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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 8-K12B
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
June 15, 2022
Date of Report (Date of Earliest Event Reported)
 
Panbela Therapeutics, Inc
(Exact Name of Registrant as Specified in its Charter)
 
Delaware
 
001-39468
 
88-2805017
(State of Incorporation)
 
(Commission File Number)
 
(I.R.S. Employer Identification No.)
 
712 Vista Blvd #305
Waconia, Minnesota
 
55387
(Address of Principal Executive Offices)
 
(Zip Code)
 
(952) 479-1196
(Registrant’s Telephone Number, Including Area Code)
Canary Merger Holdings, Inc.
(Former Name or Former Address, if Changed Since Last Report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading Symbol
 
Name of each exchange on which registered
Common Stock, $0.001 par value
 
PBLA
 
The Nasdaq Stock Market LLC
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 

 
EXPLANATORY NOTE
 
On June 15, 2022 (the “Closing Date”), Panbela Therapeutics, Inc. (formerly known as Canary Merger Holdings, Inc.), a Delaware corporation (“Panbela”), completed the previously announced strategic business reorganization and acquisition of Cancer Prevention Pharmaceuticals, Inc. (“Cancer Prevention”) pursuant to the agreement and plan of merger, dated as of February 21, 2022 (the “Merger Agreement”), by and among Panbela, Cancer Prevention and Panbela Research, Inc. (formerly known as Panbela Therapeutics, Inc., “Panbela Research”), among others. Pursuant to the terms of the Merger Agreement, (i) Canary Merger Subsidiary I, Inc. (“Merger Sub I”), then a wholly-owned subsidiary of Panbela, which was itself a wholly-owned subsidiary of Panbela Research, merged with and into Panbela Research (the “First Merger”), with Panbela Research surviving the First Merger, and (ii) Canary Merger Subsidiary II, Inc., then a wholly-owned subsidiary of Panbela, merged with and into Cancer Prevention (the “Second Merger” and, together with the First Merger, the “Mergers”), with Cancer Prevention surviving the Second Merger. As a result of the Mergers, each of Panbela Research and Cancer Prevention became a wholly-owned subsidiary of Panbela. In addition, in connection with the consummation of the Mergers, “Panbela Therapeutics, Inc.” was renamed “Panbela Research, Inc.” and “Canary Merger Holdings, Inc.” was renamed “Panbela Therapeutics, Inc.”
 
Item 1.01
Entry into a Material Definitive Agreement.
 
Cancer Prevention is party to a licensing agreement with One-Two Therapeutics Assets Limited (“One-Two”) dated as of July 16, 2021 (the “License Agreement”). Under the License Agreement, One-Two has licensed the North American development and commercialization rights for the Cancer Prevention’s familial adenomatous polyposis (FAP) product, CPP-IX/Sul or Flynpovi, a combination pharmaceutical product formulated for oral delivery for the FAP indication in adults containing both active ingredients, as described in Cancer Prevention’s new drug application. In addition to an upfront payment made to Cancer Prevention on the effective date, Cancer Prevention is entitled to a milestone payment of up to $70,000,000 upon regulatory approval of Flynpovi by the Food and Drug Administration (FDA) and royalties on net sales of Flynpovi in the licensed territory receive a milestone payment net of certain expenses upon regulatory approval of Flynpovi by the FDA and royalties on net sales in North America. One-Two is responsible for all costs of development and approval of Flynpovi in North America.
 
The information set forth in Item 2.03 of this current report is incorporated into this Item 1.01 by reference.
 
Item 2.01
Completion of Acquisition or Disposition of Assets.
 
In accordance with the terms of the Merger Agreement and as a result of the First Merger, Panbela Research implemented a holding company reorganization pursuant to which each share of common stock, par value $0.001 per share, of Panbela Research issued and outstanding immediately prior to the effective time of the First Merger was automatically converted into and exchanged for one share of Panbela Common Stock. Each share of Panbela Common Stock held by Panbela Research was automatically cancelled and ceased to exist as of the effective time of the First Merger. Each share of common stock, par value $0.001 per share, of Merger Sub I held by Panbela was automatically converted into and exchanged for one share of common stock of Panbela Research, as the surviving entity. Also as a result of the First Merger, Panbela assumed all rights and obligations with respect to Panbela Research’s equity incentive plans and outstanding awards thereunder. Additionally, Panbela assumed all rights and obligations with respect to outstanding warrants to purchase shares of Panbela Common Stock. Accordingly, all of Panbela Research’s securityholders immediately prior to the consummation of the First Merger became securityholders of Panbela on identical terms.
 
In accordance with the terms of the Merger agreement and as a result of the Second Merger, each share of capital stock of Cancer Prevention issued and outstanding immediately prior to the effective time of the Second Merger was automatically converted into the applicable consideration consisting of shares of Panbela Common Stock and potential Post-Closing Contingent Payments as previously disclosed. Additionally, Panbela assumed all remaining in-the-money options outstanding under Cancer Prevention’s 2010 Equity Incentive Plan, the text of which is filed as Exhibit 10.1 to this current report, through the issuance of replacement options to purchase shares of Panbela Common Stock and issued replacement warrants to purchase shares of Panbela Common Stock.
 
 

 
Following the completion of the Mergers on June 15, 2022, there were an aggregate of 20,774,045 shares of Panbela Common Stock issued and outstanding. The shares of Panbela Common Stock are expected to commence trading on The Nasdaq Stock Market LLC under the existing ticker symbol “PBLA” on June 16, 2022.
 
The description of the Merger Agreement contained herein does not purport to be complete and is qualified by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 hereto and incorporated herein by reference. This summary is not intended to modify or supplement any factual disclosures about Panbela, Panbela Research, or Cancer Prevention and should not be relied upon as disclosure about any such person without consideration of the periodic and current reports and statements that Panbela Research has filed and Panbela files with the Securities and Exchange Commission (the “Commission”). The terms of the Merger Agreement govern the contractual rights and relationships between, and allocate risks among, the parties thereto in relation to the transactions contemplated thereby. In particular, the representations and warranties made by the parties to each other in the Merger Agreement reflect negotiations between, and are solely for the benefit of, the parties thereto and may be limited or modified by a variety of factors, including subsequent events, information included in public filings, disclosures made during negotiations, correspondence between the parties and disclosure schedules to the Merger Agreement. Accordingly, the representations and warranties may not describe the actual state of affairs at the date they were made or at any other time and should not be relied upon as statements of fact.
 
The information set forth in the Explanatory Note to this current report is incorporated into this Item 2.01 by reference.
 
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
 
On June 15, 2022, Panbela entered into a guaranty (the “Guaranty”) pursuant to which it has agreed to guarantee the payment obligation of Cancer Prevention under a promissory note in favor of Sucampo GmbH dated as of September 6, 2017, as amended (the “Sucampo Note”). As the result of a capitalization of all principal and accrued but unpaid interest through the date of the Second Merger, the Sucampo Note had a principal balance of approximately $6.2 million and no accrued but unpaid interest as of the date of the Guaranty. Amounts outstanding under the Sucampo Note bear interest at a rate of 5.0% per annum. Cancer Prevention is required to make five payments of $1 million, plus accrued but unpaid interest, on January 31st of each of 2023, 2024, 2025, 2026, with the remaining balance due on January 31, 2027. All or a portion of the first payment due in January 2023 may become payable earlier if Cancer Prevention or Panbela completes a financing on or before January 31, 2023. Upon the occurrence of certain events of default, the Sucampo Note requires repayment of the entire balance. The conversion features of the Sucampo Note reflected in its original title were eliminated in a prior amendment.
 
The foregoing descriptions of the Sucampo Note and the Guaranty do not purport to be complete and are qualified by reference to, the text of each such document, which is filed as Exhibit 10.4 and Exhibit 10.5, respectively, to this current report and is incorporated herein by reference.
 
Item 3.01.
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
 
Prior to the completion of the Mergers, shares of common stock of Panbela Research were registered pursuant to Section 12(b) of the Exchange Act and listed on The Nasdaq Stock Market LLC. In connection with the completion of the Mergers, the shares of common stock of Panbela Research will be suspended from trading on The Nasdaq Stock Market LLC prior to the open of trading on June 16, 2022.
 
The information set forth in the Explanatory Note and Item 2.01 of this current report is incorporated into this Item 3.01 by reference.
 
Item 3.02
Unregistered Sales of Equity Securities.
 
In connection with the Mergers, Panbela sold and issued the following securities to the holders of Cancer Prevention securities pursuant to the Second Merger: (a) 6,587,576 shares of Panbela Common Stock, (b) 731,957 shares of Panbela Common Stock that remained subject to the Holdback Escrow (as defined in the Merger Agreement), (iv) replacement options to purchase up to 1,596,754 shares of Panbela Common Stock at a weighted average purchase price of $0.35 per share, and (v) replacement warrants to purchase up to 338,060 shares of Panbela Common Stock at a weighted average purchase price of $4.145 per share.
 
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These securities were issued in a transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on Section 4(a)(2) of the Securities Act, and Regulation D promulgated thereunder. Accordingly, all such securities are restricted securities and may not be offered or sold by the holders of those shares, absent registration or an applicable exemption from registration requirements.
 
The information set forth in the Explanatory Note of this current report is incorporated into this Item 3.02 by reference.
 
Item 3.03
Material Modification to Rights of Security Holders.
 
In connection with the Mergers, the Panbela Common Stock was assigned a new CUSIP of 69833W107.
 
The information set forth in the Explanatory Note and in Items 1.01 and 5.03 relating to the Panbela Common Stock is incorporated by reference into this Item 3.03.
 
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
 
Board of Directors
 
In connection with, and effective immediately before the effective time of the First Merger, then current directors of Panbela Research, Suzanne Gagnon and Paul W. Schaffer, each resigned all positions with Panbela Research’s board of directors (the “Board”). There are no disagreements between either Dr. Gagnon or Mr. Schaffer and Panbela relating to its operations, policies or practices that resulted in their decisions to resign. All other directors of Panbela Research continue to serve as directors of Panbela. As a result of Mr. Schaffer’s departure, current director Arthur J. Fratamico was also named chair of the nominating and governance committee of the Board.
 
In accordance with the Merger Agreement and in connection with, and effective immediately after the Second Merger, each of Daniel J. Donovan and Jeffrey E. Jacob was appointed to Panbela’s Board, filling the two vacancies in Class I created by the departures of Dr. Gagnon and Mr. Schaffer. Each is expected to serve the remainder of the Class I term scheduled to expire as of Panbela’s annual meeting of stockholders to be held in 2023. Mr. Donovan has been appointed to serve on the audit and compensation committees of the Board.
 
Jeffrey E. Jacob, age 60, served as Chief Executive Officer of Cancer Prevention from 2009 until the consummation of the Second Merger in June 2022. He has served as principal at Tucson Pharma Ventures LLC, an Arizona-based biopharmaceutical consulting and investment firm, since 2004.
 
Daniel J. Donovan, age 58, served as a director and Chief Business Officer, a non-employee position, of Cancer Prevention from 2011 until the consummation of the Second Merger in June 2022. He has served as chief executive officer of rareLife Solutions, Inc., a private company, since he co-founded it in 2014.
 
Additional information regarding Mr. Jacob and Mr. Donovan’s backgrounds, experience and qualifications is set forth in the definitive proxy statement filed by Panbela Research with the Commission on April 29, 2022 (the “Proxy Statement”).
 
No Change to Compensatory Arrangements
 
No change was made to the compensatory arrangements involving our executive officers other than Panbela’s assumption of the existing obligations of Panbela Research with respect to existing employment agreements and all other existing compensatory arrangements with our President and Chief Executive Officer, Jennifer K. Simpson, and our Vice President of Finance, Chief Financial Officer, Secretary and Treasurer, Susan Horvath.
 
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Related Party Transaction with Incoming Director
 
Also on the Closing Date, Cancer Prevention entered into a Separation and Release Agreement (the “Separation Agreement”) with Mr. Jacob, now a director of Panbela, whereby he resigned as its Chief Executive Officer, employee, and all other capacities, immediately prior to the closing under the Merger Agreement. In consideration for Mr. Jacob’s acknowledgements, representations, warranties, covenants, releases and agreements set forth in the Separation Agreement, Cancer Prevention has agreed to pay to Mr. Jacob a total of $350,000, representing one times his base salary at the time of his resignation. Such payment will become due upon the earlier of (i) Cancer Prevention or its parent completing a material financing and (ii) the two-year anniversary of the Closing Date. As further consideration, Cancer Prevention has also agreed to reimburse Mr. Jacob for the employer’s portion of the premium payments for him to continue his current medical insurance coverage for 12 months through the Consolidated Omnibus Budget Reconciliation Act (COBRA).
 
The foregoing description of the Separation Agreement does not purport to be complete and is qualified by reference to, the text of the Separation Agreement, which is filed as Exhibit 10.6 to this current report and is incorporated herein by reference.
 
--12-31
Item 5.03
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
 
On June 15, 2022, in accordance with the terms of the Merger Agreement, Panbela amended and restated its certificate of incorporation and bylaws to reflect the changes set forth in the Merger Agreement and its exhibits as described in the Proxy Statement. The resulting certificate of incorporation and bylaws are identical to those of Panbela Research immediately prior to the consummation of the First Merger.
 
The foregoing descriptions of the amended and restated certificate of incorporation of Panbela and the bylaws of Panbela do not purport to be complete and are qualified by reference to, the text of each such document, which is filed as Exhibit 3.1 and Exhibit 3.2, respectively, to this current report and is incorporated herein by reference.
 
Item 7.01
Regulation FD Disclosure.
 
On June 16, 2022, Panbela issued a press release announcing the completion of the Mergers, the text of which is furnished as Exhibit 99.1 to this current report and is incorporated herein by reference.
 
Item 8.01
Other Items.
 
This Current Report on Form 8-K establishes Panbela as the successor issuer to Panbela Research pursuant to Rule 12g-3(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Pursuant to Rule 12g-3(d) under the Exchange Act, the shares of common stock, $0.001 par value per share, of Panbela (“Panbela Common Stock”) are deemed to be registered under Section 12(b) of the Exchange Act, and Panbela is subject to the informational requirements of the Exchange Act and the rules and regulations promulgated thereunder. Panbela hereby reports this succession in accordance with Rule 12g-3(f) under the Exchange Act. The description of the Panbela Common Stock set forth in Exhibit 4.1 to this current report is incorporated herein by reference.
 
Item 9.01
Financial Exhibits.
 
(a)         Financial statements of business or funds acquired.
 
The financial information required by this Item 9.01(a) was previously reported in the Proxy Statement and, pursuant to General Instruction B.3 of Form 8-K is not required to be reported herein.
 
(b)         Pro forma financial information.
 
The unaudited pro forma condensed combined financial information of Panbela Therapeutics, Inc. as of and for the three months ended March 31, 2022 and the fiscal year ended December 31, 2021 and the related notes thereto are attached as Exhibit 99.3 to this current report and incorporated herein by reference.
 
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(d)         Exhibits.
 
Exhibit No.
 
Description
 
Method of Filing
2.1*
   
Incorporated by reference
3.1
   
Filed electronically
3.2
   
Filed electronically
4.1
   
Incorporated by reference
10.1
   
Filed electronically
10.2
   
Filed electronically
10.3
   
Filed electronically
10.4
   
Filed electronically
10.5
   
Filed electronically
10.6
   
Filed electronically
23.1
   
Filed electronically
99.1
   
Furnished electronically
99.2
   
Incorporated by reference
99.3
   
Filed electronically
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)
   
*
Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule will be furnished to the SEC upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any document so furnished.
 
The information contained in Item 7.01 of this current report and Exhibit 99.1 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
 
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.
 
PANBELA THERAPEUTICS, INC.
Date: June 16, 2022
By:
/s/ Susan Horvath
Susan Horvath
Chief Financial Officer
 
 
 
 
 

Exhibit 3.1

 

AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
PANBELA THERAPEUTICS, INC.

 

Panbela Therapeutics, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), certifies as follows:

 

ARTICLE 1
Name

 

The name of the Corporation is Panbela Therapeutics, Inc.

 

ARTICLE 2
Registered Office

 

The address of the Corporation’s registered office in the State of Delaware is 1675 South State Street, Suite B, Dover, Delaware 19901, located in Kent County. The name of the Corporation’s registered agent for service of process at such address is Capitol Services, Inc.

 

ARTICLE 3
Purpose

 

3.1         Purposes. The Corporation will have general business purposes in accordance with the laws of the State of Delaware.

 

3.2       Powers. The Corporation will have and may exercise all the powers granted or available under the laws of the State of Delaware and laws amendatory thereof and supplementary thereto, including all powers necessary or convenient to effect any or all of the business purposes for which the Corporation is incorporated.

 

ARTICLE 4
Stock

 

4.1.         Authorized Capital Stock. The Corporation is authorized to issue one hundred and ten million (110,000,000) shares of capital stock, of which one hundred million (100,000,000) shares will be shares of common stock, par value $0.001 per share (the “Common Stock”), and ten million (10,000,000) shares will be shares of preferred stock, par value $0.001 per share (the “Preferred Stock”).

 

4.2       Common Stock. Except as otherwise provided by law or by the resolution or resolutions adopted by the board of directors of the Corporation designating the rights, powers and preferences of any series of Preferred Stock, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. All shares of Common Stock will be voting shares and will be entitled to one vote per share. There shall be no cumulative voting.

 

4.3         Preferred Stock Rights. Shares of Preferred Stock may be issued from time to time in one or more series. The board of directors of the Corporation is hereby authorized by resolution or resolutions to fix the voting rights, if any, designations, powers, preferences and the relative, participation, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, of any unissued series of Preferred Stock, to fix the number of shares constituting such series, and to increase or decrease the number of shares of any such series (but not below the number of shares thereof then outstanding).

 

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ARTICLE 5
Board Of Directors

 

5.1         Number and Classification of Directors; Vacancies and Removal.

 

(a)         Number. Except as otherwise provided by the resolution or resolutions adopted by the board of directors of the Corporation designating the rights, powers and preferences of any series of Preferred Stock, the number of directors of the Corporation shall be fixed, and may be increased or decreased from time to time, exclusively by the board of directors.

 

(b)         Removal. Subject to the rights, if any, of any series of Preferred Stock to elect directors and to remove any director whom the holders of any such series have the right to elect, any director (including persons elected by directors to fill vacancies in the board of directors) may be removed from office (i) only with cause and (ii) only by the affirmative vote of the holders of 75% or more of the outstanding shares of capital stock then entitled to vote at an election of directors. At least 45 days prior to any annual or special meeting of stockholders at which it is proposed that any director be removed from office, written notice of such proposed removal and the alleged grounds thereof shall be sent to the director whose removal will be considered at the meeting.

 

(c)         Classes. The Board shall be divided into three classes, as nearly equal in number as possible, designated Class I, Class II and Class III. Class I directors shall initially serve until the first annual meeting of stockholders following the effectiveness of this Article 5.1(c); Class II directors shall initially serve until the second annual meeting of stockholders following the effectiveness of this Article 5.1(c); and Class III directors shall initially serve until the third annual meeting of stockholders following the effectiveness of this Article 5.1(c). Commencing with the first annual meeting of stockholders following the effectiveness of this Article 5.1(c), directors of each class the term of which shall then expire shall be elected to hold office for a three-year term and until the election and qualification of their respective successors in office. In case of any increase or decrease, from time to time, in the number of directors, the number of directors in each class shall be apportioned as nearly equal as possible. The Board is authorized to assign members of the Board already in office to Class I, Class II or Class III.

 

5.2         No Written Ballot. Unless and except to the extent that the bylaws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot.

 

ARTICLE 6
Bylaws

 

In furtherance and not in limitation of the powers conferred by law, the Board of Directors is expressly authorized to adopt, amend and repeal the bylaws of the Corporation, subject to the power of the holders of capital stock of the Corporation to adopt, amend or repeal the bylaws; provided, however, that, with respect to the power of holders of the capital stock to adopt, amend and repeal bylaws of the Corporation, notwithstanding any other provision of the bylaws or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the capital stock of the Corporation required by law, the bylaws or any Preferred Stock, the affirmative vote of the holders of at least 66.67% of the voting power of all of the then-outstanding shares entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the bylaws of the Corporation.

 

ARTICLE 7
Amending The Certificate Of Incorporation

 

The Corporation reserves the right at any time from time to time to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, and any other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by law. All rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article.

 

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ARTICLE 8
Director Liability; Indemnification And Insurance

 

8.1         Elimination of Certain Liability of Directors. The personal liability of the directors of the Corporation shall be eliminated to the fullest extent permitted by law. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.

 

8.2          Indemnification.

 

(a)         Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Corporation, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, to the fullest extent permitted by law, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, amounts paid or to be paid in settlement, and excise taxes or penalties arising under the Employee Retirement Income Security Act of 1974) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in paragraph (b) below, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the board of directors of the Corporation. The right to indemnification conferred in this Article shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the DGCL requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article or otherwise. The Corporation may, by action of the board of directors, provide indemnification to employees and agents of the Corporation with the same scope and effect as the foregoing indemnification of directors and officers.

 

(b)         Right of Claimant to Bring Suit. If a claim under paragraph (a) above is not paid in full by the Corporation within 30 days after eligibility for a claim has been received/determined by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

 

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(c)         Non-Exclusivity of Rights. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation (as it may be amended from time to time), bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

 

8.3         Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, limited liability company, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

 

8.4         Amendment or Repeal. No amendment, modification or repeal of this Article, adoption of any provision in this Certificate of Incorporation, or change in the law or interpretation of the law shall adversely affect any right or protection of any person under this Article with respect to any act or omission that occurred prior to the time of such amendment, modification, repeal, adoption or change.

 

ARTICLE 9
Stockholder Action

 

Except as otherwise required by law, special meetings of stockholders of the Corporation for any purpose or purposes may be called only by the Board of Directors, the Chairman of the Board or the Chief Executive Officer of the Corporation. Special meetings of the stockholders may not be called by any other person or persons.

 

ARTICLE 10
Dispute Resolution

 

10.1         Exclusive Forum. Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for any or all intracorporate claims, which shall include claims, including claims in the right of the Corporation, (i) that are based upon a violation of a duty by a current or former director or officer or stockholder in such capacity, or (ii) as to which Title 8 of the DGCL confers jurisdiction upon the Delaware Court of Chancery, shall be a state court located within the State of Delaware (or, if no state court located in the State of Delaware has jurisdiction, the federal district court for the District of Delaware).

B-4
 

Exhibit 3.2

 

PANBELA THERAPEUTICS, INC.

 

Bylaws

 

ARTICLE I
OFFICES

 

Section 1.1         REGISTERED OFFICE. The Corporation shall maintain a registered office and registered agent within the State of Delaware at such place within such State as may be designated from time to time by the Board of Directors of the Corporation.

 

Section 1.2         OTHER OFFICES. The Corporation may also have offices in such other places, either within or without the State of Delaware, as the Board of Directors may from time to time designate or the business of the Corporation may from time to time require.

 

ARTICLE II
STOCKHOLDERS

 

Section 2.1         MEETINGS OF STOCKHOLDERS.

 

(a)         ANNUAL MEETINGS. Annual meetings of the stockholders, at which they shall elect members of the board of directors and transact such other business as may properly come before the meeting, shall be held on such date and at such time as the board of directors may designate.

 

(b)         SPECIAL MEETINGS. Except as otherwise required by law, special meetings of stockholders of the Corporation for any purpose or purposes may be called only by the Board of Directors, the Chairman of the Board or the Chief Executive Officer of the Corporation. Special meetings of the stockholders may not be called by any other person or persons.

 

(c)         PLACE OF MEETINGS. Meetings of the stockholders shall be held at such place, either within or without the State of Delaware, or solely by means of remote communication, as the board of directors shall determine.

 

(d)         NOTICE OF MEETING. Notice, stating the place, if any, day and time of the meeting, and the means of remote communication, if any, shall be delivered by the Corporation not less than ten days nor more than 60 days before the date of the meeting to each stockholder of record entitled to vote at such meeting. Notice of a special meeting shall also state the purpose or purposes for which the meeting has been called. Without limiting the manner by which notice may otherwise be given, notice may be given by a form of electronic transmission that satisfies the requirements of the Delaware General Corporation Law. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail with postage thereon prepaid, addressed to the stockholder at his or her address as it appears in the Corporation’s records. Meetings may be held without notice if all stockholders entitled to vote are present, or if notice is waived by those not present in accordance with Article VIII of these Bylaws. Any previously scheduled meeting of the stockholders may be postponed, and any special meeting of the stockholders may be cancelled, by resolution of the board of directors upon public notice given prior to the date previously scheduled for such meeting of stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting (or any supplement thereto).

 

(e)         CHAIR OF STOCKHOLDERS MEETING. The Chair of the Board, or in the Chair’s absence, a Vice Chair, or in the absence of any Vice Chair, the Chief Executive Officer, or in the absence of the Chief Executive Officer, the Secretary, or in the absence of the Secretary, a chair chosen by a majority of the directors present, shall act as chair of the meetings of the stockholders.

 

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Section 2.2         QUORUM OF STOCKHOLDERS; ADJOURNMENT; REQUIRED VOTE; PROXIES.

 

(a)    QUORUM OF STOCKHOLDERS; ADJOURNMENT. Except as otherwise provided by law, by the Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) or by these Bylaws, the holders of a majority of the voting power of the shares of stock of the Corporation issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of a majority of the shares of such class or series issued and outstanding and entitled to vote shall constitute a quorum of such class or series for the transaction of such business. The chair of the meeting or a majority of the shares so represented may adjourn the meeting from time to time, whether or not there is such a quorum. No notice of the time and place of adjourned meetings need be given, except that notice of the adjourned meeting shall be required if the adjournment is for more than 30 days or if after the adjournment a new record date is fixed for the adjourned meeting. The stockholders present at a duly called meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

 

(b)    REQUIRED VOTE. Except as is otherwise required by law, the Certificate of Incorporation or these Bylaws, each holder of record of shares of stock of the Corporation having voting powers shall be entitled, at each meeting of the stockholders, to one vote for every share of such stock standing in his or her name on the record of stockholders of the Corporation and, if a quorum is present and unless otherwise required by the Certificate of Incorporation, the affirmative vote of a majority of the shares of stock represented at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, except with respect to the election of directors. Election of directors at all meetings of the stockholders at which directors are to be elected shall, subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, be elected by a plurality of the votes cast.

 

(c)    PROXIES. Each stockholder of record entitled to vote at any meeting may do so in person or by proxy authorized by an instrument in writing or in such other manner or form, such as electronic transmission, permitted by the Delaware General Corporation Law, by such stockholder or his or her duly authorized attorney in fact.

 

Section 2.3         LIST OF STOCKHOLDERS. At least ten days before each meeting of stockholders, the Secretary or agent having charge of the stock transfer book shall make a complete list of the stockholders entitled to vote at such meeting, arranged in alphabetical order, with the address of each and the number of shares held by each. Such list shall be subject to inspection by any stockholder for a period of ten days prior to such meeting, for any purpose related to the meeting, at the principal office of the Corporation at any time during usual business hours or on a reasonably accessible electronic network. Such list shall be produced and kept open at the time and place of meeting, or if the meeting is to be held solely by means of remote communication then on a reasonably accessible electronic network, and shall be subject to the inspection of any stockholder during the whole time of the meeting.

 

Section 2.4         NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS.

 

(a)    ANNUAL MEETINGS OF STOCKHOLDERS.

 

(1)         Nominations of persons for election to the board of directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (A) pursuant to the Corporation’s notice of meeting, (B) by or at the direction of the board of directors, or (C) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Section 2.4, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.4.

 

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(2)         For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (C) of paragraph (a)(1) of this Section 2.4, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to the date of such annual meeting and not later than the close of business on the later of the 90th day prior to the date of such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall any adjournment or postponement of an annual meeting or the public announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Such stockholder’s notice must set forth:

 

(A)         as to each person whom the stockholder proposes to nominate for election or reelection as a director, (i) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), and (ii) information relating to any agreement, arrangement or understanding, including a voting commitment, or any relationship, including financial transactions and compensation, between such person and the stockholder or any Stockholder Associated Person (as defined in Section 2.4(c)(2) below); provided, that the Corporation may also require any proposed nominee to furnish such other information as the Corporation may reasonably require to determine the eligibility of such proposed nominee to serve as a director;

 

(B)         as to any business, other than the nomination of a director or directors, that the stockholder proposes to bring before the meeting, (i) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such stockholder and any Stockholder Associated Person in such business, (ii) a description of all agreements, arrangements and understandings between such stockholder and any Stockholder Associated Person and any other person or persons (including their names) in connection with the proposal of such business by such stockholder, and (iii) if the proposal or business is to be included in the Corporation’s proxy statement, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend these Bylaws, the language of the proposed amendment); and

 

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(C)         as to the stockholder giving the notice and any Stockholder Associated Person, (i) the name and address of such stockholder, as they appear on the Corporation’s stock ledger, and the name and address, if different, of such Stockholder Associated Person, (ii) the class, series and number of all shares of stock of the Corporation which are held of record or are beneficially owned by such stockholder and by such Stockholder Associated Person, (iii) the nominee holder for, and the number of, shares owned beneficially but not of record by such stockholder and by such Stockholder Associated Person, (iv) any derivative position, including without limitation any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, directly or indirectly held or beneficially held by such stockholder and such Stockholder Associated Person, and whether and the extent to which any hedging, equity swap or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any short position or interest or any borrowing or lending of shares of stock) has been made by, such stockholder or such Stockholder Associated Person with respect to any shares of stock of the Corporation, or whether such stockholder or Stockholder Associated Person has an economic interest in the Corporation not reported as record or beneficial ownership, (v) any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder or Stockholder Associated Person has a right to vote any shares of stock of the Corporation, (vi) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder or Stockholder Associated Person that are separated or separable from the underlying shares of the Corporation, (vii) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or through a qualified representative at the meeting to propose such nomination or business, and (viii) a representation whether such stockholder or Stockholder Associated Person intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to elect the nominee or to approve or adopt the proposal and/or (y) otherwise to solicit proxies from stockholders in support of such nomination or proposal, and the information called for by this paragraph (2)(C) shall be supplemented by such stockholder and Stockholder Associated Person not later than 10 days after the record date for the meeting to disclose such information as of the record date.

 

(3)         Notwithstanding anything in the second sentence of paragraph (a)(2) of this Section 2.4 to the contrary, in the event that the number of directors to be elected to the board of directors of the Corporation is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased board of directors at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 2.4 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.

 

(b)         SPECIAL MEETINGS OF STOCKHOLDERS. The business to be transacted at any special meeting shall be limited to the purposes stated in the notice of such meetings. Nominations of persons for election to the board of directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (1) by or at the direction of the board of directors or (2) provided that the board of directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 2.4 and is a shareholder of record at the time of the special meeting, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.4. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the board of directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (a)(2) of this Section 2.4 shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to the date of such special meeting and not later than the close of business on the later of the 90th day prior to the date of such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the board of directors to be elected at such meeting. In no event shall any adjournment or postponement of a special meeting or the public announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

 

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(c)         GENERAL.

 

(1)         Only such persons who are nominated in accordance with the procedures set forth in this Section 2.4 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.4. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the chair of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 2.4 and, if any proposed nomination or business is not in compliance with this Section 2.4, to declare that such defective nomination or proposal shall be disregarded. Notwithstanding the foregoing provisions of this Section 2.4, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposal, such nomination or proposed business shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Corporation.

 

(2)         For purposes of this Bylaw, (A) “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or other national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act; and (B) “Stockholder Associated Person” of any stockholder shall mean (i) any person or entity controlling, controlled by or under common control with, directly or indirectly, or acting in concert with, such stockholder, (ii) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder, and (iii) any person or entity controlling, controlled by or under common control with a Stockholder Associated Person as defined in the foregoing clauses (B)(i) or (B)(ii).

 

(3)         Notwithstanding the foregoing provisions of this Section 2.4, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.4. Nothing in this Section 2.4 shall be deemed to affect any rights (A) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (B) of the holders of any series of Preferred Stock to elect directors under specified circumstances.

 

Section 2.5         INSPECTORS OF ELECTIONS. The board of directors by resolution shall appoint one or more inspectors, which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives, to act at the meetings of stockholders and make a written report thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act or is able to act at a meeting of stockholders, the chair of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall have the duties prescribed by law.          

 

ARTICLE III
BOARD OF DIRECTORS

 

Section 3.1         GENERAL POWERS. The business and affairs of the Corporation shall be managed under the direction of the board of directors. In addition to the powers and authorities by these Bylaws expressly conferred upon them, the board of directors may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders.

 

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Section 3.2         NUMBER. Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, the number of directors of the Corporation shall be fixed, and may be increased or decreased from time to time, exclusively by the board of directors; provided, however, that no decrease in the number comprising the entire board made pursuant to this Section 3.2 shall shorten the term of any incumbent director.

 

Section 3.3         SPECIAL MEETINGS. Special meetings of the board of directors may be called by the Chair of the Board, the Chief Executive Officer or the board of directors. The person or persons authorized to call special meetings of the board of directors may fix the place and time of the meetings. Notice of any special meeting shall be given to each director and shall state the time and place for the special meeting.

 

Section 3.4         NOTICE. If notice of a board of directors’ meeting is required to be given, notice of shall be given to each director at his or her business or residence in writing by hand delivery, first-class or overnight mail or courier service, electronic transmission (including, without limitation, via facsimile transmission or electronic mail), or orally by telephone. If mailed by first-class mail, such notice shall be deemed adequately delivered when deposited in the United States mails so addressed, with postage thereon prepaid, no later than the third business day preceding the date of such meeting. If by overnight mail or courier service, such notice shall be deemed adequately delivered when the notice is delivered to the overnight mail or courier service company at least twenty-four hours before such meeting. If by electronic transmission, such notice shall be deemed adequately delivered when the notice is transmitted at least 12 hours before such meeting. If by telephone or by hand delivery, the notice shall be given at least 12 hours prior to the time set for the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice of such meeting, except for amendments to these Bylaws, as provided under Article IX of these Bylaws. A meeting may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in accordance with Article VIII of these Bylaws.

 

Section 3.5         QUORUM. Subject to Section 3.8 of these Bylaws and except as may be otherwise specifically provided by law or the Certificate of Incorporation, a majority of the board of directors then in office shall constitute a quorum for the transaction of business, but if at any meeting of the board of directors there shall be less than a quorum present, a majority of the directors present may adjourn the meeting from time to time without further notice. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, except as may be otherwise specifically provided by law or the Certificate of Incorporation. The directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough directors to leave less than a quorum.

 

Section 3.6         USE OF COMMUNICATIONS EQUIPMENT. Directors may participate in a meeting of the board of directors or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

 

Section 3.7         ACTION BY CONSENT OF THE BOARD OF DIRECTORS. Any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee.

 

Section 3.8         VACANCIES. Subject to applicable law and the rights of the holders of any series of Preferred Stock with respect to such series of Preferred Stock, and unless the board of directors otherwise determines, vacancies resulting from death, resignation, retirement, disqualification, removal from office or other cause, and newly created directorships resulting from any increase in the authorized number of directors, may be filled only by the affirmative vote of a majority of the remaining directors, though less than a quorum of the board of directors, or by the sole remaining director, and each director so chosen shall hold office for a term expiring at the annual meeting of stockholders and until such director’s successor shall have been duly elected and qualified.

 

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Section 3.9         COMMITTEES.

 

The board of directors may designate one or more committees, each of which shall consist of one or more directors. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not constituting a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

 

Any committee shall, to the extent provided in a resolution of the board of directors and subject to the limitations contained in the Delaware General Corporation Law, have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the Corporation. Each committee shall keep such records and report to the board of directors in such manner as the board of directors may from time to time determine. Except as the board of directors may otherwise determine, any committee may make rules for the conduct of its business. Except as provided in the next sentence, and unless otherwise provided in a resolution of the board of directors or in rules adopted by the committee, each committee shall conduct its business as nearly as possible in the same manner as provided in these Bylaws for the board of directors. A majority of the members of a committee shall constitute a quorum, and the act of a majority of the members of a committee present at any meeting at which a quorum is present shall be the act of the committee.

 

The board of directors shall have power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee. The term of office of the members of each committee shall be as fixed from time to time by the board of directors; provided, however, that any committee member who ceases to be a member of the board of directors shall automatically cease to be a committee member.

 

Nothing herein shall be deemed to prevent the board of directors from appointing one or more committees consisting in whole or in part of persons who are not directors of the Corporation; provided, however, that no such committee shall have or may exercise any authority of the board of directors.

 

ARTICLE IV
BOOKS AND RECORDS

 

The board of directors shall cause to be kept a record containing the minutes of the proceedings of the meetings of the Board and of the stockholders, appropriate stock books and registers and such books of records and accounts as may be necessary for the proper conduct of the business of the Corporation. Unless otherwise required by the laws of Delaware, the books and records of the Corporation may be kept at the principal office of the Corporation, or at any other place or places inside or outside the State of Delaware.

 

ARTICLE V
OFFICERS

 

Section 5.1         OFFICERS; ELECTION OR APPOINTMENT. The board of directors shall take such action as may be necessary from time to time to ensure that the Corporation has such officers as are necessary, under Section 6.1 of these Bylaws and the Delaware General Corporation Law as currently in effect or as the same may hereafter be amended, to enable it to sign stock certificates. In addition, the board of directors at any time and from time to time may elect (a) one or more Chair of the Board and/or one or more Vice Chairs of the Board, (b) one or more Chief Executive Officers, one or more Presidents and/or one or more Chief Operating Officers, (c) one or more Vice Presidents, one or more Treasurers and/or one or more Secretaries and/or (d) one or more other officers, in each case if and to the extent the board of directors deems desirable. The board of directors may give any officer such further designations or alternate titles as it considers desirable. In addition, the board of directors at any time and from time to time may authorize the Chair of the Board or the Chief Executive Officer of the Corporation to appoint one or more officers of the kind described in clauses (c) and (d) above. Any number of offices may be held by the same person and directors may hold any office unless the Certificate of Incorporation or these Bylaws otherwise provide.

 

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Section 5.2         TERM OF OFFICE; RESIGNATION; REMOVAL; VACANCIES. Unless otherwise provided in the resolution of the board of directors electing or authorizing the appointment of any officer, each officer shall hold office until his or her successor is elected or appointed and qualified or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the board of directors or to such person or persons as the board of directors may designate. Such resignation shall take effect at the time specified therein or, if not so specified, upon receipt, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. The board of directors may remove any officer with or without cause at any time. The Chair of the Board or the Chief Executive Officer authorized by the board of directors to appoint a person to hold an office of the Corporation may also remove such person from such office with or without cause at any time, unless otherwise provided in the resolution of the Board providing such authorization. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation, but the election or appointment of an officer shall not of itself create contractual rights. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled by the board of directors at any regular or special meeting or by the Chair of the Board or the Chief Executive Officer authorized by the board of directors to appoint a person to hold such office.

 

Section 5.3         POWERS AND DUTIES. The officers of the Corporation shall have such powers and duties in the management of the Corporation as shall be stated in these Bylaws or in a resolution of the board of directors which is not inconsistent with these Bylaws and, to the extent not so stated, as generally pertain to their respective offices, subject to the control of the board of directors. A Secretary or such other officer appointed to do so by the board of directors shall have the duty to record the proceedings of the meetings of the stockholders, the board of directors and any committees in a book to be kept for that purpose.

 

ARTICLE VI
STOCK

 

Section 6.1         STOCK CERTIFICATES. The shares of the Corporation may be either in certificated or in uncertificated form. If shares are issued in uncertificated form, each stockholder shall be entitled, upon written request, to a stock certificate or certificates duly numbered, certifying the number and class of shares in the Corporation owned by the stockholder and otherwise as specified in this Section 6.1. Each certificate for shares of stock shall be in such form as may be prescribed by the board of directors and shall be signed in the name of the Corporation by (a) the Chair of the Board, the Chief Executive Officer, the President or a Vice President, and (b) by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue. Each certificate will include any legends required by law or deemed necessary or advisable by the board of directors.

 

Section 6.2         LOST, STOLEN OR DESTROYED CERTIFICATES. The Corporation may issue a new certificate of stock or uncertificated shares in place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation and/or the board of directors may require the owner of such lost, stolen or destroyed certificate, or his or her legal representatives, to make an affidavit of that fact and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of any such certificate or issuance of any such new certificate or uncertificated shares. Anything herein to the contrary notwithstanding, the board of directors, in its absolute discretion, may refuse to issue any such new certificate or uncertificated shares, except pursuant to legal proceedings under the laws of the State of Delaware.

 

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Section 6.3       TRANSFERS OF STOCK. The shares of the stock of the Corporation shall be transferable on the books of the Corporation by the holder thereof in person or by his or her attorney upon surrender for cancellation of a certificate or certificates for at least the same number of shares, or other evidence of ownership if no certificates shall have been issued, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, and with such proof of the validity and authenticity of the signature as the Corporation or its agents may reasonably require.

 

Section 6.4         REGISTERED STOCKHOLDERS. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or legal claim or claims to or interest in such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware.

 

Section 6.5         REGULATIONS. Except as otherwise provided by law, the board of directors may make such additional rules and regulations, not inconsistent with the Bylaws, as it may deem expedient concerning the issue, transfer and registration of the securities of the Corporation. The board of directors may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars and may require all certificates for shares of capital stock to bear the signature or signatures of any of them.

 

Section 6.6       RECORD DATE. For the purpose of determining stockholders entitled to notice of, or to vote at, any meeting of stockholders or any adjournment thereof, or for the purpose of determining stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitlements to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date. Such date shall not be more than 60 nor less than ten days before the date of any such meeting, nor more than 60 days prior to any other action.

 

ARTICLE VII
DEPOSITARIES AND CHECKS

 

Depositaries of the funds of the Corporation shall be designated by the board of directors; and all checks on such funds shall be signed by such officers or other employees of the Corporation as the board of directors from time to time may designate.

 

ARTICLE VIII
WAIVER OF NOTICE

 

Any notice of a meeting required to be given by law, by the Certificate of Incorporation, or by these Bylaws may be waived by the person entitled thereto, either before or after the time of such meeting stated in such notice. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the stockholders or the board of directors or committee thereof need be specified in any waiver of notice of such meeting. Attendance at any meeting shall constitute waiver of notice except attendance for the express purpose of objecting, at the beginning of the meeting, to the transaction of business because the meeting is not lawfully called or convened.

 

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ARTICLE IX
AMENDMENT

 

In furtherance and not in limitation of the powers conferred by law, the board of directors is expressly authorized to adopt, amend and repeal these Bylaws, subject to the power of the holders of capital stock of the Corporation to adopt, amend or repeal the Bylaws; provided, however, that, with respect to the power of holders of the capital stock to adopt, amend and repeal these Bylaws, notwithstanding any other provision of these Bylaws or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the capital stock of the Corporation required by law, these Bylaws or any preferred stock, the affirmative vote of the holders of at least 66.67% of the voting power of all of the then-outstanding shares entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of these Bylaws.

 

ARTICLE X
INDEMNIFICATION AND INSURANCE

 

Section 10.1         RIGHT TO INDEMNIFICATION. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit, claim or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Corporation, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in Section 10.4 of this Article X, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the board of directors.

 

Section 10.2         ADVANCEMENT OF EXPENSES. The right to indemnification conferred in this Article X shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition., however, that if the Delaware General Corporation Law requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article X or otherwise.

 

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Section 10.3         OBTAINING INDEMNIFICATION. To obtain indemnification under this Article X, the Board of Directors must first determine whether and to what extent a claimant is entitled to indemnification. Claimant, as requested by the Board of Directors, shall submit to the Corporation such documentation and information as is reasonably available to the claimant and is reasonably necessary to determine whether and to what extent the claimant is entitled to indemnification. With respect to evaluating the eligibility of a claimant for indemnification pursuant to the first sentence of this Section 10.3, a determination, if required by applicable law, with respect to the claimant’s entitlement thereto shall be made as follows: (1) if requested by the claimant, by Independent Counsel (as hereinafter defined), or (2) if no request is made by the claimant for a determination by Independent Counsel, (i) by the board of directors by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined), or (ii) if a quorum of the board of directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the board of directors, a copy of which shall be delivered to the claimant, or (iii) if a quorum of Disinterested Directors so directs, by the stockholders of the Corporation. In the event the determination of entitlement to indemnification is to be made by Independent Counsel at the request of the claimant, the Independent Counsel shall be selected by the board of directors unless there shall have occurred within two years prior to the date of the commencement of the action, suit or proceeding for which indemnification is claimed a Change in Control (as defined below), in which case the Independent Counsel shall be selected by the claimant unless the claimant shall request that such selection be made by the board of directors. If it is so determined that the claimant is entitled to indemnification, payment to the claimant shall be made within 30 days after such determination. If a claimant is successful, in whole or in part, in any suit brought against the Corporation to recover the unpaid amount of any claim to indemnification, the claimant shall be entitled to be paid also the expense of prosecuting such claim.

 

Section 10.4         RIGHT OF CLAIMANT TO BRING SUIT. If a claim under Section 10.1 of this Article X is not paid in full by the Corporation within 30 days after eligibility for a claim, pursuant to Section 10.3 of this Article X, has been received or determined by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standard of conduct which makes it permissible under the Delaware General Corporation Law for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its board of directors, Independent Counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its board of directors, Independent Counsel or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

 

Section 10.5.         CORPORATIONS OBLIGATION TO INDEMNIFY. If a determination shall have been made pursuant to Section 10.3 of this Article X that the claimant is entitled to indemnification, the Corporation shall be bound by such determination in any judicial proceeding commenced pursuant to Section 10.4 of this Article X.

 

Section 10.6         PRECLUSION FROM CHALLENGING ARTICLE X. The Corporation shall be precluded from asserting in any judicial proceeding commenced pursuant to Section 10.4 of this Article X that the procedures and presumptions of this Article X are not valid, binding and enforceable and shall stipulate in such proceeding that the Corporation is bound by all the provisions of this Article X.

 

For purposes of this Article X:

 

(a)         “Change in Control” shall be deemed to occur only if a majority of the members of the board of directors shall not be (i) individuals elected as directors of the Corporation for whose election proxies shall have been solicited by the board of directors of the Corporation or (ii) individuals elected or appointed by the board of directors of the Corporation to fill vacancies on the board of directors caused by death or resignation (but not by removal) or to fill newly created directorships.

 

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(b)         “Disinterested Director” means a director of the Corporation who is not and was not a party to the matter in respect of which indemnification is sought by the claimant.

 

(c)         “Independent Counsel” means a law firm, a member of a law firm, or an independent practitioner, that is experienced in matters of corporation law and shall include any person who, under the applicable standards of professional conduct then prevailing, would not have a conflict of interest in representing either the Corporation or the claimant in an action to determine the claimant’s rights under this Article X.

 

Section 10.7         NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article X shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise. No repeal or modification of this Article X shall in any way diminish or adversely affect the rights of any director, officer, employee or agent of the Corporation hereunder in respect of any occurrence or matter arising prior to any such repeal or modification.

 

Section 10.8        INSURANCE. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, limited liability company, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law. To the extent that the Corporation maintains any policy or policies providing such insurance, each such director or officer, and each such agent or employee to which rights to indemnification have been granted as provided in Section 10.9 of this Article X, shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage thereunder for any such director, officer, employee or agent.

 

Section 10.9         OTHER EMPLOYEES AND AGENTS. The Corporation may, to the extent authorized from time to time by the board of directors, grant rights to indemnification, and rights to be paid by the Corporation the expenses incurred in defending any proceeding in advance of its final disposition, to any employee or agent or class of employees or agents of the Corporation (including the heirs, executors, administrators or estate of each such person) to the fullest extent of the provisions of this Article X with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

 

Section 10.10         VALIDITY OF ARTICLE X. If any provision or provisions of this Article X shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article X (including, without limitation, each portion of any paragraph of this Article X containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article X (including, without limitation, each such portion of any paragraph of this Article X containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

ARTICLE XI
LITIGATION COSTS

 

Except to the extent prohibited by the Delaware General Corporation Law, and unless the Board of Directors or one of its committees otherwise approves in accordance with Section 141 of the Delaware General Corporation Law, the Certificate of Incorporation and these Bylaws, in the event that any person or entity (a “Claiming Party”) (a) initiates, asserts, joins, offers substantial assistance to or has a direct financial interest in (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation arising pursuant to any provision of the Delaware General Corporation Law or the Certificate of Incorporation or Bylaws, (iv) any action to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or these Bylaws or (v) any action asserting a claim against the Corporation governed by the internal affairs doctrine (each, a “Covered Proceeding”), and (b) such Claiming Party does not obtain a judgment on the merits that substantially achieves, in substance and amount, the full remedy sought by such Claiming Party, then each such Claiming Party shall be obligated to reimburse the Corporation and any such director, officer or other employee for all fees, costs and expenses of every kind and description (including, but not limited to, all attorneys’ fees and other litigation expenses) that the Corporation or any such director, officer or other employee actually incurs in connection with the Covered Proceeding.

 

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ARTICLE XII
MISCELLANEOUS PROVISIONS

 

Section 12.1.         FISCAL YEAR. The fiscal year of the Corporation shall be as fixed by the board of directors.

 

Section 12.2.         DIVIDENDS. The board of directors may from time to time declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and the Certificate of Incorporation.

 

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Exhibit 10.1

 

CANCER PREVENTION PHARMACEUTICALS, INC.

 

2010 EQUITY INCENTIVE PLAN*

 

 

1.

Purposes of the Plan. The purposes of this Plan are:

 

 

to attract and retain the best available personnel for positions of substantial responsibility,

 

 

to provide additional incentive to Employees, Directors and Consultants, and

 

 

to promote the success of the Company’s business.

 

The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, and Restricted Stock.

 

 

2.

Definitions. As used herein, the following definitions will apply:

 

(a)    “Administrator” means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan.

 

(b)    “Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.

 

(c)    “Award” means, individually or collectively, a grant under the Plan of Options or Restricted Stock.

 

(d)    “Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.

 

(e)    “Board” means the Board of Directors of the Company.

 

(f)    “Change in Control” means the occurrence of any of the following events:

 

(i)    Change in Ownership of the Company. A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company, except that any change in the ownership of the stock of the Company as a result of a private financing of the Company that is approved by the Board will not be considered a Change in Control; or

 

* As amended through June 15, 2022.

 

 

 

(ii)    Change in Effective Control of the Company. If the Company has a class of securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this clause (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or

 

(iii)    Change in Ownership of a Substantial Portion of the Companys Assets. A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

 

For purposes of this Section 2(f), persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

 

Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.

 

Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

 

(g)    “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor or amended section of the Code.

 

(h)    “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board, or by the compensation committee of the Board, in accordance with Section 4 hereof.

 

(i)    “Common Stock” means the common stock of the Company.

 

(j)    “Company” means Cancer Prevention Pharmaceuticals, Inc., a Delaware corporation, or any successor thereto.

 

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(k)    “Consultant” means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity including a member of an advisory committee.

 

(l)    “Director” means a member of the Board.

 

(m)   “Disability” means total and permanent disability as defined in Code Section 22(e)(3), provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.

 

(n)    “Employee” means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.

 

(o)    “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(p)    “Exchange Program” means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for Awards of the same type (which may have higher or lower exercise prices and different terms), Awards of a different type, and/or cash, (ii) Participants would have the opportunity to transfer any outstanding Awards to a financial institution or other person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding Award is reduced or increased. The Administrator will determine the terms and conditions of any Exchange Program in its sole discretion.

 

(q)    “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

 

(i)    If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

 

(ii)    If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids and asks were reported on that date, as applicable, on the last trading date such bids and asks were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

 

(iii)    In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator.

 

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(r)    “Incentive Stock Option” means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Code Section 422 and the regulations promulgated thereunder.

 

(s)    “Nonstatutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.

 

(t)    “Option” means a stock option granted pursuant to the Plan.

 

(u)    “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Code Section 424(e).

 

(v)    “Participant” means the holder of an outstanding Award.

 

(w)    “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.

 

(x)    “Plan” means this 2010 Equity Incentive Plan.

 

(y)    “Restricted Stock” means Shares issued pursuant to an Award of Restricted Stock under Section 8 of the Plan, or issued pursuant to the early exercise of an Option.

 

(z)    “Service Provider” means an Employee, Director or Consultant.

 

(aa)    “Share” means a share of the Common Stock, as adjusted in accordance with Section 9 of the Plan.

 

(bb)    “Subsidiary” means a “subsidiary corporation,” whether now or hereafter exist‐ing, as defined in Code Section 424(f).

 

 

3.

Stock Subject to the Plan.

 

(a)    Stock Subject to the Plan. Subject to the provisions of Section 11 of the Plan, the maximum aggregate number of Shares that may be subject to Awards and sold under the Plan is 5,500,000 Shares. The Shares may be authorized but unissued, or reacquired Common Stock.

 

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(b)    Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted Stock, is forfeited to or repurchased by the Company due to the failure to vest, the unpurchased Shares (or for Awards other than Options the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of Restricted Stock are repurchased by the Company or are forfeited to the Company due to the failure to vest, such Shares will become available for future grant under the Plan. Shares used to pay the exercise price of an Award or to satisfy the tax withholding obligations related to an Award will become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding the foregoing and, subject to adjustment as provided in Section 11, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under Code Section 422 and the Treasury Regulations promulgated thereunder, any Shares that become available for issuance under the Plan pursuant to Section 3(b).

 

(c)    Share Reserve. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of the Plan.

 

 

4.

Administration of the Plan.

 

(a)    Procedure.

 

(i)    Multiple Administrative Bodies. Different Committees with respect to different groups of Service Providers may administer the Plan.

 

(ii)    Other Administration. Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee, which Committee will be constituted to satisfy Applicable Laws.

 

(b)    Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:

 

(i)    to determine the Fair Market Value;

 

(ii)    to select the Service Providers to whom Awards may be granted hereunder;

 

(iii)    to determine the number of Shares to be covered by each Award granted hereunder;

 

(iv)    to approve forms of Award Agreements for use under the Plan;

 

(v)    to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine;

 

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(vi)    to institute and determine the terms and conditions of an Exchange Program;

 

(vii)    to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

 

(viii)    to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;

 

(ix)    to modify or amend each Award (subject to Section 16(c) of the Plan), including but not limited to the discretionary authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to Section 6(d));

 

(x)    to allow Participants to satisfy withholding tax obligations in a manner prescribed in Section 12;

 

(xi)    to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;

 

(xii)    to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that otherwise would be due to such Participant under an Award; and

 

(xiii)    to make all other determinations deemed necessary or advisable for administering the Plan.

 

(c)    Effect of Administrators Decision. The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.

 

 

5.

Eligibility. Nonstatutory Stock Options and Restricted Stock may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.

 

 

6.

Stock Options.

 

(a)    Grant of Options. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Options in such amounts as the Administrator, in its sole discretion, will determine.

 

(b)    Option Agreement. Each Award of an Option will be evidenced by an Award Agreement that will specify the exercise price, the term of the Option, the number of Shares subject to the Option, the exercise restrictions, if any, applicable to the Option, and such other terms and conditions as the Administrator, in its sole discretion, will determine.

 

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(c)    Limitations. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. Notwithstanding such designation, however, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of this Section 6(c), Incentive Stock Options will be taken into account in the order in which they were granted, the Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted, and calculation will be performed in accordance with Code Section 422 and Treasury Regulations promulgated thereunder.

 

(d)    Term of Option. The term of each Option will be stated in the Award Agreement; provided, however, that the term will be no more than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.

 

(e)    Option Exercise Price and Consideration.

 

(i)    Exercise Price. The per Share exercise price for the Shares to be issued pursuant to the exercise of an Option will be determined by the Administrator, but will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. In addition, in the case of an Incentive Stock Option granted to an Employee who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant. Notwithstanding the foregoing provisions of this Section 6(e)(i), Options may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Code Section 424(a).

 

(ii)    Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.

 

(iii)    Form of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option will be exercised and provided further that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (5) consideration received by the Company under cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with the Plan; (6) by net exercise, (7) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws, or (8) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator will consider if acceptance of such consideration may be reasonably expected to benefit the Company.

 

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(f)    Exercise of Option.

 

(i)    Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.

 

An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such form as the Administrator may specify from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with applicable tax withholding). Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 11 of the Plan.

 

Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

 

(ii)    Termination of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the Participant’s termination as the result of the Participant’s death or Disability, the Participant may exercise his or her Option within thirty (30) days of termination, or such longer period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the extent that the Option is vested on the date of termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

 

(iii)    Disability of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within six (6) months of termination, or such longer period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the extent the Option is vested on the date of termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

 

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(iv)    Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised within six (6) months following the Participant’s death, or within such longer period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the extent that the Option is vested on the date of death, by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to the Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution. Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

 

 

7.

Restricted Stock.

 

(a)    Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.

 

(b)    Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed.

 

(c)    Transferability. Except as provided in this Section 8 or as the Administrator determines, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

 

(d)    Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

 

(e)    Removal of Restrictions. Except as otherwise provided in this Section 8, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.

 

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(f)    Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.

 

(g)    Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the Administrator provides otherwise. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.

 

(h)    Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan.

 

8.         Compliance With Code Section 409A. Awards will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Code Section 409A, except as otherwise determined in the sole discretion of the Administrator. The Plan and each Award Agreement under the Plan is intended to meet the requirements of Code Section 409A and will be construed and interpreted in accordance with such intent, except as otherwise determined in the sole discretion of the Administrator. To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Code Section 409A the Award will be granted, paid, settled or deferred in a manner that will meet the requirements of Code Section 409A, such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Code Section 409A.

 

9.         Leaves of Absence/Transfer Between Locations. Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of absence. A Participant will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then six (6) months following the first (1st) day of such leave, any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.

 

10.          Limited Transferability of Awards.

 

(a)    Unless determined otherwise by the Administrator, Awards may not be sold, pledged, assigned, hypothecated, or otherwise transferred in any manner other than by will or by the laws of descent and distribution, and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award may only be transferred (i) by will, (ii) by the laws of descent and distribution, or (iii) as permitted by Rule 701 of the Securities Act of 1933, as amended (the “Securities Act”).

 

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(b)    Further, until the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, or after the Administrator determines that it is, will, or may no longer be relying upon the exemption from registration under the Exchange Act as set forth in Rule 12h-1(f) promulgated under the Exchange Act, an Option, or prior to exercise, the Shares subject to the Option, may not be pledged, hypothecated or otherwise transferred or disposed of, in any manner, including by entering into any short position, any “put equivalent position” or any “call equivalent position” (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act, respectively), other than to (i) persons who are “family members” (as defined in Rule 701(c)(3) of the Securities Act) through gifts or domestic relations orders, or (ii) to an executor or guardian of the Participant upon the death or disability of the Participant. Notwithstanding the foregoing sentence, the Administrator, in its sole discretion, may determine to permit transfers to the Company or in connection with a Change in Control or other acquisition transactions involving the Company to the extent permitted by Rule 12h-1(f).

 

11.          Adjustments; Dissolution or Liquidation; Merger or Change in Control.

 

(a)    Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award.

 

(b)    Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.

 

(c)    Merger or Change in Control. In the event of a merger or Change in Control, each outstanding Award will be treated as the Administrator determines (subject to the provisions of the proceeding paragraph) without a Participant’s consent, including, without limitation, that (i) Awards will be assumed, or substantially equivalent Awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices; (ii) upon written notice to a Participant, that the Participant’s Awards will terminate upon or immediately prior to the consummation of such merger or Change in Control; (iii) outstanding Awards will vest and become exercisable, realizable, or payable, or restrictions applicable to an Award will lapse, in whole or in part prior to or upon consummation of such merger or Change in Control, and, to the extent the Administrator determines, terminate upon or immediately prior to the effectiveness of such merger or Change in Control; (iv) (A) the termination of an Award in exchange for an amount of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights as of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment), or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion; or (v) any combination of the foregoing. In taking any of the actions permitted under this subsection 11(c), the Administrator will not be obligated to treat all Awards, all Awards held by a Participant, or all Awards of the same type, similarly.

 

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In the event that the successor corporation does not assume or substitute for the Award (or portion thereof), the Participant will fully vest in and have the right to exercise all of his or her outstanding Options, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions will lapse, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met. In addition, if an Option is not assumed or substituted in the event of a merger or Change in Control, the Administrator will notify the Participant in writing or electronically that the Option will be exercisable for a period of time determined by the Administrator in its sole discretion, and the Option will terminate upon the expiration of such period.

 

For the purposes of this subsection 11(c), an Award will be considered assumed if, following the merger or Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option, for each Share subject to such Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or Change in Control.

 

Notwithstanding anything in this Section 11(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent; provided, however, a modification to such performance goals only to reflect the successor corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.

 

Notwithstanding anything in this Section 11(c) to the contrary, if a payment under an Award Agreement is subject to Code Section 409A and if the change in control definition contained in the Award Agreement does not comply with the definition of “change of control” for purposes of a distribution under Code Section 409A, then any payment of an amount that is otherwise accelerated under this Section will be delayed until the earliest time that such payment would be permissible under Code Section 409A without triggering any penalties applicable under Code Section 409A.

 

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12.          Tax Withholding.

 

(a)    Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof).

 

(b)    Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum statutory amount required to be withheld, (iii) delivering to the Company already-owned Shares having a Fair Market Value equal to the statutory amount required to be withheld, provided the delivery of such Shares will not result in any adverse accounting consequences, as the Administrator determines in its sole discretion, or (iv) selling a sufficient number of Shares otherwise deliverable to the Participant through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.

 

13.          No Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor will they interfere in any way with the Participant’s right or the Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.

 

14.          Date of Grant. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.

 

15.          Term of Plan. Subject to Section 19 of the Plan, the Plan will become effective upon its adoption by the Board. Unless sooner terminated under Section 16, the Plan will continue in effect until October 31, 2030.

 

16.          Amendment and Termination of the Plan.

 

(a)    Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.

 

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(b)    Stockholder Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

 

(c)    Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

 

17.          Conditions Upon Issuance of Shares.

 

(a)    Legal Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.

 

(b)    Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

 

18.         Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not have been obtained.

 

19.          Stockholder Approval. The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.

 

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Exhibit 10.2

 

PANBELA THERAPEUTICS, INC.

 

STOCK OPTION ASSUMPTION NOTICE

 

As you know, on June 15, 2022 (the “Closing Date”) Panbela Therapeutics, Inc. (“Panbela”) acquired Cancer Prevention Pharmaceuticals, Inc. (“CPP”) (the “Merger”), pursuant to the Agreement and Plan of Merger by and among Panbela Therapeutics, Inc., Cancer Prevention Pharmaceuticals, Inc, Canary Merger Holdings, Inc. (“HoldCo”), Canary Merger Subsidiary I, Inc., and Canary Merger Subsidiary II, Inc., dated as of February 21, 2022 (the “Merger Agreement”). At the Closing Date, you held one or more outstanding options, vested or unvested, to purchase the common stock of CPP granted to you under the Cancer Prevention Pharmaceuticals, Inc. 2010 Equity Incentive Plan (the “Plan”). Pursuant to the Merger Agreement, on the Closing Date, HoldCo assumed all obligations of CPP under the outstanding option(s), whether or not then vested or exercisable, issued under the Plan and held by optionees who were service providers of CPP immediately prior to the Closing Date. This Stock Option Assumption Notice (the “Notice”) evidences the terms of HoldCo’s assumption of your outstanding option(s) to purchase’s common stock granted to you under the Plan (the “CPP Option(s)”), and documented by a stock option agreement(s), including any amendment(s) thereof, entered into by and between you and CPP (collectively, the “Option Agreement(s)”), including the necessary adjustments for assumption of the CPP Option(s) that are required by the Merger.

 

The table below summarizes your CPP Option(s) immediately before and after the Merger:

 

Grant Details  
   
Optionee Name [Optionee Name]
   
Grant Date  [Grant Date]
   
Type of Option    [ISO/NSO]
   
Number of HoldCo Option Shares  [Shares Granted]
   
Exercise Price Per HoldCo Share [$    .    ]
   
Original Number of CPP Option Shares [Pre-Merger Shares]
   
Original Exercise Price Per CPP Share [Pre-Merger Exercise Price]
   
Expiration Date [Expiration Date]
   
Vesting Schedule Post-Merger: 100% Vested

 

This Option shall be exercisable for thirty (30) days after Participant ceases to be a Service Provider, unless such termination is due to Participant’s death or Disability, in which case this Option shall be exercisable for six (6) months after Participant ceases to be a Service Provider. Notwithstanding the foregoing sentence, in no event may this Option be exercised after the Term/Expiration Date as provided above and this Option may be subject to earlier termination as provided in the Plan.

 

1

 

Pursuant to the Merger Agreement and the Plan, your outstanding CPP Option(s) was assumed by HoldCo as of the Closing Date and converted into an equivalent option to acquire that number of whole shares of HoldCo common stock (“HoldCo Option(s)”) equal to the product, determined by multiplying (i) the Option Exchange Ratio (as defined in the Merger Agreement and specified below) by (ii) the number of shares of common stock that were issuable upon exercise of your outstanding CPP Option(s) immediately prior to the Closing Date, and rounding the resulting product down to the next whole number of shares of HoldCo common stock. The exercise price per share of your HoldCo Option(s) was determined by (i) dividing the exercise price per share of common stock at which your outstanding CPP Option(s) was exercisable immediately prior to the Closing Date by (ii) the Option Exchange Ratio, and rounding the resulting quotient up to the next whole cent. These post-Merger adjustments are based on an Option Exchange Ratio of 0.8886, as determined in accordance with the terms of the Merger Agreement, and are intended to: (i) assure that the total spread of your HoldCo Option(s) (i.e., the difference between the aggregate fair market value and the aggregate exercise price) does not exceed the total spread that existed immediately prior to the Merger; and (ii) to preserve, on a per share basis, the ratio of exercise price to fair market value that existed immediately prior to the Merger.

 

Unless otherwise defined herein, the terms defined in the Plan and Option Agreements shall have the same defined meanings in this Notice, except that all references to the Company shall be replaced with HoldCo.

 

The terms and conditions of the original Option Agreement(s) will continue to apply to your HoldCo Option(s), except (1) Your HoldCo Option(s) are fully vested, (2) the HoldCo Option(s) will be exercisable for shares of HoldCo common stock as described above, (3) the exercise price applicable to the HoldCo Option(s) will be determined as described above. Upon termination of your service with HoldCo or any present or future HoldCo subsidiary, you will have the applicable limited post-termination exercise period specified in your Option Agreement(s) for your HoldCo Option(s) to the extent outstanding at the time of termination after which time your HoldCo Option(s) will expire and NOT be exercisable for HoldCo common stock.

 

To exercise your HoldCo Option(s), you must notify HoldCo by completing a “Notice of Exercise of Stock Option” in a form approved by HoldCo and filing it with the Human Resources Department of HoldCo. Any notice of exercise must specify how many shares of HoldCo common stock you wish to purchase and how such shares should be registered. The notice of exercise will be effective when it is received by HoldCo.

 

Nothing in this Notice or the Option Agreement(s) interferes in any way with your right and HoldCo or any present or future HoldCo subsidiary’s right, which rights are expressly reserved, to terminate your service at any time for any reason. Future options, if any, you may receive from HoldCo will be governed by the terms of the HoldCo stock option plan under which such options are granted, and such terms may be different from the terms of your HoldCo Option(s), including, but not limited to, the time period in which you have to exercise vested options after your termination of service.

 

 

2

 

Exhibit 10.3

 

FORM OF REPLACEMENT WARRANT

 

This Warrant Replacement Notice (this “Replacement Notice”) is issued by Cancer Prevention Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and Panbela Therapeutics, Inc., a Delaware corporation formerly known as Canary Merger Holdings, Inc. (“HoldCo”).Capitalized terms used, but not defined herein, have the meanings ascribed to them in the Agreement and Plan of Merger dated as of February 21, 2022 (the “Merger Agreement”) by and among the Company, Panbela Therapeutics, Inc., (“Parent”), HoldCo, Canary Merger Subsidiary I, Inc., Canary Merger Subsidiary II, Inc., (“Merger Sub II”), and Fortis Advisors, LLC, in its capacity as Stockholder Representative.

 

WHEREAS, the Company and [●] or its registered assigns (the “Holder”) are parties to that certain Warrant to Purchase Common Stock of Cancer Prevention Pharmaceuticals, Inc., dated as of [●], (the “Existing Warrant”; capitalized terms used herein but not otherwise defined in this Replacement Notice shall have the meanings ascribed to such terms in the Existing Warrant);

 

WHEREAS, pursuant to the Existing Warrant, the Company issued [●]warrants to the Holder to purchase shares of the Company’s common stock, par value $0.001 per share (“Company Common Stock”), at a purchase price of $5.00 per share;

 

WHEREAS, the Merger Agreement provides, among other things, that Merger Sub II will be merged with and into the Company and Merger Sub II shall cease to exist, and the Company shall continue as the surviving corporation as a subsidiary of Holdco; and that each warrant to acquire shares of Company Common Stock (each, a “Company Warrant”) that is outstanding immediately prior to the consummation of the merger shall be, without any action on the part of the holder thereof be assumed by HoldCo and shall be converted into a warrant to purchase shares of common stock of HoldCo (“HoldCo Common Stock”);

 

WHEREAS, the Merger Agreement also provides that warrant as so assumed and converted shall continue to have, and shall be subject to, the same terms and conditions as applied to the warrant immediately prior to the consummation of the merger, and each assumed and converted warrant shall be a warrant to acquire that number of whole shares of HoldCo Common Stock (rounded down to the nearest whole share) equal to the product of: (i) the number of shares of Company Common Stock subject to each Existing Warrant; and (ii) the Exchange Ratio (as defined in the Merger Agreement), at an exercise price per share of HoldCo Common Stock (rounded up to the nearest whole cent) equal to the quotient obtained by dividing (A) the exercise price per share of Company Common Stock of such Existing Warrant by (B) the Exchange Ratio; and

 

WHEREAS, Section 5(a) of the Existing Warrant provides that the Company and its successor may make appropriate adjustments to the Existing Warrant in the event of a merger involving the Company.

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the Existing Warrant is amended and replaced with the following Warrant to Purchase Common Stock of HoldCo, effective as of the date of the consummation of the Merger.

 

1

 

 

WARRANT TO PURCHASE COMMON STOCK

 

OF

 

PANBELA THERAPEUTICS, INC.

 

No. []  Amended as of June 15, 2022
  Replaces warrant dated as of [ORIGINAL ISSUE DATE]
  Void after [EXPIRATION DATE]

       

THIS CERTIFIES THAT, for value received [●] or its registered assigns (the “Holder) is entitled, subject to the provisions and upon the terms and conditions set forth herein, at any time on or after, February 21, 2022 and prior to or at 5:00 p.m. (New York time) on [EXPIRATION DATE] to purchase from Panbela Therapeutics, Inc., a Delaware corporation (the “Company) up to [●] shares of common stock, par value $0.001 per share of the Company, as subject to adjustment hereunder (the “Shares”). The purchase price shall be equal to $[●] per share, subject to further adjustment. The term “Warrant as used herein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein. This Warrant replaces a warrant originally issued on [ORIGINAL ISSUE DATE] in connection with the transactions described in an Exchange Agreement, dated as of the same date (as amended, modified or supplemented), by and among the Cancer Prevention Pharmaceuticals, Inc. and the Holder (the “Exchange Agreement) pursuant to which the Holder exchanged a Convertible Promissory Note for securities, including this Warrant.

 

1.            Exercise of the Warrant.

 

(a)    Exercise. The purchase rights represented by this Warrant may be exercised at the election of the Holder, in whole or in part, by:

 

(i)    the tender to the Company at its principal office (or such other office or agency as the Company may designate) of a notice of exercise in the form of Exhibit A (the “Notice of Exercise), duly completed and executed by or on behalf of the Holder, together with the surrender of this Warrant; and

 

(ii)    the payment to the Company of an amount equal to (x) the Exercise Price multiplied by (y) the number of Shares being purchased, by wire transfer or certified, cashier's or other check acceptable to the Company and payable to the order of the Company.

 

(b)    Stock Certificates. The rights under this Warrant shall be deemed to have been exercised and the Shares issuable upon such exercise shall be deemed to have been issued immediately prior to the close of business on the date this Warrant is exercised in accordance with its terms, and the person entitled to receive the Shares issuable upon such exercise shall be treated for all purposes as the holder of record of such Shares as of the close of business on such date. As promptly as reasonably practicable on or after such date, the Company shall instruct its transfer agent or depository to enter in its book entry settlement system the names of the respective holders thereof for that number of shares issuable upon such exercise. If the transfer agent or depository for the Company ceases to make its book-entry settlement system available for the Shares the Company shall instruct the transfer agent or depository to issue physical certificates for the Shares.

 

(c)    No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of the rights under this Warrant. In lieu of such fractional share to which the Holder would otherwise be entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction.

 

2

 

(d)    Reservation of Common Stock. The Company agrees during the term the rights under this Warrant are exercisable to take all reasonable action to reserve and keep available from its authorized and unissued shares of Common Stock for the purpose of effecting the exercise of this Warrant such number of shares of Common Stock as shall from time to time be sufficient to effect the exercise of the rights under this Warrant; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient for purposes of the exercise of this Warrant, without limitation of such other remedies as may be available to the Holder, the Company will use all reasonable efforts to take such corporate action as may, in the opinion of counsel, be necessary to increase its authorized and unissued shares of Common Stock to a number of shares as shall be sufficient for such purposes. The Company represents and warrants that all shares that may be issued upon the exercise of this Warrant will, when issued in accordance with the terms hereof, be validly issued, fully paid and nonassessable.

 

2.            Replacement of the Warrant. Subject to the receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at the expense of the Holder shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.

 

3.            Transfer of the Warrant.

 

(a)    Warrant Register. The Company shall maintain a register (the “Warrant Register) containing the name and address of the Holder or Holders. Until this Warrant is transferred on the Warrant Register in accordance herewith, the Company may treat the Holder as shown on the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary. Any Holder of this Warrant (or of any portion of this Warrant) may change its address as shown on the Warrant Register by written notice to the Company requesting a change.

 

(b)    Warrant Agent. The Company may appoint an agent for the purpose of maintaining the Warrant Register referred to in Section 3(a), issuing the Shares or other securities then issuable upon the exercise of the rights under this Warrant, exchanging this Warrant, replacing this Warrant or conducting related activities.

 

(c)    Transferability of the Warrant Subject to the provisions of this Warrant with respect to compliance with the Securities Act of 1933, as amended (the “Securities Act”), and limitations on assignments and transfers, including without limitation compliance with the restrictions on transfer set forth in Section 4, title to this Warrant may be transferred by endorsement (by the transferor and the transferee executing the assignment form attached as Exhibit B (the “Assignment Form)) and delivery in the same manner as a negotiable instrument transferable by endorsement and delivery.

 

(d)    Exchange of the Warrant upon a Transfer. On surrender of this Warrant (and a properly endorsed Assignment Form) for exchange, subject to the provisions of this Warrant with respect to compliance with the Securities Act and limitations on assignments and transfers, the Company shall issue to or on the order of the Holder a new warrant or warrants of like tenor, in the name of the Holder or as the Holder (on payment by the Holder of any applicable transfer taxes) may direct, for the number of shares issuable upon exercise hereof, and the Company shall register any such transfer upon the Warrant Register. This Warrant (and the securities issuable upon exercise of the rights under this Warrant) must be surrendered to the Company or its warrant or transfer agent, as applicable, as a condition precedent to the sale, pledge, hypothecation or other transfer of any interest in any of the securities represented hereby.

 

3

 

(e)    Taxes. In no event shall the Company be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of any certificate in a name other than that of the Holder, and the Company shall not be required to issue or deliver any such certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid or is not payable.

 

4.            Restrictions on Transfer of the Warrant and Shares; Compliance with Securities Laws. By acceptance of this Warrant, the Holder agrees to comply with the following:

 

(a)    Restrictions on Transfers. Any transfer of this Warrant or the Shares must be in compliance with all applicable federal and state securities laws. The Holder agrees not to make any sale, assignment, transfer, pledge or other disposition of all or any portion of the Shares, or any beneficial interest therein, unless and until the transferee thereof has agreed in writing for the benefit of the Company to take and hold such Shares subject to, and to be bound by, the terms and conditions set forth in this Warrant to the same extent as if the transferee were the original Holder hereunder, and

 

(i)    there is then in effect a registration statement under the Securities Act disposition and such disposition is made in accordance with such registration statement or

 

(ii)     (A) such Holder shall have given prior written notice to the Company of such Holder's intention to make such disposition and shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition, and (C) if requested by the Company, such Holder shall have furnished the Company, at the Holder's expense, with an opinion of counsel, reasonably satisfactory to the Company, to the effect that such disposition will not require registration of such Shares under the Securities Act; or

 

(iii)    a “no action” letter from the Securities and Exchange Commission to the effect that the transfer of such Shares without registration will not result in a recommendation by the staff of the Shares and Exchange Commission that action be taken with respect thereto, whereupon such Holder shall be entitled to transfer such Shares in accordance with the terms of the notice delivered by the Holder to the Company.

 

(b)    Permitted Transfers. Permitted transfers include (i) a transfer not involving a change in beneficial ownership, or (ii) transactions involving the distribution without consideration of Shares by any Holder to (x) a parent, subsidiary or other affiliate of a Holder that is a corporation, (y) any of the Holder's partners, members or other equity owners, or retired partners or members, or to the estate of any of its partners, members or other equity owners or retired partners or members, or (z) a venture capital fund that is controlled by or under common control with one or more general partners or managing members of, or shares the same management company with, the Holder; provided, in each case, that the Holder shall give written notice to the Company of the Holder's intention to effect such disposition and shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition.

 

(c)    Instructions Regarding Transfer Restrictions. The Holder consents to the Company making a notation on its records and giving instructions to any transfer agent in order to implement the restrictions on transfer established in this Section 4.

 

(d)    Removal of Legend. Any legend referring to federal and state securities laws identified stamped on a certificate evidencing the Shares (and the common stock issuable upon conversion thereof) and the stock transfer instructions and record notations with respect to such securities shall be removed and the Company shall issue a certificate without such legend to the holder of such securities if (i) such securities are registered under the Securities Act, or (ii) such holder provides the Company with an opinion of counsel reasonably acceptable to the Company to the effect that a sale or transfer of such securities may be made without registration or qualification.

 

4

 

5.            Adjustments. Subject to the expiration of this Warrant, the number and kind of Shares purchasable hereunder and the Exercise Price therefor are subject to adjustment from time to time, as follows:

 

(a)    Merger or Reorganization. If at any time there shall be any reorganization, recapitalization, merger or consolidation (a “Reorganization) involving the Company in which Shares are converted into or exchanged for securities, cash or other property, then, as a part of such Reorganization, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, the kind and amount of securities, cash or other property of the successor corporation resulting from such Reorganization, equivalent in value to that which a holder of the Shares deliverable upon exercise of this Warrant would have been entitled in such Reorganization if the right to purchase the Shares hereunder had been exercised immediately prior to such Reorganization. In any such case, appropriate adjustment (as determined in good faith by the Board of Directors of the successor corporation) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after such Reorganization to the end that the provisions of this Warrant shall be applicable after the event, as near as reasonably may be, in relation to any shares or other securities deliverable after that event upon the exercise of this Warrant.

 

(b)    Reclassification of Shares. If the Shares issuable upon exercise of this Warrant are changed into the same or a different number of securities of any other class or classes by reclassification, capital reorganization, conversion of all outstanding shares of the relevant class or series or otherwise (other than as otherwise provided for herein) (a “Reclassification), then, in any such event, in lieu of the number of Shares which the Holder would otherwise have been entitled to receive, the Holder shall have the right thereafter to exercise this Warrant for a number of shares of such other class or classes of stock that a holder of the number of securities deliverable upon exercise of this Warrant immediately before that change would have been entitled to receive in such Reclassification, all subject to further adjustment as provided herein with respect to such other shares.

 

(c)    Subdivisions and Combinations. In the event that the outstanding shares of Common Stock are subdivided (by stock split, by payment of a stock dividend or otherwise) into a greater number of shares of such securities, the number of Shares issuable upon exercise of the rights under this Warrant immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately increased, and the Exercise Price shall be proportionately decreased, and in the event that the outstanding shares of Common Stock are combined (by reclassification or otherwise) into a lesser number of shares of such securities, the number of Shares issuable upon exercise of the rights under this Warrant immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately decreased, and the Exercise Price shall be proportionately increased.

 

(d)    Notice of Adjustments. Upon any adjustment in accordance with this Section 5, the Company shall give notice thereof to the Holder, which notice shall state the event giving rise to the adjustment, the Exercise Price as adjusted and the number of securities or other property purchasable upon the exercise of the rights under this Warrant, setting forth in reasonable detail the method of calculation of each. The Company shall, upon the written request of any Holder, furnish or cause to be furnished to such Holder a certificate setting forth (i) such adjustments, (ii) the Exercise Price at the time in effect and (iii) the number of securities and the amount, if any, of other property that at the time would be received upon exercise of this Warrant.

 

5

 

6.            No Rights as a Stockholder. Nothing contained herein shall entitle the Holder to any rights as a stockholder of the Company or to be deemed the holder of any securities that may at any time be issuable on the exercise of the rights hereunder for any purpose nor shall anything contained herein be construed to confer upon the Holder, as such, any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to no par value, consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or any other rights of a stockholder of the Company until the rights under the Warrant shall have been exercised and the Shares purchasable upon exercise of the rights hereunder shall have become deliverable as provided herein.

 

7.            Miscellaneous.

 

(a)    Amendments. Except as expressly provided herein, neither this Warrant nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument referencing this Warrant and signed by the Company and the Holder.

 

(b)    Waivers. No waiver of any single breach or default shall be deemed a waiver of any other breach or default theretofore or thereafter occurring.

 

(c)    Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail (if to the Holder) or otherwise delivered by hand, messenger or courier service addressed:

 

(i)    if to the Holder, to the Holder at the Holder's address, facsimile number or electronic mail address as shown in the Company's records, as may be updated in accordance with the provisions hereof, or until any such Holder so furnishes an address, facsimile number or electronic mail address to the Company, then to and at the address, facsimile number or electronic mail address of the last holder of this Warrant for which the Company has contact information in its records; or

 

(ii)    if to the Company, to the attention of the President or Chief Financial Officer of the Company at the Company's address as shown on the signature page hereto, or at such other address as the Company shall have furnished to the Holder.

 

Each such notice or other communication shall for all purposes of this Warrant be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered, or (ii) if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent by facsimile, upon confirmation of facsimile transfer or, if sent by electronic mail, upon confirmation of delivery when directed to the relevant electronic mail address. In the event of any conflict between the Company's books and records and this Warrant or any notice delivered hereunder, the Company's books and records will control absent fraud or error.

 

(d)    Governing Law. This Warrant and all actions arising out of or in connection with this Warrant shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law provisions of the State of Delaware, or of any other state.

 

(e)    Jurisdiction and Venue. Each of the Holder and the Company irrevocably consents to the exclusive jurisdiction and venue of any court within Kent County in the State of Delaware in connection with any matter based upon or arising out of this Warrant or the matters contemplated herein, and agrees that process may be served upon them in any manner authorized by the laws of the State of Delaware for such persons.

 

6

 

(f)    Titles and Subtitles. The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant. All references in this Warrant to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

 

(g)    Severability. If any provision of this Warrant becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Warrant, and such illegal, unenforceable or void provision shall be replaced with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, unenforceable or void provision. The balance of this Warrant shall be enforceable in accordance with its terms.

 

(h)    Waiver of Jury Trial EACH OF THE HOLDER AND THE COMPANY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS WARRANT.

 

(i)    Rights and Obligations Survive Exercise of the Warrant. Except as otherwise provided herein, the rights and obligations of the Company and the Holder under this Warrant shall survive exercise of this Warrant.

 

(j)    Entire Agreement. Except as expressly set forth herein, this Warrant (including the exhibits attached hereto) constitutes the entire agreement and understanding of the Company and the Holder with respect to the subject matter hereof and supersede all prior agreements and understandings relating to the subject matter hereof.

 

(signature page follows)

 

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The Company signs this Warrant as of the date stated on the first page.

 

PANBELA THERAPEUTICS, INC.

 

By                                                                        
Name:
Title:

 

 

 

8
 

Exhibit 10.4

 

CONVERTIBLE PROMISSORY NOTE

 

THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR THE SECURITIES LAWS OF ANY OTHER STATE OR JURISDICTION. THEY MAY NOT BE PURCHASED WITH A VIEW FOR DISTRIBUTION OR RESALE, AND MAY ONLY BE OFFERED, SOLD, MORTGAGED, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH EITHER AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITY UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES ACT, OR AN OPINION OF COUNSEL FOR THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR THE LAWS OF ANY OTHER JURISDICTION.

 

CANCER PREVENTION PHARMACEUTICALS, INC.

 

Principal Amount: $5,000,000 Issuance Date: September 6, 2017

         

 

FOR VALUE RECEIVED, Cancer Prevention Pharmaceuticals, Inc., a Delaware corporation (the “Company”), promises to pay to Sucampo AG, a Swiss corporation, or its registered assigns (“Lender”), the principal sum of Five Million Dollars ($5,000,000), or such lesser amount as shall equal the outstanding principal amount hereof (the “Principal”), and to pay simple interest on any outstanding Principal from the date set forth above as the Issuance Date (the “Issuance Date”) of this Convertible Promissory Note (the “Note”) until the same becomes due and payable whether on the Maturity Date or upon acceleration, prepayment or otherwise at a rate equal to 5.0% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. All unpaid Principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable on the earlier of (i) September 6, 2020 or September 6, 2021, if the proviso set forth under Section 2 is applicable (the “Maturity Date”), (ii) when, upon the occurrence and during the continuance of an Event of Default, such amounts are declared due and payable by Lender or made automatically due and payable, in each case, in accordance with the terms hereof, or (iii) upon a Sale in the event that the Lender has not elected to convert this Note in accordance with Section 2(b) below.

 

This Note is issued pursuant to that certain Securities Purchase Agreement dated as of January 9, 2016 (the “Purchase Agreement”) by and between the Company and the Lender. Any capitalized term not otherwise defined herein shall have the meaning assigned to it in the Purchase Agreement.

 

The following is a statement of the rights of Lender and the conditions to which this Note is subject, and to which Lender, by the acceptance of this Note, agrees:

 

 

1.

Form and Application of Payments; Equal Rank.

 

(a)    Unless earlier converted into Common Stock as provided in this Note, all payments of Principal and interest under the Note shall be in lawful money of the United States of America. All payments hereunder shall be applied first to any unpaid and accrued interest on and second to the repayment of the unpaid Principal balance of the Note.

 

(b)    This Note shall rank equally and ratably without priority over any other note issued by the Company.

 

(c)    This Note may be prepaid without the written consent of the Lender as described in Section 8.

 

1

 

Exhibit 10.4

 

 

2.

Conversion.

 

(a)    Automatic Conversion Qualified Financing. If, prior to the Maturity Date, the Company consummates a Qualified Financing (as such term is defined below), all Principal of and accrued and unpaid interest on this Note shall automatically convert without further action by the Lender into fully paid and nonassessable shares of Qualified Financing securities at a conversion price per share (the “Conversion Price”) equal to a twenty percent (20%) discount to the lowest per share purchase price for the Qualified Financing securities paid by the investors in the Qualified Financing. A “Qualified Financing” means the first to occur of (i) a firm commitment underwritten public offering of Common Stock pursuant to an effective registration statement under the Securities Act covering the offer and sale of Common Stock for the account of the Company (“IPO”), or (ii) a private placement in one financing transaction or a series of related financing transactions of debt, equity, preferred or convertible securities, in each case with aggregate gross proceeds (before underwriters’ and/or financial advisory fees and commissions and offering expenses) to the Company (excluding any investment by the Lender in such offering) of at least Ten Million Dollars ($10,000,000). Notwithstanding the foregoing, in no event shall Lender be required to acquire shares of the Company’s capital stock such that Lender’s ownership interest in the Company would exceed 19.9% of the Company’s outstanding capital stock. Accordingly, the maximum amount of Principal and interest that Purchaser can be obligated to convert pursuant to this Section 2(a) is such amount as would result in Purchaser’s ownership being 19.9% of the Company’s outstanding capital stock (or, to the extent permissible under U.S. GAAP for determining whether the Company is an associate company or subsidiary of the Purchaser, the Company’s issued capital stock on a fully diluted basis after taking into account the conversion of all convertible securities) (the “Threshold”). Any remaining Principal and interest will remain outstanding under this Note until repaid in accordance with the terms hereof or converted in accordance with the terms of the next proviso; provided, however that if at any time after the Qualified Financing the Lender shall be able to convert any additional remaining Principal or interest outstanding under this Note without its ownership exceeding the Threshold then it shall be obligated to convert such Principal and interest at such time; and, provided, further that with respect to any Principal or interest which exceeds the Threshold and shall remain outstanding under this Note: (i) the interest rate of this Note will be reduced to three percent (3.0%) and the default interest rate set forth in Section 5 shall be reduced to eight percent (8.0%); (ii) the Maturity Date shall be extended to September 6, 2021; (iii) the Events of Default under Section 4 shall be amended such that Sections 4(b)(e)(f) and (g) shall no longer be Events of Default and the only Events of Default shall be those under Sections 4(a)(c) and (d); and (iv) Section 9 shall be deleted in its entirety.

 

(b)    Optional Conversion Upon Sale of the Company. In the event of the sale of all or substantially all of the assets of the Company or consolidation or merger of the Company other than a reincorporation merger (the “Sale”) that occurs prior to the Maturity Date or a Qualified Financing, then the Principal and accrued interest of this Note outstanding at such time will convert immediately prior to the Sale, at the written election of the Lender (the “Lender Sale Notice”) given within ten (10) days of the Lender’s receipt from the Company of notice of the Sale (the “Companys Sale Notice”) into fully paid and non-assessable shares of (i) Common Stock at a conversion rate equal to the lowest per share price of the Company’s most recent Common Stock financing or (ii) if the most recent financing was a preferred stock financing, preferred stock at a conversion rate equal to the lowest per share price of the Company’s most recent preferred stock financing (the “Optional Sale Conversion Price”).

 

(c)    Optional Conversion if no Qualified Financing or Sale. If a Qualified Financing or a Sale has not been consummated prior to the Maturity Date, at the written election of the Lender given not less than ten (10) business days prior to the Maturity Date (“Notice of Election to Convert”), the Principal together with all accrued and unpaid interest on the Notes outstanding shall convert into shares of Common Stock on the date set forth in the Notice of Election to Convert at a conversion rate equal to per share price of the Common Stock as set forth in its most recent 409A valuation conducted by a third party appraiser (the “409A Optional Conversion Price”).

 

(d)    Conversion Procedure.

 

(i)    Conversion Pursuant to Automatic Conversion. If this Note is to be automatically converted, written notice shall be delivered to Lender at the address last shown on the records of the Company for Lender or given by Lender to the Company for the purpose of notice (“Notice Address”), notifying Lender of the conversion to be effected, specifying the Conversion Price, the Principal to be converted, together with all accrued and unpaid interest, the date on which such conversion is expected to occur and calling upon Lender to surrender to the Company, in the manner and at the place designated, the Note; provided, however, that upon the consummation of a Qualified Financing, this Note shall be deemed converted and of no further force and effect, whether or not it is delivered for cancellation. The Company shall, as soon as practicable thereafter, at its costs issue and deliver to such Lender a certificate or certificates for the number of shares to which Lender shall be entitled upon such conversion, including a check payable to Lender for any cash amounts payable as described in Section 2(e). Any conversion of this Note pursuant to Section 2(a) shall be deemed to have been made immediately prior to the closing of the Qualified Financing and on and after such date the persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such shares of Common Stock. Any conversion of this Note pursuant to Section 2(b) shall be deemed to have been made immediately prior to the closing of the Sale and on and after such date the persons entitled to receive the shares of capital stock issuable upon such conversion shall be treated for all purposes as the record holder of such shares of capital stock. Any conversion of this Note pursuant to Section 2(c) shall be deemed to have been made on the date set forth in the Notice of Election to Convert and on and after such date the persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such shares of Common Stock.

 

2

 

Exhibit 10.4

 

(ii)    Conversion Pursuant to Optional Conversion. Upon receipt of an executed Lender Sale Notice or an executed Notice of Election to Convert together with this original Note, the Company shall, as soon as practicable after the Sale or the conversion date set forth in the Notice of Election to Convert, issue and deliver to Lender a certificate or certificates for the number of shares to which such Lender shall be entitled upon such conversion, including a check payable to Lender for any cash amounts payable as described in Section 2(e). The Company shall send the Lender a notice via facsimile or electronic mail confirming receipt of the Lender Sale Notice or Notice of Election to Convert within two (2) days of receipt thereof. If for any reason the Sale does not occur on the date set forth in the Company’s Sale Notice, the Company will return to the Lender this Note and the Lender Sale Notice shall be deemed rescinded.

 

Any certificates representing shares of Common Stock issued pursuant to this Section 2(d) shall bear the following legend:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS CERTIFICATE MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY OF THE SECURITIES REPRESENTED HEREBY.

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD IN THE EVENT OF A PUBLIC OFFERING, AS SET FORTH IN THE NOTE PURSUANT TO WHICH THESE SHARES WERE ISSUED, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.

 

(e)    Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. Upon the conversion of the outstanding principal and unpaid accrued interest under this Note into Common Stock, in lieu of the Company issuing any fractional shares to the Lender, the Company shall pay to the Lender the amount of outstanding principal and accrued interest that is not so converted.

 

(f)    Release. Upon full conversion of this Note and the payment of the amounts specified in this Section 2, the Company shall be forever released from all its obligations and liabilities under this Note.

 

3.            Principal and Interest Repayment. Unless this Note has been converted in accordance with the terms of Section 2 above or has been satisfied in accordance with the terms of this Note, the entire outstanding Principal and all unpaid accrued interest shall become fully due and payable on the Maturity Date, upon the occurrence of an Event of Default or upon a Sale. If the payments to be made by the Company shall be stated to be due on a date which is not a business day, such payment may be made on the next succeeding business day, and the interest payment on each such date shall include the amount thereof which shall accrue during the period of such extension of time.

 

3

 

Exhibit 10.4

 

4.            Events of Default. Subject to the proviso set forth in Section 2 of this Note, each of the following shall constitute an Event of Default hereunder:

 

(a)    The Company’s failure to pay to the Lender any amount of Principal, or interest when and as due under this Note after taking into account a thirty (30) day grace period;

 

(b)    The Company shall fail to observe or perform any material covenant, obligation, condition or agreement contained in this Note or the Securities Purchase Agreement and such failure shall continue for thirty (30) days after the Company’s receipt of written notice to the Company of such failure;

 

(c)    The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) admit in writing its inability to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, (v) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vi) take any action for the purpose of effecting any of the foregoing;

 

(d)    An involuntary petition is filed against the Company (unless such petition is dismissed or discharged within 120 days) under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of the Company;

 

(e)    Defaults shall exist under any material agreements of the Company with any third party or parties which consists of the failure to pay any indebtedness for borrowed money in excess of Two Hundred and Fifty Thousand Dollars ($250,000) at maturity or which results in a right by such third party or parties, whether or not exercised, to accelerate the maturity of such indebtedness for borrowed money in excess of Two Hundred and Fifty Thousand Dollars ($250,000) of the Company; unless the Company is actively controlling such default;

 

(f)    A final judgment or order for the payment of money in excess of Two Hundred and Fifty Thousand Dollars ($250,000) (exclusive of amounts covered by insurance) shall be rendered against the Company and the same shall remain undischarged for a period of 120 days during which execution shall not be effectively stayed, or any judgment, writ, assessment, warrant of attachment, or execution or similar process shall be issued or levied against a substantial part of the property of the Company and such judgment, writ, or similar process shall not be released, stayed, vacated or otherwise dismissed within 90 days after issue or levy; or

 

(g)    Any representation or warranty made by or on behalf of the Company in the Purchase Agreement, this Note or otherwise furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made.

 

5.            Remedies Upon Event of Default. Upon the occurrence of any Event of Default (other than an Event of Default described in Sections 4(c) or 4(d)) and at any time thereafter during the continuance of such Event of Default, Lender may, by written notice to the Company, declare all outstanding amounts and obligations payable by the Company under this Note to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in any other documents to the contrary notwithstanding. Upon the occurrence of any Event of Default described in Sections 4(c) and 4(d), immediately and without notice, all outstanding amounts and obligations payable by the Company hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in any other documents to the contrary notwithstanding. In addition to the foregoing remedies, upon the occurrence and during the continuance of any Event of Default, Lender may exercise any other right, power or remedy granted to it by the Purchase Agreement, this Note or any other documents, agreements or instruments delivered to Lender in connection with the execution of the Purchase Agreement or otherwise permitted to it by law, either by suit in equity or by action at law, or both. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of a third party for collection after default or if Lender seeks to enforce its rights under this Note, then the Company shall pay, in addition to the Principal and interest payable hereunder, the reasonable attorneys’ fees and reasonable attorneys’ costs incurred by Lender in connection therewith. In addition to all other rights and remedies available to Lender under this Note, applicable law or otherwise, after an Event of Default the rate of interest under this Note shall increase, subject to the proviso set forth in Section 2 of this Note, to ten percent (10.0%) per annum from and after an Event of Default occurs until the date that this Note is paid in full or such Event of Default is cured.

 

4

 

Exhibit 10.4

 

6.            Restrictions on Sale. The Lender hereby agrees not to sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, of any Common Stock (or other securities) of the Company held by the Lender during the 180-day period following the effective date of the registration statement for the Company’s IPO (or such other period as may be requested by the Company or an underwriter solely to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and

 

(ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto)(the “Lock-up Period”), provided, that all officers and directors of the Company and holders of at least 5% of the Company’s voting securities are bound by and have entered into similar agreements. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all holders subject to such agreements, pro rata based on the number of shares subject to such agreements. The obligations described in this Section 6 shall not apply to a registration relating solely to employee benefit plans on Form S-l or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions and may stamp each certificate with a legend as substantially set forth in Section 2(c) with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of such 180-day (or other) period. The Lender agrees to execute a market stand-off agreement with the underwriters in the offering in customary form consistent with the provisions of this Section 6.

 

7.            Adjustments. The number of shares of Common Stock to be issued upon each conversion of this Note shall be subject to adjustments as follows:

 

(a)    If the Company at any time subdivides (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise) the shares of capital stock acquirable hereunder into a greater number of shares, then, after the date of record for effecting such subdivision, the Optional Sale Conversion Price and the 409A Optional Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. If the Company at any time combines (by any reverse stock split, recapitalization, reorganization, reclassification or otherwise) the shares of capital stock acquirable hereunder into a smaller number of shares, then, after the date of record for effecting such combination, the Optional Sale Conversion Price and the 409A Optional Conversion Price in effect immediately prior to such combination will be proportionately increased.

 

(b)    If at any time or from time to time after the date upon which this Note was issued by the Company, the shares of capital stock issuable upon the conversion of this Note shall be changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification, reorganization, merger, exchange, consolidation, sale of assets or otherwise, then, in any such event, the Lender, unless this Note has been previously converted, shall have the right thereafter to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification, reorganization, merger, exchange, consolidation, sale of assets, or otherwise by a holder of the number of shares of capital stock into which such shares of this Note could have been converted immediately prior to such recapitalization, reclassification, reorganization, merger, exchange, consolidation, sale of assets, distribution of assets or other change, or with respect to such other securities or property by the terms thereof.

 

5

 

Exhibit 10.4

 

(c)    Upon the occurrence of each adjustment or readjustment of the Optional Sale Conversion Price and the 409A Optional Conversion Price as a result of the events described in this Section 7, the Company, at its expense, shall compute such adjustment or readjustment and prepare and furnish to the Lender a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. Failure to give such notice or any defect therein shall not affect the legality or validity of the subject adjustment.

 

8.            Prepayment. At any time after the date hereof, the Company shall have the right to prepay all or part of the Principal and interest outstanding. The portion of this Note subject to prepayment (the “Optional Prepayment Amount”) pursuant to this Section 8 shall be redeemed by the Company in cash at a price (the “Company Optional Prepayment Price”) equal to the Principal Amount and interest being redeemed as of the Company Optional Prepayment Date. The Company may exercise its right to prepay this Note under this Section 8 by delivering a written notice thereof by facsimile or electronic mail or overnight courier to the Lender (the “Company Optional Prepayment Notice” and the date on which such notice is sent or delivered by the Company is referred to as the “Company Optional Prepayment Notice Date”). The Company Optional Prepayment Notice shall (a) state the date on which the Company Optional Prepayment shall occur (the “Company Optional Prepayment Date”), which date shall not be less than five (5) days nor more than twenty (20) days following the Company Optional Prepayment Notice Date, and (b) state the Optional Prepayment Amount and the Company Optional Prepayment Price. All amounts converted by the Lender after the Company Optional Prepayment Notice Date shall reduce the Company Optional Prepayment Amount of this Note to be redeemed on the Company Optional Prepayment Date. Prepayments made pursuant to this Section 8 shall be made in cash on the Company Optional Prepayment Date. Any partial prepayment under this Note shall be in an amount of at least

 

$1,000,000 and increments of $1,000,000.

 

9.           Covenants. Until this Note has been converted, or paid in full (subject to the proviso set forth in Section 2 of this Note), the following covenants shall apply:

 

(a)    All payments under this Note shall rank pari passu with all other notes of the Company.

 

(b)    The Company shall not, directly or indirectly, declare or pay any cash dividend or distribution on any of its capital stock.

 

(c)    The Company shall maintain its corporate existence and good standing in the state of its incorporation, shall maintain qualification and good standing in each other jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on its business.

 

(d)    The Company shall deliver to Lender: (i) as soon as available, but in any event within 180 days after the end of the Company’s fiscal year, audited consolidated and consolidating financial statements of the Company prepared in accordance with GAAP, consistently applied; (ii) if applicable, copies of all statements, reports and notices sent or made available generally by the Company to its security holders; and (iii) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against the Company that could reasonably be expected to result in damages or costs to the Company of Two Hundred Fifty Thousand Dollars ($250,000) or more. Notwithstanding the foregoing, the Company will be deemed to have furnished the information referred to above in clause (i) to the Lender if the Company has filed Forms 10-K with the Securities and Exchange Commission via the EDGAR filing system and such reports are publicly available.

 

(e)    The Company shall make due and timely payment or deposit of all material federal, state, and local taxes, assessments, or contributions required of it by law, including, but not limited to, those laws concerning income taxes, F.I.C.A., F.U.T.A. and state disability, and will execute and deliver to Lender on demand, proof indicating that the Company has made such payments or deposits and any appropriate certificates attesting to the payment or deposit thereof; provided that the Company needs not make any payment if the amount or validity of such payment is contested in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by the Company.

 

6

 

Exhibit 10.4

 

(h)         The Company, at its expense, shall maintain liability and other insurance, in each case as ordinarily insured against by other owners in businesses similar to the Company’s. Upon Lender’s request, the Company shall deliver to the Lender certified copies of the policies of insurance and evidence of all premium payments.

 

10.          Expenses. In the event of any default hereunder, the Company shall pay all reasonable attorneys’ fees, expenses and court costs incurred by Lender in enforcing and collecting this Note.

 

11.          Notices. All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be in writing and faxed, mailed or delivered to each party at the respective addresses of the parties as set forth in the Purchase Agreement, or at such other address or facsimile number as the Company shall have furnished to Lender in writing. All such notices and communications will be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one business day after being delivered by facsimile (with receipt of appropriate confirmation), (iv) one business day after being deposited with an overnight courier service of recognized standing or (v) four days after being deposited in the U.S. mail, first class with postage prepaid.

 

12.          Waiver. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

 

13.         Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Note (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in New York, New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Note, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

14.         Successors and Assigns; Transfer of this Note or Securities Issuable on Conversion Hereof.

 

(a)    Subject to the restrictions on transfer described herein, the rights and obligations of the Company and Lender shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

 

(b)    Neither this Note nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company or the Lender without the prior written consent of the other party.

 

15.         Waiver and Amendment. The provisions of this Note may only be amended, waived or modified upon the written consent of the Company and Lender.

 

7

 

IN WITNESS WHEREOF, the Company has caused this Note to be issued as of the date first written above.

 

 

CANCER PREVENTION PHARMACEUTICALS, INC.

 

 

 

 

 

 

By:

/s/ Jeffrey E. Jacob

 

 

Name:

Jeffrey E. Jacob

 

 

Title:

Chief Executive Officer

 

 

8

 

Exhibit 10.4

 

AMENDMENT TO CONVERTIBLE PROMISSORY NOTES

 
 

This AMENDMENT TO CONVERTIBLE PROMISSORY NOTES, dated August 4, 2018 (the “Amendment”), to (i) that certain Convertible Promissory Note dated as of January 9, 2016, made by Cancer Prevention Pharmaceuticals, Inc. (the “Company”) in favor of Sucampo AG (“Lender”), an indirect, wholly owned subsidiary of Mallinckrodt plc, in the original principal amount of $5,000,000 and (ii) that certain Convertible Promissory Note dated as of September 6, 2017, made by the Company in favor of Lender, in the original principal amount of

 

$5,000,000 (the Convertible Promissory Notes in subclauses (i) and (ii) collectively referred to herein as the “Notes”), is entered into by and between the Company and Lender. Capitalized terms used herein and not defined shall have the meanings set forth in the Notes.

 

W I T N E S S E T H :

 

WHEREAS, the Company and Lender desire to amend the Notes as further described in this Amendment and Exhibit B (as such term is defined under the License and Collaboration Agreement dated as of the date hereof between the Company and the Lender (the “License Agreement”)).

 

NOW, THEREFORE, in consideration of the premises, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree to amend the Notes as follows:

 

1.    Notwithstanding anything in the Notes to the contrary, the Lender agrees that the Company may satisfy its payment obligations under the Notes by either paying cash on hand as required pursuant to the terms of the Notes or, so long as the License Agreement has not expired by its terms or been terminated, through the offset procedures as described in Exhibit B to the License Agreement, such determination of payment method to be in the Company’s sole discretion.

 

2.    Subclause (i) in the first grammatical paragraph of each of the Notes is hereby amended and restated as follows: “(i) January 31, 2023 (the “Maturity Date”),”.

 

3.    The Notes, as amended by this Amendment and the reference to the License Agreement contained herein, contain the entire agreement between the parties hereto regarding the subject matter thereof, and there are no other agreements, warranties or representations which are not set forth therein or herein. This Amendment may not be modified or amended except by an instrument in writing duly signed by or on behalf of the parties hereto. In case of a conflict between the terms of this Amendment and the Notes, the terms of this Amendment control. Except as expressly set forth in this Amendment, the terms of the Notes remain unchanged and in full force and effect.

 

4.    This Amendment shall be governed by and construed and enforced in accordance with the local laws of the State of New York applicable to agreements made and to be performed entirely within the State, without regard to conflict of laws principles.

 

5.    This Amendment may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

6.    The Company hereby reaffirms its obligations under the Notes and confirms that the obligations of the Company thereunder remain in full force and effect without defense, offset, or counterclaim.

 

CANCER PREVENTION PHARMACEUTICALS, INC.   SUCAMPO AG  
           
By: /s/ Jeffrey Jacob    By:  /s/ Stephanie D Miller  
Name: Jeffrey Jacob   Name:  Stephanie D Miller  
Title: Chief Executive Officer   Title: Director  

 

1

 

Exhibit 10.4

 

AGREEMENT TO FURTHER AMEND CONVERTIBLE PROMISSORY NOTES

 

On April 7, 2022, Cancer Prevention Pharmaceuticals, Inc. (the “Company”) and Sucampo GmbH (f/k/a Sucampo AG) (“Lender”), for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, enter into this AGREEMENT TO FURTHER AMEND CONVERTIBLE PROMISSORY NOTES to be effective on the date and time specified below (this “Amendment Agreement”). Initially capitalized terms used herein and not otherwise defined herein have the meanings given them in the Notes.

 

RECITALS:

 

A.

Company made that certain Convertible Promissory Note dated as of January 9, 2016 in favor of Lender in the original principal amount of $5,000,000, as amended by that Amendment to Convertible Promissory Notes dated August 4, 2018 (the “First Amendment”) between the Company and Lender (as amended and as may be amended, restated, replaced or otherwise modified from time to time, the “2016 Note”).

 

B.

Company made that certain Convertible Promissory Note dated as of September 6, 2017 in favor of Lender in the original principal amount of $5,000,000, as amended by the First Amendment (as amended and as may be amended, restated, replaced or otherwise modified from time to time, the “2017 Note” and, together with the 2016 Note, the “Notes”).

 

C.

Company, Panbela Therapeutics, Inc., Canary Merger Holdings, Inc. (the “Parent”), and other various special acquisition entities entered into that certain Agreement and Plan of Merger dated as of February 21, 2022, as amended from time to time (the “Sale Agreement”).

 

D.

In connection with the Sale Agreement, the Company and Lender desire to further amend the Notes as described in, and subject to the terms and conditions of, this Amendment Agreement.

 

AMENDMENTS AND AGREEMENTS:

 

Effective as of immediately before the consummation of the Second Merger (as defined in the Sale Agreement as in effect on the date hereof) (the “Closing”):

 

A.

2016 Note Conversion in Full.

 

1.

Notwithstanding anything to the contrary set forth in the 2016 Note, Company and Lender hereby agree that the entirety of the outstanding principal of the 2016 Note and accrued but unpaid interest under the 2016 Note shall be converted, subject to, and conditioned upon the occurrence of, and effective as of immediately prior to, the Closing, into fully paid and non-assessable shares of the Company’s Series A-2 Preferred Stock, par value $0.001 per share, at a price equal to $3.00 per share. Company waives all notice or other requirements under the 2016 Note in connection with the foregoing conversion.

 

2.

Notwithstanding the foregoing, in no event will Lender be required to acquire shares of the Company’s capital stock such that, after giving effect to such acquisition and the Closing, Lender’s ownership in the Parent would exceed 9.9% of Parent’s outstanding capital stock (the “Threshold”). Any amount of principal and interest that remains outstanding under the 2016 Note, after conversion of the maximum amount of principal and interest pursuant to Section A.1 without exceeding the Threshold (the “Excess Amount”), will be added to, and included as a part of, the Amended Principal Amount (as defined below) and will remain outstanding until repaid as provided in the 2017 Note, as amended hereby, and the 2016 Note will be deemed amended accordingly. Any shares issuable to the Lender pursuant to the terms of this Agreement in excess of the Threshold shall not be deemed to be beneficially owned by the Lender for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Securities Exchange Act of 1934, as amended

 

2

 

Exhibit 10.4

 

B.

2017 Note Modification.

 

1.

Promptly following (but no later than 5 business days after) the Closing, the Company will issue an amended and restated note in substitution of the 2017 Note to reflect the amendments to the 2017 Note set forth in this Amendment Agreement.

 

2.

The stated Principal Amount of the 2017 Note, as indicated on the first page of the 2017 Note, is hereby amended by increasing the Principal Amount to the sum of (x) the outstanding Principal Amount of the 2017 Note as of the date hereof plus (y) the amount of all accrued but unpaid interest thereon, through the date of the Closing (the “Amended Principal Amount”), and by changing the title thereof on the first page of the 2017 Note to read as “Amended Principal Amount.”

 

3.

The stated Issuance Date of the 2017 Note, as indicated on the first page of the 2017 Note, is hereby amended by changing it to be the date of the Closing (the “Amended Issuance Date”), and by changing the title thereof on the first page of the 2017 Note to read as “Amended Issuance Date.”

 

4.

The “Mandatory Prepayment Amount” (as referenced in Section B.5 below) shall equal the sum of (x) the Excess Amount, if any, and (y) $1,000,000.

 

5.

The first paragraph of the 2017 Note, which paragraph begins with the words “FOR VALUE RECEIVED,” is hereby amended by changing it to read in its entirety as follows:

 

FOR VALUE RECEIVED, Cancer Prevention Pharmaceuticals, Inc., a Delaware corporation, (the “Company”) promises to pay to Sucampo GmbH, a Swiss company with limited liability, or its permitted assigns (“Lender”) the principal sum of [the Amended Principal Amount – to be written out], or such lesser amount as shall equal the outstanding principal amount hereof (the “Principal”), and to pay simple interest on any outstanding Principal from the date set forth above as the Amended Issuance Date of this Convertible Promissory Note (this “Note”) until the same become due and payable as provided below, or upon acceleration, prepayment, or otherwise at a rate equal to 5.0% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. All unpaid Principal, together with any then unpaid and accrued interest, as amended, and other amounts payable hereunder are due and payable as follows:

 

(i)    One Million Dollars ($1,000,000), plus all interest accrued but unpaid under this Note through the date of payment thereof under this Note, on or before each of January 31, 2023, January 31, 2024, January 31, 2025, and January 31, 2026. If any portion of the outstanding principal of, and accrued but unpaid interest under, that certain Convertible Promissory Note dated as of January 9, 2016 made by Company in favor of Lender in the original principal amount of $5,000,000, as amended, (the “2016 Note”) is not earlier converted into shares of the Company’s Series A-2 Preferred Stock, par value $0.001 per share, (the “2016 Note Remaining Balance”) the Company must pay under the 2016 Note, in complete satisfaction of the 2016 Note, the 2016 Note Remaining Balance concurrently with the January 31, 2023 payment under this Note;

 

(ii)    all of the then remaining unpaid balance plus all accrued and unpaid interest thereon, and any other amounts payable hereunder, on or before January 31, 2027; and

 

(iii)    all of the then remaining unpaid balance plus all accrued and unpaid interest thereon, and any other amounts payable hereunder, immediately upon the occurrence of the sale of all or substantially all of the assets of the Company or a consolidation or merger of the Company other than a reincorporation merger (a “Sale”), excluding the transactions contemplated pursuant to that certain Agreement and Plan of Merger dated as of February 21, 2022 among the Company, Panbela Therapeutics, Inc., Canary Merger Holdings, Inc. and other various special acquisition entities (as amended) (the “Specified Transaction”).

 

3

 

Exhibit 10.4

 

In the event the Company or any direct or indirect parent company of the Company (the “Parent”) receives cash proceeds from any issuance or offering of debt, equity, preferred, or convertible securities, on or before January 31, 2023, then the Company shall be required to make a concurrent mandatory prepayment of this Note from such cash proceeds in an amount equal to the lesser of: (i) [the Mandatory Prepayment Amount – to be written out in the amended and restated note], plus all interest accrued but unpaid under this Note through the date of payment thereof under this Note; and (ii) ten percent (10%) of such cash proceeds. The amount payable by the Company to the Lender on January 31, 2023 pursuant to this Note will be reduced on a dollar-for-dollar basis by the amount of such cash proceeds paid by the Company to the Lender

 

Upon the occurrence and during the continuance of an Event of Default, all unpaid Principal, together with any then unpaid and accrued interest, as amended, and other amounts payable hereunder may be declared due and payable by the Lender or made automatically due and payable, in each case, in accordance with the terms hereof.

 

6.

The first sentence of Section 3 of the 2017 Note is hereby amended by inserting the following phrase “other than the Specified Transaction” immediately following the phrase “or upon a Sale”.

 

7.

Each of Sections 2, 6 and 7 of the 2017 Note is hereby amended by deleting such Section entirely and replacing the section heading with “Reserved.”.

 

8.

Lender acknowledges and covenants that, to the extent it owns 5% or more of the issuance and outstanding shares of CPP common stock at and as of the Closing, it will execute and deliver the Lock-Up Agreement (as defined in the Sale Agreement) effective as of the Closing.

 

C.

Additional Covenants.

 

1.

At Closing, any resulting parent (whether direct or indirect) shall execute and deliver a guaranty in favor of Lender with respect to Company’s payment obligations under the 2017 Note, which guaranty shall be in form and substance reasonably satisfactory to Lender. If such parent shall not execute and deliver such a guaranty at or prior to the Closing, Section B of this Amendment Agreement shall become null and void, and all of Lender’s rights and remedies with respect to the 2017 Note (without giving effect to this Amendment Agreement) shall be reinstated. Notwithstanding anything to the contrary in the 2017 Note, that Company hereby agrees that Lender shall be permitted to exercise all remedies contemplated pursuant to Section 5 of the 2017 Note immediately upon the occurrence of the Closing if: (x) such parent shall not have executed and delivered the guaranty contemplated pursuant to this Section C(1); and (y) Company shall not have paid all amounts due pursuant to the 2017 Note at the Closing.

 

2.

The Company hereby covenants and agrees that one hundred percent (100%) of any 12T Payments (as defined in the Sale Agreement as in effect on the date hereof) received the Company or any of its subsidiaries, shall be immediately paid over to Lender to be applied to Company’s obligations pursuant to the 2017 Note (whether or not such obligations are then due and payable) until such obligations are paid in full. The Company shall not assign or otherwise encumber its rights to receive the 12T Payments until the Company’s obligations pursuant to the 2017 Note (whether or not such obligations are then due and payable) are paid in full.

 

3.

The Company covenants and agrees that it shall not incur or suffer to exist any indebtedness or other obligation having payment priority over the 2017 Note.

 

4

 

Exhibit 10.4

 

D.

Miscellaneous.

 

1.

This Amendment Agreement may not be modified or amended except by an instrument in writing duly signed by or on behalf of the parties hereto. Except as expressly set forth in this Amendment Agreement, the terms of the Notes remain unchanged and in full force and effect and the Company hereby reaffirms its obligations under the Notes and confirms that the obligations of the Company thereunder remain in full force and effect without defense, offset, or counterclaim.

 

2.

This Amendment Agreement is governed by and construed and enforced in accordance with the local laws of the State of New York applicable to agreements made and to be performed entirely within the State of New York, and without regard to its conflict of laws principles.

 

3.

This Amendment Agreement may be executed simultaneously in any number of counterparts, each of which is deemed an original but all of which together shall constitute one and the same instrument.

 

4.

Each of the Company and the Lender has the corporate power and authority, and the legal right, to execute, deliver and perform this Amendment Agreement and has taken all necessary action to authorize the execution, delivery and performance of this Amendment Agreement.

 

5.

No consent or authorization of, filing with, notice to or other act by, or in respect of, any governmental authority or any other person is required in connection with this Amendment Agreement, except consents, authorizations, filings and notices which have been obtained or made and are in full force and effect.

 

6.

This Amendment Agreement has been duly executed and delivered on behalf of the Company and the Lender. This Amendment Agreement and the 2017 Note will constitute the legal, valid and binding obligations of the Company and the Lender, enforceable against each of them in accordance with their terms except as enforceability may be limited by applicable future bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). Each party shall bear its own costs and expenses incurred in connection with the negotiation and execution of this Amendment Agreement.

 

 

CANCER PREVENTION
PHARMACEUTICALS, INC.
 
     
By: /s/ Jeffrey Jacob  
Name:  Jeffrey Jacob  
Title:  Chief Executive Officer  
     
     
SUCAMPO GMBH  
     
By: /s/ Karma Worpa  
Name: Karma Worpa  
Title:  Director  

         
        

5

Exhibit 10.5

 

GUARANTY

 

THIS GUARANTY (“Guaranty”) is made effective as of June 15, 2022, by Panbela Therapeutics, Inc. (f/k/a Canary Merger Holdings, Inc.), a Delaware corporation (“Guarantor”), in favor of Sucampo GmbH (f/k/a Sucampo AG), a Swiss corporation (“Creditor”). Initially capitalized terms used herein and not otherwise defined herein have the meanings given them in the Amendment Agreement (as defined below).

 

RECITALS

 

A.         Creditor extended credit to Cancer Prevention Pharmaceuticals, Inc., a Delaware corporation (“Debtor”), pursuant to a Convertible Promissory Note dated as of September 6, 2017 in favor of Lender in the original principal amount of $5,000,000, as amended by that certain Amendment to Convertible Promissory Notes dated August 4, 2018, and as further amended by that certain Agreement to Further Amend Convertible Notes, dated April 7, 2022 (the “Amendment Agreement”) between the Debtor and Creditor (as amended and as may be amended, restated, replaced or otherwise modified from time to time, the “2017 Note”).

 

B.          Guarantor will derive substantial direct and indirect benefits from the amendments of the loan evidenced by the 2017 Note and the other agreements of Creditor under the Amendment Agreement.

 

C.         Guarantor acknowledges that Creditor would not have amended the loan evidenced by the 2017 Note without its requirement that Guarantor execute and deliver this Guaranty, and Guarantor is willing and has agreed to guarantee all of the obligations of Debtor under the 2017 Note, as hereinafter provided.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Guarantor agrees as follows:

 

1.         The Guaranty. Guarantor, individually, and jointly and severally with every other person or entity that now or at any time hereafter guarantees the Indebtedness (as such term is defined herein), unconditionally guarantees to Creditor, and its successors, participants, endorsees and assigns, the due performance and full and prompt payment, whether at maturity or by acceleration or otherwise, of the Indebtedness. As used herein, the term “Indebtedness” means (a) the due and punctual payment in full by Debtor of all payments and other amounts due Creditor from Debtor under the 2017 Note, (b) the due and punctual performance and observance by Debtor of all of the other terms and conditions agreed to by Debtor in the 2017 Note, and (c) all extensions, renewals, amendments, restatements or replacements of the foregoing, together with all costs, expenses and reasonable attorneys’ fees incurred by Creditor in collecting the foregoing or enforcing the 2017 Note or this Guaranty or otherwise chargeable to Debtor or Guarantor under the 2017 Note, this Guaranty or any other document executed in connection herewith.

 

2.         Certain Creditor Discretions. Guarantor expressly agrees that Creditor may, in its sole and absolute discretion, without notice to or further assent of Guarantor, and without in any way releasing, affecting or impairing the obligations and liabilities of Guarantor hereunder: (a) waive compliance with, or default under, or grant any other indulgences with respect to, the 2017 Note, (b) modify, amend or change any provisions of the 2017 Note with the written agreement of Debtor, (c) grant extensions or renewals of or with respect to the obligations and covenants of Debtor under the 2017 Note (and/or effect any release, compromise or settlement with Debtor in connection therewith), and (d) deal in all respects with Debtor as if this Guaranty were not in effect.

 

 

 

 

3.         Nature of Guaranty. The liability of Guarantor under this Guaranty shall be primary, direct and immediate and not conditional or contingent upon pursuit by Creditor of any remedies it may have against Debtor with respect to the 2017 Note. This Guaranty is a guarantee of payment and not merely of collection, and Guarantor’s obligations hereunder are not conditioned upon the validity or enforceability of the 2017 Note. No exercise or non-exercise by Creditor of any right given to it hereunder or under the 2017 Note shall affect any of Guarantor’s obligations hereunder or give Guarantor any recourse against Creditor. Without limiting the generality of the foregoing, Creditor shall not be required to make any demand on Debtor or any other guarantor of the 2017 Note or the Indebtedness, or otherwise pursue or exhaust its remedies against Debtor or such guarantor before, simultaneously with or after, enforcing its rights and remedies hereunder against Guarantor. Any one or more successive and/or concurrent actions may be brought hereon against Guarantor either in the same action, if any, brought against Debtor, or in separate actions, as often as Creditor, in its sole discretion, may deem advisable. Guarantor hereby expressly waives any notice or demand to which it would otherwise be entitled hereunder solely by reason of the fact that its position is one of suretyship, including without limitation notice of non-performance of Debtor under the 2017 Note and presentment for payment, protest, or notice of protest for any obligation created under the 2017 Note.

 

4.         Default. Upon the default of Debtor with respect to any of its obligations or liabilities to Creditor under the 2017 Note, or in case Debtor or Guarantor shall become insolvent or make an assignment for the benefit of creditors, or if a petition in bankruptcy or an arrangement be filed by or against Debtor or Guarantor, or in the event of an appointment of a receiver for Debtor or Guarantor or their properties, or in the event that a judgment is obtained or warrant of attachment issued against Debtor or Guarantor, all of the obligations and liabilities of Debtor and Guarantor to Creditor, whether direct or contingent, and of every kind and description, shall, without notice or demand, at the option of Creditor, become immediately due and payable and shall be taken up forthwith by the Guarantor.

 

5.         Certain Rights of Creditor. All rights and remedies afforded to Creditor by reason of this Guaranty and the 2017 Note, or by law, are separate and cumulative and the exercise of one shall not in any way limit or prejudice the exercise of any other such rights or remedies. No delay or omission by Creditor in exercising any such right or remedy shall operate as a waiver thereof. No waiver of any rights or remedies hereunder shall be deemed made by Creditor unless in writing and duly executed. No modification or amendment hereof shall be deemed made except in writing duly executed by Creditor and Guarantor. Any such written waiver shall apply only to the particular instance specified therein and shall not impair the further exercise of such right or remedy or of any other right or remedy of Creditor, and no single or partial exercise of any right or remedy hereunder shall preclude further exercise of any other right or remedy.

 

6.         No Impairment. The obligation of Guarantor to make payment for or perform the obligations of Debtor in accordance with the terms of this Guaranty shall not be impaired, modified, changed, released or limited in any manner or for any reason whatsoever, including without limitation: (a) any impairment, modification, change, release, rejection or limitation of the liability of Debtor or its estate in bankruptcy or reorganization resulting from the operation of any present or future provision of the United States Bankruptcy Code or other similar laws or statutes affecting the enforcement of creditors’ rights; (b) any amendment, modification or waiver of any provision of the 2017 Note or the Indebtedness; (c) any waiver, extension, release or modification with respect to any of the obligations of Debtor under the 2017 Note or the impairment or suspension of any of Creditor’s rights or remedies against Debtor; or (d) any merger or consolidation of Debtor with any other limited liability company, corporation or other business entity, or any sale, lease or transfer of any or all of the assets of the Debtor.

 

7.         Binding Obligation. The Guarantor irrevocably acknowledges and confirms that this Guaranty constitutes its valid and binding obligation. Execution of this Guaranty by Guarantor will not constitute a violation or breach of any other agreement to which Guarantor is a party.

 

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8.         Governing Law; Forum. This Guaranty shall be governed by and construed in accordance with the laws of the State of New York, without regard to such jurisdiction’s conflict of laws principles. Guarantor agrees to submit to the jurisdiction of any state or federal court located in the State of New York to resolve any dispute arising from, through, or in any manner related to this Guaranty.

 

9.         Partial Invalidity. In case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Guaranty, but this Guaranty shall be construed as if such invalid, illegal or unenforceable provision or provisions had never been contained herein.

 

10.         Titles and Headings; Rules of Construction. Titles and headings to sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Guaranty. Whenever the context so requires the use of or reference to any gender includes the masculine, feminine and neuter genders; and all terms used in the singular shall have comparable meanings when used in the plural and vice versa.

 

11.         Costs. Creditor shall be entitled, in addition to such other relief as it may be entitled, to collect from Guarantor all of Creditor’s costs and expenses (including, without limitation, reasonable attorneys’ fees and costs) incurred in enforcing the terms of this Guaranty.

 

12.         WAIVER OF JURY TRIAL. GUARANTOR AND CREDITOR (BY ITS ACCEPTANCE HEREOF), TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW, HEREBY WAIVE THEIR RIGHT TO TRIAL BY JURY ON ANY AND ALL MATTERS RELATING TO THIS GUARANTY.

 

13.         Successors and Assigns. Guarantor shall not assign its obligations under this Guaranty, in whole or in part, without the prior written consent of Creditor. This Guaranty shall inure to the benefit of Creditor and its successors and assigns and shall be binding upon Guarantor and upon its legal representative, successors and permitted assigns, including transferee(s) of substantially all of its assets and its stockholders(s) in the event of its dissolution or insolvency. All references herein to Debtor and Guarantor respectively, shall be deemed to include any successor or successors thereof, whether immediate or remote.

 

14.         Subrogation. Until such time as Creditor has received payment of the full amount of all the Indebtedness, no payment made by or for the account of Guarantor pursuant to this Guaranty entitles Guarantor by subrogation or otherwise to any payment by Debtor or from or out of any property of Debtor, and notwithstanding any right (including any right of subrogation) that Guarantor would otherwise have or be able to assert by operation of applicable law or otherwise, Guarantor will not exercise any right or remedy against Debtor or any property of Debtor by reason of any performance by Guarantor of this Guaranty. Upon the payment in full in cash to Creditor of the full amount of all the Indebtedness, nothing in this Guaranty shall prevent Guarantor from then exercising any right (including any right of subrogation) or remedy against Debtor or any property of Debtor that Guarantor may have under applicable law or otherwise by reason of any performance by Guarantor of this Guaranty.

 

16.         Notice. If notice is required by law, upon the occurrence of any act of default on the part of Debtor of the terms and conditions of the 2017 Note or any other document executed in connection therewith, notice thereof shall be given by Creditor to Guarantor in writing by depositing the same in the U.S. Mail, postage prepaid, registered or certified mail, return receipt requested, addressed to Guarantor at 712 Vista Boulevard, #305, Waconia, Minnesota, 55387, Attention: Chief Financial Officer, or such address as Guarantor may hereafter designate in writing, which such notice shall be deemed delivered upon mailing.

 

[Signature page follows.]

 

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This Guaranty is executed as of the day and year first above written.

 

 

 

PANBELA THERAPEUTICS, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Susan Horvath

 

 

Name: 

Susan Horvath

 

 

Title:

Chief Financial Officer

 

 

         

4

Exhibit 10.6

 

CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT

 

This Confidential Separation and Release Agreement (“Agreement”) is made by and between Jeffrey Jacob (“Employee”) and Cancer Prevention Pharmaceuticals, Inc. (“Company” or “Employer”). Employee and Employer shall be referred to herein collectively as the “Parties” or individually to as a “Party.”

 

RECITALS

 

WHEREAS, Employee has been employed as the Chief Executive Officer of the Company;

 

WHEREAS, Employee’s employment with the Company has been governed by an Employment Agreement dated January 1, 2019, as amended by the Addendum to Employment Agreement dated January 1, 2022 (collectively, the “Employment Agreement”), and an Employee Intellectual Property, Confidentiality, and Non-Compete Agreement (“Restrictive Covenant Agreement”) effective January 24, 2011;

 

WHEREAS, the Company has entered into an Agreement and Plan of Merger with Panbela Therapeutics, Inc. (“Panbela”), and other parties dated February 21, 2022 (“Merger Agreement”) under which the Company will merge into a subsidiary of Panbela (“Transaction”);

 

WHEREAS, in accordance with Section 1.06 of the Merger Agreement, Employee will be elected as a Company Appointed Director of Canary Merger Holdings, Inc., a direct wholly owned subsidiary of Panbela following the closing of the Transaction, and shall receive additional benefits in connection with the consummation of the Transaction;

 

WHEREAS, in accordance with Section 3(D) of the Employment Agreement, the Company is electing to terminate the Employee’s employment as of immediately prior to the Closing of the Transaction (the “Separation Date”) and this Agreement shall be entered into and effective as of the Closing Date (as defined in the Merger Agreement);

 

WHEREAS, the Parties wish to enter into this Agreement as a means of acknowledging Employee’s prior service to the Company, and to facilitate a smooth transition for Employee and an amicable separation of the Parties relationship to date, by resolving all Claims (as defined below) that Employee may have against Employer and any of the Released Parties (as defined below), including, but not limited to, any proceeding and all Claims arising out of or in any way related to Employee’s employment with or separation from Employer.

 

NOW, THEREFORE, in consideration of the mutual promises made herein, the adequacy and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

AGREEMENT

 

1.    Separation Arrangements.

 

(a)    Base Salary. Employee will continue to be paid Employee’s base salary, less applicable withholdings for federal, state and local taxes, in accordance with the Company’s regular payroll practices through the Separation Date.

 

(b)    Severance Payment. In addition to the various benefits provided to Employee pursuant to the Merger Agreement, including his continued involvement with the Company, and in exchange for Employee agreeing to the terms of this Agreement, the Company will pay Employee (i) all Accrued Obligations (as defined in the Employment Agreement), (ii) one times the Employee’s Base Salary (as defined in the Employment Agreement) ($350,000), and (iii) one times the amount of bonus, if any, paid to Employee for the 2021 fiscal year (with the payments under subsections (ii) and (iii) collectively, the “Severance Payment”).

 

 

 

 

(c)    Benefits. Employee's participation in the Company's employee benefit programs and plans will cease on the date on which Employee becomes ineligible for benefits as dictated by the terms governing such employee benefit plan or program, which may be the Separation Date or the end of the month following the Separation Date. Subject to employee signing and not revoking this Agreement and continuing to comply with the terms of this Agreement, after such date, if Employee timely and properly elects COBRA continuation coverage, the Company will either pay directly to Insperity, or reimburse Employee directly, for the employer’s portion of the premium payments paid for COBRA continuation coverage for 12 months following the Separation Date.

 

(d)    Conditions. The Company’s Severance Payment will be conditioned upon (i) Employee timely executing and not revoking this Agreement, (ii) Employee continuing to comply with the terms of this Agreement and the Restrictive Covenant Agreement, and (iii) the Company’s (or a designated affiliate of Parent to support the Company) closing (the “Closing”) of an additional round of material financing following the closing of the Transaction. Buyer must pay the Severance Payment in a lump sum on or before: (i) the date 60 days following the Closing Date (the “Early Payment Date”); or (ii) if, on or before the Early Payment Date, Buyer has not obtained, cumulatively, at least $10MM in additional financing (the “Post-Closing Financing”), the date 3 business days after the date on which Buyer obtains the Post-Closing Financing; or (iii) if Buyer does not obtain the Post-Closing Financing on or before the date 5 business days before the 2-year anniversary of the Closing, the date 2 years after the Closing..

 

(e)    Acknowledgements. Employee acknowledges and agrees that, other than as set forth in these Paragraphs 2(a), 2(b), and 2(c), Employee is not entitled to and will not be entitled to any other compensation or benefits of any kind or description from the Company in connection with his employment and the termination of his employment. The Severance Payments and benefits continuation described in Paragraphs 2(b) and 2(c) constitute the total severance or termination payments to be paid to Employee by the Company and is in lieu of any and all payments and/or other consideration of any kind which at any time has been the subject of any prior discussion, representations, inducements or promises, oral or written, direct or indirect, contingent or otherwise, including without limitation any post-termination payments outlined in the Employment Agreement. The Severance Payments and benefits continuation are in addition to anything else of value Employee would receive if Employee did not sign this Agreement or signed and then revoked this Agreement.

 

2.    Acknowledgement of Notice of Termination. Employee acknowledges and agrees that he has received notice of termination, and such notice has fulfilled the Notice of Termination requirements as defined in Section 3(E) of the Employment Agreement. Employee acknowledges and agrees he is waiving any further Notice of Termination required under the Employment Agreement.

 

3.    Resignations. Employee acknowledges and agrees that he has resigned effective as of the Separation Date from any positions with the Company, including as a manager, officer, director, or fiduciary of the Company or any related entity, except as contemplated by the Merger Agreement, and will promptly cooperate in the execution of the appropriate documents to effect the resignation as requested by the Company.

 

4.    Acknowledgment of No Equity Interests. Upon giving effect to the transactions contemplated by the Merger Agreement, the Employee acknowledges and agrees that he does not have any rights with respect to any equity or equity-based interests in the Company or any other Released Party (as defined below) except for equity, warrant, or options that are in the Merger Agreement Disclosure Letter and the final Consideration Spreadsheet provided by the Companies to the Transfer Agent and Shareholder Representative. This includes the Employee individually and/or entities for which Employee held a financial interest, prior to this Release.

 

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5.    General Release. In consideration of the obligations of the Company set forth herein and other good and valuable consideration, all of which Employee agrees Employee would not be entitled without executing this Agreement, Employee, on behalf of himself and his family, heirs, spouse, agents, executors, administrators, legal representatives and their respective successors and assigns (each, a “Releasing Party” and collectively, the “Releasing Parties”), releases and discharges the Company and its parents, subsidiaries, affiliates and affiliated funds, and their respective present and former partners, members, directors, officers, principals, shareholders, employees, agents, attorneys, successors and assigns, in their individual and representative capacities (each, a “Released Party” and collectively, the “Released Parties”), from any and all manner of actions and causes of action, suits, debts, dues, accounts, bonds, covenants, contracts, agreements, judgments, charges, claims, and demands whatsoever, whether or not now known, suspected or claimed, which Employee and all of the other Releasing Parties have, or may hereafter have, against the Released Parties or any of them arising out of or by reason of any cause, matter or thing whatsoever from the beginning of the world to the date this Agreement is executed (“Claims”), including, without limitation, Employee's employment by the Company and the termination thereof, Employee's wages, compensation, bonus, expenses, and/or employee benefits, and all matters currently capable of being known arising under any federal, state or local statute, rule, regulation or principle of contract law (whether oral or written, express or implied), tort law or common law, including, but not limited to, claims arising under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act, the Equal Pay Act, the Employee Retirement Income Security Act, the Civil Rights Act of 1991, Section 1981 of U.S.C. Title 42, the Fair Credit Reporting Act, the Worker Adjustment and Retraining Notification Act, the National Labor Relations Act, the Age Discrimination in Employment Act, the Uniform Services Employment and Reemployment Rights Act, the Genetic Information Nondiscrimination Act, the Immigration Reform and Control Act, Arizona wage laws, Arizona equal pay laws, the Arizona Employment Protection Act, the Arizona Civil Rights Act, the Arizona Occupational Health and Safety Act, Arizona right to work laws, Arizona employee drug testing laws, the Arizona Medical Marijuana Act, Arizona genetic testing laws, the Arizona criminal code, all state or local whistleblower protection statutes, codes, or regulations, and any and all local laws that can be legally waived. Notwithstanding the foregoing, nothing in this Agreement will: (a) affect any vested employee benefits to which Employee may be entitled under any existing employee benefit plans of the Company, (b) prohibit Employee from enforcing this Agreement, or (c) waive any claim that may not be waived under applicable law. This provision does not release the Released Parties from obligations to perform under this Agreement or the Merger Agreement.

 

6.    No Pending Actions and Covenant Not to Sue. Employee represents and warrants to the Company that Employee is the sole owner of all of the Claims and has not sold, assigned, transferred or otherwise disposed of or encumbered any of the Claims. Employee further represents and warrants that Employee has not filed or initiated, or caused to be filed or initiated, any complaint, claim, charge, or cause of action of any type on his behalf against any of Released Parties in any federal or state court or with any federal, state or local governmental agency. Employee agrees that Employee will not file or initiate, or cause to be filed or initiated, any complaint, claim, charge, or cause of action of any type on his behalf against any of Released Parties in any federal or state court or with any federal, state or local governmental agency. Employee further agrees not to be a member of any class action in any court or before any governmental agency or in any private forum seeking relief against any of Released Parties based on or arising out of any of the Released Claims and waives any right to, and agrees that Employee will not accept, any monetary relief or any other form of relief as a result of any such class action.

 

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7.    Certain Governmental Agency Matters. Employee’s general and specific release of all Claims and covenant not to sue above shall not prevent Employee from filing charges with the United States Equal Employment Opportunity Commission, any state or local government fair employment practices agency or the National Labor Relations Board, or claims with the Securities and Exchange Commission, and shall not prevent Employee from participating in any investigation by any such agencies. However, to the maximum extent permitted by law, Employee hereby waives, on behalf of Employee and each other Releasing Party, any and all right to, and agrees that Employee and the Releasing Parties will not accept, any monetary recovery or any other relief of any type from any of the Released Parties which Employee or any other Releasing Party might obtain as a result of, or in any way arising out of, such filing or participation that involves, concerns, grows out of or in any way relates to any of the Claims (other than any award issued by a government agency based on Employee’s participation in any investigation).

 

8.    Additional Acknowledgements. Employee acknowledges, that as of the date of this Agreement, Employee has been compensated for all hours worked during Employee's employment with the Company. Employee represents and warrants that Employee has, to Employee’s knowledge, suffered no injury or illness arising out of the course of Employee’s employment.

 

9.    No Knowledge of Improper Conduct. Employee represents and warrants that Employee (i) has not reported any alleged improper conduct or activity to the Company or any of its affiliates, (ii) has no knowledge of any such conduct or activity and (iii) has not been retaliated against for reporting any allegations of wrongdoing by the Company or any of its affiliates.

 

10.    Confidentiality. The Parties agree to maintain in complete confidence the existence of this Agreement, the contents and terms of this Agreement except for the fact that the Employee is no longer employed by the Company effective as of the Separation Date, and the consideration for this Agreement.

 

11.    Non-Disparagement. Employee agrees to refrain from any disparagement, defamation, libel, or slander of the Company or any of its affiliates and agrees to refrain from any tortious interference with the contracts and relationships of the Company or any of its affiliates. Senior Management of the company agrees to refrain from any disparagement, defamation, libel, or slander of the Employee and agrees to refrain from any tortious interference with the contracts and relationships of the Employee.

 

12.    Return of Property. Employee represents and warrants that as of the date of termination of his employment with the Company, Employee returned all property of the Company or any of its affiliates assigned or otherwise provided to Employee (including, without limitation, all computer equipment, cellular phones, credit and debit cards and keys and access cards or fobs to any facility at which the Company or any of its affiliates has operations). Employee represents and warrants that Employee has not taken from the Company or any of its affiliates any other property of the Company or any of its affiliates (including the originals and/or any copies of any information provided to or acquired by Employee in connection with the performance of work for the Company or any of its affiliates (including all files, correspondence, communications, memoranda, emails, records, manuals, and all other documents, no matter how produced or reproduced, computer programs, software, and files containing confidential information and any other information, and all usernames and passwords for all software and internet accounts and programs)), it being acknowledged and agreed by Employee that all such property is the sole and exclusive property of the Company and its affiliates.

 

13.    Consideration Period; Revocation. Employee hereby acknowledges that the Company has informed the Employee that the Employee has up to twenty-one (21) days to sign this Agreement and Employee may knowingly and voluntarily waive that twenty-one (21) day period by signing this Agreement earlier. Employee also understands that Employee shall have seven (7) days following the date on which Employee signs this Agreement within which to revoke it by providing a written notice of Employee’s revocation to the Company as set forth in Section 14.

 

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14.    Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing, and, except as otherwise provided in this Agreement, shall be deemed effectively given upon the earlier of actual receipt, or (a) personal delivery to the Party to be notified, (b) when sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent:

 

 

(a)

To the Employee at the address set forth below such Employee’s signature hereto.

 

 

(b)

To the Company or to such other address of a Party as may have been provided by written notice pursuant to this Section 14 by such Party to the other Parties.

 

15.    Recommendation to Seek Counsel. Employee acknowledges that Employee has read this Agreement, that Employee has been advised that the Employee should consult with an attorney before the Employee executes this Agreement, and that Employee understands all of its terms and executes it voluntarily and with full knowledge of its significance and the consequences thereof.

 

16.    Revocation; Effective Date. This Agreement shall take effect on the eighth (8th) day following Employee’s execution of this Agreement (the “Effective Date”) unless Employee’s written revocation is delivered to the Company within seven (7) days after such execution. If delivered by mail, the written revocation must be (1) postmarked within the seven (7)-day period; (2) properly addressed to the Company; and (3) sent by certified mail return receipt requested. For the avoidance of doubt, Employee’s employment is terminated as of immediately prior to the Closing, regardless of whether Employee executes or revokes this Agreement, and the Severance Payment set forth above shall not be provided until after the Effective Date and all conditions for the payment of such Severance Payments have been satisfied.

 

17.    Miscellaneous. Employee acknowledges that this Agreement will be subject to the governing law, venue, jurisdiction, and interpretation provisions set forth in Section 10 of the Employment Agreement, which are hereby incorporated by reference as if fully set forth herein.

 

 

[SIGNATURE PAGE TO FOLLOW]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the respective dates set forth below.

 

 

 

CANCER PREVENTION PHARMACEUTICALS, INC.

 

 

 

 

 

 

 

 

 

Dated: June 15, 2022

 

/s/ Andrew Levitch

 

 

By:

Andrew Levitch

 

 

Title:

Chief Financial Officer

 

       
       
  JEFFREY JACOB  
       
       
Dated: June 15, 2022                                    /s/ Jeffrey Jacob    
       
       
  Address:    
       

 

 

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Exhibit 23.1

 

 

CONSENT OF INDEPENDENT PUBLIC ACCOUNTING FIRM

 

 

We consent to the incorporation by reference in this Form 8-K-12B of our report dated March 22, 2022, with respect to the consolidated financial statements of Cancer Prevention Pharmaceuticals, Inc. (Company) as of December 31, 2021 and 2020 and for the two years then ended (which report includes an explanatory paragraph regarding the existence of substantial doubt about the Company’s ability to continue as a going concern).

 

 

/s/ Mayer Hoffman McCann P.C.

 

 

San Diego, CA

June 15, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.1

 

ex_387621img001.gif

 

 

Panbela Therapeutics, Inc. Closes Acquisition of Cancer Prevention Pharmaceuticals, Inc.

 

MINNEAPOLIS (GLOBE NEWSWIRE) June 16, 2022 - Panbela Therapeutics, Inc. (Nasdaq: PBLA), a clinical stage company developing disruptive therapeutics for the treatment of patients with cancer, today announced the closing of its acquisition of Cancer Prevention Pharmaceuticals, Inc. (CPP), a private clinical stage company developing therapeutics to reduce the risk and recurrence of cancer and rare diseases, for a combination of stock and future milestone payments.

 

The combined entity will focus on maximizing its extensive pipeline addressing an estimated aggregate $5 billion market opportunity for the areas of initial focus: familial adenomatous polyposis (FAP), first-line metastatic pancreatic cancer, colorectal cancer prevention and ovarian cancer.

 

“Closing this transaction achieves our goal of creating a diversified pipeline with an ability to hit multiple targets, four clinical stage assets, two of which are late-stage registration assets, thereby increasing the potential of the combined company,” said Jennifer K. Simpson, PhD, MSN, CRNP, President & Chief Executive Officer of Panbela. “Together, our capabilities will have an even greater chance to help more patients. The addition of CPP is an excellent fit that we feel produces substantial shareholder value.”

 

The closing of the merger follows the satisfaction of all customary closing conditions, including the unanimous approval by the boards of directors of each company and the stockholders of CPP.

 

 

About our Pipeline

 

The pipeline consists of assets currently in clinical trials with an initial focus on familial adenomatous polyposis (FAP), first-line metastatic pancreatic cancer, neoadjuvant pancreatic cancer, colorectal cancer prevention and ovarian cancer. The combined development programs have a steady cadence of catalysts with programs ranging from pre-clinical to registration studies.

 

 

 

SBP-101

 

SBP-101 is a proprietary polyamine analogue designed to induce polyamine metabolic inhibition (PMI) by exploiting an observed high affinity of the compound for pancreatic ductal adenocarcinoma and other tumors. The molecule has shown signals of tumor growth inhibition in clinical studies of US and Australian metastatic pancreatic cancer patients, demonstrating a median overall survival (OS) of 14.6 months which is final, and an objective response rate (ORR) of 48%, both exceeding what is seen typically with the standard of care of gemcitabine + nab-paclitaxel suggesting potential complementary activity with the existing FDA-approved standard chemotherapy regimen. In data evaluated from clinical studies to date, SBP-101 has not shown exacerbation of bone marrow suppression and peripheral neuropathy, which can be chemotherapy-related adverse events. Serious visual adverse events have been evaluated and patients with a history of retinopathy or at risk of retinal detachment will be excluded from future SBP-101 studies. The safety data and PMI profile observed in the current Panbela sponsored clinical trial provides support for continued evaluation of SBP-101 in a randomized clinical trial. For more information, please visit https://clinicaltrials.gov/ct2/show/NCT03412799 .

 

Flynpovi

 

Flynpovi is a combination of CPP-1X (eflornithine) and sulindac with a dual mechanism inhibiting polyamine synthesis and increase polyamine export and catabolism. In a Phase 3 clinical trial in patients with sporadic large bowel polyps, the combination prevented > 90% subsequent pre-cancerous sporadic adenomas versus placebo. Focusing on FAP patients with lower gastrointestinal tract anatomy in the recent Phase 3 trial comparing Flynpovi to single agent eflornithine and single agent sulindac, FAP patients with lower GI anatomy (patients with an intact colon, retained rectum or surgical pouch), Flynpovi showed statistically significant benefit compared to both single agents (p≤0.02) in delaying surgical events in the lower GI for up to four years. The safety profile for Flynpovi did not significantly differ from the single agents and supports the continued evaluation of Flynpovi for FAP.

 

CPP-1X

 

CPP-1X (eflornithine) is being developed as a single agent tablet or high dose power sachet for several indications including prevention of gastric cancer, treatment of neuroblastoma and recent onset Type 1 diabetes. Preclinical studies as well as Phase 1 or Phase 2 investigator-initiated trials suggest that CPP-1X treatment is well tolerated and has potential activity.

 

About Panbela

 

Panbela Therapeutics, Inc. is a clinical-stage biopharmaceutical company developing disruptive therapeutics for patients with urgent unmet medical needs. The company’s lead assets are SBP-101 and Flynpovi Further information can be found at www.panbela.com. Panbela Therapeutics, Inc. common stock is listed on The Nasdaq Stock Market LLC under the symbol PBLA.

 

 

 

Cautionary Statement Regarding Forward-Looking Statements

 

This press release contains forward-looking statements, including within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: believe, design, expect, feel, intend, may, plan, scheduled, and will. Examples of forward-looking statements include statements we make regarding results of collaborations with third parties and future studies. All statements other than statements of historical fact are statements that should be deemed forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially and adversely from the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) our ability to obtain additional funding to complete clinical trials; (ii) progress and success of our Phase 1 clinical trial; (iii) the impact of the current COVID-19 pandemic on our ability to complete monitoring and reporting in our current clinical trial and procure the active ingredient; (iv) our ability to demonstrate the safety and effectiveness of our SBP-101 product candidate (v) our ability to obtain regulatory approvals for our SBP-101 product candidate in the United States, the European Union or other international markets; (vi) the market acceptance and level of future sales of our SBP-101 product candidate; (vii) the cost and delays in product development that may result from changes in regulatory oversight applicable to our SBP-101 product candidate; (viii) the rate of progress in establishing reimbursement arrangements with third-party payors; (ix) the effect of competing technological and market developments; (x) the costs involved in filing and prosecuting patent applications and enforcing or defending patent claims; and (xi) such other factors as discussed in Part I, Item 1A under the caption Risk Factors in our most recent Annual Report on Form 10-K, any additional risks presented in our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. Any forward-looking statement made by us in this press release is based on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement or reasons why actual results would differ from those anticipated in any such forward-looking statement, whether written or oral, whether as a result of new information, future developments or otherwise.

 

 

 

Contact Information:

 

Investors: 
James Carbonara 
Hayden IR 
(646) 755-7412 
james@haydenir.com

 

Media: 
Tammy Groene 
Panbela Therapeutics, Inc. 
(952) 479-1196 
IR@panbela.com

 

 

 

Exhibit 99.3

 

Unaudited Pro Forma Condensed Combined Financial Information, and Related Notes Thereto, of Panbela Holdings, Inc. 

As of and for the Fiscal Quarter ended March 31, 2022 and for the Fiscal Year ended December 31, 2021 

 

The following unaudited pro forma condensed combined financial statements of Panbela Therapeutics, Inc., formerly known as Canary Merger Holdings, Inc. (“HoldCo”), are based on the historical consolidated financial statements of Panbela Research, Inc. formerly known as Panbela Therapeutics, Inc. (“Panbela”) and the historical consolidated financial statements of Cancer Prevention Pharmaceuticals, Inc. (“CPP”) as adjusted to give effect to the mergers, which resulted in Panbela and CPP each becoming wholly owned subsidiaries of HoldCo. The transaction is expected to be accounted for as an asset acquisition. The unaudited pro forma condensed combined statements of operations for quarter-ended March 31, 2022 give effect to the acquisition as if it had occurred on January 1, 2022, and the unaudited pro forma condensed combined statements of operations for year-ended December 31, 2021 give effect to the acquisition as if it had occurred on January 1, 2021. The unaudited pro forma condensed combined balance sheets as of March 31, 2022 and December 31, 2021 give effect to the acquisition of CPP as if it had occurred on those days. The transaction accounting adjustments for the acquisition consist of those necessary to account for the acquisition and are based on available information and on assumptions that Panbela believes are reasonable under the circumstances to reflect, on a pro forma basis, the impact of the acquisition of CPP on the historical financial statements of Panbela. No pro forma adjustments were required to confirm CPP’s accounting policies to Panbela’s accounting policies, which policies are also expected to be adopted by HoldCo without revision. Adjustments are discussed in greater detail below.

 

The pro forma combined financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition and the related financing occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of HoldCo. HoldCo and Panbela’s actual financial conditions and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

 

Panbela has performed a preliminary valuation analysis of the fair market value of CPP’s assets to be acquired and liabilities to be assumed. Using total consideration for the acquisition, Panbela has estimated the allocations of such assets and liabilities. The following table summarizes the allocation of the preliminary purchase price as if a closing occurred on March 31, 2022. The pro forma financial information has been prepared by Panbela in accordance with Article 11 of Regulation S-X.

 

Panbela Therapeutics, Inc.  

 

Unaudited Pro Forma Condensed Combined Balance Sheet 

 

As of March 31, 2022 

 

(in thousands) 

 

 

   

Panbela Therapeutics, Inc.

   

Cancer Prevention Pharmaceuticals, Inc.

   

Pro Forma Adjustments

   

Total

   

ASSETS

                                 

Current assets:

                                 

Cash and cash equivalents

  $ 7,386     $ 217             $ 7,603    

Accounts receivable

    0       0               0    

Prepaid expenses and other current assets

    182       287               469    

Income tax receivable

    365       0               365    

Total current assets

    7,933       504               8,437    

Acquired in-process research and development

    0       0               0  

(1a)

Other noncurrent assets

    3,155       0               3,155    

Total assets

  $ 11,088     $ 504             $ 11,592    
                                   

LIABILITIES AND STOCKHOLDERS' EQUITY

                                 

Current liabilities:

                                 

Accounts payable

  $ 3,986     $ 805             $ 4,791    

Accrued expenses

    521       111       2,496       3,128  

(1b)

Current portion of long-term debt

            13,432       (11,743 )     1,689  

(1e)

Warrant Liability

            127               127    

Total current liabilities

    4,507       14,475               9,735    

Long-term debt

    0       1,818       3,376       5,194  

(1e)

Total liabilities

    4,507       16,293               14,929    
                                   

Redeemable preferred stock

    0       12,526       (12,526 )     0  

(1c)

                                   

Stockholders' equity:

                                 

Common stock

    13       3       5       21  

(1c)

Additional paid-in capital

    66,561       8,319       (8,319 )     66,561  

(1c)

Accumulated deficit

    (59,827 )     (36,637 )     26,711       (69,753 )

(1d)

Accumulated comprehensive (loss) income

    (166 )     0               (166 )

(1c)

Total stockholders' equity

    6,581       (28,315 )             (3,337 )  

Total liabilities, temporary equity and stockholders' equity

  $ 11,088     $ 504             $ 11,592    
                                   

 

(1a) Reflects the preliminary estimated fair value associated with acquired in-process research and development ("IPR&D") based on the asset acquisition method of accounting and will be expensed immediately as the assets have no alternative future use. 

(1b) Reflects the accrual adjustment of estimated additional transaction costs ($1,959 thousand) and severance costs ($537 thousand) related to the merger not included in the historical financial statements. 

(1c) Reflects the stock consideration component of the merger and the elimination of CPP's historical common stock and preferred stock, additional paid-in-capital and accumulated other comprehensive loss. 

(1d) Reflects the adjustment to accumulated deficit (e.g., elimination of historical deficit, accrual of transaction costs, accrual of severance costs). 

(1e) Reflects adjustment for remaining debt obligations and accrued interest. 

 

 

 

Panbela Therapeutics, Inc.  

 

Unaudited Pro Forma Condensed Combined Statement of Operations 

 

As of March 31, 2022 

 

(in thousands) 

 

 

   

Panbela Therapeutics, Inc.

   

Cancer Prevention Pharmaceuticals, Inc.

   

Pro Forma Adjustments

   

Total

   

Revenue

  $ -     $ 84             $ 84    
                                   

Operating expenses:

                                 

Cost of revenue

    0       0               0    

Research and development

    2,208       231       24,643       27,082  

(2a)

General and administrative

    1,796       695       2,496       4,987  

(2b)

Operating loss

    (4,004 )     (842 )             (31,985 )  
                                   

Other income (expense):

                                 

Interest income (expense), net

    (2 )     (203 )     (60 )     (265 )

(2d)

Gain on debt forgiveness

    0       0               0    

Change in fair value of warrant liability

    0       0               0    

Other income (expense)

    311       63               374    

Total other income (expense)

    309       (140 )             109    

Loss before income tax benefit

                            0    
                                   

Income tax benefit

    29                       29    
                                   

Net loss

    (3,666 )     (982 )             (31,847 )  

Foreign currency translation adjustment

    (299 )     0               517    

Comprehensive loss

  $ (3,965 )   $ (982 )           $ (31,330 )  
                                   

Basic and diluted net loss per share

  $ (0.27 )                   $ (1.53 )  

Weighted average shares outstanding (basic and diluted)

    13,445,732               7,328,313       20,774,045  

(2c)

                                   

 

(2a) Reflects the preliminary estimated fair value associated with acquired in-process research and development ("IPR&D") based on the asset acquisition method of accounting and will be expensed immediately as the assets have no alternative future use. 

(2b) Reflects the adjustment to general and administrative expense to record estimated transaction costs ($1,959 thousand) and severance costs ($537 thousand) not included in the historical financial statements. 

(2c) Reflects the adjustment as a result of issuance of shares of the Company's common stock upon close of the transaction, at which point the Company expects 20,774,045 to be authorized and outstanding. 

(2d) Reflects adjustment for remaining interest expense associated with remaining debt obligations. 

 

 

 

Panbela Therapeutics, Inc.  

 

Unaudited Pro Forma Condensed Combined Balance Sheet 

 

As of December 31, 2021 

 

(in thousands) 

 

 

   

Panbela Therapeutics, Inc.

   

Cancer Prevention Pharmaceuticals, Inc.

   

Pro Forma Adjustments

   

Total

   

ASSETS

                                 

Current assets:

                                 

Cash and cash equivalents

  $ 11,867     $ 696             $ 12,563    

Accounts receivable

    0       111               111    

Prepaid expenses and other current assets

    91       157               248    

Income tax receivable

    321       28               349    

Total current assets

    12,279       991               13,270    

Acquired in-process research and development

    0       0               0  

(1a)

Other noncurrent assets

    593       0               593    

Total assets

  $ 12,872     $ 991             $ 13,863    
                                   

LIABILITIES AND STOCKHOLDERS' EQUITY

                                 

Current liabilities:

                                 

Accounts payable

  $ 640     $ 524             $ 1,164    

Accrued expenses

    2,020       99       2,496       4,615  

(1b)

Current portion of long-term debt

    0       1,293       (604 )     689  

(1e)

Warrant Liability

    0       127               127    

Total current liabilities

    2,660       2,044               6,596    

Long-term debt

    0       13,755       (7,561 )     6,194  

(1e)

Total liabilities

    2,660       15,799               12,790    
                                   

Redeemable preferred stock

    0       12,526       (12,526 )     0  

(1c)

                                   

Stockholders' equity:

                                 

Common stock

    13       3       6       21  

(1c)

Additional paid-in capital

    66,227       8,319       (8,319 )     66,227  

(1c)

Accumulated deficit

    (56,161 )     (35,655 )     26,508       (65,308 )

(1d)

Accumulated comprehensive (loss) income

    133       0               133  

(1c)

Total stockholders' equity

    10,212       (27,333 )             1,074    

Total liabilities, temporary equity and stockholders' equity

  $ 12,872     $ 991             $ 13,863    
                                   

 

(1a) Reflects the preliminary estimated fair value associated with acquired in-process research and development ("IPR&D") based on the asset acquisition method of accounting and will be expensed immediately as the assets have no alternative future use. 

(1b) Reflects the accrual adjustment of estimated additional transaction costs ($1,959 thousand) and severance costs ($537 thousand) related to the merger not included in the historical financial statements. 

(1c) Reflects the stock consideration component of the merger and the elimination of CPP's historical common stock and preferred stock, additional paid-in-capital and accumulated other comprehensive loss. 

(1d) Reflects the adjustment to accumulated deficit (e.g., elimination of historical deficit, accrual of transaction costs, accrual of severance costs). 

(1e) Reflects adjustment for remaining debt obligations and accrued interest. 

 

 

 

Panbela Therapeutics, Inc.  

 

Unaudited Pro Forma Condensed Combined Statement of Operations 

 

As of December 31, 2021 

 

(in thousands) 

 

 

   

Panbela Therapeutics, Inc.

   

Cancer Prevention Pharmaceuticals, Inc.

   

Pro Forma Adjustments

   

Total

   

Revenue

  $ -     $ 4,542             $ 4,542    
                                   

Operating expenses:

                                 

Cost of revenue

    0       1,002               1,002    

Research and development

    5,423       1,193       24,643       31,259  

(2a)

General and administrative

    4,587       1,431       2,496       8,514  

(2b)

Operating loss

    (10,010 )     916               (36,233 )  
                                   

Other income (expense):

                                 

Interest income (expense), net

    (11 )     (804 )     541       (274 )

(2d)

Gain on debt forgiveness

    0       301               301    

Change in fair value of warrant liability

    0       59               59    

Other income (expense)

    (602 )     (158 )             (760 )  

Total other income (expense)

    (613 )     (602 )             (674 )  

Loss before income tax benefit

                            0    
                                   

Income tax benefit

    488       0               488    
                                   

Net loss

    (10,135 )     314               (36,419 )  

Foreign currency translation adjustment

    517       0               517    

Comprehensive loss

  $ (9,618 )   $ 314             $ (35,902 )  
                                   

Basic and diluted net loss per share

  $ (0.87 )                   $ (1.75 )  

Weighted average shares outstanding (basic and diluted)

    11,709,035               9,065,010       20,774,045  

(2c)

                                   

 

(2a) Reflects the preliminary estimated fair value associated with acquired in-process research and development ("IPR&D") based on the asset acquisition method of accounting and will be expensed immediately as the assets have no alternative future use. 

(2b) Reflects the adjustment to general and administrative expense to record estimated transaction costs ($1,959 thousand) and severance costs ($537 thousand) not included in the historical financial statements. 

(2c) Reflects the adjustment as a result of issuance of shares of the Company's common stock upon close of the transaction, at which point the Company expects 20,774,045 to be authorized and outstanding. 

(2d) Reflects adjustment for remaining interest expense associated with remaining debt obligations. 

 

 

 

This preliminary purchase price allocation has been used to prepare the transaction accounting adjustments in the pro forma balance sheet and income statement. The final purchase price allocation will be determined when Panbela has completed the detailed valuations and necessary calculations. The final allocation is expected to be completed in a future report to be filed with the SEC by HoldCo within the applicable transition period and could differ materially from the preliminary allocation used in the transaction accounting adjustments. The final allocation may include changes in fair values of acquired in-process research and development intangible assets and other changes to assets and liabilities.

 

Disclosures of estimated purchase price calculation

Estimated consideration of approximately $8,854 thousand is based on the Company's closing share price of $1.25 on June 13, 2022 (as adjusted for issuance of shares of the Company's common stock upon close of the transaction), as well as estimated transaction costs of $1,959 thousand. The value of purchase price consideration will change based on fluctuations in the share price of the Company's common stock on the closing date. The Company believes that a 10% fluctuation in the market price of its common stock is reasonably possible based on historical volatility, and the potential effect on the purchase price would be: 

 

   

Company's share price
(as reported)

   

Company's share price
(as adjusted)

   

Purchase price

 

As presented

  $ 1.25     $ 0.74     $ 8,854  

10% increase

  $ 1.38     $ 0.81     $ 9,544  

10% decrease

  $ 1.13     $ 0.66     $ 8,165  

 

Contingent consideration has not been recognized as part of the purchase price calculation as the purchase will be accounted for as an asset acquisition and it is neither probable nor estimable that such payments will occur.