Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is made as of September 22, 2022 (the “Effective Date”) by and between Sonendo, Inc, a Delaware corporation (the “Company”), and each of the several purchasers identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser”).
“Aggregate Purchase Price” means the aggregate Total Purchase Price paid by all Purchasers collectively.
“Company Counsel” means Reed Smith LLP.
“DTC” means the Depository Trust Company.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.
“Material Adverse Effect” has the meaning set forth in Section 4(b).
“Outside Date” means the thirtieth (30th) day following the date of this Agreement.
“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.
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“Principal Trading Market” means the Trading Market on which the Common Stock is primarily listed and quoted for trading, which, as of the date of this Agreement and the Closing Date, shall be The New York Stock Exchange.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Pro Rata Interest” means the number of Securities purchased by each Purchaser, relative to the total number of Securities being sold to all Purchasers hereunder.
“Reporting Period” means the period commencing on the Closing Date and ending on the earliest of: (i) the date as of which the Purchasers may sell all of the Securities under Rule 144 without volume or manner-of-sale restrictions and without the requirement for the Company to be in compliance with the current public information requirements under Rule 144(c)(1) (or any successor thereto) promulgated under the Securities Act; (ii) the second anniversary of the Closing Date; or (iii) the date on which such Purchaser shall have sold all of the Securities pursuant to a Registration Statement.
“Registration Effective Date” means the earliest of the date that (a) all of the Shares and Warrant Shares are covered by an effective Registration Statement, (b) all of the Shares and Warrant Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions, (c) the one-year anniversary of the Closing Date; provided, that a holder of Securities is not an affiliate of the Company, or (d) all of the Shares and Warrant Shares may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions and Company counsel has delivered to such holders a standing written unqualified opinion that resales may then be made by such holders of the Shares and Warrant Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such holders.
“Required Approvals” has the meaning set forth in Section 4(e).
“Retail Private Placement” means the concurrent offer and sale by the Company of the Securities to certain retail accredited investors (the “Retail Investors”).
“Retail Investor Securities Purchase Agreement” means the securities purchase agreement entered into by the Company and the Retail Investors concurrently with this Agreement pertaining to the Retail Private Placement.
“SEC Reports” means the reports, schedules, forms, statements and other documents required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (and all exhibits thereto and documents incorporated by reference therein), for the two years preceding the date of this Agreement (or such shorter period as the Company was required by law or regulation to file such material).
“Securities Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.
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“Subsidiaries” has the meaning set forth in Section 4(a).
“Trading Market” means whichever of the New York Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or the OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.
“Transaction Documents” means this Agreement, the Warrants, the schedules and exhibits attached hereto and any other documents or agreements explicitly contemplated hereunder.
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“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTIONS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE SECURITIES LAWS OF OTHER STATES AND JURISDICTIONS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT.”
It is understood that book-entry notations evidencing the Securities held by affiliates of the Company at the issuance may bear the following or any similar legend:
“AS LONG AS THE HOLDER OF THESE SECURITIES IS AN AFFILIATE OF THE ISSUER, THESE SECURITIES MAY NOT BE SOLD, OR OFFERED FOR SALE, IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SALE OF THESE SECURITIES UNDER THE SECURITIES ACT OF 1933, OR THE SALE OTHERWISE BEING EXEMPT FROM REGISTRATION UNDER SUCH ACT. THE ISSUER MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.”
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In addition, the Securities may contain a legend regarding affiliate status of the Purchaser, if applicable and, if required by the authorities of any state in connection with the issuance and sale of the Securities, the legend required by such state authority.
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If to the Company: |
| Sonendo, Inc. |
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| 26061 Merit Circle, Suite 102 |
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| Laguna Hills, California 92653 |
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| Telephone No.: (949) 766-3636 |
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| Email: mwatts@sonendo.com |
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| Attention: Michael Watts |
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With a copy to (which shall not constitute notice): | ||
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| Reed Smith LLP 1901 Avenue of Stars, Suite 700 |
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| Los Angeles, CA 90067-6078 |
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| Telephone No.: (310) 734 -5200 |
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| Email: msanders@reedsmith.com |
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| Attention: Michael Sanders
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If to a Purchaser: |
| To the address set forth under such Purchaser’s name on the signature page hereof; |
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[Signature Pages Follow]
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The undersigned has executed this Agreement as of the date first set forth above.
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THE COMPANY:
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SONENDO, INC. | ||
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By: |
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(Signature) | ||
Name: |
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Title: |
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Address: | ||
26061 Merit Circle, Suite 102 | ||
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Attention: Chief Financial Officer |
[Signature Page to Stock Purchase Agreement]
The undersigned has executed this Agreement as of the date first set forth above.
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PURCHASER: | |
[____________] | |
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(Signature) | |
Name: |
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Title: |
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Address: | |
c/o | |
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Attention: | |
Facsimile: | |
Email: |
Total Purchase Price: ________________________________
Number of Shares Purchased: _________________________
Number of Warrants Purchased: _______________________
Beneficial Ownership Blocker on Warrants (if applicable): 󠄀 9.99% 󠄀 19.99%
Tax ID: ______________________________________
[Signature Page to Stock Purchase Agreement]
EXHIBIT A
PLAN OF DISTRIBUTION
We are registering the shares of common stock and the shares of common stock issuable upon exercise of pre-funded warrants (collectively, the “Placement Shares”) previously issued in the private placement to permit the resale of these Placement Shares by the holders thereof from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholder of the Placement Shares. We will bear all fees and expenses incident to our obligation to register the Placement Shares.
The selling stockholders, which shall include donees, pledgees, transferees or other successors-in-interest selling Placement Shares or interests in Placement Shares received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their Placement Shares or interests in Placement Shares on any stock exchange, market or trading facility on which the shares of common stock of the Company are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.
The selling stockholders may use any one or more of the following methods when disposing of shares or interests therein:
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| on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; |
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| ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
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| block trades in which the broker-dealer will attempt to sell the Placement Shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; |
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| purchases by a broker-dealer as principal and resale by the broker-dealer for its own account; |
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| an exchange distribution in accordance with the rules of the applicable exchange; |
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| privately negotiated transactions; |
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| short sales; |
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| through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
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| through agreements between broker-dealers and the selling stockholders to sell a specified number of such Placement Shares at a stipulated price per share; |
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| a combination of any such methods of sale; and |
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| any other method permitted by applicable law. |
The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the Placement Shares owned by them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell the Placement Shares, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b) or other applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer the Placement Shares in other circumstances, in which case the pledgees, transferees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
In connection with the sale of the Placement Shares or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into options or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to each such broker-dealer or other financial institution of Placement Shares offered by this prospectus, which Placement Shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The aggregate proceeds to the selling stockholders from the sale of the Placement Shares offered by them will be the purchase price of the Placement Shares less discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with its agents from time to time, to reject, in whole or in part, any proposed purchase of Placement Shares to be made directly or through agents. We will not receive any of the proceeds from this offering.
The selling stockholders also may resell all or a portion of the Placement Shares in open market transactions in reliance upon Rule 144 under the Securities Act, provided that they meet the criteria and conform to the requirements of that rule.
There can be no assurance that any selling stockholder will sell any or all of the Placement Shares registered pursuant to the registration statement, of which this prospectus forms a part.
The selling stockholders and any underwriters, broker-dealers or agents that participate in the sale of the Placement Shares or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the Placement Shares may be underwriting discounts and commissions under the Securities Act. Selling stockholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act.
To the extent required, the Placement Shares to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, and any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.
In order to comply with the securities laws of some states, if applicable, the Placement Shares may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the Placement Shares may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.
We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of Placement Shares in the market and to the activities of the selling
stockholders and their affiliates. In addition, to the extent applicable, we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the Placement Shares against certain liabilities, including liabilities arising under the Securities Act.
We are required to pay all fees and expenses incident to the registration of the Placement Shares. We have agreed to indemnify the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the Placement Shares offered by this prospectus. Once sold under the registration statement, of which this prospectus forms a part, the Placement Shares will be freely tradable in the hands of persons other than our affiliates.
We have agreed with the selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier of (1) such time as all of the Placement shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement or (2) the date on which all of the Placement Shares may be sold without restriction pursuant to Rule 144 of the Securities Act.