THIS
WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL) REASONABLY SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAWS.
WARRANT
AGREEMENT
To
Purchase Common Shares of
VBI
VACCINES INC.
Dated
as of October 30, 2017 (the “
Effective Date
”)
WHEREAS,
VBI Vaccines Inc., a corporation organized under the laws of British Columbia, Canada (the “
Company
”) has entered
into a subscription agreement of even date herewith (as amended and in effect from time to time, the “
Subscription Agreement
”)
with the undersigned warrantholder (the “
Warrantholder
”).
WHEREAS,
pursuant to the Subscription Agreement and as additional consideration to the Warrantholder for, among other things, its agreements
in the Subscription Agreement, the Company has agreed to issue to the Warrantholder this Warrant Agreement, evidencing the right
to purchase common shares of the Company (this “
Warrant
”, “
Warrant Agreement
”, or this “
Agreement
”).
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Company and Warrantholder agree as follows:
SECTION
1. GRANT OF THE RIGHT TO PURCHASE COMMON SHARES
(a)
For value received, the Company hereby grants to the Warrantholder, and the Warrantholder is entitled, upon the terms and subject
to the conditions hereinafter set forth, to subscribe for and purchase, from the Company, up to the number of fully paid and non-assessable
Common Shares (as defined below) equal to the Number of Shares (as defined below), at a purchase price per share equal to the
Exercise Price (as defined below). The number and Exercise Price of such shares are subject to adjustment as provided in
Section
8
. As used herein, the following terms shall have the following meanings:
“
Charter
”
means the Company’s Articles, as may be amended and in effect from time to time.
“
Common
Shares
” means the Company’s common shares, no par value per share, as presently constituted under the Charter,
and any class and/or series of Company capital stock for or into which such common shares may be converted or exchanged in a reorganization,
recapitalization or similar transaction.
“
Exchange
Act
” means the Securities Exchange Act of 1934, as amended.
“
Exercise
Price
” means $3.34, subject to adjustment from time to time in accordance with the provisions of this Agreement.
“
Merger
Event
” means any of the following: (i) a sale, lease or other transfer of all or substantially all assets of the Company,
(ii) any merger or consolidation involving the Company in which the Company is not the surviving entity or in which the outstanding
shares of the Company’s capital stock are otherwise converted into or exchanged for shares of capital stock or other securities
or property of another entity and in which the holders of a majority of the outstanding shares of capital stock of the Company
immediately prior to such merger or consolidation do not hold a majority of the surviving entity or other entity immediately following
such merger or consolidation, or (iii) any sale by holders of the outstanding voting equity securities of the Company in a single
transaction or series of related transactions of shares constituting a majority of the outstanding combined voting power of the
Company.
“
Purchase
Price
” means, with respect to any exercise of this Warrant, an amount equal to the Exercise Price (subject to adjustment
from time to time in accordance with the provisions of this Agreement) multiplied by the number of Common Shares as to which this
Warrant is then exercised.
“
Rule
144
” means Rule 144 of the Securities Act, as amended.
“
Securities
Act
” means the Securities Act of 1933, as amended.
(b)
Number of Shares
. This Warrant shall be exercisable for [●] Common Shares, subject to adjustment from time to time
in accordance with the provisions of this Agreement, subject to further adjustment thereafter from time to time in accordance
with the provisions of this Agreement.
SECTION
2. TERM OF THE AGREEMENT
The
term of this Agreement and the right to purchase Common Shares as granted herein shall commence on the Effective Date and, subject
to
Section 8(a)
, shall be exercisable for a period ending upon the fourth (4th) anniversary of the Effective Date.
SECTION
3. EXERCISE OF THE PURCHASE RIGHTS
(a)
Exercise
. The purchase rights set forth in this Agreement are exercisable by the Warrantholder, in whole or in part, at
any time, or from time to time, prior to the expiration of the term set forth in
Section 2
, by tendering to the Company
at its principal office a notice of exercise in the form attached hereto as
Exhibit I
(the “
Notice of Exercise
”),
duly completed and executed. Promptly upon receipt of the Notice of Exercise and the payment of the Purchase Price in cash or
certified check, and in no event later than three business (3) days thereafter, the Company shall, subject to the prior receipt
of all necessary regulatory approvals, including those of the NASDAQ Capital Market and the Toronto Stock Exchange, cause its
transfer agent to issue to the Warrantholder in book entry form the number of Common Shares purchased, and the Company shall execute
the acknowledgment of exercise in the form attached hereto as
Exhibit II
(the “
Acknowledgment of Exercise
”)
indicating the number of shares which remain subject to future purchases under this Agreement, if any.
Upon
any partial exercise of this Warrant, the Company shall, upon the Warrantholder’s written request, promptly issue an amended
Agreement representing the remaining number of shares purchasable hereunder. All other terms and conditions of such amended Agreement
shall be identical to those contained herein, including, but not limited to the Effective Date hereof.
SECTION
4. RESERVATION OF SHARES
During
the term of this Agreement, the Company will at all times have authorized and reserved a sufficient number of Common Shares to
provide for the exercise of the rights to purchase Common Shares as provided for herein.
SECTION
5. NO FRACTIONAL SHARES OR SCRIP
No
fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Agreement, but in lieu of
such fractional shares the Company shall make a cash payment therefor upon the basis of the Exercise Price then in effect.
SECTION
6. NO RIGHTS AS SHAREHOLDER
Without
limitation of any provision hereof, Warrantholder agrees that this Agreement does not entitle the Warrantholder to any voting
rights or other rights as a stockholder of the Company prior to the exercise of any of the purchase rights set forth in this Agreement.
SECTION
7. WARRANTHOLDER REGISTRY
The
Company shall maintain a registry showing the name and address of the registered holder of this Agreement. Warrantholder’s
initial address, for purposes of such registry, is set forth in
Section 12(g)
. Warrantholder may change such address by
giving written notice of such changed address to the Company.
SECTION
8. ADJUSTMENT RIGHTS
The
Exercise Price and the number of Common Shares purchasable hereunder are subject to adjustment from time to time, as follows:
(a)
Merger Event
. In connection with a Merger Event, this Warrant shall, on and after the closing thereof, automatically and
without further action on the part of any party or other person, represent the right to receive the consideration payable on or
in respect of all Common Shares that are issuable hereunder as of immediately prior to the closing of such Merger Event less the
Purchase Price for all such Common Shares (such consideration to include both the consideration payable at the closing of such
Merger Event and all deferred consideration payable thereafter, if any, including, but not limited to, payments of amounts deposited
at such closing into escrow and payments in the nature of earn-outs, milestone payments or other performance-based payments),
and such Merger Event consideration shall be paid to Warrantholder as and when it is paid to the holders of the outstanding Common
Shares.
(b)
Reclassification of Shares
. Except for Merger Events subject to
Section 8(a)
, if the Company at any time shall,
by combination, reclassification, exchange or subdivision of securities or otherwise, change any of the securities as to which
purchase rights under this Agreement exist into the same or a different number of securities of any other class or classes of
securities, this Agreement shall thereafter represent the right to acquire such number and kind of securities as would have been
issuable as the result of such change with respect to the securities which were subject to the purchase rights under this Agreement
immediately prior to such combination, reclassification, exchange, subdivision or other change. The provisions of this
Section
8(b)
shall similarly apply to successive combination, reclassification, exchange, subdivision or other change.
(c)
Subdivision or Combination of Shares
. If the Company at any time shall combine or subdivide its Common Shares, (i) in the
case of a subdivision, the Exercise Price shall be proportionately decreased and the number of shares for which this Warrant is
exercisable shall be proportionately increased, or (ii) in the case of a combination, the Exercise Price shall be proportionately
increased and the number of shares for which this Warrant is exercisable shall be proportionately decreased.
(d)
Stock Dividends
. If the Company at any time while this Agreement is outstanding and unexpired shall:
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(i)
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pay
a dividend with respect to the outstanding Common Shares payable in additional Common Shares, then the Exercise Price shall
be adjusted, as of the record date applicable to such dividend, to that price determined by multiplying the Exercise Price
in effect immediately prior to such date of determination by a fraction (A) the numerator of which shall be the total number
of Common Shares outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be
the total number of Common Shares outstanding immediately after such dividend or distribution, and the number of Common Shares
for which this Warrant is exercisable shall be proportionately increased; or
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(ii)
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make any other dividend
or distribution on or with respect to Common Shares, except any dividend or distribution (A) in cash, or (B) specifically
provided for in any other clause of this
Section 8
, then, in each such case, provision shall be made by the Company
such that the Warrantholder shall receive upon exercise of this Warrant a proportionate share of any such distribution as
though it were the holder of the Common Shares as of the record date fixed for the determination of the shareholders of the
Company entitled to receive such distribution.
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(e)
Notice of Certain Events
. If: (i) the Company shall declare any dividend or distribution upon its outstanding Common Shares,
payable in shares, cash, property or other securities; (ii) the Company shall offer for subscription pro rata to the holders of
its Common Shares any additional shares of any class or other rights; (iii) there shall be any Merger Event; or (iv) there shall
be any voluntary dissolution, liquidation or winding up of the Company; then, in connection with each such event, the Company
shall give the Warrantholder notice thereof at the same time and in the same manner as it gives notice thereof to the holders
of outstanding Common Shares.
SECTION
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
(a)
Reservation of Common Shares
. The Company covenants and agrees that all Commnon Shares, if any, that may be issued upon
the exercise of this Warrant will, upon issuance, be validly issued and outstanding, fully paid and non-assessable. The Company
further covenants and agrees that the Company will, at all times during the term hereof, have authorized and reserved, free from
preemptive rights, a sufficient number of Common Shares to provide for the exercise of the rights represented by this Warrant.
If at any time during the term hereof the number of authorized but unissued Common Shares shall not be sufficient to permit exercise
of this Warrant in full, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued Common Shares to such number of shares as shall be sufficient for such purposes.
(b)
Due Authority
. The execution and delivery by the Company of this Agreement and the performance of all obligations of the
Company hereunder, including the issuance to Warrantholder of the right to acquire the Common Shares, have been duly authorized
by all necessary corporate action on the part of the Company. This Agreement constitutes a legal, valid and binding agreement
of the Company, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors’ rights generally (including, without limitation, fraudulent
conveyance laws) and by general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(c)
Consents and Approvals
. No consent or approval of, giving of notice to, registration with, or taking of any other action
in respect of any state, federal or other governmental authority or agency is required with respect to the execution, delivery
and performance by the Company of its obligations under this Agreement, except for the filing of notices pursuant to Regulation
D under the Securities Act, any filing required by applicable state securities law, which filings will be effective by the time
required thereby and such consents, approvals, authorizations, orders and registrations or qualifications as may be required under
applicable state and provincial securities laws or by the by-laws and rules of the NASDAQ or the Toronto Stock Exchange in connection
with the issuance of the Common Shares.
SECTION
10. REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER
This
Agreement has been entered into by the Company in reliance upon the following representations and covenants of the Warrantholder:
(a)
Investment Purpose
. This Warrant and the shares issued on exercise hereof will be acquired for investment and not with
a view to the sale or distribution of any part thereof in violation of applicable federal and state securities laws, and the Warrantholder
has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.
(b)
Financial Risk
. The Warrantholder has such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment in the
Company.
(c)
No Short Sales
. Warrantholder has not at any time on or prior to the Effective Date engaged in any short sales or equivalent
transactions in the Common Shares. Warrantholder agrees that at all times from and after the Effective Date and on or before the
expiration or earlier termination of this Agreement, it shall not engage in any short sales or equivalent transactions in the
Common Shares.
(d)
Canadian Securities Laws.
The Warrantholder covenants and agrees that it (i) will not, during the period ending on the
date that is four (4) months and one (1) day after the Effective Date, sell or otherwise effect a trade of this Warrant or the
underlying Common Shares to any person known to be resident in any jurisdiction in Canada or any person known to be acquiring
such securities for the benefit of another person resident in any jurisdiction in Canada, and (ii) will not sell the Common Shares
through the facilities of the Toronto Stock Exchange, other than in a transaction made in compliance with the prospectus requirements
of applicable Canadian securities laws or pursuant to a transaction that is otherwise made in reliance on an available exemption
from the prospectus requirements of applicable Canadian securities laws.
SECTION
11. TRANSFERS
Subject
to Section 10(f) and compliance with applicable federal and state securities laws, this Agreement and all rights hereunder are
transferable, in whole or in part, without charge to the holder hereof (except for transfer taxes) upon surrender of this Agreement
properly endorsed, with the prior written consent of the Company. Each taker and holder of this Agreement, by taking or holding
the same, consents and agrees that this Agreement, when endorsed in blank, shall be deemed negotiable, and that the holder hereof,
when this Agreement shall have been so endorsed and its transfer recorded on the Company’s books, shall be treated by the
Company and all other persons dealing with this Agreement as the absolute owner hereof for any purpose and as the person entitled
to exercise the rights represented by this Agreement. Subject to the Company’s prior written consent, the transfer of this
Agreement shall be recorded on the books of the Company upon receipt by the Company of a notice of transfer in the form attached
hereto as Exhibit III (the “
Transfer Notice
”) and an opinion of counsel (which may be Company counsel) reasonably
satisfactory to the Company that such transfer does not require registration under the Securities Act or any applicable state
securities laws, at its principal offices and the payment to the Company of all transfer taxes and other governmental charges
imposed on such transfer.
SECTION
12. MISCELLANEOUS
.
(a)
Successors and Assigns
. This Agreement shall be binding upon any successors or assigns of the Company.
(b)
Remedies
. In the event of any default hereunder, the non-defaulting party may proceed to protect and enforce its rights
either by suit in equity and/or by action at law, including but not limited to an action for damages as a result of any such default,
and/or an action for specific performance for any default where the non-defaulting party will not have an adequate remedy at law
and where damages will not be readily ascertainable.
(c)
No Impairment of Rights
. The Company will not, by amendment of its Charter or through any other means, avoid or seek to
avoid the observance or performance of any of the terms of this Agreement, but will at all times in good faith assist in the carrying
out of all such terms and in the taking of all such actions as may be necessary or appropriate in order to protect the rights
of the Warrantholder against impairment.
(d)
Additional Documents
. The Company agrees to supply such other documents as the Warrantholder may from time to time reasonably
request.
(e)
Severability
. In the event any one or more of the provisions of this Agreement shall for any reason be held invalid, illegal
or unenforceable, the remaining provisions of this Agreement shall be unimpaired, and the invalid, illegal or unenforceable provision
shall be replaced by a mutually acceptable valid, legal and enforceable provision, which comes closest to the intention of the
parties underlying the invalid, illegal or unenforceable provision.
(f)
Notices
. Except as otherwise provided herein, any notice, demand, request, consent, approval, declaration, service of process
or other communication that is required, contemplated, or permitted under this Agreement or with respect to the subject matter
hereof shall be in writing, and shall be deemed to have been validly served, given, delivered, and received upon the earlier of:
(a) personal delivery to the party to be notified, (b) when sent by confirmed telex, electronic transmission or facsimile if sent
during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of receipt, and shall be addressed to the party to
be notified as follows:
If
to Warrantholder:
14
Shenkar St.
Herzelia, Israel
Attention:
Ran Nussnaum
With
a copy to (which shall not constitute notice):
Horn
& Co.
Amot
Investments Tower
2 Weizmann St., 24
th
Floor
Attention:
Ohad Mamann
Facsimile:
972-3-637 8201
Email:
omamann@hornlaw.co.il
If
to the Company:
VBI
Vaccines Inc.
222
Third Street, Suite 2241
Cambridge,
Massachusetts 02142
Attention:
Jeff Baxter
Email:
jbaxter@vbivaccines.com
With
a copy to (which shall not constitute notice):
Haynes
and Boone, LLP
30
Rockefeller Plaza
New
York, New York 10112
Attn:
Rick A. Werner, Esq.
E-mail:
rick.werner@haynesboone.com
or
to such other address as each party may designate for itself by like notice.
(g)
Entire Agreement; Amendments
. This Agreement constitutes the entire agreement and understanding of the parties hereto in
respect of the subject matter hereof, and supersedes and replaces in their entirety any prior proposals, term sheets, letters,
negotiations or other documents or agreements, whether written or oral, with respect to the subject matter hereof. None of the
terms of this Agreement may be amended except by an instrument executed by each of the parties hereto.
(h)
Headings
. The various headings in this Agreement are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or any provisions hereof.
(i)
No Strict Construction
. The parties hereto have participated jointly in the negotiation and drafting of this Agreement.
In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
(j)
No Waiver
. No omission or delay by Warrantholder at any time to enforce any right or remedy reserved to it, or to require
performance of any of the terms, covenants or provisions hereof by Warrantholder at any time designated, shall be a waiver of
any such right or remedy to which Warrantholder is entitled, nor shall it in any way affect the right of Warrantholder to enforce
such provisions thereafter during the term of this Agreement.
(k)
Survival
. All agreements, representations and warranties contained in this Agreement or in any document delivered pursuant
hereto shall be for the benefit of Warrantholder and shall survive the execution and delivery of this Agreement and the expiration
or other termination of this Agreement.
(l)
Governing Law
. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State
of New York, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction.
(m)
Consent to Jurisdiction and Venue
. All judicial proceedings arising in or under or related to this Agreement may be brought
in any state or federal court of competent jurisdiction located in the State of New York, Borough of Manhattan. By execution and
delivery of this Agreement, each party hereto generally and unconditionally: (a) consents to personal jurisdiction in the State
of New York, Borough of Manhattan; (b) waives any objection as to jurisdiction or venue in the State of New York, Borough of Manhattan;
(c) agrees not to assert any defense based on lack of jurisdiction or venue in the aforesaid courts; and (d) irrevocably agrees
to be bound by any judgment rendered thereby in connection with this Agreement. Service of process on any party hereto in any
action arising out of or relating to this Agreement shall be effective if given in accordance with the requirements for notice
set forth in
Section 12(f)
, and shall be deemed effective and received as set forth in
Section 12(f)
. Nothing herein
shall affect the right to serve process in any other manner permitted by law or shall limit the right of either party to bring
proceedings in the courts of any other jurisdiction.
(n)
Mutual Waiver of Jury Trial
. Because disputes arising in connection with complex financial transactions are most quickly
and economically resolved by an experienced and expert person and the parties wish applicable state and federal laws to apply
(rather than arbitration rules), the parties desire that their disputes arising under or in connection with this Agreement be
resolved by a judge applying such applicable laws. EACH OF THE COMPANY AND WARRANTHOLDER SPECIFICALLY WAIVES ANY RIGHT IT MAY
HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM (COLLECTIVELY,
“
CLAIMS
”) ASSERTED BY THE COMPANY AGAINST WARRANTHOLDER OR ITS ASSIGNEE OR BY WARRANTHOLDER OR ITS ASSIGNEE
AGAINST THE COMPANY RELATING TO THIS AGREEMENT. This waiver extends to all such Claims, including Claims that involve persons
or entities other the Company and Warrantholder; Claims that arise out of or are in any way connected to the relationship between
the Company and Warrantholder; and any Claims for damages, breach of contract, specific performance, or any equitable or legal
relief of any kind, arising out of this Agreement.
(o)
Counterparts
. This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number
of counterparts (including by facsimile or electronic delivery (PDF)), and by different parties hereto in separate counterparts,
each of which when so delivered shall be deemed an original, but all of which counterparts shall constitute but one and the same
instrument.
(p)
Lost, Stolen, Mutilated or Destroyed Warrant
. If this Warrant is lost, stolen, mutilated or destroyed, the Company may,
on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include
the surrender thereof), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen,
mutilated or destroyed Warrant shall be at any time enforceable by anyone.
(q)
Legends
. To the extent required by applicable laws, this Warrant and the Common Shares issuable hereunder (and the securities
issuable, directly or indirectly, upon conversion of such Common Shares, if any) may be imprinted with a restricted securities
legend in substantially the following form:
THIS
SECURITY MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER THE SECURITIES ACT
OF 1933, AS AMENDED AND ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO RULE 144 OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
[
Remainder
of Page Intentionally Left Blank
]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by its officers thereunto duly authorized as of
the Effective Date.
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COMPANY:
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VBI
VACCINES INC.
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By:
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WARRANTHOLDER:
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By:
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[
Signature
Page to Warrant
]
EXHIBIT
I
NOTICE
OF EXERCISE
To:
[ ]
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(1)
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The
undersigned Warrantholder hereby elects to purchase _______ Common Shares of VBI Vaccines Inc., pursuant to the terms of the
Agreement dated the _____ day of _____ , 2017 (the “
Agreement
”) between VBI Vaccines Inc. and the Warrantholder,
and tenders herewith payment of the full Purchase Price in cash, together with all applicable transfer taxes, if any.
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(2)
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Please
issue a certificate or certificates representing said Common Shares in the name of the undersigned or in such other name as
is specified below.
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WARRANTHOLDER:
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[●]
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EXHIBIT
II
1.
ACKNOWLEDGMENT OF EXERCISE
The
undersigned [ ], hereby acknowledge receipt of the “Notice of Exercise” from [●], to purchase [ ] Common Shares
of VBI Vaccines Inc., pursuant to the terms of the Warrant, and further acknowledges that [ ] shares remain subject to purchase
under the terms of the Warrant.
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COMPANY:
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VBI
VACCINES INC.
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By:
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Date:
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EXHIBIT
III
TRANSFER
NOTICE
(To
transfer or assign the foregoing Warrant execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby transferred and assigned to
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whose
address is
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Dated:
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Holder’s
Signature:
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Holder’s
Address:
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Signature
Guaranteed:
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NOTE:
The signature to this Transfer Notice must correspond with the name as it appears on the face of the Agreement, without alteration
or enlargement or any change whatever. Officers of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Agreement.
VBI
Vaccines Announces Full Exercise of Underwriters’ Option to Purchase Additional Shares and Upsized Registered Direct
Offering for Aggregate Proceeds of $71.9 Million
CAMBRIDGE,
Mass. (October 30, 2017)
– VBI Vaccines Inc. (Nasdaq: VBIV) (TSX: VBV) (VBI), a commercial-stage biopharmaceutical company
developing next-generation infectious disease and immuno-oncology vaccines, today announced that the underwriters of its previously
announced underwritten public offering have exercised their option to purchase an additional 2,100,000 shares. In addition, VBI’s
previously announced concurrent registered direct offering was upsized from US$20.8 million to US$22.8 million. All shares offered
in both the underwritten public offering and the registered direct offering were offered at a price of US$3.05 per share. The
expected aggregate gross proceeds to VBI from the offerings are US$71.9 million, before deducting the underwriting discounts and
commissions and estimated offering expenses.
The
pricing for the underwritten public offering was for a total of 16,100,000 common shares, which includes the additional 2,100,000
shares purchased by the underwriters pursuant to the exercised option, for expected gross proceeds of US$49.1 million. The pricing
for the concurrent registered direct offering was for a total number of 7,475,410 common shares for expected gross proceeds of
US$22.8 million.
BMO
Capital Markets and Canaccord Genuity acted as book-runners, and Ladenburg Thalmann acted as lead manager for the underwritten
public offering. Noble Life Science Partners acted as a financial advisor to VBI in connection with the underwritten public offering.
The registered direct offering was made without an underwriter or a placement agent.
VBI
intends to use the net proceeds from both offerings to progress its pipeline programs, including funding the pivotal Phase III
clinical program for Sci-B-Vac® in the United States, Europe and Canada, funding the Phase I/IIa clinical study of VBI-1901
for glioblastoma multiforme, and funding the continued development of VBI-1501A, VBI’s congenital cytomegalovirus clinical
candidate. Net proceeds will also be used for general corporate purposes, including working capital and capital expenditures.
A
shelf registration statement relating to the common shares was previously filed with the Securities and Exchange Commission (the
“SEC”) and declared effective on June 8, 2017. A preliminary prospectus supplement and accompanying prospectus related
to the underwritten public offering was filed with the SEC on October 25, 2017. A final prospectus supplement and accompanying
prospectus, dated October 26, 2017, relating to the offerings was filed with the SEC and available on the SEC’s website
at www.sec.gov. Copies of the final prospectus supplement and accompanying prospectus for the underwritten public offering may
be obtained from BMO Capital Markets Corp., Attention: Equity Syndicate Department, 3 Times Square, 25
th
Floor, New
York, NY 10036 or by e-mail at bmoprospectus@bmo.com, or from Canaccord Genuity Inc., Attention: Equity Syndicate Department,
99 High Street, 12th Floor, Boston, MA 02110 or by e-mail at prospectus@canaccordgenuity.com.
The
offerings are expected to close on or about October 30, 2017, subject to satisfaction of customary closing conditions. VBI intends
to rely on the exemption set forth in Section 602.1 of the TSX Company Manual, which provides that the TSX will not apply certain
of its requirements to issuers whose shares are listed on another recognized stock exchange, such as the NASDAQ. In addition,
closing of the registered direct offering is contingent upon VBI completing, inclusive of the proceeds from the registered direct
offering, financings for an aggregate amount of $55,000,000.
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VBI Vaccines Inc. | 222 Third Street, Suite 2241 | Cambridge, MA 02142 | 617-830-3031 | info@vbivaccines.com
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This
press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be
any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state or other jurisdiction. Any offer, if at all, will
be made only by means of the prospectus supplement and accompanying prospectus forming a part of the effective registration statement.
The
securities will not be offered or sold, directly or indirectly, in Canada or to any resident of Canada.
About
VBI Vaccines Inc.
VBI
Vaccines Inc. is a commercial-stage biopharmaceutical company developing a next generation of vaccines to address unmet needs
in infectious disease and immuno-oncology. VBI’s first marketed product is Sci-B-Vac®, a hepatitis B (HBV) vaccine that
mimics all three viral surface antigens of the hepatitis B virus; Sci-B-Vac is approved for use in Israel and 14 other countries.
VBI’s eVLP Platform technology allows for the development of enveloped virus-like particle (eVLP) vaccines that closely
mimic the target virus to elicit a potent immune response. VBI is advancing a pipeline of eVLP vaccines, with lead programs in
cytomegalovirus (CMV) and glioblastoma multiforme (GBM). VBI is also advancing its LPV™ Thermostability Platform, a proprietary
formulation and process that enables vaccines and biologics to preserve stability, potency, and safety. VBI is headquartered in
Cambridge, MA with research operations in Ottawa, Canada and research and manufacturing facilities in Rehovot, Israel.
Cautionary
Statement on Forward-looking Information
Certain
statements in this press release that are forward-looking and not statements of historical fact are forward-looking statements
within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are forward-looking
information within the meaning of Canadian securities laws (collectively, “forward-looking statements”). These statements
involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, the satisfaction
of closing conditions, prevailing market conditions, the anticipated use of the proceeds of the offerings which could change as
a result of market conditions or for other reasons, and the impact of general economic, industry or political conditions in the
United States or internationally. Additional risks and uncertainties relating to the proposed offerings, VBI and its business
can be found under the heading “Risk Factors” in the preliminary prospectus supplement and accompanying prospectus
relating to the offerings, in VBI’s most recent quarterly and annual reports filed with the SEC and with the Canadian security
regulatory authorities at www.sedar.com and in the preliminary prospectus supplement and accompanying prospectus relating to the
offerings to be filed with the SEC. Given these risks, uncertainties and factors, you are cautioned not to place undue reliance
on such forward-looking statements, which are qualified in their entirety by this cautionary statement. All such forward-looking
statements made herein are based on our current expectations and we undertake no duty or obligation to update or revise any forward-looking
statements for any reason, except as required by law.
VBI
Investor Contact
Nell
Beattie, Chief Business Officer
Email:
IR@vbivaccines.com
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VBI Vaccines Inc. | 222 Third Street, Suite 2241 | Cambridge, MA 02142 | 617-830-3031 | info@vbivaccines.com
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VBI Vaccines
Announces Closing of Public Offering and Concurrent Registered Direct Offering of Common Shares
CAMBRIDGE,
Mass. (October 31, 2017) –
VBI Vaccines Inc. (Nasdaq: VBIV) (TSX: VBV) (VBI), a commercial-stage biopharmaceutical company
developing next-generation infectious disease and immuno-oncology vaccines, today announced the closing of its previously announced
underwritten public offering of 16,100,000 common shares, which included 2,100,000 shares sold pursuant to the underwriters’
full exercise of their option to purchase additional shares at a price to the public of US$3.05 per share.
VBI
also closed its concurrent registered direct offering of 7,475,410 common shares at a price of US$3.05 per share. Aggregate gross
proceeds from the public offering and registered direct offering, before deducting the underwriting discounts and commissions
and estimated offering expenses, were approximately US$71.9 million.
Immediately
following the closing of both the underwritten public offering and the registered direct offering, the number of outstanding common
shares of the company is 63,804,781.
BMO
Capital Markets and Canaccord Genuity acted as book-runners, and Ladenburg Thalmann acted as lead manager for the underwritten
public offering. Noble Life Science Partners acted as a financial advisor to VBI in connection with the underwritten public offering.
The registered direct offering was made without an underwriter or a placement agent.
VBI
intends to use the net proceeds from both offerings to progress its pipeline programs, including funding the pivotal Phase III
clinical program for Sci-B-Vac
®
in the United States, Europe, and Canada, funding the Phase I/IIa clinical
study of VBI-1901 for glioblastoma multiforme, and funding the continued development of VBI-1501A, VBI’s congenital cytomegalovirus
clinical candidate. Net proceeds will also be used for general corporate purposes, including working capital and capital expenditures.
A
shelf registration statement relating to the common shares was previously filed with the Securities and Exchange Commission (the
“SEC”) and declared effective on June 8, 2017. A preliminary prospectus supplement and accompanying prospectus related
to the underwritten public offering was filed with the SEC on October 25, 2017. A final prospectus supplement and accompanying
prospectus, dated October 26, 2017, relating to the offerings was filed with the SEC and available on the SEC’s website
at www.sec.gov. Copies of the final prospectus supplement and accompanying prospectus for the underwritten public offering may
be obtained from BMO Capital Markets Corp., Attention: Equity Syndicate Department, 3 Times Square, 25
th
Floor, New
York, NY 10036 or by e-mail at bmoprospectus@bmo.com, or from Canaccord Genuity Inc., Attention: Equity Syndicate Department,
99 High Street, 12th Floor, Boston, MA 02110 or by e-mail at prospectus@canaccordgenuity.com.
This
press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be
any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state or other jurisdiction. Any offer, if at all, will
be made only by means of the prospectus supplement and accompanying prospectus forming a part of the effective registration statement.
About
VBI Vaccines Inc.
VBI
Vaccines Inc. is a commercial-stage biopharmaceutical company developing a next generation of vaccines to address unmet needs
in infectious disease and immuno-oncology. VBI’s first marketed product is Sci-B-Vac®, a hepatitis B (HBV) vaccine that
mimics all three viral surface antigens of the hepatitis B virus; Sci-B-Vac is approved for use in Israel and 14 other countries.
VBI’s eVLP Platform technology allows for the development of enveloped virus-like particle (eVLP) vaccines that closely
mimic the target virus to elicit a potent immune response. VBI is advancing a pipeline of eVLP vaccines, with lead programs in
cytomegalovirus (CMV) and glioblastoma multiforme (GBM). VBI is also advancing its LPV™ Thermostability Platform, a proprietary
formulation and process that enables vaccines and biologics to preserve stability, potency, and safety. VBI is headquartered in
Cambridge, MA with research operations in Ottawa, Canada and research and manufacturing facilities in Rehovot, Israel.
Cautionary
Statement on Forward-looking Information
Certain
statements in this press release that are forward-looking and not statements of historical fact are forward-looking statements
within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are forward-looking
information within the meaning of Canadian securities laws (collectively, “forward-looking statements”). These statements
involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, the anticipated
use of the proceeds of the offerings which could change as a result of market conditions or for other reasons, and the impact
of general economic, industry or political conditions in the United States or internationally. Additional risks and uncertainties
relating to the proposed offerings, VBI and its business can be found under the heading “Risk Factors” in the preliminary
prospectus supplement and accompanying prospectus relating to the offerings, in VBI’s most recent quarterly and annual reports
filed with the SEC and with the Canadian security regulatory authorities at www.sedar.com and in the preliminary prospectus supplement
and accompanying prospectus relating to the offerings to be filed with the SEC. Given these risks, uncertainties and factors,
you are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this
cautionary statement. All such forward-looking statements made herein are based on our current expectations and we undertake no
duty or obligation to update or revise any forward-looking statements for any reason, except as required by law.
VBI
Investor Contact
Nell
Beattie, Chief Business Officer
Email:
IR@vbivaccines.com