Zenas BioPharma, Inc.(ZBIO) - 2025 Q3 - Quarterly Results

Agreement Overview This agreement, dated October 7, 2025, governs the sale of common stock by Zenas BioPharma, Inc. to investors, including registration rights under a Securities Act exemption Preamble This section introduces the Securities Purchase Agreement, outlining its parties, effective date, and the purpose of selling common stock with registration rights - The agreement was signed on October 7, 2025, between Zenas BioPharma, Inc. and the investors[2] - The agreement's purpose is for the company to sell common stock to investors, relying on a registration exemption under Section 4(a)(2) of the Securities Act[2] - A registration rights agreement will also be signed, providing registration rights for the shares under the Securities Act and applicable state securities laws[2] 1. Definitions This section provides comprehensive definitions for key terms used throughout the agreement, ensuring clear understanding and consistent interpretation 1.1 Key Definitions This chapter defines key terms such as 'Material Adverse Effect,' 'Share Price,' 'Insider Share Price,' and 'SEC Reports,' crucial for understanding the agreement's provisions - A 'Material Adverse Effect' is defined as a material adverse effect on the business, financial condition, assets, liabilities, stockholders' equity, or results of operations of the Company and its subsidiaries, or a material delay or impairment of the Company's ability to perform its obligations under the agreement[34] - The 'Share Price' is defined as $19.00 per share, while the 'Insider Share Price' is defined as $20.85 per share[31][43] - 'SEC Reports' include the Company's most recently filed annual report on Form 10-K and all subsequent quarterly reports on Form 10-Q or current reports on Form 8-K[42] 2. Purchase and Sale of Shares This section details the terms for the purchase and sale of shares to both investors and insiders, including the closing procedures and pricing 2.1 Purchase and Sale to Investors The company agrees to sell shares to investors listed in Exhibit A at a purchase price of $19.00 per share - The Company will sell shares to the investors listed in Exhibit A[52] Share Purchase Price | Purchaser | Purchase Price (per share) | | :-------- | :------------------------- | | Investors | $19.00 | 2.2 Purchase and Sale to Insiders The company agrees to sell shares to insider investors listed in Exhibit B at a purchase price of $20.85 per share - The Company will sell shares to the insider investors listed in Exhibit B[53] Insider Share Purchase Price | Purchaser | Purchase Price (per share) | | :-------- | :------------------------- | | Insiders | $20.85 | 2.3 Closing This section outlines the closing procedures for the purchase and sale of shares, including timing, issuance format, payment method, and refund conditions - The closing will occur remotely on the second business day but no later than the fifth business day following the agreement date[54] - Shares will be issued in book-entry form without restrictive legends, and investors must pay the purchase price via wire transfer[54] - If closing does not occur within one business day after the anticipated closing date, the Company will refund the wired purchase amount[54] 3. Representations and Warranties of the Company This section details the company's assurances regarding its legal status, financial condition, operational compliance, and the validity of the shares being sold 3.1 Organization and Power The company is duly incorporated and validly existing under Delaware law, possessing all necessary corporate power and authority to conduct its business - The Company is duly incorporated and validly existing in Delaware[57] - The Company possesses the corporate power and authority necessary to conduct its business[57] 3.2 Capitalization The company's capitalization information disclosed in SEC reports is accurate, with all issued common stock being validly issued and fully paid - The Company's capitalization information disclosed in its SEC Reports is accurate in all material respects[58] - All issued common stock is duly authorized, validly issued, fully paid, and non-assessable[58] - The issuance did not violate any preemptive or similar rights[58] 3.3 Registration Rights Except for specific agreements and SEC disclosures, the company has no other contractual obligations to grant registration rights - Except as disclosed in specific agreements and SEC filings, the Company has no other registration rights obligations[60] 3.4 Authorization The company possesses all necessary corporate power and authority to execute and perform its obligations under the transaction agreements, including share issuance - The Company possesses all corporate power and authority required to execute the transaction agreements and perform its obligations[61] - All necessary corporate actions, including Board of Directors approval, have been completed[61] 3.5 Valid Issuance The shares are duly authorized and, upon issuance and payment, will be validly issued, fully paid, non-assessable, and exempt from registration requirements - The shares are duly authorized and, upon issuance, delivery, and payment, will be validly issued, fully paid, and non-assessable[62] - The issuance of shares is not subject to any un-waived preemptive or similar rights[62] - The issuance and delivery of shares will be exempt from the registration and prospectus delivery requirements of the Securities Act and applicable state securities laws[62] 3.6 No Conflict The company's execution and performance of this agreement will not violate applicable laws, organizational documents, or material agreements, unless such violations are not expected to result in a Material Adverse Effect - The Company's performance of its obligations will not conflict with applicable laws, organizational documents, or material agreements, unless such conflicts are not reasonably expected to result in a Material Adverse Effect[64] 3.7 Consents Assuming investor representations are accurate, the company's performance of its obligations requires no further government consents, except for SEC/Exchange Act filings and Nasdaq listing notifications - The Company's performance of its obligations requires no additional government consents, except for SEC/Exchange Act requirements, national exchange listing notifications, and customary post-closing SEC filings[65] 3.8 SEC Filings; Financial Statements The company has filed all required SEC reports, which comply with applicable laws and GAAP, accurately presenting its financial condition and operations - The Company has filed all required SEC Reports and complies with the Exchange Act and Form S-3 requirements[67] - The SEC Reports, at the time of filing, complied in all material respects with applicable requirements and contained no material misstatements or omissions[67] - The consolidated financial statements comply with GAAP and SEC regulations, fairly presenting the Company's financial position, results of operations, and cash flows[68] 3.8(a) SEC Filings Compliance This subsection confirms the company's adherence to SEC reporting requirements, including timely filings and absence of material misstatements or ongoing SEC reviews - The Company has filed all required SEC Reports within the past year and complies with General Instruction I.A.3 of Form S-3[67] - All filed SEC Reports, at the time of filing, complied in all material respects with Exchange Act requirements and contained no material misstatements or omissions[67] - There are no outstanding or unresolved comments from the SEC staff on the SEC Reports, and the Company is unaware of any SEC Reports under SEC review[67] 3.8(b) Financial Statements Accuracy This subsection affirms the accuracy of the company's consolidated financial statements, their compliance with GAAP and SEC regulations, and the absence of undisclosed material liabilities - The consolidated financial statements included in the SEC Reports comply in all material respects with applicable accounting requirements and SEC regulations[68] - The financial statements fairly present the consolidated financial position, results of operations, and cash flows of the Company and its subsidiaries, prepared consistently with GAAP[68] - The Company has incurred no other material liabilities except those disclosed or arising in the ordinary course of business[68] 3.9 Absence of Changes Since December 31, 2024, the company's business has operated in the ordinary course, with no material adverse changes or transactions outside this agreement - Since December 31, 2024, the Company's business has been conducted only in the ordinary course, with no material transactions or contract changes[69] - No events or conditions have occurred that are reasonably expected to result in a Material Adverse Effect[69] - General changes in economic, market, industry, natural disaster, or political conditions, or failure to meet performance expectations, do not themselves constitute a Material Adverse Effect[69][70] 3.10 Absence of Litigation Neither the company nor its subsidiaries are involved in any litigation or investigations that would reasonably result in a Material Adverse Effect, nor have they been involved in securities-related claims in the past decade - Neither the Company nor its subsidiaries have any pending or known threatened litigation that is reasonably expected to result in a Material Adverse Effect[71] - Neither the Company nor any of its directors or officers have been involved in claims related to securities laws or fiduciary duties in the past ten years[71] 3.11 Compliance with Law; Permits The company and its subsidiaries comply with all applicable laws and possess all necessary government authorizations, with no undisclosed legal or governmental proceedings expected to have a Material Adverse Effect - Neither the Company nor its subsidiaries have any pending or known threatened legal or governmental proceedings, unless accurately described in SEC Reports and not expected to result in a Material Adverse Effect[73] - The Company complies with all applicable laws and possesses all government authorizations required to conduct its business[73] 3.12 Intellectual Property The company owns or has rights to all necessary intellectual property for its operations, which do not infringe on third-party rights, and its product candidates are covered by owned or licensed patents - The Company and its subsidiaries own or have the right to use all necessary intellectual property to conduct their business[74] - The Company's business operations do not infringe on others' intellectual property, and the Company's intellectual property is free from third-party rights or liens[74] - The Company's product candidates under development are covered by one or more patents or patent applications owned or exclusively licensed by the Company[74] 3.13 Employee Benefits The company's employee benefit plans comply with applicable laws and regulations, including ERISA, with no non-exempt prohibited transactions or significant liabilities expected - The Company's employee benefit plans comply with their terms and applicable laws and regulations, including ERISA and the Code[75] - No non-exempt prohibited transactions have occurred or are reasonably expected to occur[75] 3.14 Taxes The company and its subsidiaries have filed all required tax returns and paid all due taxes, with no outstanding tax deficiencies or extensions of limitation periods - The Company and its subsidiaries have filed all required tax returns and paid all due taxes, unless failure to file or pay is not reasonably expected to result in a Material Adverse Effect[76] - The Company has no outstanding tax deficiencies, nor any pending agreements or waivers extending the statutory period of limitations for any tax returns[76] 3.15 Environmental Laws The company and its subsidiaries comply with all applicable environmental laws and possess necessary permits, with no expected material costs or liabilities arising from environmental regulations - The Company and its subsidiaries comply with all applicable environmental laws and have obtained all necessary permits[78] - Neither the Company nor its subsidiaries have incurred any costs or liabilities under environmental laws that are reasonably expected to result in a Material Adverse Effect[78] 3.16 Title The company owns no real property but holds good and marketable title to all material personal property, free of liens, and leases real property under valid agreements - The Company owns no real property[79] - The Company and its subsidiaries hold good and marketable title to all personal property material to their business, free of liens, encumbrances, and defects[79] 3.17 Insurance The company maintains adequate and customary insurance coverage and has no reason to believe it cannot renew existing policies or obtain similar coverage without a Material Adverse Effect - The Company and its subsidiaries maintain insurance coverage deemed adequate and customary in the Company's reasonable judgment[81] - The Company has no reason to believe it cannot renew existing insurance at a cost not reasonably expected to result in a Material Adverse Effect[81] 3.18 Nasdaq Stock Market The company's common stock is listed on the Nasdaq Global Select Market under 'ZBIO,' and the company complies with all Nasdaq listing requirements, with no pending delisting actions - The Company's common stock is listed and traded on the Nasdaq Global Select Market under the symbol 'ZBIO'[82] - The Company complies with all applicable Nasdaq listing requirements[82] - There are no pending or known threatened actions or investigations for delisting or deregistration of the Company's stock[82] 3.19 Sarbanes-Oxley Act Since January 1, 2025, the company has materially complied with the Sarbanes-Oxley Act of 2002 and applicable SEC rules and regulations - Since January 1, 2025, the Company has materially complied with the Sarbanes-Oxley Act of 2002 and applicable SEC rules and regulations[83] 3.20 Clinical Data and Regulatory Compliance The company's preclinical and clinical studies comply with protocols and healthcare laws, with accurate results and no notices to terminate or modify trials - Studies described in SEC Reports were conducted in all material respects according to designed and approved protocols, procedures, controls, and all healthcare laws[84] - Descriptions of study results are accurate and complete in all material respects, and the Company is unaware of other studies materially inconsistent with those described in SEC Reports[84] - The Company has received no notices requiring termination, suspension, or modification of clinical trials[84] 3.21 Compliance with Health Care Laws The company and its subsidiaries materially comply with all applicable healthcare laws and possess necessary licenses, with no notices of violations or actions to restrict licenses - The Company and its subsidiaries materially comply with all applicable healthcare laws[85] - The Company possesses all required healthcare licenses and complies with its obligations[85] - The Company has received no notices alleging healthcare law violations, nor any from the FDA or other government entities to restrict, suspend, modify, or revoke any material healthcare licenses[85][86] 3.22 Accounting Controls and Disclosure Controls and Procedures The company maintains adequate internal accounting controls and disclosure controls, with no material weaknesses or adverse changes in financial reporting controls since December 31, 2024 - The Company and its subsidiaries maintain internal accounting controls sufficient to provide reasonable assurance[87] - Since December 31, 2024, there have been no material weaknesses in the Company's internal controls over financial reporting, nor any changes materially affecting them[87] - The Company has filed all required tax returns and paid all due taxes, with no outstanding tax deficiencies[87] 3.23 Price Stabilization of Common Stock The company has not taken any actions to stabilize or manipulate the price of its common stock, directly or indirectly - The Company has not taken any action designed or reasonably expected to cause or result in the stabilization or manipulation of the share price[88] 3.24 Investment Company Act The company is not, and will not be required to register as, an 'investment company' under the Investment Company Act of 1940 after issuing shares - The Company is not currently, and will not be required to register as, an 'investment company' after issuing and selling shares[89] 3.25 General Solicitation; No Integration or Aggregation The company has not engaged in general solicitation for this offering and has not sold or offered securities that would require registration or shareholder approval when integrated with this offering - Neither the Company nor its authorized representatives have engaged in general solicitation or advertising for the issuance or sale of shares[90] - The Company has not sold any securities that are known or will be integrated with the issuance and sale of shares, requiring registration under the Securities Act or shareholder approval[90] 3.26 Brokers and Finders Except for the placement agent, the company has not engaged any other brokers or finders in connection with the transactions contemplated by this agreement - Except for the placement agent, the Company has not engaged other brokers or finders in connection with the transactions contemplated by this agreement[92] 3.27 Reliance by the Investors The company has reasonable grounds for its statements and acknowledges that investors will rely on the truth and accuracy of its representations and warranties - The Company has reasonable grounds to make the statements in this section[93] - Investors will rely on the truth and accuracy of the Company's statements[93] 3.28 No Additional Agreements Beyond the transaction agreements and shared side letters, no other agreements or understandings exist between the company and any investor regarding these transactions - Except for the transaction agreements and shared side letter agreements, no other agreements exist between the Company and investors[94] 3.29 Anti-Bribery and Anti-Money Laundering Laws The company and its subsidiaries comply with all applicable financial record-keeping and anti-money laundering laws, with no related litigation or proceedings - The Company and its subsidiaries' operations materially comply with all applicable financial record-keeping and reporting requirements, including the Bank Secrecy Act and anti-money laundering laws[95] - Neither the Company nor its subsidiaries have any pending or known threatened litigation or proceedings involving anti-money laundering laws[95] 3.30 Sanctions Neither the company nor its affiliates are subject to sanctions, and proceeds from this offering will not be used to fund sanctioned parties or countries, nor have they knowingly transacted with such parties in the past five years - Neither the Company, its subsidiaries, directors, employees, nor agents are subject to any sanctions, nor are they owned or controlled by sanctioned parties[96] - The Company will not directly or indirectly use the proceeds to fund or facilitate activities or business with any sanctioned party or country, or otherwise cause any person to violate sanctions[97][100] - In the past five years, the Company and its subsidiaries have not knowingly transacted with any sanctioned party or in sanctioned countries[97] 3.31 Cybersecurity The company's IT systems are robust and secure, with implemented controls to protect confidential information and ensure operational integrity, and no significant security breaches have occurred - The IT systems of the Company, its subsidiaries, and their third-party providers are sufficient to support business operations and have no material defects[98] - The Company has implemented and maintains physical, technical, and administrative controls to protect confidential information and the integrity, continuous operation, and security of IT systems[98] - No internal or external security breaches, interruptions, or unauthorized access have occurred[98] 3.32 Compliance with Data Privacy Laws The company and its subsidiaries materially comply with all applicable data privacy laws and contractual obligations, including GDPR and CCPA, and have not received notices of violations - The Company and its subsidiaries materially comply with all applicable data privacy and security laws, regulations, and contractual obligations, including GDPR and CCPA[99] - The Company has developed and complies with data privacy and security policies, providing accurate privacy practice notices to data subjects[99] - The Company has received no notices of privacy and security obligation violations, nor participated in any related investigations or corrective actions[99] 3.33 Transactions with Affiliates and Employees There are no undisclosed direct or indirect relationships or transactions between the company or its subsidiaries and its directors, officers, shareholders, customers, or suppliers that require disclosure - There are no undisclosed transactions or relationships between the Company and its affiliates and employees that require disclosure[101] 4. Representations and Warranties of Each Investor This section outlines each investor's assurances regarding their organizational status, authorization, investment intent, experience, and understanding of the unregistered securities 4.1 Organization If an investor is an entity, it is duly organized, validly existing, and in good standing under the laws of its jurisdiction, possessing all necessary powers to conduct its business - If an investor is an entity, it is duly organized, validly existing, and in good standing under the laws of its organizing jurisdiction[102] 4.2 Authorization If an investor is an entity, it possesses all necessary corporate power and authority to execute and perform its obligations under this agreement, which constitutes a legal and binding obligation - If an investor is an entity, it possesses all power and authority required to execute this agreement and transaction agreements and perform its obligations[103] - All necessary corporate actions have been completed, and this agreement constitutes a legal, valid, and binding obligation for the investor[103] 4.3 No Conflicts The investor's execution and performance of the transaction agreements will not conflict with its organizational documents, applicable laws, or other agreements, unless such conflicts do not materially delay or impede its obligations - The investor's performance of its obligations will not conflict with organizational documents or applicable laws, unless such conflicts do not materially delay or impede its obligations[105] 4.4 Residency The investor's residency or office for investment decisions is as stated on the signature page, unless otherwise notified to the company - The investor's residency or investment decision office address is listed on the signature page[106] 4.5 Brokers and Finders The investor has not engaged any brokers or finders for this transaction whose fees would be payable by the company - The investor has not engaged any brokers or finders for this agreement whose fees are payable by the Company[107] 4.6 Investment Representations and Warranties The investor represents being a qualified buyer with sufficient knowledge and experience to assess investment risks, understanding that the shares are unregistered and rely on federal and state exemptions - The investor represents being a 'qualified institutional buyer' or 'institutional accredited investor' (if an entity), or an 'accredited investor' (if an individual)[108] - The investor possesses the knowledge and experience to evaluate investment risks[108] - The investor understands that the issuance and sale of shares are unregistered and rely on federal and state exemptions not involving a public offering[108] 4.7 Intent The investor is purchasing shares for its own account, with no intent to resell or distribute in violation of the Securities Act, and understands the shares must be held indefinitely unless resold under a registration statement or exemption - The investor is purchasing shares solely for its own account, with no intent to resell or distribute in violation of the Securities Act[110] - The investor understands that shares must be held indefinitely unless resold under a registration statement or exemption[110] 4.8 Investment Experience; Ability to Protect Its Own Interests and Bear Economic Risks The investor acknowledges the ability to bear the economic risks and potential total loss of the investment, possessing sufficient financial knowledge and experience to evaluate the merits and risks of such an investment - The investor acknowledges the ability to bear the economic risks and complete loss of the share investment[111] - The investor possesses the knowledge and experience to evaluate the merits, disadvantages, and risks of such an investment[111] - The investor has independently analyzed and fully considered the risks of investing in shares and determined that shares are a suitable investment[111] 4.9 Independent Investment Decision The investor understands that the transaction agreements do not constitute legal, tax, or investment advice and has consulted necessary advisors for its investment decision - The investor understands that the agreement or Company materials do not constitute legal, tax, or investment advice[112] - The investor has consulted legal, tax, and investment advisors deemed necessary or appropriate for its decision to purchase shares[112] 4.10 Securities Not Registered; Legends The investor acknowledges that the shares are unregistered under the Securities Act and must be held indefinitely unless resold via a registration statement or exemption, and may bear restrictive legends - The investor acknowledges that shares are unregistered under the Securities Act and must be held indefinitely unless resold through a registration statement or exemption[114] - The investor understands that Rule 144 exemptions depend on various conditions, and share certificates or book-entry records may bear restrictive legends[114][115] 4.11 No General Solicitation The investor confirms direct purchase of shares and awareness of the offering through direct contact or existing relationships, not via general or public solicitation - The investor purchased shares directly from the Company and learned of this offering through direct contact with the placement agent or the Company (or its representatives)[116] - The investor did not learn of this offering through any general or public solicitation[116] 4.12 Access to Information The investor's decision to purchase shares relies solely on independent investigation, SEC reports, and the agreement's representations, having had the opportunity to obtain necessary information - The investor's decision to purchase shares relies solely on its independent investigation, SEC Reports, and the statements, warranties, and covenants in this agreement[118] - The investor and its professional advisors have had the opportunity to inquire and obtain necessary information about the Company, its business, and the terms and conditions of the share offering[118] 4.13 Certain Trading Activities Except for this transaction, the investor or its representatives have not engaged in buying or selling company securities, including short selling, during a specified period, with exceptions for certain investment vehicles - The investor or its representatives have not executed any purchase or sale of Company securities, including short selling, during a specified period[119] - This statement has specific exceptions for multi-managed investment vehicles and investment advisors using information barriers[119] 5. Covenants This section outlines the ongoing obligations and agreements of both the company and investors, covering aspects like further assurances, listing, disclosure, and indemnification 5.1 Further Assurances Both parties agree to cooperate and take reasonable actions to fulfill the agreement's intent, with investors promptly notifying the company if their representations become inaccurate - Each party agrees to cooperate and take reasonable actions to achieve the intent and purpose of this agreement[121] - Investors agree to promptly notify the Company if their representations and warranties are no longer accurate[121] 5.2 Listing The company commits to using commercially reasonable efforts to maintain its common stock listing on the Nasdaq Global Select Market and comply with Nasdaq's obligations - The Company shall use commercially reasonable efforts to maintain the listing and trading of its common stock on the Nasdaq Global Select Market[122] - The Company will comply with Nasdaq's reporting, filing, and other obligations[122] 5.3 Disclosure of Transactions The company will disclose material terms of this agreement and non-public information via a press release or Form 8-K, and will not publicly disclose investor names without prior written consent, unless legally required - The Company shall issue a press release and/or file a Form 8-K current report with the SEC before the disclosure time, disclosing all material terms of this agreement and transaction agreements, and all material non-public information disclosed to investors[123] - The Company shall not publicly disclose any investor's name or its affiliates or advisors without prior written consent, unless legally required[123] 5.4 Integration The company and its affiliates shall not sell or offer any securities that would integrate with this offering, requiring registration under the Securities Act or shareholder approval - The Company and its affiliates shall not sell any securities that would integrate with the issuance or sale of shares, requiring registration under the Securities Act or shareholder approval[125] 5.5 Removal of Legends The company will use commercially reasonable efforts to remove restrictive legends from shares upon investor request for resale under Rule 144 or other exemptions, bearing related transfer agent and legal counsel fees - When investors sell shares under Rule 144 or other Securities Act exemptions, the Company shall use commercially reasonable efforts to request the transfer agent to remove restrictive legends from the shares[126] - The Company will create new book-entry records without legends within the specified timeframe upon receiving investor requests and customary documentation[126][127] - The Company will bear the related fees of the transfer agent and legal counsel[126] 5.6 Withholding Taxes Each investor agrees to provide information and forms reasonably requested by the company to assist with compliance with applicable tax laws, including withholding obligations - Investors agree to provide information to assist the Company in complying with tax laws, including withholding obligations[129] 5.7 Fees and Commissions The company is solely responsible for paying all placement agent fees, financial advisor fees, or broker commissions related to this agreement, excluding those engaged by investors - The Company shall be solely responsible for paying all placement agent fees, financial advisor fees, or broker commissions related to this agreement's transactions (excluding those engaged by investors)[130] 5.8 No Conflicting Agreements The company will not take any actions or enter into agreements that would materially conflict with or interfere with its obligations to investors under the transaction agreements - The Company will not take any action, enter into any agreement, or make any commitment that would materially conflict with or interfere with its obligations to investors[131] 5.9 Indemnification The company agrees to indemnify investors and their affiliates from losses, claims, damages, liabilities, and expenses arising from the company's breach of representations, warranties, or covenants in the transaction agreements - The Company agrees to indemnify and hold harmless the indemnified parties from all losses, claims, damages, liabilities, and expenses arising from the Company's breach of representations, warranties, covenants, or agreements in the transaction agreements[132] - Indemnified parties shall promptly notify the indemnifying party in writing of any claim and allow the indemnifying party to assume defense[133] 5.10 Subsequent Equity Sales The company is restricted from issuing common stock or equivalents, performing reverse stock splits, or filing related SEC registration statements for a specified period, with exceptions for certain issuances - From the agreement date until 60 days after the closing date or the effective date of the registration statement (whichever is earlier), the Company shall not issue common stock or equivalents, perform reverse stock splits, recapitalizations, or similar transactions, nor file SEC registration statements related to common stock or equivalents, except under the terms of the registration rights agreement[134] - This restriction does not apply to the issuance of shares under this agreement, conversion/exercise of existing securities, issuances under Company stock compensation plans, and certain Form S-3 registration statements[134] 6. Conditions of Closing This section outlines the conditions that must be met or waived for both investors and the company to complete the closing of the share purchase and sale 6.1 Conditions to the Obligation of the Investors Investors' obligation to close is contingent upon the accuracy of company representations, performance of obligations, absence of injunctions, receipt of necessary consents, and other specific deliverables - The truth and accuracy of the Company's representations and warranties are preconditions for investor closing[135] - The Company must perform all agreement obligations, and no legal or governmental order prohibiting or preventing share purchase must exist[137] - The Company must obtain all necessary consents, provide required materials to the transfer agent, and no Material Adverse Change has occurred since the agreement date[138][139] - The Company must provide legal counsel opinion, compliance certificate, secretary's certificate, and sign the Registration Rights Agreement[139][140][141][142] - The common stock must be listed on a national exchange, and Nasdaq has not objected to the share listing notice[144] - The Company must receive full payment for shares purchased by other investors[146] 6.2 Conditions to the Obligation of the Company The company's obligation to close is contingent upon the accuracy of investor representations, performance of obligations, absence of injunctions, signing of the registration rights agreement, and receipt of investor payments - The truth and accuracy of each investor's representations and warranties are preconditions for Company closing[147] - Each investor must perform all agreement obligations, and no legal or governmental order prohibiting or preventing share purchase must exist[148] - Each investor must sign and deliver the Registration Rights Agreement[149] - The Company must receive full payment for shares purchased by each investor[150] 7. Termination This section outlines the conditions under which the obligations to close the transaction may be terminated, including mutual agreement, unfulfilled conditions, or failure to close by a specified date 7.1 Termination Provisions Closing obligations can be terminated by mutual written consent, failure to satisfy or waive closing conditions, or if closing does not occur by the fifth business day after the agreement date, provided the terminating party is not in breach - Mutual written consent can terminate closing obligations[152] - If closing conditions for either the Company or an investor cannot be satisfied and are not waived, obligations can be terminated[152] - If closing does not occur by the fifth business day after the agreement date, obligations can be terminated[152] - The party seeking termination must not be in breach of any representations, warranties, covenants, or agreements in the transaction agreements[152] 7.2 Notice If either party terminates closing obligations, the company must provide written notice to other investors, and this section does not relieve liability for breaches or impair rights to enforce obligations - If the Company or an investor terminates closing obligations, the Company shall provide written notice to other investors[153] - This section does not relieve any party from liability for breaching other terms of the transaction agreements, nor does it impair the right to enforce obligations[153] 8. Miscellaneous Provisions This section covers general contractual terms, including public statements, notices, governing law, waivers, expenses, assignments, confidentiality, and interpretations 8.1 Public Statements or Releases Neither party shall issue public statements about this agreement without prior consent, except for legally required disclosures, which allow for reasonable review by the other party - Neither the Company nor investors shall issue any public statements regarding the existence or terms of this agreement without prior consent[154] - Public statements made to fulfill legal obligations are exempt, but require allowing the other party reasonable time to comment before release[154] 8.2 Notices All required notices or communications under this agreement must be in writing and delivered via personal delivery, email, registered mail, or nationally recognized overnight courier to specified addresses - Notices shall be in writing and delivered via personal delivery, email, registered mail, or nationally recognized overnight courier[156] - The Company's and investors' notice addresses are specified in the agreement and may be changed[156][157] 8.3 Consent to Electronic Notice Each investor consents to receive shareholder notices via their specified email address, with consent revoked if electronic notices are returned or undeliverable until a new address is provided - Each investor consents to receive any shareholder notices under this agreement via their specified email address[158] - If electronic notices are returned or undeliverable, such consent will be deemed revoked[158] 8.4 Severability If any part of this agreement is deemed unenforceable or conflicts with applicable law, that part will be replaced to achieve its original commercial purpose, while the rest of the agreement remains binding - If any part or provision of this agreement is deemed unenforceable, that part will be replaced with a provision that best achieves its original commercial purpose, and the remainder of the agreement remains valid[159] 8.5 Governing Law; Submission to Jurisdiction; Venue; Waiver of Trial by Jury This agreement is governed by New York law, with parties irrevocably submitting to the jurisdiction of New York courts, waiving objections to venue and the right to a jury trial - This agreement is governed by and construed in accordance with the laws of the State of New York[161] - The Company and each investor irrevocably submit to the general jurisdiction of any state or federal court in Manhattan, New York, and waive any objection to venue[162] - Each party irrevocably waives the right to a jury trial in any legal action or proceeding related to this agreement[162] 8.6 Waiver A waiver of any term or condition of this agreement in one instance does not constitute a further or continuing waiver of that term or any other term - A waiver of any term of this agreement shall not be deemed a further or continuing waiver of that term or any other term[163] 8.7 Expenses Each party generally bears its own expenses, but the company is responsible for transfer agent fees, stamp duties, other taxes (excluding income tax), customs duties, and all placement agent fees related to the transaction - Each party shall pay its own out-of-pocket fees and expenses incurred in connection with the proposed investment in shares and the completion of the transactions[165] - The Company shall pay all transfer agent fees, stamp duties, other taxes (excluding income tax), and customs duties related to the delivery of shares to investors[165] - The Company shall pay all placement agent fees related to this agreement's transactions[165] 8.8 Assignment Neither party may assign its rights or obligations without prior written consent, though investors may assign their right to purchase shares to affiliates or managed funds without company consent, provided the assignee agrees to be bound by the terms - Neither party may assign its rights or obligations under this agreement without the other party's prior written consent[166] - Investors may assign their right to purchase shares to their affiliates or other investment funds or accounts managed or advised by their investment manager without the Company's prior consent[166] 8.9 Confidential Information Investors commit to keeping all disclosed information confidential until public disclosure, with exceptions for professional advisors, and the company will maintain confidentiality of investor-provided information unless legally required - Each investor commits to keeping all disclosed information confidential until the Company publicly discloses the transactions contemplated by this agreement and any material non-public information provided to investors[167] - The Company may request reasonable and customary additional information from investors to assess their qualifications and commits to keeping investor-provided information confidential, unless legally required[168] 8.10 Reliance by and Exculpation of Placement Agents Investors acknowledge not relying on placement agents for investment decisions, conducting their own due diligence, and the company agrees that placement agents can rely on its representations and are not responsible for company-provided information unless due to gross negligence or willful misconduct - Each investor agrees that its investment decision was not based on any statements, warranties, or representations from the placement agent[170] - The placement agent acts solely as a placement agent, not an underwriter or fiduciary, and investors will conduct their own due diligence[170] - The Company agrees that the placement agent may rely on its representations, warranties, agreements, and covenants, and the placement agent is not responsible for any information or documents provided by the Company, unless due to its own gross negligence or willful misconduct[171][172] 8.11 Third Parties This agreement does not confer rights or obligations on any person other than the parties, except that placement agents and indemnified parties are intended third-party beneficiaries of specific provisions - This agreement is not intended to confer any rights, remedies, claims, interests, obligations, or liabilities on any person other than the parties[174] - The placement agent and indemnified parties are intended third-party beneficiaries of specific terms of this agreement[174] 8.12 Independent Nature of Investors' Obligations and Right Each investor's obligations are independent, not joint, and this agreement does not constitute a partnership or joint venture among investors, who retain the right to independently protect and enforce their rights - Each investor's obligations under this agreement are independent, not joint, and no investor is responsible for another investor's performance of obligations[175] - Nothing in this agreement or any action taken by investors shall be deemed to constitute a partnership, association, joint venture, or any other type of entity among investors[175] - Each investor has the right to independently protect and enforce its rights[175] 8.13 Headings Headings, subheadings, and section titles in this agreement are for convenience only and do not form part of or affect its interpretation - Headings in this agreement are for convenience only, do not form part of the agreement, and do not affect its interpretation[176] 8.14 Counterparts This agreement may be executed in multiple counterparts, all constituting the same agreement, with fax or PDF signatures (including electronic signatures) having the same legal effect as originals - This agreement may be executed in two or more identical counterparts, all of which shall be deemed the same agreement[178] - Fax or PDF signatures (including electronic signatures compliant with the U.S. federal ESIGN Act) shall be deemed duly executed and have the same legal effect as originals[178] 8.15 Entire Agreement; Amendments This agreement and transaction agreements constitute the complete agreement between parties, superseding prior understandings, and any amendments require written form signed by the company and majority shareholders, with this section not amendable without placement agent consent - This agreement and the transaction agreements constitute the entire agreement between the parties regarding the subject matter, superseding all prior agreements[179] - Any amendment, modification, alteration, or change to this agreement is invalid unless in writing and duly signed by the Company and investors holding a majority of shares[179] - This section may not be amended, modified, altered, or waived without the prior written consent of the placement agent[179] 8.16 Survival The covenants, representations, and warranties made by the parties in this agreement will survive the closing and delivery of shares according to their respective terms, with each investor responsible only for its own statements - The covenants, representations, and warranties made by the parties in this agreement shall survive the closing and delivery of shares[180] - Each investor is solely responsible for its own representations, warranties, agreements, and covenants[180] 8.17 Contract Interpretation This agreement is a joint product of all investors and the company, negotiated and agreed upon by all parties, and shall not be construed against any single party - This agreement is a joint product of all investors and the Company and shall not be construed against any single party[181] 8.18 Arm's Length Negotiations For clarity, all parties acknowledge and confirm that the terms and conditions of the shares were the result of arm's length negotiations - Each party acknowledges and confirms that the terms and conditions of the shares were the result of arm's length negotiations[182] 8.19 Acknowledgements Regarding Placement Agents Purchasers acknowledge that placement agents acted on a 'best efforts' basis and were compensated by the company, and that investment decisions were based on their own due diligence, not on placement agent advice or representations - Each purchaser confirms that the placement agent acted on a 'best efforts' basis and was compensated by the Company[183] - Each purchaser declares that its investment decision was based on its due diligence results regarding the Company, not on any information or advice provided by the placement agent[185] - The placement agent made no representations or warranties regarding the Company or the transaction[185] Exhibits This section lists the appendices to the agreement, including investor lists and the template for the registration rights agreement Exhibit A: Investors Exhibit A provides a list of investors participating in this Securities Purchase Agreement Exhibit B: Insider Investors Exhibit B provides a list of insider investors participating in this Securities Purchase Agreement Exhibit C: Form of Registration Rights Agreement Exhibit C provides the template for the Registration Rights Agreement, which grants registration rights for the shares under the Securities Act and applicable state securities laws