VVOS Vivos Therapeutics Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of the

Securities Exchange act of 1934

 

Date of Report (Date of earliest event reported): February 14, 2025

 

Vivos Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware		001-39796		81-3224056
(State or other jurisdiction of incorporation or organization)		(Commission file number)		(IRS Employer Identification No.)

 

7921 Southpark Plaza, Suite 210

Littleton, Colorado 80120

(Address of principal executive offices) (Zip Code)

 

(844) 672-4357

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		VVOS		The NASDAQ Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 1.01

Entry Into a Material Definitive Agreement.

 

On February 14, 2025, Vivos Therapeutics, Inc. (the “Company”), entered into an At The Market Offering Agreement, (the “Offering Agreement”), with H.C. Wainwright & Co., LLC, as agent (“Wainwright”), pursuant to which the Company may offer and sell, from time to time through Wainwright shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), having an aggregate value of up to $3,328,881 (the “Shares”).

 

The offer and sale of the Shares will be made pursuant to a shelf registration statement on Form S-3 and the related prospectus (File No. 333-262554) filed by the Company with the Securities and Exchange Commission (the “SEC”), on February 7, 2022 and, declared effective by the SEC on February 14, 2022, as supplemented by a prospectus supplement dated February 14, 2025 and filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”).

 

Pursuant to the Offering Agreement, Wainwright may sell the Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act including sales made by means of ordinary brokers’ transactions, including on The Nasdaq Capital Market, at market prices or as otherwise permitted by law. Wainwright will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the Shares pursuant to the Offering Agreement from time to time, based upon instructions from the Company, including any price or size limits or other customary parameters or conditions the Company may impose.

 

The Company is not obligated to make any sales of the Shares under the Offering Agreement. The offering of Shares pursuant to the Offering Agreement will terminate upon the earliest of (a) the sale of all of the Shares subject to the Offering Agreement and (b) the termination of the Offering Agreement by Wainwright or the Company, as permitted therein.

 

The Company will pay to Wainwright a cash commission of 3% of the gross sales price of any Common Stock sold under the Offering Agreement and has agreed to provide Wainwright with customary indemnification and contribution rights. The Company will also reimburse Wainwright for certain specified expenses in connection with entering into the Offering Agreement.

 

The Offering Agreement contains customary representations and warranties and conditions to the sale of the Shares pursuant thereto.

 

The foregoing description of the Offering Agreement is not complete and is qualified in its entirety by reference to the full text of such agreement, a copy of which is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference into this Item 1.01. A copy of the opinion of Ellenoff Grossman & Schole LLP relating to the legality of the Shares is filed as Exhibit 5.1 to this Current Report on Form 8-K and incorporated by reference into this Item 1.01.

 

This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy the Common Stock discussed herein, nor shall there be any offer, solicitation, or sale of securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

 

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

As previously reported on a Current Report filed on September 12, 2024 (the “Previous 8-K”), on September 7, 2024, the Board, with the recommendation of the Compensation Committee of the Board and with reference to data provided by a third-party compensation consultant, reviewed and approved amended and restated employment agreements for each of R. Kirk Huntsman, the Company’s Chief Executive Officer (the “Amended and Restated Huntsman Agreement”), and Bradford Amman, the Company’s Chief Financial Officer, Secretary and Treasurer (the “Amended and Restated Amman Agreement”), such agreements to take effect on January 1, 2025.

 

The Amended and Restated Huntsman Agreement and the Amended and Restated Amman Agreement are filed respectively as Exhibit 10.2 and 10.3 to this Current Report. A description of the terms and provisions of these agreements are provided in the Previous 8-K.

 

Item 9.01

Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.		Exhibit
5.1		Opinion of Ellenoff Grossman & Schole LLP
10.1		At the Market Offering Agreement, dated February 14 2025, between the Company and H.C. Wainwright & Co., LLC
10.2		Amended and Restated Employment Agreement, dated January 1, 2025, between the Company and R. Kirk Huntsman
10.3		Amended and Restated Employment Agreement, dated January 1, 2025, between the Company and Bradford Amman
23.1		Consent of Ellenoff Grossman & Schole LLP (included in Exhibit 5.1 hereto)
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	VIVOS THERAPEUTICS, INC.
Dated: February 14, 2025	By:	/s/ R. Kirk Huntsman
		R. Kirk Huntsman
		Chief Executive Officer

 

 

 

 

Exhibit 5.1

 

1345 AVENUE OF THE AMERICAS, 11th FLOOR NEW YORK, NEW YORK 10017 TELEPHONE: (212) 370-1300 FACSIMILE: (212) 370-7889 www.egsllp.com

 

February 14, 2025

 

Vivos Therapeutics, Inc.

at 7921 Southpark Plaza, Suite 210

Littleton, Colorado 80120

 

Re: Registration Statement on Form S-3 (333-262554)

 

Ladies and Gentlemen:

 

We have acted as counsel to Vivos Therapeutics Inc., a Delaware corporation (the “Company”), in connection with the above-referenced registration statement (the “Registration Statement”), the base prospectus dated February 14, 2022 (the “Base Prospectus”) and the prospectus supplement dated February 14, 2025 (the “Prospectus Supplement” and together with the Base Prospectus, the “Prospectus”), relating to the offering by the Company of up to $3,328,881 of shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (“Common Stock”). The Shares are covered by the Registration Statement and we understand that the Shares are to be offered and sold in the manner described in the Prospectus. This opinion is being delivered at the request of the Company and in accordance with the requirements of Item 601(b)(5) of Regulation S-K promulgated by the Commission.

 

For purposes of this opinion, we have examined such documents and reviewed such questions of law as we have considered necessary and appropriate for the purposes of our opinion set forth below. In rendering our opinion, we have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures and the conformity to authentic originals of all documents submitted to us as copies. We have also assumed the legal capacity for all purposes relevant hereto of all natural persons and, with respect to all parties to agreements or instruments relevant hereto other than the Company, that such parties had the requisite power and authority (corporate or otherwise) to execute, deliver and perform such agreements or instruments, that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise), executed and delivered by such parties and that such agreements or instruments are the valid, binding and enforceable obligations of such parties. As to questions of fact material to our opinions, we have relied upon certificates of officers of the Company and of public officials.

 

Based upon and subject to the foregoing, we are of the opinion that the Shares have been duly authorized and, when issued and paid for as described in the Prospectus, will be validly issued, fully paid and non-assessable,.

 

We express no opinion as to matters governed by any laws other than the Delaware General Corporation Law, the laws of the State of New York and the federal laws of the United States of America, all as in effect on the date hereof.

 

We consent to the filing of this opinion with the SEC as Exhibit 5.1 to the Company’s Current Report on Form 8-K filed on February 14, 2025, which is incorporated by reference in the Prospectus. We also consent to the reference of our firm under the caption “Experts” in the Prospectus and in each case in any amendment or supplement thereto. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 and Section 11 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission promulgated thereunder, nor do we admit that we are experts with respect to any part of the Prospectus within the meaning of the term “expert” as used in the Securities Act of 1933, as amended, or the related rules and regulations of the Securities and Exchange Commission promulgated thereunder.

 

	Very truly yours,
	/s/ Ellenoff Grossman & Schole LLP
	Ellenoff Grossman & Schole LLP

 

 

Exhibit 10.1

 

AT THE MARKET OFFERING AGREEMENT

 

February 14, 2025

 

H.C. Wainwright & Co., LLC

430 Park Avenue

New York, New York 10022

 

Ladies and Gentlemen:

 

Vivos Therapeutics, Inc., a Delaware corporation (the “Company”), confirms its agreement (this “Agreement”) with H.C. Wainwright & Co., LLC (the “Manager”) as follows:

 

1. Definitions. The terms that follow, when used in this Agreement and any Terms Agreement, shall have the meanings indicated.

 

“Accountants” shall have the meaning ascribed to such term in Section 4(m).

 

“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

 

“Action” shall have the meaning ascribed to such term in Section 3(p).

 

“Affiliate” shall have the meaning ascribed to such term in Section 3(o).

 

“Applicable Time” shall mean, with respect to any Shares, the time of sale of such Shares pursuant to this Agreement or any relevant Terms Agreement.

 

“Base Prospectus” shall mean the base prospectus contained in the Registration Statement at the Execution Time.

 

“Board” shall have the meaning ascribed to such term in Section 2(b)(iii).

 

“Broker Fee” shall have the meaning ascribed to such term in Section 2(b)(v).

 

“Business Day” shall mean any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, that, for purposes of clarity, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.

 

 

“Commission” shall mean the United States Securities and Exchange Commission.

 

“Common Stock” shall have the meaning ascribed to such term in Section 2.

 

“Common Stock Equivalents” shall have the meaning ascribed to such term in Section 3(g).

 

“Company Counsel” shall have the meaning ascribed to such term in Section 4(l).

 

“DTC” shall have the meaning ascribed to such term in Section 2(b)(vii).

 

“Effective Date” shall mean each date and time that the Registration Statement and any post-effective amendment or amendments thereto became or becomes effective.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

 

“Execution Time” shall mean the date and time that this Agreement is executed and delivered by the parties hereto.

 

“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405.

 

“GAAP” shall have the meaning ascribed to such term in Section 3(m).

 

“Incorporated Documents” shall mean the documents or portions thereof filed with the Commission on or prior to the Effective Date that are incorporated by reference in the Registration Statement or the Prospectus and any documents or portions thereof filed with the Commission after the Effective Date that are deemed to be incorporated by reference in the Registration Statement or the Prospectus.

 

“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3(v).

 

“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as defined in Rule 433.

 

“Losses” shall have the meaning ascribed to such term in Section 7(d).

 

 

“Material Adverse Effect” shall have the meaning ascribed to such term in Section 3(b).

 

“Material Permits” shall have the meaning ascribed to such term in Section 3(t).

 

“Net Proceeds” shall have the meaning ascribed to such term in Section 2(b)(v).

 

“Permitted Free Writing Prospectus” shall have the meaning ascribed to such term in Section 4(g).

 

“Placement” shall have the meaning ascribed to such term in Section 2(c).

 

“Proceeding” shall have the meaning ascribed to such term in Section 3(b).

 

“Prospectus” shall mean the Base Prospectus, as supplemented by the most recently filed Prospectus Supplement (if any).

 

“Prospectus Supplement” shall mean each prospectus supplement relating to the Shares prepared and filed pursuant to Rule 424(b) from time to time.

 

“Registration Statement” shall mean the shelf registration statement (File Number 333-262554) on Form S-3, including exhibits and financial statements and any prospectus supplement relating to the Shares that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430B, as amended on each Effective Date and, in the event any post-effective amendment thereto becomes effective, shall also mean such registration statement as so amended.

 

“Representation Date” shall have the meaning ascribed to such term in Section 4(k).

 

“Required Approvals” shall have the meaning ascribed to such term in Section 3(e).

 

“Rule 158”, “Rule 164”, “Rule 172”, “Rule 173”, “Rule 405”, “Rule 415”, “Rule 424”, “Rule 430B” and “Rule 433” refer to such rules under the Act.

 

“Sales Notice” shall have the meaning ascribed to such term in Section 2(b)(i).

 

“SEC Reports” shall have the meaning ascribed to such term in Section 3(m).

 

 

“Settlement Date” shall have the meaning ascribed to such term in Section 2(b)(vii).

 

“Subsidiary” shall have the meaning ascribed to such term in Section 3(a).

 

“Terms Agreement” shall have the meaning ascribed to such term in Section 2(a).

 

“Time of Delivery” shall have the meaning ascribed to such term in Section 2(c).

 

“Trading Day” means a day on which the Trading Market is open for trading.

 

“Trading Market” means The Nasdaq Capital Market.

 

2. Sale and Delivery of Shares. The Company proposes to issue and sell through or to the Manager, as sales agent and/or principal, from time to time during the term of this Agreement and on the terms set forth herein, up to the lesser of such number of shares (the “Shares”) of the Company’s common stock, $0.0001 par value per share (“Common Stock”), that does not exceed (a) the number or dollar amount of shares of Common Stock registered on the Registration Statement and as reflected on the Prospectus Supplement, pursuant to which the offering is being made, (b) the number of authorized but unissued shares of Common Stock (less the number of shares of Common Stock issuable upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise reserved from the Company’s authorized capital stock), or (c) the number or dollar amount of shares of Common Stock that would cause the Company or the offering of the Shares to not satisfy the eligibility and transaction requirements for use of Form S-3, including, if applicable, General Instruction I.B.6 of Registration Statement on Form S-3 (the lesser of (a), (b) and (c), the “Maximum Amount”). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitations set forth in this Section 2 on the number and aggregate sales price of Shares issued and sold under this Agreement shall be the sole responsibility of the Company and that the Manager shall have no obligation in connection with such compliance.

 

(a) Appointment of Manager as Selling Agent; Terms Agreement. For purposes of selling the Shares through the Manager, the Company hereby appoints the Manager as exclusive agent of the Company for the purpose of selling the Shares of the Company pursuant to this Agreement and the Manager agrees to use its commercially reasonable efforts consistent with its normal trading and sales practices for similar at the market programs to sell the Shares on the terms and subject to the conditions stated herein. The Company agrees that, whenever it determines to sell the Shares directly to the Manager as principal, it will enter into a separate agreement (each, a “Terms Agreement”) in substantially the form of Annex I hereto, relating to such sale in accordance with Section 2 of this Agreement.

 

 

(b) Agent Sales. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company will issue and agrees to sell Shares from time to time through the Manager, acting as sales agent, and the Manager agrees to use its commercially reasonable efforts to sell, as sales agent for the Company, on the following terms:

 

(i) The Shares are to be sold on a daily basis or otherwise as shall be agreed to by the Company and the Manager on any day that (A) is a Trading Day, (B) the Company has instructed the Manager by telephone (confirmed promptly by electronic mail) to make such sales (“Sales Notice”) and (C) the Company has satisfied its obligations under Section 6 of this Agreement. The Company will designate the maximum amount of the Shares to be sold by the Manager daily (subject to the limitations set forth in Section 2(d)) and the minimum price per Share at which such Shares may be sold. Subject to the terms and conditions hereof, the Manager shall use its commercially reasonable efforts to sell on a particular day all of the Shares designated for the sale by the Company on such day. The gross sales price of the Shares sold under this Section 2(b) shall be the market price for the shares of Common Stock sold by the Manager under this Section 2(b) on the Trading Market at the time of sale of such Shares.

 

(ii) The Company acknowledges and agrees that (A) there can be no assurance that the Manager will be successful in selling the Shares, (B) the Manager will incur no liability or obligation to the Company or any other person or entity if it does not sell the Shares for any reason other than a failure by the Manager to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Shares as required under this Agreement, and (C) the Manager shall be under no obligation to purchase Shares on a principal basis pursuant to this Agreement, except as otherwise specifically agreed by the Manager and the Company pursuant to a Terms Agreement.

 

(iii) The Company shall not authorize the issuance and sale of, and the Manager shall not be obligated to use its commercially reasonable efforts to sell, any Share at a price lower than the minimum price therefor designated from time to time by the Company’s Board of Directors (the “Board”), or a duly authorized committee thereof, or such duly authorized officers of the Company, and notified to the Manager in writing. The Company or the Manager may, upon notice to the other party hereto by telephone (confirmed promptly by electronic mail), suspend the offering of the Shares for any reason and at any time; provided, however, that such suspension or termination shall not affect or impair the parties’ respective obligations with respect to the Shares sold hereunder prior to the giving of such notice.

 

 

(iv) The Manager may sell Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 under the Act, including without limitation sales made directly on the Trading Market, on any other existing trading market for the Common Stock or to or through a market maker. The Manager may also sell Shares in privately negotiated transactions, provided that (A) such sales shall not exceed the Maximum Amount (subject to Company stockholder approval under applicable laws and the rules and regulations of the Trading Market) and (B) the Manager receives the Company’s prior written approval for any sales in privately negotiated transactions and if so provided in the “Plan of Distribution” section of the Prospectus Supplement or a supplement to the Prospectus Supplement or a new Prospectus Supplement disclosing the terms of such privately negotiated transaction.

 

(v) The compensation to the Manager for sales of the Shares under this Section 2(b) shall be a placement fee of 3.0% of the gross sales price of the Shares sold pursuant to this Section 2(b) (“Broker Fee”). The foregoing rate of compensation shall not apply when the Manager acts as principal, in which case the Company may sell Shares to the Manager as principal at a price agreed upon at the relevant Applicable Time pursuant to a Terms Agreement. The remaining proceeds, after deduction of the Broker Fee and deduction of any transaction fees imposed by any clearing firm, execution broker, or governmental or self-regulatory organization in respect of such sales, shall constitute the net proceeds to the Company for such Shares (the “Net Proceeds”).

 

(vi) The Manager shall provide written confirmation (which may be by facsimile or electronic mail) to the Company following the close of trading on the Trading Market each day in which the Shares are sold under this Section 2(b) setting forth the number of the Shares sold on such day, the aggregate gross sales proceeds and the Net Proceeds to the Company, and the compensation payable by the Company to the Manager with respect to such sales.

 

(vii) Unless otherwise agreed between the Company and the Manager, settlement for sales of the Shares will occur at 10:00 a.m. (New York City time) on the first (1st) Trading Day, or any such shorter settlement cycle as may be in effect pursuant to Rule 15c6-1 under the Exchange Act from time to time, following the date on which such sales are made (each, a “Settlement Date”). On or before the Trading Day prior to each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Shares being sold by crediting the Manager’s or its designee’s account (provided that the Manager shall have given the Company written notice of such designee at least one Trading Day prior to the Settlement Date) at The Depository Trust Company (“DTC”) through its Deposit and Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto which Shares in all cases shall be freely tradable, transferable, registered shares in good deliverable form. On each Settlement Date, the Manager will deliver the related Net Proceeds in same day funds to an account designated by the Company. The Company agrees that, if the Company, or its transfer agent (if applicable), defaults in its obligation to deliver duly authorized Shares on a Settlement Date, in addition to and in no way limiting the rights and obligations set forth in Section 7 hereto, the Company will (i) hold the Manager harmless against any loss, claim, damage, or reasonable, documented expense (including reasonable and documented legal fees and expenses), as incurred, arising out of or in connection with such default by the Company, and (ii) pay to the Manager any commission, discount or other compensation to which the Manager would otherwise have been entitled absent such default.

 

 

(viii) At each Applicable Time, Settlement Date, and Representation Date, the Company shall be deemed to have affirmed each representation and warranty contained in this Agreement as if such representation and warranty were made as of such date, modified as necessary to relate to the Registration Statement and the Prospectus as amended as of such date. Any obligation of the Manager to use its commercially reasonable efforts to sell the Shares on behalf of the Company shall be subject to the continuing accuracy of the representations and warranties of the Company herein, to the performance by the Company of its obligations hereunder and to the continuing satisfaction of the additional conditions specified in Section 6 of this Agreement.

 

(ix) If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution” and the record date for the determination of stockholders entitled to receive the Distribution, the “Record Date”), the Company hereby covenants that, in connection with any sales of Shares pursuant to a Sales Notice on the Record Date, the Company shall issue and deliver such Shares to the Manager on the Record Date and the Record Date shall be the Settlement Date and the Company shall cover any additional costs of the Manager in connection with the delivery of Shares on the Record Date.

 

 

(c) Term Sales. If the Company wishes to sell the Shares pursuant to this Agreement in a manner other than as set forth in Section 2(b) of this Agreement (each, a “Placement”), the Company will notify the Manager of the proposed terms of such Placement. If the Manager, acting as principal, wishes to accept such proposed terms (which it may decline to do for any reason in its sole discretion) or, following discussions with the Company wishes to accept amended terms, the Manager and the Company will enter into a Terms Agreement setting forth the terms of such Placement. The terms set forth in a Terms Agreement will not be binding on the Company or the Manager unless and until the Company and the Manager have each executed such Terms Agreement accepting all of the terms of such Terms Agreement. In the event of a conflict between the terms of this Agreement and the terms of a Terms Agreement, the terms of such Terms Agreement will control. A Terms Agreement may also specify certain provisions relating to the reoffering of such Shares by the Manager. The commitment of the Manager to purchase the Shares pursuant to any Terms Agreement shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each Terms Agreement shall specify the number of the Shares to be purchased by the Manager pursuant thereto, the price to be paid to the Company for such Shares, any provisions relating to rights of, and default by, underwriters acting together with the Manager in the reoffering of the Shares, and the time and date (each such time and date being referred to herein as a “Time of Delivery”) and place of delivery of and payment for such Shares. Such Terms Agreement shall also specify any requirements for opinions of counsel, accountants’ letters and officers’ certificates pursuant to Section 6 of this Agreement and any other information or documents required by the Manager.

 

(d) Maximum Number of Shares. Under no circumstances shall the Company cause or request the offer or sale of any Shares if, after giving effect to the sale of such Shares, the aggregate amount of Shares sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of Shares under this Agreement, the Maximum Amount, (B) the amount available for offer and sale under the currently effective Registration Statement and (C) the amount authorized from time to time to be issued and sold under this Agreement by the Board, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Manager in writing. Under no circumstances shall the Company cause or request the offer or sale of any Shares pursuant to this Agreement at a price lower than the minimum price authorized from time to time by the Board, a duly authorized committee thereof or a duly authorized executive officer, and notified to the Manager in writing. Further, under no circumstances shall the Company cause or permit the aggregate offering amount of Shares sold pursuant to this Agreement to exceed the Maximum Amount.

 

(e) Regulation M Notice. Unless the exceptive provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act are satisfied with respect to the Shares, the Company shall give the Manager at least one (1) Business Day’s prior notice of its intent to sell any Shares in order to allow the Manager time to comply with Regulation M.

 

 

3. Representations and Warranties. The Company represents and warrants to, and agrees with, the Manager at the Execution Time and on each such time that the following representations and warranties are repeated or deemed to be made pursuant to this Agreement, as set forth below, except as set forth in the Registration Statement, the Prospectus or the Incorporated Documents.

 

(a) Subsidiaries. All of the direct and indirect subsidiaries (individually, a “Subsidiary”) of the Company are set forth on Exhibit 21.1 to the Company’s Registration Statement on Form S-1 filed with the Commission on January 22, 2025. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any “Liens” (which for purposes of this Agreement shall mean a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction), 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.

 

(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 in 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 this Agreement, (ii) a material adverse effect on the results of operations, assets, business, prospects (as such prospects are disclosed in the Registration Statement, the Prospectus or the Incorporated Documents) or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, from that set forth in the Registration Statement, the Base Prospectus, any Prospectus Supplement, the Prospectus or the Incorporated Documents, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no “Proceeding” (which for purposes of this Agreement shall mean any action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened) 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 and Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby 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 or the Company’s stockholders in connection herewith other than in connection with the Required Approvals. This Agreement has been duly executed and delivered by the Company and, when delivered in accordance with the terms hereof, 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, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby 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, individually or in the aggregate, 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” (defined as 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, including the Trading Market) in connection with the execution, delivery and performance by the Company of this Agreement, other than (i) the filings required by this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) the filing of application(s) to and approval by the Trading Market for the listing of the Shares for trading thereon in the time and manner required thereby, and (iv) such filings as are required to be made under applicable state securities laws and the rules and regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”) (collectively, the “Required Approvals”).

 

 

(f) Issuance of Shares. The Shares are duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement. The issuance by the Company of the Shares has been registered under the Act and all of the Shares are freely transferable and tradable by the purchasers thereof without restriction (other than any restrictions arising solely from an act or omission of such a purchaser). The Shares are being issued pursuant to the Registration Statement and the issuance of the Shares has been registered by the Company under the Act. The “Plan of Distribution” section within the Registration Statement permits the issuance and sale of the Shares as contemplated by this Agreement. Upon receipt of the Shares, the purchasers of such Shares will have good and marketable title to such Shares and the Shares will be freely tradable on the Trading Market.

 

(g) Capitalization. The capitalization of the Company is as set forth in the SEC Reports. The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plan and pursuant to the conversion and/or exercise of securities exercisable, exchangeable or convertible into Common Stock (“Common Stock Equivalents”) outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement. Except as set forth in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Shares will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person. Except as set forth in the SEC Reports with respect to outstanding warrants containing customary stock based anti-dilution protection, there are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board or others is required for the issuance and sale of the Shares. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

 

 

(h) Registration Statement. The Company meets the requirements for use of Form S-3 under the Act and has prepared and filed with the Commission the Registration Statement, including a related Base Prospectus, for registration under the Act of the offering and sale of the Shares. Such Registration Statement is effective and available for the offer and sale of the Shares as of the date hereof. As filed, the Base Prospectus contains all material information required by the Act and the rules thereunder, and, except to the extent the Manager shall agree in writing to a modification, shall be in all substantive respects in the form furnished to the Manager prior to the Execution Time or prior to any such time this representation is repeated or deemed to be made. The Registration Statement, at the Execution Time, each such time this representation is repeated or deemed to be made, and at all times during which a prospectus is required by the Act to be delivered (whether physically or through compliance with Rule 172, 173 or any similar rule) in connection with any offer or sale of the Shares, meets the requirements set forth in Rule 415(a)(1)(x). The initial Effective Date of the Registration Statement was not earlier than the date three years before the Execution Time. The Company meets the transaction requirements as set forth in General Instruction I.B.1 of Form S-3 or, if applicable, as set forth in General Instruction I.B.6 of Form S-3 with respect to the aggregate market value of securities being sold pursuant to this offering and during the twelve (12) calendar months prior to such time that this representation is made or deemed to be made.

 

(i) Accuracy of Incorporated Documents. The Incorporated Documents, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the rules thereunder, and none of the Incorporated Documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made not misleading; and any further documents so filed and incorporated by reference in the Registration Statement, the Base Prospectus, the Prospectus Supplement or the Prospectus, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the rules thereunder, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

 

(j) Ineligible Issuer. (i) At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Shares and (ii) as of the Execution Time and on each such time this representation is repeated or deemed to be made (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an Ineligible Issuer (as defined in Rule 405), without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an Ineligible Issuer.

 

(k) Free Writing Prospectus. The Company is eligible to use Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus will not include any information the substance of which conflicts with the information contained in the Registration Statement, including any Incorporated Documents and any prospectus supplement deemed to be a part thereof that has not been superseded or modified; and each Issuer Free Writing Prospectus will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Manager specifically for use therein. Any Issuer Free Writing Prospectus that the Company is required to file pursuant to Rule 433(d) has been, or will be, filed with the Commission in accordance with the requirements of the Act and the rules thereunder. Each Issuer Free Writing Prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) or that was prepared by or behalf of or used by the Company complies or will comply in all material respects with the requirements of the Act and the rules thereunder. The Company will not, without the prior consent of the Manager, prepare, use or refer to, any Issuer Free Writing Prospectuses.

 

(l) Proceedings Related to Registration Statement. The Registration Statement is not the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the Act, and the Company is not the subject of a pending proceeding under Section 8A of the Act in connection with the offering of the Shares. The Company has not received any notice that the Commission has issued or intends to issue a stop-order with respect to the Registration Statement or that the Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends or has threatened in writing to do so.

 

 

(m) SEC Reports. The Company has complied in all material respects with the requirements to file all reports, schedules, forms, statements and other documents required to be filed by the Company under the 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, together with the Prospectus and the Prospectus Supplement, 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 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 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 or as subsequently amended or corrected in a subsequent SEC Report. 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.

 

(n) [RESERVED]

 

 

(o) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date on which this representation is being made, (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 not required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (v) the Company has not issued any equity securities to any officer, director or “Affiliate” (defined as 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 144 under the Act), except pursuant to existing Company stock option plans, and (vi) no executive officer of the Company or member of the Board has resigned from any position with the Company. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Shares contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects (as such prospects are disclosed in the Registration Statement, the Prospectus or the Incorporated Documents), properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.

 

(p) Litigation. Except as set forth in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”). None of the Actions set forth in the SEC Reports, (i) adversely affects or challenges the legality, validity or enforceability of this Agreement or the Shares 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, to the Company’s knowledge, 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 Act.

 

 

(q) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(r) 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.

 

(s) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

 

 

(t) 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.

 

(u) 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, except where such non-compliance would not reasonably be expected to have a Material Adverse Effect.

 

(v) 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, except where such expiration, termination or abandonment would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as 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 (other than patent or trademark applications) 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.

 

 

(w) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary for companies of a similar size in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

(x) Affiliate Transactions. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

 

(y) Sarbanes Oxley Compliance. The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, 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. Except as disclosed in the SEC Reports with respect to material weaknesses in internal controls, 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.

 

 

(z) Certain Fees. Other than payments to be made to the Manager, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. The Manager shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement.

 

(aa) No Other Sales Agency Agreement. The Company has not entered into any other sales agency agreements or other similar arrangements with any agent or any other representative in respect of at the market offerings of the Shares.

 

(bb) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares from the Manager pursuant to this Agreement, 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. The Company shall conduct its business in a manner so as to reasonably ensure that it or its Subsidiaries will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.

 

 

(cc) Listing and Maintenance Requirements. The Common Stock is listed on the Trading Market and the issuance of the Shares as contemplated by this Agreement does not contravene the rules and regulations of the Trading Market. 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. Except as set forth in the SEC Reports, 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.

 

(dd) Application of Takeover Protections. The Company and the Board have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Shares.

 

(ee) Solvency. Based on the consolidated financial condition of the Company as of the date hereof, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt) within one year from the date hereof. The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the date hereof. The SEC Reports set forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than accrued liabilities and trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

 

(ff) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all required United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

 

(gg) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

(hh) Accountants. The Company’s accounting firm is set forth in the SEC Reports. To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ended December 31, 2024.

 

(ii) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Manager in connection with the Shares.

 

 

(jj) FDA. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company’s knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company.

 

(kk) Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results.

 

 

(ll) Cybersecurity. (i)(x) There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s information technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”) except as would not, individually or in the aggregate, have a Material Adverse Effect, and (y) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as would not, individually or in the aggregate, have a Material Adverse Effect; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practices.

 

(mm) Compliance with Data Privacy Laws. (i) The Company and the Subsidiaries are, and at all times during the past three years were, in compliance with all applicable data privacy and security laws and regulations, including, as applicable, the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively, “Privacy Laws”); (ii) the Company and the Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling and analysis of Personal Data (the “Policies”); (iii) the Company provides accurate notice of its applicable Policies to its customers, employees, third party vendors and representatives as required by Privacy Laws; and (iv) applicable Policies provide accurate and sufficient notice of the Company’s then-current privacy practices relating to its subject matter, and do not contain any material omissions of the Company’s then-current privacy practices, as required by Privacy Laws. “Personal Data” means (i) a natural person’s name, street address, telephone number, email address, photograph, social security number, bank information, or customer or account number; (ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by GDPR; and (iv) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any identifiable data related to an identified person’s health or sexual orientation. (i) None of such disclosures made or contained in any of the Policies have been inaccurate, misleading, or deceptive in violation of any Privacy Laws and (ii) the execution, delivery and performance of this Agreement will not result in a breach of any Privacy Laws or Policies. Neither the Company nor the Subsidiaries, (i) has, to the knowledge of the Company, received written notice of any actual or potential liability of the Company or the Subsidiaries under, or actual or potential violation by the Company or the Subsidiaries of, any of the Privacy Laws; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation or other corrective action pursuant to any regulatory request or demand pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement by or with any court or arbitrator or governmental or regulatory authority that imposed any obligation or liability under any Privacy Law.

 

 

(nn) Office of Foreign Assets Control. Neither the Company nor any of its Subsidiaries, nor to the knowledge of the Company, any of the directors, officers or employees of the Company or its Subsidiaries, is an individual or entity that is, or is owned or controlled by an individual or entity that is: (i) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union, His Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor (ii) located, organized or resident in a country or territory that is the subject of Sanctions. Neither the Company nor any of its Subsidiaries will, directly or indirectly, use the proceeds of the transactions contemplated hereby, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other individual or entity: (i) to fund or facilitate any activities or business of or with any individual or entity or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions or (ii) in any other manner that will result in a violation of Sanctions by any individual or entity (including any individual or entity participating in the transactions contemplated hereby, whether as underwriter, advisor, investor or otherwise). For the past five years, neither the Company nor any of its Subsidiaries has knowingly engaged in, and is not now knowingly engaged in, any dealings or transactions with any individual or entity, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.

 

(oo) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Manager’s request.

 

(pp) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

 

(qq) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

 

(rr) FINRA Member Shareholders. There are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the knowledge of the Company, any five percent (5%) or greater stockholder of the Company, except as set forth in the Registration Statement, the Base Prospectus, any Prospectus Supplement or the Prospectus.

 

4. Agreements. The Company agrees with the Manager that:

 

(a) Right to Review Amendments and Supplements to Registration Statement and Prospectus. During any period when the delivery of a prospectus relating to the Shares is required (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under the Act in connection with the offering or the sale of Shares, the Company will not file any amendment to the Registration Statement or supplement (including any Prospectus Supplement) to the Base Prospectus unless the Company has furnished to the Manager a copy for its review prior to filing and will not file any such proposed amendment or supplement to which the Manager reasonably objects (provided, however, that the Company will have no obligation to provide the Manager any advance copy of a filing or to provide the Manager an opportunity to object to a filing if such filing does not name the Manager and does not relate to the transactions contemplated herein). The Company has properly completed the Prospectus, in a form approved by the Manager, and filed such Prospectus, as amended at the Execution Time, with the Commission pursuant to the applicable paragraph of Rule 424(b) by the Execution Time and will cause any supplement to the Prospectus to be properly completed, in a form approved by the Manager, and will file such supplement with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed thereby and will provide evidence reasonably satisfactory to the Manager of such timely filing. The Company will promptly advise the Manager (i) when the Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b), (ii) when, during any period when the delivery of a prospectus (whether physically or through compliance with Rule 172, 173 or any similar rule) is required under the Act in connection with the offering or sale of the Shares, any amendment to the Registration Statement shall have been filed or become effective (other than any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act), (iii) of any request by the Commission or its staff for any amendment of the Registration Statement, or for any supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any notice objecting to its use or the institution or threatening of any proceeding for that purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Company will use its commercially reasonable efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its commercially reasonable efforts to have such amendment or new registration statement declared effective as soon as practicable.

 

 

(b) Subsequent Events. If, at any time on or after an Applicable Time but prior to the related Settlement Date, any event occurs as a result of which the Registration Statement or Prospectus would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made or the circumstances then prevailing not misleading, the Company will (i) notify promptly the Manager so that any use of the Registration Statement or Prospectus may cease until such are amended or supplemented; (ii) amend or supplement the Registration Statement or Prospectus to correct such statement or omission; and (iii) supply any such amendment or supplement to the Manager in such quantities as the Manager may reasonably request.

 

(c) Notification of Subsequent Filings. During any period when the delivery of a prospectus relating to the Shares is required (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under the Act, any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or if it shall be necessary to amend the Registration Statement, file a new registration statement or supplement the Prospectus to comply with the Act or the Exchange Act or the respective rules thereunder, including in connection with use or delivery of the Prospectus, the Company promptly will (i) notify the Manager of any such event (provided that such notification to the Manager shall not be required if a Sales Notice is not pending at the time of such event and if there have been no sale of Shares under this Agreement at the time of or following such event but prior to Company’s knowledge of such event, but such notification shall be required at least two (2) Trading Days prior to delivery by the Company of any instruction to the Manager to sell Shares hereunder), (ii) subject to Section 4(a), prepare and file with the Commission an amendment or supplement or new registration statement which will correct such statement or omission or effect such compliance, (iii) use its commercially reasonable efforts to have any amendment to the Registration Statement or new registration statement declared effective as soon as practicable in order to avoid any disruption in use of the Prospectus and (iv) supply any supplemented Prospectus to the Manager in such quantities as the Manager may reasonably request.

 

 

(d) Earnings Statements. As soon as practicable, the Company will make generally available to its security holders and to the Manager an earnings statement or statements of the Company and its Subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158. For the avoidance of doubt, the Company’s compliance with the reporting requirements of the Exchange Act shall be deemed to satisfy the requirements of this Section 4(d).

 

(e) Delivery of Registration Statement. Upon the request of the Manager, the Company will furnish to the Manager and counsel for the Manager, without charge, signed copies of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus by the Manager or dealer may be required by the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule), as many copies of the Prospectus and each Issuer Free Writing Prospectus and any supplement thereto as the Manager may reasonably request. The Company will pay the expenses of printing or other production of all documents relating to the offering.

 

(f) Qualification of Shares. The Company will arrange, if necessary, for the qualification of the Shares for sale under the laws of such jurisdictions in the United States of America as the Manager may designate and will maintain such qualifications in effect so long as required for the distribution of the Shares; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the Shares, in any jurisdiction where it is not now so subject.

 

(g) Free Writing Prospectus. The Company agrees that, unless it has or shall have obtained the prior written consent of the Manager, and the Manager agrees with the Company that, unless it has or shall have obtained, as the case may be, the prior written consent of the Company, it has not made and will not make any offer relating to the Shares that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405) required to be filed by the Company with the Commission or retained by the Company under Rule 433. Any such free writing prospectus consented to by the Manager or the Company is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (ii) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.

 

 

(h) Subsequent Equity Issuances. The Company shall not deliver any Sales Notice hereunder (and any Sales Notice previously delivered shall not apply during such two (2) Trading Days) for at least two (2) Trading Days prior to any date on which the Company or any Subsidiary offers, sells, issues, contracts to sell, contracts to issue or otherwise disposes of, directly or indirectly, any other shares of Common Stock or any Common Stock Equivalents (other than the Shares), subject to Manager’s right to waive this obligation; provided that, without compliance with the foregoing obligation, the Company may issue and sell Common Stock or Common Stock Equivalents (i) pursuant to any employee equity plan, stock ownership plan or dividend reinvestment plan of the Company in effect from time to time, (ii) to officers, directors, employees, consultants and contractors as compensation for services rendered to the Company and (iii) issuable upon the conversion or exercise of Common Stock Equivalents outstanding at the Execution Time.

 

(i) Market Manipulation. Until the termination of this Agreement, the Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation in violation of the Act, Exchange Act or the rules and regulations thereunder of the price of any security of the Company to facilitate the sale or resale of the Shares or otherwise violate any provision of Regulation M under the Exchange Act.

 

(j) Notification of Incorrect Certificate. The Company will, at any time during the term of this Agreement, as supplemented from time to time, advise the Manager immediately after it shall have received notice or obtained knowledge thereof, of any information or fact that would alter or affect any opinion, certificate, letter and other document provided to the Manager pursuant to Section 6 herein; provided that such notification to the Manager shall not be required if a Sales Notice is not pending at the time of such notice or knowledge of such information or fact, but such notification shall be required at least two (2) Trading Days prior to delivery by the Company of any instruction to the Manager to sell Shares hereunder.

 

 

(k) Certification of Accuracy of Disclosure. Upon commencement of the offering of the Shares under this Agreement (and upon the recommencement of the offering of the Shares under this Agreement following the termination of a suspension of sales hereunder lasting more than 30 Trading Days), and each time that (i) a new Registration Statement is filed and declared effective by the Commission, (ii) the Registration Statement or Prospectus shall be amended or supplemented, other than by means of Incorporated Documents, (iii) the Company files its Annual Report on Form 10-K under the Exchange Act, (iv) the Company files its quarterly reports on Form 10-Q under the Exchange Act, (v) the Company files a Current Report on Form 8-K containing amended financial information (other than information that is furnished and not filed), if the Manager reasonably determines that the information in such Form 8-K is material, or (vi) the Shares are delivered to the Manager as principal at the Time of Delivery pursuant to a Terms Agreement (such commencement or recommencement date and each such date referred to in (i), (ii), (iii), (iv), (v) and (vi) above, a “Representation Date”), the Company shall furnish or cause to be furnished to the Manager forthwith a certificate dated and delivered on the Representation Date, in form reasonably satisfactory to the Manager to the effect that the statements contained in the certificate referred to in Section 6 of this Agreement which were last furnished to the Manager are true and correct at the Representation Date, as though made at and as of such date (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such date) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in said Section 6, modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the date of delivery of such certificate. The requirement to provide a certificate under this Section 4(k) shall be waived for any Representation Date occurring at a time at which no Sales Notice is pending, which waiver shall continue until the earlier to occur of the date the Company delivers a Sales Notice hereunder (which for such calendar quarter shall be considered a Representation Date) and the next occurring Representation Date on which the Company files its Annual Report on Form 10-K. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following a Representation Date when the Company relied on such waiver and did not provide the Manager with a certificate under this Section 4(k), then before the Company delivers a Sales Notice hereunder, the Company shall provide the Manager with such a certificate, dated the date of the Sales Notice

 

 

(l) Bring Down Opinions; Negative Assurance. Within five (5) Trading Days of each Representation Date, the Company shall furnish or cause to be furnished forthwith to the Manager and to counsel to the Manager a written opinion of counsel to the Company (“Company Counsel”) addressed to the Manager and dated and delivered within five (5) Trading Days of such Representation Date, in form and substance reasonably satisfactory to the Manager, including a negative assurance representation. The requirement to furnish or cause to be furnished an opinion (but not with respect to a negative assurance representation) under this Section 4(l) shall be waived for any Representation Date other than a Representation Date on which a new Registration Statement is filed and declared effective by the Commission or a material amendment to the Registration Statement or Prospectus is made or the Company files its Annual Report on Form 10-K or a material amendment thereto under the Exchange Act, unless the Manager reasonably requests such deliverable required by this Section 4(l) in connection with a Representation Date, upon which request such deliverable shall be deliverable hereunder The requirement to provide an opinion or negative assurance representation under this Section 4(l) shall be waived for any Representation Date occurring at a time at which no Sales Notice is pending, which waiver shall continue until the earlier to occur of the date the Company delivers a Sales Notice hereunder (which for such calendar quarter shall be considered a Representation Date) and the next occurring Representation Date on which the Company files its Annual Report on Form 10-K. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following a Representation Date when the Company relied on such waiver and did not provide the Manager with opinions and a negative assurance representation under this Section 4(l), then before the Company delivers a Sales Notice hereunder, the Company shall provide the Manager with such opinion and negative assurance, dated the date of the Sales Notice.

 

(m) Auditor Bring Down “Comfort” Letter. Unless waived in writing by the Manager, within five (5) Trading Days of each Representation Date, the Company shall cause (1) the Company’s auditors (the “Accountants”), or other independent accountants satisfactory to the Manager forthwith to furnish the Manager a letter, and (2) the Chief Financial Officer of the Company forthwith to furnish the Manager a certificate, in each case dated within five (5) Trading Days of such Representation Date, in form satisfactory to the Manager, of the same tenor as the letters and certificate referred to in Section 6 of this Agreement but modified to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letters and certificate. The requirement to furnish or cause to be furnished a “comfort” letter under this Section 4(m) shall be waived for any Representation Date other than a Representation Date on which a new Registration Statement is filed and declared effective by the Commission or a material amendment to the Registration Statement or Prospectus is made or the Company files its Annual Report on Form 10-K or a material amendment thereto under the Exchange Act, unless the Manager reasonably requests the deliverables required by this Section 4(m) in connection with a Representation Date, upon which request such deliverable shall be deliverable hereunder. Notwithstanding the foregoing, the requirement to deliver or cause to be delivered one or more letters or certificates under this Section 4(m) shall, at the request of the Company, be waived for any Representation Date occurring at a time at which no Sales Notice is pending, which waiver shall continue until the earlier to occur of the date the Company delivers a Sales Notice hereunder (which for such calendar quarter shall be considered a Representation Date) and the next occurring Representation Date on which the Company files its Annual Report on Form 10-K. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following a Representation Date when the Company relied on such waiver and did not provide the Manager with a letter or certificate under this Section 4(m), then before the Company delivers a Sales Notice hereunder, the Company shall provide the Manager with such letter and certificate dated the date of the Sales Notice.

 

 

(n) Due Diligence Session. Upon commencement of the offering of the Shares under this Agreement (and upon the recommencement of the offering of the Shares under this Agreement following the termination of a suspension of sales hereunder lasting more than 30 Trading Days), and at each Representation Date, the Company will conduct a due diligence session, in form and substance, reasonably satisfactory to the Manager, which shall include representatives of management, Company Counsel and Accountants. The Company shall cooperate timely with any reasonable due diligence request from or review conducted by the Manager or its agents from time to time in connection with the transactions contemplated by this Agreement, including, without limitation, providing information and available documents and access to appropriate corporate officers and the Company’s agents during regular business hours, and timely furnishing or causing to be furnished such certificates, letters and opinions from the Company, its officers and its agents, as the Manager may reasonably request. The Company shall reimburse the Manager for Manager’s counsel’s fees in each such Representation Date, up to a maximum of $5,000 per Representation Date in connection with a new Registration Statement or the filing of the Company’s Annual Report on Form 10-K and $2,500 in connection with each other Representation Date, plus any incidental expense incurred by the Manager in connection therewith.

 

(o) Acknowledgment of Trading. The Company consents to the Manager trading in the Common Stock for the Manager’s own account and for the account of its clients at the same time as sales of the Shares occur pursuant to this Agreement or pursuant to a Terms Agreement.

 

(p) Disclosure of Shares Sold. The Company will disclose in its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, as applicable, the number of Shares sold through the Manager under this Agreement, the Net Proceeds to the Company and the compensation paid by the Company with respect to sales of Shares pursuant to this Agreement during the relevant quarter; and, if required by any subsequent change in Commission policy or request, more frequently by means of a Current Report on Form 8-K or a further Prospectus Supplement.

 

(q) Rescission Right. If to the knowledge of the Company, the conditions set forth in Section 6 shall not have been satisfied as of the applicable Settlement Date, the Company will offer to any person who has agreed to purchase Shares from the Company as the result of an offer to purchase solicited by the Manager the right to refuse to purchase and pay for such Shares.

 

 

(r) Bring Down of Representations and Warranties. Each acceptance by the Company of an offer to purchase the Shares hereunder, and each execution and delivery by the Company of a Terms Agreement, shall be deemed to be an affirmation to the Manager that the representations and warranties of the Company contained in or made pursuant to this Agreement are true and correct as of the date of such acceptance or of such Terms Agreement as though made at and as of such date, and an undertaking that such representations and warranties will be true and correct as of the Settlement Date for the Shares relating to such acceptance or as of the Time of Delivery relating to such sale, as the case may be, as though made at and as of such date (except that such representations and warranties shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented relating to such Shares).

 

(s) Reservation of Shares. The Company shall ensure that there are at all times sufficient shares of Common Stock to provide for the issuance, free of any preemptive rights, out of its authorized but unissued shares of Common Stock or shares of Common Stock held in treasury, of the maximum aggregate number of Shares authorized for issuance by the Board pursuant to the terms of this Agreement. The Company will use its commercially reasonable efforts to cause the Shares to be listed for trading on the Trading Market and to maintain such listing.

 

(t) Obligation Under Exchange Act. During any period when the delivery of a prospectus relating to the Shares is required (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under the Act, the Company will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and the regulations thereunder.

 

(u) DTC Facility. The Company shall cooperate with the Manager and use its reasonable efforts to permit the Shares to be eligible for clearance and settlement through the facilities of DTC.

 

(v) Use of Proceeds. The Company will apply the Net Proceeds from the sale of the Shares in the manner set forth in the Prospectus.

 

(w) Filing of Prospectus Supplement. If any sales are made pursuant to this Agreement which are not made in “at the market” offerings as defined in Rule 415, including, without limitation, any Placement pursuant to a Terms Agreement, the Company shall file a Prospectus Supplement describing the terms of such transaction, the amount of Shares sold, the price thereof, the Manager’s compensation, and such other information as may be required pursuant to Rule 424 and Rule 430B, as applicable, within the time required by Rule 424.

 

 

(x) Additional Registration Statement. To the extent that the Registration Statement is not available for the sales of the Shares as contemplated by this Agreement, the Company shall file a new registration statement with respect to any additional shares of Common Stock necessary to complete such sales of the Shares and shall cause such registration statement to become effective as promptly as practicable. After the effectiveness of any such registration statement, all references to “Registration Statement” included in this Agreement shall be deemed to include such new registration statement, including all documents incorporated by reference therein pursuant to Item 12 of Form S-3, and all references to “Base Prospectus” included in this Agreement shall be deemed to include the final form of base prospectus, including all documents incorporated therein by reference, included in any such registration statement at the time such registration statement became effective.

 

5. Payment of Expenses. The Company agrees to pay the costs and expenses incident to the performance of its obligations under this Agreement, whether or not the transactions contemplated hereby are consummated, including without limitation: (i) the preparation, printing or reproduction and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), the Prospectus and each Issuer Free Writing Prospectus, and each amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, the Prospectus, and each Issuer Free Writing Prospectus, and all amendments or supplements to any of them, as may, in each case, be reasonably requested for use in connection with the offering and sale of the Shares; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Shares, including any stamp or transfer taxes in connection with the original issuance and sale of the Shares; (iv) the printing (or reproduction) and delivery of this Agreement, any blue sky memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Shares; (v) the registration of the Shares under the Exchange Act, if applicable, and the listing of the Shares on the Trading Market; (vi) any registration or qualification of the Shares for offer and sale under the securities or blue sky laws of the several states (including filing fees and the reasonable fees and expenses of counsel for the Manager relating to such registration and qualification); (vii) the transportation and other expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of the Shares; (viii) the fees and expenses of the Company’s accountants and the fees and expenses of counsel (including local and special counsel) for the Company; (ix) the filing fee under FINRA Rule 5110; (x) the reasonable fees and expenses of the Manager’s counsel, not to exceed $80,000 (excluding any periodic due diligence fees provided for under Section 4(n)), which shall be paid upon the Execution Time; and (xi) all other costs and expenses incident to the performance by the Company of its obligations hereunder.

 

 

6. Conditions to the Obligations of the Manager. The obligations of the Manager under this Agreement and any Terms Agreement shall be subject to (i) the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time, each Representation Date, and as of each Applicable Time, Settlement Date and Time of Delivery, (ii) the performance by the Company of its obligations hereunder and (iii) the following additional conditions:

 

(a) Filing of Prospectus Supplement. The Prospectus, and any supplement thereto, required by Rule 424 to be filed with the Commission have been filed in the manner and within the time period required by Rule 424(b) with respect to any sale of Shares; each Prospectus Supplement shall have been filed in the manner required by Rule 424(b) within the time period required hereunder and under the Act; any other material required to be filed by the Company pursuant to Rule 433(d) under the Act, shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been issued and no proceedings for that purpose shall have been instituted or threatened.

 

(b) Delivery of Opinion. The Company shall have caused the Company Counsel to furnish to the Manager its opinion and negative assurance statement, dated as of such date and addressed to the Manager in form and substance acceptable to the Manager.

 

(c) Delivery of Officer’s Certificate. The Company shall have furnished or caused to be furnished to the Manager a certificate of the Company signed by the Chief Executive Officer or the President and the principal financial or accounting officer of the Company, dated as of such date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Prospectus, any Prospectus Supplement and any documents incorporated by reference therein and any supplements or amendments thereto and this Agreement and that:

 

(i) the representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of such date with the same effect as if made on such date and the Company has complied in all material respects with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to such date;

 

(ii) no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no proceedings for that purpose have been instituted or, to the Company’s knowledge, threatened; and

 

(iii) since the date of the most recent financial statements included in the Registration Statement, the Prospectus and the Incorporated Documents, there has been no Material Adverse Effect on the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Registration Statement and the Prospectus.

 

 

(d) Delivery of Accountants’ “Comfort” Letter. The Company shall have requested and caused the Accountants to have furnished to the Manager letters (which may refer to letters previously delivered to the Manager), dated as of such date, in customary form and substance reasonably satisfactory to the Manager, confirming that they are independent accountants within the meaning of the Act and the Exchange Act and the respective applicable rules and regulations adopted by the Commission thereunder and that they have performed a review of any unaudited interim financial information of the Company included or incorporated by reference in the Registration Statement and the Prospectus and provide customary “comfort” as to such review in customary form and substance reasonably satisfactory to the Manager.

 

(e) No Material Adverse Event. Since the respective dates as of which information is disclosed in the Registration Statement, the Prospectus and the Incorporated Documents, except as otherwise stated therein, there shall not have been (i) any change or decrease in previously reported results specified in the letter or letters referred to in paragraph (d) of this Section 6 or (ii) any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Registration Statement, the Prospectus and the Incorporated Documents (exclusive of any amendment or supplement thereto) the effect of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment of the Manager, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Shares as contemplated by the Registration Statement (exclusive of any amendment thereof), the Incorporated Documents and the Prospectus (exclusive of any amendment or supplement thereto).

 

(f) Payment of All Fees. The Company shall have paid the required Commission filing fees relating to the Shares within the time period required by Rule 456(b)(1)(i) of the Act without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the Act and, if applicable, shall have updated the “Calculation of Registration Fee” table in accordance with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration Statement or on the cover page of a prospectus filed pursuant to Rule 424(b).

 

(g) No FINRA Objections. FINRA shall not have raised any objection with respect to the fairness and reasonableness of the terms and arrangements under this Agreement.

 

(h) Shares Listed on Trading Market. The Shares shall have been listed and admitted and authorized for trading on the Trading Market, and satisfactory evidence of such actions shall have been provided to the Manager.

 

 

(i) Other Assurances. Prior to each Settlement Date and Time of Delivery, as applicable, the Company shall have furnished to the Manager such further information, certificates and documents as the Manager may reasonably request.

 

If any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Manager and counsel for the Manager, this Agreement and all obligations of the Manager hereunder may be canceled at, or at any time prior to, any Settlement Date or Time of Delivery, as applicable, by the Manager. Notice of such cancellation shall be given to the Company in writing or by telephone and confirmed in writing by email.

 

The documents required to be delivered by this Section 6 shall be delivered to the office of Lowenstein Sandler LLP, counsel for the Manager, at 1251 Avenue of the Americas, New York, New York 10020, email: SSkolnick@lowenstein.com, on each such date as provided in this Agreement.

 

7. Indemnification and Contribution.

 

(a) Indemnification by Company. The Company agrees to indemnify and hold harmless the Manager, the directors, officers, employees and agents of the Manager and each person who controls the Manager within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in the Base Prospectus, any Prospectus Supplement, the Prospectus, any Issuer Free Writing Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or arise out of or are based upon any Proceeding, commenced or threatened (whether or not the Manager is a target of or party to such Proceeding) or result from or relate to any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement, and agrees to reimburse each such indemnified party for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by the Manager specifically for inclusion therein. This indemnity agreement will be in addition to any liability that the Company may otherwise have.

 

 

(b) Indemnification by Manager. The Manager agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to the Manager, but only with reference to written information relating to the Manager furnished to the Company by the Manager specifically for inclusion in the documents referred to in the foregoing indemnity; provided, however, that in no case shall the Manager be responsible for any amount in excess of the Broker Fee applicable to the Shares and paid hereunder. This indemnity agreement will be in addition to any liability which the Manager may otherwise have.

 

(c) Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding.

 

 

(d) Contribution. In the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 7 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Manager agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same) (collectively “Losses”) to which the Company and the Manager may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by the Manager on the other from the offering of the Shares; provided, however, that in no case shall the Manager be responsible for any amount in excess of the Broker Fee applicable to the Shares and paid hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Manager severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and of the Manager on the other in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by it, and benefits received by the Manager shall be deemed to be equal to the Broker Fee applicable to the Shares and paid hereunder as determined by this Agreement. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company on the one hand or the Manager on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Manager agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person who controls the Manager within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of the Manager shall have the same rights to contribution as the Manager, and each person who controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).

 

 

8. Termination.

 

(a) The Company shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement relating to the solicitation of offers to purchase the Shares in its sole discretion at any time upon three (3) Business Days’ prior written notice. Any such termination shall be without liability of any party to any other party except that (i) with respect to any pending sale, through the Manager for the Company, the obligations of the Company, including in respect of compensation of the Manager, shall remain in full force and effect notwithstanding the termination and (ii) the provisions of Sections 5, 6, 7, 8, 9, 10, 12, the second sentence of 13, 14 and 15 of this Agreement shall remain in full force and effect notwithstanding such termination.

 

(b) The Manager shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement relating to the solicitation of offers to purchase the Shares in its sole discretion at any time. Any such termination shall be without liability of any party to any other party except that the provisions of Sections 5, 6, 7, 8, 9, 10, 12, the second sentence of 13, 14 and 15 of this Agreement shall remain in full force and effect notwithstanding such termination.

 

(c) This Agreement shall remain in full force and effect until such date that this Agreement is terminated pursuant to Sections 8(a) or (b) above or otherwise by mutual agreement of the parties, provided that any such termination by mutual agreement shall in all cases be deemed to provide that Sections 5, 6, 7, 8, 9, 10, 12, the second sentence of 13, 14 and 15 of this Agreement shall remain in full force and effect.

 

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

 

 

(e) In the case of any purchase of Shares by the Manager pursuant to a Terms Agreement, the obligations of the Manager pursuant to such Terms Agreement shall be subject to termination, in the absolute discretion of the Manager, by prompt oral notice given to the Company prior to the Time of Delivery relating to such Shares, if any, and confirmed promptly by electronic mail, if since the time of execution of the Terms Agreement and prior to such delivery and payment, (i) trading in the Common Stock shall have been suspended by the Commission or the Trading Market or trading in securities generally on the Trading Market shall have been suspended or limited or minimum prices shall have been established on such exchange, (ii) a banking moratorium shall have been declared either by Federal or New York State authorities or (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Manager, impractical or inadvisable to proceed with the offering or delivery of the Shares as contemplated by the Prospectus (exclusive of any amendment or supplement thereto).

 

9. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Manager set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by the Manager or the Company or any of the officers, directors, employees, agents or controlling persons referred to in Section 7, and will survive delivery of and payment for the Shares.

 

10. Notices. All communications hereunder will be in writing and effective only on receipt, and will be mailed, delivered, or e-mailed to the addresses of the Company and the Manager, respectively, set forth on the signature page hereto.

 

11. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Section 7, and no other person will have any right or obligation hereunder.

 

12. No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and sale of the Shares pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the Manager and any affiliate through which it may be acting, on the other, (b) the Manager is acting solely as sales agent and/or principal in connection with the purchase and sale of the Company’s securities and not as a fiduciary of the Company and (c) the Company’s engagement of the Manager in connection with the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether the Manager has advised or is currently advising the Company on related or other matters). The Company agrees that it will not claim that the Manager has rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.

 

13. Integration. This Agreement and any Terms Agreement supersede all prior agreements and understandings (whether written or oral) between the Company and the Manager with respect to the subject matter hereof. Notwithstanding anything herein to the contrary, the letter agreement, dated May 2, 2024, as amended to date, by and between the Company and the Manager shall continue to be effective and the terms therein shall continue to survive and be enforceable by the Manager in accordance with its terms, provided that, in the event of a conflict between the terms of the letter agreement and this Agreement in connection with at-the-market facility, the terms of the letter agreement shall prevail.

 

14. 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 Manager. 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.

 

 

15. Applicable Law. This Agreement and any Terms Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York. Each of the Company and the Manager: (i) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted exclusively in New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection which it may have or hereafter to the venue of any such suit, action or proceeding, and (iii) irrevocably consents to the exclusive jurisdiction of the New York Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding. Each of the Company and the Manager further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified mail to the Company’s address shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon the Manager mailed by certified mail to the Manager’s address shall be deemed in every respect effective service process upon the Manager, in any such suit, action or proceeding. If either party shall commence an action or proceeding to enforce any provision of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

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

 

17. Counterparts. This Agreement and any Terms Agreement may be executed in one or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon one and the same agreement. Counterparts may be delivered via electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

18. 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.

 

19. Headings. The section headings used in this Agreement and any Terms Agreement are for convenience only and shall not affect the construction hereof.

 

**************************

 

 

If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the Manager.

 

Very truly yours,

 

VIVOS THERAPEUTICS, INC.
By:	/s/ R. Kirk Huntsman
Name:	R. Kirk Huntsman
Title:	Chairman and Chief Executive Officer

 

Address for Notice:

 

7921 SouthPark Plaza, Suite 210

Littleton, Colorado 80120

Attention: R. Kirk Huntsman and Bradford Amman

Email: kirk@vivoslife.com and bamman@vivoslife.com

 

The foregoing Agreement is hereby confirmed and accepted as of the date first written above.

 

H.C. WAINWRIGHT & CO., LLC
By:	/s/ Edward D. Silvera
Name:	Edward D. Silvera
Title:	Chief Operating Officer

 

Address for Notice:

 

430 Park Avenue

New York, New York 10022

Attention: Chief Executive Officer

E-mail: notices@hcwco.com

 

 

Form of Terms Agreement

ANNEX I

VIVOS THERAPEUTICS, INC.

TERMS AGREEMENT

 

Dear Sirs:

 

Vivos Therapeutics, Inc. (the “Company”) proposes, subject to the terms and conditions stated herein and in the At The Market Offering Agreement, dated February 14, 2025 (the “At The Market Offering Agreement”), between the Company and H.C. Wainwright & Co., LLC (“Manager”), to issue and sell to Manager the securities specified in the Schedule I hereto (the “Purchased Shares”).

 

Each of the provisions of the At The Market Offering Agreement not specifically related to the solicitation by the Manager, as agent of the Company, of offers to purchase securities is incorporated herein by reference in its entirety, and shall be deemed to be part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Terms Agreement and the Time of Delivery, except that each representation and warranty in Section 3 of the At The Market Offering Agreement which makes reference to the Prospectus (as therein defined) shall be deemed to be a representation and warranty as of the date of the At The Market Offering Agreement in relation to the Prospectus, and also a representation and warranty as of the date of this Terms Agreement and the Time of Delivery in relation to the Prospectus as amended and supplemented to relate to the Purchased Shares.

 

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

 

Subject to the terms and conditions set forth herein and in the At The Market Offering Agreement which are incorporated herein by reference, the Company agrees to issue and sell to the Manager and the latter agrees to purchase from the Company the number of shares of the Purchased Shares at the time and place and at the purchase price set forth in the Schedule I hereto.

 

If the foregoing is in accordance with your understanding, please sign and return to us a counterpart hereof, whereupon this Terms Agreement, including those provisions of the At The Market Offering Agreement incorporated herein by reference, shall constitute a binding agreement between the Manager and the Company.

 

 

VIVOS THERAPEUTICS, INC.
By:
Name:
Title:

 

ACCEPTED as of the date first written above.

 

H.C. WAINWRIGHT & CO., LLC
By:
Name:
Title:

 

 

Schedule I

 

 

 

Exhibit 10.2

 

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of the 1st day of January 2025 (the “Effective Date”) by and between VIVOS THERAPEUTICS, INC., a Delaware corporation having its principal place of business at 9137 S. Ridgeline Blvd., Suite 135, Highlands Ranch, Colorado 80129 (the “Company”) and R. KIRK HUNTSMAN, an individual currently residing in the City of ______ (the “Executive”). As used herein, the term “Parties” shall be used to refer to the Company and Executive jointly.

 

RECITALS

 

A. Company is engaged in the business of, among other things, developing and marketing products for the treatment of sleep and breathing disorders;

 

B. Executive is currently employed by Company as Chief Executive Officer, pursuant to that certain Employment Agreement dated May 4, 2017 and subsequently amended and restated October 8, 2020 (collectively, the “Prior Agreements”) ;

 

C. Company desires to continue to employ Executive in the capacity of an executive officer of Company, and Executive desires to be employed in such capacity and on the terms and conditions set forth in this Agreement;

 

D. As a result, Company and Executive have agreed to amend and restate the Prior Agreements by virtue of this Agreement;

 

E. The success of Company depends to a substantial extent upon maintaining strict secrecy with respect to confidential information and trade secrets relating to the business of Company;

 

F. Executive, by reason of Executive’s employment with Company, is being given access to and will acquire, or has been given access to and acquired, knowledge of confidential and sensitive business information and trade secrets of Company, and may further be involved in customer, product, and/or intellectual property development during the course of Executive’s employment;

 

G. Executive acknowledges that Company has informed Executive that it is only willing to continue to employ Executive in reliance upon the agreements and covenants of Executive herein, and that executing and complying with this Agreement is an express condition of continued employment.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the Parties agree as follows:

 

1. Employment.

 

(a) Company hereby employs Executive to serve as the Chief Executive Officer of Company on the terms and conditions set forth herein. In such capacity, Executive shall have the responsibilities normally associated with such position, subject to the direction and supervision of the Board of Directors of Company (the “Board”), including the duties set forth in Attachment A and any other duties assigned to Executive from time to time by the Board.

 

 

(b) Executive accepts employment hereunder and agrees that, during the term of Executive’s employment, Executive will observe and comply with the policies and rules of Company and devote substantially all Executive’s time during normal business hours and best efforts to the performance of Executive’s duties hereunder, which duties shall be performed in an efficient and competent manner and to the best of Executive’s ability. Executive further agrees that, during the term of this Agreement, Executive will not, without the prior written consent of the Board, directly or indirectly engage in any manner in any business or other endeavor, either as an owner, employee, officer, director, independent contractor, agent, partner, advisor, or in any other capacity calling for the rendition of Executive’s personal services. This restriction shall not preclude Executive from having passive investments, and devoting reasonable time to the supervision thereof (so long as such does not create a conflict of interest or interfere with Executive’s obligations hereunder), in any business or enterprise that is not in competition with any business or enterprise of Company or any of its parents, subsidiaries or affiliates. This Agreement shall not limit Executive’s community, religious, or charitable activities so long as such activities do not impair or interfere with Executive’s performance of the services contemplated by this Agreement.

 

(c) Executive’s employment and the place of performance of Executive’s duties will be at Company’s corporate headquarters and/or at a separate office facility in Denver, Colorado, or at such other location as mutually agreed upon by Executive and Company.

 

2. Compensation; Benefits.

 

For all services rendered by Executive to or on behalf of Company, Company shall provide or cause to be provided to Executive, subject to making any and all withholdings and deductions required of Company by law with all other income tax consequences being borne by Executive, the following:

 

(a) Base Salary. Executive is receiving an annualized base salary of $450,000 per year (the “Base Salary”), payable in accordance with the normal payroll practices of Company, and net of applicable withholding and deductions. Executive’s Base Salary shall be reviewed annually by the Board. Any increases in such Base Salary shall be at the sole discretion of the Board.

 

(b) Management Incentive Plan. Executive shall be eligible for cash incentive compensation in accordance with Attachment B (the “Management Incentive Plan”), attached hereto and made a part hereof by this reference. Cash incentive compensation shall be paid semi- annually upon review and approval of the Compensation Committee of the Board.

 

(c) Equity Awards. Executive shall be eligible to participate in Company’s then existing equity incentive plan during the term of employment as determined by the Compensation Committee of the Board in its sole discretion and subject to the terms of any such plan. Any equity awards granted to Executive during the term of employment will be subject to all of the terms and conditions of the plan, the Company’s insider trading policy, the Company’s then existing clawback or recoupment policy, and the award agreement that Executive is required to sign to accept such award.

 

 

(d) Expense Reimbursement. Executive shall be entitled to reimbursement for all reasonable out-of-pocket business expenses incurred directly by Executive in performing Executive’s duties and obligations under this Agreement. Company shall reimburse Executive for such reasonable business expenses on a monthly basis, upon submission by Executive of appropriate receipts, vouchers or other documents in accordance with Company’s policy.

 

(e) Fringe Benefits. Executive shall be entitled to participate in any fringe benefit plans, including medical and dental plans, as adopted by the Company from time to time and applicable to other employees of Company, including without limitation profit-sharing, 401(k), incentive savings, group life insurance, salary continuation, and disability plans, subject to the terms and conditions of each such plan. Company reserves the right to adopt, amend, modify, replace, or discontinue any such fringe benefit plan or its relative contribution to such plan at any time and in its sole discretion.

 

(f) Paid Time Off. Executive shall be eligible for four (4) weeks of paid time off (“PTO”) annually. Executive may take the paid time off at any time during the year, so long as it does not create hardship for Company. In addition, Executive shall be entitled to paid sick leave and paid holidays in accordance with Company’s policies applicable to other executive employees. Upon the termination of this Agreement for any reason other than Cause (as defined below), Executive shall have the right to receive any accrued but unused PTO.

 

3. Term and Termination.

 

(a) Term. Unless terminated earlier, the term of this Agreement shall be for a period of three (3) years commencing with the Effective Date and continuing until December 31, 2027 (the “Term”).

 

(b) Termination By Company for Cause. Company may terminate this Agreement immediately at any time for Cause. For purposes of this Agreement, “Cause” shall mean (i) any act of dishonesty or fraud with respect to Company; (ii) commission of a felony or a crime involving moral turpitude or the entrance of a plea of guilty or nolo contendere to a felony or a crime involving moral turpitude; (iii) any other criminal act, reasonably determined by the Board, to cause material harm to Company’s standing and reputation; (iv) any action involving a material breach of the terms of the Agreement, including Executive’s continued material failure to perform Executive’s duties to Company after thirty (30) days’ written notice thereof to Executive (spelling out in sufficient detail such failures), without correction of such failure; (v) gross negligence or willful misconduct by Executive with respect to Company, as reasonably determined by the Board; (vi) any acts that violate any policy of Company relating to discrimination or harassment; or (vii) any act or other misconduct that results in or could result in significant reputational harm to the Company. In the event of a termination for Cause, Executive shall not be entitled to receive any unpaid amounts under Executive’s Base Salary and Management Incentive Plan.

 

 

(c) Termination By Company Without Cause. Company may terminate this Agreement immediately at any time without Cause by giving Executive written notice specifying the effective date of such termination. In the event of a termination without Cause, but subject to Executive’s timely execution (and non-revocation) of the Release (as defined below), Executive shall be entitled to receive: (i) a pro-rated Management Incentive Plan payment in accordance with the terms and conditions of Attachment B; (ii) a cash severance payment equal to 12 months of Executive’s then Base Salary (the “Base Salary Severance”); (iii) a lump cash payment equal to 12 times the monthly premium required to be paid by the Executive to continue the Executive’s group health care and dental care coverage as in effect for the year in which the termination of employment occurs, based on the monthly COBRA premium in effect as of the termination date, with such lump sum amount paid to Executive during the first payroll period following the date on which the revocation period described in the Release expires; and (iv) all of Executive’s outstanding equity awards that are not yet vested shall vest in full on the date on which the revocation period described in the Release expires.

 

(d) Termination By Executive For Good Reason. Executive shall be entitled to terminate this Agreement immediately at any time for Good Reason by giving Company written notice of such termination. For purposes of this Agreement, “Good Reason” shall mean, without Executive’s consent (i) the assignment to Executive of duties inconsistent with the position and nature of Executive’s employment as Chief Executive Officer, the substantial and material reduction of the duties of Executive, which is inconsistent with the position and nature of Executive’s employment as Chief Executive Officer, or the change of Executive’s title indicating a substantial and material change in the position and nature of Executive’s employment; (ii) a reduction in compensation and benefits that would diminish the aggregate value of Executive’s compensation and benefits (except in the case of an equal reduction in salaries for all senior executives because of the financial condition of Company); or (iii) the failure by Company to obtain from any successor an agreement to assume and perform this Agreement; provided, however, that Executive shall not have the right to terminate this Agreement for Good Reason unless: (A) Executive has provided written notice to Company of the intent to terminate the Agreement under this provision identifying the specific condition Executive believes to constitute Good Reason; (B) Company has been given at least 30 days after receiving such notice to cure such condition; and (C) Company fails to reasonably cure the condition. If Executive resigns with Good Reason, subject to Executive’s timely execution (and non-revocation) of the Release, Executive shall be entitled to receive: (i) a pro-rated Management Incentive Plan payment in accordance with the terms and conditions of Attachment B; (ii) the Base Salary Severance; (iii) a lump cash payment equal to 12 times the monthly premium required to be paid by the Executive to continue the Executive’s group health care and dental care coverage as in effect for the year in which the termination of employment occurs, based on the monthly COBRA premium in effect as of the termination date, with such lump sum amount paid to Executive during the first payroll period following the date on which the revocation period described in the Release expires; and (iv) all of Executive’s outstanding equity awards that are not yet vested shall vest in full on the date on which the revocation period described in the Release expires.

 

(e) Termination By Executive Without Good Reason. Executive may also terminate this Agreement at any time without Good Reason by giving Company at least sixty (60) days’ prior written notice. In such event, Executive shall be entitled to receive Executive’s Base Salary through the date of such resignation.

 

 

(f) Termination Due To Disability. If Executive becomes Disabled (as defined below), this Agreement shall terminate and subject to Executive’s timely execution (and non-revocation) of the Release, Executive shall be entitled to receive: (i) a pro-rated Management Incentive Plan payment in accordance with the terms and conditions of Attachment B; (ii) the Base Salary Severance but such Base Salary Severance shall be reduced to six (6) months; (iii) a lump cash payment equal to six (6) times the monthly premium required to be paid by the Executive to continue the Executive’s group health care and dental care coverage as in effect for the year in which the termination of employment occurs, based on the monthly COBRA premium in effect as of the termination date, with such lump sum amount paid to Executive during the first payroll period following the date on which the revocation period described in the Release expires; and (iv) all of Executive’s outstanding equity awards that are not yet vested shall vest in full on the date on which the revocation period described in the Release expires. For this purpose, “Disability” means Executive’s inability to engage in any substantially gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code.

 

(g) Termination Due To Death. If Executive dies subject to Executive’s estate’s timely execution (and non-revocation) of the Release, the estate shall be entitled to receive: (i) a pro-rated Management Incentive Plan payment in accordance with the terms and conditions of Attachment B; (ii) the Base Salary Severance but such Base Salary Severance shall be reduced to six (6) months; (iii) a lump cash payment equal to six (6) times the monthly premium required to be paid by the Executive to continue the Executive’s group health care and dental care coverage as in effect for the year in which the termination of employment occurs, based on the monthly COBRA premium in effect as of the termination date, with such lump sum amount paid to Executive during the first payroll period following the date on which the revocation period described in the Release expires; and (iv) all of Executive’s outstanding equity awards that are not yet vested shall vest in full on the date on which the revocation period described in the Release expires.

 

(h) Impact of Change In Control.

 

(i) In the event of a Change In Control (as defined below), and notwithstanding the fact that Executive may continue to provide services from and after the Change In Control, on the date of a Change In Control, all of Executive’s outstanding equity awards that are not yet vested shall vest in full. For purposes of this Agreement, “Change In Control” shall have the meaning ascribed to it in the Company’s then existing equity incentive plan.

 

(ii) In the event Executive’s employment is terminated by the Company without Cause or Executive resigns for Good Reason during the 12 month period following a Change In Control, then, subject to Executive’s timely execution (and non-revocation) of the Release, Executive shall be entitled to receive: (i) a pro-rated Management Incentive Plan payment in accordance with the terms and conditions of Attachment B; (ii) a cash severance payment equal to 24 months of Executive’s then Base Salary (the “Enhanced Base Salary Severance”); and (iii) a lump cash payment equal to 24 times the monthly premium required to be paid by the Executive to continue the Executive’s group health care and dental care coverage as in effect for the year in which the termination of employment occurs, based on the monthly COBRA premium in effect as of the termination date, with such lump sum amount paid to Executive during the first payroll period following the date on which the revocation period described in the Release expires

 

 

(i) Provisions of Agreement that Survive Termination. No termination of this Agreement shall affect any of the rights and obligations of the Parties hereto under Sections 4 through 8, and it is expressly contemplated by the Parties that such rights and obligations shall survive such termination in accordance with the terms of such sections.

 

(j) Resignation from Positions. Upon termination of Executive hereunder for any reason, Executive agrees that Executive shall be deemed to have resigned from all officer, director, management or board positions to which Executive may have been elected or appointed by reason of Executive’s employment or involvement with Company, specifically including but not limited to the Board, and any other boards and/or industry associations in which Executive serves as a result of or in Executive’s capacity as Chief Executive Officer (collectively, the “Associations”). Executive agrees to promptly execute and deliver to Company or its designee any other document, including without limitation a letter of resignation, reasonably requested by Company to effectuate the purposes of this Section 3(j). If Company is unable, after reasonable effort, to secure Executive’s signature on any document that Company deems to be necessary to effectuate the purposes of this Section 3(j), Executive hereby designates and appoints Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact, to act for and on Executive’s behalf to execute, verify and submit to any appropriate third party any such document, which shall thereafter have the same legal force and effect as if executed by Executive.

 

(k) Release Requirement. As a condition to receiving (and continuing to receive) the post-termination payments and benefits described in this Agreement, Executive (or Executive’s spouse or estate) must (i) within not later than 60 days after the last day of employment (the “Release Deadline”), execute (and not revoke) and deliver to the Company a Mutual Release Of All Claims And Covenant Not To Sue Agreement (the “Release”) in a form to be prepared by the Company at the time of Executive’s separation from employment; and (ii) remain in full compliance with such Release. The Company will have the obligation to provide Executive with the Release within seven (7) days of the termination date. None of the post-termination payments and benefits described in this Agreement will be paid or provided until the Release is effective and irrevocable and if the Release does not become effective and irrevocable by the Release Deadline, Executive will forfeit all rights to the post-termination severance payments and benefits described in this Agreement. If the Release is effective and irrevocable on the Release Deadline, then, except as required the following sentence and/or Section 409A (as defined below), any payments that would have been made to Executive during the 60 day period immediately following Executive’s separation from service will be paid to Executive on the first Company payroll period following the Release Deadline and any remaining payments will be made as provided in this Agreement. Additionally, and notwithstanding anything herein to the contrary, in the event that the time period within which Executive must return and not revoke the Release straddles two (2) calendar years, in all events any post-termination payments that are subject to Section 409A will be made (or commence, as applicable) in the second such calendar year.

 

 

4. Restrictive Covenants.

 

The Executive understands that the nature of the Executive’s position gives the Executive access to and knowledge of trade secrets and Confidential Information (as defined in the Nondisclosure Agreement) and places the Executive in a position of trust and confidence with the Company. The Executive understands and acknowledges that the Executive is being hired because the executive services the Executive provides to the Company are unique, special, or extraordinary. Executive further understands and acknowledges that the Company’s ability to reserve these for the exclusive knowledge and use of the Company is of great competitive importance and commercial value to the Company, and that improper use or disclosure by the Employee is likely to result in unfair or unlawful competitive activity. Accordingly, Executive agrees as follows:

 

(a) Definitions. The following definitions shall apply to this Section 4:

 

(i) The term “Competitive Business” means any business whose products, services, or activities compete in whole or in part with the products services, or activities of Company, or planned products, services, or activities in which Executive was involved, during Executive’s employment with Company.

 

(ii) The term “Customer Information” identifying facts and circumstances specific to the Company’s customer, including, but is not limited to, names, phone numbers, addresses, email addresses, order history, order preferences, chain of command, and pricing information.

 

(iii) The term “Nondisclosure Agreement” means the Employee Confidential Information and Invention Assignment Agreement attached hereto as Attachment C.

 

(iv) The term “Prohibited Activity” is activity in which the Executive contributes the Executive’s knowledge, directly or indirectly, in whole or in part, as an employee, employer, owner, operator, manager, advisor, consultant, contractor, agent, partner, director, stockholder, officer, volunteer, intern, or any other similar capacity to a Competitive Business. Prohibited Activity also includes activity that may require or inevitably require the use or disclosure of trade secrets, proprietary information, or confidential information.

 

(v) The term “Restricted Area” shall mean the continental United States.

 

(vi) The term “Restricted Period” shall mean the period of Executive’s employment with the Company and 24 months immediately following the termination of Executive’s employment with the Company, regardless of the reason for the termination.

 

(b) Non-Competition. During the Restricted Period, Executive agrees and covenants not to engage in Prohibited Activity within the Restricted Area. The Company hereby provides the Executive with the attached Attachment D intending to comply with C.R.S. § 8-2-113.

 

(c) Non-Solicitation. Executive understands and acknowledges that the Company has expended and continues to expend significant time and expense in recruiting and training its employees and that the loss of employees would cause significant and irreparable harm to the Company. Executive agrees and covenants not to directly or indirectly solicit, hire, recruit, or attempt to solicit, hire, or recruit, any employee of the Company, or induce the termination of employment of any employee of the Company, during the Restricted Period. This non-solicitation provision explicitly covers all forms of oral, written, or electronic communication, including, but not limited to, communications by email, regular mail, express mail, telephone, fax, instant message, and social media (including, but not limited to, Facebook, LinkedIn, Instagram, Twitter, TikTok, and any other social media platform, whether or not in existence at the time of entering into this Agreement).

 

 

(d) Non-Solicitation of Customers. Executive understands and acknowledges that because of the Executive’s experience with and relationship to the Company, the Executive will has and will continue to have access to and will learn/has learned and will continue to learn about much or all of the Company’s Customer Information, including, but not limited to, confidential information. Executive understands and acknowledges that: (i) the Company’s relationships with its customers is of great competitive value; (ii) the Company has invested and continues to invest substantial resources in developing and preserving its customer, vendor, and/or supplier relationships and goodwill; and (iii) the loss of any such relationships or goodwill will cause significant and irreparable harm to the Company. Accordingly, Executive agrees and covenants that during the Restricted Period, not to directly or indirectly solicit, contact, or attempt to solicit or contact, using any other form of oral, written, or electronic communication, including, but not limited to, email, regular mail, express mail, telephone, fax, instant message, or social media (including, but not limited to, Facebook, LinkedIn, Instagram, Twitter, TikTok, and any other social media platform, whether or not in existence at the time of entering into this Agreement), or meet with the Company’s actual or prospective customers, vendors, and suppliers for purposes of offering or accepting goods or services similar to or competitive with those offered by the Company. This restriction shall only apply to the actual and prospective customers, vendors, and suppliers with which Company conducted business in the 24 month period preceding the date of solicitation or the Termination Date, whichever is earlier, and with which Executive had contact or about which Executive learned confidential information.

 

(e) Tolling of Restrictive Covenants. Should Executive violate any of the terms of Section 4 of this Agreement, the duration of the restrictions contained in Section 4 shall be extended by the duration of time during which Executive was in violation of the same.

 

(f) Property of Company. Any property, confidential information, and all other business information, data, or documents, shall be and remain solely and exclusively the property of Company. During Executive’s employment, Executive shall not remove from the property or premises of Company any confidential information or any other documents or data relating to the business, work, services or sales of Company, or copies thereof, unless authorized by Company and required for Executive to perform Executive’s duties under this Agreement. Upon the termination of Executive’s employment (regardless of whether such termination is with or without Cause or Good Reason), Executive shall promptly deliver to Company all property, documents, files, data, and other items (whether maintained in electronic or hard copy format) obtained in the course of Executive’s employment with Company, including any Company-leased vehicle, whether or not Executive believes such items constitute or contain confidential information, and without retaining any copies, notes, or excerpts thereof. At Company’s request, Executive shall permit Company or its designee to review any computer, devices, or data storage hardware on which Executive stored or accessed any business information of Company or its customers to confirm that such business information has been permanently removed and deleted therefrom.

 

 

(g) Remedies. Executive acknowledges that the restrictions contained herein are reasonable, mutually beneficial, and necessary in order to protect Company’s legitimate business interests, that any violation thereof would result in irreparable injury to Company and that Executive therefore acknowledges and agrees that, in the event of any violation hereof, Executive shall be authorized and entitled to obtain temporary, preliminary, and permanent injunctive relief, as well as an equitable accounting of all profits or benefits arising out of such violation, which rights and remedies shall be cumulative and in addition to any other rights or remedies to which Company may be entitled.

 

(i) Inventions; Intellectual Property; Confidential Information. The Employee Confidential Information and Invention Assignment Agreement (the “Nondisclosure Agreement”) attached hereto as Attachment C is incorporated and made a part hereof by this reference. Notwithstanding the other provisions of this Agreement and the Nondisclosure Agreement, Executive will not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that: (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, if Executive files a lawsuit for retaliation by Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and use the trade secret information in the court proceeding if Executive files any document containing the trade secret under seal and does not disclose the trade secret except pursuant to court order.

 

5. Non-Disparagement.

 

Following the termination of Executive’s employment hereunder for any reason, Executive agrees that Executive shall not make any statements disparaging Company, its Board, its business, and/or the officers, directors, stockholders, or employees of Company or the Associations. Nothing in this Agreement shall prevent Executive from the disclosure of information that: (A) is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In the event that Executive files a lawsuit alleging retaliation by the Company for reporting a suspected violation of law, Executive may disclose confidential information related to the suspected violation of law or alleged retaliation to Employee’s attorney and use that information in the court proceeding if Executive or Executive’s attorney: (Y) files any document containing confidential information under seal; and (Z) does not disclose the confidential information, except pursuant to court order. Executive understands and acknowledges that the Company provides this notice in compliance with the Defend Trade Secrets Act of 2016.

 

6. Non-Assignability.

 

It is understood that this Agreement has been entered into personally by the Parties. Neither party shall have the right to assign, transfer, encumber or dispose of any duties, rights or payments due hereunder, which duties, rights and payments with respect hereto are expressly declared to be non-assignable and non-transferable, being based upon the personal services of Executive, and any attempted assignment or transfer shall be null and void and without binding effect on either party; provided, however, that Company may assign this Agreement to any parent, subsidiary, affiliate or successor corporation.

 

 

7. Complete Agreement.

 

Except as to any prior intellectual property, non-competition, non-solicitation and non-disclosure covenants or agreements entered into between Company and Executive, this Agreement constitutes the full understanding and entire employment agreement of the Parties, and supersedes and is in lieu of any and all other understandings or agreements between Company and Executive including the Prior Agreements which, other than as specifically set forth in this Agreement, is superseded in its entirety. Nothing herein is intended to limit any rights or duties Executive has under the terms of any applicable incentive compensation, benefit plan or other similar agreements.

 

8. Disputes.

 

Notwithstanding Section 4 reserving the right to seek injunctive relief, this Section of this Agreement will be enforceable for the duration of Executive’s employment with Company, and thereafter with respect to any such claims arising from or relating to Executive’s employment or cessation of employment with Company. THE PARTIES ACKNOWLEDGE THAT THEY MUST ARBITRATE ALL SUCH EMPLOYMENT-RELATED CLAIMS, AND THAT THEY MAY NOT FILE A LAWSUIT IN COURT, OTHER THAN FOR THE PURPOSES OF SEEKING INJUNCTIVE RELIEF UNDER SECTION 4.

 

Any dispute or claim arising to or in any way related to this Agreement shall be settled by binding arbitration in Denver, Colorado, but any dispute or controversy arising out of or interpreting this Agreement shall be settled in accordance with the laws of the State of Colorado as if this Agreement were executed and all actions were performed hereunder within the State of Colorado. All arbitration shall be conducted in accordance with the rules and regulations of the American Arbitration Association (“AAA”). AAA shall designate an arbitrator from an approved list of arbitrators following both Parties’ review and deletion of those arbitrators on the approved list having a conflict of interest with either party. Each party shall pay its own expenses associated with such arbitration and except for Company’s obligations under the Securities Exchange Act of 1934, if any, the Parties agree to keep all such matters confidential. A demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter has arisen and in no event shall such demand be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statutes of limitations. The decision of the arbitrators shall be rendered within 60 days of submission of any claim or dispute, shall be in writing and mailed to all the Parties included in the arbitration. The decision of the arbitrator shall be binding upon the Parties and judgment in accordance with that decision may be entered in any court having jurisdiction thereof.

 

The only claims or disputes excluded from binding arbitration under this Agreement are the following: any claim by Executive for workers’ compensation benefits or for benefits under a Company plan that provides its own arbitration procedure; and any claim by either Party for equitable relief, including but not limited to, a temporary restraining order, preliminary injunction or permanent injunction against the other party. This agreement to submit all covered claims to binding arbitration in no way alters the exclusivity of Executive’s remedy in the event of any termination with or without Cause.

 

 

9. Amendments.

 

Any amendment to this Agreement shall be made only in writing and signed by each of the Parties hereto.

 

10. Governing Law.

 

The internal laws of the State of Colorado shall govern the construction and enforcement of this Agreement.

 

11. Notices.

 

Any notice required or authorized hereunder shall be deemed delivered when deposited, postage prepaid, in the United States mail, certified, with return receipt requested, addressed to the Parties as follows:

 

If to Executive:	R. Kirk Huntsman
With a copy to:
If to Company:	Vivos Therapeutics, Inc. 7921 Southpark Plaza Suite 210 Littleton, CO 80120 Attention: Board of Directors
With a copy to:	Snell & Wilmer L.L.P. 1200 Seventeenth Street Suite 1900 Denver, CO 80202 Attention: Martin C. Walsh, Jr.

 

 

12. Code Section 409A.

 

(a) This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and related U.S. Treasury regulations or pronouncements (“Section 409A”) and any ambiguous provision will be construed in a manner that is compliant with or exempt from the application of Section 409A. To the extent required by Section 409A, any reference to an Executive’s termination of employment shall mean a cessation of the employment relationship between the Executive and Company which constitutes a “separation from service” as determined in accordance with Section 409A. Nevertheless, the Company does not and cannot guarantee any particular tax effect or treatment of the amounts due under this Agreement. Except for the Company’s responsibility to withhold applicable income and employment taxes from compensation paid or provided to Executive, the Company will not be responsible for the payment of any applicable taxes on compensation paid or provided pursuant to this Agreement. Neither the time nor schedule of any payment under this Agreement may be accelerated or subject to further deferral except as permitted by Section 409A of the Internal Revenue Code and the applicable regulations. Executive does not have any right to make any election regarding the time or form of any payment due under this Agreement except as permitted by Section 409A. Installment payments made pursuant to this Agreement shall be treated as separate payments for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii). In the event this Agreement or any benefit paid to Executive hereunder is deemed to be subject to Section 409A, Executive consents to the Company adopting such conforming amendments or taking such actions as the Company deems necessary, in its reasonable discretion, to comply with Section 409A and avoid the imposition of taxes under Section 409A.

 

(b) Notwithstanding anything in this Agreement to the contrary notwithstanding, if on the date of termination of Executive’s employment with Company, Executive is a “specified employee” as defined in Treasury Regulation Section 1.409A-1(i)(1), and as a result of such termination would receive any payment that, absent the application of this Section 12 would be subject to interest and additional tax imposed pursuant to Section 409A as a result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be made prior to the date that is the earliest of (i) 6 months after the date of termination of Executive’s employment;

(i) Executive’s death; or (iii) such other date as will cause such payment not to be subject to such interest and additional tax.

 

13. Code Section 280G. In the event that it is determined that any payment or distribution of any type to or for Executive’s benefit made by the Company, by any of its affiliates, by any person who acquires ownership or effective control or ownership of a substantial portion of the Company’s assets (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) or by any affiliate of such person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”)), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are collectively referred to as the “Excise Tax”), then such payments or distributions or benefits will be payable either:

 

(i) in full; or

 

 

(ii) as to such lesser amount which would result in no portion of such payments or distributions or benefits being subject to the Excise Tax.

 

Executive will receive the greater, on an after-tax basis, of (i) or (ii) above. In the event that clause (ii) above applies, and a reduction is required to be applied to the Total Payments, the Total Payments will be reduced by the Company in the following order: (1) cash severance payments and benefits due under this Agreement will be reduced (if necessary, to zero) in such order with amounts that are payable first reduced first; provided, however that in all events such payments which are not subject to Section 409A of the Code will be reduced first; (2) payments and benefits due in respect of any options to purchase shares of common stock of the Company will be reduced second; (3) payments and benefits due in respect of any full value equity awards (i.e., restricted stock or restricted stock units) for which an election under Section 83(b) of the Code has not been made will be reduced third; and (4) payments and benefits due in respect of any full value equity awards (i.e., restricted stock or restricted stock units) for which an election under Section 83(b) of the Code has been made will be reduced fourth. Notwithstanding anything to the contrary herein, in all events, Executive will have no right, power or discretion to determine the reduction of payments and/or benefits hereunder and any such reduction will be structured in a manner intended to comply with Section 409A of the Code.

 

Unless Executive and the Company agree otherwise in writing, any determination required under this Section 13 will be made in writing by a qualified independent accountant or compensation consulting firm selected by the Company (the “Accountant”) whose determination will be conclusive and binding. Executive and the Company will furnish the Accountant such documentation and documents as the Accountant may reasonably request in order to make a determination. The Company will bear all costs that the Accountant may reasonably incur in connection with performing any calculations contemplated by this Section 13.

 

14. Binding Effect.

 

This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, permitted assigns, heirs, executors and legal representatives.

 

15. Counterparts.

 

This Agreement may be executed by the Parties hereto in separate counterparts, each of which when so executed and delivered shall be an original but all such counterparts together shall constitute one and the same instrument. Each counterpart may consist of two copies hereof each signed by one of the Parties hereto.

 

16. Construction.

 

Headings in this Agreement are for convenience only and shall not control the meaning of this Agreement. Whenever applicable, masculine and neutral pronouns shall equally apply to the feminine genders; the singular shall include the plural and the plural shall include the singular. The Parties have reviewed and understand this Agreement, and each has had a full opportunity to negotiate this Agreement’s terms and to consult with counsel of their own choosing. Therefore, the Parties expressly waive all applicable common law and statutory rules of construction that any provision of this Agreement should be construed against this Agreement’s drafter, and agree that this Agreement and all amendments thereto shall be construed as a whole, according to the fair meaning of the language used.

 

17. Severability and Modification by Court.

 

If any court of competent jurisdiction declares any provision of this Agreement invalid or unenforceable, the remainder of this Agreement shall remain fully enforceable. To the extent that any such court concludes that any provision of this Agreement is void or voidable, the court shall reform such provision(s) to render the provision(s) enforceable, but only to the extent absolutely necessary to render the provision(s) enforceable and only in view of the Parties’ express desire that Company be protected to the greatest extent allowed by law from unfair competition, unfair solicitation and/or the misuse or disclosure of its confidential information and records containing such information.

 

[Signature Page to follow.]

 

 

THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day of the date first written above.

 

	VIVOS THERAPEUTICS, INC.
	By:	/S/ BRADFORD AMMAN
	Title:	CFO

 

	EXECUTIVE:
	/S/ R. KIRK HUNTSMAN
	R. KIRK HUNTSMAN

 

 

Attachment A

 

Job Description for Chief Executive Officer

 

Job Title:	Chief Executive Officer
Department:	Executive
Reports To:	Board of Directors

 

SUMMARY

 

The Chief Executive Officer (“CEO”) has primary responsibility for planning, organizing, staffing, and operating Vivos Therapeutics, Inc. and its subsidiaries and affiliates (“Vivos”) toward its primary objectives, based on profit and return on capital, and is accountable to the Board of Directors for the results of performance of all employees.

 

The CEO is accountable for the management of the daily affairs of Company to achieve the corporate goals and increase shareholder value.

 

The CEO helps to establish and communicate the management style, corporate culture, business philosophy and ethical values by which Vivos will operate.

 

The CEO manages and directs Vivos by performing the following duties personally or through subordinate managers.

 

ESSENTIAL DUTIES AND RESPONSIBILITIES include the following. Other duties may be assigned.

 

●

Plans the overall business strategy and goals of Vivos that will assure a defined rate of return on stockholder investment and establishes objectives for each function to meet those goals, with the approval and cooperation of the Board of Directors.

 

●

Plans, coordinates, and controls the daily operation of Vivos through Vivos’ managers. Prepares and presents an annual business plan and budget, for Vivos’ operations, to the Board of Directors.

 

●

Establishes current and long range goals, objectives, plans and policies, subject to approval by the Board of Directors.

 

●

Determines the appropriate organization structure and staffing responsibilities required to meet Vivos’ objectives. Dispenses advice, guidance, direction, and authorization to carry out major plans, standards and procedures, consistent with established policies and Board approval.

 

●

Meets with Vivos’ executives to ensure that operations are being executed in accordance with Vivos’ policies.

 

 

●

Oversees the adequacy and soundness of Vivos’ financial structure.

 

●

Reviews operating results of Vivos, compares them to established objectives, and takes steps to ensure that appropriate measures are taken to correct unsatisfactory results.

 

●

Plans and directs all investigations and negotiations pertaining to mergers, joint ventures, the acquisition of businesses, or the sale of major assets with approval of the Board of Directors.

 

●

Establishes and maintains an effective system of communications throughout Vivos.

 

●

Fulfills responsibility to the Board of Directors to inform or seek approval for significant matters such as financing, capital expenditures, and appointment of officers.

 

●

Ensures that Vivos business transactions are conducted in accordance with prevailing legal and regulatory requirements.

 

●

Reviews and determines approval of all recommendations for compensation of managers and employees.

 

●

Participates and/or presents at stockholders’ meetings.

 

●

Represents Vivos with major customers, shareholders, the financial community, Security and Exchange Commission and the public.

 

●

Plans and develops industrial, labor, and public relations policies designed to improve company’s image and relations with customers, employees, stockholders, and public.

 

●

Evaluates performance of executives for compliance with established policies and objectives of firm and contributions in attaining objectives.

 

●

Any other job, duty or task reasonably assigned from time to time by the Board of Directors of Vivos, acting reasonably.

 

 

Attachment B

 

MANAGEMENT INCENTIVE PLAN

 

1. INCENTIVE. Executive shall be eligible for cash incentive compensation in the total gross amount of up to 75% of Executive’s Base Salary, less required withholding and deductions, based on achievement of established annual performance objectives (the “MBO Milestones”). Incentive compensation paid pursuant to this Plan shall be paid semi-annually upon review and approval of the Compensation Committee of the Board.

 

2. MBO MILESTONES. Executive’s entitlement to incentive compensation pursuant to this Plan shall be based upon achievement of the following annual performance objectives:

 

MBO Milestone		Percentage Weight
Reinstatement of Shelf		20%
Closing of financings of $10M+		20%
Topline revenue in excess of annual forecast		20%
Additional FDA Clearance(s)		10%
Operating cash flow in excess of forecast		10%
Acquisition or strategic commercial partnership approved by the Board		20%

 

The foregoing MBO Milestones shall be in effect for 2024 and 2025 and have been approved by the Compensation Committee of the Board and the Board, and are subject to modification by the Compensation Committee of the Board. Future MBO Milestones shall be established by the Compensation Committee of the Board in its sole discretion.

 

3. TERMINATION. Other than the pro-rated payments described below, Executive must remain in continuous employment with the Company on each applicable semi-annual payment date to receive the cash incentive compensation payment for any given period; provided, that, if Executive’s employment is terminated without Cause, Executive resigns for Good Reason, Executive dies, or Executive becomes Disabled, and Executive satisfies the requirements Section forth in Section 3 of the Agreement, then Executive shall be entitled to receive a pro-rated cash incentive compensation payment for the semi-annual period during which sum termination of employment occurs (with the pro-rated amount calculated by reference to actual performance and the number of days during the period Executive was employment by the Company) and with such lump sum amount paid to Executive in a single sum cash payment no later than 30 days following the last day of the applicable semi-annual bonus period.

 

 

Attachment C

 

EMPLOYEE CONFIDENTIAL INFORMATION AND

INVENTION ASSIGNMENT AGREEMENT

 

(See Attached)

 

 

Attachment D

 

NOTICE REGARDING COVENANTS NOT TO COMPETE

 

To:	Vivos Therapeutics, Inc.
From:	R. Kirk Huntsman

Date: September 16, 2024

 

Re: Notice Pursuant to C.R.S. § 8-2-113

 

 

In compliance with C.R.S. § 8-2-113(4), you are hereby notified that the enclosed AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT and the Employee Nondisclosure and Invention, IP and Copyright Assignment Agreement between Company and Executive dated N/A entered into between you and VIVOS THERAPEUTICS, INC. (the “Company”) are being provided to you.

 

Both of the documents referenced above contain one or more covenants not to compete that are reasonably necessary to protect the Company’s trade secrets. The covenants not to compete contained in the two documents could restrict your options for subsequent employment following your separation from the Company.

 

Please refer to Section 4 of the AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT for the specific provisions constituting the covenants not to compete.

 

		I acknowledge receipt of this Notice and receipt of the Agreement.
		Signature:	/S/R. Kirk Huntsman
		Print Name:	R. Kirk Huntsman
		Date:	_9/16/24_________________________________________________

 

 

 

 

Exhibit 10.3

 

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of the 1st day of January 2025 (the “Effective Date”) by and between VIVOS THERAPEUTICS, INC., a Delaware corporation having its principal place of business at 9137 S. Ridgeline Blvd., Suite 135, Highlands Ranch, Colorado 80129 (the “Company”) and BRADFORD AMMAN, an individual currently residing in the City of ________, Colorado (the “Executive”). As used herein, the term “Parties” shall be used to refer to the Company and Executive jointly.

 

RECITALS

 

A. Company is engaged in the business of, among other things, developing and marketing products for the treatment of sleep and breathing disorders;

 

B. Executive is currently employed by Company as Chief Financial Officer, pursuant to that certain Employment Agreement dated October 22, 2018 and subsequently amended and restated October 8, 2020 (collectively, the “Prior Agreements”);

 

C. Company desires to continue to employ Executive in the capacity of an executive officer of Company, and Executive desires to be employed in such capacity and on the terms and conditions set forth in this Agreement;

 

D. As a result, Company and Executive have agreed to amend and restate the Prior Agreements by virtue of this Agreement;

 

E. The success of Company depends to a substantial extent upon maintaining strict secrecy with respect to confidential information and trade secrets relating to the business of Company;

 

F. Executive, by reason of Executive’s employment with Company, is being given access to and will acquire, or has been given access to and acquired, knowledge of confidential and sensitive business information and trade secrets of Company, and may further be involved in customer, product, and/or intellectual property development during the course of Executive’s employment;

 

G. Executive acknowledges that Company has informed Executive that it is only willing to continue to employ Executive in reliance upon the agreements and covenants of Executive herein, and that executing and complying with this Agreement is an express condition of continued employment.

 

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the Parties agree as follows:

 

1. Employment.

 

(a) Company hereby employs Executive to serve as the Chief Financial Officer of Company on the terms and conditions set forth herein. In such capacity, Executive shall have the responsibilities normally associated with such position, subject to the direction and supervision of the Chief Executive Officer, including the duties set forth in Attachment A and any other duties assigned to Executive from time to time by the Chief Executive Officer and/or the Company’s Board of Directors (the “Board”).

 

(b) Executive accepts employment hereunder and agrees that, during the term of Executive’s employment, Executive will observe and comply with the policies and rules of Company and devote substantially all Executive’s time during normal business hours and best efforts to the performance of Executive’s duties hereunder, which duties shall be performed in an efficient and competent manner and to the best of Executive’s ability. Executive further agrees that, during the term of this Agreement, Executive will not, without the prior written consent of the Board, directly or indirectly engage in any manner in any business or other endeavor, either as an owner, employee, officer, director, independent contractor, agent, partner, advisor, or in any other capacity calling for the rendition of Executive’s personal services. This restriction shall not preclude Executive from having passive investments, and devoting reasonable time to the supervision thereof (so long as such does not create a conflict of interest or interfere with Executive’s obligations hereunder), in any business or enterprise that is not in competition with any business or enterprise of Company or any of its parents, subsidiaries or affiliates. This Agreement shall not limit Executive’s community, religious, or charitable activities so long as such activities do not impair or interfere with Executive’s performance of the services contemplated by this Agreement.

 

(c) Executive’s employment and the place of performance of Executive’s duties will be at Company’s corporate headquarters and/or at a separate office facility in Denver, Colorado, or at such other location as mutually agreed upon by Executive and Company.

 

2. Compensation; Benefits.

 

For all services rendered by Executive to or on behalf of Company, Company shall provide or cause to be provided to Executive, subject to making any and all withholdings and deductions required of Company by law with all other income tax consequences being borne by Executive, the following:

 

(a) Base Salary. Executive is receiving an annualized base salary of $320,000 per year (the “Base Salary”), payable in accordance with the normal payroll practices of Company, and net of applicable withholding and deductions. Executive’s Base Salary shall be reviewed annually by the Board. Any increases in such Base Salary shall be at the sole discretion of the Board.

 

(b) Management Incentive Plan. Executive shall be eligible for cash incentive compensation in accordance with Attachment B (the “Management Incentive Plan”), attached hereto and made a part hereof by this reference. Cash incentive compensation shall be paid semi- annually upon review and approval of the Compensation Committee of the Board.

 

 

(c) Equity Awards. Executive shall be eligible to participate in Company’s then existing equity incentive plan during the term of employment as determined by the Compensation Committee of the Board in its sole discretion and subject to the terms of any such plan. Any equity awards granted to Executive during the term of employment will be subject to all of the terms and conditions of the plan, the Company’s insider trading policy, the Company’s then existing clawback or recoupment policy, and the award agreement that Executive is required to sign to accept such award.

 

(d) Expense Reimbursement. Executive shall be entitled to reimbursement for all reasonable out-of-pocket business expenses incurred directly by Executive in performing Executive’s duties and obligations under this Agreement. Company shall reimburse Executive for such reasonable business expenses on a monthly basis, upon submission by Executive of appropriate receipts, vouchers or other documents in accordance with Company’s policy.

 

(e) Fringe Benefits. Executive shall be entitled to participate in any fringe benefit plans, including medical and dental plans, as adopted by the Company from time to time and applicable to other employees of Company, including without limitation profit-sharing, 401(k), incentive savings, group life insurance, salary continuation, and disability plans, subject to the terms and conditions of each such plan. Company reserves the right to adopt, amend, modify, replace, or discontinue any such fringe benefit plan or its relative contribution to such plan at any time and in its sole discretion.

 

(f) Paid Time Off. Executive shall be eligible for four (4) weeks of paid time off (“PTO”) annually. Executive may take the paid time off at any time during the year, so long as it does not create hardship for Company. In addition, Executive shall be entitled to paid sick leave and paid holidays in accordance with Company’s policies applicable to other executive employees. Upon the termination of this Agreement for any reason other than Cause (as defined below), Executive shall have the right to receive any accrued but unused PTO.

 

3. Term and Termination.

 

(a) Term. Unless terminated earlier, the term of this Agreement shall be for a period of three (3) years commencing with the Effective Date and continuing until December 31, 2027 (the “Term”).

 

(b) Termination By Company for Cause. Company may terminate this Agreement immediately at any time for Cause. For purposes of this Agreement, “Cause” shall mean (i) any act of dishonesty or fraud with respect to Company; (ii) commission of a felony or a crime involving moral turpitude or the entrance of a plea of guilty or nolo contendere to a felony or a crime involving moral turpitude; (iii) any other criminal act, reasonably determined by the Board, to cause material harm to Company’s standing and reputation; (iv) any action involving a material breach of the terms of the Agreement, including Executive’s continued material failure to perform Executive’s duties to Company after thirty (30) days’ written notice thereof to Executive (spelling out in sufficient detail such failures), without correction of such failure; (v) gross negligence or willful misconduct by Executive with respect to Company, as reasonably determined by the Board; (vi) any acts that violate any policy of Company relating to discrimination or harassment; or (vii) any act or other misconduct that results in or could result in significant reputational harm to the Company. In the event of a termination for Cause, Executive shall not be entitled to receive any unpaid amounts under Executive’s Base Salary and Management Incentive Plan.

 

 

(c) Termination By Company Without Cause. Company may terminate this Agreement immediately at any time without Cause by giving Executive written notice specifying the effective date of such termination. In the event of a termination without Cause, but subject to Executive’s timely execution (and non-revocation) of the Release (as defined below), Executive shall be entitled to receive: (i) a pro-rated Management Incentive Plan payment in accordance with the terms and conditions of Attachment B; (ii) a cash severance payment equal to 12 months of Executive’s then Base Salary (the “Base Salary Severance”); (iii) a lump cash payment equal to 12 times the monthly premium required to be paid by the Executive to continue the Executive’s group health care and dental care coverage as in effect for the year in which the termination of employment occurs, based on the monthly COBRA premium in effect as of the termination date, with such lump sum amount paid to Executive during the first payroll period following the date on which the revocation period described in the Release expires; and (iv) all of Executive’s outstanding equity awards that are not yet vested shall vest in full on the date on which the revocation period described in the Release expires.

 

(d) Termination By Executive For Good Reason. Executive shall be entitled to terminate this Agreement immediately at any time for Good Reason by giving Company written notice of such termination. For purposes of this Agreement, “Good Reason” shall mean, without Executive’s consent (i) the assignment to Executive of duties inconsistent with the position and nature of Executive’s employment as Chief Financial Officer, the substantial and material reduction of the duties of Executive, which is inconsistent with the position and nature of Executive’s employment as Chief Financial Officer, or the change of Executive’s title indicating a substantial and material change in the position and nature of Executive’s employment; (ii) a reduction in compensation and benefits that would diminish the aggregate value of Executive’s compensation and benefits (except in the case of an equal reduction in salaries for all senior executives because of the financial condition of Company); or (iii) the failure by Company to obtain from any successor an agreement to assume and perform this Agreement; provided, however, that Executive shall not have the right to terminate this Agreement for Good Reason unless: (A) Executive has provided written notice to Company of the intent to terminate the Agreement under this provision identifying the specific condition Executive believes to constitute Good Reason; (B) Company has been given at least 30 days after receiving such notice to cure such condition; and (C) Company fails to reasonably cure the condition. If Executive resigns with Good Reason, subject to Executive’s timely execution (and non-revocation) of the Release, Executive shall be entitled to receive: (i) a pro-rated Management Incentive Plan payment in accordance with the terms and conditions of Attachment B; (ii) the Base Salary Severance; (iii) a lump cash payment equal to 12 times the monthly premium required to be paid by the Executive to continue the Executive’s group health care and dental care coverage as in effect for the year in which the termination of employment occurs, based on the monthly COBRA premium in effect as of the termination date, with such lump sum amount paid to Executive during the first payroll period following the date on which the revocation period described in the Release expires; and (iv) all of Executive’s outstanding equity awards that are not yet vested shall vest in full on the date on which the revocation period described in the Release expires.

 

 

(e) Termination By Executive Without Good Reason. Executive may also terminate this Agreement at any time without Good Reason by giving Company at least sixty (60) days’ prior written notice. In such event, Executive shall be entitled to receive Executive’s Base Salary through the date of such resignation.

 

(f) Termination Due To Disability. If Executive becomes Disabled (as defined below), this Agreement shall terminate and subject to Executive’s timely execution (and non-revocation) of the Release, Executive shall be entitled to receive: (i) a pro-rated Management Incentive Plan payment in accordance with the terms and conditions of Attachment B; (ii) the Base Salary Severance but such Base Salary Severance shall be reduced to six (6) months; (iii) a lump cash payment equal to six (6) times the monthly premium required to be paid by the Executive to continue the Executive’s group health care and dental care coverage as in effect for the year in which the termination of employment occurs, based on the monthly COBRA premium in effect as of the termination date, with such lump sum amount paid to Executive during the first payroll period following the date on which the revocation period described in the Release expires; and (iv) all of Executive’s outstanding equity awards that are not yet vested shall vest in full on the date on which the revocation period described in the Release expires. For this purpose, “Disability” means Executive’s inability to engage in any substantially gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code.

 

(g) Termination Due To Death. If Executive dies subject to Executive’s estate’s timely execution (and non-revocation) of the Release, the estate shall be entitled to receive: (i) a pro-rated Management Incentive Plan payment in accordance with the terms and conditions of Attachment B; (ii) the Base Salary Severance but such Base Salary Severance shall be reduced to six (6) months; (iii) a lump cash payment equal to six (6) times the monthly premium required to be paid by the Executive to continue the Executive’s group health care and dental care coverage as in effect for the year in which the termination of employment occurs, based on the monthly COBRA premium in effect as of the termination date, with such lump sum amount paid to Executive during the first payroll period following the date on which the revocation period described in the Release expires; and (iv) all of Executive’s outstanding equity awards that are not yet vested shall vest in full on the date on which the revocation period described in the Release expires.

 

(h) Impact of Change In Control.

 

(i) In the event of a Change In Control (as defined below), and notwithstanding the fact that Executive may continue to provide services from and after the Change In Control, on the date of a Change In Control, all of Executive’s outstanding equity awards that are not yet vested shall vest in full. For purposes of this Agreement, “Change In Control” shall have the meaning ascribed to it in the Company’s then existing equity incentive plan.

 

 

(ii) In the event Executive’s employment is terminated by the Company without Cause or Executive resigns for Good Reason during the 12 month period following a Change In Control, then, subject to Executive’s timely execution (and non-revocation) of the Release, Executive shall be entitled to receive: (i) a pro-rated Management Incentive Plan payment in accordance with the terms and conditions of Attachment B; (ii) a cash severance payment equal to 24 months of Executive’s then Base Salary (the “Enhanced Base Salary Severance”); and (iii) a lump cash payment equal to 24 times the monthly premium required to be paid by the Executive to continue the Executive’s group health care and dental care coverage as in effect for the year in which the termination of employment occurs, based on the monthly COBRA premium in effect as of the termination date, with such lump sum amount paid to Executive during the first payroll period following the date on which the revocation period described in the Release expires

 

(i) Provisions of Agreement that Survive Termination. No termination of this Agreement shall affect any of the rights and obligations of the Parties hereto under Sections 4 through 8, and it is expressly contemplated by the Parties that such rights and obligations shall survive such termination in accordance with the terms of such sections.

 

(j) Resignation from Positions. Upon termination of Executive hereunder for any reason, Executive agrees that Executive shall be deemed to have resigned from all officer, director, management or board positions to which Executive may have been elected or appointed by reason of Executive’s employment or involvement with Company and any other boards and/or industry associations in which Executive serves as a result of or in Executive’s capacity as Chief Financial Officer (collectively, the “Associations”). Executive agrees to promptly execute and deliver to Company or its designee any other document, including without limitation a letter of resignation, reasonably requested by Company to effectuate the purposes of this Section 3(j). If Company is unable, after reasonable effort, to secure Executive’s signature on any document that Company deems to be necessary to effectuate the purposes of this Section 3(j), Executive hereby designates and appoints Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact, to act for and on Executive’s behalf to execute, verify and submit to any appropriate third party any such document, which shall thereafter have the same legal force and effect as if executed by Executive.

 

(k) Release Requirement. As a condition to receiving (and continuing to receive) the post-termination payments and benefits described in this Agreement, Executive (or Executive’s spouse or estate) must (i) within not later than 60 days after the last day of employment (the “Release Deadline”), execute (and not revoke) and deliver to the Company a Mutual Release Of All Claims And Covenant Not To Sue Agreement (the “Release”) in a form to be prepared by the Company at the time of Executive’s separation from employment; and (ii) remain in full compliance with such Release. The Company will have the obligation to provide Executive with the Release within seven (7) days of the termination date. None of the post-termination payments and benefits described in this Agreement will be paid or provided until the Release is effective and irrevocable and if the Release does not become effective and irrevocable by the Release Deadline, Executive will forfeit all rights to the post-termination severance payments and benefits described in this Agreement. If the Release is effective and irrevocable on the Release Deadline, then, except as required the following sentence and/or Section 409A (as defined below), any payments that would have been made to Executive during the 60 day period immediately following Executive’s separation from service will be paid to Executive on the first Company payroll period following the Release Deadline and any remaining payments will be made as provided in this Agreement. Additionally, and notwithstanding anything herein to the contrary, in the event that the time period within which Executive must return and not revoke the Release straddles two (2) calendar years, in all events any post-termination payments that are subject to Section 409A will be made (or commence, as applicable) in the second such calendar year.

 

 

4. Restrictive Covenants.

 

The Executive understands that the nature of the Executive’s position gives the Executive access to and knowledge of trade secrets and Confidential Information (as defined in the Nondisclosure Agreement) and places the Executive in a position of trust and confidence with the Company. The Executive understands and acknowledges that the Executive is being hired because the executive services the Executive provides to the Company are unique, special, or extraordinary. Executive further understands and acknowledges that the Company’s ability to reserve these for the exclusive knowledge and use of the Company is of great competitive importance and commercial value to the Company, and that improper use or disclosure by the Employee is likely to result in unfair or unlawful competitive activity. Accordingly, Executive agrees as follows:

 

(a) Definitions. The following definitions shall apply to this Section 4:

 

(i) The term “Competitive Business” means any business whose products, services, or activities compete in whole or in part with the products services, or activities of Company, or planned products, services, or activities in which Executive was involved, during Executive’s employment with Company.

 

(ii) The term “Customer Information” identifying facts and circumstances specific to the Company’s customer, including, but is not limited to, names, phone numbers, addresses, email addresses, order history, order preferences, chain of command, and pricing information.

 

(iii) The term “Nondisclosure Agreement” means the Employee Confidential Information and Invention Assignment Agreement attached hereto as Attachment C.

 

(iv) The term “Prohibited Activity” is activity in which the Executive contributes the Executive’s knowledge, directly or indirectly, in whole or in part, as an employee, employer, owner, operator, manager, advisor, consultant, contractor, agent, partner, director, stockholder, officer, volunteer, intern, or any other similar capacity to a Competitive Business. Prohibited Activity also includes activity that may require or inevitably require the use or disclosure of trade secrets, proprietary information, or confidential information.

 

(v) The term “Restricted Area” shall mean the continental United States.

 

(vi) The term “Restricted Period” shall mean the period of Executive’s employment with the Company and 24 months immediately following the termination of Executive’s employment with the Company, regardless of the reason for the termination.

 

(b) Non-Competition. During the Restricted Period, Executive agrees and covenants not to engage in Prohibited Activity within the Restricted Area. The Company hereby provides the Executive with the attached Attachment D intending to comply with C.R.S. § 8-2-113.

 

(c) Non-Solicitation. Executive understands and acknowledges that the Company has expended and continues to expend significant time and expense in recruiting and training its employees and that the loss of employees would cause significant and irreparable harm to the Company. Executive agrees and covenants not to directly or indirectly solicit, hire, recruit, or attempt to solicit, hire, or recruit, any employee of the Company, or induce the termination of employment of any employee of the Company, during the Restricted Period. This non-solicitation provision explicitly covers all forms of oral, written, or electronic communication, including, but not limited to, communications by email, regular mail, express mail, telephone, fax, instant message, and social media (including, but not limited to, Facebook, LinkedIn, Instagram, Twitter, TikTok, and any other social media platform, whether or not in existence at the time of entering into this Agreement).

 

 

(d) Non-Solicitation of Customers. Executive understands and acknowledges that because of the Executive’s experience with and relationship to the Company, the Executive will has and will continue to have access to and will learn/has learned and will continue to learn about much or all of the Company’s Customer Information, including, but not limited to, confidential information. Executive understands and acknowledges that: (i) the Company’s relationships with its customers is of great competitive value; (ii) the Company has invested and continues to invest substantial resources in developing and preserving its customer, vendor, and/or supplier relationships and goodwill; and (iii) the loss of any such relationships or goodwill will cause significant and irreparable harm to the Company. Accordingly, Executive agrees and covenants that during the Restricted Period, not to directly or indirectly solicit, contact, or attempt to solicit or contact, using any other form of oral, written, or electronic communication, including, but not limited to, email, regular mail, express mail, telephone, fax, instant message, or social media (including, but not limited to, Facebook, LinkedIn, Instagram, Twitter, TikTok, and any other social media platform, whether or not in existence at the time of entering into this Agreement), or meet with the Company’s actual or prospective customers, vendors, and suppliers for purposes of offering or accepting goods or services similar to or competitive with those offered by the Company. This restriction shall only apply to the actual and prospective customers, vendors, and suppliers with which Company conducted business in the 24 month period preceding the date of solicitation or the Termination Date, whichever is earlier, and with which Executive had contact or about which Executive learned confidential information.

 

(e) Tolling of Restrictive Covenants. Should Executive violate any of the terms of Section 4 of this Agreement, the duration of the restrictions contained in Section 4 shall be extended by the duration of time during which Executive was in violation of the same.

 

(f) Property of Company. Any property, confidential information, and all other business information, data, or documents, shall be and remain solely and exclusively the property of Company. During Executive’s employment, Executive shall not remove from the property or premises of Company any confidential information or any other documents or data relating to the business, work, services or sales of Company, or copies thereof, unless authorized by Company and required for Executive to perform Executive’s duties under this Agreement. Upon the termination of Executive’s employment (regardless of whether such termination is with or without Cause or Good Reason), Executive shall promptly deliver to Company all property, documents, files, data, and other items (whether maintained in electronic or hard copy format) obtained in the course of Executive’s employment with Company, including any Company-leased vehicle, whether or not Executive believes such items constitute or contain confidential information, and without retaining any copies, notes, or excerpts thereof. At Company’s request, Executive shall permit Company or its designee to review any computer, devices, or data storage hardware on which Executive stored or accessed any business information of Company or its customers to confirm that such business information has been permanently removed and deleted therefrom.

 

 

(g) Remedies. Executive acknowledges that the restrictions contained herein are reasonable, mutually beneficial, and necessary in order to protect Company’s legitimate business interests, that any violation thereof would result in irreparable injury to Company and that Executive therefore acknowledges and agrees that, in the event of any violation hereof, Executive shall be authorized and entitled to obtain temporary, preliminary, and permanent injunctive relief, as well as an equitable accounting of all profits or benefits arising out of such violation, which rights and remedies shall be cumulative and in addition to any other rights or remedies to which Company may be entitled.

 

(i) Inventions; Intellectual Property; Confidential Information. The Employee Confidential Information and Invention Assignment Agreement (the “Nondisclosure Agreement”) attached hereto as Attachment C is incorporated and made a part hereof by this reference. Notwithstanding the other provisions of this Agreement and the Nondisclosure Agreement, Executive will not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that: (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, if Executive files a lawsuit for retaliation by Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and use the trade secret information in the court proceeding if Executive files any document containing the trade secret under seal and does not disclose the trade secret except pursuant to court order.

 

5. Non-Disparagement.

 

Following the termination of Executive’s employment hereunder for any reason, Executive agrees that Executive shall not make any statements disparaging Company, its Board, its business, and/or the officers, directors, stockholders, or employees of Company or the Associations. Nothing in this Agreement shall prevent Executive from the disclosure of information that: (A) is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In the event that Executive files a lawsuit alleging retaliation by the Company for reporting a suspected violation of law, Executive may disclose confidential information related to the suspected violation of law or alleged retaliation to Employee’s attorney and use that information in the court proceeding if Executive or Executive’s attorney: (Y) files any document containing confidential information under seal; and (Z) does not disclose the confidential information, except pursuant to court order. Executive understands and acknowledges that the Company provides this notice in compliance with the Defend Trade Secrets Act of 2016.

 

 

6. Non-Assignability.

 

It is understood that this Agreement has been entered into personally by the Parties. Neither party shall have the right to assign, transfer, encumber or dispose of any duties, rights or payments due hereunder, which duties, rights and payments with respect hereto are expressly declared to be non-assignable and non-transferable, being based upon the personal services of Executive, and any attempted assignment or transfer shall be null and void and without binding effect on either party; provided, however, that Company may assign this Agreement to any parent, subsidiary, affiliate or successor corporation.

 

7. Complete Agreement.

 

Except as to any prior intellectual property, non-competition, non-solicitation and non-disclosure covenants or agreements entered into between Company and Executive, this Agreement constitutes the full understanding and entire employment agreement of the Parties, and supersedes and is in lieu of any and all other understandings or agreements between Company and Executive including the Prior Agreements which, other than as specifically set forth in this Agreement, is superseded in its entirety. Nothing herein is intended to limit any rights or duties Executive has under the terms of any applicable incentive compensation, benefit plan or other similar agreements.

 

8. Disputes.

 

Notwithstanding Section 4 reserving the right to seek injunctive relief, this Section of this Agreement will be enforceable for the duration of Executive’s employment with Company, and thereafter with respect to any such claims arising from or relating to Executive’s employment or cessation of employment with Company. THE PARTIES ACKNOWLEDGE THAT THEY MUST ARBITRATE ALL SUCH EMPLOYMENT-RELATED CLAIMS, AND THAT THEY MAY NOT FILE A LAWSUIT IN COURT, OTHER THAN FOR THE PURPOSES OF SEEKING INJUNCTIVE RELIEF UNDER SECTION 4.

 

Any dispute or claim arising to or in any way related to this Agreement shall be settled by binding arbitration in Denver, Colorado, but any dispute or controversy arising out of or interpreting this Agreement shall be settled in accordance with the laws of the State of Colorado as if this Agreement were executed and all actions were performed hereunder within the State of Colorado. All arbitration shall be conducted in accordance with the rules and regulations of the American Arbitration Association (“AAA”). AAA shall designate an arbitrator from an approved list of arbitrators following both Parties’ review and deletion of those arbitrators on the approved list having a conflict of interest with either party. Each party shall pay its own expenses associated with such arbitration and except for Company’s obligations under the Securities Exchange Act of 1934, if any, the Parties agree to keep all such matters confidential. A demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter has arisen and in no event shall such demand be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statutes of limitations. The decision of the arbitrators shall be rendered within 60 days of submission of any claim or dispute, shall be in writing and mailed to all the Parties included in the arbitration. The decision of the arbitrator shall be binding upon the Parties and judgment in accordance with that decision may be entered in any court having jurisdiction thereof.

 

The only claims or disputes excluded from binding arbitration under this Agreement are the following: any claim by Executive for workers’ compensation benefits or for benefits under a Company plan that provides its own arbitration procedure; and any claim by either Party for equitable relief, including but not limited to, a temporary restraining order, preliminary injunction or permanent injunction against the other party. This agreement to submit all covered claims to binding arbitration in no way alters the exclusivity of Executive’s remedy in the event of any termination with or without Cause.

 

9. Amendments.

 

Any amendment to this Agreement shall be made only in writing and signed by each of the Parties hereto.

 

10. Governing Law.

 

The internal laws of the State of Colorado shall govern the construction and enforcement of this Agreement.

 

11. Notices.

 

Any notice required or authorized hereunder shall be deemed delivered when deposited, postage prepaid, in the United States mail, certified, with return receipt requested, addressed to the Parties as follows:

 

	If to Executive:		Bradford Amman
	With a copy to:
	If to Company:		Vivos Therapeutics, Inc. 7921 Southpark Plaza Suite 210 Littleton, CO 80120 Attention: Board of Directors
	With a copy to:		Snell & Wilmer L.L.P. 1200 Seventeenth Street Suite 1900 Denver, CO 80202 Attention: Martin C. Walsh, Jr.

 

 

12. Code Section 409A.

 

(a) This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and related U.S. Treasury regulations or pronouncements (“Section 409A”) and any ambiguous provision will be construed in a manner that is compliant with or exempt from the application of Section 409A. To the extent required by Section 409A, any reference to an Executive’s termination of employment shall mean a cessation of the employment relationship between the Executive and Company which constitutes a “separation from service” as determined in accordance with Section 409A. Nevertheless, the Company does not and cannot guarantee any particular tax effect or treatment of the amounts due under this Agreement. Except for the Company’s responsibility to withhold applicable income and employment taxes from compensation paid or provided to Executive, the Company will not be responsible for the payment of any applicable taxes on compensation paid or provided pursuant to this Agreement. Neither the time nor schedule of any payment under this Agreement may be accelerated or subject to further deferral except as permitted by Section 409A of the Internal Revenue Code and the applicable regulations. Executive does not have any right to make any election regarding the time or form of any payment due under this Agreement except as permitted by Section 409A. Installment payments made pursuant to this Agreement shall be treated as separate payments for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii). In the event this Agreement or any benefit paid to Executive hereunder is deemed to be subject to Section 409A, Executive consents to the Company adopting such conforming amendments or taking such actions as the Company deems necessary, in its reasonable discretion, to comply with Section 409A and avoid the imposition of taxes under Section 409A.

 

(b) Notwithstanding anything in this Agreement to the contrary notwithstanding, if on the date of termination of Executive’s employment with Company, Executive is a “specified employee” as defined in Treasury Regulation Section 1.409A-1(i)(1), and as a result of such termination would receive any payment that, absent the application of this Section 12 would be subject to interest and additional tax imposed pursuant to Section 409A as a result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be made prior to the date that is the earliest of (i) 6 months after the date of termination of Executive’s employment;

(i) Executive’s death; or (iii) such other date as will cause such payment not to be subject to such interest and additional tax.

 

13. Code Section 280G. In the event that it is determined that any payment or distribution of any type to or for Executive’s benefit made by the Company, by any of its affiliates, by any person who acquires ownership or effective control or ownership of a substantial portion of the Company’s assets (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) or by any affiliate of such person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”)), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are collectively referred to as the “Excise Tax”), then such payments or distributions or benefits will be payable either:

 

(i) in full; or

 

(ii) as to such lesser amount which would result in no portion of such payments or distributions or benefits being subject to the Excise Tax.

 

 

Executive will receive the greater, on an after-tax basis, of (i) or (ii) above. In the event that clause (ii) above applies, and a reduction is required to be applied to the Total Payments, the Total Payments will be reduced by the Company in the following order: (1) cash severance payments and benefits due under this Agreement will be reduced (if necessary, to zero) in such order with amounts that are payable first reduced first; provided, however that in all events such payments which are not subject to Section 409A of the Code will be reduced first; (2) payments and benefits due in respect of any options to purchase shares of common stock of the Company will be reduced second; (3) payments and benefits due in respect of any full value equity awards (i.e., restricted stock or restricted stock units) for which an election under Section 83(b) of the Code has not been made will be reduced third; and (4) payments and benefits due in respect of any full value equity awards (i.e., restricted stock or restricted stock units) for which an election under Section 83(b) of the Code has been made will be reduced fourth. Notwithstanding anything to the contrary herein, in all events, Executive will have no right, power or discretion to determine the reduction of payments and/or benefits hereunder and any such reduction will be structured in a manner intended to comply with Section 409A of the Code.

 

Unless Executive and the Company agree otherwise in writing, any determination required under this Section 13 will be made in writing by a qualified independent accountant or compensation consulting firm selected by the Company (the “Accountant”) whose determination will be conclusive and binding. Executive and the Company will furnish the Accountant such documentation and documents as the Accountant may reasonably request in order to make a determination. The Company will bear all costs that the Accountant may reasonably incur in connection with performing any calculations contemplated by this Section 13.

 

14. Binding Effect.

 

This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, permitted assigns, heirs, executors and legal representatives.

 

15. Counterparts.

 

This Agreement may be executed by the Parties hereto in separate counterparts, each of which when so executed and delivered shall be an original but all such counterparts together shall constitute one and the same instrument. Each counterpart may consist of two copies hereof each signed by one of the Parties hereto.

 

16. Construction.

 

Headings in this Agreement are for convenience only and shall not control the meaning of this Agreement. Whenever applicable, masculine and neutral pronouns shall equally apply to the feminine genders; the singular shall include the plural and the plural shall include the singular. The Parties have reviewed and understand this Agreement, and each has had a full opportunity to negotiate this Agreement’s terms and to consult with counsel of their own choosing. Therefore, the Parties expressly waive all applicable common law and statutory rules of construction that any provision of this Agreement should be construed against this Agreement’s drafter, and agree that this Agreement and all amendments thereto shall be construed as a whole, according to the fair meaning of the language used.

 

17. Severability and Modification by Court.

 

If any court of competent jurisdiction declares any provision of this Agreement invalid or unenforceable, the remainder of this Agreement shall remain fully enforceable. To the extent that any such court concludes that any provision of this Agreement is void or voidable, the court shall reform such provision(s) to render the provision(s) enforceable, but only to the extent absolutely necessary to render the provision(s) enforceable and only in view of the Parties’ express desire that Company be protected to the greatest extent allowed by law from unfair competition, unfair solicitation and/or the misuse or disclosure of its confidential information and records containing such information.

 

[Signature Page to follow.]

 

 

THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day of the date first written above.

 

	VIVOS THERAPEUTICS, INC.
	By:	/S/ R. KIRK HUNTSMAN
	Title:	Chief Executive Officer
	EXECUTIVE:
	/S/ BRADFORD AMMAN
	BRADFORD AMMAN

 

 

Attachment A

 

Job Description for Chief Financial Officer

 

Job Title:		Chief Financial Officer
Department:		Executive
Reports To:		Chief Executive Officer

 

SUMMARY

 

The Chief Financial Officer (“CFO”) has primary responsibility for assisting the CEO in developing the strategic direction and positioning of the Company.

 

The CFO is accountable for the accounting and financial operations of the Company.

 

The CFO leads and directs Vivos by performing the following duties personally or through subordinate managers.

 

ESSENTIAL DUTIES AND RESPONSIBILITIES include the following. Other duties may be assigned.

 

	●	assist the CEO in developing, for the Board’s approval, a strategic direction and positioning to ensure the Corporation’s success;
	●	together with the CEO, develop and recommend to the Board an annual operating plan, financial forecast and financial budget that support the Corporation’s long term strategy;
	●	create, coordinate, and evaluate the financial controls and supporting information systems of the Corporation;
	●	together with the CEO, approve and coordinate changes and improvements to disclosure controls and procedures and internal control over financial reporting;
	●	ensure that effective internal controls are in place and take steps to enhance, where necessary, the internal control systems within the Corporation;
	●	keep the Board aware of the financial position and financial development of the Corporation;
	●	develop appropriate key performance indicators to monitor and drive the financial performance of the Corporation;
	●	ensure proper training of all personnel working on financial, accounting, audit or fiscal matters;
	●	oversee and monitor the Corporation’s financial position, banking and financing activities and capital structure and monitor the respect of banking and financial covenants and hedging arrangements, as applicable;
	●	ensure the adequacy of the Corporation’s insurance coverage;
	●	oversee and monitor effective tax strategies and compliance for the Corporation;
	●	coordinate the preparation of the Corporation’s financial statements and management discussion and analysis (annual and interim);
	●	review, approve and present the Corporation’s annual and interim earnings releases, financial statements and management discussion and analysis;

 

 

	●	certify documents as required under securities laws;
	●	oversee the mandate and the work of the internal auditor of the Corporation;
	●	coordinate the annual audit (and any special or non-recurring audit) with the Corporation’s external auditors;
	●	coordinate the review, and liaise with the external auditors as required, of all financial information disclosed in any offering documents of the Corporation;
	●	communicate transparently and collaborate to the fullest extent possible with the Corporation’s external auditors;
	●	oversee the Corporation’s processes for identifying, assessing and managing the principal risks of the Corporation’s business;
	●	assist the Corporation’s Audit Committee in performing its duties required under the applicable securities laws and the Audit Committee Charter;
	●	attend meetings of the Board and its Committees and present the financial information necessary or relevant to the Board or such Committees for discharging its and their duties;
	●	ensure the information communicated to the public fairly portrays the position of the Corporation;
	●	establish and maintain lines of communications with the investor community and oversee the dissemination of the Corporation’s press releases, annual report, communications with analysts and the media and investor relations; and
	●	perform other functions related to the office of the CFO or as may be reasonably requested by the Corporation’s CEO or Board.
	●	Any other job, duty or task reasonably assigned from time to time by the Board of Directors of Vivos, acting reasonably.

 

 

Attachment B

 

MANAGEMENT INCENTIVE PLAN

 

1. INCENTIVE. Executive shall be eligible for cash incentive compensation in the total gross amount of up to 50% of Executive’s Base Salary, less required withholding and deductions, based on achievement of established annual performance objectives (the “MBO Milestones”). Incentive compensation paid pursuant to this Plan shall be paid semi-annually upon review and approval of the Compensation Committee of the Board.

 

2. MBO MILESTONES. Executive’s entitlement to incentive compensation pursuant to this Plan shall be based upon achievement of the following annual performance objectives:

 

MBO Milestone		Percentage Weight
Reinstatement of Shelf		20%
Closing of financings of $10M+		20%
Topline revenue in excess of annual forecast		20%
Additional FDA Clearance(s)		10%
Operating cash flow in excess of forecast		10%
Acquisition or strategic commercial partnership approved by the Board		20%

 

The foregoing MBO Milestones shall be in effect for 2024 and 2025 and have been approved by the Compensation Committee of the Board and the Board, and are subject to modification by the Compensation Committee of the Board. Future MBO Milestones shall be established by the Compensation Committee of the Board in its sole discretion.

 

3. TERMINATION. Other than the pro-rated payments described below, Executive must remain in continuous employment with the Company on each applicable semi-annual payment date to receive the cash incentive compensation payment for any given period; provided, that, if Executive’s employment is terminated without Cause, Executive resigns for Good Reason, Executive dies, or Executive becomes Disabled, and Executive satisfies the requirements Section forth in Section 3 of the Agreement, then Executive shall be entitled to receive a pro-rated cash incentive compensation payment for the semi-annual period during which sum termination of employment occurs (with the pro-rated amount calculated by reference to actual performance and the number of days during the period Executive was employment by the Company) and with such lump sum amount paid to Executive in a single sum cash payment no later than 30 days following the last day of the applicable semi-annual bonus period.

 

 

Attachment C

 

EMPLOYEE CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT

 

(See Attached)

 

 

Attachment D

 

NOTICE REGARDING COVENANTS NOT TO COMPETE

 

To:	Vivos Therapeutics, Inc.
From:	Bradford Amman
Date:	September 13, 2024
Re:	Notice Pursuant to C.R.S. § 8-2-113

 

 

In compliance with C.R.S. § 8-2-113(4), you are hereby notified that the enclosed AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT and the Employee Nondisclosure and Invention, IP and Copyright Assignment Agreement between Company and Executive dated September 13, 2024 entered into between you and VIVOS THERAPEUTICS, INC. (the “Company”) are being provided to you.

 

Both of the documents referenced above contain one or more covenants not to compete that are reasonably necessary to protect the Company’s trade secrets. The covenants not to compete contained in the two documents could restrict your options for subsequent employment following your separation from the Company.

 

Please refer to Section 4 of the AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT for the specific provisions constituting the covenants not to compete.

 

		I acknowledge receipt of this Notice and receipt of the Agreement.
		Signature:	/S/ BRADFORD AMMAN
		Print Name:	Bradford Amman
		Date:	September 13, 2024

 

 

v3.25.0.1

Cover	Feb. 14, 2025
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 14, 2025
Entity File Number	001-39796
Entity Registrant Name	Vivos Therapeutics, Inc.
Entity Central Index Key	0001716166
Entity Tax Identification Number	81-3224056
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	7921 Southpark Plaza
Entity Address, Address Line Two	Suite 210
Entity Address, City or Town	Littleton
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80120
City Area Code	(844)
Local Phone Number	672-4357
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	VVOS
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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