|
Delaware
(State or other jurisdiction of incorporation or organization) |
| |
2834
(Primary Standard Industrial Classification Code Number) |
| |
85-0870387
(I.R.S. Employer Identification No.) |
|
|
Copies to:
|
| |||
|
Steven M. Skolnick, Esq.
Lowenstein Sandler LLP 1251 Avenue of the Americas New York, New York 10020 Telephone: (212) 262-6700 |
| |
Richard I., Anslow, Esq.
Lawrence Rosenbloom, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, New York 10105 Telephone: (212) 370-1300 |
|
|
Large accelerated filer
☐
|
| |
Accelerated filer
☐
|
|
|
Non-accelerated filer
☒
|
| |
Smaller reporting company
☒
|
|
| | | |
Emerging growth company
☒
|
|
| | |
Per Share
|
| |
Total
|
| ||||||
Initial public offering price
|
| | | $ | | | | | $ | | | ||
Underwriting discounts and commissions(1)
|
| | | $ | | | | | $ | | | ||
Proceeds, before expenses, to us
|
| | | $ | | | | | $ | | |
| | |
Page
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| | | | 55 | | | |
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| | | | 96 | | | |
| | | | 98 | | | |
| | | | 103 | | | |
| | | | 103 | | | |
| | | | 103 | | | |
| | | | 103 | | | |
| | | | F-1 | | |
| | |
For the Three
Months Ended March 31, 2020 |
| |
For the Three
Months Ended March 31, 2019 |
| |
For the
Year Ended December 31, 2019 |
| |
For the Period
from April 5, 2018 (Inception) through December 31, 2018 |
| ||||||||||||
Statement of Operations Data | | | | | | | | | | | | | | | | | | | | | | | | | |
General and administrative expense
|
| | | $ | 79,411 | | | | | $ | 7,747 | | | | | $ | 114,496 | | | | | $ | 12,342 | | |
Research and development expense
|
| | | | 195,812 | | | | | | 106,632 | | | | | | 484,113 | | | | | | 204,161 | | |
Research and development expense – license acquired
|
| | | | — | | | | | | — | | | | | | — | | | | | | 5,776 | | |
Net loss
|
| | | $ | (275,223) | | | | | $ | (114,379) | | | | | $ | 598,609 | | | | | $ | 222,279 | | |
Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash
|
| | | $ | 249,804 | | | | | $ | 6,442 | | | | | $ | 24,947 | | | | | $ | 9,322 | | |
Total assets
|
| | | | 249,804 | | | | | | 6,442 | | | | | | 24,947 | | | | | | 9,322 | | |
Working capital (deficit)
|
| | | | 32,690 | | | | | | 3,988 | | | | | | (98,301) | | | | | | 2,721 | | |
Temporary equity
|
| | | | 1,187,345 | | | | | | 352,619 | | | | | | 765,527 | | | | | | 232,096 | | |
Accumulated deficit
|
| | | | (1,154,655) | | | | | | (348,631) | | | | | | (863,828) | | | | | | (229,375) | | |
Total members’ deficit
|
| | | | (1,154,655) | | | | | | (348,631) | | | | | | (863,828) | | | | | | (229,375) | | |
| | |
As of
|
| |||||||||||||||
| | |
Actual
|
| |
Pro Forma
|
| |
Pro
Forma as Adjusted |
| |||||||||
| | |
(unaudited)
|
| |||||||||||||||
| | |
(in thousands, except share and per
share data) |
| |||||||||||||||
Cash
|
| | | $ | 250 | | | | | $ | 350 | | | | | $ | 13,225 | | |
Preferred units, 2,257,600 issued and outstanding at March 31, 2020; aggregate liquidation preferences of $1,187,345 as of March 31, 2020 (pro forma and pro forma adjusted)
|
| | | | 1,187 | | | | | | | | | | | | | | |
Members’ (deficit): | | | | | | | | | | | | | | | | | | | |
Common units, 5,775,898 shares issued and outstanding (actual); 7,355,555
shares issued and outstanding (pro forma); 9,855,555 issued and outstanding (pro forma as adjusted) |
| | | | | | | | | | | | | | | | | | |
Additional paid in capital
|
| | | | — | | | | | | 1,505 | | | | | | 14,480 | | |
Accumulated deficit
|
| | | | (1,155) | | | | | | (1,155) | | | | | | (1,155) | | |
Total members’ equity (deficit)
|
| | | | (1,155) | | | | | | 350 | | | | | | 13,325 | | |
Total capitalization
|
| | | $ | (1,155) | | | | | $ | 350 | | | | | $ | 13,325 | | |
|
Assumed initial public offering price per share
|
| | | $ | 6.00 | | |
|
Historical net tangible book value per share as of
|
| | | $ | (0.20) | | |
|
Pro forma increase in net tangible book value per share attributable to the conversion of preferred stock and the conversion of the 2020 Notes
|
| | | $ | 0.25 | | |
|
Pro forma net tangible book value per share as of March 31, 2020
|
| | | $ | 0.05 | | |
|
Pro forma increase in net tangible book value per share attributable to new investors
|
| | | $ | 1.30 | | |
|
Pro forma as adjusted net tangible book value per share after this offering
|
| | | $ | 1.35 | | |
|
Dilution per share to new investors participating in this offering
|
| | | $ | 4.65 | | |
| | |
Shares Purchased
|
| |
Total Consideration
|
| |
Average Price
Per Share |
| |||||||||||||||||||||
| | |
Number
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| ||||||||||||||||||
Existing stockholders
|
| | | | 7,355,555 | | | | | | 74.6% | | | | | $ | 878,718 | | | | | | 5.8% | | | | | $ | 0.12 | | |
Investors participating in this offering
|
| | | | 2,500,000 | | | | | | 25.4% | | | | | $ | 15,000,000 | | | | | | 94.2% | | | | | $ | 6.00 | | |
Total
|
| | | | 9,855,555 | | | | | | 100% | | | | | $ | 15,878,718 | | | | | | 100% | | | | | $ | 1.61 | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Operating expenses
|
| | | | | | | | | | | | |
General and administrative
|
| | | $ | 79,411 | | | | | $ | 7,747 | | |
Research and development
|
| | | | 195,812 | | | | | | 106,632 | | |
Total operating expenses
|
| | | | 275,223 | | | | | | 114,379 | | |
Loss from operations
|
| | | | (275,223) | | | | | | (114,379) | | |
Net loss
|
| | | $ | (275,223) | | | | | $ | (114,379) | | |
Proforma weighted average number of common shares outstanding, basic and diluted
|
| | | | 5,775,898 | | | | | | 5,775,898 | | |
Proforma net loss per share, basic and diluted
|
| | | $ | (0.05) | | | | | $ | (0.02) | | |
| | |
For the
Year Ended December 31, 2019 |
| |
For the Period
from April 5, 2018 (Inception) through December 31, 2018 |
| ||||||
Operating expenses | | | | | | | | | | | | | |
General and administrative
|
| | | | 114,496 | | | | | | 12,342 | | |
Research and development
|
| | | | 484,113 | | | | | | 204,161 | | |
Research and development – license acquired
|
| | | | — | | | | | | 5,776 | | |
Total operating expenses
|
| | | | 598,609 | | | | | | 222,279 | | |
Loss from operations
|
| | | | (598,609) | | | | | | (222,279) | | |
Net loss
|
| | | $ | (598,609) | | | | | $ | (222,279) | | |
Weighted average number of common shares outstanding, basic and diluted
|
| | | | 5,775,898 | | | | | | 5,775,898 | | |
Net loss per share, basic and diluted
|
| | | $ | (0.10) | | | | | $ | (0.04) | | |
Outcome
|
| |
Suramin
|
| |
Placebo
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Instruments
|
| |
Factor or
behaviour |
| |
Time after
Treatement (days) |
| |
Difference from
baseline (mean ± SD) |
| |
95% CI
|
| |
d(1)
|
| |
N
|
| |
P(2)
|
| |
p(3)
|
| |
Difference from
baseline (mean ± SD) |
| |
95% CI
|
| |
d(1)
|
| |
N
|
| |
P(2)
|
| |
p(3)
|
| |||||||||||||||||||||||||||
Primary outcomes | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ADOS-2
|
| | Comparision | | | | | 45 | | | |
-1.6 ± 0.55
|
| |
-2.3 to -0.9
|
| | | | 2.9 | | | | | | 5 | | | | | | 0.0028 | | | | | | 0.038 | | | |
-0.4 ± 0.55
|
| |
-1.1 to + 0.28
|
| | | | 0.7 | | | | | | 5 | | | | | | 0.18 | | | | | | 0.16 | | |
| | | Raw | | | | | 45 | | | |
-4.6 ± 1.9
|
| |
-7.0. to -2.2
|
| | | | 2.4 | | | | | | 5 | | | | | | 0.0062 | | | | | | 0.039 | | | |
-0.4 ± 1.8
|
| |
-2.7 to +1.9
|
| | | | 0.22 | | | | | | 5 | | | | | | 0.65 | | | | | | 0.58 | | |
| | | Social | | | | | 45 | | | |
-3.2 ± 1.9
|
| |
-5.6 to -0.8
|
| | | | 1.7 | | | | | | 5 | | | | | | 0.020 | | | | | | 0.043 | | | |
0.0 ± 1.7
|
| |
-2.2 to +2.2
|
| | | | 0 | | | | | | 5 | | | | | | 0.99 | | | | | | 0.71 | | |
| | | Rest/Rep | | | | | 45 | | | |
-1.4 ± 0.89
|
| |
-2.5 to -0.29
|
| | | | 1.6 | | | | | | 5 | | | | | | 0.025 | | | | | | 0.059 | | | |
-0.4 ± 2.1
|
| |
-3.0 to +2.2
|
| | | | 0.19 | | | | | | 5 | | | | | | 0.69 | | | | | | 0.58 | | |
EOWPVT
|
| | Vocabulary | | | | | 45 | | | |
-4.2 ± -8.3
|
| |
-14.50 to +6.1
|
| | | | -0.51 | | | | | | 5 | | | | | | 0.32 | | | | | | 0.50 | | | |
+2.0 ± 4.6
|
| |
-3.8 to +7.8
|
| | | | 0.43 | | | | | | 5 | | | | | | 0.39 | | | | | | 0.50 | | |
Secondary Outcomes | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ABC
|
| | Stereotypy | | | | | 7 | | | |
-3.6 ± 2.1
|
| |
-6.2 to -1.0
|
| | | | 1.7 | | | | | | 5 | | | | | | 0.018 | | | | | | 0.043 | | | |
+0.4 ± 1.9
|
| |
-2.0 to +2.8
|
| | | | -0.21 | | | | | | 5 | | | | | | 0.67 | | | | | | 0.68 | | |
| | | Stereotypy | | | | | 45 | | | |
-4.0 ± 2.3
|
| |
-6.9 to -1.1
|
| | | | 1.7 | | | | | | 5 | | | | | | 0.019 | | | | | | 0.042 | | | |
+1.0 ± 4.3
|
| |
4.3 to +6.3
|
| | | | -0.23 | | | | | | 5 | | | | | | 0.63 | | | | | | 0.69 | | |
ATEC
|
| | Total | | | | | 7 | | | |
-10 ± 7.7
|
| |
-20 to -0.46
|
| | | | 1.3 | | | | | | 5 | | | | | | 0.044 | | | | | | 0.043 | | | |
+7.2 ± 14
|
| |
-10 to +25
|
| | | | -0.51 | | | | | | 5 | | | | | | 0.32 | | | | | | 0.35 | | |
| | | Language | | | | | 7 | | | |
-2.2 ± 1.5
|
| |
-4.0 to -0.36
|
| | | | 1.4 | | | | | | 5 | | | | | | 0.021 | | | | | | 0.059 | | | |
0.0 ± 4.1
|
| |
-5.0 to +5.0
|
| | | | 0 | | | | | | 5 | | | | | | 0.99 | | | | | | 0.89 | | |
| | | Sociability | | | | | 7 | | | |
-3.6 ± 2.6
|
| |
-6.8 to -0.36
|
| | | | 1.4 | | | | | | 5 | | | | | | 0.025 | | | | | | 0.063 | | | |
-0.8 ± 2.8
|
| |
4.3 to +2.6
|
| | | | 0.29 | | | | | | 5 | | | | | | 0.55 | | | | | | 0.58 | | |
| | | Language | | | | | 45 | | | |
-2.0 ± 1.4
|
| |
-2.7 to -0.49
|
| | | | 1.4 | | | | | | 5 | | | | | | 0.034 | | | | | | 0.059 | | | |
-0.2 ± 2.9
|
| |
-3.8 to +3.4
|
| | | | 0.07 | | | | | | 5 | | | | | | 0.88 | | | | | | 0.79 | | |
CGI
|
| |
Overall ASD
|
| | | | 45 | | | |
-1.8 ± 1.04
|
| |
-3.4 to -0.15
|
| | | | 1.7 | | | | | | 5 | | | | | | 0.05 | | | | | | n/a | | | |
0.0 ± 0.34
|
| |
-0.55 to +0.55
|
| | | | 0 | | | | | | 5 | | | | | | 0.99 | | | | | | n/a | | |
| | |
E. Language
|
| | | | 45 | | | |
-2.0 ± 1.04
|
| |
-3.6 to -0.35
|
| | | | 1.9 | | | | | | 5 | | | | | | 0.01 | | | | | | n/a | | | |
0.0 ± 0.34
|
| |
-0.55 to +0.55
|
| | | | 0 | | | | | | 5 | | | | | | 0.99 | | | | | | n/a | | |
| | |
Social Inter.
|
| | | | 45 | | | |
-2.0 ± 1.04
|
| |
-3.6 to -0.35
|
| | | | 1.9 | | | | | | 5 | | | | | | 0.01 | | | | | | n/a | | | |
0.0 ± 0.34
|
| |
-0.55 to +0.55
|
| | | | 0 | | | | | | 5 | | | | | | 0.99 | | | | | | n/a | | |
RBQ
|
| | Total | | | | | 45 | | | |
-3.2 ± 5.8
|
| |
-10.4 to +4.0
|
| | | | 0.55 | | | | | | 5 | | | | | | 0.28 | | | | | | 0.22 | | | |
-0.8 ± 3.3
|
| |
-4.9 to 3.3
|
| | | | 0.24 | | | | | | 5 | | | | | | 0.62 | | | | | | 0.47 | | |
Name
|
| |
Age
|
| |
Position(s)
|
|
Howard J. Weisman | | | 60 | | | Chief Executive Officer and Class III Director | |
Joseph Lucchese | | | 53 | | | Chief Financial Officer | |
Michael Derby | | | 47 | | |
Executive Chairman of the Board and Class II Director
|
|
Zachary Rome | | | 36 | | | Chief Operating Officer and Class I Director | |
David Hough, MD | | | 63 | | | Chief Medical Officer | |
Karen Dawes | | | 69 | | | Class III Director | |
Karen LaRochelle | | | 53 | | | Class II Director | |
Paul K. Wotton, Ph.D. | | | 59 | | | Class III Director | |
Robert Apple | | | 54 | | | Class I Director | |
Name of Beneficial Owner(1)
|
| |
Number of
Shares Beneficially Owned(2) |
| |
Percentage
Owned Prior to the Offering |
| |
Percentage
Owned After the Offering(3) |
| | |||||||||||
5% Stockholders | | | | | | | | | | | | | | | | | | | | | ||
TardiMed Sciences, LLC(4)(7)
|
| | | | 7,241,745 | | | | | | 98.8% | | | | | | 73.5% | | | | ||
Directors and Executive Officers | | | | | | | | | | | | | | | | | | | | | ||
Howard J. Weisman(5)
|
| | | | — | | | | | | — | | | | | | — | | | | ||
Joseph Lucchese(6)
|
| | | | — | | | | | | — | | | | | | — | | | | ||
Michael Derby(7)
|
| | | | 7,241,745 | | | | | | 98.8 | | | | | | — | | | | ||
Zachary Rome(8)
|
| | | | 72,916 | | | | | | * | | | | | | — | | | | ||
David Hough, MD
|
| | | | — | | | | | | — | | | | | | — | | | | ||
Karen Dawes(9)
|
| | | | — | | | | | | — | | | | | | — | | | | ||
Karen | | | | | — | | | | | | — | | | | | | — | | | | ||
LaRochelle | | | | | — | | | | | | — | | | | | | — | | | | ||
Paul K. Wotton, Ph.D.
|
| | | | — | | | | | | — | | | | | | — | | | | ||
Robert Apple
|
| | | | — | | | | | | — | | | | | | — | | | | ||
Directors and Executive Officers as a group (9 persons)
|
| | | | 7,314,661 | | | | | | 99.7 | | | | | | 74.2 | | | | | |
Date Available for Sale
|
| |
Shares Eligible for Sale
|
| |
Description
|
|
Date of Prospectus | | |
2,500,000
|
| | Shares sold in the offering that are not subject to a lock-up | |
90 Days after Date of Prospectus | | |
—
|
| | Shares saleable under Rules 144 and 701 that are not subject to a lock-up | |
180 Days after Date of Prospectus | | |
793,054
|
| | Lock-up released; shares saleable under Rules 144 and 701 | |
Underwriter
|
| |
Number of
shares of common stock |
| |||
The Benchmark Company, LLC
|
| |
|
| |||
Brookline Capital Markets, a division of Arcadia Securities, LLC
|
| | |||||
Total:
|
| | | | | |
| | |
Per Share of
Common Stock |
| |
Total without
Exercise of Over-allotment option |
| |
Total with
Exercise of Over-allotment option |
| |||||||||
Public offering price
|
| | | $ | | | | | $ | | | | | $ | | | |||
Underwriting discount(1)
|
| | | $ | | | | | $ | | | | | $ | | | |||
Non-accountable expense allowance(2)
|
| | | $ | | | | | $ | | | | | $ | | | |||
Net proceeds to us
|
| | | $ | | | | | $ | | | | | $ | | |
| | |
Page No.
|
| |||
Audited Financial Statements
|
| | |||||
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-7 | | |
| | |
Page No.
|
| |||
Interim Condensed Financial Statements (Unaudited)
|
| | |||||
| | | | F-14 | | | |
| | | | F-15 | | | |
| | | | F-16 | | | |
| | | | F-17 | | | |
| | | | F-18 | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | |
Cash
|
| | | $ | 24,947 | | | | | $ | 9,322 | | |
Total current assets
|
| | | | 24,947 | | | | | | 9,322 | | |
Total assets
|
| | | $ | 24,947 | | | | | $ | 9,322 | | |
LIABILITIES, TEMPORARY EQUITY AND MEMBERS’ DEFICIT | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 41,023 | | | | | $ | — | | |
Accounts payable – related party
|
| | | | 15,325 | | | | | | 2,454 | | |
Accrued expenses
|
| | | | 66,900 | | | | | | 4,147 | | |
Total current liabilities
|
| | | | 123,248 | | | | | | 6,601 | | |
Total liabilities
|
| | | | 123,248 | | | | | | 6,601 | | |
Temporary equity | | | | ||||||||||
Preferred units, 1,445,173 and 450,000 shares issued and outstanding at December 31, 2019 and 2018; liquidation preference of $765,527 and $232,096 and of December 31, 2019 and 2018, respectively
|
| | | | 765,527 | | | | | | 232,096 | | |
Commitments and contingencies (Note 7) | | | | | | | | | | | | | |
Members’ deficit | | | | | | | | | | | | | |
Accumulated deficit
|
| | | | (863,828) | | | | | | (229,375) | | |
Total members’ deficit
|
| | | | (863,828) | | | | | | (229,375) | | |
Total liabilities, temporary equity and members’ deficit
|
| | | $ | 24,947 | | | | | $ | 9,322 | | |
| | |
For the Year
Ended December 31, 2019 |
| |
For the Period
from April 5, 2018 (Inception) through December 31, 2018 |
| ||||||
Operating expenses | | | | | | | | | | | | | |
General and administrative
|
| | | $ | 114,496 | | | | | $ | 12,342 | | |
Research and development
|
| | | | 484,113 | | | | | | 204,161 | | |
Research and development – license acquired
|
| | | | — | | | | | | 5,776 | | |
Total operating expenses
|
| | | | 598,609 | | | | | | 222,279 | | |
Loss from operations
|
| | | | (598,609) | | | | | | (222,279) | | |
Net loss
|
| | | $ | (598,609) | | | | | $ | (222,279) | | |
Proforma weighted average number of common shares outstanding, basic and
diluted |
| | | | 5,775,898 | | | | | | 5,775,898 | | |
Proforma net loss per share, basic and diluted
|
| | | $ | (0.10) | | | | | $ | (0.04) | | |
| | |
Common Stock
|
| |
Accumulated
Deficit |
| |
Total
Members' Deficit |
| |||||||||||||||
| | |
Units
|
| |
Amount
|
| ||||||||||||||||||
Balance at April 5, 2018 (Inception)
|
| | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Contribution from TardiMed
|
| | | | 5,775,898 | | | | | | — | | | | | | — | | | | | | | | |
Accrued preferred unit dividend
|
| | | | — | | | | | | — | | | | | | (7,096) | | | | | | (7,096) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | (222,279) | | | | | | (222,279) | | |
Balance at December 31, 2018
|
| | | | 5,775,898 | | | | | $ | — | | | | | $ | (229,375) | | | | | $ | (229,375) | | |
Accrued preferred unit dividend
|
| | | | — | | | | | | — | | | | | | (35,844) | | | | | | (35,844) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | (598,609) | | | | | | (598,609) | | |
Balance at December 31, 2019
|
| | | | 5,775,898 | | | | | $ | — | | | | | $ | (863,828) | | | | | $ | (863,828) | | |
| | |
For the Year
Ended December 31, 2019 |
| |
For the Period
from April 5, 2018 (Inception) through December 31, 2018 |
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (598,609) | | | | | $ | (222,279) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Research and development-licenses acquired, expense
|
| | | | — | | | | | | 5,776 | | |
Non-cash contribution from TardiMed
|
| | | | 62,587 | | | | | | — | | |
Changes in assets and liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | | 41,023 | | | | | | — | | |
Accounts payable – related party
|
| | | | 12,871 | | | | | | 2,454 | | |
Accrued expenses
|
| | | | 62,753 | | | | | | 4,147 | | |
Net cash used in operating activities
|
| | | | (419,375) | | | | | | (209,902) | | |
Cash flows from investing activities | | | | | | | | | | | | | |
Purchase of research and development licenses
|
| | | | — | | | | | | (5,776) | | |
Net cash used in investing activities
|
| | | | — | | | | | | (5,776) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Contribution from TardiMed
|
| | | | 435,000 | | | | | | 200,000 | | |
Contribution from a third-party
|
| | | | — | | | | | | 25,000 | | |
Net cash provided by financing activities
|
| | | | 435,000 | | | | | | 225,000 | | |
Net increase in cash
|
| | | | 15,625 | | | | | | 9,322 | | |
Cash, beginning of period
|
| | | | 9,322 | | | | | | — | | |
Cash, end of period
|
| | | $ | 24,947 | | | | | $ | 9,322 | | |
Non cash financing activities: | | | | | | | | | | | | | |
Accrued preferred unit dividend
|
| | | $ | 35,844 | | | | | $ | 7,096 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Accrued expenses: | | | | | | | | | | | | | |
Research and development
|
| | | $ | 66,900 | | | | | $ | 4,147 | | |
Total accrued expenses
|
| | | $ | 66,900 | | | | | $ | 4,147 | | |
| | |
Preferred Units
|
| |||||||||
| | |
Shares
|
| |
Amount
|
| ||||||
Balance at April 5, 2018 (Inception)
|
| | | | — | | | | | $ | — | | |
Contribution from TardiMed
|
| | | | 400,000 | | | | | | 200,000 | | |
Contribution from a third-party
|
| | | | 50,000 | | | | | | 25,000 | | |
Accrued preferred unit dividend
|
| | | | — | | | | | | 7,096 | | |
Balance at December 31, 2018
|
| | | | 450,000 | | | | | $ | 232,096 | | |
Contribution from TardiMed
|
| | | | 870,000 | | | | | | 435,000 | | |
Non-cash contribution from TardiMed
|
| | | | 125,173 | | | | | | 62,587 | | |
Accrued preferred unit dividend
|
| | | | — | | | | | | 35,844 | | |
Balance at December 31, 2019
|
| | | | 1,445,173 | | | | | $ | 765,527 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Net Loss
|
| | | $ | (598,609) | | | | | $ | (222,279) | | |
Cumulative Dividends
|
| | | | (35,844) | | | | | | (7,096) | | |
Net Loss applicable to common unit holder
|
| | | $ | (634,453) | | | | | $ | (229,375) | | |
Weighted average number of common shares outstanding, basic and diluted
|
| | | | 5,775,898 | | | | | | 5,775,898 | | |
Pro forma net loss per share, basic and diluted
|
| | | $ | (0.10) | | | | | $ | (0.04) | | |
Pro forma net loss applicable to common unit holder per share, basic and diluted
|
| | | $ | (0.11) | | | | | $ | (0.04) | | |
| | |
March 31,
2020 |
| |
December 31,
2019 |
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | |
Cash
|
| | | $ | 249,804 | | | | | $ | 24,947 | | |
Total assets
|
| | | $ | 249,804 | | | | | $ | 24,947 | | |
LIABILITIES, MEMBERS’ DEFICIT AND TEMPORARY EQUITY | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 170,160 | | | | | $ | 41,023 | | |
Accounts payable – related party
|
| | | | 7,988 | | | | | | 15,325 | | |
Accrued expenses
|
| | | | 38,966 | | | | | | 66,900 | | |
Total current liabilities
|
| | | | 217,114 | | | | | | 123,248 | | |
Total liabilities
|
| | | | 217,114 | | | | | | 123,248 | | |
Temporary equity | | | | | | | | | | | | | |
Preferred units, 2,257,600 and 1,445,173 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively; aggregate liquidation preference of $1,187,345 and $765,527 as of March 31, 2020 and December 31, 2019, respectively
|
| | | | 1,187,345 | | | | | | 765,527 | | |
Commitments and contingencies (Note 6) | | | | | | | | | | | | | |
Members’ deficit | | | | | | | | | | | | | |
Accumulated deficit
|
| | | | (1,154,655) | | | | | | (863,828) | | |
Total members’ deficit
|
| | | | (1,154,655) | | | | | | (863,828) | | |
Total liabilities, members’ deficit and temporary equity
|
| | | $ | 249,804 | | | | | $ | 24,947 | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Operating expenses | | | | | | | | | | | | | |
General and administrative
|
| | | $ | 79,411 | | | | | $ | 7,747 | | |
Research and development
|
| | | | 195,812 | | | | | | 106,632 | | |
Total operating expenses
|
| | | | 275,223 | | | | | | 114,379 | | |
Loss from operations
|
| | | | (275,223) | | | | | | (114,379) | | |
Net loss
|
| | | $ | (275,223) | | | | | $ | (114,379) | | |
Proforma weighted average number of common shares outstanding, basic and diluted
|
| | | | 5,775,898 | | | | | | 5,775,898 | | |
Proforma net loss per share, basic and diluted
|
| | | $ | (0.05) | | | | | $ | (0.02) | | |
| | |
Common Stock
|
| |
Accumulated
Deficit |
| |
Total
Members’ Deficit |
| |||||||||||||||
| | |
Units
|
| |
Amount
|
| ||||||||||||||||||
Balance at January 1, 2020
|
| | | | 5,775,898 | | | | | $ | — | | | | | $ | (863,828) | | | | | $ | (863,828) | | |
Accrued preferred unit dividend
|
| | | | — | | | | | | — | | | | | | (15,604) | | | | | | (15,604) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | (275,223) | | | | | | (275,223) | | |
Balance at March 31, 2020
|
| | | | 5,775,898 | | | | | $ | — | | | | | $ | (1,154,655) | | | | | $ | (1,154,655) | | |
|
| | |
Common Stock
|
| |
Accumulated
Deficit |
| |
Total
Members’ Deficit |
| |||||||||||||||
| | |
Units
|
| |
Amount
|
| ||||||||||||||||||
Balance at January 1, 2019
|
| | |
|
5,775,898
|
| | | |
$
|
—
|
| | | |
$
|
(229,375)
|
| | | |
$
|
(229,375)
|
| |
Accrued preferred unit dividend
|
| | | | — | | | | | | — | | | | | | (4,877) | | | | | | (4,877) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | (114,379) | | | | | | (114,379) | | |
Balance at March 31, 2019
|
| | | | 5,775,898 | | | | | $ | — | | | | | $ | (348,631) | | | | | $ | (348,631) | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (275,223) | | | | | $ | (114,379) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Non-cash contribution from TardiMed
|
| | | | 36,214 | | | | | | 15,646 | | |
Changes in assets and liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | | 129,137 | | | | | | — | | |
Accounts payable – related party
|
| | | | (7,337) | | | | | | — | | |
Accrued expenses
|
| | | | (27,934) | | | | | | (4,147) | | |
Net cash used in operating activities
|
| | | | (145,143) | | | | | | (102,880) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Contribution from TardiMed
|
| | | | 320,000 | | | | | | 100,000 | | |
Third party investor contributions
|
| | | | 50,000 | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 370,000 | | | | | | 100,000 | | |
Net increase (decrease) in cash
|
| | | | 224,857 | | | | | | (2,880) | | |
Cash, beginning of period
|
| | | | 24,947 | | | | | | 9,322 | | |
Cash, end of period
|
| | | $ | 249,804 | | | | | $ | 6,442 | | |
Non cash financing activities: | | | | | | | | | | | | | |
Accrued preferred unit dividend
|
| | | $ | 15,604 | | | | | $ | 4,877 | | |
| | |
March 31,
2020 |
| |
December 31,
2019 |
| ||||||
Accrued expenses:
|
| | | ||||||||||
Research and development
|
| | | $ | 9,600 | | | | | $ | 66,900 | | |
Audit fees
|
| | | | 20,600 | | | | | | — | | |
Employee and related expenses
|
| | | | 8,766 | | | | | | — | | |
Total accrued expenses
|
| | | $ | 38,966 | | | | | $ | 66,900 | | |
|
| | |
Three Months Ended
March 31, 2020 |
| |
Year Ended
December 31, 2019 |
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||
Opening balance
|
| | | | 1,445,173 | | | | | $ | 765,527 | | | | | | 450,000 | | | | | $ | 232,096 | | |
Contribution from TardiMed
|
| | | | 640,000 | | | | | | 320,000 | | | | | | 870,000 | | | | | | 435,000 | | |
Investor contributions
|
| | | | 100,000 | | | | | | 50,000 | | | | | | — | | | | | | — | | |
Non-cash contribution from TardiMed
|
| | | | 72,427 | | | | | | 36,214 | | | | | | 125,173 | | | | | | 62,587 | | |
Accrued preferred unit dividend
|
| | | | — | | | | | | 15,604 | | | | | | — | | | | | | 35,844 | | |
Ending balance
|
| | | | 2,257,600 | | | | | $ | 1,187,345 | | | | | | 1,445,173 | | | | | $ | 765,527 | | |
| | |
Three months ended March 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net loss
|
| | | $ | (275,223) | | | | | $ | (114,379) | | |
Weighted average number of common shares outstanding, basic and diluted
|
| | | | 5,775,898 | | | | | | 5,775,898 | | |
Net loss per share, basic and diluted
|
| | | $ | (0.05) | | | | | $ | (0.02) | | |
| | |
Members
Deficit |
| |
ProForma
Adjustment |
| |
Proforma
Stockholders Deficit |
| |||||||||
Common units, 5,775,898 shares issued and outstanding
|
| | | $ | — | | | | | | — | | | | | $ | — | | |
Preferred stock, par value $0.0001 zero shares issued and outstanding, 2,696,439 shares authorized, Common stock, par value $0.0001 5,775,898 shares issued and outstanding, 20,000,000 shares authorized,
|
| | | | — | | | | | | 578 | | | | | | 578 | | |
Additional paid-in capital
|
| | | | — | | | | | | (578) | | | | | | (578) | | |
Accumulated deficit
|
| | | $ | (1,154,655) | | | | | | — | | | | | $ | (1,154,655) | | |
Total Members’ deficit and Stockholders’ deficit
|
| | | $ | (1,154,655) | | | | | | — | | | | | $ | (1,154,655) | | |
|
SEC Filing Fee
|
| | | $ | 2,395.78 | | |
|
FINRA Fee
|
| | | $ | 3,268.63 | | |
|
Underwriter Legal Fees and Expenses.
|
| | | $ | 100,000.00 | | |
|
Nasdaq Fee
|
| | | $ | 50,000.00 | | |
|
Printing Expenses
|
| | | $ | 85,000.00 | | |
|
Accounting Fees and Expenses
|
| | | $ | 120,000.00 | | |
|
Legal Fees and Expenses
|
| | | $ | 415,000.00 | | |
|
Transfer Agent and Registrar Expenses
|
| | | $ | 24,100.00 | | |
|
Miscellaneous
|
| | | $ | 5,900.00 | | |
|
Total
|
| | | $ | 2,025,000.00 | | |
Exhibit No.
|
| |
Description of Document
|
|
1.1 | | | Form of Underwriting Agreement** | |
3.1 | | | Certificate of Incorporation of PaxMedica, Inc., as currently in effect*** | |
3.2 | | | Form of Amended and Restated Certificate of Incorporation of PaxMedica, Inc., to be effective upon completion of this offering** | |
3.3 | | | Bylaws of PaxMedica, Inc., as currently in effect*** | |
3.4 | | | Form of Amended and Restated Bylaws of PaxMedica, Inc. to be effective upon completion of this offering** | |
3.5 | | | Certificate of Amendment to the Certificate of Incorporation of PaxMedica, Inc.* | |
4.1 | | | Specimen Certificate representing shares of common stock of PaxMedica, Inc.* | |
4.2 | | | Form of Representative’s Warrant** | |
5.1 | | | Opinion of Lowenstein Sandler LLP regarding the validity of the common stock being registered** | |
10.1 | | | Form of Indemnification Agreement entered into by PaxMedica, Inc. with its Officers and Directors* | |
10.2 | | | PaxMedica, Inc. 2020 Omnibus Equity Incentive Plan†*** | |
| | | | PAXMEDICA, INC. | |
| | | |
/s/ Howard J. Weisman
Howard J. Weisman
|
|
| | | | Chief Executive Officer | |
| | | | (Principal Executive Officer) | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Howard J. Weisman
Howard J. Weisman
|
| |
Chief Executive Officer and Director
(Principal Executive Officer) |
| | July 22, 2020 | |
|
/s/ Joseph Lucchese
Joseph Lucchese
|
| |
Chief Financial Officer
(Principal Financial and Accounting Officer) |
| | July 22, 2020 | |
|
/s/ Zachary Rome
Zachary Rome
|
| |
Chief Operating Officer and Director
|
| | July 22, 2020 | |
|
/s/ David Hough
David Hough, M.D.
|
| |
Chief Medical Officer
|
| | July 22, 2020 | |
|
/s/ Michael Derby
Michael Derby
|
| |
Director
|
| | July 22, 2020 | |
|
/s/ Karen Dawes
Karen Dawes
|
| |
Director
|
| | July 22, 2020 | |
|
/s/ Karen LaRochelle
Karen LaRochelle
|
| |
Director
|
| | July 22, 2020 | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Paul Wotton
Paul Wotton, Ph.D.
|
| |
Director
|
| | July 22, 2020 | |
|
/s/ Robert Apple
Robert Apple
|
| |
Director
|
| | July 22, 2020 | |
Exhibit 3.5
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PAXMEDICA, INC.
Pursuant to Section 242 of the General Corporation Law of the State of Delaware, PaxMedica, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), does hereby certify as follows:
1. The date of filing of the original Certificate of Incorporation of this corporation with the Secretary of State of the State of Delaware was April 15, 2020.
2. The Certificate of Incorporation of the Corporation is hereby amended to effect a reverse stock split of the Corporation’s common stock by adding the following after the first paragraph of Article V:
“Effective upon the effective time of this Certificate of Amendment of the Certificate of Incorporation (the “Split Effective Time”), (i) every one (1) whole share of Common Stock of the Company issued and outstanding immediately prior to the Split Effective Time shall be changed, combined and reclassified into 0.5775898 shares of Common Stock.
Notwithstanding the foregoing, there shall be no fractional shares of Common Stock issued in connection with the reclassification of Common Stock effected hereby. In lieu of fractional interests in shares of Common Stock to which any stockholder would otherwise be entitled pursuant hereto (after aggregating all fractions of a share to which such stockholder would otherwise be entitled), such stockholder shall be entitled to receive a cash payment equal to the fair value of one share of Common Stock as determined by the Board of Directors of the Company multiplied by such fraction. From and after the Split Effective Time, certificates representing shares Common Stock issued and outstanding prior to the Split Effective Time shall represent the number of whole shares of Common Stock after the Split Effective Time into which such shares Common Stock shall have been reclassified pursuant to this Certificate of Amendment of the Certificate of Incorporation and the right to receive cash in lieu of fractional shares as provided herein. Upon surrender by stockholders of certificates representing shares of Common Stock issued and outstanding prior to the Split Effective Time, cash in lieu of fractional shares, if any, will be issued to such stockholders.”
3. Pursuant to Section 228(a) of the General Corporation Law of the State of Delaware, the holders of outstanding shares of the Corporation having no less than the minimum number of votes that would be necessary to authorize or take such actions at a meeting at which all shares entitled to vote thereon were present and voted, consented to the adoption of the aforesaid amendments without a meeting, without a vote and without prior notice and that written notice of the taking of such actions was given in accordance with Section 228(e) of the General Corporation Law of the State of Delaware.
4. The foregoing amendments were duly adopted in accordance with the provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware.
5. This Certificate of Amendment and the amendments to the Certificate of Incorporation effected hereby shall be effective immediately upon filing.
[Signature Page Follows]
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its Chief Executive Officer on this 22nd day of July, 2020.
PAXMEDICA, INC. | ||
By: | /s/ Howard J. Weisman | |
Name: | Howard J. Weisman | |
Title: | Chief Executive Officer |
-2-
Exhibit 4.1
ADD ADD ADD ADD MR PO A 4 3 2 1 DESIGNATIONSAMPLE BOX (IF 505006, ZQ|CERT#|COY|CLS|RGSTRY|ACCT#|TRANSTYPE|RUN#|TRANS# COMMON STOCK PAR VALUE $0.0001 Certificate Number COMMON STOCK Shares * * 0 0 0 0 0 0 * * * * * * * * * * * * * * * * * * ANY) Louisville, KY 40233 - 5006 ZQ00000000 THIS CERTIFIES THAT PAXMEDICA, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** MrMR.Alexander.DavidSAMPLEample****Mr.AlexanderDavid&SampleMRS****Mr.Alexander.SAMPLEDavidSample****Mr.Alexander&David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David MRSample****.Mr. SAMPLEAlexanderDavidSample****Mr. &AlexanderMRSDavidSample.**** SAMPLEMr.AlexanderDavidSample**** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. lexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Sample **** Mr. Sample * * * 0 0 0 0 0 0 * * * * * * * * * * * * * * * * * * * * * 0 0 0 0 0 0 * * * * * * * * * * * * * * * * * * * * * 0 0 0 0 0 0 * * * * * * * * * * * * * * * * * * * * * 0 0 0 0 0 0 * * * * * * * * * * * * * * SEE REVERSE FOR CERTAIN DEFINITIONS CUSIP 70424C 10 4 Total 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 Certificate DTC Number Insurance Holder CUSIP/IDENTIFIER Transaction of ID Numbers 12345678 Shares Value 6 5 4 3 2 1 Num/No . 123456789012345 654321 Denom 1,000,000 XXXXXX . . XX 7 6 5 4 3 2 1 Total 123456 00 XXXXXXXXXXX is the owner of **000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares*** *000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares**** 000000**Shares 000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****0 THIS CERTIFICATE IS TRANSFERABLE IN 00000**Shares 000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000** hares****000000**Shares****00 0000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000***ZERO HUNDREDTHOUSAND CITIES DESIGNATED BY THE TRANSFER 000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****0000 AGENT, AVAILABLE ONLINE AT 00**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000 Shares****00000 0**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000 Shares****000000 **Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000*ZEROHUNDREDANDZERO*** www.computershare.com *Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000** Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**S FULLY-PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF PaxMedica, Inc. (hereinafter called the “Company”), transferable on the books of the Company in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby, are issued and shall be held subject to all of the provisions of the Certificate of Incorporation, as amended, and the By-Laws, as amended, of the Company (copies of which are on file with the Company and with the Transfer Agent), to all of which each holder, by acceptance hereof, assents. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar. Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers. DATED DD-MMM-YYYY FACSIMILE SIGNATURE TO COME DIC A E COUNTERSIGNED AND REGISTERED: M ,I X RPORA N P A TE C COMPUTERSHARE TRUST COMPANY, N.A. O . C TRANSFER AGENT AND REGISTRAR, President 4/15/2020 FACSIMILE SIGNATURE TO COME D E L E R AWA Secretary By AUTHORIZED SIGNATURE
PAXMEDICA, INC. THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, A SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OF THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND RIGHTS, AND THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR EACH SERIES, WHICH ARE FIXED BY THE CERTIFICATE OF INCORPORATION OF THE COMPANY, AS AMENDED, AND THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE SECRETARY OF THE COMPANY OR TO THE TRANSFER AGENT. THE BOARD OF DIRECTORS MAY REQUIRE THE OWNER OF A LOST OR DESTROYED STOCK CERTIFICATE, OR HIS LEGAL REPRESENTATIVES, TO GIVE THE COMPANY A BOND TO INDEMNIFY IT AND ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST THEM ON ACCOUNT OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT -............................................ Custodian ................................................ (Cust) (Minor) TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act ........................................................ (State) JT TEN - as joint tenants with right of survivorship UNIF TRF MIN ACT -............................................ Custodian (until age ................................ ) and not as tenants in common (Cust) under Uniform Transfers to Minors Act ............................. ................... (Minor) (State) Additional abbreviations may also be used though not in the above list. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE For value received, hereby sell, assign and transfer unto (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) Shares of the common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint Attorney to transfer the said stock on the books of the within-named Company with full power of substitution in the premises. Dated: 20 Signature: Signature: Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. Signature(s) Guaranteed: Medallion Guarantee Stamp THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15. The IRS requires that the named transfer agent (“we”) report the cost basis of certain shares or units acquired after January 1, 2011. If your shares or units are covered by the legislation, and you requested to sell or transfer the shares or units using a specific cost basis calculation method, then we have processed as you requested. If you did not specify a cost basis calculation method, then we have defaulted to the first in, first out (FIFO) method. Please consult your tax advisor if you need additional information about cost basis. If you do not keep in contact with the issuer or do not have any activity in your account for the time period specified by state law, your property may become subject to state unclaimed property laws and transferred to the appropriate state.
Exhibit 10.1
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (“Agreement”) is made as of ____________ by and between PaxMedica, Inc., a Delaware corporation (the “Company”), and ____________ (“Indemnitee”).
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors or officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation and due to the fact that such exposure frequently bears no relationship to compensation paid to such officers and directors;
WHEREAS, the Company and Indemnitee recognize that plaintiffs often seek damages in such large amounts and the costs of litigation may be so enormous (whether or not the case is meritorious), that the defense and/or settlement of such litigation is often beyond the personal resources of directors and officers;
WHEREAS, Indemnitee may be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the “DGCL”). The Company’s Certificate of Incorporation, as amended, provides for the indemnification of the officers and directors of the Company to the fullest extent permitted by Section 145 of the DGCL. The DGCL expressly provides that the indemnification provisions set forth therein are not exclusive and contemplate that contracts may be entered into between the Company and its directors and officers with respect to indemnification;
WHEREAS, Section 145 of the DGCL empowers the Company to indemnify its officers, directors, employees and agents by agreement and to indemnify persons who serve, at the Company’s request, as the directors, officers, employees or agents of other corporations or enterprises;
WHEREAS, Section 102(b)(7) of the DGCL allows the Company to include in its Certificate of Incorporation a provision limiting or eliminating the personal liability of a director for monetary damages in respect of claims by shareholders and corporations for breach of certain fiduciary duties, and the Company has so provided in its Certificate of Incorporation that each director shall be exculpated from such liability to the maximum extent permitted by law;
WHEREAS, the Company, after reasonable investigation, has determined that the liability insurance coverage presently available to the Company may be inadequate in certain circumstances to cover all possible exposure for which Indemnitee should be protected.
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining highly competent persons to serve as directors and officers. The Board of Directors of the Company (the “Board”) has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Company’s Certificate of Incorporation and Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and
WHEREAS, Indemnitee does not regard the protection available under the Company's Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company. Indemnitee agrees to serve as a director or officer of the Company or, at the request of the Company, as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other corporation, limited liability company, partnership, joint venture, trust employee benefit plan or other enterprise of which Indemnitee was serving at the Company’s request as a director, officer, employee, agent or fiduciary) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment with the Company (or any of its subsidiaries or any other corporation, limited liability company, partnership, joint venture, trust employee benefit plan or other enterprise of which Indemnitee was serving at the Company’s request as a director, officer, employee, agent or fiduciary), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other corporation, limited liability company, partnership, joint venture, trust employee benefit plan or other enterprise of which Indemnitee was serving at the Company’s request as a director, officer, employee, agent or fiduciary). The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as an officer or director of the Company.
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Section 2. Definitions. As used in this Agreement:
(a) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:
i. Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company representing thirty-five percent (35%) or more of the combined voting power of the Company's then outstanding securities;
ii. Change in Board. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in Sections 2(a)(i), 2(a)(iii) or 2(a)(iv)) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;
iii. Corporate Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity;
iv. Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets; and
v. Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.
For purposes of this Section 2(a), the following terms shall have the following meanings:
(A) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
(B) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
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(C) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(b) “Corporate Status” describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company or of any other corporation, limited liability company, partnership or joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Company.
(c) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(d) “Expenses” shall include all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 13(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee's rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(e) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(f) “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative legislative, or investigative nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting as director or officer of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement; except one initiated by an Indemnitee to enforce his rights under this Agreement.
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Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. If the Indemnitee is not wholly successful in such Proceeding, the Company also shall indemnify Indemnitee against all Expenses reasonably incurred in connection with a claim, issue or matter related to any claim, issue, or matter on which the Indemnitee was successful. For purposes of this Section and without limiting the foregoing, if any Proceeding is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee was liable to the Company, (iii) a plea of guilty or nolo contendere by Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and (v) with respect to any criminal proceeding, an adjudication that Indemnitee had reasonable cause to believe Indemnitee’s conduct was unlawful, Indemnitee shall be considered for purposes of this Agreement to have been successful with respect thereto.
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Section 6. Indemnification For Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise participates in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
Section 7. Additional Indemnification.
(a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 7(a), the meaning of the phrase “to the fullest extent permitted by applicable law” shall include, but not be limited to:
i. to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
ii. to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 8. Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for any Proceedings with respect to which final judgment is rendered against Indemnitee for payment of (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(a) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act), or
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(c) any Proceeding involving the enforcement of non-compete and/or non-disclosure agreements or the non-compete and/or non-disclosure provisions of employment, consulting or similar agreements the Indemnitee may be a party to with the Company or any subsidiary of the Company or any other applicable foreign or domestic corporation, partnership, joint venture, trust or other enterprise, if any; or
(d) except as provided in Section 13(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
Section 9. Advances of Expenses. The Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made within thirty (30) days after receipt by the Corporation of (i) a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of any Proceeding, and (ii) an undertaking by or on behalf of Indemnitee to repay such amount or amounts, only if, and to the extent that, it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Corporation as authorized by this Agreement or otherwise. Such undertaking shall be accepted without reference to the financial ability of Indemnitee to make such repayment. Advances shall be unsecured and interest free. Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 9 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 8 or to any Proceeding for which the Company has assumed the defense thereof in accordance with Section 10(b) of this Agreement.
Section 10. Procedure for Notification and Defense of Claim.
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such action, suit or proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
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(b) In the event the Company shall be obligated to pay the Expenses of Indemnitee with respect to a Proceeding, as provided in this Agreement, the Company shall be entitled to assume the defense of such Proceeding, with counsel reasonably acceptable to Indemnitee, upon delivery of written notice of its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, provided that (1) Indemnitee shall have the right to employ Indemnitee’s own counsel in such Proceeding at Indemnitee’s expense and (2) if (i) the employment of counsel by Indemnitee has been previously authorized in writing by the Company, (ii) counsel to the Company or Indemnitee shall have reasonably concluded that there may be a conflict of interest or position, or reasonably believes that a conflict is likely to arise, on any significant issue between the Company and the Indemnitee in the conduct of such defense or (iii) the Company shall not, in fact, have employed counsel to assume the defense of such Proceeding, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company, except as otherwise expressly provided by this Agreement.
(c) The Company will be entitled to participate in the Proceeding at its own expense.
Section 11. Procedure Upon Application for Indemnification.
(a) Upon written request by Indemnitee for indemnification pursuant to Section 10(a), a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred after the date of this Agreement, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred after the date of this Agreement, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Disinterested Directors, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys' fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
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(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 11(a) hereof, the Independent Counsel shall be selected as provided in this Section 11(b). If a Change in Control shall not have occurred after the date of this Agreement, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred after the date of this Agreement, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the submission by Indemnitee or the Company, as the case may be, of a written objection, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other's selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 11(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 13(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).
Section 12. Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
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(b) Subject to Section 13(e), if the person, persons or entity empowered or selected under Section 11 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 12(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 11(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 11(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee's action is based on the records or books of account of the Company or other corporation, limited liability company, partnership, joint venture, trust employee benefit plan or other enterprise of which Indemnitee was serving as a director, officer, employee, agent or fiduciary, including financial statements, or on information supplied to Indemnitee by the officers of the Company or other corporation, limited liability company, partnership, joint venture, trust employee benefit plan or other enterprise of which Indemnitee was serving as a director, officer, employee, agent or fiduciary in the course of their duties, or on the advice of legal counsel for the enterprise or on information or records given or reports made to the Company or other corporation, limited liability company, partnership, joint venture, trust employee benefit plan or other enterprise of which Indemnitee was serving as a director, officer, employee, agent or fiduciary by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Company or other corporation, limited liability company, partnership, joint venture, trust employee benefit plan or other enterprise of which Indemnitee was serving as a director, officer, employee, agent or fiduciary. The provisions of this Section 12(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
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(e) Actions of Others. The knowledge and/or actions, or failure to act, of any other director, officer, agent or employee of the Company or other corporation, limited liability company, partnership, joint venture, trust employee benefit plan or other enterprise of which Indemnitee was serving as a director, officer, employee, agent or fiduciary shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 13. Remedies of Indemnitee.
(a) Subject to Section 13(e), in the event that (i) a determination is made pursuant to Section 11 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 11(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 or 6 or the last sentence of Section 11(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Section 3, 4 or 7 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of his entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 13(a); provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitee's right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 11(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 13 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 13 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 11(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 13, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
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(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 13 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee's rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors' and officers' liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
Section 14. Non-exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Company's Certificate of Incorporation, the Company's By-laws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Company's Certificate of Incorporation, the Company’s By-laws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
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(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company and the Indemnitee shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.
(c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with respect to any insurance policy, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(e) The Company's obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise.
Section 15. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 16. Enforcement. The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
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Section 17. Entire Agreement. Supersedes Prior Agreements. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation of the Company and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
Section 18. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.
Section 19. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise except to the extent the Corporation is prejudiced in its defense of such action, suit or proceeding as a result of such failure.
Section 20. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
PaxMedica, Inc.
50 Tice Blvd, Suite A26
Woodcliff Lake, NJ 07677
Attention: Executive Chairman of the Board
or to any other address as may have been furnished to Indemnitee by the Company.
Section 21. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
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Section 22. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 13(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably Corporation Services Company as its agent in the State of Delaware as such party's agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 23. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 24. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
PAXMEDICA, INC. | ||
By: | ||
Name: Howard Weisman | ||
Title: CEO |
INDEMNITEE | ||
Name: | ||
Address: |
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Exhibit 10.13
NEITHER THIS NOTE NOR THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED, ASSIGNED, OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (2) THE MAKER RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF THIS NOTE OR SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE MAKER, THAT THIS NOTE OR SUCH SECURITIES, AS APPLICABLE, MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED, OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS.
8% CONVERTIBLE PROMISSORY NOTE
FOR VALUE RECEIVED, PaxMedica, Inc., a Delaware corporation (the "Maker"), hereby promises to pay to _______________ or its successors, assigns and legal representatives (the "Holder"), at _________________________, or at such other location as the Holder may designate from time to time, the sum of ___________________Dollars (US$________________) (the “Principal Amount”) in lawful money of the United States of America, together with interest thereon at a rate of eight percent (8%) per annum commencing on the date of this Note and payable together with the Principal Amount on the Maturity Date (as defined herein) in accordance with the provisions of this 8% Convertible Promissory Note (the “Note”).
This Note is one of a series of 8% convertible notes of like tenor and ranking made by the Maker in favor of certain investors and issued, from time to time (collectively, the “Notes”) pursuant to that certain Convertible Note Subscription Agreement by and between the Maker and certain investors, including the Holder, of even date herewith, including all attachments, schedules and exhibits thereto (the “Securities Purchase Agreement”). Capitalized terms used and not otherwise defied herein shall have the meanings set forth in the Convertible Note Subscription Agreement. Each of the Notes shall rank equally without preference or priority of any kind over one another, and all payments on account of Principal Amount and interest with respect to any of the Notes shall be applied ratably and proportionately on the outstanding Notes on the basis of the Principal Amount of the outstanding indebtedness represented thereby.
1. Seniority. The indebtedness evidenced by this Note and the payment of the Principal Amount and interest shall be Senior (as hereinafter defined) to, and have priority in right of payment over, all indebtedness of Maker. “Senior,” as used herein, shall be deemed to mean that, in the event of any default in the payment of the obligations represented by this Note (after giving effect to “cure” provisions, if any) or of any liquidation, insolvency, bankruptcy, reorganization or similar proceedings relating to the Maker, all sums payable on this Note shall first be paid in full, with interest, if any, before any payment is made upon any other indebtedness, now outstanding or hereinafter incurred, and, in any such event, any payment or distribution of any character which shall be made in respect of any other indebtedness of Maker shall be paid over to Holder for application to the payment hereof, unless and until the obligations under this Note (which shall mean the Principal Amount, any accrued but unpaid interest and any costs and expenses payable under this Note) shall have been paid and satisfied in full.
2. Maturity of the Note and Payment of Interest. This Note shall mature and the Principal Amount and accrued but unpaid interest hereunder shall become due and payable twelve (12) months from the date hereof (the “Maturity Date”). Interest shall accrue on the Principal Amount at a rate of eight percent (8%) per annum. Interest shall be computed on the basis of a 365 day year for the actual number of days elapsed.
2. Optional Prepayment. The Maker may at any time hereafter, upon thirty (30) days prior written notice to the Holder, prepay without premium or penalty, any portion or all of the outstanding principal amount of this Note, together with interest accrued on such prepaid amount to the date of payment.
4. Events of Default. Each of the following shall constitute an “Event of Default” hereunder:
(a) The Maker's failure (i) to pay all or any part of the principal or interest hereunder when due and payable, or (ii) to cure any noncompliance with any material agreement or covenant set forth herein within fifteen (15) days of the date on which the Maker receives notice thereof, or (iii) to comply in any material respect with any law to which the Maker is subject;
(b) The Maker ceases operations;
(c) The Maker shall have applied for or consented to the appointment of a custodian, receiver, trustee or liquidator, or other court-appointed fiduciary of all or a substantial part of its properties; or a custodian, receiver, trustee or liquidator or other court appointed fiduciary shall have been appointed with or without the consent of the Maker; or the Maker is generally not paying its debts as they become due by means of available assets or is insolvent, or has made a general assignment for the benefit of creditors; or the Maker files a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or seeking to take advantage of any insolvency law, or an answer admitting the material allegations of a petition in any bankruptcy, reorganization or insolvency proceeding or has taken action for the purpose of effecting any of the foregoing; or if, within sixty (60) days after the commencement of any proceeding against the Maker seeking any reorganization, rehabilitation, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the Federal bankruptcy code or similar order under future similar legislation, the appointment of any trustee, receiver, custodian, liquidator, or other court-appointed fiduciary of the Maker or of all or any substantial part of its properties, such order or appointment shall not have been vacated or stayed on appeal or otherwise or if, within sixty (60) days after the expiration of any such stay, such order or appointment shall not have been vacated;
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(d) The Maker issues indebtedness senior in right of repayment, liquidation, or otherwise, to this Note;
(e) The Maker breaches or defaults on any financial instrument, security, loan or obligation to which it is a party.
Upon the occurrence and during the continuance of an Event of Default, interest shall accrue on the Principal Amount and accrued but unpaid interest hereunder at a rate of fifteen percent (15%) per annum, until such time as the Event of Default is cured or the Note is repaid. Upon the occurrence of any Event of Default, the Holder may also pursue any available remedy, whether at law or in equity.
5. Conversion.
(a) Conversion Upon Qualified Financing. If, prior to repayment or conversion of the Note, the Maker engages in a Qualified Financing (as hereinafter defined), the outstanding principal amount of and all accrued but unpaid interest on this Note shall automatically be converted, without any action of the Holder, at the time of the closing of the Qualified Financing into fully paid and non-assessable shares of common stock, par value $0.0001 per share (the “Common Stock”), issued in such Qualified Financing at a conversion price equal to seventy five percent (75%) of the price per share paid by the investors purchasing such capital stock in such Qualified Financing (such shares issued upon conversion, “Conversion Shares”). “Qualified Financing” shall mean (i) a reverse merger or similar transaction between the Maker and a corporation whose securities are publicly traded in the U.S., Canada or other jurisdiction, or (ii) the closing of the initial public offering of the Maker’s capital stock (“IPO”). If the Qualified Financing is an IPO, the Holder will not, directly or indirectly, offer, sell, agree to offer or sell, solicit offers to purchase, grant any call option or purchase any put option with respect to, hypothecate, pledge, borrow or otherwise dispose of or agree to dispose of, directly or indirectly, any Conversion Shares or other shares of Common Stock beneficially owned by the Holder during the one hundred eighty (180) days from the date of the final prospectus for the IPO.
(b) Conversion Upon Change of Control. If, prior to repayment or conversion of the Note, the Maker engages in a Change of Control (as hereinafter defined), the outstanding principal amount of and all accrued but unpaid interest on this Note shall automatically be converted, without any action of the Holder, at the time of the closing of the Change of Control into fully paid and non-assessable shares of Common Stock at a conversion price equal to the quotient of the Principal Amount plus accrued but unpaid interest outstanding immediately prior to the time of such Change of Control divided by a per share price equal to seventy five percent (75%) of the price per share of the Common Stock set forth in the definitive agreement(s) approved by the Maker in connection with such Change of Control. The Maker shall provide each Holder with at least five (5) days prior written notice of the anticipated closing of a Change of Control. “Change of Control” shall mean any of the following: (i) the sale or disposition of all or substantially all of the assets of Maker to a third party; (ii) the acquisition by a third party of more than fifty percent (50%) of Maker’s outstanding voting capital stock; or (iii) the merger or consolidation of Maker with or into another entity unless the holders of Maker’s voting capital stock immediately prior to such merger or consolidation hold at least fifty percent (50%) of the ownership of voting capital stock of the acquiring third party or the surviving entity in such merger or consolidation, as the case may be, immediately after the merger or consolidation. Notwithstanding the foregoing, (x) a Change of Control shall not be deemed to occur on account of a Qualified Financing; and (y) any transaction or series of transactions principally for bona fide equity financing purposes shall not be deemed to be a Change of Control of Maker. In the event the Change of Control is a transaction wholly for cash, the outstanding principal amount of and all accrued but unpaid interest on this Note shall convert at per share price equal to 75% of the Enterprise Value (as defined herein) set forth in the definitive agreement(s) approved by the Maker in connection with such Change of Control. “Enterprise Value” shall mean the quotient of the total cash consideration received by the Maker in the Change of Control transaction divided by the total shares of Common Stock outstanding immediately prior to the closing of the Change of Control (on a fully diluted basis, including the Notes on an as converted basis).
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(c) Conversion Procedures. On the date of conversion of this Note, the outstanding Principal Amount of and all accrued but unpaid interest on this Note through the date of conversion shall be converted without any further action by the Holder and whether or not the Note is surrendered to the Maker. The Maker shall not be obligated to issue certificates evidencing the Conversion Shares (as defined in the Purchase Agreement) unless (a) this Note is delivered to the Maker or the Holder notifies the Maker that this Note has been lost, stolen or destroyed and executes an agreement satisfactory to the Maker to indemnify the Maker from any loss incurred by it in connection with this Note. The Maker shall, as soon as practicable thereafter, issue and deliver certificates representing the number of Conversion Shares in accordance with the provisions hereof.
6. Fees and Expenses. Each party will be responsible for its own attorney’s fees and transaction expenses.
7. Waiver of Presentment, Demand and Dishonor. No delay on the part of the Holder in exercising any power or right hereunder shall operate as a waiver of any such power or right; nor shall any single or partial exercise of any power or right preclude any other or further exercise of such power or right, or the exercise of any other power or right, and no waiver whatsoever shall be valid unless in writing, signed by the Holder, and then only to the extent expressly set forth therein; provided, that in no event shall the Holder have any right to convert the Principal Amount and accrued interest under this Note at any time after this Note has been prepaid by the Maker or at any time after the Maturity Date. No remedy is exclusive of any other remedy and all remedies shall be cumulative to the maximum extent permitted by applicable law. The Maker hereby waives presentment, demand for payment, diligence, notice of dishonor and all other notices or demands in connection with the delivery, acceptance, performance, default or indorsement of this Note.
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8. Amendments and Assignment. Any term of this Note may be amended, modified or waived (including, without limitation, any extension of the Maturity Date) upon the written consent of the Maker and a Majority of Holders (as herein after defined); provided however, that, any such amendment or waiver must apply to all outstanding Notes. No such waiver or consent in any one instance shall be construed to be a continuing waiver or a waiver in any other instance unless it expressly so provides. The Maker shall promptly notify all holders of the Notes of any such change or amendment. “Majority of Holders” as used herein, shall be deemed to mean the holders of more than fifty percent (50%) of the outstanding aggregate Principal Amount of the Notes.
9. Governing Law; Consent to Jurisdiction. This Note shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without reference to the choice of law provisions thereof. The Maker irrevocably submits to the exclusive jurisdiction of the courts of the State of Delaware and the United States District Court for the District of Delaware for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Note and the transactions contemplated hereby. The Maker irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
10. Usury. This Note is hereby expressly limited so that in no event whatsoever shall the amount paid or agreed to be paid to the Holder hereunder exceed that permissible under applicable law. If at any time the performance of any provision of this Note involves a payment exceeding the limit that may be validly charged under applicable law, then the obligation to be performed shall be automatically reduced to such limit.
11. JURY WAIVER. THE HOLDER AND THE MAKER EACH WAIVES ANY RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF THIS NOTE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN.
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SIGNATURES
PAXMEDICA, INC. | ||
By: | ||
Title: | ||
Accepted and Agreed to: | ||
HOLDER: | ||
Print Name of Holder | ||
By: | ||
Signature | ||
Print Name (if signing on behalf of entity) | ||
Title (if applicable) |
[SIGNATURE PAGE TO PAXMEDICA, INC. CONVERTIBLE PROMISSORY NOTE]
Exhibit 10.14
PAXMEDICA, INC.
CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT
This CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT (this “Agreement”) is entered into as of ____, 2020 (the “Effective Date”), by and between PaxMedica, Inc., a Delaware corporation (the “Company”), and ______ (the “Investor”).
WHEREAS, on the terms and conditions set forth herein, Investor is willing to purchase from the Company convertible promissory notes in the aggregate principal amount of up to $_______.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants set forth in this Agreement, the parties agree as follows:
1. Definitions. In addition to any terms defined elsewhere in this Agreement, the following terms have the meanings indicated for purposes of this Agreement:
1.1 “Conversion Shares” means the capital stock into which the Notes may be converted pursuant to the terms of the Notes.
2. The Loan Commitment.
2.1 Loan Commitment. Subject to the terms and conditions of this Agreement, the Investor agrees to make a loan (the “Loan”) to the Company in the aggregate principal amount of up to $____. The proceeds of the Loan shall be used by the Company for general working capital.
2.2 Notes. The Loan made by the Investor shall be evidenced by one or more promissory notes (collectively, the “Notes”) of the Company in substantially the form attached hereto as Exhibit A.
2.3 Closing. The purchase and sale of the Notes (each a “Closing”) shall take place by electronic exchange of documents and signatures, at such time or times as the Investor makes a Loan pursuant to Section 2.1 above, provided that the maximum aggregate principal amount of Notes sold under this Agreement shall not exceed $___. Any such sale shall be upon the same terms and conditions as those contained herein, and such persons or entities shall become parties to this Agreement and such persons or entities shall have the rights and obligations of an Investor hereunder. The Company the Investor shall hold an initial Closing on the Effective Date (the “Initial Closing”).
2.4 Delivery. Within a reasonable time following each Closing, the Company shall deliver to Investor a Note evidencing the Loan.
3. Representations and Warranties of the Company. The Company hereby represents and warrants to each Investor that, as of the Initial Closing:
3.1 Organization; Good Standing; Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own and operate its properties and assets and to carry on its business as presently conducted, to execute and deliver this Agreement and the Notes (collectively, the “Transaction Documents”), to issue and sell the Notes and to perform its obligations under the Transaction Documents. The Company has not failed to qualify to transact business as a foreign corporation in any jurisdiction where the failure to be so qualified would have a material adverse effect on its business, properties or financial condition (a “Material Adverse Effect”).
3.2 Authorization and Enforceability. All corporate action on the part of the Company and its officers, directors and stockholders necessary for the authorization, execution and delivery of the Transaction Documents and the performance of all obligations of the Company thereunder has been taken or will be taken prior to the Initial Closing, and the Transaction Documents constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
3.3 Governmental Consents. No consent, approval, qualification, order or authorization of, or filing with, any governmental authority is required on the part of the Company in connection with the Company’s valid execution, delivery or performance of this Agreement or the offer, sale or issuance of the Notes, other than (a) such filings as shall have been made prior to the applicable Closing, and (b) any notices of sale required to be filed with the Securities and Exchange Commission pursuant to Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), or post-closing filings required to be filed under applicable state securities laws, which shall be timely filed within the applicable periods.
3.4 Permits. The Company has all franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted by it, the lack of which would have a Material Adverse Effect, and the Company is not in default in any material respect under any of such franchises, permits, licenses or other authority.
3.5 Compliance with Other Instruments. The Company is not in violation or default of any provision of its Certificate of Incorporation or Bylaws, any provision of any material mortgage, agreement, instrument or contract to which it is a party or by which it is bound or, to the Company’s knowledge, any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the Company other than any such violation or default that would not have a Material Adverse Effect. The execution, delivery and performance by the Company of the Transaction Documents and the consummation of the transactions contemplated thereby will not, with or without the passage of time or the giving of notice, result in any such violation or default, the creation of any material lien, charge or encumbrance upon any assets of the Company, or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company.
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3.6 Litigation. There is no action, suit, proceeding or investigation pending or, to the Company’s knowledge, currently threatened in writing against the Company that questions the validity of the Transaction Documents or the right of the Company to enter into the Transaction Documents, or to consummate the transactions contemplated thereby, or that might result, if determined adversely to the Company, in a Material Adverse Effect, or in any material change in the current equity ownership of the Company.
3.7 No “Bad Actor” Disqualification. The Company has exercised reasonable care to determine whether any Covered Person (as defined below) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (“Disqualification Events”). To the Company’s knowledge, no Covered Person is subject to a Disqualification Event, except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has complied, to the extent applicable, with any disclosure obligations under Rule 506(e) under the Securities Act. “Covered Persons” are those persons specified in Rule 506(d)(1) under the Securities Act, including the Company; any predecessor or affiliate of the Company; any director, executive officer or other officer participating in the sale of the Notes; any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power; any promoter (as defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of the sale of the Notes; and any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of the Notes (a “Solicitor”), any general partner or managing member of any Solicitor, and any director, executive officer or other officer participating in the sale of the Notes of any Solicitor or general partner or managing member of any Solicitor.
4. Representations and Warranties of the Investors. The Investor hereby represents and warrants that:
4.1 Authorization. Such Investor has full power and authority to enter into the Transaction Documents, and the Transaction Documents constitute valid and legally binding obligations of such Investor, enforceable in accordance with their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
4.2 Purchase Entirely for Own Account. This Agreement is made with such Investor in reliance upon such Investor’s representation to the Company, which by such Investor’s execution of this Agreement such Investor hereby confirms, that the Notes and any capital stock issuable upon conversion of the Notes (collectively, the “Securities”) will be acquired for investment for such Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. Such Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation in any of the Securities to any third person.
4.3 Reliance upon Investors’ Representations. Such Investor understands that the Notes are not, and any capital stock acquired on conversion or exercise thereof at the time of issuance may not be, registered under the Securities Act on the ground that the sale provided for in this Agreement and the issuance of securities hereunder is exempt from registration under the Securities Act and that the Company’s reliance on such exemption is based on the Investors’ representations set forth herein. Such Investor realizes that the basis for such exemption may not be present if, notwithstanding such representations, such Investor has in mind merely acquiring the Securities for a fixed or determinable period in the future, or for a market rise, or for sale if the market does not rise. Such Investor has no such intention.
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4.4 Receipt of Information. Such Investor believes it has received all the information it considers necessary or appropriate for deciding whether to purchase the Securities. Such Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities, and the business, properties, prospects and financial condition of the Company and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify the accuracy of any information furnished to it or to which it had access. The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 3 of this Agreement or the right of the Investors to rely thereon.
4.5 Investment Experience. Such Investor is experienced in evaluating and investing in securities of companies in the development stage and is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment in the Securities and is able, without impairing such Investor’s financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of such Investor’s investment. If other than an individual, such Investor also represents it has not been organized for the purpose of acquiring the Securities.
4.6 Accredited Investor. Such Investor is an “accredited investor,” as such term is defined in Rule 501(a) of Regulation D under the Securities Act.
4.7 Restricted Securities. Such Investor understands that the Securities may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom and that, in the absence of an effective registration statement covering the Securities or an available exemption from registration under the Securities Act, the Securities must be held indefinitely. In particular, such Investor is aware that the Securities may not be sold pursuant to Rule 144 promulgated under the Securities Act unless all of the conditions of that Rule are met.
4.8 Legends. Each of the Investors understands and agrees that the Securities shall be endorsed with the legend set forth below, and such Investor covenants that, except to the extent such restrictions are waived by the Company, such Investor shall not transfer the Securities represented by any such certificate without complying with the restrictions on transfer described in such legend (except that the Company shall not require an opinion of counsel in connection with a transfer to an affiliated entity or pursuant to Rule 144):
“THESE SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.”
4.9 Foreign Investor. If such Investor is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), such Investor hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with the purchase of the Securities and this Agreement, including (a) any foreign exchange restrictions applicable to such purchase, (b) any governmental or other consents that may be required, and (c) any tax consequences that may be relevant to the purchase, holding, redemption, sale or transfer of the Securities. Such Investor’s subscription and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of such Investor’s jurisdiction.
5. Pari Passu with All Notes. Each Note shall rank equally without preference or priority of any kind with each of the Notes issued by the Company. All payments of principal and interest with respect to the Notes shall be applied ratably and proportionately on each such Note on the basis of the original principal amount of outstanding indebtedness represented by such Note.
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6. Non-Reliance.
6.1 In making an investment decision, the Investor understands that it must rely on its own examination of the Company and the terms of the Notes, including the merits and risks involved, and is aware that the Investor is required to bear the financial risks of this investment for an indefinite period of time;
6.2 The Investor is not relying on the Company with respect to the legal, tax, economic and related considerations of an investment in the Notes, and the Investor relied on the advice of, or has consulted with, only its own advisors;
6.3 In evaluating the suitability of an investment in the Notes and the Company, the Investor has not relied upon any representation or information (oral or written) other than as stated in this Agreement or the corporate overview presentation delivered by the Company (the “PaxMedica Overview”);
6.4 The Investor understands and acknowledges that (a) there are substantial doubts about the Company’s ability to continue as a going concern; (b) the Company will have broad discretion with respect to the application of the remaining funds received by the Company in the offering of the Notes and the Company may not use the proceeds effectively;
6.5 The Investor acknowledges that any estimates or forward-looking statements or projections (including projections of future expenses, pricing, or clinical developments) included in any materials provided by the Company to the Investor in connection with the offering of the Notes were prepared by the Company in good faith but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the Company and should not be relied upon. IN PARTICULAR, THE INVESTOR ACKNOWLEDGES AND AGREES THAT:
6.5.1 THE PAXMEDICA OVERVIEW FURNISHED TO THE INVESTOR IN CONNECTION WITH THE OFFERING CONTAINS “FORWARD-LOOKING STATEMENTS” AS THAT TERM IS DEFINED IN SECTION 27A OF THE SECURITIES ACT, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED;
6.5.2 SUCH FORWARD LOOKING STATEMENTS ARE BASED ON THE CURRENT INTENTIONS, EXPECTATIONS, ESTIMATES AND PROJECTIONS OF THE COMPANY’S MANAGEMENT REGARDING THE COMPANY’S PROPOSED BUSINESS PLANS, ITS ABILITY TO EXECUTE SUCH BUSINESS PLANS, AND EXPECTATIONS REGARDING THE PRICING OF OTHER COMPETITIVE PRODUCTS, AND THAT BECAUSE SUCH STATEMENTS INVOLVE RISKS AND UNCERTAINTIES, THE ACTUAL RESULTS AND PERFORMANCE OF THE COMPANY MAY DIFFER MATERIALLY FROM THE RESULTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS;
6.5.3 AS SUCH, THE COMPANY HAS NOT MADE AND IS NOT MAKING ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PROJECTIONS, ESTIMATES, FORECASTS OR BUDGETS HERETOFORE DELIVERED TO OR MADE AVAILABLE TO THE INVESTOR OF FUTURE REVENUES, EVENTS, EXPENSES, EXPENDITURES, FUTURE RESULTS OF OPERATIONS, EXPECTED RETURNS, THE PRICING OF OTHER COMPETITIVE PRODUCTS OR SIMILAR INFORMATION INCLUDING, BUT NOT LIMITED TO, ANY OF FOREGOING SET FORTH WITHIN THE PAXMEDICA OVERVIEW;
6.5.4 ACCORDINGLY, IN MAKING ITS INVESTMENT DECISION, THE INVESTOR HAS NOT RELIED ON ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, FROM THE COMPANY WITH RESPECT TO THE FORWARD LOOKING STATEMENTS SET FORTH WITHIN THE PAXMEDICA OVERVIEW; AND
6.5.5 THEREFORE THE INVESTOR WAIVES ANY RIGHT HE, SHE OR IT MAY HAVE AGAINST THE COMPANY FOR ANY LOSS OR DAMAGE RESULTING FROM THE USE OF OR RELIANCE UPON ANY SUCH FORWARD LOOKING STATEMENTS SET FORTH WITHIN THE PAXMEDICA OVERVIEW.
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7. Miscellaneous.
7.1 Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein.
7.2 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under this Agreement, except as expressly provided in this Agreement.
7.3 Governing Law. This Agreement shall be governed by and construed under the internal laws of the State of Delaware, without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.
7.4 Counterparts; Electronic Signatures. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed and delivered by facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and upon such delivery any such signature shall be deemed to have the same effect as if the original signature had been delivered to the other party.
7.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
7.6 Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing, addressed (a) if to an Investor, as indicated on the signature page hereto, or at such other address as such Investor shall have furnished to the Company in writing at least five (5) days prior to any notice to be given hereunder, or (b) if to the Company, at its principal office, Attention: Chief Financial Officer, or at such other address as the Company shall furnish to each Investor in writing at least five (5) days prior to any notice to be given hereunder. All such notices and other written communications shall be deemed effectively given upon personal delivery to the party to be notified (or upon the date of attempted delivery where delivery is refused) or, if sent by facsimile, upon receipt of appropriate written confirmation of receipt, or five (5) days after deposit with the United States Postal Service, by registered or certified mail, or one (1) day after deposit with next day air courier, with postage and fees prepaid and addressed to the party entitled to such notice, or, if sent by electronic mail, when directed to any electronic mail address set forth on the Schedule of Investors attached hereto as Exhibit A.
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7.7 Finders’ Fees. Each party represents that it neither is nor will be obligated for any finders’ fee or commission in connection with this transaction. Each Investor agrees to indemnify and to hold harmless the Company and each other Investor from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which such Investor is responsible. The Company agrees to indemnify and hold harmless each Investor from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.
7.8 Attorneys’ Fees. Each party is responsible for its own legal fees and expenses related to this transaction.
7.9 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Investor. Any amendment or waiver so effected shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding (including securities into which such securities have been converted), each future holder of all such securities and the Company. The Investor acknowledges that by the operation of this Section 6.9 the Investor will have the right and power to diminish or eliminate all rights of such Investor under this Agreement.
7.10 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party to this Agreement, upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default therefore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement or any waiver on the part of any party of any provisions or conditions of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.
7.11 Severability. If any provision of this Agreement is held to be illegal or unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
7.12 California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
COMPANY: | ||
PAXMEDICA, INC. | ||
By: | ||
Name: | Joseph Lucchese | |
Title: | Chief Financial Officer | |
Address: | 50 Tice Blvd, Suite A26 Woodcliff Lake, NJ 07677 |
PaxMedica, Inc.
Convertible Note Subscription Agreement
Signature Page
INVESTOR: | ||
By: | ||
Name: | ||
Title: | ||
Address: |
PaxMedica, Inc.
Convertible Note Subscription Agreement
Signature Page
EXHIBIT A
FORM OF CONVERTIBLE PROMISSORY NOTE
B-1
Exhibit 23.1
Independent Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Registration Statement of PaxMedica, Inc. (formerly Purinix Pharmaceuticals LLC) on Form S-1 Amendment No. 1 [File No. 333-239676] of our report dated May 15, 2020, except for Note 11 which is dated July 23, 2020, which includes an explanatory paragraph as to the Company’s ability to continue as a going concern, with respect to our audits of the financial statements of PaxMedica, Inc. (formerly Purinix Pharmaceuticals LLC) as of December 31, 2019 and 2018 and for the year ended December 31, 2019 and for the period from April 5, 2018 (Inception) through December 31, 2018, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus
/s/ Marcum llp
Marcum llp
New York, NY
July 23, 2020