to the applicable anticipated filing date. Each Purchaser further agrees that it shall not be entitled to be named as a selling
stockholder in the Resale Registration Statement or use the prospectus in the Resale Registration Statement for offers and resales
of Registrable Securities at any time, unless such Purchaser has returned to the Company a completed and signed Selling Stockholder
Questionnaire and a response to any reasonable requests for further information as described in the previous sentence. If a Purchaser
returns a Selling Stockholder Questionnaire or a request for further information, in either case, after its respective deadline,
the Company shall use its commercially reasonable efforts to take such actions as are required to name such Purchaser as a selling
stockholder in the Resale Registration Statement or any pre-effective or post-effective amendment thereto and to include (to the
extent not theretofore included) in the Resale Registration Statement the Registrable Securities identified in such late Selling
Stockholder Questionnaire or request for further information. Each Purchaser acknowledges and agrees that the information in the
Selling Stockholder Questionnaire or request for further information as described in this Section 4.1(c) will be used by the Company
in the preparation of the Resale Registration Statement and hereby consents to the inclusion of such information in the Resale
Registration Statement.
(d) Upon
filing the Resale Registration Statement, provided no Suspension (as defined below) exists, the Company shall use its commercially
reasonable efforts to cause such Resale Registration Statement to be declared effective by the Commission as soon as practicable
thereafter, including the filing of amendments and post-effective amendments and supplements to such Resale Registration Statement.
The Company shall otherwise comply with all rules and regulations of the Commission and other governmental and regulatory authorities
applicable to the registration of such Registrable Securities and the effectiveness of the Resale Registration Statement.
(e) The
Company shall maintain the effectiveness of such Resale Registration Statement and shall comply with its other obligations under
this Section 4.1 until the earlier to occur of (i) such time as the Purchaser owns no Registrable Securities and (ii) such
time as the Registrable Securities may be resold by the Purchaser pursuant to Rule 144 of the Securities Act without the requirement
for the Company to be in compliance with the current public information required under such Rule and without volume or manner-of-sale
restrictions. The Company shall promptly notify the Purchaser (which notice shall, pursuant to clauses (iii) through (vi) hereof,
be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as
reasonably possible of the following events: (i) with respect to a Registration Statement or any post-effective amendment, when
the same has become effective, (ii) receipt of any request for additional information by the Commission or any other governmental
entity during the period of effectiveness of the Resale Registration Statement or amendments or supplements to the Resale Registration
Statement or any related prospectus; (iii) the issuance by the Commission or any other governmental entity of any stop order suspending
the effectiveness of the Resale Registration Statement or the initiation of any proceedings for that purpose and the Company will
promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest
possible moment if such stop order should be issued; (iv) receipt of any notification with respect to the suspension of the
qualification or exemption from qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose; (v) the Company’s reasonable determination that a post-effective amendment to the Resale
Registration Statement would be appropriate (in which event the Company will, as promptly practicable thereafter, make available
to the Purchaser any such supplement or amendment to the Resale Registration Statement and, as applicable, the related prospectus)
and (vi) the Company’s good faith determination that a suspension is necessary (A) to delay the disclosure of material non-public
information concerning the Company, the disclosure of which at the time would be, in the good faith opinion of the Company, detrimental
to the Company or (B) to amend or supplement the affected Resale Registration Statement or the related Prospectus so that such
Resale Registration Statement or prospectus shall not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances
under which they were made, not misleading (a “Suspension”).
(f) The
Company shall furnish to the Purchaser with respect to the Registrable Securities registered under the Resale Registration Statement
such number of copies of the prospectus (including preliminary and supplemental prospectuses and prospectus amendments) as the
Purchaser may reasonably request, in order to facilitate the public sale or other disposition of all or any of the Registrable
Securities by the Purchaser.
(g) The
Company shall file documents required of the Company for normal blue sky clearance in states as shall be reasonably appropriate
in the opinion of the Company and its legal counsel; provided, however, that the Company shall not be required to
qualify to do business or consent to general service of process in any jurisdiction in which it would not otherwise be required
to qualify but for this Section 4.1(g).
(h) All
expenses incident to the Company’s compliance with this Section 4.1, including, without limitation, all registration and
filing fees, fees and expenses of compliance with securities laws, printing expenses, filing expenses, and fees and disbursements
of the Company’s counsel and independent registered public accountants will be borne by the Company. Any expenses incurred
in connection with the sale of any of the Shares or the Warrant Shares pursuant to the Resale Registration Statement shall be borne
by the Company except that any brokerage commissions shall be borne by the Purchaser.
(i) The
Company shall, at the reasonable request of the Purchaser, prepare and file with the Commission such amendments (including post-effective
amendments) and supplements to the Resale Registration Statement and any prospectus used in connection with the Resale Registration
Statement as may be necessary in order to make reasonable changes to the plan of distribution set forth in such Resale Registration
Statement.
(j) Notwithstanding
anything herein to the contrary, the Purchaser’s rights under this Section 4.1 shall be automatically assignable by the Purchaser
to any Affiliate of Purchaser of all or any portion of such Registrable Securities, to the extent of the Registrable Securities
so transferred, if: (i) the Purchaser agrees in writing with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of the name and address of such transferee or assignee, and
the securities with respect to such registration rights are being transferred or assigned, and (iii) at or before the time the
Company receives the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing
to be bound by the provisions of Section 4.1 of this Agreement. In the event that the Purchaser transfers all or any portion of
its Registrable Securities pursuant to this Section 4.1(j), the Company shall have ten (10) Trading Days following the receipt
of such notice to file any amendments or supplements necessary to keep the Resale Registration Statement current and effective
pursuant to Rule 415. Upon any such assignment, all of the Purchaser’s rights under this Agreement with respect to such transferred
securities shall inure to the benefit of the transferee.
4.2 Furnishing
of Information. Until the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the
Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject
to the reporting requirements of the Exchange Act.
4.3 Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes.
4.4 Reservation
of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available
at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company
to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.
4.5 Listing
of Common Stock. The Company hereby agrees to use reasonable best efforts to maintain the listing or quotation of the Common
Stock on the Trading Market on which it is currently listed, and prior to or concurrently with the Closing, the Company shall apply
to list or quote all of the Shares and Warrant Shares on such Trading Market and promptly secure the listing of all of the Shares
and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on
any other Trading Market, it will then include in such application all of the Shares and Warrant Shares, and will take such other
action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on such other Trading Market as promptly
as possible. The Company will then take all action reasonably necessary to continue the listing and trading of 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.
4.6 Certain
Transactions and Confidentiality. The Company agrees to publicly disclose the transactions contemplated by this Agreement in
the manner required by law within four (4) Trading Days of the execution of this Agreement. Each Purchaser, severally and not jointly
with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with
it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing
with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly
announced. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that until such time as the transactions contemplated by this Agreement are publicly announced by the Company, such Purchaser will
maintain the confidentiality of the existence and terms of this transaction; provided, however, that if the Company
fails to publicly announce the transaction and the Purchaser is required by law to make a disclosure regarding the transaction,
the Purchaser may disclose such information as is required by law. Each Purchaser, severally and not jointly with the other Purchasers,
covenants that until such time as the transactions contemplated by this Agreement are publicly announced by the Company, such Purchaser
will maintain the confidentiality of the existence and terms of this transaction.
ARTICLE
V.
MISCELLANEOUS
5.1 Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent
fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company
and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery
of any Securities to the Purchasers.
5.2 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.
5.3 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto
at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth
on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant
to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
5.4 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Purchaser or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought. Any amendment or waiver effected in accordance with this Section 5.4 shall be binding
upon the Purchaser and the Company. No waiver of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair
the exercise of any such right.
5.5 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.6 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of
each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to
whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect
to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.7 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.
5.8 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof.
5.9 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.10 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.
5.11 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
5.12 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or
in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.13 Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers
are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser
to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction Documents.
5.14 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.
5.15 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.
5.16 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK; SIGNATURE PAGES FOLLOW]
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.
| CASI PHARMACEUTICALS, INC. |
|
Address for Notice: |
| |
|
|
|
| By: |
|
|
Fax: 240-864-2782 |
| |
Name: Cynthia W. Hu |
|
E-mail: |
| |
Title: COO and General Counsel |
|
cynthiaw@casipharmaceuticals.com |
| |
|
|
|
| With a copy to (which shall not constitute notice): |
|
|
| |
|
|
| Richard Baltz |
|
Fax: 202.942.5999 |
| Arnold & Porter |
|
E-mail: |
| 601 Massachusetts Ave., NW |
|
Richard.Baltz@arnoldporter.com |
| Washington, DC 20001 |
|
|
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER SIGNATURE PAGES TO CASI SECURITIES
PURCHASE AGREEMENT]
IN WITNESS WHEREOF,
the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as
of the date first indicated above.
Name of Purchaser:
Signature of Authorized Signatory of
Purchaser:
Name of Authorized Signatory:
Title of Authorized Signatory:
Email Address of Authorized Signatory:
Facsimile Number of Authorized Signatory:
Address for Notice to Purchaser:
Address for Delivery of Warrants to Purchaser
(if not same as address for notice):
Subscription Amount: $
Unit Price: $
Shares:
Warrant Shares:
EIN Number:
¨
Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed
to purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations
of the Company to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded,
(ii) the Closing shall occur by the second (2nd) Trading Day following the date of this Agreement and (iii) any condition to Closing
contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the
above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition
and shall instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement,
instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing Date.
Exhibit A
Form of Warrant
See attached.
CASI Pharmaceuticals, Inc.
| Warrant Shares: [_______________] |
|
Issue Date: [_______________] |
THIS COMMON STOCK PURCHASE WARRANT (the
“Warrant”) certifies that, for value received, [__________________] (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after one
hundred eighty days following the Issue Date (the “Initial Exercise Date”) and on or prior to the close of business
on the third anniversary of the Issue Date (the “Termination Date”) but not thereafter, to subscribe for and
purchase from CASI Pharmaceuticals, Inc., a Delaware corporation (the “Company”), up to [_________] shares (subject
to adjustments as provided below) (the “Warrant Shares”) of Common Stock.
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement
(the “Purchase Agreement”), dated September 11, 2018, among the Company and the purchaser signatory thereto.
Section 2. Exercise.
(a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile
copy (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).
Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as
defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise
Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United
States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise.
No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and
the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation
within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall each maintain records showing the number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. In the
event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest
error. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions
of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available
for purchase hereunder at any given time may be less than the amount stated on the face hereof.
(b) Exercise
Price. The exercise price per share of the Common Stock under this Warrant shall be $[_______], subject to adjustment hereunder
(the “Exercise Price”).
(c) Cashless
Exercise. If there is no effective registration statement registering, or no current prospectus available for, the issuance
of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless
exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:
(A) = as applicable: (i) the VWAP on the
Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed
and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to
Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64)
of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either
(y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the
Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the
applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day
and is delivered within two (2) hours thereafter pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable
Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered
pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;
(B) = the Exercise Price of this Warrant
as adjusted hereunder; and
(X) = the number of Warrant Shares that
would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of
a cash exercise rather than a cashless exercise.
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9)
of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The
Company agrees not to take any position contrary to this Section 2(c).
“Bid Price” means, for
any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted
on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common
Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink
Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in
interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid
by the Company.
“VWAP” means, for any
date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted
on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day
from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC Bulletin Board is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board,
(c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are
then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the
Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.
(d) Mechanics
of Exercise.
(i) Delivery
of Certificates Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or
resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical
delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the
number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the
Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice
of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading
Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant
Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes
to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of
the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a
cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the
Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the
Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP
of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day for each Trading Day after such Warrant
Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a
transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein,
“Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on
the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice
of Exercise.
(ii) Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to Holder a new Warrant
evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.
(iii)
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
(iv) Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder,
if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i), pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise
purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated
receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount,
if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required
to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder. Nothing herein shall limit a Holder’s right to pursue any other remedies available to
it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant
to the terms hereof.
(v) No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.
(vi) Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of Warrant Shares, all of which taxes and expenses shall be paid by the Company,
and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however,
that in the event Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by an assignment form substantially in the form attached hereto duly executed by the Holder (an “Assignment
Form”) and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer
tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise
and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required
for same-day electronic delivery of the Warrant Shares.
(vii) Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
(e)
Holder’s Exercise Limitations. The Company shall not effect any
exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section
2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice
of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with
the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would
beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties
shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such
determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise
of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or
Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the
Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall
be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it
being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance
with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in
accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the
submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of
which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the
Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to
any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of
Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s
most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by
the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of
Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day
confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as
of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership
Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may
increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the
provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be
effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall
be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct
this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such
limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section 3. Certain
Adjustments.
| (a) | Stock Dividends and Splits. If the Company, at
any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares
of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance
of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares
of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares
issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or re-classification. |
| (b) | Calculations. All calculations under this Section
3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the
number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares
of Common Stock (excluding treasury shares, if any) issued and outstanding. |
| (i) | Adjustment to Exercise Price. Whenever the Exercise
Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or
email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares
and setting forth a brief statement of the facts requiring such adjustment. |
| (ii) | Notice to Allow Exercise by Holder. If (A) the
Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare
a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all
holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any
rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets
of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property,
or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company,
then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or
email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange
their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any
notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective
date of the event triggering such notice except as may otherwise be expressly set forth herein. |
Section 4. Transfer
of Warrant.
(a) Transferability.
This Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office
of the Company or its designated agent, together with (i) a written assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making
of such transfer and (ii) any other documents or certificates reasonably requested by the Company to effect such transfer. Upon
such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly
be cancelled. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.
(b) New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial
issue date set forth on the first page of this Warrant and shall be identical with this Warrant except as to the number of Warrant
Shares issuable pursuant thereto.
(c) Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.
Section 5. Compliance
with Securities Laws; Disposition of Warrant or Warrant Shares. Holder, by accepting this Warrant, represents to the Company
that this Warrant and the Warrant Shares to be issued upon exercise hereof are being acquired for its own account for investment
purposes only and not with a view to distribution or resale, and that Holder will not offer, sell or otherwise dispose of this
Warrant or any Warrant Shares except under circumstances that will not result in a violation of the Securities Act of 1933, as
amended (the “Act”), or any state or other securities laws. This Warrant, any Warrant subsequently issued to Holder,
and all certificates representing the Warrant Shares issued hereunder (unless registered under the Act and any applicable state
or other securities law) shall be stamped or imprinted with a legend in substantially the following form:
[THIS WARRANT HAS] [THE SECURITIES EVIDENCED HEREBY
HAVE] NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE OR OTHER SECURITIES LAWS AND MAY NOT BE OFFERED,
SOLD, TRANSFERRED OR ASSIGNED EXCEPT (i) PURSUANT TO REGISTRATIONS THEREOF UNDER SUCH LAWS, OR (ii) IF, IN THE OPINION OF COUNSEL
THE PROPOSED TRANSFER MAY BE EFFECTED IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS WITHOUT SUCH REGISTRATIONS.
ASSIGNED EXCEPT (i) PURSUANT TO REGISTRATIONS THEREOF
UNDER SUCH LAWS, OR (ii) IF, IN THE OPINION OF COUNSEL THE PROPOSED TRANSFER MAY BE EFFECTED IN COMPLIANCE WITH APPLICABLE SECURITIES
LAWS WITHOUT SUCH REGISTRATIONS.
Section 6. Miscellaneous.
(a) No
Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set forth in Section 2.
(b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.
(c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
Business Day.
(d) Authorized
Shares; Noncircumvention.
The Company covenants that, during the period
the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants
that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the
necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such action as
may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that
all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable.
Except and to the extent as waived or consented
to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation
or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times
in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate
to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately
prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use its reasonable
best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof,
as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result
in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall
obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body
or bodies having jurisdiction thereof.
(e) Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.
(f) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies.
(g) Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Purchase Agreement.
(h) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be adequate.
(i) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.
(j) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
(k) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions
of this Warrant.
(l) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of
this Warrant.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company has caused
this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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CASI PHARMACEUTICALS, INC. |
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By: |
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Name: |
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Title: |
ANNEX A to Warrant
NOTICE OF EXERCISE
| To: | CASI PHARMACEUTICALS,
Inc. |
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes,
if any.
(2) Payment
shall take the form of (check applicable box):
[ ] in lawful
money of the United States; or
[ ] if permitted the cancellation
of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c) of the Warrant,
to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
(3) Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The Warrant Shares shall be delivered to the following DWAC
Account Number:
[SIGNATURE OF HOLDER]
| Name of Investing Entity: |
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| Signature of Authorized Signatory of Investing Entity: |
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| Name of Authorized Signatory: |
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| Title of Authorized Signatory: |
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ANNEX B to Warrant
ASSIGNMENT FORM
(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to purchase shares)
FOR VALUE RECEIVED, the foregoing Warrant
and all rights evidenced thereby are hereby assigned to:
| Name: |
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(Please Print) |
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| Address: |
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(Please Print) |
Phone Number:
Email Address:
Dated: _______________________________
Holder’s Signature : ___________________________________________
Holder’s Address: ____________________________________________
Exhibit B
Selling Stockholder Questionnaire
See attached.
CASI PHARMACEUTICALS, INC.
SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE
The undersigned holder
of shares of the common stock, par value $0.01 per share, of CASI Pharmaceuticals, Inc. (the “Company”)
understands that the Company intends to file with the Securities and Exchange Commission a registration statement on Form S-3,
or such other form if, at such time, Form S-3 is not available (the “Resale Registration Statement”)
for the registration and the resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”),
of the Registrable Securities in accordance with the terms of the Securities Purchase Agreement, dated as of September 30, 2018,
between the Company and the Purchaser (the “Securities Purchase Agreement”). All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the Securities Purchase Agreement.
In order to sell or
otherwise dispose of any Registrable Securities pursuant to the Resale Registration Statement, a holder of Registrable Securities
generally will be required to be named as a selling stockholder in the related prospectus or a supplement thereto (as so supplemented,
the “Prospectus”) and deliver the Prospectus to purchasers of Registrable Securities (including pursuant
to Rule 172 under the Securities Act). Each Purchaser must complete and deliver this Notice and Questionnaire in order to be named
as selling stockholders in the Prospectus.
Certain legal consequences
arise from being named as a selling stockholder in the Resale Registration Statement and the Prospectus. Holders of Registrable
Securities are advised to consult their own securities law counsel regarding the consequences of being named or not named as a
selling stockholder in the Resale Registration Statement and the Prospectus.
NOTICE
The undersigned holder
(the “Selling Stockholder”) of Registrable Securities hereby gives notice to the Company of its intention
to sell or otherwise dispose of Registrable Securities owned by it and listed below in Item (3), unless otherwise specified in
Item (3), pursuant to the Resale Registration Statement. The undersigned, by signing and returning this Notice and Questionnaire,
understands and agrees that it will be bound by the terms and conditions of this Notice and Questionnaire and the Securities Purchase
Agreement.
The undersigned hereby
provides the following information to the Company and represents and warrants that such information is accurate and complete:
QUESTIONNAIRE
| A. | Full Legal Name of Selling Stockholder: |
| B. | Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities
Listed in Item 3 below are held: |
| C. | Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly
alone or with others has power to vote or dispose of the securities covered by the questionnaire): |
| 2. | Address for Notices to Selling Stockholder: |
| E-mail address of Contact Person: |
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| 3. | Beneficial Ownership of Registrable Securities: |
| A. | Type and Number of Registrable Securities beneficially owned: |
| B. | Number of shares of Common Stock to be registered pursuant to this Notice for resale: |
| A. | Are you a broker-dealer? |
Yes ¨ No ¨
| B. | If “yes” to Section 4(a), did you receive your Registrable Securities as compensation
for investment banking services to the Company? |
Yes ¨ No ¨
Note: If no, the Commission’s
staff has indicated that you should be identified as an underwriter in the Registration Statement.
| C. | Are you an affiliate of a broker-dealer? |
Yes ¨ No ¨
| Note: | If yes, provide a narrative explanation below: |
| D. | If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities
in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements
or understandings, directly or indirectly, with any person to distribute the Registrable Securities? |
Yes ¨ No ¨
Note: If no, the Commission’s
staff has indicated that you should be identified as an underwriter in the Registration Statement.
| 5. | Beneficial Ownership of Other Securities of the Company Owned by the Selling Stockholder. |
Except as set forth below
in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
Type and amount of other securities beneficially
owned:
| 6. | Relationships with the Company: |
Except as set forth below,
neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company
(or its predecessors or affiliates) during the past three years.
State any exceptions
here:
The undersigned has reviewed
the form of Plan of Distribution attached as Exhibit A to this Notice and Questionnaire, and hereby confirms that, except as set
forth below, the information contained therein regarding the undersigned and its plan of distribution is correct and complete.
State any exceptions
here:
The undersigned agrees to promptly notify
the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof and
prior to the effective date of any applicable Resale Registration Statement. All notices hereunder shall be made in writing, by
hand delivery, confirmed or facsimile transmission, first-class mail or air courier guaranteeing overnight delivery at the address
set forth below. In the absence of any such notification, the Company shall be entitled to continue to rely on the accuracy of
the information in this Notice and Questionnaire.
By signing below, the undersigned consents
to the disclosure of the information contained herein in its answers to Items (1) through (7) above and the inclusion of such information
in the Resale Registration Statement and the Prospectus. The undersigned understands that such information will be relied upon
by the Company in connection with the preparation or amendment of any such Registration Statement and the Prospectus.
By signing below, the undersigned acknowledges
that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange Act and the rules
and regulations thereunder, particularly Regulation M in connection with any offering of Registrable Securities pursuant to the
Resale Registration Statement. The undersigned also acknowledges that it understands that the answers to this Notice and Questionnaire
are furnished for use in connection with the Resale Registration Statement filed pursuant to the Securities Purchase Agreement
and any amendments or supplements thereto filed with the Commission pursuant to the Securities Act.
The undersigned hereby acknowledges and
is advised of the following Interpretation 239.10 of the SEC Staff’s Compliance and Disclosure Interpretations regarding
short selling:
“An Issuer filed a Form S-3 registration
statement for a secondary offering of common stock which is not yet effective. One of the selling stockholders wanted to do a short
sale of common stock “against the box” and cover the short sale with registered shares after the effective date. The
issuer was advised that the short sale could not be made before the registration statement become effective, because the shares
underlying the short sale are deemed to be sold at the time such sale is made. There would, therefore, be a violation of Section
5 if the shares were effectively sold prior to the effective date.” [Nov. 26, 2008]
By returning this Notice and Questionnaire,
the undersigned will be deemed to be aware of the foregoing interpretation.
I confirm that, to the best of my knowledge
and belief, the foregoing statements (including, without limitation the answers to this Notice and Questionnaire) are correct.
IN WITNESS WHEREOF
the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person
or by its duly authorized agent.
[Signature Page to Selling Stockholder Notice
and Questionnaire]
Exhibit A
PLAN OF DISTRIBUTION
Each of the selling stockholders and any
of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock
on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be
at fixed or negotiated prices. The selling stockholders may use any one or more of the following methods when selling shares:
| · | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| · | block trades in which the broker-dealer will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction; |
| · | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| · | an exchange distribution in accordance with the rules of the applicable exchange; |
| · | privately negotiated transactions; |
| · | in the over-the-counter market; |
| · | settlement of short sales entered into after the effective date of the registration statement of
which this prospectus is a part; |
| · | in transactions through broker-dealers that agree with the selling stockholders to sell a specified
number of such securities at a stipulated price per security; |
| · | through the writing or settlement of options or other hedging transactions, whether through an
options exchange or otherwise; or |
| · | a combination of any such methods or any other method permitted pursuant to applicable law. |
The selling stockholders may, from time
to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in
the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from
time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus. The selling stockholders also may transfer the shares of common stock in other circumstances,
in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this
prospectus.
The selling stockholders may also sell shares
under Rule 144 under the Securities Act, if available, rather than under this prospectus.
To the extent required, this prospectus
may be amended or supplemented from time to time to describe a specific plan of distribution. In connection with distributions
of the shares or otherwise, the selling stockholder may enter into hedging transactions with broker-dealers or other financial
institutions. In connection with such transactions, broker-dealers or other financial institutions may engage in short sales of
the common stock in the course of hedging the positions they assume with the selling stockholder. The selling stockholder may also
sell the common stock short and redeliver the shares to close out such short positions. The selling stockholders may also enter
into option or other transactions with broker-dealers or other financial institutions which require the delivery to such broker-dealer
or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). The selling stockholders may also
pledge shares to a broker-dealer or other financial institution, and, upon a default, such broker-dealer or other financial institution,
may effect sales of the pledged shares pursuant to this prospectus (as supplemented or amended to reflect such transaction).
In effecting sales, broker-dealers or agents
engaged by the selling stockholders may arrange for other broker-dealers to participate. Broker-dealers or agents may receive commissions,
discounts or concessions from the selling stockholders in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus,
the selling stockholders and any broker-dealers who execute sales for the selling stockholder may be deemed to be “underwriters”
within the meaning of the Securities Act in connection with such sales. Any profits realized by the selling stockholders and the
compensation of any broker-dealer may be deemed to be underwriting discounts and commissions.
In order to comply with the securities laws
of certain states, if applicable, the shares must be sold in such jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain states the shares may not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification requirement is available.
Under applicable rules and regulations under
the Exchange Act, any person engaged in the distribution of the common stock may not simultaneously engage in market making activities
with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of
the distribution. In addition, the selling stockholders will be subject to applicable provisions of the Exchange Act and the rules
and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of securities of the common
stock by the selling stockholders or any other person. The selling stockholders may indemnify any broker-dealer that participates
in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities
Act.
At the time a particular offer of shares
is made, if required, a prospectus supplement will be distributed that will set forth the number of shares being offered and the
terms of the offering, including the name of any underwriter, dealer or agent, the purchase price paid by any underwriter, any
discount, commission and other item constituting compensation, any discount, commission or concession allowed or reallowed or paid
to any dealer, and the proposed selling price to the public.
We are required to pay certain fees and
expenses incurred by us incident to the registration of the securities. In addition, we have agreed to indemnify the selling stockholders
against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
We agreed to keep this prospectus effective
until the earlier of (i) the date on which the securities may be resold by the selling stockholders without registration and without
regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance
with the current public information under Rule 144 under the Securities Act or any other rule of similar effect, and (ii) such
time as the selling stockholders own no securities that are required to be registered pursuant to their respective agreements.
