WARRANT AGREEMENT
THIS WARRANT AGREEMENT made as of March 18, 2015 (the “
Issuance Date
”), between Galena Biopharma, Inc., a Delaware corporation (the “
Company
”), Computershare Inc., a Delaware corporation (“
Computershare
”), and its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company (and together with Computershare, the “
Warrant Agent
”).
WHEREAS, the Company has sold, or may sell, up to 24,358,974 shares of common stock, par value $0.0001 per share (the “
Common Stock
” and includes any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock), of the Company and warrants to purchase 14,006,410 shares of Common Stock (each, a “
Warrant Share
” and, collectively, the “
Warrant Shares
”), subject to adjustment as described herein (each, a “
Warrant
” and, collectively, the “
Warrants
”), pursuant to an Underwriting Agreement between the Company and Raymond James & Associates, Inc., as Representative of the Underwriters, dated March 13, 2015 (the “
Underwriting Agreement
”); and
WHEREAS, both the Common Stock and the Warrants were issued by the Company in a public offering pursuant to an effective shelf registration statement on Form S-3, Registration No. 333-188849 (the “
Registration Statement
”) filed with the Securities and Exchange Commission (the “
Commission
”) under the Securities Act of 1933, as amended (the “
Act
”), and a related base prospectus and prospectus supplement; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange and exercise of the Warrants; and
WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Warrant Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1.
Appointment of Warrant Agent
. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Warrant Agreement.
2.
Warrants
.
2.1
Form of Warrant
. Each Warrant shall be issued in registered form only, shall be in substantially the form of
Exhibit A
hereto, the provisions of which are incorporated herein, and shall be signed by, or bear the facsimile signature of, the Chief Executive Officer, Chief Financial Officer, President or Secretary of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.
2.2.
Effect of Countersignature
. Unless and until countersigned by the manual or facsimile signature of the Warrant Agent pursuant to this Warrant Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.
2.3.
Registration
.
2.3.1.
Warrant Register
. The Warrant Agent shall maintain books (the “
Warrant Register
”) for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. The Warrants may be represented by definitive Warrant Certificates in physical form or by one or more book-entry warrant certificates (the “
Book-Entry Warrant Certificates
”) deposited with the Depository Trust Company (the “
Depository
”) and registered in the name of Cede & Co., a nominee of the Depository. Definitive Warrant Certificates shall be in substantially the form annexed hereto as
Exhibit A
. Ownership of beneficial interests in the Book-Entry Warrant Certificates shall be shown on, and the transfer of such ownership shall be effected through, records maintained (i) by the Depository or its nominee for each Book-Entry Warrant Certificate; (ii) by institutions that have accounts with the Depository (such institution, with respect to a Warrant in its account, a “
Participant
”); or (iii) directly on the book-entry records of the Warrant Agent with respect only to owners of beneficial interests that request such direct registration.
If the Depository subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant Agent regarding making other arrangements for book-entry settlement within ten (10) days after the Depository ceases to make its book-entry settlement available. In the event that the Company does not make alternative arrangements for book-entry settlement within ten (10) days or the Warrants are not eligible for, or it is no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depository to deliver to the Warrant Agent for cancellation each Book-Entry Warrant Certificate, and the Company shall instruct the Warrant Agent to deliver to the Depository definitive Warrant Certificates in physical form evidencing such Warrants.
2.3.2.
Beneficial Owner; Registered Holder
. The term “beneficial owner” shall mean any person in whose name ownership of a beneficial interest in the Warrants evidenced by (a) a Book-Entry Warrant Certificate is recorded in the records maintained by the Depository or its nominee or (b) a definitive Warrant Certificate is recorded in the book-entry records of the Warrant Agent. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant shall be registered in the Warrant Register (“registered holder”), as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
2.4.
Detachability of Warrants
. The Common Stock and the Warrants will be issued separately and will be separately transferable immediately upon issuance.
3.
Terms and Exercise of Warrants
.
3.1.
Exercise Price
. The exercise price per whole share of the Common Stock under each Warrant shall be $2.08, subject to adjustment hereunder (the “
Exercise Price
”).
3.2.
Duration of Warrants
. A Warrant may be exercised only during the period (the “
Exercise Period
”) commencing on the Issuance Date and terminating at 5:00 P.M., Eastern time on March 18, 2020 (the “
Expiration Date
”). Each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Warrant Agreement shall cease at the close of business on the Expiration Date.
3.3.
Exercise of Warrants
.
3.3.1.
Exercise and Payment
. A registered holder may exercise a Warrant by delivering, not later than 5:00 P.M., Eastern time, on any Business Day during the Exercise Period (the “
Exercise Date
”) to the Warrant Agent at its corporate trust department (i) the Warrant Certificate evidencing the Warrants to be exercised, or, in the case of a Book-Entry Warrant Certificate, the Warrants to be exercised (the “
Book-Entry Warrants
”) free on the records of the Depository to an account of the Warrant Agent at the Depository designated for such purpose in writing by the Warrant Agent to the Depository from time to time, (ii) an election to purchase the Shares underlying the Warrants to be exercised (the “
Election to Purchase
”), properly completed and executed by the registered holder on the reverse of the Warrant Certificate or, in the case of a Book-Entry Warrant Certificate, properly delivered by the Participant in accordance with the Depository’s procedures, and (iii), except as provided in Section 3.3.8, the Warrant Price for each Warrant to be exercised in lawful money of the United States of America by wire, certified or official bank check, or wire transfer, in immediately available funds. The term “
Warrant Price
” as used in this Warrant Agreement refers to price per share of Common Stock at which shares may be purchased at the time the Warrant is exercised.
If any of (A) the Warrant Certificate or the Book-Entry Warrants, (B) the Election to Purchase, or (C) the Warrant Price therefor, is received by the Warrant Agent after 5:00 P.M., Eastern time, on the specified Exercise Date, the Warrants will be deemed to be received and exercised on the Business Day next succeeding the Exercise Date. If the date specified as the Exercise Date is not a Business Day, the Warrants will be deemed to be received and exercised on the next succeeding day that is a Business Day. If the Warrants are received or deemed to be received after the Expiration Date, the exercise thereof will be null and void and any funds delivered to the Warrant Agent will be returned to the registered holder or Participant, as the case may be, as soon as practicable. In no event will interest accrue on funds deposited with the Warrant Agent in respect of an exercise or attempted exercise of Warrants. The validity of any exercise of Warrants will be determined by the Company in its sole discretion and such determination will be final and binding upon the registered holder and the Warrant Agent. Neither the Company nor the Warrant Agent shall have any obligation to inform a registered holder of the invalidity of any exercise of Warrants.
The Warrant Agent shall forward funds received for warrant exercises in a given month by the 5th Business Day of the following month by wire transfer to an account designated by the Company.
All funds received by Computershare under this Warrant Agreement that are to be distributed or applied by Computershare in the performance of services (the “
Funds
”) shall be held by Computershare as agent for the Company and deposited in one or more bank accounts to be maintained by Computershare in its name as agent for the Company. Until paid pursuant to the terms of this Warrant Agreement, Computershare will hold the Funds through such accounts in: deposit accounts of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment grade by Standard and Poor’s Corporation (LT Local Issuer Credit Rating), Moody’s Investors Service, Inc. (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.). Computershare shall have no responsibility or liability for any diminution of the Funds that may result from any deposit made by Computershare in accordance with this paragraph, including any losses resulting from a default by any bank, financial institution or other third party. Computershare may from time to time receive interest, dividends or other earnings in connection with such deposits. Computershare shall not be obligated to pay such interest, dividends or earnings to the Company, any holder or any other party.
3.3.2.
Issuance of Certificates
. The Warrant Agent shall, within a reasonable time, advise the Company and the transfer agent and registrar in respect of (a) the Shares issuable upon such exercise as to the number of Warrants exercised in accordance with the terms and conditions of this Warrant Agreement, (b) the instructions of each registered holder or Participant, as the case may be, with respect to delivery of the Warrant Shares issuable upon such exercise, and the delivery of definitive Warrant certificates, as appropriate, evidencing the balance, if any, of the Warrants remaining after such exercise, (c) in case of a Book-Entry Warrant Certificate, the notation that shall be made to the records maintained by the Depository, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance, if any, of the Warrants remaining after such exercise and (d) such other information as the Company or such transfer agent and registrar shall reasonably require.
The Company shall cause the Warrant Agent to, by 5:00 P.M., Eastern time, on the third Business Day next succeeding the Exercise Date of any Warrant and the clearance of the funds in payment of the Warrant Price (the “
Warrant Shares Delivery Date
”), execute, issue and deliver, on the Company’s behalf, the Warrant Shares to which such registered holder or Participant, as the case may be, is entitled, in fully registered form, registered in such name or names as may be directed by such registered holder or the Participant, as the case may be. If the Warrant Agent fails for any reason to deliver to such registered holder or Participant, as the case may be, the Warrant Shares subject to an exercise notice by the Warrant Shares Delivery Date, the Company shall pay to the registered holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable exercise notice), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Shares Delivery Date until such Warrant Shares are delivered or the registered holder rescinds such exercise
In lieu of delivering physical certificates representing the Warrant Shares issuable upon exercise, provided the Company’s transfer agent is participating in the Depository’s Fast Automated Securities Transfer program, the Company shall use its reasonable best efforts to cause its transfer agent to electronically transmit the Warrant Shares issuable upon exercise to the Depository’s Fast Automated Securities Transfer program.
If the Warrant Agent fails to comply with the preceding paragraphs in this Section 3.3.2 by the Warrant Shares Delivery Date, then the registered holder or Participant will have the right to rescind its exercise.
3.3.3.
Valid Issuance
. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Warrant Agreement shall be validly issued, fully paid and nonassessable.
3.3.4.
Dividends
. The accrual of dividends, if any, on the Warrant Shares issued upon the valid exercise of any Warrant will be governed by the terms generally applicable to the Common Stock. From and after the issuance of such Warrant Shares, the former holder of the Warrants exercised will be entitled to the benefits generally available to other holders of Common Stock and such former holder’s right to receive payments of dividends and any other amounts payable in respect of the Warrant Shares shall be governed by, and shall be subject to, the terms and provisions generally applicable to the Common Stock.
3.3.5
No Fractional Exercise
. A registered holder may exercise a Warrant from time to time only for whole shares of Common Stock. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of a Warrant. As to any fraction of a share which the holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share. If fewer than all of the Warrants evidenced by a Warrant Certificate are exercised, a new Warrant Certificate for the number of unexercised Warrants remaining shall be executed by the Company and countersigned by the Warrant Agent as provided in Section 2 of this Warrant Agreement, and delivered to the holder of the Warrant Certificate at the address specified on the books of the Warrant Agent or as otherwise specified by such registered holder. If fewer than all the Warrants evidenced by a Book-Entry Warrant Certificate are exercised, a notation shall be made to the records maintained by the Depository, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance of the Warrants remaining after such exercise. The Company shall provide an initial funding of one thousand dollars ($1,000) for the purpose of issuing cash in lieu of fractional shares. From time to time thereafter, the Warrant Agent may request additional funding to cover payments for fractional Warrant Shares. The Warrant Agent shall have no obligation to make such payments for fractional Warrant Shares unless the Company shall have provided the necessary funds to pay in full all amounts due and payable with respect thereto.
3.3.6
No Transfer Taxes
. Issuance of Warrant Shares shall be made without charge to a registered holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the registered holder or in such name or names as may be directed by the registered holder; provided, however, that in the event Warrant Shares are to be issued in a name other than the name of the registered holder, a Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the registered holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all transfer agent fees required for same-day processing of any exercise notice.
3.3.7
Date of Issuance
. Each person in whose name any such certificate for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.
3.3.8
Optional Cashless Exercise
. If at any time during the term of this Warrant Agreement there is no effective registration statement registering, or no current prospectus available for, the issuance or resale of the Warrant Shares by the registered holder, then the Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = the VWAP on the Trading Day immediately preceding the date on which holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable exercise notice;
(B) = the Exercise Price of this Warrant, as adjusted hereunder; and
(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.
“
VWAP
” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market (as defined below), the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Company and reasonably acceptable to the holders of a majority in interest of the total number of Warrants issued under the Underwriting Agreement then outstanding, the fees and expenses of which shall be paid by the Company.
“
Trading Day
” means a day on which the principal Trading Market is open for trading.
“
Trading Market
” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market, the New York Stock Exchange, the OTC Bulletin Board or the OTC Markets, Inc. (or any successors to any of the foregoing).
Notwithstanding the first sentence of this Section 3.3.8 or any other provision hereof, on the Termination Date, this Warrant, to the extent not exercised prior thereto, shall be automatically exercised via cashless exercise pursuant to this Section 3.3.8.
Upon receipt of an Election to Purchase for a cashless exercise, the Company shall calculate and transmit to the Warrant Agent, and the Warrant Agent shall have no obligation under this Warrant Agreement to calculate, the Cashless Exercise Ratio. The number of shares of Common Stock to be issued on such exercise will be determined by the Company (with written notice thereof to the Warrant Agent) using the formula set forth in this Section 3.3.8, the Warrant Agent shall have no duty or obligation to investigate or confirm whether the Company’s determination of the number of shares of Common Stock to be issued on such exercise, pursuant to this Section 3.3.8 is accurate or correct.
3.3.9
Disputes
. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the registered holder the number of Warrant Shares that are not disputed.
3.3.10
Limitations on Exercise
. The Warrant Agent shall not effect any exercise of this Warrant, and a registered holder shall not have the right to exercise any portion of the Warrant to the extent that after giving effect to such issuance after exercise as set forth on the applicable exercise notice, the registered holder (together with the registered holder’s affiliates, and any other persons acting as a group together with the registered holder or any of the registered holder’s affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the registered holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise of the Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of the Warrant beneficially owned by the registered holder or any of its affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the registered holder or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this Section 3.3.10, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”) and the rules and regulations promulgated thereunder, it being acknowledged by the registered holder that the Company is not representing to the registered holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the registered holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 3.3.10 applies, the determination of whether the Warrant is exercisable (in relation to other securities owned by the registered holder together with any affiliates) and of which portion of the Warrant is exercisable shall be in the sole discretion of the registered holder, and the submission of an exercise notice shall be deemed to be the registered holder’s determination of whether the Warrant is exercisable (in relation to other securities owned by the registered holder together with any affiliates) and of which portion of the Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 3.3.10, in determining the number of outstanding shares of Common Stock, a registered holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a registered holder, the Company shall within two Trading Days confirm orally and in writing to the registered holder the number of shares of Common Stock then outstanding as established by (A), (B) or (C) above, as applicable. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the Warrant, by the registered holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “
Beneficial Ownership Limitation
” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of the Warrant. The registered holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 3.3.10, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of the Warrant held by the registered holder and the provisions of this Section 3.3.10 shall continue to apply. Any such increase will not be effective until the 61st day after such notice is delivered to the Company and shall only be effective with respect to such registered holder. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3.3.10 to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of the Warrant.
3.4.
Buy-in Procedures and Compensation
. In addition to any other rights available to a registered holder, if the Company fails to cause its transfer agent to transmit to the registered holder the Warrant Shares pursuant to an exercise on or before the Warrant Shares Delivery Date, and if after such date, the registered holder is required by its broker to purchase (in an open market transaction or otherwise) or the registered holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the registered holder of the Warrant Shares that the registered holder anticipated receiving from the Company upon such exercise (a “
Buy-In
”), then the Company shall (A) pay in cash to the registered holder the amount, if any, by which (x) the registered holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the registered holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the registered holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the registered holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the registered holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the registered holder $1,000. The registered holder shall provide the Company written notice indicating the amounts payable to the registered holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a registered holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
Notwithstanding the foregoing, the Company shall not be required to make the payments set forth herein in the case of uncertificated Warrant Shares if the registered holder fails to timely file a request with the Depository Trust Company to receive such uncertificated Warrant Shares.
3.5 Cost Basis Information. (a) In the event of a cash exercise, the Company hereby instructs the Warrant Agent to record cost basis for newly issued shares in a manner to be subsequently communicated by the Company to the Warrant Agent.
(b) In the event of a cashless exercise: the Company shall provide cost basis for shares issued pursuant to a cashless exercise at the time the Company confirms the number of Warrant Shares issuable in connection with the cashless exercise to the Warrant Agent pursuant to Section 3.3.3 hereof.
4.
Adjustments
.
4.1.
Stock Dividends and Splits
. If the Company, at any time while a Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of a Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of a Warrant shall be proportionately adjusted such that the aggregate Exercise Price of a Warrant shall remain unchanged. Any adjustment made pursuant to this Section 2(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
4.2.
Subsequent Rights Offerings
. If the Company, at any time while a Warrant is outstanding, shall issue rights, options or warrants to all holders of Common Stock (and not to the registered holders of the Warrants) entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the VWAP on the record date mentioned below, then, the Exercise Price shall be multiplied by a fraction, of which the denominator shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights, options or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the numerator shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights, options or warrants plus the number of shares which the aggregate offering price of the total number of shares so offered (assuming receipt by the Company in full of all consideration payable upon exercise of such rights, options or warrants) would purchase at such VWAP. Such adjustment shall be made whenever such rights, options or warrants are issued, and shall become effective immediately after the record date for the determination of stockholders entitled to receive such rights, options or warrants.
4.3.
Pro Rata Distributions
. If the Company, at any time while a Warrant is outstanding, shall distribute to all holders of Common Stock (and not to the registered holders of the Warrants) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security, then in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the VWAP determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less the then per share fair market value at such record date of the portion of such assets or evidence of indebtedness or rights or warrants so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors of the Company in good faith. In either case the adjustments shall be described in a statement provided to the registered holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above.
4.4.
Fundamental Transaction
. If, at any time while a Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person (other than a merger with a wholly-owned subsidiary of the Company for purposes of offering a corporate name change), (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “
Fundamental Transaction
”), then, upon any subsequent exercise of a Warrant, the registered holders each shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of each registered holder (without regard to any limitation in Section 3.3.10 on the exercise of a Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “
Alternate Consideration
”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which a Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 3.3.10 on the exercise of a Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then each registered holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of a Warrant following such Fundamental Transaction.
Notwithstanding the foregoing, in the event of a Fundamental Transaction, at the request of the registered holder delivered before the 90th day after such Fundamental Transaction, the Company (or the Successor Entity (as defined below) shall purchase a Warrant from the registered holder by paying to the registered holder, within five business days after such request (or, if later, on the effective date of the Fundamental Transaction), cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of a Warrant on the date of such Fundamental Transaction. “
Black Scholes Value
” means the value of a Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“
Bloomberg
”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of a Warrant as of the date of the public announcement of the applicable Fundamental Transaction; (ii) an expected volatility equal to the lesser of 100% and the 60-day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction; (iii) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction; and (iv) a remaining option time equal to the remaining term of a Warrant as of the date of the public announcement of the applicable Fundamental Transaction.
The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “
Successor Entity
”) to assume in writing all of the obligations of the Company under this Warrant Agreement and the other documents governing the transaction in accordance with the provisions of this Section 4.4 pursuant to written agreements in form and substance reasonably satisfactory to the registered holder and approved by the registered holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the registered holder, deliver to the registered holder in exchange for a Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this registered holder which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of a Warrant (without regard to any limitations on the exercise of a Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of a Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the registered holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of a Warrant and the other documents governing the transaction referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under a Warrant and the other documents governing the transaction with the same effect as if such Successor Entity had been named as the Company herein.
4.5.
Notices
.
4.5.1.
Adjustment to Exercise Price
. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 4, the Company shall give reasonable written notice thereof to the Warrant Agent, which notice shall set forth the Exercise Price after such adjustment and set forth a brief statement of the facts requiring such adjustment. The Company agrees that it will provide the Warrant Agent with any new or amended exercise terms. The Warrant Agent shall have no obligation under any Section of this Warrant Agreement to determine whether an adjustment made hereunder has occurred or are scheduled or contemplated to occur or to calculate any of the adjustments set forth in this Warrant Agreement.
4.5.2.
Notices of Certain Events to Allow Exercise
. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to each registered holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The registered holder shall remain entitled to exercise a Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
4.6.
Form of Warrant
. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Warrant Agreement. However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
4.7.
Calculations
. All calculations under this Section 4 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 4, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
5.
Transfer and Exchange of Warrants
.
5.1.
Registration of Transfer
. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.
5.2.
Procedure for Surrender of Warrants
. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the registered holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise provided herein or in any Book-Entry Warrant Certificate, each Book-Entry Warrant Certificate may be transferred only in whole and only to the Depository, to another nominee of the Depository, to a successor depository, or to a nominee of a successor depository; provided further, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants or Warrant Shares must also bear a restrictive legend. Upon any such registration of transfer, the Company shall execute, and the Warrant Agent shall countersign and deliver, in the name of the designated transferee a new Warrant Certificate or Warrant Certificates of any authorized denomination evidencing in the aggregate a like number of unexercised Warrants.
A party requesting transfer of Warrants must provide any evidence of authority that may be required by the Warrant Agent, including but not limited to, a signature guarantee from an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association.
5.3.
Fractional Warrants
. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of a warrant certificate for a fraction of a warrant.
5.4.
Service Charges
. No service charge shall be made for any exchange or registration of transfer of Warrants.
5.5.
Warrant Execution and Countersignature
. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Warrant Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
6.
Other Provisions Relating to Rights of Registered Holders of Warrants
.
6.1.
No Rights as Stockholder
. Except as otherwise specifically provided herein, a registered holder, solely in its capacity as a holder of a Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant Agreement be construed to confer upon a registered holder, solely in its capacity as the registered holder of a Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the registered holder of the Warrant Shares which it is then entitled to receive upon the due exercise of a Warrant. In addition, nothing contained in this Warrant Agreement shall be construed as imposing any liabilities on a registered holder to purchase any securities (upon exercise of a Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. A Warrant does not entitle the registered holder thereof to any of the rights of a stockholder.
6.2.
Lost, Stolen or Destroyed Warrants
. The Warrant Agent shall issue replacement Warrants in a form mutually agreed to by Warrant Agent and the Company for those certificates alleged to have been lost, stolen or destroyed, upon receipt by Warrant Agent of an open penalty surety bond satisfactory to it and holding it and Company harmless, absent notice to Warrant Agent that such certificates have been acquired by a bona fide purchaser. Warrant Agent may, at its option, issue replacement Warrants for mutilated certificates upon presentation thereof without such indemnity.
6.3.
Authorized Shares
. The Company covenants that, during the period the Warrants are outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under a Warrant. The Company further covenants that its issuance of the Warrants shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary Warrant Shares upon the exercise of the purchase rights under the Warrants. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by a Warrant will, upon exercise of the purchase rights represented by a Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by a registered holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of a Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of a registered holder as set forth in this Warrant Agreement against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of a Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant Agreement. Before taking any action which would result in an adjustment in the number of Warrant Shares for which a Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
7.
Concerning the Warrant Agent and Other Matters
.
7.1.
Payment of Taxes
. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of Warrants, but the Company or the Warrant Agent shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares. The Warrant Agent shall not register any transfer or issue or deliver any Warrant Certificate(s) unless or until the persons requesting the registration or issuance shall have paid to the Warrant Agent for the account of the Company the amount of such transfer tax, if any, or shall have established to the reasonable satisfaction of the Company and the Warrant Agent that such transfer tax, if any, has been paid.
7.2.
Resignation, Consolidation, or Merger of Warrant Agent
.
7.2.1.
Appointment of Successor Warrant Agent
. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving thirty (30) days’ notice in writing to the Company pursuant to the notice provisions in Section 8.2 hereof. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice, submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be authorized under applicable laws to exercise the powers of a transfer agent and subject to supervision or examination by federal or state authorities. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
7.2.2.
Notice of Successor Warrant Agent
. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.
7.2.3.
Merger or Consolidation of Warrant Agent
. Any corporation into which the Warrant Agent may be merged or converted or with which it may be consolidated or any corporation resulting from any merger, conversion, or consolidation to which the Warrant Agent shall be a party, or any corporation succeeding to the business of the Warrant Agent, shall be the successor Warrant Agent under this Warrant Agreement without any further act.
7.3.
Fees and Expenses of Warrant Agent
.
7.3.1.
Remuneration
. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
7.3.2.
Further Assurances
. The Company shall perform, acknowledge and deliver or cause to be performed, acknowledged and delivered all such further and other acts, documents, instruments and assurances as may be reasonably required by the Warrant Agent for the carrying out or performing by the Warrant Agent of the provisions of this Warrant Agreement.
7.4.
Liability of Warrant Agent
.
7.4.1.
Reliance on Company Statement
. Whenever in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer, Chief Financial Officer, President or Chairman of the Board of Directors of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon, and be held harmless for such reliance, such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Warrant Agreement, and shall not be held liable in connection with any delay in receiving such statement.
7.4.2.
Indemnification
. The Company covenants and agrees to indemnify and to hold the Warrant Agent harmless against any costs, expenses (including reasonable fees of its legal counsel), losses or damages, which may be paid, incurred or suffered by or to which it may become subject, arising from or out of, directly or indirectly, any claims or liability resulting from its actions as Warrant Agent pursuant hereto; provided, that such covenant and agreement does not extend to, and the Warrant Agent shall not be indemnified with respect to, such costs, expenses, losses and damages incurred or suffered by the Warrant Agent as a result of, or arising out of, its gross negligence, bad faith, or willful misconduct. This Section 7.4.2 shall survive termination of this Warrant Agreement or any removal of the Warrant Agent.
7.4.3.
Instructions
. From time to time, Company may provide Warrant Agent with instructions concerning the services performed by the Warrant Agent hereunder. In addition, at any time Warrant Agent may apply to any officer of Company for instruction, and may consult with legal counsel for Warrant Agent or Company with respect to any matter arising in connection with the services to be performed by the Warrant Agent under this Warrant Agreement. Warrant Agent and its agents and subcontractors shall not be liable and shall be indemnified by Company for any action taken or omitted by Warrant Agent in reliance upon any Company instructions or upon the advice or opinion of such counsel. Warrant Agent shall not be held to have notice of any change of authority of any person, until receipt of written notice thereof from Company. This Section 7.4.3 shall survive termination of this Warrant Agreement or any removal of the Warrant Agent.
7.4.4.
Exclusions
. The Warrant Agent shall have no responsibility with respect to the validity of this Warrant Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Warrant Agreement or in any Warrant; nor shall it be responsible to make calculations under Section 3.3.8 or any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Warrant Agreement or any Warrant or as to whether any shares of Common Stock will when issued be valid and fully paid and nonassessable.
7.4.5. Rights and Duties of Warrant Agent. (a) The Warrant Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by it in accordance with such opinion.
(b) The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Warrant Agreement or in the Warrant Certificates (except its countersignature thereof) or be required to verify the same, and all such statements and recitals are and shall be deemed to have been made by the Company only.
(c) The Warrant Agent shall not have any duty or responsibility in the case of the receipt of any written demand from any holder of Warrants with respect to any action or default by the Company, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or to make any demand upon the Company.
(d) The Warrant Agent and any stockholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Warrant Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity.
(e) The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, absent gross negligence, bad faith or willful misconduct (each as determined by a final judgment of a court of competent jurisdiction) in the selection and continued employment thereof.
(f) The Warrant Agent may rely on and shall be held harmless and protected and shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it in reliance upon any certificate, statement, instrument, opinion, notice, letter, facsimile transmission, telegram or other document, or any security delivered to it, and believed by it to be genuine and to have been made or signed by the proper party or parties, or upon any written or oral instructions or statements from the Company with respect to any matter relating to its acting as Warrant Agent hereunder.
(g) The Warrant Agent shall not be obligated to expend or risk its own funds or to take any action that it believes would expose or subject it to expense or liability or to a risk of incurring expense or liability, unless it has been furnished with assurances of repayment or indemnity satisfactory to it.
(h) The Warrant Agent shall not be liable or responsible for any failure of the Company to comply with any of its obligations relating to any registration statement filed with the Commission or this Warrant Agreement, including without limitation obligations under applicable regulation or law.
(i) The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any Warrants authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Warrant Agreement or for the application by the Company of the proceeds of the issue and sale, or exercise, of the Warrants.
(j) The Warrant Agent shall act hereunder solely as agent for the Company, and its duties shall be determined solely by the express provisions hereof (and no duties or obligations shall be inferred or implied). The Warrant Agent shall not assume any obligations or relationship of agency or trust with any of the owners or holders of the Warrants.
(k) The Warrant Agent may rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty of signature by an “eligible guarantor institution” that is a member or participant in the Securities Transfer Agents Medallion Program or other comparable “signature guarantee program” or insurance program in addition to, or in substitution for, the foregoing; or (b) any law, act, regulation or any interpretation of the same even though such law, act, or regulation may thereafter have been altered, changed, amended or repealed.
(l) In the event the Warrant Agent believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or other communication, paper or document received by the Warrant Agent hereunder, the Warrant Agent, may, in its sole discretion, refrain from taking any action, and shall be fully protected and shall not be liable in any way to Company, the holder of any Warrant Certificate or Book-Entry Warrant Certificate or any other person or entity for refraining from taking such action, unless the Warrant Agent receives written instructions signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction of Warrant Agent.
7.5.
Acceptance of Agency
. The Warrant Agent hereby accepts the agency established by this Warrant Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares of Common Stock through the exercise of Warrants.
7.6.
Limitation on Liability of Warrant Agent
. Notwithstanding anything contained herein to the contrary, the Warrant Agent’s aggregate liability during any term of this Warrant Agreement with respect to, arising from, or arising in connection with this Warrant Agreement, or from all services provided or omitted to be provided under this Warrant Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the amounts paid hereunder by the Company to Warrant Agent as fees and charges, but not including reimbursable expenses, during the twelve (12) months immediately preceding the event for which recovery from Warrant Agent is being sought. This Section 7.6 shall survive termination of this Warrant Agreement or any removal of the Warrant Agent.
7.7.
Opinion of Counsel
. The Company shall provide an opinion of counsel prior to the Issuance Date to set up a reserve of Warrants and related Common Stock. The opinion shall state that all Warrants or Common Stock, as applicable, are:
(1) registered under the Act, or are exempt from such registration, and all appropriate state securities law filings have been made with respect to the warrants or shares; and
(2) validly issued, fully paid and non-assessable.
8.
Miscellaneous Provisions
.
8.1.
Successors
. Subject to applicable securities laws, this Warrant Agreement and the Warrants and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of each registered holder. The provisions of this Warrant Agreement are intended to be for the benefit of any holder from time to time of this Warrant Agreement and shall be enforceable by the holder or holder of Warrant Shares.
8.2.
Notices
. Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall delivered by hand or sent by registered or certified mail or overnight courier service addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:
Galena Biopharma, Inc.
4640 SW Macadam Avenue, Suite 270
Portland, Oregon, 97239
Attn: Ryan Dunlap
Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be delivered by hand or sent by registered or certified mail or overnight courier service addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:
Computershare Inc.
Computershare Trust Company, N.A.
250 Royall Street
Canton, MA 02021
Attn: Scott Travis
with a copy in each case to:
Kelley Drye & Warren LLP
101 Park Avenue
New York, NY 10178
Attn: Merrill Stone, Esq.
and
Raymond James & Associates, Inc.
880 Carillon Parkway
St. Petersburg, Florida 33716
Attention: Equity Capital Markets
8.3.
Jurisdiction
. The validity, interpretation, and performance of this Warrant Agreement and of the Warrants shall be governed in all respects by the laws of the State of Delaware, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Warrant Agreement shall be brought and enforced in the courts of the State of Delaware or the United States District Court for the District of Delaware, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenience forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 8.2 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim.
8.4.
Persons Having Rights under this Warrant Agreement
. Nothing in this Warrant Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the registered holders of the Warrants, any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the registered holders of the Warrants.
8.5.
Examination of the Warrant Agreement
. A copy of this Warrant Agreement shall be available at all reasonable times at the office of the Warrant Agent, for inspection by the registered holder of any Warrant. The Warrant Agent may require any such holder to submit his Warrant for inspection by it.
8.6.
Counterparts
. This Warrant Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Warrant Agreement transmitted electronically shall have the same authority, effect, and enforceability as an original signature.
8.7.
Effect of Headings
. The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not affect the interpretation thereof.
8.8
Amendments
. This Warrant Agreement may be amended by the parties hereto without the consent of any registered holder: (i) for the purpose of curing any ambiguity or (ii) of curing, correcting or supplementing any defective provision contained herein or (iii) adding or for the purpose of changing any other provisions with respect to matters or questions arising under this Warrant Agreement as the parties may deem necessary or desirable and that the parties deem shall not materially adversely affect the interest of the registered holders. Any modifications or amendments to Section 3.3.10 shall require the written consent of all the registered holders. All other modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period, shall require the written consent of the registered holders of Warrants equal to at least 67% of the Warrant Shares issuable upon exercise of all then outstanding Warrants. As a condition precedent to the Warrant Agent’s execution of any amendment, the Company shall deliver to the Warrant Agent a certificate from a duly authorized officer of the Company that states that the proposed amendment is in compliance with the terms of this Section 8.8. No consideration shall be offered or paid to any person to amend or consent to a waiver or modification of any provision of this Warrant Agreement unless the same consideration is also offered to all holders of the Warrants.
8.9
Severability
. Wherever possible, each provision of this Warrant Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant Agreement.
8.10
Restrictions
. Each registered holder acknowledges that the Warrant Shares acquired upon the exercise of a Warrant, if not registered, and the registered holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
8.11.
Nonwaiver and Expenses
. No course of dealing or any delay or failure to exercise any right hereunder on the part of a registered holder shall operate as a waiver of such right or otherwise prejudice such a registered holder’s rights, powers or remedies. Without limiting any other provision of this Warrant Agreement or the Underwriting Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant Agreement or the Warrants, which results in any material damages to a registered holder, the Company shall pay such registered holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the registered holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
8.12.
Limitation of Liability
. No provision hereof, in the absence of any affirmative action by the registered holder to exercise a Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of a registered holder, shall give rise to any liability of each registered holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
8.13.
Remedies
. The registered holders, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant Agreement and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
8.14.
Confidentiality
. The Warrant Agent and the Company agree that all books, records, information and data pertaining to the business of the other party, including inter alia, personal, non-public warrant holder information, which are exchanged or received pursuant to the negotiation or the carrying out of this Warrant Agreement including the fees for services set forth in the attached schedule shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law, including, without limitation, pursuant to subpoenas from state or federal government authorities (e.g., in divorce and criminal actions).
8.15.
Consequential Damages
. Neither party to this Warrant Agreement shall be liable to the other party for any consequential, indirect, special or incidental damages under any provisions of this Warrant Agreement or for any consequential, indirect, penal, special or incidental damages arising out of any act or failure to act hereunder even if that party has been advised of or has foreseen the possibility of such damages.
8.16
Force Majeure
. Notwithstanding anything to the contrary contained herein, the Warrant Agent will not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.
9.
Certain Definitions
. For purposes of this Warrant Agreement, the following terms shall have the following meanings:
9.1 “
Business Day
” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law or executive order to remain closed.
9.2 “
Common Stock
” means (i) the Company’s shares of Common Stock and (ii) any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.
9.3 “
Control
” (including the terms “
controlling
”, “
controlled by
” or “
under common control with
”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
9.4 “
Expiration Date
” means the date that is the five-year anniversary of the Issuance Date (or March 18, 2020) or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a “
Holiday
”), the next date that is not a Holiday, as the same may be extended pursuant to Section 3.3.7.
9.5 “
Person
” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.
9.6 “Principal Market” means the principal securities exchange or securities market on which the Common Shares are then traded.
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IN WITNESS WHEREOF, this Warrant Agreement has been duly executed by the parties hereto as of the day and year first above written.
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GALENA BIOPHARMA, INC.
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By:
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/s/ Mark W. Schwartz
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Name:
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Mark W. Schwartz, Ph.D.
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Title:
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President and CEO
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COMPUTERSHARE INC.
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By:
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/s/ Neda Sheridan
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Name:
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Neda Sheridan
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Title:
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Vice President
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COMPUTERSHARE TRUST COMPANY, N.A.
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By:
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/s/ Neda Sheridan
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Name:
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Neda Sheridan
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Title:
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Vice President
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EXHIBIT A
WARRANT NUMBER:
GALENA BIOPHARMA, INC.
WARRANT CERTIFICATE
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THIS CERTIFIES THAT, for value received
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is the registered holder of a Warrant or Warrants (the “
Warrant
”) expiring on March 18, 2020, subject to extension in certain events (“
Expiration Date
”), to purchase [ ] fully paid and non-assessable shares (“
Shares
”) of Common Stock, par value $0.0001 per share (“
Common Stock
”), of Galena Biopharma, Inc., a Delaware corporation (the “
Company
”). The Warrant entitles the holder thereof to purchase from the Company such number of shares of Common Stock at the price of $2.08 per share (subject to adjustment), upon surrender of this Warrant Certificate and payment of the Warrant Price to Computershare Inc. and Computershare Trust Company, N.A. (collectively, the “
Warrant Agent
”), at its corporate trust department, but only subject to the conditions set forth herein and in the Warrant Agreement between the Company and the Warrant Agent (as may be amended from time to time, the “
Warrant Agreement
”). The Warrant Agreement provides that upon the occurrence of certain events, the Warrant Price and the number of Shares purchasable hereunder, set forth on the face hereof, may, subject to certain conditions, be adjusted. The term “
Warrant Price
” as used in this Warrant Certificate refers to the price per share of Common Stock at which Shares may be purchased at the time the Warrant is exercised. Capitalized terms used and not defined herein shall have the meanings set forth in the Warrant Agreement.
No fraction of a Share will be issued upon any exercise of a Warrant. If the holder of a Warrant would be entitled to receive a fraction of a Share upon any exercise of a Warrant, the Company shall, at its election, either pay a cash adjustment in respect of such fraction in an amount equal to such fraction multiplied by the Exercise Price or round up such fraction to the next whole share.
Upon any exercise of the Warrant for less than the total number of full Shares provided for herein, there shall be issued to the registered holder hereof or the registered holder’s assignee a new Warrant Certificate covering the number of Shares for which the Warrant has not been exercised, provided that such holder has previously surrendered this Warrant to the Warrant Agent.
Upon surrender of the Warrant Certificate for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer, the Warrant Agent shall register the transfer. A new Warrant Certificate or Warrant Certificates evidencing in the aggregate a like number of Warrants shall be issued and the old Warrant Certificate shall be canceled.
Warrant Certificates, when surrendered to the Warrant Agent, may be transferred or exchanged in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates evidencing in the aggregate a like number of Warrants.
The Company and the Warrant Agent may deem and treat the registered holder as the absolute owner of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
This Warrant Certificate does not entitle the registered holder to any of the rights of a stockholder of the Company.
[
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GALENA BIOPHARMA, INC.
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By:
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Name:
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Title:
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COUNTERSIGNED:
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COMPUTERSHARE INC.
as Warrant Agent
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By:
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Authorized Officer
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COMPUTERSHARE TRUST COMPANY, N.A.
as Warrant Agent
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By:
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Authorized Officer
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[
Signature page to Warrant Certificate
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ELECTION TO PURCHASE FORM
(to be executed by the registered holder in order to exercise Warrants)
The undersigned registered holder irrevocably elects to exercise Warrants to purchase shares of Common Stock represented by this Warrant Certificate and to purchase such shares of Common Stock issuable upon the exercise of such Warrants, and requests that such shares shall be issued in the name of
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(PLEASE TYPE OR PRINT NAME AND ADDRESS)
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(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
and be delivered to:
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(PLEASE PRINT OR TYPE NAME AND ADDRESS)
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and, at the sole election of the registered holder, if such number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered in the name of, and delivered to, the registered holder at the address stated below:
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(SIGNATURE)
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(ADDRESS)
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(TAX IDENTIFICATION NUMBER)
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ASSIGNMENT
(to be executed by the registered holder in order to assign Warrants)
For Value Received, hereby sells, assigns, and transfers unto
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(PLEASE TYPE OR PRINT NAME AND ADDRESS)
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(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
and be delivered to
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(PLEASE PRINT OR TYPE NAME AND ADDRESS)
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Warrants to purchase shares of Common Stock represented by this Warrant Certificate, and hereby irrevocably constitutes and appoints Attorney to transfer this Warrant Certificate on the books of the Company, with full power of substitution in the premises.
The signature to the assignment of the Subscription Form must correspond to the name written upon the face of this Warrant Certificate in every particular, without alteration or enlargement or any change whatsoever, and must be guaranteed by a commercial bank or trust company or a member firm of the American Stock Exchange, New York Stock Exchange, Pacific Stock Exchange or Chicago Stock Exchange.
40259621v.2
THIS SEPARATION AND CONSULTING AGREEMENT (this “
Agreement
”) is entered into on June 24, 2015 by and between the Parties.
R E C I T A L S
WHEREAS, the Parties desire to provide for the termination of Kivinski’s employment with the Company on the terms and subject to the conditions set forth herein; and
WHEREAS, in connection with such termination, the Parties desire that Kivinski be retained to provide consulting services to the Company as provided herein; and
WHEREAS, the Parties desire to fully and finally resolve, without litigation, any and all claims and disputes between them concerning Kivinski’s employment by the Company, the termination of her employment and all related matters on the terms set forth herein;
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing and the mutual promises contained in this Agreement, the Parties agree as follows:
1.
Definitions
. Unless otherwise defined herein, capitalized terms used herein shall have the meanings indicated in paragraph 7.
2.
Termination of Employment; Resignation
.
(a)
Kivinski’s employment with the Company terminated on the Separation Date, and the Employment Agreement, together with any of Kivinski’s previous employment arrangements with the Company, is terminated as of the Separation Date, except that the terms of the Employment Agreement that continue beyond the termination of such employment, including, but not limited to Exhibit 1 thereof (
i.e.
, Employee Confidentiality, Non-Competition, and Proprietary Information Agreement) shall not be affected by this Agreement (provided, however, that the governing law and arbitration provisions of the Employment Agreement, paragraph 12 thereof, are superseded by this Agreement and have no force or effect after the Separation Date).
(b)
Kivinski hereby resigns as of the Separation Date from all offices and positions at the Company and any of its subsidiaries or affiliates.
3.
Separation Arrangements
.
(a)
To the extent it shall not have done so previously, upon the execution and delivery of this Agreement, the Company shall pay Kivinski any accrued and unpaid base salary, any and all accrued and unpaid vacation pay, any other paid time off as of the Separation Date.
(b)
To the extent it shall not have done so previously, upon presentation by Kivinski on or after the Separation Date, the Company shall reimburse Kivinski for any previously unreimbursed business expenses incurred by her prior to the Separation Date in accordance with the Company’s usual expense reimbursement policies.
(c)
Kivinski acknowledges and agrees that the foregoing compensation is all of the compensation and benefits payable or otherwise to be provided to Kivinski by the Company on and after the Separation Date in connection with or as a result of Kivinski’s employment, or termination of employment, with the Company, and that Kivinski is not entitled to any other compensation, benefits or perquisites from the Company.
(d)
In consideration of this Agreement, including the Release, the Company shall pay Kivinski the following compensation:
(i)
Upon the Effective Date, the Company shall pay Kivinski $100,000, which equals four months of Kivinski’s annual salary under the Employment Agreement.
(ii)
The Company shall pay or reimburse Kivinski for up to $2,000 of reasonable, documented, out-of-pocket expenses incurred by her in relocating her residence from Oregon to her home in California following the Separation Date.
(iii)
Kivinski agrees that all compensation payable under this Subparagraph 3(d) is in addition to any compensation she is otherwise entitled to under her Employment Agreement or otherwise as a result of any obligation arising from her employment with the Company.
(e)
Kivinski agrees that all compensation payable under this Paragraph 3 shall be paid after withholding for taxes that, in the Company’s reasonable good faith judgment, are required to be withheld by the Company.
4.
Company Property
. Kivinski hereby acknowledges and agrees that, to the extent she has not previously done so, on the date of this Agreement Kivinski shall return to the Company all Company property, including, but not limited to, all keys, credit cards, documents, equipment (including computer and telephone equipment) files, data, and records of any kind whatsoever that she has, or has had, in her possession or control.
5.
Consulting Agreement
.
(a)
The Company hereby agrees that, commencing on the Separation Date, the Company shall engage Kivinski as a consultant, and Kivinski hereby accepts such engagement with the Company, upon the terms hereinafter set forth.
(b)
During the Term, Kivinski shall make herself reasonably available during the Company’s normal business hours to consult with the officers, directors, employees and other agents and representatives of the Company and its affiliates on all legal aspects of the business, operations and activities of the Company and its affiliates. Kivinski shall make herself so available by telephone, via the Internet or other remote access, as the Company deems reasonably necessary in the performance of her consulting services hereunder. During the Term, Kivinski shall devote such of her business time and attention as is reasonably necessary hereunder. Kivinski shall do so to the best of her abilities and in a professional and diligent manner. During the Term and subject to the performance of her duties under this paragraph 5(b), Kivinski may engage on a full-time or part-time basis in any other business activities, provided that nothing in this paragraph shall be construed as permitting Kivinski to engage in any activities expressly prohibited by the other terms and provisions of this Agreement.
(c)
Except as directed and authorized, in advance, in writing by the Chief Executive Officer of the Company, Kivinski shall have no authority, and shall not purport, to execute or agree to any contract, agreement or instrument on behalf of the Company.
(d)
Kivinski shall only provide those services that are requested of her by the Chief Executive Officer of the Company, or his designee.
(e)
As full consideration for all consulting services rendered hereunder by Kivinski, during the Term the Company shall (i) pay to Kivinski a consulting fee of $25,000 per month (prorated for any partial month), payable in accordance with the Company’s usual payroll practices, and (ii) pay or reimburse Kivinski for the premiums for continuation through COBRA or otherwise of Kivinski’s healthcare benefits as in effect prior to the Separation Date for herself and her family under the Company’s employee healthcare plans in effect from time to time; thereafter, Kivinski will be permitted to continue those benefits at her own expense through COBRA coverage, with additional materials on COBRA coverage to be provided to Kivinski by the Company at the appropriate time. Kivinski’s coverage under the Company’s plans shall be subject to the terms of the applicable plan documents and generally applicable Company policies. Nothing in this Agreement shall restrict or otherwise affect the Company’s right to alter, modify, add to or discontinue its employee healthcare benefits at any time as it may determine in its sole judgment.
(f)
Kivinski shall be fully responsible to pay any and all ordinary expenses and disbursements that she incurs in the performance of her consulting services, except to the extent Kivinski is requested to travel or incur extraordinary expense at the request of the Company in performance of her consulting services.
(g)
It is understood and agreed that, because Kivinski will not be an employee of the Company:
(i)
The Company shall not withhold any taxes from amounts paid to Kivinski pursuant to paragraph 5(e);
(ii)
Kivinski shall not be eligible to participate in any benefits or programs sponsored or financed by the Company for its employees; and
(iii)
Kivinski shall be solely liable and responsible for paying any and all taxes relating to all amounts paid to Kivinski under paragraph 5(e) or paragraph 6(c).
(h)
All systems, inventions, discoveries, apparatus, techniques, methods, know-how, formulae or improvements made, developed or conceived by the consultant during consultant’s engagement by the Company whenever or wherever made, developed or conceived, and whether or not during business hours, which constitute an improvement, on those heretofore, now or at any during consultant’s engagement, developed, manufactured or used by the Company in connection with the manufacture, process or marketing of any product heretofore or now or hereafter developed or distributed by the Company, or any services to be performed by the Company or of any product which shall or could reasonably be manufactured or developed or marketed in the reasonable expansion of the Company’s business, shall be and continue to remain the Company’s exclusive property, without any added compensation or any reimbursement for expenses to consultant, and upon the conception of any and every such invention, process, discovery or improvement and without waiting to perfect or complete it, consultant promises and agrees that consultant will immediately disclose it to the Company and to no one else and thenceforth will treat it as the property and secret of the Company. Consultant will also execute any instruments requested from time to time by the Company to vest in it complete title and ownership to such invention, discovery or improvement and will, at the request of the Company, do such acts and execute such instrument as the Company may require, but at the Company’s expense to obtain Letters of Patent, trademarks or copyrights in the United States and foreign countries, for such invention, discovery or improvement and for the purpose of vesting title thereto in the Company, all without any reimbursement for expenses (except as provided above) and without any additional compensation of any kind to consultant.
6.
Termination
.
(a)
The Company shall have the right to terminate this Agreement only for Cause upon notice to Kivinski.
(b)
Kivinski shall have the right to terminate this Agreement upon not less than 10 days' notice to the Company at any time.
(c)
Upon termination of this Agreement by the Company or Kivinski, the Company shall pay any accrued and unpaid consulting fees and payments or reimbursements under paragraph 5(e) through the date of termination. The terms of paragraphs 7 and 8(b) and, to
the extent necessary to construe or enforce such paragraphs, paragraph 10 hereof shall survive the expiration or termination of the Agreement.
7.
Confidentiality; Non-Disparagement
.
(a)
Kivinski agrees that, other than as required by law, she will never disclose any information whatsoever concerning the Company, her employment by the Company (except the fact and nature of her employment), or the business, clinical trials, technologies or other aspect of the Company or its business. Further, Kivinski agrees that, other than as required by law, she will never disclose any information concerning the termination of such employment, this Agreement or any of its terms or provisions, directly or by implication, except to members of her immediate family and to her legal and financial advisors, and then only on condition that they agree never to further disclose any such information to others. Kivinski further agrees that she will never disparage or criticize the Company, its business, management, affiliates or product candidates, products or technology, and that she will not otherwise do or say anything that could disrupt the good morale of Company employees or harm their interests or reputation, in each case, except in connection with any legal proceeding by Kivinski to enforce her rights under this Agreement.
(b)
The Company agrees that, other than as required by law, including, without limitation, the requirement of Form 8‑K under the Securities Exchange Act of 1934, as amended, it will never, and will never permit its officers to, disclose any information concerning Kivinski's employment by the Company, the circumstances surrounding the termination of that employment, this Agreement or any of its terms or provisions, directly or by implication, except to their respective legal and financial advisors, and then only on condition that they agree not to further disclose any such information to others. The Company further agrees that it will never make any disparaging statements concerning Kivinski in authorized corporate communications to third parties, except that the Company may provide to prospective employers of Kivinski upon their request the Company’s standard reference check and except in connection with any legal proceeding by the Company to enforce its rights under this Agreement. In any authorized corporate communications in this regard, the Company will say only that Kivinski was employed as the Company’s Vice President and General Counsel until the termination of her employment as described in the Form 8‑K referred to above.
(c)
The Parties acknowledge and agree that nothing in this Agreement constitutes an acknowledgement of wrongdoing by either of the Parties. The Parties agree not to represent or imply to any third party that the Agreement in any way reflects an admission by any of the other Parties of wrongdoing or illegal conduct.
8.
Release; Further Assurances
.
(a)
In further consideration of the Company entering into this Agreement, and its promise to make payments and to provide benefits hereunder to which Kivinski is otherwise
not entitled, Kivinski shall, concurrently with her execution and delivery of this Agreement, execute and deliver to the Company the Release.
(b)
The Parties hereby agree to make, execute and deliver such other instruments or documents, and to do or cause to be done such further or additional acts, as may be reasonably necessary to effectuate the purposes or to implement the terms of this Agreement.
9.
Definitions
.
(a)
As used in this Agreement, the following capitalized terms shall have the meanings indicated:
(i)
“
Agreement
” means, collectively, this Separation and Consulting Agreement, as it may be amended as provided herein, and the Release.
(ii)
“
Cause
” means the consultant’s conviction of, or plea of guilty or nolo contendere to, any felony or other crime of moral turpitude, or the consultant’s act of fraud or material dishonesty injurious to the Company or its reputation.
(iii)
The “
Company
” means Galena Biopharma, Inc., a Delaware corporation.
(iv)
“
Effective Date
” has the meaning set forth in the Release.
(v)
“
Employment Agreement
” means the employment agreement between the Company and Kivinski entered into on or about July 28, 2014.
(vi)
“
Kivinski
” means Margaret Kivinski.
(vii)
“
Parties
” means Kivinski and the Company, collectively.
(viii)
“
Release
” means the General Release in the form attached hereto as
Exhibit 1
.
(ix)
“
Separation Date
” means June 18, 2015.
(x)
“
Term
” means the period commencing on the Separation Date and ending on the six-month anniversary of the Separation Date.
10.
Miscellaneous
.
(a)
This Agreement may be amended only by a subsequent writing executed by the Parties.
(b)
This Agreement and the other agreements referred to in this Agreement set forth the entire understanding of the Parties regarding this subject matter and supersede all prior contracts, agreements, arrangements, communications, discussions, representations and warranties, whether oral or written, between the Parties regarding this subject matter.
(c)
Each section and subsection of this Agreement constitutes a separate and distinct provision of this Agreement. It is the intent of the Parties that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applicable in each jurisdiction in which enforcement is sought. Accordingly, if any provision of this Agreement is adjudicated to be invalid, ineffective or unenforceable, the remaining provisions will not be affected by such adjudication. The invalid, ineffective or unenforceable provision will, without further action by the Parties, be automatically amended to effect the original purpose and intent of the invalid, ineffective or unenforceable provision; provided, however, that such amendment will apply only with respect to the operation of such provision in the particular jurisdiction with respect to which such adjudication is made.
(d)
None of the terms of this Agreement will be deemed to be waived or amended by either Party unless such a waiver or amendment specifically references this Agreement and is in writing signed by an authorized representative of the Party to be bound. Any such signed waiver will be effective only in the specific instance and for the specific purpose for which it was made or given.
(e)
The headings in this Agreement are solely for convenience of reference and are not to be given any effect in the construction or interpretation of this Agreement.
(f)
This Agreement may be executed in counterparts, including counterparts transmitted by electronic mail or facsimile transmission, each of which will be deemed to be an original and all of which together will constitute one and the same instrument.
(g)
Kivinski acknowledges that her failure to comply with any of the provisions of paragraph 7 of this Agreement will irreparably harm the business and that the Company will not have an adequate remedy at law in the event of such non-compliance. Therefore, Kivinski acknowledges that the Company will be entitled to injunctive relief and specific performance without the posting of bond or other security, in addition to whatever other remedies it may have, at law or in equity, in any court of competent jurisdiction against any acts of non-compliance by Kivinski under this Agreement.
(h)
The prevailing Party in any litigation relating to an alleged breach of this Agreement shall be entitled to an award of its reasonable attorneys’ fees and costs to the extent permitted by law.
(i)
This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Oregon without regard to any conflict or choice of law rules that would result in the application of any other state’s law.
(j)
The Parties to this Agreement acknowledge that they have entered into this Agreement voluntarily, without coercion and based upon their judgment and not in reliance upon any representation or promises made by the other Party other than those contained or referred to herein.
(k)
This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, legal representatives, successors and assigns.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have caused this Separation and Consulting Agreement to be executed as of the date first set forth above.
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/s/ Margaret Kivinski
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MARGARET KIVINSKI
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GALENA BIOPHARMA, INC.
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By:
/s/ Mark W. Schwartz
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Mark W. Schwartz, Ph.D.
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President and Chief Executive Officer
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[Signature Page of Separation and Consulting Agreement]
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EXHIBIT 1
GENERAL RELEASE
1. For and in consideration of the payments and other benefits provided in the Separation and Consulting Agreement, dated June 24, 2015 (the “
Separation Agreement
”), by and between Galena Biopharma, Inc. (the “
Company
”) and myself, and other good and valuable consideration, I, for and on behalf of myself and my heirs, administrators, executors, and assigns, effective the date hereof, do hereby fully and forever Release, remise and discharge the Company, its successors and assigns, and the direct and indirect parents, subsidiaries and affiliates of the Company, together with their respective officers, directors, partners, shareholders, members, managers, employees and agents (collectively, the “
Group
”), from any and all Claims (as defined below) which I had, may have had, or now have against the Company or any other member of the Group, for or by reason of any matter, cause or thing whatsoever, including any claim arising out of or attributable to my employment or the termination of my employment with the Company, including but not limited to Claims of retaliation, specifically including, but not limited to Claims arising from any complaints or disagreements with Company management, breach of contract, breach of the Employment Agreement, wrongful termination, unjust dismissal, defamation, libel or slander, or under any federal, state or local law dealing with discrimination based on age, race, sex, national origin, handicap, religion, disability or sexual preference. This Release includes, but is not limited to, all Claims arising under Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Family Medical Leave Act, the Equal Pay Act, the ERISA, the Family and Medical Leave Act of 1993, the ADA, the Fair Labor Standards Act, and all other federal and Oregon and California state and local labor and anti-discrimination laws, the common law and any other purported restriction on an employer’s right to terminate the employment of employees. As used in this Release, the term “
Claims
” shall include all claims, covenants, warranties, promises, undertakings, actions, suits, causes of action, obligations, debts, attorneys’ fees, accounts, judgments, losses and liabilities, of whatsoever kind or nature, in law, equity or otherwise.
2. I specifically release all Claims under the Age Discrimination in Employment Act (the “
ADEA
”) and Older Worker Benefit Protection Act relating to my employment and its termination.
3. I understand and agree that this Release fully and finally releases and forever resolves the matters released and discharged in paragraph 1 and 2, including those which may be unknown, unanticipated and/or unsuspected, and hereby expressly waive all benefits under California Civil Code Section 1542, as well as under any other applicable state statutes or common law principles of similar effect, for the purpose of implementing a full and complete release. I expressly acknowledge that this Release is intended to include all Claims, including Claims, if any, which I do not know or suspect to exist in my favor and that this Release extinguishes those Claims to the extent that such benefits may contravene the release set forth in
this paragraph 3. I acknowledge that I have read and understand California Civil Code Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
4. This Release does not release any rights which as a matter of law cannot be waived, including but not limited to the rights or claims Kivinski may have arising under any workers’ compensation statute or to vested accrued benefits earned under an employee benefit plan maintained by the Company and governed by the Employee Retirement Income Security Act of 1974. Nor is this Release intended to limit Kivinski from filing a charge with, or participating in an investigation conducted by, the Equal Employment Opportunity Commission (“EEOC”) or similar state or federal agency; provided, however, that Kivinski expressly waives and relinquishes any rights Kivinski might have to recover monetary damages or other relief, whether equitable or legal, in any such proceeding concerning events or actions that arose on or before the date Kivinski signed this Agreement and Release and Kivinski agrees to notify any such agency that this Release constitutes a full and final settlement by Kivinski of all claims released hereunder.
5. I represent that I have not transferred or assigned, or purported to transfer or assign, any Claims or filed or permitted to be filed against the Group, individually or collectively, any lawsuits, claims, arbitrations, or proceedings and I covenant and agree that I will not do so at any time hereafter with respect to the subject matter of this Release and Claims released pursuant to this Release (including, without limitation, any Claims relating to the termination of my employment), except as may be necessary to enforce this Release, to obtain benefits described in or granted under this Release, or to seek a determination of the validity of the waiver of my rights under the ADEA. Except as otherwise provided in the preceding sentence, I will not voluntarily participate in any judicial or other proceeding of any nature or description against any member of the Group that in any way involves the allegations and facts that I could have raised against any member of the Group as of the date hereof, except as provided by law.
6. I am specifically agreeing to the terms of this Release because the Company has agreed to pay to me money and other benefits to which I am not otherwise entitled and has provided such other good and valuable consideration as specified in the Separation Agreement. The Company has agreed to provide this money and other benefits because of my agreement to accept it in full settlement of all possible Claims I might have or ever had, and because of my execution of this Release.
7. Notwithstanding any other provision of this Release, I will retain any rights that I have pursuant to the Separation Agreement.
8. I acknowledge that I have read this Release in its entirety, fully understand its meaning and am executing this Release voluntarily and of my own free will with full knowledge of its significance. I acknowledge and warrant that I have had the opportunity to consider for twenty-one (21) days the terms and provisions of this Release, although I may execute the Agreement and Release before the expiration of that period, and that I have been advised by the Company to consult with an attorney prior to executing this Release. I shall have the right to revoke this Release for a period of seven (7) days following my execution of this Release, by giving written notice of such revocation to the Company. I understand that if I revoke this Release, the Separation Agreement shall be null and void
ab initio
and of no further force or effect and in such event I shall immediately pay and return to the Company the amount I received pursuant to paragraph 3(a)(i) of the Separation Agreement. This Release shall not become effective until the eighth day following my execution of it (the “
Effective Date
”).
9. The Company shall be entitled to have the provisions of this Release specifically enforced through injunctive relief, without having to prove the inadequacy of the available remedies at law, and without being required to post bond or security, it being acknowledged and agreed that such breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company. Moreover, I understand and agree that if I breach any provisions of this Release, in addition to any other legal or equitable remedy the Company may have, I shall reimburse the Company for all its reasonable attorneys’ fees and costs incurred by it arising out of any such breach to the extent permitted by and as consistent with the law. The remedies set forth in this paragraph 9 shall not apply to any challenge to the validity of the waiver and Release of my rights under the ADEA. In the event I challenge the validity of the waiver and Release of my rights under the ADEA, then the Company’s right to attorneys’ fees and costs shall be governed by the provisions of the ADEA, so that the Company may recover such fees and costs if the lawsuit is brought by me in bad faith. Any such action permitted to the Company by this paragraph, however, shall not affect or impair any of my obligations under this Release, including without limitation, the Release of claims in paragraphs 1 through 3 hereof. I further agree that nothing herein shall preclude the Company from recovering attorneys’ fees, costs or any other remedies specifically authorized under applicable law.
10. In the event that any one or more of the provisions of this Release is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions contained in this Release is held to be excessively broad as to duration, scope, activity or subject, such provisions will be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law.
11. Nothing herein shall be deemed to constitute an admission of wrongdoing by the Company or any member of the Group. Neither this Release nor any of its terms shall be used as an admission or introduced as evidence as to any issue of law or fact in any proceeding, suit or action, other than an action to enforce this Release.
12. The terms of this Release and all rights and obligations of the parties thereto, including its enforcement, shall be interpreted and governed by the laws of the State of Oregon, without regard to the choice of law provisions of Oregon law, to the extent such provisions require the application of the laws of any other jurisdiction.
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Dated: June 24, 2015
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MARGARET KIVINSKI
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GENERAL RELEASE
1. For and in consideration of the payments and other benefits provided in the Separation and Consulting Agreement, dated June 24, 2015 (the “
Separation Agreement
”), by and between Galena Biopharma, Inc. (the “
Company
”) and myself, and other good and valuable consideration, I, for and on behalf of myself and my heirs, administrators, executors, and assigns, effective the date hereof, do hereby fully and forever Release, remise and discharge the Company, its successors and assigns, and the direct and indirect parents, subsidiaries and affiliates of the Company, together with their respective officers, directors, partners, shareholders, members, managers, employees and agents (collectively, the “
Group
”), from any and all Claims (as defined below) which I had, may have had, or now have against the Company or any other member of the Group, for or by reason of any matter, cause or thing whatsoever, including any claim arising out of or attributable to my employment or the termination of my employment with the Company, including but not limited to Claims of retaliation, specifically including, but not limited to Claims arising from any complaints or disagreements with Company management, breach of contract, breach of the Employment Agreement, wrongful termination, unjust dismissal, defamation, libel or slander, or under any federal, state or local law dealing with discrimination based on age, race, sex, national origin, handicap, religion, disability or sexual preference. This Release includes, but is not limited to, all Claims arising under Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Family Medical Leave Act, the Equal Pay Act, the ERISA, the Family and Medical Leave Act of 1993, the ADA, the Fair Labor Standards Act, and all other federal and Oregon and California state and local labor and anti-discrimination laws, the common law and any other purported restriction on an employer’s right to terminate the employment of employees. As used in this Release, the term “
Claims
” shall include all claims, covenants, warranties, promises, undertakings, actions, suits, causes of action, obligations, debts, attorneys’ fees, accounts, judgments, losses and liabilities, of whatsoever kind or nature, in law, equity or otherwise.
2. I specifically release all Claims under the Age Discrimination in Employment Act (the “
ADEA
”) and Older Worker Benefit Protection Act relating to my employment and its termination.
3. I understand and agree that this Release fully and finally releases and forever resolves the matters released and discharged in paragraph 1 and 2, including those which may be unknown, unanticipated and/or unsuspected, and hereby expressly waive all benefits under California Civil Code Section 1542, as well as under any other applicable state statutes or common law principles of similar effect, for the purpose of implementing a full and complete release. I expressly acknowledge that this Release is intended to include all Claims, including Claims, if any, which I do not know or suspect to exist in my favor and that this Release extinguishes those Claims to the extent that such benefits may contravene the release set forth in this paragraph 3. I acknowledge that I have read and understand California Civil Code Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
4. This Release does not release any rights which as a matter of law cannot be waived, including but not limited to the rights or claims Kivinski may have arising under any workers’ compensation statute or to vested accrued benefits earned under an employee benefit plan maintained by the Company and governed by the Employee Retirement Income Security Act of 1974. Nor is this Release intended to limit Kivinski from filing a charge with, or participating in an investigation conducted by, the Equal Employment Opportunity Commission (“EEOC”) or similar state or federal agency; provided, however, that Kivinski expressly waives and relinquishes any rights Kivinski might have to recover monetary damages or other relief, whether equitable or legal, in any such proceeding concerning events or actions that arose on or before the date Kivinski signed this Agreement and Release and Kivinski agrees to notify any such agency that this Release constitutes a full and final settlement by Kivinski of all claims released hereunder.
5. I represent that I have not transferred or assigned, or purported to transfer or assign, any Claims or filed or permitted to be filed against the Group, individually or collectively, any lawsuits, claims, arbitrations, or proceedings and I covenant and agree that I will not do so at any time hereafter with respect to the subject matter of this Release and Claims released pursuant to this Release (including, without limitation, any Claims relating to the termination of my employment), except as may be necessary to enforce this Release, to obtain benefits described in or granted under this Release, or to seek a determination of the validity of the waiver of my rights under the ADEA. Except as otherwise provided in the preceding sentence, I will not voluntarily participate in any judicial or other proceeding of any nature or description against any member of the Group that in any way involves the allegations and facts that I could have raised against any member of the Group as of the date hereof, except as provided by law.
6. I am specifically agreeing to the terms of this Release because the Company has agreed to pay to me money and other benefits to which I am not otherwise entitled and has provided such other good and valuable consideration as specified in the Separation Agreement. The Company has agreed to provide this money and other benefits because of my agreement to accept it in full settlement of all possible Claims I might have or ever had, and because of my execution of this Release.
7. Notwithstanding any other provision of this Release, I will retain any rights that I have pursuant to the Separation Agreement.
8. I acknowledge that I have read this Release in its entirety, fully understand its meaning and am executing this Release voluntarily and of my own free will with full knowledge of its significance. I acknowledge and warrant that I have had the opportunity to consider for twenty-one (21) days the terms and provisions of this Release, although I may execute the Agreement and Release before the expiration of that period, and that I have been advised by the Company to consult with an attorney prior to executing this Release. I shall have the right to revoke this Release for a period of seven (7) days following my execution of this Release, by giving written notice of such revocation to the Company. I understand that if I revoke this Release, the Separation Agreement shall be null and void
ab initio
and of no further force or effect and in such event I shall immediately pay and return to the Company the amount I received pursuant to paragraph 3(a)(i) of the Separation Agreement. This Release shall not become effective until the eighth day following my execution of it (the “
Effective Date
”).
9. The Company shall be entitled to have the provisions of this Release specifically enforced through injunctive relief, without having to prove the inadequacy of the available remedies at law, and without being required to post bond or security, it being acknowledged and agreed that such breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company. Moreover, I understand and agree that if I breach any provisions of this Release, in addition to any other legal or equitable remedy the Company may have, I shall reimburse the Company for all its reasonable attorneys’ fees and costs incurred by it arising out of any such breach to the extent permitted by and as consistent with the law. The remedies set forth in this paragraph 9 shall not apply to any challenge to the validity of the waiver and Release of my rights under the ADEA. In the event I challenge the validity of the waiver and Release of my rights under the ADEA, then the Company’s right to attorneys’ fees and costs shall be governed by the provisions of the ADEA, so that the Company may recover such fees and costs if the lawsuit is brought by me in bad faith. Any such action permitted to the Company by this paragraph, however, shall not affect or impair any of my obligations under this Release, including without limitation, the Release of claims in paragraphs 1 through 3 hereof. I further agree that nothing herein shall preclude the Company from recovering attorneys’ fees, costs or any other remedies specifically authorized under applicable law.
10. In the event that any one or more of the provisions of this Release is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions contained in this Release is held to be excessively broad as to duration, scope, activity or subject, such provisions will be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law.
11. Nothing herein shall be deemed to constitute an admission of wrongdoing by the Company or any member of the Group. Neither this Release nor any of its terms shall be used as an admission or introduced as evidence as to any issue of law or fact in any proceeding, suit or action, other than an action to enforce this Release.
12. The terms of this Release and all rights and obligations of the parties thereto, including its enforcement, shall be interpreted and governed by the laws of the State of Oregon, without regard to the choice of law provisions of Oregon law, to the extent such provisions require the application of the laws of any other jurisdiction.
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Dated: June 24, 2015
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/s/ Margaret Kivinski
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MARGARET KIVINSKI
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