As
filed with the Securities and Exchange Commission on August 2, 2019
Registration
No. 333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
PROVENTION
BIO, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
|
81-5245912
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
(I.R.S.
Employer
Identification
Number)
|
Provention
Bio, Inc.
P.O.
Box 666
Oldwick,
New Jersey 08858
Telephone:
(908) 336-0360
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Ashleigh
Palmer
Chief
Executive Officer
P.O.
Box 666
Oldwick,
New Jersey 08858
Telephone:
(908) 336-0360
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
of all communications, including communications sent to the agent for service, to:
Michael
J. Lerner, Esq.
Steven
M. Skolnick, Esq.
Lowenstein
Sandler LLP
1251
Avenue of the Americas
New
York, New York 10020
Tel:
(212) 262-6700
Approximate
date of commencement of proposed sale to the public
: From time to time after this Registration Statement becomes effective.
|
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please
check the following box:
|
|
[ ]
|
|
|
|
|
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment
plans, check the following box:
|
|
[X]
|
|
|
|
|
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering.
|
|
[ ]
|
|
|
|
|
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
|
|
[ ]
|
|
|
|
|
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall
become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.
|
|
[ ]
|
|
|
|
|
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following
box.
|
|
[ ]
|
|
|
|
|
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated
filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange
Act.
|
|
[ ]
|
|
Large
accelerated filer:
|
|
[ ]
|
|
Accelerated
filer:
|
|
[ ]
|
|
|
|
|
|
|
|
|
|
|
|
Non-accelerated
filer:
|
|
[X]
|
|
Smaller
reporting company:
|
|
[X]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging
growth company:
|
|
[X]
|
|
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 7(a)(2)(B) of Securities Act.
CALCULATION
OF REGISTRATION FEE
|
Title
of each class of
securities
to be registered
(1)
|
|
Amount
to be
registered
(1)
(2)
|
|
|
Proposed
maximum
offering
price
per
unit
(1) (2)
|
|
|
Proposed
maximum
aggregate
offering
price
(1) (2)
|
|
|
Amount
of
registration
fee
(2)
|
|
|
Common
Stock, par value $0.0001 per share
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock, par value $0.0001 per share
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
Securities
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription
Rights
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL:
|
|
|
|
|
|
|
|
|
|
$
|
200,000,000
|
|
|
$
|
24,240
|
|
|
(1)
|
In
no event will the aggregate offering price of all securities issued from time to time by the registrant under this registration
statement exceed $200,000,000 or its equivalent in any other currency, currency units, or composite currency or currencies.
The securities covered by this registration statement may be sold separately, together or as units with other securities registered
under this registration statement.
|
|
|
|
|
(2)
|
The
proposed maximum aggregate price has been estimated solely for the purpose of calculating the registration fee pursuant to
Rule 457(o) under the Securities Act of 1933, as amended (the “Securities Act”).
|
|
|
|
|
(3)
|
Subject
to note (1), this registration statement covers such an indeterminate amount of common stock (with accompanying purchase rights,
if any) as may be sold, from time to time, at indeterminate prices, by the registrant and such indeterminate number of shares
of common stock as may, from time to time, be issued upon conversion or exchange of other securities registered hereunder,
to the extent any such securities are, by their terms, convertible or exchangeable for common stock.
|
|
|
|
|
(4)
|
Subject
to note (1), this registration statement covers such an indeterminate number of shares of preferred stock (with accompanying
purchase rights, if any) as may be sold from time to time at indeterminate prices by the registrant. Also covered is such
an indeterminate amount of common stock (with accompanying purchase rights, if any) (i) as may be issuable or deliverable
upon conversion of shares of preferred stock, and (ii) as may be required for delivery upon conversion of shares of preferred
stock as a result of anti-dilution provisions.
|
|
|
|
|
(5)
|
Subject
to note (1), this registration statement covers such an indeterminate amount and number of warrants (including subscription
rights) representing rights to purchase common stock, preferred stock and debt securities registered under this registration
statement as may be sold from time to time at indeterminate prices by the registrant. Also covered is such an indeterminate
amount of common stock and preferred stock (in each case, with accompanying purchase rights, if any) and debt securities (i)
as may be issuable or deliverable upon exercise of warrants, and (ii) as may be required for delivery upon exercise of any
warrants as a result of anti-dilution provisions.
|
|
|
|
|
(6)
|
Subject
to note (1), this registration statement covers such an indeterminate amount of debt securities as may be sold from time to
time at indeterminate prices by the registrant. If any debt securities are issued at an original issue discount, then the
offering price shall be in such greater principal amount as shall result in an aggregate initial offering price not to exceed
$200,000,000. Also covered is such an indeterminate amount of common stock and preferred stock (in each case, with accompanying
purchase rights, if any) (i) as may be issuable or deliverable upon the exercise or conversion of debt securities, and (ii)
as may be required for delivery upon exercise or conversion of debt securities as a result of anti-dilution provisions.
|
|
|
|
|
(7)
|
Subject
to note (1), this registration statement covers such an indeterminate amount and number of subscription rights, representing
rights to purchase common stock, preferred stock, warrants and debt securities registered under this registration statement,
as may be sold from time to time at indeterminate prices by the registrant. Also covered is such an indeterminate amount of
common stock, preferred stock and warrants (in each case, with accompanying purchase rights, if any) and debt securities (i)
as may be issuable or deliverable upon exercise of subscription rights, and (ii) as may be required for delivery upon exercise
of any subscription rights as a result of anti-dilution provisions.
|
|
|
|
|
(8)
|
Each
unit will represent an interest in two or more securities, which may or may not be separable from one another.
|
The
Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective
on such date as the Commission acting pursuant to said Section 8(a), may determine.
EXPLANATORY
NOTE
This
registration statement contains two prospectuses:
●
a base prospectus which covers the offering, issuance and sale by the registrant in one or more offerings of up to a maximum aggregate
offering price of $200,000,000 of the registrant’s common stock, preferred stock, debt securities, warrants, subscription
rights and/or units; and
●
a sales agreement prospectus covering the offering, issuance and sale by the registrant of up to a maximum aggregate offering
price of $50,000,000 of the registrant’s common stock that may be issued and sold under a sales agreement, or the Sales
Agreement, that the registrant has entered into with SVB Leerink LLC and Cantor Fitzgerald & Co.
The
base prospectus immediately follows this explanatory note. The specific terms of any securities to be offered pursuant to the
base prospectus other than the shares under the Sales Agreement will be specified in a prospectus supplement to the base prospectus.
The sales agreement prospectus immediately follows the base prospectus. The common stock that may be offered, issued and sold
by the registrant under the sales agreement prospectus is included in the $200,000,000 of securities that may be offered, issued
and sold by the registrant under the base prospectus. Upon termination of the Sales Agreement, any portion of the $50,000,000
included in the sales agreement prospectus that is not sold pursuant to the Sales Agreement will be available for sale in other
offerings pursuant to the base prospectus, and if no shares are sold under the Sales Agreement, the full $50,000,000 of
securities may be sold in other offerings pursuant to the base prospectus and a corresponding prospectus supplement.
The
information in this prospectus is not complete and may be changed. A registration statement relating to these securities has been
filed with the Securities and Exchange Commission. These securities may not be sold until the registration statement is effective.
This prospectus is not an offer to sell these securities and does not solicit an offer to buy these securities in any state or
other jurisdiction where the offer or sale is not permitted.
Subject
to completion, dated August 2, 2019
PROSPECTUS
Provention
Bio, Inc.
$200,000,000
Common
Stock
Preferred
Stock
Warrants
Debt
Securities
Subscription
Rights
Units
We
may offer, issue and sell from time to time together or separately, in one or more offerings, any combination of (i) our common
stock, (ii) our preferred stock, which we may issue in one or more series, (iii) warrants, (iv) senior or subordinated debt securities,
(v) subscription rights and (vi) units. The debt securities may consist of debentures, notes, or other types of debt. The debt
securities, preferred stock, warrants and subscription rights may be convertible into, or exercisable or exchangeable for, common
or preferred stock or other securities of ours. The units may consist of any combination of the securities listed above.
The
aggregate public offering price of the securities that we are offering will not exceed $200,000,000. We will offer the securities
in an amount and on terms to be set forth in one or more supplements to this prospectus. Our common stock is listed on the Nasdaq
Capital Market under the symbol “PRVB.” The last reported sale price for our common stock on July 31, 2019 as quoted
on the Nasdaq Capital Market was $10.56 per share. You are urged to obtain current market quotations of our common stock. We have
no preferred stock, warrants, debt securities, subscription rights or units listed on any market. Each prospectus supplement will
indicate if the securities offered thereby will be listed on any securities exchange.
Should
we offer any of the securities described in this prospectus, we will provide you with the specific terms of the particular securities
being offered in supplements to this prospectus. You should read this prospectus and any supplement, together with additional
information described under the headings “Additional Information” and “Incorporation of Certain Information
by Reference” carefully before you invest. This prospectus may not be used to sell securities unless accompanied by a prospectus
supplement.
Investing
in our securities involves risk. You should carefully consider the risks that we refer you to under the section captioned “
Risk
Factors
” in this prospectus on page 4 before buying our securities.
We
may sell these securities directly to our stockholders or to other purchasers or through agents on our behalf or through underwriters
or dealers as designated from time to time. If any agents or underwriters are involved in the sale of any of these securities,
the applicable prospectus supplement will provide the names of the agents or underwriters and any applicable fees, commissions
or discounts.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is , 2019
TABLE
OF CONTENTS
Provention
Bio, Inc. is referred to herein as “Provention,” “the Company,” “we,” “us,” and
“our,” unless the context indicates otherwise. This prospectus and the information incorporated herein by reference
contain references to trademarks, service marks and trade names owned by us or other companies. Solely for convenience, trademarks,
service marks and trade names referred to in this prospectus and the information incorporated herein, including logos, artwork,
and other visual displays, may appear without the
®
or
™
symbols, but such references are not
intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights
of the applicable licensor to these trademarks, service marks and trade names. We do not intend our use or display of other companies’
trade names, service marks or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
Other trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners.
You
may only rely on the information contained in this prospectus and the accompanying prospectus supplement or that we have referred
you to. We have not authorized anyone to provide you with different information. This prospectus and any prospectus supplement
do not constitute an offer to sell or a solicitation of an offer to buy any securities other than the securities offered by this
prospectus and the prospectus supplement. This prospectus and any prospectus supplement do not constitute an offer to sell or
a solicitation of an offer to buy any securities in any circumstances in which such offer or solicitation is unlawful. Neither
the delivery of this prospectus or any prospectus supplement nor any sale made hereunder shall, under any circumstances, create
any implication that there has been no change in our affairs since the date of this prospectus or such prospectus supplement or
that the information contained by reference to this prospectus or any prospectus supplement is correct as of any time after its
date.
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, using a “shelf”
registration process. Under this shelf registration process, we may from time to time offer and sell, in one or more offerings,
any or all of the securities described in this prospectus, separately or together, up to an aggregate offering price of $200,000,000.
This prospectus provides you with a general description of our securities being offered. When we issue the securities being offered
by this prospectus, we will provide a prospectus supplement (which term includes, as applicable, the sales agreement prospectus
filed with the registration statement of which this prospectus forms a part) that will contain specific information about the
terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You
should read both this prospectus and any prospectus supplement together with additional information described under the heading
“Additional Information” and “Incorporation of Certain Information by Reference.”
PROSPECTUS
SUMMARY
This
summary highlights certain information about us, this offering and selected information contained elsewhere in or incorporated
by reference into this prospectus. This summary is not complete and does not contain all of the information that you should consider
before deciding whether to invest in our common stock. For a more complete understanding of our company and this offering, we
encourage you to read and consider carefully the more detailed information in this prospectus, and the information included in
any free writing prospectus that we have authorized for use in connection with this offering, including the information under
the heading “Risk Factors” in this prospectus on page 4 and in the documents incorporated by reference into
this prospectus.
Our
Company
We
are a clinical stage biopharmaceutical company, focused on the development and commercialization of novel therapeutics and innovative
approaches aimed at intercepting and preventing immune-mediated diseases. We are leveraging a transformational drug development
strategy that sources, repositions and advances potential therapeutic candidates that in most instances have undergone previous
clinical testing but may have been underdeveloped or deprioritized because of insufficient clinical trial efficacy (i.e., a benefit
in endpoints relevant for the disease or condition under study as compared to placebo) or for strategic reasons. Importantly,
these product candidates not only appear to have been well-tolerated but have demonstrated proof-of-mechanism (i.e., evidence
that the experimental drug has the intended biologic effect in its target and/or pathway) by preventing or intercepting potentially
clinically relevant immunopathologic pathways. These characteristics exemplify the profile against which therapeutic candidates
are evaluated for strategic refocusing or advancement to the next stage of clinical development. In this context, we are creating
a diverse portfolio of innovative solutions targeting opportunities focused on intercepting and preventing immune-mediated disease.
Our
mission is to in-license, transform and develop clinical-stage, or nearly clinical-stage, therapeutic candidates targeting the
high morbidity, mortality and escalating costs of autoimmune and inflammatory diseases, including: celiac disease, type 1 diabetes,
or T1D, Crohn’s disease, or CD, and lupus. Our current development pipeline consists of a Phase 3 product candidate
for the interception and possible delay or prevention of T1D, a Phase 2 product candidate for celiac disease, a Phase 2
product candidate for CD, a Phase 1 product candidate for systemic lupus erythematosus, or SLE, and a preclinical candidate
that we expect to submit a Clinical Trial Application, or CTA, in 2020 and that we intend to develop for acute coxsackie B virus,
also referred to as coxsackie virus B or CVB, infection and the potential prevention or delay in onset of T1D. All of these programs
have been selected and acquired or in-licensed because of their therapeutic potential to interrupt, delay, reverse or prevent
the onset or progression of life-threatening or debilitating immune-mediated disease.
We
preferentially source, reposition, transform and advance underdeveloped or deprioritized clinical-stage, or nearly clinical-stage,
therapeutic candidates targeting the interception and prevention of immune-mediated disease. Our “predict” and “pre-empt”
therapeutic approach focuses on identifying at-risk patients and intervening before the targeted disease begins, re-appears, exacerbates
or progresses. We believe our experience and expertise in translational medicine, immunology, and the design and execution of
rapid go/no-go clinical trials makes us unique in the field of immune-mediated disease.
We have access to relevant
in-licensing opportunities from industry-leading pharmaceutical companies; innovative, development-stage biotechnology companies;
and world-renowned academic centers. To date, we have obtained exclusive worldwide rights to an enterovirus vaccine platform,
targeting the prevention of CVB infections and T1D onset, from Vactech Ltd., a Finnish biotechnology company; one clinical-stage
product candidate from an affiliated entity of Janssen Pharmaceuticals, Inc., or Janssen, a small molecule targeting
an upstream pathological mechanism believed to drive CD; two product candidates from MacroGenics, Inc., a Phase 3 clinical-stage
product candidate for the interception and possible delay or prevention of T1D and a Phase 1 clinical-stage product candidate
for the potential treatment of SLE; and a Phase 2 clinical-stage product candidate from Amgen, Inc., or Amgen, targeting celiac
disease.
Focus
and Pipeline
Inflammation
is a natural consequence of most infections as it is the immune system’s first response to invading pathogens in the event
of injury or acute illness. Most of the time, this response is beneficial and well-controlled; helping to repair tissue damage
and clear pathogens from the body. In addition to directly damaging tissues and organs, an infection can sometimes result in the
excessive release of toxic immune mediators leading to a potentially life-threatening acute pathological immune response. When
patients have the requisite genetic predisposition, infections can also trigger chronic autoimmune responses that persist and
progress long after the original insult has subsided. These sustained pathological responses have been linked to an increased
susceptibility to chronic debilitating and potentially life threatening diseases like inflammatory bowel disease, diabetes, cancer,
and certain neurological disorders.
Our
“predict” and “preempt” therapeutic approach is to intercept the underlying pathological immune and inflammatory
responses in susceptible individuals. Our pipeline includes:
|
|
●
|
PRV-031: a humanized, anti-CD3
mAb for the interception of T1D in pediatric patients with newly-diagnosed T1D
and, potentially, for delaying and/or preventing disease progression in subjects at risk
of developing T1D, which has been designated by the U.S. Food and Drug Administration,
or FDA, as orphan drug for the treatment of newly-diagnosed T1D;
|
|
|
●
|
PRV-015:
a human anti-interleukin 15, or IL-15, mAb for the treatment of gluten-free diet non-responsive celiac disease, or NRCD, intercepting
the effects of contaminating gluten in the most common autoimmune disorder without any approved medication (celiac disease);
|
|
|
●
|
PRV-6527:
an oral small molecule CSF-1R inhibitor targeting the differentiation and activation of antigen-presenting cells, or APCs,
to prevent chronic inflammatory responses and progression or relapse in CD;
|
|
|
●
|
PRV-3279:
a humanized bispecific scaffold molecule targeting the B-cell surface proteins, CD32B and CD79B, for the treatment of SLE
and for the prevention of immunogenicity biotherapeutics such as gene therapy;
|
|
|
●
|
PRV-101:
a CVB vaccine to prevent acute CVB infections and, in those patients at risk, preventing the CVB-triggered autoimmune damage
to pancreatic beta cells that progresses to T1D and T1D-associated celiac disease; and
|
Our
Risks
Investing
in our securities involves a high degree of risk. You should carefully consider all of the information in this prospectus and
in the documents incorporated into this prospectus by reference prior to investing in our common stock. These risks are discussed
more fully in the section titled “Risk Factors” in our Annual report on Form 10-K for the year ended December 31,
2018, as updated by our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019. These risks and uncertainties include,
but are not limited to, the following:
|
|
●
|
We
are a clinical stage biopharmaceutical company with a limited operating history;
|
|
|
|
|
|
|
●
|
We
have incurred substantial operating losses in each year since our inception and expect to continue to incur substantial losses
for the foreseeable future and we may never become profitable or, if achieved, be able to sustain profitability;
|
|
|
|
|
|
|
●
|
There
is substantial doubt regarding our ability to continue as a going concern;
|
|
|
|
|
|
|
●
|
We
need to raise additional capital;
|
|
|
|
|
|
|
●
|
We
have limited product candidates and may not be able to acquire additional product candidates in the future;
|
|
|
|
|
|
|
●
|
Although
we may pursue expedited regulatory approval pathways for a product candidate, it may not qualify for expedited development
or, if it does qualify, expedited development may not actually lead to a faster development or regulatory review or approval
process;
|
|
|
|
|
|
|
●
|
We
may be unable to obtain or maintain governmental approvals to market our product candidates in the United States, European
Union, or in other jurisdictions;
|
|
|
|
|
|
|
●
|
Even
if we receive regulatory approval for any of our product candidates, we may not be able to successfully commercialize any
approved products and the revenue that we generate from sales, if any, may be limited;
|
|
|
|
|
|
|
●
|
Clinical
drug development involves a lengthy and expensive process with an uncertain outcome, and the results of earlier studies and
trials may not be predictive of future trial results;
|
|
|
|
|
|
|
●
|
We
depend on rights to certain pharmaceutical compounds that have been licensed to us; we do not control these pharmaceutical
compounds and any loss of our rights to them could prevent us from selling our products;
|
|
|
|
|
|
|
●
|
We
may be unable to protect our intellectual property rights or may infringe on the intellectual property rights of others; and
|
|
|
|
|
|
|
●
|
If
product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization
of our product candidates.
|
Implications
of Being an Emerging Growth Company
We
are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act,
and, for as long as we continue to be an “emerging growth company,” we may choose to take advantage of exemptions
from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including,
but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act of 2002, as amended, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation
and stockholder approval of any golden parachute payments not previously approved. We will be an “emerging growth company”
until the earlier of (i) December 31, 2023, the last day of the fiscal year following the fifth anniversary of our July 2018 initial
public offering, (ii) the last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion, (iii) the
date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, or the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds
$700 million as of the last business day of our most recently completed second fiscal quarter, or (iv) the date on which we have
issued more than $1 billion in non-convertible debt during the preceding three-year period. We intend to take advantage of these
reporting exemptions described above until we are no longer an “emerging growth company.” Under the JOBS Act, “emerging
growth companies” can also delay adopting new or revised accounting standards until such time as those standards apply to
private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards
and, therefore, we are subject to the same new or revised accounting standards as other public companies that are not “emerging
growth companies.”
Corporate
Information
We
are a Delaware corporation formed on October 4, 2016. We are a virtual company and maintain a mailing address at P.O. Box 666,
Oldwick, NJ 08858. Our phone number is (908) 336-0360 and our web address is http://www.proventionbio.com. Information contained
in or accessible through our web site is not, and should not be deemed to be, incorporated by reference in, or considered part
of, this prospectus.
RISK
FACTORS
An
investment in our common stock is speculative and illiquid and involves a high degree of risk including the risk of a loss of
your entire investment. You should carefully consider the risk factors set forth under the heading “Risk Factors”
in our Annual Report on Form 10-K for the year ended December 31, 2018, as may be revised or supplemented by our subsequent Quarterly
Reports on Form 10-Q or Current Reports on Form 8-K, each of which are on file with the SEC and are incorporated herein by reference,
and which may be amended, supplemented or superseded from time to time by other reports we file with the SEC in the future.
These
risk factors contain, in addition to historical information, forward looking statements that involve risks and uncertainties.
Our actual results could differ significantly from the results discussed in the forward looking statements.
The occurrence
of any of the adverse developments described in the documents incorporated by reference could materially and adversely harm our
business, financial condition, results of operations or prospects. In such event, the value of our common stock could decline,
and you could lose all or a substantial portion of the money that you pay for our common stock. In addition, the risks and uncertainties
discussed in the documents incorporated by reference are not the only ones we face. Our business, financial condition, results
of operations or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not
believe are material, and these risks and uncertainties could results in a complete loss of your investment. In assessing these
risks and uncertainties, you should also refer to the other information contained in this prospectus (as supplemented or amended)
and the documents incorporated by reference in this prospectus.
FORWARD-LOOKING
STATEMENTS
This
prospectus, including the documents that we incorporate by reference, contains forward-looking statements as that term is defined
in the federal securities laws. The events described in forward-looking statements contained in this prospectus, including the
documents that we incorporate by reference, may not occur. Generally, these statements relate to our business plans or strategies,
projected or anticipated benefits or other consequences of our plans or strategies, financing plans, projected or anticipated
benefits from acquisitions that we may make, or projections involving anticipated revenues, earnings or other aspects of our operating
results or financial position, and the outcome of any contingencies. Any such forward-looking statements are based on current
expectations, estimates and projections of management. We intend for these forward-looking statements to be covered by the safe-harbor
provisions for forward-looking statements. Words such as “may,” “expect,” “believe,” “anticipate,”
“project,” “plan,” “intend,” “estimate,” and “continue,” and their
opposites and similar expressions are intended to identify forward-looking statements. We caution you that these statements are
not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many
of which are beyond our control that may influence the accuracy of the statements and the projections upon which the statements
are based. Factors that may affect our results include, but are not limited to, the risks and uncertainties discussed in the “Risk
Factors” section of this prospectus, any accompanying prospectus supplements, in our Annual Report on Form 10-K or in other
reports we file with the SEC.
Any
one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking
statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially
from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any
forward-looking statements, whether from new information, future events or otherwise.
You
should rely only on the information in this prospectus. We have not authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent information, you should not rely upon it.
USE
OF PROCEEDS
Unless
we inform you otherwise in the prospectus supplement, we will use the net proceeds from the sale of the securities offered by
this prospectus and the exercise price from the exercise of any convertible securities, if any, for general corporate purposes,
which may include funding research, development and product manufacturing, clinical trials, acquisitions or investments in businesses,
products or technologies that are complementary to our own, increasing our working capital, reducing indebtedness, and capital
expenditures.
When
particular securities are offered, the prospectus supplement relating to that offering will set forth our intended use of the
net proceeds received from the sale of those securities we sell. Pending the application of the net proceeds for these purposes,
we expect to invest the proceeds in short-term, interest-bearing instruments or other investment-grade securities.
THE
SECURITIES WE MAY OFFER
General
The
descriptions of the securities contained in this prospectus, together with the applicable prospectus supplements, summarize all
of the material terms and provisions of the various types of securities that we may offer. We will describe in the applicable
prospectus supplement relating to any securities the particular terms of the securities offered by that prospectus supplement.
If we indicate in the applicable prospectus supplement, the terms of the securities may differ from the terms we have summarized
below. We may also include in the prospectus supplement information about material United States federal income tax considerations
relating to the securities, and the securities exchange, if any, on which the securities will be listed.
We
may sell from time to time, together or separately, in one or more offerings:
|
|
●
|
common
stock;
|
|
|
|
|
|
|
●
|
preferred
stock;
|
|
|
|
|
|
|
●
|
debt
securities;
|
|
|
|
|
|
|
●
|
subscription
rights to purchase shares of common stock, preferred stock or debt securities;
|
|
|
|
|
|
|
●
|
warrants
to purchase shares of common stock or preferred stock; and
|
|
|
|
|
|
|
●
|
units
consisting of any combination of the securities listed above.
|
In
this prospectus, we refer to the common stock, preferred stock, debt securities, subscription rights, warrants and units collectively
as “securities.” The total dollar amount of all securities that we may sell will not exceed $200,000,000.
If
we issue debt securities at a discount from their original stated principal amount, then, for purposes of calculating the total
dollar amount of all securities issued under this prospectus, we will treat the initial offering price of the debt securities
as the total original principal amount of the debt securities.
This
prospectus may not be used to consummate a sale of securities unless it is accompanied by a prospectus supplement.
DESCRIPTION
OF CAPITAL STOCK
General
Our
authorized capital stock consists of:
|
|
●
|
100,000,000
shares of common stock, par value $0.0001 per share; and
|
|
|
|
|
|
|
●
|
25,000,000
shares of preferred stock, par value $0.0001 per share, of which, as of the date of this prospectus, none of which shares
have been designated.
|
As
of close of business on July 31, 2019, 39,337,282 shares of common stock were issued and outstanding and no shares of preferred
stock were issued and outstanding.
The
additional shares of our authorized capital stock available for issuance may be issued at times and under circumstances so as
to have a dilutive effect on earnings per share and on the equity ownership of the holders of our common stock. The ability of
our board of directors to issue additional shares of stock could enhance the board’s ability to negotiate on behalf of the
stockholders in a takeover situation but could also be used by the board to make a change-in-control more difficult, thereby denying
stockholders the potential to sell their shares at a premium and entrenching current management. The following description is
a summary of the material provisions of our capital stock. You should refer to our Second Amended and Restated Certificate of
Incorporation and our Amended and Restated Bylaws, both of which are on file with the SEC as exhibits to previous SEC filings,
for additional information. The summary below is qualified by provisions of applicable law.
Common
Stock
Holders
of our common stock are entitled to such dividends as may be declared by our board of directors out of funds legally available
for such purpose. The shares of common stock are neither redeemable nor convertible. Holders of common stock have no preemptive
or subscription rights to purchase any of our securities.
Each
holder of our common stock is entitled to one vote for each such share outstanding in the holder’s name. No holder of common
stock is entitled to cumulate votes in voting for directors.
In
the event of our liquidation, dissolution or winding up, the holders of our common stock are entitled to receive pro rata our
assets, which are legally available for distribution, after payments of all debts and other liabilities. All of the outstanding
shares of our common stock are fully paid and non-assessable. The shares of common stock offered by this prospectus will also
be fully paid and non-assessable.
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is Computershare Limited.
Preferred
Stock
Our
board of directors has the authority, without further action by our stockholders, to issue up to 25,000,000 shares of preferred
stock in one or more classes or series and to fix the designations, rights, preferences, privileges and restrictions thereof,
without further vote or action by the stockholders. These rights, preferences and privileges could include dividend rights, conversion
rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting,
or the designation of, such class or series, any or all of which may be greater than the rights of common stock. The issuance
of our preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders
will receive dividend payments and payments upon our liquidation. In addition, the issuance of preferred stock could have the
effect of delaying, deferring or preventing a change in control of our company or other corporate action. We currently have no
plans to issue any shares of preferred stock.
If
we offer a specific series of preferred stock under this prospectus, we will describe the terms of the preferred stock in the
prospectus supplement for such offering and will file a copy of the certificate establishing the terms of the preferred stock
with the SEC. To the extent required, this description will include:
|
|
●
|
the
title and stated value;
|
|
|
|
|
|
|
●
|
the
number of shares offered, the liquidation preference per share and the purchase price;
|
|
|
|
|
|
|
●
|
the
dividend rate(s), period(s) and/or payment date(s), or method(s) of calculation for such dividends;
|
|
|
|
|
|
|
●
|
whether
dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate;
|
|
|
|
|
|
|
●
|
the
procedures for any auction and remarketing, if any;
|
|
|
|
|
|
|
●
|
the
provisions for a sinking fund, if any;
|
|
|
|
|
|
|
●
|
the
provisions for redemption, if applicable;
|
|
|
|
|
|
|
●
|
any
listing of the preferred stock on any securities exchange or market;
|
|
|
|
|
|
|
●
|
whether
the preferred stock will be convertible into our common stock, and, if applicable, the conversion price (or how it will be
calculated) and conversion period;
|
|
|
|
|
|
|
●
|
whether
the preferred stock will be exchangeable into debt securities, and, if applicable, the exchange price (or how it will be calculated)
and exchange period;
|
|
|
|
|
|
|
●
|
voting
rights, if any, of the preferred stock;
|
|
|
|
|
|
|
●
|
a
discussion of any material and/or special U.S. federal income tax considerations applicable to the preferred stock;
|
|
|
|
|
|
|
●
|
the
relative ranking and preferences of the preferred stock as to dividend rights and rights upon liquidation, dissolution or
winding up of our affairs; and
|
|
|
|
|
|
|
●
|
any
material limitations on issuance of any class or series of preferred stock ranking senior to or on a parity with the series
of preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of our company.
|
Transfer
Agent and Registrar for Preferred Stock
The
transfer agent and registrar for any series or class of preferred stock will be set forth in each applicable prospectus supplement.
Anti-Takeover
Provisions
The
provisions of Delaware law, our Second Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws could
have the effect of delaying, deferring or discouraging another person from acquiring control of our company. These provisions,
which are summarized below, may have the effect of discouraging takeover bids. They are also designed, in part, to encourage persons
seeking to acquire control of us to negotiate first with our board of directors. We believe that the benefits of increased protection
of our potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a
proposal to acquire us because negotiation of these proposals could result in an improvement of their terms.
Delaware
Law
We
are subject to Section 203 of the Delaware General Corporation Law, or DGCL, an anti-takeover law. In general, Section 203 prohibits
a Delaware corporation from engaging in any business combination (as defined below) with any interested stockholder (as defined
below) for a period of three years following the date that the stockholder became an interested stockholder, unless:
|
|
●
prior to that date, the board of directors of the corporation approved either the business combination or the transaction
that resulted in the stockholder becoming an interested stockholder;
|
|
|
|
|
|
●
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for
purposes of determining the number of shares of voting stock outstanding (but not the voting stock owned by the interested
stockholder) those shares owned by persons who are directors and officers and by excluding employee stock plans in which employee
participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in
a tender or exchange offer; or
|
|
|
|
|
|
●
on or subsequent to that date, the business combination is approved by the board of directors of the corporation and authorized
at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of
the outstanding voting stock that is not owned by the interested stockholder.
|
In
general, Section 203 defines “business combination” to include the following:
|
|
●
any merger or consolidation involving the corporation and the interested stockholder;
|
|
|
|
|
|
●
any sale, lease, exchange, mortgage, transfer, pledge or other disposition of 10% or more of the assets of the corporation
involving the interested stockholder;
|
|
|
|
|
|
●subject
to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation
to the interested stockholder;
|
|
|
|
|
|
●
subject to limited exceptions, any transaction involving the corporation that has the effect of increasing the proportionate
share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or
|
|
|
|
|
|
●
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits
provided by or through the corporation.
|
In
general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding
voting stock of the corporation, or who beneficially owns 15% or more of the outstanding voting stock of the corporation at any
time within a three-year period immediately prior to the date of determining whether such person is an interested stockholder,
and any entity or person affiliated with or controlling or controlled by any of these entities or persons.
Certificate
of Incorporation and Bylaw Provisions
Our
Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws include a number of provisions that could
deter hostile takeovers or delay or prevent changes in control of our company. Certain of these provisions are summarized in the
following paragraphs.
Effects
of authorized but unissued common stock.
One of the effects of the existence of authorized but unissued common stock may be
to enable our board of directors to make more difficult or to discourage an attempt to obtain control of our company by means
of a merger, tender offer, proxy contest or otherwise, and thereby to protect the continuity of management. If, in the due exercise
of its fiduciary obligations, the board of directors were to determine that a takeover proposal was not in our best interest,
such shares could be issued by the board of directors without stockholder approval in one or more transactions that might prevent
or render more difficult or costly the completion of the takeover transaction by diluting the voting or other rights of the proposed
acquirer or insurgent stockholder group, by putting a substantial voting bloc in institutional or other hands that might undertake
to support the position of the incumbent board of directors, by effecting an acquisition that might complicate or preclude the
takeover, or otherwise.
Cumulative
Voting.
Our Second Amended and Restated Certificate of Incorporation does not provide for cumulative voting in the election
of directors, which would allow holders of less than a majority of the stock to elect some directors.
Director
Vacancies.
Our Second Amended and Restated Certificate of Incorporation provides that all vacancies may be filled by the affirmative
vote of a majority of directors then in office, even if less than a quorum.
Stockholder
Action; Special Meeting of Stockholders.
Our Amended and Restated Bylaws provide that stockholders may act by written consent.
However, stockholders pursuing an action by written consent will be required to comply with certain notice and record date requirements
that are set forth in the General Corporation Law of the State of Delaware. A special meeting of stockholders may be called by
the Chairman of the board of directors, the President, the Chief Executive Officer, or the board of directors at any time and
for any purpose or purposes as shall be stated in the notice of the meeting, or by request of the holders of record of at least
20% of outstanding shares of common stock. This provision could prevent stockholders from calling a special meeting because, unless
certain significant stockholders were to join with them, they might not obtain the percentage necessary to request the meeting.
Therefore, stockholders holding less than 20% of issued and outstanding common stock, without the assistance of management, may
be unable to propose a vote on any transaction which may delay, defer or prevent a change of control, even if the transaction
were in the best interests of certain of our stockholders.
Advance
Notice Requirements for Stockholder Proposals and Director Nominations.
Our Amended and Restated Bylaws establish advance
notice procedures with respect to stockholder proposals and the nomination of candidates for election as director. In order for
any matter to be “properly brought” before a meeting, a stockholder will have to comply with such advance notice procedures
and provide us with certain information. Our Amended and Restated Bylaws allow the presiding officer at a meeting of stockholders
to adopt rules and regulations for the conduct of meetings which may have the effect of precluding the conduct of certain business
at a meeting if such rules and regulations are not followed. These provisions may also defer, delay or discourage a potential
acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting
to influence or obtain control of our company.
Supermajority
Voting for Amendments to Our Governing Documents.
Any amendment to our Second Amended and Restated Certificate of Incorporation
related to the provisions governing, among other things, the general powers of the Board of Directors, the number and election
of directors, the filling of director vacancies, the ability of the Board to adopt, amend or repeal the Amended and Restated Bylaws,
the ability to call special stockholder meetings, and director liability and indemnification, will require the affirmative vote
of at least 66 2/3% of the voting power of all shares of our capital stock then outstanding. Our Second Amended and Restated Certificate
of Incorporation provides that the board of directors is expressly authorized to adopt, amend or repeal our Amended and Restated
Bylaws and that our stockholders may amend our Amended and Restated Bylaws only with the approval of at least 66 2/3% of the voting
power of all shares of our capital stock then outstanding.
Choice
of Forum.
Our Second Amended and Restated Certificate of Incorporation provides that, subject to certain exceptions, the Court
of Chancery of the State of Delaware will be the exclusive forum for any claim, including any derivative claim, (i) that is 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 the
DGCL, or any other provision of Title 8 of the Delaware Code, confers jurisdiction upon the Court of Chancery. This provision
does not apply to any claims arising under the Securities Act or the Exchange Act, or any claim in which exclusive jurisdiction
is vested in a court or forum other than the Court of Chancery or for which the Court of Chancery does not have subject matter
jurisdiction. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation
has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable
or unenforceable.
Section
27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created
by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits
brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive
jurisdiction. In addition, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over
all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As a
result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Securities
Act or any other claim for which the federal and state courts have concurrent jurisdiction.
DESCRIPTION
OF STOCK WARRANTS
We
summarize below some of the provisions that will apply to the warrants unless the applicable prospectus supplement provides otherwise.
This summary may not contain all information that is important to you. The complete terms of the warrants will be contained in
the applicable warrant certificate and warrant agreement. These documents have been or will be included or incorporated by reference
as exhibits to the registration statement of which this prospectus is a part. You should read the warrant certificate and the
warrant agreement. You should also read the prospectus supplement, which will contain additional information and which may update
or change some of the information below.
General
We
may issue, together with common or preferred stock as units or separately, warrants for the purchase of shares of our common or
preferred stock. The terms of each warrant will be discussed in the applicable prospectus supplement relating to the particular
series of warrants. The form(s) of certificate representing the warrants and/or the warrant agreement will be, in each case, filed
with the SEC as an exhibit to a document incorporated by reference in the registration statement of which this prospectus is a
part on or prior to the date of any prospectus supplement relating to an offering of the particular warrant. The following summary
of material provisions of the warrants and the warrant agreements are subject to, and qualified in their entirety by reference
to, all the provisions of the warrant agreement and warrant certificate applicable to a particular series of warrants.
The
prospectus supplement relating to any series of warrants that are offered by this prospectus will describe, among other things,
the following terms to the extent they are applicable to that series of warrants:
|
|
●
|
the
procedures and conditions relating to the exercise of the warrants;
|
|
|
|
|
|
|
●
|
the
number of shares of our common or preferred stock, if any, issued with the warrants;
|
|
|
|
|
|
|
●
|
the
date, if any, on and after which the warrants and any related shares of our common or preferred stock will be separately transferable;
|
|
|
|
|
|
|
●
|
the
offering price of the warrants, if any;
|
|
|
|
|
|
|
●
|
the
number of shares of our common or preferred stock which may be purchased upon exercise of the warrants and the price or prices
at which the shares may be purchased upon exercise;
|
|
|
|
|
|
|
●
|
the
date on which the right to exercise the warrants will begin and the date on which the right will expire;
|
|
|
|
|
|
|
●
|
a
discussion of the material United States federal income tax considerations applicable to the exercise of the warrants;
|
|
|
|
|
|
|
●
|
anti-dilution
provisions of the warrants, if any;
|
|
|
|
|
|
|
●
|
call
provisions of the warrants, if any; and
|
|
|
|
|
|
|
●
|
any
other material terms of the warrants.
|
Each
warrant may entitle the holder to purchase for cash, or, in limited circumstances, by effecting a cashless exercise for, the number
of shares of our common or preferred stock at the exercise price that is described in the applicable prospectus supplement. Warrants
will be exercisable during the period of time described in the applicable prospectus supplement. After that period, unexercised
warrants will be void. Warrants may be exercised in the manner described in the applicable prospectus supplement.
A
holder of a warrant will not have any of the rights of a holder of our common or preferred stock before the stock is purchased
upon exercise of the warrant. Therefore, before a warrant is exercised, the holder of the warrant will not be entitled to receive
any dividend payments or exercise any voting or other rights associated with shares of our common or preferred stock which may
be purchased when the warrant is exercised.
Transfer
Agent and Registrar
The
transfer agent and registrar, if any, for any warrants will be set forth in the applicable prospectus supplement.
DESCRIPTION
OF DEBT SECURITIES
This
prospectus describes certain general terms and provisions of debt securities that we may offer. The debt securities may be issued
pursuant to, in the case of senior debt securities, a senior indenture, and in the case of subordinated debt securities, a subordinated
indenture, in each case in the forms filed as exhibits to this registration statement, which we refer to as the “indentures.”
The indentures will be entered into between us and a trustee to be named prior to the issuance of any debt securities, which we
refer to as the “trustee.” The indentures will not limit the amount of debt securities that can be issued thereunder
and will provide that the debt securities may be issued from time to time in one or more series pursuant to the terms of one or
more securities resolutions or supplemental indentures creating such series.
We
have summarized below the material provisions of the indentures and the debt securities or indicated which material provisions
will be described in the related prospectus supplement for any offering of debt securities. These descriptions are only summaries,
and you should refer to the relevant indenture for the particular offering of debt securities itself which will describe completely
the terms and definitions of the offered debt securities and contain additional information about the debt securities.
Terms
When
we offer to sell a particular series of debt securities, we will describe the specific terms of the securities in a prospectus
supplement. The prospectus supplement will set forth the following terms, as applicable, of the debt securities offered thereby:
|
|
●
|
the
designation, aggregate principal amount, currency or composite currency and denominations;
|
|
|
|
|
|
|
●
|
the
price at which such debt securities will be issued and, if an index formula or other method is used, the method for determining
amounts of principal or interest;
|
|
|
|
|
|
|
●
|
the
maturity date and other dates, if any, on which principal will be payable;
|
|
|
|
|
|
|
●
|
whether
or not the debt securities will be secured or unsecured, and the terms of any secured debt;
|
|
|
|
|
|
|
●
|
whether
the debt securities rank as senior debt, senior subordinated debt, subordinated debt or any combination thereof, and the terms
of any subordination;
|
|
|
|
|
|
|
●
|
the
interest rate (which may be fixed or variable), if any;
|
|
|
|
|
|
|
●
|
the
date or dates from which interest will accrue and on which interest will be payable, and the record dates for the payment
of interest;
|
|
|
|
|
|
|
●
|
the
manner of paying principal and interest;
|
|
|
|
|
|
|
●
|
the
place or places where principal and interest will be payable;
|
|
|
|
|
|
|
●
|
the
terms of any mandatory or optional redemption by us or any third party including any sinking fund;
|
|
|
|
|
|
|
●
|
the
terms of any conversion or exchange;
|
|
|
|
|
|
|
●
|
the
terms of any redemption at the option of holders or put by the holders;
|
|
|
|
|
|
|
●
|
any
tax indemnity provisions;
|
|
|
|
|
|
|
●
|
if
the debt securities provide that payments of principal or interest may be made in a currency other than that in which the
debt securities are denominated, the manner for determining such payments;
|
|
|
|
|
|
|
●
|
the
portion of principal payable upon acceleration of a Discounted Debt Security (as defined below);
|
|
|
|
|
|
|
●
|
whether
and upon what terms debt securities may be defeased;
|
|
|
|
|
|
|
●
|
any
events of default or covenants in addition to or in lieu of those set forth in the indentures;
|
|
|
|
|
|
|
●
|
provisions
for electronic issuance of debt securities or for the issuance of debt securities in uncertificated form; and
|
|
|
|
|
|
|
●
|
any
additional provisions or other special terms not inconsistent with the provisions of the indentures, including any terms that
may be required or advisable under United States or other applicable laws or regulations, or advisable in connection with
the marketing of the debt securities.
|
Debt
securities of any series may be issued as registered debt securities or uncertificated debt securities, in such denominations
as specified in the terms of the series.
Securities
may be issued under the indentures as discounted debt securities to be offered and sold at a substantial discount from the principal
amount thereof. Special United States federal income tax and other considerations applicable thereto will be described in the
prospectus supplement relating to such discounted debt securities. “Discounted debt security” means a security where
the amount of principal due upon acceleration is less than the stated principal amount.
We
are not obligated to issue all debt securities of one series at the same time and, unless otherwise provided in the prospectus
supplement, we may reopen a series, without the consent of the holders of the debt securities of that series, for the issuance
of additional debt securities of that series. Additional debt securities of a particular series will have the same terms and conditions
as outstanding debt securities of such series, except for the date of original issuance and the offering price, and will be consolidated
with, and form a single series with, such outstanding debt securities.
Ranking
The
senior debt securities will rank equally with all of our other senior and unsubordinated debt. Our secured debt, if any, will
be effectively senior to the senior debt securities to the extent of the value of the assets securing such debt. The subordinated
debt securities will be subordinate and junior in right of payment to all of our present and future senior indebtedness to the
extent and in the manner described in the prospectus supplement and as set forth in the board resolution, officer’s certificate
or supplemental indenture relating to such offering.
Certain
Covenants
Any
covenants that may apply to a particular series of debt securities will be described in the prospectus supplement relating thereto.
Successor
Obligor
The
indentures provide that, unless otherwise specified in the securities resolution or supplemental indenture establishing a series
of debt securities, we shall not consolidate with or merge into, or transfer all or substantially all of our assets to, any person
in any transaction in which we are not the survivor, unless:
|
|
●
|
the
person is organized under the laws of the United States or a jurisdiction within the United States;
|
|
|
|
|
|
|
●
|
the
person assumes by supplemental indenture all of our obligations under the relevant indenture, the debt securities and any
coupons;
|
|
|
|
|
|
|
●
|
immediately
after the transaction no Default (as defined below) exists; and
|
|
|
|
|
|
|
●
|
we
deliver to the trustee an officers’ certificate and opinion of counsel stating that the transaction complies with the
foregoing requirements and that all conditions precedent provided for in the indenture relating to the transaction have been
complied with.
|
In
such event, the successor will be substituted for us, and thereafter all of our obligations under the relevant indenture, the
debt securities and any coupons will terminate.
The
indentures provide that these limitations shall not apply if our board of directors makes a good faith determination that the
principal purpose of the transaction is to change our state of incorporation.
Exchange
of Debt Securities
Registered
debt securities may be exchanged for an equal aggregate principal amount of registered debt securities of the same series and
date of maturity in such authorized denominations as may be requested upon surrender of the registered debt securities at an agency
of the Company maintained for such purpose and upon fulfillment of all other requirements of such agent.
Default
and Remedies
Unless
the securities resolution or supplemental indenture establishing the series otherwise provides (in which event the prospectus
supplement will so state), an “Event of Default” with respect to a series of debt securities will occur if:
|
|
(1)
|
we
default in any payment of interest on any debt securities of such series when the same becomes due and payable and the default
continues for a period of 30 days;
|
|
|
|
|
|
|
(2)
|
we
default in the payment of all or any part of the principal and premium, if any, of any debt securities of such series when
the same becomes due and payable at maturity or upon redemption, acceleration or otherwise and such default shall continue
for five or more days;
|
|
|
|
|
|
|
(3)
|
we
default in the performance of any of our other agreements applicable to the series and the default continues for 30 days after
the notice specified below;
|
|
|
|
|
|
|
(4)
|
a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law (as defined below) that:
|
|
|
|
|
|
|
|
|
(A)
|
is
for relief against us in an involuntary case,
|
|
|
|
|
|
|
|
|
(B)
|
appoints
a Custodian (as defined below) for us or for any substantial part of our property, or
|
|
|
|
|
|
|
|
|
(C)
|
orders
the winding up or liquidation of us, and the order or decree remains unstayed and in effect for 90 days;
|
|
|
|
|
|
|
|
(5)
|
we,
pursuant to or within the meaning of any Bankruptcy Law:
|
|
|
|
|
|
|
|
|
(A)
|
commence
a voluntary case,
|
|
|
|
|
|
|
|
|
(B)
|
consent
to the entry of an order for relief against us in an involuntary case,
|
|
|
|
|
|
|
|
|
(C)
|
consent
to the appointment of a Custodian for us or for any substantial part of our property, or
|
|
|
|
|
|
|
|
|
(D)
|
make
a general assignment for the benefit of our creditors; or
|
|
|
|
|
|
|
|
(6)
|
there
occurs any other Event of Default provided for in such series.
|
The
term “Bankruptcy Law” means Title 11 of the United States Code or any similar Federal or State law for the relief
of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator or a similar official under any
Bankruptcy Law.
“Default”
means any event which is, or after notice or passage of time would be, an Event of Default. A Default under subparagraph (3) above
is not an Event of Default until the trustee or the holders of at least 25% in principal amount of the series notify us of the
Default and we do not cure the Default within the time specified after receipt of the notice.
The
trustee may require indemnity satisfactory to it before it enforces the indentures or the debt securities of the series. Subject
to certain limitations, holders of a majority in principal amount of the debt securities of the series may direct the trustee
in its exercise of any trust or power with respect to such series. Except in the case of Default in payment on a series, the trustee
may withhold from securityholders of such series notice of any continuing Default if the trustee determines that withholding notice
is in the interest of such securityholders. We are required to furnish the trustee annually a brief certificate as to our compliance
with all conditions and covenants under the indentures.
The
indentures do not have cross-default provisions. Thus, a default by us on any other debt, including any other series of debt securities,
would not constitute an Event of Default.
Amendments
and Waivers
The
indentures and the debt securities or any coupons of the series may be amended, and any Default may be waived as follows:
Unless
the securities resolution or supplemental indenture otherwise provides (in which event the applicable prospectus supplement will
so state), the debt securities and the indentures may be amended with the consent of the holders of a majority in principal amount
of the debt securities of all series affected voting as one class. Unless the securities resolution or supplemental indenture
otherwise provides (in which event the applicable prospectus supplement will so state), a Default other than a Default in payment
on a particular series may be waived with the consent of the holders of a majority in principal amount of the debt securities
of the series. However, without the consent of each securityholder affected, no amendment or waiver may:
|
|
●
|
change
the fixed maturity of or the time for payment of interest on any debt security;
|
|
|
|
|
|
|
●
|
reduce
the principal, premium or interest payable with respect to any debt security;
|
|
|
|
|
|
|
●
|
change
the place of payment of a debt security or the currency in which the principal or interest on a debt security is payable;
|
|
|
|
|
|
|
●
|
change
the provisions for calculating any redemption or repurchase price with respect to any debt security;
|
|
|
|
|
|
|
●
|
adversely
affect any holder’s right to receive payment of principal and interest or to institute suit for the enforcement of any
such payment;
|
|
|
|
|
|
|
●
|
reduce
the amount of debt securities whose holders must consent to an amendment or waiver;
|
|
|
|
|
|
|
●
|
make
any change that materially adversely affects the right to convert any debt security;
|
|
|
|
|
|
|
●
|
waive
any Default in payment of principal of or interest on a debt security; or
|
|
|
|
|
|
|
●
|
adversely
affect any holder’s rights with respect to redemption or repurchase of a debt security.
|
Without
the consent of any securityholder, the indentures or the debt securities may be amended to:
|
|
●
|
provide
for assumption of our obligations to securityholders in the event of a merger or consolidation requiring such assumption;
|
|
|
|
|
|
|
●
|
cure
any ambiguity, omission, defect or inconsistency;
|
|
|
|
|
|
|
●
|
conform
the terms of the debt securities to the description thereof in the prospectus and prospectus supplement offering such debt
securities;
|
|
|
●
|
create
a series and establish its terms;
|
|
|
|
|
|
|
●
|
provide
for the acceptance of appointment by a successor trustee or to facilitate the administration of the trusts by more than one
trustee;
|
|
|
|
|
|
|
●
|
provide
for uncertificated or unregistered securities;
|
|
|
|
|
|
|
●
|
make
any change that does not adversely affect the rights of any securityholder;
|
|
|
|
|
|
|
●
|
add
to our covenants; or
|
|
|
|
|
|
|
●
|
make
any other change to the indentures so long as no debt securities are outstanding.
|
Conversion
Rights
Any
securities resolution or supplemental indenture establishing a series of debt securities may provide that the debt securities
of such series will be convertible at the option of the holders thereof into or for our common stock or other equity or debt instruments.
The securities resolution or supplemental indenture may establish, among other things, (1) the number or amount of shares of common
stock or other equity or debt instruments for which $1,000 aggregate principal amount of the debt securities of the series is
convertible, as may be adjusted pursuant to the terms of the relevant indenture and the securities resolution; and (2) provisions
for adjustments to the conversion rate and limitations upon exercise of the conversion right. The indentures provide that we will
not be required to make an adjustment in the conversion rate unless the adjustment would require a cumulative change of at least
1% in the conversion rate. However, we will carry forward any adjustments that are less than 1% of the conversion rate and take
them into account in any subsequent adjustment of the conversion rate.
Legal
Defeasance and Covenant Defeasance
Debt
securities of a series may be defeased in accordance with their terms and, unless the securities resolution or supplemental indenture
establishing the terms of the series otherwise provides, as set forth below. We at any time may terminate as to a series all of
our obligations (except for certain obligations, including obligations with respect to the defeasance trust and obligations to
register the transfer or exchange of a debt security, to replace destroyed, lost or stolen debt securities and coupons and to
maintain paying agencies in respect of the debt securities) with respect to the debt securities of the series and any related
coupons and the relevant indenture, which we refer to as legal defeasance. We at any time may terminate as to a series our obligations
with respect to any restrictive covenants which may be applicable to a particular series, which we refer to as covenant defeasance.
We
may exercise our legal defeasance option notwithstanding our prior exercise of our covenant defeasance option. If we exercise
our legal defeasance option, a series may not be accelerated because of an Event of Default. If we exercise our covenant defeasance
option, a series may not be accelerated by reference to any covenant which may be applicable to a series.
To
exercise either defeasance option as to a series, we must (1) irrevocably deposit in trust with the trustee (or another trustee)
money or U.S. Government Obligations (as defined below), deliver a certificate from a nationally recognized firm of independent
accountants expressing their opinion that the payments of principal and interest when due on the deposited U.S. Government Obligations,
without reinvestment, plus any deposited money without investment will provide cash at such times and in such amounts as will
be sufficient to pay the principal and interest when due on all debt securities of such series to maturity or redemption, as the
case may be; and (2) comply with certain other conditions. In particular, we must obtain an opinion of tax counsel that the defeasance
will not result in recognition of any gain or loss to holders for federal income tax purposes.
“U.S.
Government Obligations” means direct obligations of the United States or any agency or instrumentality of the United States,
the payment of which is unconditionally guaranteed by the United States, which, in either case, have the full faith and credit
of the United States pledged for payment and which are not callable at the issuer’s option, or certificates representing
an ownership interest in such obligations.
Regarding
the Trustee
Unless
otherwise indicated in a prospectus supplement, the trustee will also act as depository of funds, transfer agent, paying agent
and conversion agent, as applicable, with respect to the debt securities. In certain circumstances, we or the securityholders
may remove the trustee as the trustee under a given indenture. The indenture trustee may also provide additional unrelated services
to us as a depository of funds, registrar, trustee and similar services.
Governing
Law
The
indentures and the debt securities will be governed by New York law, except to the extent that the Trust Indenture Act of 1939
is applicable.
DESCRIPTION
OF SUBSCRIPTION RIGHTS
We
may issue subscription rights to purchase our common stock or debt securities. These subscription rights may be offered independently
or together with any other security offered hereby and may or may not be transferable by the stockholder receiving the subscription
rights in such offering. In connection with any offering of subscription rights, we may enter into a standby arrangement with
one or more underwriters or other purchasers pursuant to which the underwriters or other purchasers may be required to purchase
any securities remaining unsubscribed for after such offering.
The
prospectus supplement relating to any subscription rights we offer, if any, will, to the extent applicable, include specific terms
relating to the offering, including some or all of the following:
|
|
●
|
the
price, if any, for the subscription rights;
|
|
|
|
|
|
|
●
|
the
exercise price payable for our common stock or debt securities upon the exercise of the subscription rights;
|
|
|
|
|
|
|
●
|
the
number of subscription rights to be issued to each stockholder;
|
|
|
|
|
|
|
●
|
the
number and terms of our common stock or debt securities which may be purchased per each subscription right;
|
|
|
|
|
|
|
●
|
the
extent to which the subscription rights are transferable;
|
|
|
|
|
|
|
●
|
any
other terms of the subscription rights, including the terms, procedures and limitations relating to the exchange and exercise
of the subscription rights;
|
|
|
|
|
|
|
●
|
the
date on which the right to exercise the subscription rights shall commence, and the date on which the subscription rights
shall expire;
|
|
|
|
|
|
|
●
|
the
extent to which the subscription rights may include an over-subscription privilege with respect to unsubscribed securities
or an over-allotment privilege to the extent the securities are fully subscribed; and
|
|
|
|
|
|
|
●
|
if
applicable, the material terms of any standby underwriting or purchase arrangement which may be entered into by us in connection
with the offering of subscription rights.
|
DESCRIPTION OF UNITS
We
may issue units comprised of one or more of the other securities described in this prospectus in any combination. Each unit will
be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit
will have the rights and obligations of a holder of each included security (but, to the extent convertible securities are included
in the units, the holder of the units will be deemed the holder of the convertible securities and not the holder of the underlying
securities). The unit agreement under which a unit is issued, if any, may provide that the securities included in the unit may
not be held or transferred separately, at any time or at any time before a specified date. The applicable prospectus supplement
may describe:
|
|
●
|
the
designation and terms of the units and of the securities comprising the units, including whether and under what circumstances
those securities may be held or transferred separately;
|
|
|
|
|
|
|
●
|
any
provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units;
|
|
|
|
|
|
|
●
|
the
terms of the unit agreement governing the units;
|
|
|
|
|
|
|
●
|
United
States federal income tax considerations relevant to the units; and
|
|
|
|
|
|
|
●
|
whether
the units will be issued in fully registered global form.
|
This
summary of certain general terms of units and any summary description of units in the applicable prospectus supplement do not
purport to be complete and are qualified in their entirety by reference to all provisions of the applicable unit agreement and,
if applicable, collateral arrangements and depositary arrangements relating to such units. The forms of the unit agreements and
other documents relating to a particular issue of units will be filed with the SEC each time we issue units, and you should read
those documents for provisions that may be important to you.
FORMS
OF SECURITIES
Each
debt security and, to the extent applicable, warrant, subscription right and unit, will be represented either by a certificate
issued in definitive form to a particular investor or by one or more global securities representing the entire issuance of securities.
Certificated securities in definitive form and global securities will be issued in registered form. Definitive securities name
you or your nominee as the owner of the security, and in order to transfer or exchange these securities or to receive payments
other than interest or other interim payments, you or your nominee must physically deliver the securities to the trustee, registrar,
paying agent or other agent, as applicable. Global securities name a depositary or its nominee as the owner of the debt securities
or warrants represented by these global securities. The depositary maintains a computerized system that will reflect each investor’s
beneficial ownership of the securities through an account maintained by the investor with its broker/dealer, bank, trust company
or other representative, as we explain more fully below.
Global
Securities
Registered
Global Securities
. We may issue the registered debt securities and, to the extent applicable, warrants, subscription rights
and units, in the form of one or more fully registered global securities that will be deposited with a depositary or its nominee
identified in the applicable prospectus supplement and registered in the name of that depositary or nominee. In those cases, one
or more registered global securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate
principal or face amount of the securities to be represented by registered global securities. Unless and until it is exchanged
in whole for securities in definitive registered form, a registered global security may not be transferred except as a whole by
and among the depositary for the registered global security, the nominees of the depositary or any successors of the depositary
or those nominees.
If
not described below, any specific terms of the depositary arrangement with respect to any securities to be represented by a registered
global security will be described in the prospectus supplement relating to those securities. We anticipate that the following
provisions will apply to all depositary arrangements.
Ownership
of beneficial interests in a registered global security will be limited to persons, called participants, that have accounts with
the depositary or persons that may hold interests through participants. Upon the issuance of a registered global security, the
depositary will credit, on its book-entry registration and transfer system, the participants’ accounts with the respective
principal or face amounts of the securities beneficially owned by the participants. Any dealers, underwriters or agents participating
in the distribution of the securities will designate the accounts to be credited. Ownership of beneficial interests in a registered
global security will be shown on, and the transfer of ownership interests will be effected only through, records maintained by
the depositary, with respect to interests of participants, and on the records of participants, with respect to interests of persons
holding through participants. The laws of some states may require that some purchasers of securities take physical delivery of
these securities in definitive form. These laws may impair your ability to own, transfer or pledge beneficial interests in registered
global securities.
So
long as the depositary, or its nominee, is the registered owner of a registered global security, that depositary or its nominee,
as the case may be, will be considered the sole owner or holder of the securities represented by the registered global security
for all purposes under the applicable indenture or warrant agreement. Except as described below, owners of beneficial interests
in a registered global security will not be entitled to have the securities represented by the registered global security registered
in their names, will not receive or be entitled to receive physical delivery of the securities in definitive form and will not
be considered the owners or holders of the securities under the applicable indenture or warrant agreement. Accordingly, each person
owning a beneficial interest in a registered global security must rely on the procedures of the depositary for that registered
global security and, if that person is not a participant, on the procedures of the participant through which the person owns its
interest, to exercise any rights of a holder under the applicable indenture or warrant agreement. We understand that under existing
industry practices, if we request any action of holders or if an owner of a beneficial interest in a registered global security
desires to give or take any action that a holder is entitled to give or take under the applicable indenture or warrant agreement,
the depositary for the registered global security would authorize the participants holding the relevant beneficial interests to
give or take that action, and the participants would authorize beneficial owners owning through them to give or take that action
or would otherwise act upon the instructions of beneficial owners holding through them.
Principal,
premium, if any, interest payments on debt securities and any payments to holders with respect to warrants represented by a registered
global security registered in the name of a depositary or its nominee will be made to the depositary or its nominee, as the case
may be, as the registered owner of the registered global security. None of the Company, the trustees, the warrant agents or any
other agent of the Company, the trustees or the warrant agents will have any responsibility or liability for any aspect of the
records relating to payments made on account of beneficial ownership interests in the registered global security or for maintaining,
supervising or reviewing any records relating to those beneficial ownership interests.
We
expect that the depositary for any of the securities represented by a registered global security, upon receipt of any payment
of principal, premium, interest or other distribution of underlying securities or other property to holders on that registered
global security, will immediately credit participants’ accounts in amounts proportionate to their respective beneficial
interests in that registered global security as shown on the records of the depositary. We also expect that payments by participants
to owners of beneficial interests in a registered global security held through participants will be governed by standing customer
instructions and customary practices, as is now the case with the securities held for the accounts of customers in bearer form
or registered in “street name,” and will be the responsibility of those participants.
If
the depositary for any of these securities represented by a registered global security is at any time unwilling or unable to continue
as depositary or ceases to be a clearing agency registered under the Exchange Act, and a successor depositary registered as a
clearing agency under the Exchange Act is not appointed by us within 90 days, we will issue securities in definitive form in exchange
for the registered global security that had been held by the depositary. Any securities issued in definitive form in exchange
for a registered global security will be registered in the name or names that the depositary gives to the relevant trustee or
warrant agent or other relevant agent of ours or theirs. It is expected that the depositary’s instructions will be based
upon directions received by the depositary from participants with respect to ownership of beneficial interests in the registered
global security that had been held by the depositary.
PLAN
OF DISTRIBUTION
Initial
Offering and Sale of Securities
Unless
otherwise set forth in a prospectus supplement accompanying this prospectus, we may sell the securities being offered hereby,
from time to time, by one or more of the following methods:
|
|
●
|
to
or through underwriting syndicates represented by managing underwriters;
|
|
|
|
|
|
|
●
|
through
one or more underwriters without a syndicate for them to offer and sell to the public;
|
|
|
|
|
|
|
●
|
through
dealers or agents; and
|
|
|
|
|
|
|
●
|
to
investors directly in negotiated sales or in competitively bid transactions.
|
Offerings
of securities covered by this prospectus also may be made into an existing trading market for those securities in transactions
at other than a fixed price, either:
|
|
●
|
on
or through the facilities of the Nasdaq Capital Market or any other securities exchange or quotation or trading service on
which those securities may be listed, quoted, or traded at the time of sale; and/or
|
|
|
|
|
|
|
●
|
to
or through a market maker other than on the securities exchanges or quotation or trading services set forth above.
|
Those
at-the-market offerings, if any, will be conducted by underwriters acting as principal or agent of the Company, who may also be
third-party sellers of securities as described above. The prospectus supplement with respect to the offered securities will set
forth the terms of the offering of the offered securities, including:
|
|
●
|
the
name or names of any underwriters, dealers or agents;
|
|
|
|
|
|
|
●
|
the
purchase price of the offered securities and the proceeds to us from such sale;
|
|
|
|
|
|
|
●
|
any
underwriting discounts and commissions or agency fees and other items constituting underwriters’ or agents’ compensation;
|
|
|
|
|
|
|
●
|
any
initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers;
|
|
|
|
|
|
|
●
|
any
securities exchange on which such offered securities may be listed; and
|
|
|
|
|
|
|
●
|
any
underwriter, agent or dealer involved in the offer and sale of any series of the securities.
|
The
distribution of the securities may be effected from time to time in one or more transactions:
|
|
●
|
at
fixed prices, which may be changed;
|
|
|
|
|
|
|
●
|
at
market prices prevailing at the time of the sale;
|
|
|
|
|
|
|
●
|
at
varying prices determined at the time of sale; or
|
|
|
|
|
|
|
●
|
at
negotiated prices.
|
|
|
|
|
|
|
Each
prospectus supplement will set forth the manner and terms of an offering of securities including:
|
|
|
|
|
|
|
●
|
whether
that offering is being made to underwriters, through agents or directly to the public;
|
|
|
|
|
|
|
●
|
the
rules and procedures for any auction or bidding process, if used;
|
|
|
|
|
|
|
●
|
the
securities’ purchase price or initial public offering price; and
|
|
|
|
|
|
|
●
|
the
proceeds we anticipate from the sale of the securities, if any.
|
In
addition, we may enter into derivative or hedging transactions with third parties, or sell securities not covered by this prospectus
to third parties in privately negotiated transactions. The applicable prospectus supplement may indicate, in connection with such
a transaction, that the third parties may sell securities covered by and pursuant to this prospectus and an applicable prospectus
supplement. If so, the third party may use securities pledged by us or borrowed from us or others to settle such sales and may
use securities received from us to close out any related short positions. We may also loan or pledge securities covered by this
prospectus and an applicable prospectus supplement to third parties, who may sell the loaned securities or, in an event of default
in the case of a pledge, sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement.
Sales
Through Underwriters
If
underwriters are used in the sale of some or all of the securities covered by this prospectus, the underwriters will acquire the
securities for their own account. The underwriters may resell the securities, either directly to the public or to securities dealers,
at various times in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying
prices determined at the time of sale. The obligations of the underwriters to purchase the securities will be subject to certain
conditions. Unless indicated otherwise in a prospectus supplement, the underwriters will be obligated to purchase all the securities
of the series offered if any of the securities are purchased.
Any
initial public offering price and any concessions allowed or reallowed to dealers may be changed intermittently.
Sales
Through Agents
Unless
otherwise indicated in the applicable prospectus supplement, when securities are sold through an agent, the designated agent will
agree, for the period of its appointment as agent, to use specified efforts to sell the securities for our account and will receive
commissions from us as will be set forth in the applicable prospectus supplement.
Securities
bought in accordance with a redemption or repayment under their terms also may be offered and sold, if so indicated in the applicable
prospectus supplement, in connection with a remarketing by one or more firms acting as principals for their own accounts or as
agents for us. Any remarketing firm will be identified and the terms of its agreement, if any, with us and its compensation will
be described in the prospectus supplement. Remarketing firms may be deemed to be underwriters in connection with the securities
remarketed by them.
If
so indicated in the applicable prospectus supplement, we may authorize agents, underwriters or dealers to solicit offers by certain
specified institutions to purchase securities at a price set forth in the prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a future date specified in the prospectus supplement. These contracts will be subject only
to those conditions set forth in the applicable prospectus supplement, and the prospectus supplement will set forth the commissions
payable for solicitation of these contracts.
Direct
Sales
We
may also sell offered securities directly to institutional investors or others. In this case, no underwriters or agents would
be involved. The terms of such sales will be described in the applicable prospectus supplement.
General
Information
Broker-dealers,
agents or underwriters may receive compensation in the form of discounts, concessions or commissions from us and/or the purchasers
of securities for whom such broker-dealers, agents or underwriters may act as agents or to whom they sell as principal, or both.
This compensation to a particular broker-dealer might be in excess of customary commissions.
Underwriters,
dealers and agents that participate in any distribution of the offered securities may be deemed “underwriters” within
the meaning of the Securities Act of 1933, as amended (the “Securities Act”), so any discounts or commissions they
receive in connection with the distribution may be deemed to be underwriting compensation. Those underwriters and agents may be
entitled, under their agreements with us, to indemnification by us against certain civil liabilities, including liabilities under
the Securities Act, or to contribution by us to payments that they may be required to make in respect of those civil liabilities.
Certain of those underwriters or agents may be customers of, engage in transactions with, or perform services for, us or our affiliates
in the ordinary course of business. We will identify any underwriters or agents, and describe their compensation, in a prospectus
supplement. Any institutional investors or others that purchase offered securities directly, and then resell the securities, may
be deemed to be underwriters, and any discounts or commissions received by them from us and any profit on the resale of the securities
by them may be deemed to be underwriting discounts and commissions under the Securities Act.
We
will file a supplement to this prospectus, if required, pursuant to Rule 424(b) under the Securities Act, if we enter into any
material arrangement with a broker, dealer, agent or underwriter for the sale of securities through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or dealer. Such prospectus supplement will disclose:
|
|
●
|
the
name of any participating broker, dealer, agent or underwriter;
|
|
|
|
|
|
|
●
|
the
number and type of securities involved;
|
|
|
|
|
|
|
●
|
the
price at which such securities were sold;
|
|
|
|
|
|
|
●
|
any
securities exchanges on which such securities may be listed;
|
|
|
|
|
|
|
●
|
the
commissions paid or discounts or concessions allowed to any such broker, dealer, agent or underwriter, where applicable; and
|
|
|
|
|
|
|
●
|
other
facts material to the transaction.
|
In
order to facilitate the offering of certain securities under this prospectus or an applicable prospectus supplement, certain persons
participating in the offering of those securities may engage in transactions that stabilize, maintain or otherwise affect the
price of those securities during and after the offering of those securities. Specifically, if the applicable prospectus supplement
permits, the underwriters of those securities may over-allot or otherwise create a short position in those securities for their
own account by selling more of those securities than have been sold to them by us and may elect to cover any such short position
by purchasing those securities in the open market.
In
addition, the underwriters may stabilize or maintain the price of those securities by bidding for or purchasing those securities
in the open market and may impose penalty bids, under which selling concessions allowed to syndicate members or other broker-dealers
participating in the offering are reclaimed if securities previously distributed in the offering are repurchased in connection
with stabilization transactions or otherwise. The effect of these transactions may be to stabilize or maintain the market price
of the securities at a level above that which might otherwise prevail in the open market. The imposition of a penalty bid may
also affect the price of securities to the extent that it discourages resales of the securities. No representation is made as
to the magnitude or effect of any such stabilization or other transactions. Such transactions, if commenced, may be discontinued
at any time.
In
order to comply with the securities laws of certain states, if applicable, the securities must be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain states the securities may not be sold unless they have
been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement
is available and is complied with.
Rule
15c6-1 under the Exchange Act generally requires that trades in the secondary market settle in two business days, unless the parties
to any such trade expressly agree otherwise. Your prospectus supplement may provide that the original issue date for your securities
may be more than two scheduled business days after the trade date for your securities. Accordingly, in such a case, if you wish
to trade securities on any date prior to the second business day before the original issue date for your securities, you will
be required, by virtue of the fact that your securities initially are expected to settle in more than two scheduled business days
after the trade date for your securities, to make alternative settlement arrangements to prevent a failed settlement.
This
prospectus, any applicable prospectus supplement and any applicable pricing supplement in electronic format may be made available
on the Internet sites of, or through other online services maintained by, us and/or one or more of the agents and/or dealers participating
in an offering of securities, or by their affiliates. In those cases, prospective investors may be able to view offering terms
online and, depending upon the particular agent or dealer, prospective investors may be allowed to place orders online.
Other
than this prospectus, any applicable prospectus supplement and any applicable pricing supplement in electronic format, the information
on our website or the website of any agent or dealer, and any information contained in any other website maintained by any agent
or dealer:
|
|
●
|
is
not part of this prospectus, any applicable prospectus supplement or any applicable pricing supplement or the registration
statement of which they form a part;
|
|
|
|
|
|
|
●
|
has
not been approved or endorsed by us or by any agent or dealer in its capacity as an agent or dealer, except, in each case,
with respect to the respective website maintained by such entity; and
|
|
|
|
|
|
|
●
|
should
not be relied upon by investors.
|
There
can be no assurance that we will sell all or any of the securities offered by this prospectus.
This
prospectus may also be used in connection with any issuance of common stock or preferred stock upon exercise of a warrant if such
issuance is not exempt from the registration requirements of the Securities Act.
In
addition, we may issue the securities as a dividend or distribution or in a subscription rights offering to our existing securityholders.
In some cases, we or dealers acting with us or on our behalf may also purchase securities and reoffer them to the public by one
or more of the methods described above. This prospectus may be used in connection with any offering of our securities through
any of these methods or other methods described in the applicable prospectus supplement.
LEGAL
MATTERS
Unless
otherwise indicated in the applicable prospectus supplement, the validity of the securities offered hereby will be passed upon
for us by Lowenstein Sandler LLP, New York, New York. If the validity of the securities offered hereby in connection with offerings
made pursuant to this prospectus are passed upon by counsel for the underwriters, dealers or agents, if any, such counsel will
be named in the prospectus supplement relating to such offering.
EXPERTS
The
balance sheets of Provention Bio, Inc. as of December 31, 2018 and 2017, and the related statements of operations, stockholders’
equity (deficit), and cash flows for each of the years ended December 31, 2018 and 2017 and for the period from October 4, 2016
(inception) through December 31, 2016, have been audited by EisnerAmper LLP, independent registered public accounting firm, as
stated in their report which is incorporated herein by reference. Such financial statements have been incorporated herein by reference
in reliance on the report of such firm given upon their authority as experts in accounting and auditing.
ADDITIONAL
INFORMATION
This
prospectus is part of a Registration Statement on Form S-3 that we have filed with the SEC relating to the shares of our securities
being offered hereby. This prospectus does not contain all of the information in the Registration Statement and its exhibits.
The Registration Statement, its exhibits and the documents incorporated by reference in this prospectus and their exhibits, all
contain information that is material to the offering of the Securities hereby. Whenever a reference is made in this prospectus
to any of our contracts or other documents, the reference may not be complete. You should refer to the exhibits that are a part
of the Registration Statement in order to review a copy of the contract or documents. The Registration Statement and the exhibits
are available at the SEC’s Public Reference Room or through its Website.
We
file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains an Internet
site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, such
as us, that file electronically with the SEC. Additionally, you may access our filings with the SEC through our website at http://www.proventionbio.com.
The information on our website is not part of this prospectus.
We
will provide you without charge, upon your oral or written request, with a copy of any or all reports, proxy statements and other
documents we file with the SEC, as well as any or all of the documents incorporated by reference in this prospectus or the Registration
Statement (other than exhibits to such documents unless such exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to:
Provention
Bio, Inc.
P.O.
Box 666
Oldwick,
NJ 08858
Telephone
number: (908) 336-0360
You
should rely only on the information in this prospectus and the additional information described above and under the heading “Incorporation
of Certain Information by Reference” below. We have not authorized any other person to provide you with different information.
If anyone provides you with different or inconsistent information, you should not rely upon it. We are not making an offer to
sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information in
this prospectus was accurate on the date of the front cover of this prospectus only. Our business, financial condition, results
of operations and prospects may have changed since that date.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC allows us to “incorporate by reference” information that we file with it into this prospectus, which means that
we can disclose important information to you by referring you to those documents. The information incorporated by reference is
an important part of this prospectus. The information incorporated by reference is considered to be a part of this prospectus,
and information that we file later with the SEC will automatically update and supersede information contained in this prospectus
and any accompanying prospectus supplement.
We
incorporate by reference the documents listed below that we have previously filed with the SEC:
|
|
●
|
our
Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 19, 2019; and
|
|
|
|
|
|
|
●
|
our
Quarterly Report on Form 10-Q for the period ended March 31, 2019, filed with the SEC on May 8, 2019; and
|
|
|
|
|
|
|
●
|
our
Current Reports on Form 8-K filed with the SEC on March 28, 2019, May 30, 2019 and June 10, 2019 (other than the information
furnished under Item 7.01 of Form 8-K); and
|
|
|
|
|
|
|
●
|
our
Definitive Proxy Statement on Schedule 14A, filed on April 15, 2019; and
|
|
|
|
|
|
|
●
|
the
description of our common stock contained in our registration statement on Form 8-A filed with the SEC on June 22, 2018, including
any amendments or reports filed for the purposes of updating this description.
|
All
reports and other documents that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of the initial registration statement and prior to effectiveness of the registration statement shall be deemed to be incorporated
by reference in this prospectus and to be a apart hereof from the date of filing of such reports and documents. All reports and
other documents that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
prospectus but before the termination of the offering of the securities hereunder will also be considered to be incorporated by
reference into this prospectus from the date of the filing of these reports and documents, and will supersede the information
herein; provided, however, that all reports, exhibits and other information that we “furnish” to the SEC will not
be considered incorporated by reference into this prospectus. We undertake to provide without charge to each person (including
any beneficial owner) who receives a copy of this prospectus, upon written or oral request, a copy of all of the preceding documents
that are incorporated by reference (other than exhibits, unless the exhibits are specifically incorporated by reference into these
documents). You may request a copy of these materials in the manner set forth under the heading “Additional Information,”
above.
$200,000,000
Common
Stock
Preferred
Stock
Warrants
Debt
Securities
Subscription
Rights
Units
PROSPECTUS
_________________________,
2019
The
information contained in this prospectus is not complete and may be changed. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. This prospectus is not an offer to sell these securities, and
is not soliciting an offer to buy these securities, nor shall there be any sale of these securities, in any jurisdiction where
such offer, solicitation or sale is not permitted or would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction.
Subject
to completion, dated August 2, 2019
PROSPECTUS
Up
to $50,000,000
Common
Stock
We
have entered into a sales agreement, or Sales Agreement, with SVB Leerink LLC, or SVB Leerink, and Cantor Fitzgerald & Co.,
or Cantor, dated August 2, 2019 relating to shares of our common stock offered by this prospectus. In accordance with the terms
of the Sales Agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $50.0 million
from time to time through SVB Leerink and Cantor, acting as our agents. We refer to each of SVB Leerink and Cantor as an Agent
and collectively, we refer to them herein as the Agents.
Our
common stock is listed on the Nasdaq Capital Market under the symbol “PRVB.” On July 31, 2019, the last reported sales
price of our common stock on the Nasdaq Capital Market was $10.56 per share.
Sales
of our common stock, if any, under this prospectus will be made in sales deemed to be “at the market offerings” as
defined by Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, or the Securities Act. The Agents are not
required to sell any specific number or dollar amount of shares of our common stock, but will act as our sales agents using commercially
reasonable efforts consistent with their normal trading and sales practices, on mutually agreed terms between the Agents and us.
There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
The
compensation to the Agents for sales of common stock sold pursuant to the Sales Agreement will be an amount equal to 3.0%
of the gross proceeds of any shares of common stock sold under the Sales Agreement. In connection with the sale of the common
stock on our behalf, each Agent will be deemed to be an “underwriter” within the meaning of the Securities Act and
the compensation of each Agent will be deemed to be underwriting commissions or discounts. We have also agreed to provide indemnification
and contribution to the Agents with respect to certain liabilities, including liabilities under the Securities Act or the Securities
Exchange Act of 1934, as amended, or the Exchange Act. See the section titled “
Plan of Distribution
” on page
14 of this prospectus.
We
are an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such,
we have elected to comply with certain reduced public company reporting requirements for this prospectus and may elect to comply
with certain reduced public company reporting requirements for future filings.
Investing
in our common stock involves risks. Before buying any shares, you should read the discussion of material risks of investing in
our common stock in “
Risk Factors
” beginning on page 5 of this prospectus and in the documents incorporated
by reference in this prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
SVB
Leerink Cantor
The
date of this prospectus is ,
2019.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of registration statement on Form S-3 that we have filed with the Securities and Exchange Commission, or the
SEC, using a “shelf” registration process. Under the shelf registration process, we may offer shares of our common
stock having an aggregate offering price of up to $50,000,000 from time to time under this prospectus at prices and on terms to
be determined by market conditions at the time of the offering.
We
provide information to you about this offering of shares of our common stock in this prospectus, which describes the specific
terms of this offering of common stock. To the extent there is a conflict between the information contained in this prospectus,
on the one hand, and the information contained in any document incorporated by reference that was filed with the SEC before the
date of this prospectus, on the other hand, you should rely on the information in this prospectus. If any statement in one of
these documents is inconsistent with a statement in another document having a later date — for example, a document incorporated
by reference in this prospectus — the statement in the document having the later date modifies or supersedes the earlier
statement.
We
have not, and the Agents have not, authorized anyone to provide you with information different from or inconsistent with the information
contained in or incorporated by reference in this prospectus. We take no responsibility for, and can provide no assurance as to
the reliability of, any other information that others may give you. You should assume that the information appearing in this prospectus
and the documents incorporated by reference in this prospectus is accurate only as of the date of those respective documents,
regardless of the time of delivery of those respective documents. Our business, financial condition, results of operations and
prospects may have changed since those dates. You should read this prospectus and the documents incorporated by reference in this
prospectus in their entirety before making an investment decision. You should also read and consider the information in the documents
to which we have referred you in the sections of this prospectus entitled “Additional Information” and “Incorporation
of Certain Information by Reference.”
This
prospectus incorporates by reference, and any free writing prospectus may contain and incorporate by reference, market
data and industry statistics and forecasts that are based on independent industry publications and other publicly available information.
Although we believe these sources are reliable, we do not guarantee the accuracy or completeness of this information and we have
not independently verified this information. Although we are not aware of any misstatements regarding the market and industry
data presented in this prospectus and the documents incorporated herein by reference, these estimates involve risks and uncertainties
and are subject to change based on various factors, including those discussed under the heading “Risk Factors” contained
or incorporated by reference in this prospectus and any related free writing prospectus, and under similar headings in the other
documents that are incorporated by reference into this prospectus. Accordingly, investors should not place undue reliance on this
information.
We
are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted.
The distribution of this prospectus and the offering of our common stock in certain jurisdictions may be restricted by law. Persons
outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions
relating to, the offering of our common stock and the distribution of this prospectus outside the United States. This prospectus
does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities
offered by this prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or
solicitation.
Provention
Bio, Inc. is referred to herein as “Provention,” “the Company,” “we,” “us,” and
“our,” unless the context indicates otherwise. This prospectus and the information incorporated herein by reference
contain references to trademarks, service marks and trade names owned by us or other companies. Solely for convenience, trademarks,
service marks and trade names referred to in this prospectus and the information incorporated herein, including logos, artwork,
and other visual displays, may appear without the
®
or ™ symbols, but such references are not intended to
indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable
licensor to these trademarks, service marks and trade names. We do not intend our use or display of other companies’ trade
names, service marks or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
Other trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners.
PROSPECTUS
SUMMARY
The
following summary highlights some information from this prospectus. It is not complete and does not contain all of the information
that you should consider before making an investment decision. You should read this entire prospectus, including the “Risk
Factors” section on page 5 and the disclosures to which that section refers you, the financial statements and related
notes and the other more detailed information appearing elsewhere or incorporated by reference into this prospectus before investing
in any of the securities described in this prospectus.
Company
Overview
We
are a clinical stage biopharmaceutical company, focused on the development and commercialization of novel therapeutics and innovative
approaches aimed at intercepting and preventing immune-mediated diseases. We are leveraging a transformational drug development
strategy that sources, repositions and advances potential therapeutic candidates that in most instances have undergone previous
clinical testing but may have been underdeveloped or deprioritized because of insufficient clinical trial efficacy (i.e., a benefit
in endpoints relevant for the disease or condition under study as compared to placebo) or for strategic reasons. Importantly,
these product candidates not only appear to have been well-tolerated but have demonstrated proof-of-mechanism (i.e., evidence
that the experimental drug has the intended biologic effect in its target and/or pathway) by preventing or intercepting potentially
clinically relevant immunopathologic pathways. These characteristics exemplify the profile against which therapeutic candidates
are evaluated for strategic refocusing or advancement to the next stage of clinical development. In this context, we are creating
a diverse portfolio of innovative solutions targeting opportunities focused on intercepting and preventing immune-mediated disease.
Our mission is to in-license,
transform and develop clinical-stage, or nearly clinical-stage, therapeutic candidates targeting the high morbidity, mortality
and escalating costs of autoimmune and inflammatory diseases, including: celiac disease, type 1 diabetes, or T1D, Crohn’s
disease, or CD, and lupus. Our current development pipeline consists of a Phase 3 product candidate for the interception
and possible delay or prevention of T1D, a Phase 2 product candidate for celiac disease, a Phase 2 product candidate for
CD, a Phase 1 product candidate for systemic lupus erythematosus, or SLE, and a preclinical candidate that we expect to
submit a Clinical Trial Application, or CTA, in 2020 and that we intend to develop for acute coxsackie B virus, also referred
to as coxsackie virus B or CVB, infection and the potential prevention or delay in onset of T1D. All of these programs have been
selected and acquired or in-licensed because of their therapeutic potential to interrupt, delay, reverse or prevent the onset
or progression of life-threatening or debilitating immune-mediated disease.
We
preferentially source, reposition, transform and advance underdeveloped or deprioritized clinical-stage, or nearly clinical-stage,
therapeutic candidates targeting the interception and prevention of immune-mediated disease. Our “predict” and “pre-empt”
therapeutic approach focuses on identifying at-risk patients and intervening before the targeted disease begins, re-appears, exacerbates
or progresses. We believe our experience and expertise in translational medicine, immunology, and the design and execution of
rapid go/no-go clinical trials makes us unique in the field of immune-mediated disease.
We
have access to relevant in-licensing opportunities from industry-leading pharmaceutical companies; innovative, development-stage
biotechnology companies; and world-renowned academic centers. To date, we have obtained exclusive worldwide rights to an enterovirus
vaccine platform, targeting the prevention of CVB infections and T1D onset, from Vactech Ltd., a Finnish biotechnology company;
one clinical-stage product candidate from an affiliated entity of Janssen Pharmaceuticals, Inc., or Janssen,
a small molecule targeting an upstream pathological mechanism believed to drive CD; two product candidates from MacroGenics, Inc.,
a Phase 3 clinical-stage product candidate for the interception and possible delay or prevention of T1D and a Phase
1 clinical-stage product candidate for the potential treatment of SLE; and a Phase 2 clinical-stage product candidate from Amgen,
Inc., or Amgen, targeting celiac disease.
Focus
and Pipeline
Inflammation
is a natural consequence of most infections as it is the immune system’s first response to invading pathogens in the event
of injury or acute illness. Most of the time, this response is beneficial and well-controlled; helping to repair tissue damage
and clear pathogens from the body. In addition to directly damaging tissues and organs, an infection can sometimes result in the
excessive release of toxic immune mediators leading to a potentially life-threatening acute pathological immune response. When
patients have the requisite genetic predisposition, infections can also trigger chronic autoimmune responses that persist and
progress long after the original insult has subsided. These sustained pathological responses have been linked to an increased
susceptibility to chronic debilitating and potentially life threatening diseases like inflammatory bowel disease, diabetes, cancer,
and certain neurological disorders.
Our
“predict” and “preempt” therapeutic approach is to intercept the underlying pathological immune and inflammatory
responses in susceptible individuals. Our pipeline includes:
|
|
●
|
PRV-031: a humanized, anti-CD3
mAb for the interception of T1D in pediatric patients with newly-diagnosed T1D
and, potentially, for delaying and/or preventing disease progression in subjects at risk
of developing T1D, which has been designated by the U.S. Food and Drug Administration,
or FDA, as orphan drug for the treatment of newly-diagnosed T1D;
|
|
|
●
|
PRV-015:
a human anti-interleukin 15, or IL-15, mAb for the treatment of gluten-free diet non-responsive celiac disease, or NRCD, intercepting
the effects of contaminating gluten in the most common autoimmune disorder without any approved medication (celiac disease);
|
|
|
●
|
PRV-6527:
an oral small molecule CSF-1R inhibitor targeting the differentiation and activation of antigen-presenting cells, or APCs,
to prevent chronic inflammatory responses and progression or relapse in CD;
|
|
|
●
|
PRV-3279:
a humanized bispecific scaffold molecule targeting the B-cell surface proteins, CD32B and CD79B, for the treatment of SLE
and for the prevention of immunogenicity biotherapeutics such as gene therapy;
|
|
|
●
|
PRV-101:
a CVB vaccine to prevent acute CVB infections and, in those patients at risk, preventing the CVB-triggered autoimmune damage
to pancreatic beta cells that progresses to T1D and T1D-associated celiac disease; and
|
Our
Risks
Investing
in our securities involves a high degree of risk. You should carefully consider all of the information in this prospectus and
in the documents incorporated into this prospectus by reference prior to investing in our common stock. These risks are discussed
more fully in the section titled “Risk Factors” beginning on page 5 herein and in our Annual report on Form
10-K for the year ended December 31, 2018, as updated by our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.
These risks and uncertainties include, but are not limited to, the following:
|
|
●
|
We
are a clinical stage biopharmaceutical company with a limited operating history;
|
|
|
|
|
|
|
●
|
We
have incurred substantial operating losses in each year since our inception and expect to continue to incur substantial losses
for the foreseeable future and we may never become profitable or, if achieved, be able to sustain profitability;
|
|
|
|
|
|
|
●
|
There
is substantial doubt regarding our ability to continue as a going concern;
|
|
|
|
|
|
|
●
|
We
need to raise additional capital;
|
|
|
|
|
|
|
●
|
We
have limited product candidates and may not be able to acquire additional product candidates in the future;
|
|
|
●
|
Although
we may pursue expedited regulatory approval pathways for a product candidate, it may not qualify for expedited development
or, if it does qualify, expedited development may not actually lead to a faster development or regulatory review or approval
process;
|
|
|
|
|
|
|
●
|
We
may be unable to obtain or maintain governmental approvals to market our product candidates in the United States, European
Union, or in other jurisdictions;
|
|
|
●
|
Even
if we receive regulatory approval for any of our product candidates, we may not be able to successfully commercialize any
approved products and the revenue that we generate from sales, if any, may be limited;
|
|
|
|
|
|
|
●
|
Clinical
drug development involves a lengthy and expensive process with an uncertain outcome, and the results of earlier studies and
trials may not be predictive of future trial results;
|
|
|
|
|
|
|
●
|
We
depend on rights to certain pharmaceutical compounds that have been licensed to us; we do not control these pharmaceutical
compounds and any loss of our rights to them could prevent us from selling our products;
|
|
|
|
|
|
|
●
|
We
may be unable to protect our intellectual property rights or may infringe on the intellectual property rights of others; and
|
|
|
|
|
|
|
●
|
If
product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization
of our product candidates.
|
Implications
of Being an Emerging Growth Company
We
are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act,
and, for as long as we continue to be an “emerging growth company,” we may choose to take advantage of exemptions
from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including,
but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act of 2002, as amended, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation
and stockholder approval of any golden parachute payments not previously approved. We will be an “emerging growth company”
until the earlier of (i) December 31, 2023, the last day of the fiscal year following the fifth anniversary of our July 2018 initial
public offering, (ii) the last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion, (iii) the
date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur
if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our
most recently completed second fiscal quarter, or (iv) the date on which we have issued more than $1 billion in non-convertible
debt during the preceding three-year period. We intend to take advantage of these reporting exemptions described above until we
are no longer an “emerging growth company.” Under the JOBS Act, “emerging growth companies” can also delay
adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably
elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we are subject to the
same new or revised accounting standards as other public companies that are not “emerging growth companies.”
Corporate
Information
We
are a Delaware corporation formed on October 4, 2016. We are a virtual company and maintain a mailing address at P.O. Box 666,
Oldwick, NJ 08858. Our phone number is (908) 336-0360 and our web address is http://www.proventionbio.com. Information contained
in or accessible through our web site is not, and should not be deemed to be, incorporated by reference in, or considered part
of, this prospectus.
THE
OFFERING
|
Common
stock offered by us
|
|
Shares
of our common stock having an aggregate offering price of up to $50.0 million.
|
|
|
|
|
|
Common
stock to be outstanding after this offering
|
|
Up
to 44,072,130 shares of common stock (as more fully described in the notes following this table), assuming sales of
4,734,848 shares in this offering at a public offering price of $10.56 per share, which was the closing price of our common
stock on the Nasdaq Capital Market, or Nasdaq, on July 31, 2019. The actual number of shares issued will vary depending on
how many shares of common stock we choose to sell and prices at which such sales occur.
|
|
|
|
|
|
Manner
of offering
|
|
“At
the market” offering that may be made from time to time through the Agents. See “Plan of Distribution” beginning
on page 14 of this prospectus.
|
|
|
|
|
|
Use
of Proceeds
|
|
We
intend to use any net proceeds from this offering primarily to fund activities relating to the advancement of our product
candidates, and for other general corporate purposes. See “Use of Proceeds” on page 8 of this prospectus.
|
|
|
|
|
|
Risk
Factors
|
|
Investing
in our common stock involves a high degree of risk. You should read the “Risk Factors” section in this prospectus
and in the documents that are incorporated by reference in this prospectus for a discussion of factors to consider before
deciding to purchase shares of our common stock.
|
|
|
|
|
|
Nasdaq
Capital Market symbol
|
|
“PRVB”
|
The
number of shares of common stock to be outstanding after this offering is based on 39,337,282 shares of common stock outstanding
on July 31, 2019 and excludes:
|
|
●
|
5,777,610
shares of our common stock issuable upon the exercise of outstanding stock options issued under our equity incentive plan
as of July 31, 2019, with a weighted average exercise price of $6.07 per share;
|
|
|
|
|
|
|
●
|
1,124,374
additional shares of our common stock reserved for future issuance under our 2017 Equity Incentive Plan as of July 31, 2019;
and
|
|
|
|
|
|
|
●
|
2,124,568
shares of our common stock issuable upon the exercise of warrants with a weighted average exercise price of $4.35 per share
as of July 31, 2019.
|
RISK
FACTORS
Investment
in any securities offered pursuant to this prospectus and the applicable prospectus supplement involves risks. You should carefully
consider the risk factors incorporated by reference to our most recent Annual Report on Form 10-K and Quarterly Report on Form
10-Q, and any subsequent Quarterly Reports on Form 10-Q, Annual Report on Form 10-K, or Current Reports on Form 8-K we file after
the date of this prospectus, and all other information contained or incorporated by reference into this prospectus, as updated
by our subsequent filings under the Exchange Act, and the risk factors and other information contained in the applicable prospectus
supplement and any applicable free writing prospectus before acquiring any of such securities. The occurrence of any of these
risks might cause you to lose all or part of your investment in the offered securities.
Risks
Related to this Offering and our Common Stock
Our
management team may invest or spend the proceeds of this offering in ways with which you may not agree or in ways which may not
yield a significant return.
We
currently intend to use the net proceeds from this offering, if any, to continue to fund the clinical development, regulatory
and manufacturing activities of PRV-031, development activities for PRV-015, the completion of a Phase 2a clinical trial for PRV-6527,
development activities for PRV-3279 and PRV-101and for general corporate purposes, which may include the acquisition or in-licensing
of other product candidates. However, we have not determined the specific allocation of the net proceeds among these potential
uses. Our management will have broad discretion over the use and investment of the net proceeds of this offering, and, accordingly,
investors in this offering will need to rely upon the judgment of our management with respect to the use of proceeds, with only
limited information concerning our specific intentions. These proceeds could be applied in ways that do not improve our operating
results or increase the value of your investment. Please see the section entitled “Use of Proceeds” on page 8
of this prospectus for further information.
You
may experience immediate and substantial dilution
The
price per share of our common stock being offered may be higher than the net tangible book value per share of our common stock
outstanding prior to this offering. Assuming that an aggregate of 4,734,848 shares are sold at a price of $10.56 per share, the
last reported sale price of our common stock on the Nasdaq Capital Market on July 31, 2019, for aggregate proceeds of approximately
$50,000,000 in this offering, and after deducting commissions and estimated aggregate offering expenses payable by us, you will
suffer immediate and substantial dilution of $8.25 per share, representing the difference between the as adjusted net
tangible book value per share of our common stock as of March 31, 2019 after giving effect to this offering and the assumed offering
price. For a further description of the dilution that you will experience immediately after this offering, see the section in
this prospectus entitled “Dilution” on page 9.
It
is not possible to predict the aggregate proceeds resulting from sales made under the Sales Agreement.
Subject
to certain limitations in the Sales Agreement and compliance with applicable law, we have the discretion to deliver a placement
notice to an Agent at any time throughout the term of the Sales Agreement. The number of shares that are sold through such Agent
after delivering a placement notice will fluctuate based on a number of factors, including the market price of our common stock
during the sales period, any limits we may set with the Agent in any applicable placement notice and the demand for our common
stock. Because the price per share of each share sold pursuant to the Sales Agreement will fluctuate over time, it is not currently
possible to predict the aggregate proceeds to be raised in connection with sales under the Sales Agreement.
The
common stock offered hereby may be sold in “at the market offerings,” and investors who buy shares at different times
will likely pay different prices.
Investors
who purchase shares in this offering at different times will likely pay different prices, and accordingly may experience different
levels of dilution and different outcomes in their investment results. We will have discretion, subject to market demand, to vary
the timing, prices and number of shares sold in this offering. In addition, subject to the final determination by our board of
directors or any restrictions we may place in any applicable placement notice, there is no minimum or maximum sales price for
shares to be sold in this offering. Investors may experience a decline in the value of the shares they purchase in this offering
as a result of sales made at prices lower than the prices they paid.
Future
sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans,
could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.
Additional
capital will be needed in the future to continue our planned operations. To the extent we raise additional capital by issuing
equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other
equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock,
convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent
sales. These sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior
to our existing stockholders.
In
addition, sales of a substantial number of shares of our outstanding common stock in the public market could occur at any time.
These sales, or the perception in the market that the holders of a large number of shares of common stock intend to sell shares,
could reduce the market price of our common stock. Significant portions of these shares are held by a relatively small number
of stockholders. Sales by our stockholders of a substantial number of shares, or the expectation that such sales may occur, could
significantly reduce the market price of our common stock.
A
substantial number of shares may be sold in the market following this offering, which may depress the market price for our common
stock.
Sales
of a substantial number of shares of our common stock in the public market following this offering could cause the market price
of our common stock to decline. A substantial majority of the outstanding shares of our common stock are, and all of the shares
sold in this offering upon issuance will be, freely tradable without restriction or further registration under the Securities
Act, unless these shares are owned or purchased by “affiliates” as that term is defined in Rule 144 under the Securities
Act. As a result, these shares can be freely sold in the public market upon issuance, subject to restrictions under securities
laws.
The
price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for stockholders.
The
market price of our common stock has been volatile and can be subject to wide fluctuations in response to various factors, some
of which are beyond our control, including, the reporting of results of our clinical trials or partner-sponsored clinical trials
involving our programs. These factors include those discussed in this “Risk Factors” section of this prospectus, our
annual report on Form 10-K and quarterly reports on Form 10-Q and others such as:
|
|
●
|
our
commercialization, marketing and manufacturing prospects;
|
|
|
●
|
our
intentions and our ability to establish collaborations and/or partnerships;
|
|
|
●
|
the
timing or likelihood of regulatory filings and approvals;
|
|
|
●
|
our
development, commercialization, marketing and manufacturing capabilities;
|
|
|
●
|
our
expectations regarding the potential market size and the size of the patient populations for our product candidates;
|
|
|
●
|
the
implementation of our business model and strategic plans for our business and technology;
|
|
|
●
|
the
scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates,
along with any product modifications and improvements;
|
|
|
●
|
estimates
of our expenses, future revenue, capital requirements, our needs for additional financing and our ability to obtain additional
capital;
|
|
|
●
|
our
financial performance; and
|
|
|
●
|
developments
and projections relating to our competitors and our industry, including competing therapies and procedures.
|
In
addition, the stock markets in general, and the markets for biopharmaceutical and biotechnology stocks in particular, have experienced
extreme volatility that may have been unrelated to the operating performance of the issuer. These broad market fluctuations may
adversely affect the market price or liquidity of our common stock. In the past, when the market price of a stock has been volatile,
holders of that stock have sometimes instituted securities class action litigation against the issuer. If any of our stockholders
were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the attention of our management
would be diverted from the operation of our business.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and the information incorporated herein by reference contain forward-looking statements within the meaning of the federal
securities laws, which statements involve substantial risks and uncertainties. All statements, other than statements of historical
facts, included or incorporated by reference in this prospectus regarding our strategy, future events, future operations, future
financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are
forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,”
“intend,” “may,” “plan,” “predict,” “project,” “would”
and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain
these identifying words. These forward-looking statements include, among other things, statements about:
|
|
●
|
our
lack of operating history;
|
|
|
●
|
the
expectation that we will incur operating losses for the foreseeable future;
|
|
|
●
|
our
current and future capital requirements to support our development and commercialization efforts for our product candidates
and our ability to satisfy our capital needs;
|
|
|
●
|
our
dependence on our product candidates, which are still in preclinical or early stages of clinical development;
|
|
|
●
|
our
ability, or that of our third-party manufacturers, to manufacture GMP batches of our product candidates as required for pre-clinical
and clinical trials and, subsequently, our ability to manufacture commercial quantities of our product candidates;
|
|
|
●
|
our
ability to attract and retain key executives and medical and scientific personnel;
|
|
|
●
|
our
ability to successfully complete required clinical trials for our product candidates and obtain approval from the FDA or other
regulatory agencies in different jurisdictions;
|
|
|
●
|
our
lack of a sales and marketing organization and our ability to commercialize our product candidates if we obtain regulatory
approval;
|
|
|
●
|
our
dependence on third-parties to manufacture our product candidates;
|
|
|
●
|
our
reliance on third-party CROs to conduct our clinical trials;
|
|
|
●
|
our
ability to maintain or protect the validity of our licensed patents and other intellectual property;
|
|
|
●
|
our
ability to internally develop new inventions and intellectual property;
|
|
|
●
|
our
ability to compete within the market for our product candidates, if approved;
|
|
|
●
|
interpretations
of current laws and the passages of future laws;
|
|
|
●
|
acceptance
of our business model by investors;
|
|
|
●
|
our
anticipated use of proceeds from this offering;
|
|
|
●
|
the
accuracy of our estimates regarding expenses and capital requirements; and
|
|
|
●
|
our
ability to adequately support organizational and business growth.
|
Forward-looking
statements may also concern our expectations relating to our affiliates. We caution you that the foregoing list may not contain
all of the forward-looking statements made in this prospectus and the information incorporated herein.
We
may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not
place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions
and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements
included in this prospectus and the information incorporated herein, particularly in “Risk Factors,” that could cause
actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements
do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may
make.
You
should read this prospectus, the documents that we incorporate by reference into this prospectus, including our Annual Report
on Form 10-K for the year ended December 31, 2018, our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and the
documents that we have filed as exhibits to our filings with the SEC completely and with the understanding that our actual future
results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise, except as required by law.
USE
OF PROCEEDS
The
amount of proceeds from this offering will depend upon the number of shares of our common stock sold and the market price at which
they are sold. There can be no assurance that we will be able to sell any shares under or fully utilize the Sales Agreement with
the Agents as a source of financing.
We
intend to use any net proceeds from this offering primarily to fund activities relating to the advancement of our product candidates,
and for other general corporate purposes. General corporate purposes may include research and development costs, including the
conduct of one or more clinical trials and process development and manufacturing of our product candidates, potential strategic
acquisitions of complementary businesses, services or technologies, expansion of our technology infrastructure and capabilities,
working capital and capital expenditures. Although we may use a portion of the net proceeds of this offering for the acquisition
or licensing, as the case may be, of additional technologies, other assets or businesses, or for other strategic investments or
opportunities, we have no current understandings, agreements or commitments to do so.
Pending
our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments,
including short-term, investment-grade, interest-bearing instruments and U.S. government securities.
DILUTION
If
you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the difference between
the price per share you pay in this offering and our as adjusted net tangible book value per share after this offering. We calculate
net tangible book value per share by dividing our net tangible book value, which is tangible assets less total liabilities, by
the number of outstanding shares of our common stock.
Our historical net tangible book value as
of March 31, 2019 was approximately $48.9 million, or $1.31 per share. Net tangible book value per share after this offering gives
effect to the sale of $50.0 million of common stock in this offering at an assumed offering price of $10.56 per share,
which was the closing price of our common stock as reported on Nasdaq on July 31, 2019, after deducting offering commissions and
estimated expenses payable by us. Our adjusted net tangible book value as of March 31, 2019, after giving effect to this offering
as described above, would have been approximately $97.3 million, or $2.31 per share of common stock. This represents
an immediate increase in net tangible book value of $1.00 per share to existing stockholders and an immediate dilution
of $8.25 per share to new investors purchasing our common stock in this offering at the assumed offering price.
Dilution
per share to new investors is determined by subtracting as adjusted net tangible book value per share after this offering from
the assumed public offering price per share paid by new investors. The following table illustrates the per share dilution:
|
Assumed offering price per share
|
|
|
|
|
|
$
|
10.56
|
|
|
Net tangible book value per share as of March 31, 2019
|
|
$
|
1.31
|
|
|
|
|
|
|
Increase in net tangible book value per share attributable to new investors
attributable to this offering
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted net tangible book value per share as of March 31, 2019, after giving
effect to this offering
|
|
|
|
|
|
$
|
2.31
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilution in net tangible book value per share to new investors participating
in this offering
|
|
|
|
|
|
$
|
8.25
|
|
The
table above assumes for illustrative purposes that an aggregate of 4,734,848 shares of our common stock are sold at a price
of $10.56 per share, the last reported sale price of our common stock on The Nasdaq Capital Market on July 31, 2019, for
aggregate gross proceeds of approximately $50,000,000. The shares sold in this offering, if any, will be sold from time to
time at various prices. An increase of $1.00 per share in the price at which the shares are sold from the assumed offering
price of $10.56 per share shown in the table above, assuming all of our common stock in the aggregate amount of approximately
$50,000,000 is sold at that price, would result in an increase to our adjusted net tangible book value per share after the
offering to $2.33 and an increase in the dilution in net tangible book value per share to new investors in this
offering to $9.23, after deducting commissions payable by us. A decrease of $1.00 per share in the price at which the
shares are sold from the assumed offering price of $10.56 per share shown in the table above, assuming all of our common
stock in the aggregate amount of approximately $50,000,000 is sold at that price, would result in a decrease to our adjusted
net tangible book value per share after the offering to $2.28 and a decrease in the dilution in net tangible book
value per share to new investors in this offering to $7.28, after deducting commissions payable by us. This
information is supplied for illustrative purposes only, and will adjust based on the actual offering prices, the actual
number of shares that we offer and sell in this offering and other terms of each sale of shares in this offering.
The
above discussion and table are based on 37,361,562 shares of our common stock outstanding as of March 31, 2019 and excludes, as
of that date:
|
|
●
|
3,975,099
shares of our common stock issuable upon the exercise of outstanding stock options issued under our equity incentive plan
as of March 31, 2019, with a weighted average exercise price of $2.78 per share;
|
|
|
|
|
|
|
●
|
2,935,218
additional shares of our common stock reserved for future issuance under our 2017 Equity Incentive Plan as of March 31, 2019;
and
|
|
|
|
|
|
|
●
|
4,588,384
shares of our common stock issuable upon the exercise of warrants with a weighted average exercise price of $3.37 per share
as of March 31, 2019.
|
To
the extent that options or warrants are exercised, new options are issued under our 2017 Equity Incentive Plan, or we issue additional
shares of common stock in the future, there may be further dilution to investors participating in this offering. In addition,
we may choose to raise additional capital because of market conditions or strategic considerations, even if we believe that we
have sufficient funds for our current or future operating plans. If we raise additional capital through the sale of equity or
convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.
DESCRIPTION
OF CAPITAL STOCK
General
Our
authorized capital stock consists of:
|
|
●
|
100,000,000
shares of common stock, par value $0.0001 per share; and
|
|
|
|
|
|
|
●
|
25,000,000
shares of preferred stock, par value $0.0001 per share, of which, as of the date of this prospectus, none of which shares
have been designated.
|
As
of close of business on July 31, 2019, 39,337,282 shares of common stock were issued and outstanding and no shares of preferred
stock were issued and outstanding.
The
additional shares of our authorized capital stock available for issuance may be issued at times and under circumstances so as
to have a dilutive effect on earnings per share and on the equity ownership of the holders of our common stock. The ability of
our board of directors to issue additional shares of stock could enhance the board’s ability to negotiate on behalf of the
stockholders in a takeover situation but could also be used by the board to make a change-in-control more difficult, thereby denying
stockholders the potential to sell their shares at a premium and entrenching current management. The following description is
a summary of the material provisions of our capital stock. You should refer to our Second Amended and Restated Certificate of
Incorporation and our Amended and Restated Bylaws, both of which are on file with the SEC as exhibits to previous SEC filings,
for additional information. The summary below is qualified by provisions of applicable law.
Common
Stock
Holders
of our common stock are entitled to such dividends as may be declared by our board of directors out of funds legally available
for such purpose. The shares of common stock are neither redeemable nor convertible. Holders of common stock have no preemptive
or subscription rights to purchase any of our securities.
Each
holder of our common stock is entitled to one vote for each such share outstanding in the holder’s name. No holder of common
stock is entitled to cumulate votes in voting for directors.
In
the event of our liquidation, dissolution or winding up, the holders of our common stock are entitled to receive pro rata our
assets, which are legally available for distribution, after payments of all debts and other liabilities. All of the outstanding
shares of our common stock are fully paid and non-assessable. The shares of common stock offered by this prospectus will also
be fully paid and non-assessable.
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is Computershare Limited. The transfer agent and registrar’s address is
P.O. Box 43078, Providence, RI 02940.
Preferred
Stock
Our
board of directors has the authority, without further action by our stockholders, to issue up to 25,000,000 shares of preferred
stock in one or more classes or series and to fix the designations, rights, preferences, privileges and restrictions thereof,
without further vote or action by the stockholders. These rights, preferences and privileges could include dividend rights, conversion
rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting,
or the designation of, such class or series, any or all of which may be greater than the rights of common stock. The issuance
of our preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders
will receive dividend payments and payments upon our liquidation. In addition, the issuance of preferred stock could have the
effect of delaying, deferring or preventing a change in control of our company or other corporate action. We currently have no
plans to issue any shares of preferred stock.
If
we offer a specific series of preferred stock under this prospectus, we will describe the terms of the preferred stock in the
prospectus supplement for such offering and will file a copy of the certificate establishing the terms of the preferred stock
with the SEC. To the extent required, this description will include:
|
|
●
|
the
title and stated value;
|
|
|
|
|
|
|
●
|
the
number of shares offered, the liquidation preference per share and the purchase price;
|
|
|
|
|
|
|
●
|
the
dividend rate(s), period(s) and/or payment date(s), or method(s) of calculation for such dividends;
|
|
|
|
|
|
|
●
|
whether
dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate;
|
|
|
|
|
|
|
●
|
the
procedures for any auction and remarketing, if any;
|
|
|
|
|
|
|
●
|
the
provisions for a sinking fund, if any;
|
|
|
|
|
|
|
●
|
the
provisions for redemption, if applicable;
|
|
|
|
|
|
|
●
|
any
listing of the preferred stock on any securities exchange or market;
|
|
|
|
|
|
|
●
|
whether
the preferred stock will be convertible into our common stock, and, if applicable, the conversion price (or how it will be
calculated) and conversion period;
|
|
|
|
|
|
|
●
|
whether
the preferred stock will be exchangeable into debt securities, and, if applicable, the exchange price (or how it will be calculated)
and exchange period;
|
|
|
|
|
|
|
●
|
voting
rights, if any, of the preferred stock;
|
|
|
|
|
|
|
●
|
a
discussion of any material and/or special U.S. federal income tax considerations applicable to the preferred stock;
|
|
|
|
|
|
|
●
|
the
relative ranking and preferences of the preferred stock as to dividend rights and rights upon liquidation, dissolution or
winding up of our affairs; and
|
|
|
|
|
|
|
●
|
any
material limitations on issuance of any class or series of preferred stock ranking senior to or on a parity with the series
of preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of our company.
|
Transfer
Agent and Registrar for Preferred Stock
The
transfer agent and registrar for any series or class of preferred stock will be set forth in each applicable prospectus supplement.
Anti-Takeover
Provisions
The
provisions of Delaware law, our Second Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws could
have the effect of delaying, deferring or discouraging another person from acquiring control of our company. These provisions,
which are summarized below, may have the effect of discouraging takeover bids. They are also designed, in part, to encourage persons
seeking to acquire control of us to negotiate first with our board of directors. We believe that the benefits of increased protection
of our potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a
proposal to acquire us because negotiation of these proposals could result in an improvement of their terms.
Delaware
Law
We
are subject to Section 203 of the Delaware General Corporation Law, or DGCL, an anti-takeover law. In general, Section 203 prohibits
a Delaware corporation from engaging in any business combination (as defined below) with any interested stockholder (as defined
below) for a period of three years following the date that the stockholder became an interested stockholder, unless:
|
|
●
prior to that date, the board of directors of the corporation approved either the business combination or the transaction
that resulted in the stockholder becoming an interested stockholder;
|
|
|
|
|
|
●
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for
purposes of determining the number of shares of voting stock outstanding (but not the voting stock owned by the interested
stockholder) those shares owned by persons who are directors and officers and by excluding employee stock plans in which employee
participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in
a tender or exchange offer; or
|
|
|
|
|
|
●
on or subsequent to that date, the business combination is approved by the board of directors of the corporation and authorized
at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of
the outstanding voting stock that is not owned by the interested stockholder.
|
In
general, Section 203 defines “business combination” to include the following:
|
|
●
any merger or consolidation involving the corporation and the interested stockholder;
|
|
|
|
|
|
●
any sale, lease, exchange, mortgage, transfer, pledge or other disposition of 10% or more of the assets of the corporation
involving the interested stockholder;
|
|
|
|
|
|
●subject
to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation
to the interested stockholder;
|
|
|
|
|
|
●
subject to limited exceptions, any transaction involving the corporation that has the effect of increasing the proportionate
share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or
|
|
|
|
|
|
●
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits
provided by or through the corporation.
|
In
general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding
voting stock of the corporation, or who beneficially owns 15% or more of the outstanding voting stock of the corporation at any
time within a three-year period immediately prior to the date of determining whether such person is an interested stockholder,
and any entity or person affiliated with or controlling or controlled by any of these entities or persons.
Certificate
of Incorporation and Bylaw Provisions
Our
Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws include a number of provisions that could
deter hostile takeovers or delay or prevent changes in control of our company. Certain of these provisions are summarized in the
following paragraphs.
Effects
of authorized but unissued common stock.
One of the effects of the existence of authorized but unissued common stock may be
to enable our board of directors to make more difficult or to discourage an attempt to obtain control of our company by means
of a merger, tender offer, proxy contest or otherwise, and thereby to protect the continuity of management. If, in the due exercise
of its fiduciary obligations, the board of directors were to determine that a takeover proposal was not in our best interest,
such shares could be issued by the board of directors without stockholder approval in one or more transactions that might prevent
or render more difficult or costly the completion of the takeover transaction by diluting the voting or other rights of the proposed
acquirer or insurgent stockholder group, by putting a substantial voting bloc in institutional or other hands that might undertake
to support the position of the incumbent board of directors, by effecting an acquisition that might complicate or preclude the
takeover, or otherwise.
Cumulative
Voting.
Our Second Amended and Restated Certificate of Incorporation does not provide for cumulative voting in the election
of directors, which would allow holders of less than a majority of the stock to elect some directors.
Director
Vacancies.
Our Second Amended and Restated Certificate of Incorporation provides that all vacancies may be filled by the affirmative
vote of a majority of directors then in office, even if less than a quorum.
Stockholder
Action; Special Meeting of Stockholders.
Our Amended and Restated Bylaws provide that stockholders may act by written consent.
However, stockholders pursuing an action by written consent will be required to comply with certain notice and record date requirements
that are set forth in the General Corporation Law of the State of Delaware. A special meeting of stockholders may be called by
the Chairman of the board of directors, the President, the Chief Executive Officer, or the board of directors at any time and
for any purpose or purposes as shall be stated in the notice of the meeting, or by request of the holders of record of at least
20% of outstanding shares of common stock. This provision could prevent stockholders from calling a special meeting because, unless
certain significant stockholders were to join with them, they might not obtain the percentage necessary to request the meeting.
Therefore, stockholders holding less than 20% of issued and outstanding common stock, without the assistance of management, may
be unable to propose a vote on any transaction which may delay, defer or prevent a change of control, even if the transaction
were in the best interests of certain of our stockholders.
Advance
Notice Requirements for Stockholder Proposals and Director Nominations.
Our Amended and Restated Bylaws establish advance
notice procedures with respect to stockholder proposals and the nomination of candidates for election as director. In order for
any matter to be “properly brought” before a meeting, a stockholder will have to comply with such advance notice procedures
and provide us with certain information. Our Amended and Restated Bylaws allow the presiding officer at a meeting of stockholders
to adopt rules and regulations for the conduct of meetings which may have the effect of precluding the conduct of certain business
at a meeting if such rules and regulations are not followed. These provisions may also defer, delay or discourage a potential
acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting
to influence or obtain control of our company.
Supermajority
Voting for Amendments to Our Governing Documents.
Any amendment to our Second Amended and Restated Certificate of Incorporation
related to the provisions governing, among other things, the general powers of the Board of Directors, the number and election
of directors, the filling of director vacancies, the ability of the Board to adopt, amend or repeal the Amended and Restated Bylaws,
the ability to call special stockholder meetings, and director liability and indemnification, will require the affirmative vote
of at least 66 2/3% of the voting power of all shares of our capital stock then outstanding. Our Second Amended and Restated Certificate
of Incorporation provides that the board of directors is expressly authorized to adopt, amend or repeal our Amended and Restated
Bylaws and that our stockholders may amend our Amended and Restated Bylaws only with the approval of at least 66 2/3% of the voting
power of all shares of our capital stock then outstanding.
Choice
of Forum.
Our Second Amended and Restated Certificate of Incorporation provides that, subject to certain exceptions, the Court
of Chancery of the State of Delaware will be the exclusive forum for any claim, including any derivative claim, (i) that is 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 the
DGCL, or any other provision of Title 8 of the Delaware Code, confers jurisdiction upon the Court of Chancery. This provision
does not apply to any claims arising under the Securities Act or the Exchange Act, or any claim in which exclusive jurisdiction
is vested in a court or forum other than the Court of Chancery or for which the Court of Chancery does not have subject matter
jurisdiction. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation
has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable
or unenforceable.
Section
27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created
by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits
brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive
jurisdiction. In addition, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over
all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As a
result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Securities
Act or any other claim for which the federal and state courts have concurrent jurisdiction.
PLAN
OF DISTRIBUTION
We
have entered into the Sales Agreement with SVB Leerink and Cantor, under which we may issue and sell shares of our common stock
having an aggregate gross sales price of up to $50,000,000 from time to time through SVB Leerink and Cantor acting as agents.
The Sales Agreement has been filed as an exhibit to our registration statement on Form S-3 of which this prospectus forms a part.
Upon
delivery of a placement notice and subject to the terms and conditions of the Sales Agreement, the Agents may sell our common
stock by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 of the Securities
Act, including sales made directly on the Nasdaq Capital Market, on any other existing trading market for our common stock, or
to or through a market maker. We may instruct the Agents not to sell common stock if the sales cannot be effected at or above
the price designated by us from time to time. We or the Agents may suspend the offering of common stock upon notice and subject
to other conditions.
We will pay the Agents
commissions, in cash, for their services in acting as agents in the sale of our common stock. The Agents will be entitled to compensation
at a fixed commission rate of 3.0% of the gross sales price per share sold. Because there is no minimum offering amount
required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any,
are not determinable at this time. We have also agreed to reimburse the Agents for certain specified expenses, including the fees
and disbursements of their legal counsel, in an amount not to exceed $50,000, plus an additional amount not to exceed $10,000
in connection with any filings made with the Financial Industry Regulatory Agency, Inc., or FINRA. In accordance with FINRA
Rule 5110, these reimbursed fees and expenses are deemed sales compensation to the Agents in connection with this offering. We
estimate that the total expenses for the offering, excluding discounts and commissions payable to the Agents under the terms of
the Sales Agreement, will be approximately $165,000.
Each
Agent will provide written confirmation to us no later than the opening of the trading day on the Nasdaq Capital
Market after each trading day on which common stock is sold through it as sales agent under the Sales Agreement. Each confirmation
will include the number or amount of shares sold through it as sales agent on that day, the volume-weighted average price of the
shares sold and the net proceeds to us from such sales.
Settlement
for sales of common stock will occur on the second trading day following the date on which any sales are made, or on some other
date that is agreed upon by us and the Agents in connection with a particular transaction, in return for payment of the net proceeds
to us. Sales of our common stock as contemplated in this prospectus will be settled through the facilities of The Depository Trust
Company or by such other means as we and the Agents may agree upon. There is no arrangement for funds to be received in an escrow,
trust or similar arrangement.
Each
Agent will use its commercially reasonable efforts, consistent with its sales and trading practices, to solicit offers to purchase
the common stock shares under the terms and subject to the conditions set forth in the Sales Agreement. In connection with the
sale of the common stock on our behalf, the Agents will be deemed to be “underwriters” within the meaning of the Securities
Act and the compensation of the Agents will be deemed to be underwriting commissions or discounts. We have agreed to provide indemnification
and contribution to the Agents against certain civil liabilities, including liabilities under the Securities Act.
The
offering of our common stock pursuant to the Sales Agreement will terminate upon the termination of the Sales Agreement as permitted
therein. We and each Agent (with respect to itself) may each terminate the Sales Agreement at any time upon ten days’ prior
notice.
The
Agents and/or their respective affiliates have provided, and may in the future provide, various investment banking, commercial
banking and other financial services for us and our affiliates, for which services they may in the future receive customary fees.
To the extent required by Regulation M, the Agents will not engage in any market making activities involving our common stock
while the offering is ongoing under this prospectus.
This
prospectus in electronic format may be made available on a website maintained by the Agents and the Agents may distribute this
prospectus electronically.
LEGAL
MATTERS
The
validity of the common stock being offered will be passed upon for us by Lowenstein Sandler LLP, New York, New York. Pepper Hamilton
LLP, Philadelphia, Pennsylvania is counsel for the Agents in connection with this offering.
EXPERTS
The
balance sheets of Provention Bio, Inc. as of December 31, 2018 and 2017, and the related statements of operations, stockholders’
equity (deficit), and cash flows for each of the years ended December 31, 2018 and 2017 and for the period from October 4, 2016
(inception) through December 31, 2016, have been audited by EisnerAmper LLP, independent registered public accounting firm, as
stated in their report which is incorporated herein by reference. Such financial statements have been incorporated herein by reference
in reliance on the report of such firm given upon their authority as experts in accounting and auditing.
ADDITIONAL
INFORMATION
We
file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains an Internet
site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, such
as us, that file electronically with the SEC. Additionally, you may access our filings with the SEC through our website at http://www.proventionbio.com.
The information on our website is not part of this prospectus.
We
will provide you without charge, upon your oral or written request, with a copy of any or all reports, proxy statements and other
documents we file with the SEC, as well as any or all of the documents incorporated by reference in this prospectus (other than
exhibits to such documents unless such exhibits are specifically incorporated by reference into such documents). Requests for
such copies should be directed to:
Provention
Bio, Inc.
P.O.
Box 666
Oldwick,
NJ 08858
Telephone
number: (908) 336-0360
We
have filed with the SEC a registration statement on Form S-3 under the Securities Act with respect to the common stock offered
with this prospectus. This prospectus does not contain all of the information in the registration statement, parts of which we
have omitted, as allowed under the rules and regulations of the SEC. You should refer to the registration statement for further
information with respect to us and the common stock. Copies of the registration statement, including exhibits, may be inspected
without charge at the SEC’s Public Reference Room and on the SEC’s website at the addresses set forth above.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC allows us to “incorporate by reference” information that we file with it into this prospectus, which means that
we can disclose important information to you by referring you to those documents. The information incorporated by reference is
an important part of this prospectus. The information incorporated by reference is considered to be a part of this prospectus,
and information that we file later with the SEC will automatically update and supersede information contained in this prospectus
and any accompanying prospectus supplement.
We
incorporate by reference the documents listed below that we have previously filed with the SEC:
|
|
●
|
our
Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 19, 2019; and
|
|
|
|
|
|
|
●
|
our
Quarterly Report on Form 10-Q for the period ended March 31, 2019, filed with the SEC on May 8, 2019; and
|
|
|
|
|
|
|
●
|
our
Current Reports on Form 8-K filed with the SEC on March 28, 2019, May 30, 2019 and June 10, 2019 (other than the information
furnished under Item 7.01 of Form 8-K); and
|
|
|
|
|
|
|
●
|
our
Definitive Proxy Statement on Schedule 14A, filed on April 15, 2019; and
|
|
|
|
|
|
|
●
|
the
description of our common stock contained in our registration statement on Form 8-A filed with the SEC on June 22, 2018, including
any amendments or reports filed for the purposes of updating this description.
|
All
reports and other documents that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act between the
date of the initial registration statement of which this prospectus is a part and prior to the effectiveness of such registration
statement, and all such documents that we file with the SEC after the date of this prospectus and before the termination of the
offering of our securities, will also be deemed to be incorporated by reference into this prospectus from the date of the filing
of these reports and documents, and will supersede the information herein; provided, however, that all reports, exhibits and other
information that we “furnish” to the SEC will not be considered incorporated by reference into this prospectus. We
undertake to provide without charge to each person (including any beneficial owner) who receives a copy of this prospectus, upon
written or oral request, a copy of all of the preceding documents that are incorporated by reference (other than exhibits, unless
the exhibits are specifically incorporated by reference into these documents). You may request a copy of these materials in the
manner set forth under the heading “Additional Information,” above.
Any
statements contained in a document incorporated by reference in this prospectus shall be deemed to be modified, superseded or
replaced for purposes of this prospectus to the extent that a statement contained in this prospectus (or in any other subsequently
filed document which also is incorporated by reference in this prospectus) modifies, supersedes or replaces such statement. Any
statement so modified, superseded or replaced shall not be deemed, except as so modified, superseded or replaced, to constitute
a part of this prospectus. Statements contained in this prospectus and any document incorporated by reference as to the contents
of any contract, agreement or other document referred to are not necessarily complete, and in each instance reference is made
to the copy of the contract, agreement or other document filed as an exhibit to the registration statement or any incorporated
document, each statement being so qualified by this reference.
Up
to $50,000,000
Common
Stock
PROSPECTUS
SVB
Leerink Cantor
,
2019
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution
The
following table sets forth the costs and expenses to be paid by us in connection with the sale of securities being registered.
All amounts are estimates except the SEC registration fee (which has previously been paid).
|
SEC Registration Fee
|
$
|
24,240
|
|
|
|
|
|
|
Legal Fees and Expenses
|
$
|
50,000
|
|
|
|
*
|
|
|
Accounting Fees and Expenses
|
$
|
25,000
|
|
|
|
*
|
|
|
Printing and Engraving
|
$
|
10,000
|
|
|
|
*
|
|
|
Miscellaneous
|
$
|
760
|
|
|
|
*
|
|
|
Total:
|
$
|
110,000
|
|
|
|
|
|
*
Estimated
Item
15. Indemnification of Directors and Officers
Section
145 of the Delaware General Corporation Law, or DGCL, provides, in general, that a corporation incorporated under the laws of
the State of Delaware, as we are, may indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding (other than a derivative action by or in the right of the corporation) by reason
of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another enterprise, against expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such
action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause
to believe such person’s conduct was unlawful. In the case of a derivative action, a Delaware corporation may indemnify
any such person against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the corporation, except that no indemnification will be made in respect
of any claim, issue or matter as to which such person will have been adjudged to be liable to the corporation unless and only
to the extent that the Court of Chancery of the State of Delaware or any other court in which such action was brought determines
such person is fairly and reasonably entitled to indemnity for such expenses.
Our
Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide that we will indemnify our directors,
officers, employees and agents to the extent and in the manner permitted by the provisions of the DGCL, as amended from time to
time, subject to any permissible expansion or limitation of such indemnification, as may be set forth in any amendment by stockholders
or directors resolution.
Any
repeal or modification of these provisions approved by our stockholders will be prospective only and will not adversely affect
any limitation on the liability of any of our directors or officers existing as of the time of such repeal or modification.
We
have director and officer liability insurance to cover liabilities our directors and officers may incur in connection with their
services to us, including matters arising under the Securities Act.
We
have entered into indemnification agreements with all of our directors and named executive officers whereby we have agreed to
indemnify those directors and officers to the fullest extent permitted by law, including indemnification against expenses and
liabilities incurred in legal proceedings to which the director or officer was, or is threatened to be made, a party by reason
of the fact that such director or officer is or was our director, officer, employee or agent, provided that such director or officer
acted in good faith and in a manner that the director or officer reasonably believed to be in, or not opposed to, our best interests.
Item
16. Exhibits
Exhibit
No.
|
|
Description
|
|
|
|
|
|
1.1
|
|
Form
of Underwriting Agreement.**
|
|
|
|
|
|
1.2
|
|
Sales Agreement, dated August 2, 2019, by and among the Registrant, SVB Leerink LLC and Cantor Fitzgerald & Co.*
|
|
|
|
|
|
3.1
|
|
Second Amended and Restated Certificate of Incorporation of Provention Bio, Inc., effective as of July 19, 2018 (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed on July 19, 2018).
|
|
|
|
|
|
3.2
|
|
Amended and Restated By-Laws of Provention Bio, Inc., effective as of July 19, 2018 (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed on July 19, 2018).
|
|
|
|
|
|
4.1
|
|
Specimen Certificate representing shares of common stock of Provention (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1/A (File No. 333-224801) filed on June 20, 2018).
|
|
|
|
|
|
4.2
|
|
Specimen
Preferred Stock Certificate.**
|
|
|
|
|
|
4.3
|
|
Form
of Warrant Agreement.**
|
|
|
|
|
|
4.4
|
|
Form
of Warrant Certificate.**
|
|
|
|
|
|
4.5
|
|
Form of Senior Debt Indenture.*
|
|
|
|
|
|
4.6
|
|
Form of Subordinated Debt Indenture.*
|
|
|
|
|
|
4.7
|
|
Form of Senior Note (included in Exhibit 4.5).*
|
|
|
|
|
|
4.8
|
|
Form of Subordinated Note (included in Exhibit 4.6).*
|
|
|
|
|
|
4.9
|
|
Form
of Unit Agreement.**
|
|
|
|
|
|
4.10
|
|
Form
of Subscription Agreement.**
|
|
|
|
|
|
5.1
|
|
Legal
opinion of Lowenstein Sandler LLP.*
|
|
|
|
|
|
23.1
|
|
Consent of EisnerAmper LLP.*
|
|
|
|
|
|
23.2
|
|
Consent of Lowenstein Sandler LLP (included in Exhibit 5.1).*
|
|
|
|
|
|
24.1
|
|
Power of Attorney (included on the signature page).*
|
|
|
|
|
|
25.1
|
|
Statement
of Eligibility on Form T-1 of the Trustee for the Senior Debt Indenture.***
|
|
|
|
|
|
25.2
|
|
Statement
of Eligibility on Form T-1 of the Trustee for the Subordinated Debt Indenture.***
|
|
*
|
Filed
herewith.
|
|
**
|
To
be filed, if applicable, by amendment or by a report filed under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended, and incorporated herein by reference.
|
|
***
|
To
be filed pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939, as amended.
|
Item
17. Undertakings
The
undersigned Registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(a)
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933,
(b)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement,
(c)
To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement.
Provided,
however, that paragraphs (1)(a), (1)(b) and (1)(c) above do not apply if the registration statement is on Form S-3 and the information
required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part
of the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(a)
If the Registrant is relying on Rule 430B:
(i)
Each prospectus filed by the Registrant pursuant to Rule 424(b)(3)shall be deemed to be part of the registration statement as
of the date the filed prospectus was deemed part of and included in the registration statement; and
ii)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale
of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and
any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5)
That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities, the Registrant undertakes that in a primary offering of securities of the Registrant pursuant
to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the Registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the Registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the Registrant or used or referred to by the
Registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about Registrant or
its securities provided by or on behalf of the Registrant; and
(iv)
Any other communication that is an offer in the offering made by the Registrant to the purchaser.
(6)
The Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing
of the Registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(7)
The undersigned hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act
in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Securities Act.
(8)
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the forgoing
provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication
of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Oldwick, State of New Jersey, on this 2
nd
day of August,
2019.
|
|
PROVENTION
BIO, INC.
|
|
|
|
|
|
By:
|
/s/
Ashleigh
Palmer
|
|
|
|
Ashleigh
Palmer
|
|
|
|
Chief
Executive Officer
|
KNOW
ALL MEN BY THESE PRESENTS
, that each person whose signature appears below constitutes and appoints Ashleigh Palmer and Andrew
Drechsler, and each of them, each with full power to act without the other, his true and lawful attorneys-in-fact and agents,
each with full power of substitution and resubstitution, for such person and in his name, place and stead, in any and all capacities,
to sign any amendments to this Registration Statement, and to sign any registration statement for the same offering covered by
this Registration Statement, including post-effective amendments or registration statements filed pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto and other documents in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming that each of said such attorneys-in-fact and agents or
his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/
Ashleigh Palmer
|
|
Chief
Executive Officer (Principal
|
|
August
2, 2019
|
|
Ashleigh
Palmer
|
|
Executive
Officer), Director
|
|
|
|
|
|
|
|
|
|
/s/
Andrew Drechsler
|
|
Chief
Financial Officer (Principal
|
|
August
2, 2019
|
|
Andrew
Drechsler
|
|
Financial
Officer, Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
/s/
Jeffrey Bluestone
|
|
Director
|
|
August
2, 2019
|
|
Jeffrey
Bluestone
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Avery Catlin
|
|
Director
|
|
August
2, 2019
|
|
Avery
Catlin
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Anthony DiGiandomenico
|
|
Director
|
|
August
2, 2019
|
|
Anthony
DiGiandomenico
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Wayne Pisano
|
|
Director
|
|
August
2, 2019
|
|
Wayne
Pisano
|
|
|
|
|
Provention
Bio, Inc.
Shares
of Common Stock
($0.0001
par value per share)
SALES
AGREEMENT
August
2, 2019
SVB
LEERINK LLC
One
Federal Street, 37
th
Floor
Boston,
Massachusetts 02110
CANTOR
FITZGERALD & CO.
499
Park Avenue
New
York, New York 10022
Ladies
and Gentlemen:
Provention
Bio, Inc., a Delaware corporation (the “
Company
”), confirms its agreement (this “
Agreement
”)
with SVB Leerink LLC and Cantor Fitzgerald & Co. (each individually, an “
Agent
” and collectively,
the “
Agents
”), as follows:
1.
Issuance and Sale of Shares
. The Company agrees that, from time to time during the term of this Agreement, on the terms
and subject to the conditions set forth herein, it may issue and sell through the Agents, each acting as agent and/or principal,
shares (the “
Placement Shares
”) of common stock, $0.0001 par value per share, of the Company (the “
Common
Stock
”), having an aggregate offering price of up to $50,000,000, subject to the limitations set forth in Section
5(c). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitation
set forth in this Section 1 on the aggregate gross sales price of Placement Shares that may be issued and sold under this Agreement
from time to time shall be the sole responsibility of the Company, and that the Agents shall have no obligation in connection
with such compliance. The issuance and sale of Placement Shares through the Agents will be effected pursuant to the Registration
Statement (as defined below) to be filed by the Company with the Securities and Exchange Commission (the “
Commission
”)
on August 2, 2019 and to be declared effective by the Commission, although nothing in this Agreement shall be construed as requiring
the Company to issue any Placement Shares.
The
Company has prepared and will file, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules
and regulations thereunder (collectively, the “
Securities Act
”), with the Commission a registration
statement on Form S-3, including a base prospectus, relating to certain securities, and a prospectus relating to the Placement
Shares, to be issued from time to time by the Company, and which incorporates by reference documents that the Company has filed
or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the “
Exchange Act
”). The Company has prepared a prospectus or a prospectus
supplement to the base prospectus included as part of the registration statement, which prospectus or prospectus supplement specifically
relates to the Placement Shares to be issued from time to time pursuant to this Agreement (the “
Prospectus Supplement
”).
The Company will furnish to the Agents, for use by the Agents, copies of the prospectus included as part of such registration
statement, relating to the Placement Shares to be issued from time to time by the Company. Except where the context otherwise
requires, such registration statement, including all documents filed as part thereof or incorporated by reference therein, and
including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule
424(b) under the Securities Act or deemed to be a part of such registration statement pursuant to Rule 430B or Rule 462(b) under
the Securities Act, is herein called the “
Registration Statement
.” The prospectus, including all documents
incorporated therein by reference, included in the Registration Statement, as it may be supplemented, if necessary, in the form
in which such prospectus or prospectuses have most recently been filed by the Company with the Commission pursuant to Rule 424(b)
under the Securities Act, together with any “issuer free writing prospectus” (as used herein, as defined in Rule 433
under the Securities Act (“
Rule 433
”)), relating to the Placement Shares that (i) is required to be
filed with the Commission by the Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i), in each case, in the form
filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s
records pursuant to Rule 433(g), is herein called the “
Prospectus
.”
Any
reference herein to the Registration Statement, any Prospectus Supplement, the Prospectus or any issuer free writing prospectus
shall be deemed to refer to and include the documents, if any, that are or are deemed to be incorporated by reference therein
(the “
Incorporated Documents
”), including, unless the context otherwise requires, the documents, if
any, filed as exhibits to such Incorporated Documents. Any reference herein to the terms “amend,” “amendment”
or “supplement” with respect to the Registration Statement, the Prospectus Supplement, the Prospectus or any issuer
free writing prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act on or after
the most-recent effective date of the Registration Statement, or the respective dates of the Prospectus Supplement, Prospectus
or such issuer free writing prospectus, as the case may be, and incorporated therein by reference. For purposes of this Agreement,
all references to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to include
the most recent copy filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval System or, if
applicable, the Interactive Data Electronic Application system when used by the Commission (collectively, “
EDGAR
”).
2.
Placements
. Each time that the Company wishes to issue and sell any Placement Shares hereunder (each, a “
Placement
”),
it will notify an Agent (the “
Designated Agent
”) by email notice (or other method mutually agreed to
in writing by the parties) (each such notice, a “
Placement Notice
”) containing the parameters in accordance
with which it desires such Placement Shares to be sold, which at a minimum shall include the maximum number or amount of Placement
Shares to be sold, the time period during which sales are requested to be made, any limitation on the number or amount of Placement
Shares that may be sold in any one Trading Day (as defined in Section 3) and any minimum price below which sales may not be made,
a form of which containing such minimum sales parameters is attached hereto as
Schedule 1
. The Placement Notice
must originate from one of the individuals authorized to act on behalf of the Company and set forth on
Schedule 2
(with a copy to each of the other individuals from the Company listed on such
Schedule 2
), and shall be addressed
to each of the individuals from such Designated Agent set forth on
Schedule 2
, as such
Schedule 2
may be updated by either party from time to time by sending a written notice containing a revised
Schedule 2
to
the other parties in the manner provided in Section 12 (including by email correspondence to each of the individuals of the Company
set forth on
Schedule 2
, if receipt of such correspondence is actually acknowledged by any of the individuals to
whom the notice is sent, other than via auto-reply). The Placement Notice shall be effective upon receipt by such Designated Agent
unless and until (i) in accordance with the notice requirements set forth in Section 4, such Designated Agent declines to accept
the terms contained therein for any reason, in its sole discretion, within two Trading Days of the date such Designated Agent
receives the Placement Notice, (ii) in accordance with the notice requirements set forth in Section 4, such Designated Agent suspends
sales under the Placement Notice for any reason in its sole discretion, (iii) the entire amount of the Placement Shares has been
sold pursuant to this Agreement, (iv) in accordance with the notice requirements set forth in Section 4, the Company suspends
sales under or terminates the Placement Notice for any reason in its sole discretion, (v) the Company issues a subsequent Placement
Notice and explicitly indicates that its parameters supersede those contained in the earlier dated Placement Notice or (vi) this
Agreement has been terminated pursuant to the provisions of Section 11. The amount of any discount, commission or other compensation
to be paid by the Company to such Designated Agent in connection with the sale of the Placement Shares shall be calculated in
accordance with the terms set forth in
Schedule 3
. It is expressly acknowledged and agreed that neither the Company
nor the Agents will have any obligation whatsoever with respect to a Placement or any Placement Shares unless and until the Company
delivers a Placement Notice to a Designated Agent and such Designated Agent does not decline such Placement Notice pursuant to
the terms set forth above, and then only upon the terms specified therein and herein. In the event of a conflict between the terms
of this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control with respect to the matters
covered thereby.
3.
Sale of Placement Shares by the Designated Agent
. On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, including Section 5(c), upon a Designated Agent’s acceptance of the
terms of a Placement Notice as provided in Section 2, and unless the sale of the Placement Shares described therein has been declined,
suspended or otherwise terminated in accordance with the terms of this Agreement, such Designated Agent, for the period specified
in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices and
applicable state and federal laws, rules and regulations and the rules of the Nasdaq Capital Market (“
Nasdaq
”)
to sell such Placement Shares up to the number or amount specified in, and otherwise in accordance with the terms of, such Placement
Notice. The Designated Agent will provide written confirmation to the Company and the other Agent (including by email correspondence
to each of the individuals of the Company set forth on
Schedule 2
, if receipt of such correspondence is actually
acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) no later than the opening of the
Trading Day (as defined below) immediately following the Trading Day on which the Designated Agent has made sales of Placement
Shares hereunder setting forth the number or amount of Placement Shares sold on such Trading Day, the volume-weighted average
price of the Placement Shares sold and the Net Proceeds (as defined below) payable to the Company. Unless otherwise specified
by the Company in a Placement Notice, the Designated Agent may sell Placement Shares by any method permitted by law deemed to
be an “at the market offering” as defined in Rule 415 of the Securities Act, including sales made directly on or through
Nasdaq, on or through any other existing trading market for the Common Stock or to or through a market maker. If expressly authorized
by the Company (including in a Placement Notice), the Designated Agent may also sell Placement Shares in negotiated transactions.
Notwithstanding the provisions of Section 6(rr), except as may be otherwise agreed by the Company and the Designated Agent,
the Designated Agent shall not purchase Placement Shares on a principal basis pursuant to this Agreement unless the Company and
the Designated Agent enter into a separate written agreement setting forth the terms of such sale. The Company acknowledges and
agrees that (i) there can be no assurance that the Designated Agent will be successful in selling Placement Shares, (ii) the Designated
Agent will incur no liability or obligation to the Company or any other person or entity if it does not sell Placement Shares
for any reason other than a failure by the Designated Agent to use its commercially reasonable efforts consistent with its normal
trading and sales practices and applicable state and federal laws, rules and regulations and the rules of Nasdaq to sell such
Placement Shares as required under this Agreement and (iii) the Designated Agent shall be under no obligation to purchase Placement
Shares on a principal basis pursuant to this Agreement unless the Company and the Designated Agent enter into a separate written
agreement setting forth the terms of such sale. For the purposes hereof, “
Trading Day
” means any day
on which the Common Stock is purchased and sold on Nasdaq.
4.
Suspension of Sales
.
(a)
The Company or the Designated Agent may, upon notice to the other party in writing (including by email correspondence to each
of the individuals of the other party set forth on
Schedule 2
, if receipt of such correspondence is actually acknowledged
by any of the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by email
correspondence to each of the individuals of the other party set forth on
Schedule 2
), suspend any sale of Placement
Shares;
provided
,
however
, that such suspension shall not affect or impair either party’s obligations with
respect to any Placement Shares sold hereunder prior to the receipt of such notice. Each of the parties agrees that no such notice
under this Section 4 shall be effective against the other party unless notice is sent by one of the individuals named on
Schedule
2
hereto to the other party in writing (including by email correspondence to each of the individuals of the other party
set forth on
Schedule 2
, if receipt of such correspondence is actually acknowledged by any of the individuals to
whom the notice is sent, other than via auto-reply).
(b)
Notwithstanding any other provision of this Agreement, during any period in which the Company is, or could be deemed to be, in
possession of material non-public information, the Company and the Designated Agent agree that (i) no sale of Placement Shares
will take place, (ii) the Company shall not request the sale of any Placement Shares and shall cancel any effective Placement
Notices instructing the Designated Agent to make any sales and (iii) the Designated Agent shall not be obligated to sell or offer
to sell any Placement Shares.
5.
Settlement and Delivery of the Placement Shares
.
(a)
Settlement of Placement Shares
. Unless otherwise specified in the applicable Placement Notice, settlement for sales of
Placement Shares will occur on the second Trading Day (or such earlier day as is industry practice or as is required for regular-way
trading) following the date on which such sales are made (each, a “
Settlement Date
”). The amount of
proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement Shares sold (the “
Net
Proceeds
”) will be equal to the aggregate gross sales price received by the Designated Agent at which such Placement
Shares were sold, after deduction of (i) the Designated Agent’s commission, discount or other compensation for such sales
payable by the Company pursuant to Section 2 hereof, (ii) any other amounts due and payable by the Company to the Designated Agent
hereunder pursuant to Section 7(g) hereof and (iii) any transaction fees imposed by any governmental or self-regulatory organization
in respect of such sales.
(b)
Delivery of Placement Shares
. On or before each Settlement Date, the Company will issue the Placement Shares being sold
on such date and will, or will cause its transfer agent to, electronically transfer such Placement Shares by crediting the Designated
Agent’s or its designee’s account (provided the Designated Agent shall have given the Company written notice of such
designee prior to the Settlement Date) at The Depository Trust Company through its Deposit and Withdrawal at Custodian System
(“
DWAC
”) or by such other means of delivery as may be mutually agreed upon by the parties hereto, which
in all cases shall be duly authorized, freely tradeable, transferable, registered shares of Common Stock in good deliverable form.
On each Settlement Date, the Designated Agent will deliver the related Net Proceeds in same day funds to an account designated
by the Company on or prior to the Settlement Date. The Designated Agent shall be responsible for providing DWAC instructions or
other instructions for delivery by other means with regard to the transfer of the Placement Shares being sold. In addition to
and in no way limiting the rights and obligations set forth in Section 9(a) hereto, the Company agrees that if the Company or
its transfer agent (if applicable), defaults in its obligation to deliver duly authorized, freely tradeable, transferable, registered
Placement Shares in good deliverable form by 2:30 P.M., New York City time, on a Settlement Date (other than as a result of a
failure by the Designated Agent to provide instructions for delivery), the Company will (i) take all necessary action to cause
the full amount of any Net Proceeds that were delivered to the Company’s account with respect to such settlement, together
with any costs incurred by the Designated Agent and/or its clearing firm in connection with recovering such Net Proceeds, to be
immediately returned to the Designated Agent or its clearing firm no later than 5:00 P.M., New York City time, on such Settlement
Date, by wire transfer of immediately available funds to an account designated by the Designated Agent or its clearing firm, (ii)
indemnify and hold the Designated Agent and its clearing firm harmless against any loss, claim, damage, or expense (including
reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company or its transfer
agent (if applicable) and (iii) pay to the Designated Agent any commission, discount or other compensation to which it would otherwise
have been entitled absent such default. Certificates for the Placement Shares, if any, shall be in such denominations and registered
in such names as the Designated Agent may request in writing one Business Day (as defined below) before the applicable Settlement
Date. Certificates for the Placement Shares, if any, will be made available by the Company for examination and packaging by the
Designated Agent in New York City not later than 12:00 P.M., New York City time, on the Business Day prior to the applicable Settlement
Date.
(c)
Limitations on Offering Size
. Under no circumstances shall the Company cause or request the offer or sale of any Placement
Shares if, after giving effect to the sale of such Placement Shares, the aggregate number or gross sales proceeds of Placement
Shares sold pursuant to this Agreement would exceed the lesser of: (i) the number or dollar amount of shares of Common Stock registered
pursuant to, and available for offer and sale under, the Registration Statement pursuant to which the offering of Placement Shares
is being made, (ii) the number of authorized but unissued shares of Common Stock of the Company (less shares of Common Stock issuable
upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise reserved from the Company’s
authorized capital stock), (iii) the number or dollar amount of shares of Common Stock permitted to be offered and sold by the
Company under Form S-3 (including General Instruction I.B.6. thereof, if such instruction is applicable), (iv) the number
or dollar amount of shares of Common Stock that the Company’s board of directors or a duly authorized committee thereof
is authorized to issue and sell from time to time, or (v) the dollar amount of shares of Common Stock for which the Company has
filed the Prospectus Supplement. Under no circumstances shall the Company cause or request the offer or sale of any Placement
Shares pursuant to this Agreement at a price lower than the minimum price authorized from time to time by the Company’s
board of directors or a duly authorized committee thereof. Notwithstanding anything to the contrary contained herein, the parties
hereto acknowledge and agree that compliance with the limitations set forth in this Section 5(c) on the number or dollar amount
of Placement Shares that may be issued and sold under this Agreement from time to time shall be the sole responsibility of the
Company, and that the Agents shall have no obligation in connection with such compliance.
6.
Representations and Warranties of the Company
. The Company represents and warrants to, and agrees with, the Agents that
as of the date of this Agreement, and as of (i) each Representation Date (as defined in Section 7(m)), (ii) each date on which
a Placement Notice is given, (iii) the date and time of each sale of any Placement Shares pursuant to this Agreement and (iv)
each Settlement Date (each such time or date referred to in clauses (i) through (iv), an “
Applicable Time
”):
(a)
The Company and the transactions contemplated by this Agreement meet the requirements for and comply with the conditions for the
use of Form S-3 (including General Instructions I.A and I.B.1.) under the Securities Act. The Registration Statement has been
filed with the Commission and will be declared effective by the Commission under the Securities Act prior to the issuance of any
Placement Notices by the Company. At the time the Registration Statement originally became effective and at the time the Company’s
Annual Report on Form 10-K for the year ended December 31, 2018, was filed with the Commission, the Company met the then-applicable
requirements for use of Form S-3 (including General Instructions I.A and I.B.1.) under the Securities Act. The Registration Statement
meets, and the offering and sale of Placement Shares as contemplated hereby comply with, the requirements of Rule 415(a)(1)(x)
under the Securities Act. The Agents are named as the agents engaged by the Company in the section entitled “Plan of Distribution”
in the Prospectus Supplement. The Company has not received, and has no notice from the Commission of, any notice pursuant to Rule
401(g)(1) under the Securities Act objecting to the use of the shelf registration statement form. No stop order of the Commission
preventing or suspending the use of the base prospectus, the Prospectus Supplement or the Prospectus, or the effectiveness of
the Registration Statement, has been issued, and no proceedings for such purpose are pending before or, to the knowledge of the
Company, threatened by the Commission. At the time of the initial filing of the Registration Statement, the Company paid the required
Commission filing fees relating to the securities covered by the Registration Statement, including the Placement Shares that may
be sold pursuant to this Agreement, in accordance with Rule 457(o) under the Securities Act. Copies of the Registration Statement,
the Prospectus, any such amendments or supplements to any of the foregoing and all Incorporated Documents that were filed with
the Commission on or prior to the date of this Agreement have been delivered, or are available through EDGAR, to the Agents and
their counsel.
(b)
Each of the Registration Statement and any post-effective amendment thereto, at the time it became or becomes effective, at each
deemed effective date with respect to the Agents pursuant to Rule 430B(f)(2) under the Securities Act and as of each Applicable
Time, complied, complies and will comply in all material respects with the requirements of the Securities Act and did not, does
not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, except that the representations and warranties set forth in this sentence
do not apply to Agents’ Information (as defined below). The Prospectus and any amendment or supplement thereto, when so
filed with the Commission under Rule 424(b) under the Securities Act, complied, complies and as of each Applicable Time will comply
in all material respects with the requirements of the Securities Act, and each Prospectus Supplement, Prospectus or issuer free
writing prospectus (or any amendments or supplements to any of the foregoing) furnished to the Agents for use in connection with
the offering of the Placement Shares was identical to the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T. Neither the Prospectus nor any amendment or supplement thereto,
as of its date and as of each Applicable Time, included, includes or will include an untrue statement of a material fact or omitted,
omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and warranties set forth in this sentence do not apply
to Agents’ Information. Each Incorporated Document heretofore filed, when it was filed (or, if any amendment with respect
to any such document was filed, when such amendment was filed), conformed in all material respects with the requirements of the
Exchange Act and were filed on a timely basis with the Commission, and any further Incorporated Documents so filed and incorporated
after the date of this Agreement will be filed on a timely basis and, when so filed, will conform in all material respects with
the requirements of the Exchange Act; no such Incorporated Document when it was filed (or, if an amendment with respect to any
such document was filed, when such amendment was filed), contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and no such Incorporated Document, when it is filed, will contain an untrue statement
of a material fact or will omit to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading.
(c)
At the time of filing the Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that
the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act)
of the Securities Act and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in
Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the
Company be considered an ineligible issuer.
(d)
The Company is, and since the time of the initial filing of the Company’s first registration statement with the Commission
has been, an “emerging growth company,” as defined in Section 2(a) of the Securities Act (an “
Emerging
Growth Company
”).
(e)
Each issuer free writing prospectus, as of its issue date and as of each Applicable Time, did not, does not and will not
include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement
or the Prospectus, including any Incorporated Document deemed to be a part thereof that has not been superseded or modified. Each
issuer free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433 or that was prepared by
or on behalf of or used by the Company complies or will comply in all material respects with the requirements of the Securities
Act.
(f)
The Company has not distributed and, prior to the later to occur of each Settlement Date and completion of the Agents’ distribution
of the Placement Shares under this Agreement, will not distribute any offering material in connection with the offering and sale
of the Placement Shares other than the Registration Statement, the Prospectus or any Permitted Free Writing Prospectus (as defined
below).
(g)
The Company is subject to and in compliance in all material respects with the reporting requirements of Section 13 or Section
15(d) of the Exchange Act. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is listed on Nasdaq,
and the Company has taken no action designed to, or reasonably likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or delisting the Common Stock from Nasdaq, nor has the Company received any notification that
the Commission or Nasdaq is contemplating terminating such registration or listing. The Company is in compliance with the current
listing standards of Nasdaq. The Company has filed a Notification of Listing of Additional Shares with Nasdaq with respect to
the Placement Shares.
(h)
The accountants who certified the financial statements and supporting schedules included in the Registration Statement and the
Prospectus are independent public accountants as required by the Securities Act, the Exchange Act, and the Public Company Accounting
Oversight Board (United States) (the “
PCAOB
”).
(i)
The financial statements included or incorporated by reference in the Registration Statement and the Prospectus, together with
the related schedules and notes, comply as to form in all material respects with Regulation S-X under the Securities Act and present
fairly, in all material respects, the financial position of the Company at the dates indicated and the statement of operations,
stockholders’ equity and cash flows of the Company for the periods specified; said financial statements have been prepared
in conformity with U.S. generally accepted accounting principles (“
GAAP
”) applied on a consistent basis
throughout the periods involved, except, in the case of unaudited interim financial statements, subject to normal year end adjustments.
The supporting schedules, if any, present fairly, in all material respects, in accordance with GAAP the information required to
be stated therein. Except as included therein, no historical or pro forma financial statements or supporting schedules are required
to be included or incorporated by reference in the Registration Statement or the Prospectus under the Securities Act. The interactive
data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement and the Prospectus
fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s
rules and guidelines applicable thereto.
(j)
The Company is in compliance with all provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder
(collectively, the “
Sarbanes-Oxley Act
”) which the Company is required to comply with, and is actively
taking steps to ensure that it will be in compliance with other provisions of the Sarbanes-Oxley Act that will become applicable
to the Company at all times after the effectiveness of the Registration Statement (taking into account all exemptions and phase-in
periods provided under the Jumpstart Our Business Startups Act and otherwise under applicable law).
(k)
Except as otherwise stated therein, since the respective dates as of which information is given in the Registration Statement
or the Prospectus, (A) there has been no material adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company, whether or not arising in the ordinary course of business (a “
Material
Adverse Effect
”), (B) there have been no transactions entered into by the Company, other than those in the ordinary
course of business, which are material with respect to the Company, (C) there have been no material liabilities or obligations,
direct or contingent, entered into by the Company and (D) there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(l)
The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware
and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus and to enter into and perform its obligations under this Agreement; and the Company
is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where
the failure to be so qualified or to be in good standing would not result in a Material Adverse Effect.
(m)
The Company has no subsidiaries (as defined in Rule 405 under the Securities Act).
(n)
The Company has the authorized and outstanding capitalization as set forth in the Company’s quarterly report on Form 10-Q
for the most recent fiscal quarter, as of the dates referred to therein (except for subsequent issuances, if any, (A) pursuant
to this Agreement, (B) pursuant to reservations, agreements or employee benefit plans referred to or incorporated by reference
into the Registration Statement and the Prospectus or (C) pursuant to the conversion of convertible securities or exercise of
options referred to or incorporated by reference into the Registration Statement and the Prospectus). The outstanding shares of
capital stock of the Company have been duly authorized and are validly issued, fully paid and non-assessable. None of the outstanding
shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder
of the Company.
(o)
This Agreement has been duly authorized, executed and delivered by the Company.
(p)
The Placement Shares have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered
by the Company against payment therefor pursuant to this Agreement, will be validly issued, fully paid and nonassessable and will
conform in all material respects to the description thereof contained in the Prospectus. The issuance and sale of the Placement
Shares as contemplated hereby shall not be subject to any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase the Placement Shares. When issued and delivered by the Company against payment therefor pursuant to
this Agreement, the purchasers of the Placement Shares issued and sold hereunder will acquire good, marketable and valid title
to such Placement Shares, free and clear of all pledges, liens, security interests, charges, claims or encumbrances. The issuance
and sale of the Placement Shares as contemplated hereby will not cause any holder of any share capital, securities convertible
into or exchangeable or exercisable for share capital or options, warrants or other rights to purchase share capital or any other
securities of the Company to have any right to acquire any preferred shares of the Company. There are no restrictions upon the
voting or transfer of the Common Stock under the Company’s amended and restated certificate of incorporation or amended
and restated bylaws or any agreement or other instrument to which the Company is a party or otherwise filed as an exhibit to the
Registration Statement.
(q)
There are no persons with registration rights or other similar rights to have any securities registered for sale pursuant to the
Registration Statement or otherwise registered for sale or sold by the Company under the Securities Act pursuant to this Agreement,
other than those (i) rights that have been disclosed in the Registration Statement and the Prospectus and have been waived,
or (ii) that the failure to comply with would not otherwise have a Material Adverse Effect.
(r)
The Company is not (A) in violation of its charter, by-laws or similar organizational document, (B) in default in the performance
or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to which the Company is a party or by which either of them
may be bound or to which any of the properties or assets of the Company is subject (collectively, “
Agreements and
Instruments
”), except for such defaults that would not, singly or in the aggregate, result in a Material Adverse
Effect, or (C) in violation of any law, statute, rule, regulation, judgment, order, writ or decree of any arbitrator, court, governmental
body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over the Company or any of
their respective properties, assets or operations (each, a “
Governmental Entity
”), except for such violations
that would not, singly or in the aggregate, result in a Material Adverse Effect. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein and in the Registration Statement, and the Prospectus (including
the issuance and sale of the Placement Shares and the use of the proceeds from the sale of the Placement Shares as described therein
under the caption “
Use of Proceeds
”) and compliance by the Company with its obligations hereunder have
been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result
in the creation or imposition of any lien, charge or encumbrance upon any properties or assets of the Company pursuant to, the
Agreements and Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances
that would not, singly or in the aggregate, result in a Material Adverse Effect), nor will such action result in any violation
of the provisions of the charter, by-laws or similar organizational document of the Company or any law, statute, rule, regulation,
judgment, order, writ or decree of any Governmental Entity. As used herein, a “
Repayment Event
” means
any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on
such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness
by the Company.
(s)
No labor dispute with the employees of the Company exists or, to the knowledge of the Company, is imminent, and the Company is
not aware of any existing or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers, customers
or contractors, which, in either case, would result in a Material Adverse Effect.
(t)
Except as disclosed in the Registration Statement and the Prospectus, there is no action, suit, proceeding, inquiry or investigation
before or brought by any Governmental Entity (including, without limitation, any action, suit proceeding, inquiry or investigation
before or brought by the U.S. Food and Drug Administration (the “
FDA
”) or the European Medicines Agency
(the “
EMA
”)) now pending or, to the knowledge of the Company, threatened, against or affecting the Company,
which would reasonably be expected to result in a Material Adverse Effect, or which would reasonably be expected to materially
and adversely affect their respective properties or assets or the consummation of the transactions contemplated in this Agreement
or the performance by the Company of its obligations hereunder; and the aggregate of all pending legal or governmental proceedings
to which the Company is a party or of which any of their respective properties or assets is the subject which are not described
in the Registration Statement and the Prospectus, including ordinary routine litigation incidental to the business, would not
result in a Material Adverse Effect.
(u)
There are no contracts or documents which are required to be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement which have not been so described and filed as required.
(v)
No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any Governmental
Entity is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering,
issuance or sale of the Placement Shares hereunder or the consummation of the transactions contemplated by this Agreement, except
such as have been already obtained or as may be required under the Securities Act, the rules of the NASDAQ Stock Market LLC, state
securities laws or the rules of FINRA.
(w)
The Company possesses such permits, licenses, approvals, consents and other authorizations (collectively, “
Governmental
Licenses
”) issued by the appropriate Governmental Entities necessary to conduct the business now operated by them
(including, without limitation, all such permits, licenses, approvals, consents and other authorizations required by the FDA,
the EMA, or any other federal, state, local or foreign agencies or bodies engaged in the regulation of clinical or preclinical
studies, pharmaceuticals, biologics, biohazardous substances or activities related to the business now operated by the Company),
except where the failure so to possess would not, singly or in the aggregate, result in a Material Adverse Effect. The Company
is in compliance with the terms and conditions of all Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, result in a Material Adverse Effect. The Company has fulfilled and performed all of its material obligations
with respect to the Governmental Licenses and, to the knowledge of the Company, no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the
Company as a holder of any permit, except where the failure to so fulfill or perform, or the occurrence of such event, would not,
singly or in the aggregate, result in a Material Adverse Effect. All of the Governmental Licenses are valid and in full force
and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full
force and effect would not, singly or in the aggregate, result in a Material Adverse Effect. The Company has not received any
notice of proceedings relating to the revocation or modification of any Governmental Licenses which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect.
(x)
The Company has good and marketable title to all real property owned by it and good title to all other properties owned by it,
in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any
kind except such as (A) are described in the Registration Statement and the Prospectus or (B) do not, singly or in the aggregate,
materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such
property by the Company; and all of the leases and subleases material to the business of the Company, considered as one enterprise,
and under which the Company holds properties described in the Registration Statement or the Prospectus, are in full force and
effect, and the Company has not received any notice of any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company under any of the leases or subleases mentioned above, or affecting or questioning the rights of the
Company to the continued possession of the leased or subleased premises under any such lease or sublease.
(y)
Except as described in the Registration Statement and the Prospectus, to the knowledge of the Company, the Company owns or has
valid, binding and enforceable licenses or other rights under the patents, patent applications, licenses, inventions, copyrights,
know how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual property necessary for, or used in the conduct, or the
proposed conduct, of the business of the Company in the manner described in the Registration Statement and the Prospectus (collectively,
the “
Intellectual Property
”); to the knowledge of the Company, the patents, trademarks, and copyrights,
if any, included within the Intellectual Property are valid, enforceable, and subsisting; other than as disclosed in the Registration
Statement and the Prospectus, (A) the Company is not obligated to pay a material royalty, grant a license to, or provide other
material consideration to any third party in connection with the Intellectual Property, (B) the Company has not received any notice
of any claim of infringement, misappropriation or conflict with any asserted rights of others with respect to any of the Company’s
drug candidates, services, processes or Intellectual Property, (C) to the knowledge of the Company, neither the sale nor use of
any of the discoveries, inventions, drug candidates, services or processes of the Company referred to in the Registration Statement
or the Prospectus do or will, to the knowledge of the Company, infringe, misappropriate or violate any right or valid patent claim
of any third party, (D) none of the technology employed by the Company has been obtained or is being used by the Company in material
violation of any contractual obligation binding on the Company or, to the Company’s knowledge, upon any of its officers,
directors or employees or otherwise in violation of the rights of any persons, (E)to the knowledge of the Company, no third party
has any ownership right in or to any Intellectual Property that is owned by the Company, other than any co-owner of any patent
constituting Intellectual Property who is listed on the records of the U.S. Patent and Trademark Office (the “
USPTO
”)
and any co-owner of any patent application constituting Intellectual Property who is named in such patent application, and, to
the knowledge of the Company, no third party has any ownership right in or to any Intellectual Property in any field of use that
is exclusively licensed to the Company, other than any licensor to the Company of such Intellectual Property, (F) there is no
material infringement by third parties of any Intellectual Property, (G) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging the Company’s rights in or to any Intellectual Property,
and (H) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging
the validity or scope of any Intellectual Property. The Company is in compliance in all material respects with the terms of each
agreement pursuant to which Intellectual Property has been licensed to the Company, and all such agreements are in full force
and effect.
(z)
All patents and patent applications owned by or licensed to the Company or under which the Company has rights have, to the knowledge
of the Company, been duly and properly filed and maintained; to the knowledge of the Company, the parties prosecuting such patent
applications have complied with their duty of candor and disclosure to the USPTO in connection with such applications; and the
Company is not aware of any facts required to be disclosed to the USPTO that were not disclosed to the USPTO and which would preclude
the grant of a patent in connection with any such application or would reasonably be expected to form the basis of a finding of
invalidity with respect to any patents that have issued with respect to such applications. To the Company’s knowledge, all
patents and patent applications owned by the Company and filed with the USPTO or any foreign or international patent authority
(the “
Company Patent Rights
”) and all patents and patent applications in-licensed by the Company and
filed with the USPTO or any foreign or international patent authority (the “
In-licensed Patent Rights
”)
have been duly and properly filed; the Company believes it has complied with its duty of candor and disclosure to the USPTO for
the Company Patent Rights and, to the Company’s knowledge, the licensors of the In-licensed Patent Rights have complied
with their duty of candor and disclosure to the USPTO for the In-licensed Patent Rights.
(aa)
Except as described in the Registration Statement and the Prospectus,
the Company: (A) is and at all times has been in material compliance with all statutes, rules or regulations of the FDA and other
comparable Governmental Entities applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution,
marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product under development, manufactured
or distributed by the Company (“
Applicable Laws
”); (B) has not received any FDA Form 483, notice of
adverse finding, warning letter, untitled letter or other correspondence or written notice from the FDA or any Governmental Authority
alleging or asserting material noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, exemptions,
authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (“
Authorizations
”);
(C) possesses all material Authorizations and such Authorizations are valid and in full force and effect and the Company is not
in material violation of any term of any such Authorizations; (D) has not received notice of any claim, action, suit, proceeding,
hearing, enforcement, investigation, arbitration or other action from the FDA or any Governmental Authority or third party alleging
that any product operation or activity is in material violation of any Applicable Laws or Authorizations and has no knowledge
that the FDA or any Governmental Authority or third party is considering any such claim, litigation, arbitration, action, suit,
investigation or proceeding; (E) has not received notice that the FDA or any Governmental Authority has taken, is taking or intends
to take action to limit, suspend, modify or revoke any material Authorizations and has no knowledge that the FDA or any Governmental
Authority is considering such action; and (F) has filed, obtained, maintained or submitted all material reports, documents, forms,
notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments
were materially complete and correct on the date filed (or were corrected or supplemented by a subsequent submission).
(bb)
The Company has operated and currently is in compliance with
all applicable health care laws, rules and regulations (except where such failure to operate or non-compliance would not, singly
or in the aggregate, result in a Material Adverse Effect), including, without limitation, (i) the Federal, Food, Drug and Cosmetic
Act (21 U.S.C. §§ 301 et seq.); (ii) all applicable federal, state, local and all applicable foreign healthcare related
fraud and abuse laws, including, without limitation, the federal Anti-kickback Statute (42 U.S.C. § 1320a-7b(b)), the U.S.
Physician Payments Sunshine Act (42 U.S.C. § 1320a-7h), the civil False Claims Act (31 U.S.C. §§ 3729 et seq.),
the criminal False Claims Law (42 U.S.C. § 1320a-7b(a)), all criminal laws relating to healthcare fraud and abuse, including
but not limited to 18 U.S.C. Sections 286 and 287, the healthcare fraud criminal provisions under the U.S. Health Insurance Portability
and Accountability Act of 1996 (“
HIPAA
”) (42 U.S.C. Section 1320d et seq.), the exclusion laws (42 U.S.C.
§ 1320a-7), and the civil monetary penalties law (42 U.S.C. § 1320a-7a); (iii) HIPAA, as amended by the Health Information
Technology for Economic Clinical Health Act (42 U.S.C. Section 17921 et seq.); (iv) the regulations promulgated pursuant to such
laws; and (v) any other similar local, state, federal, or foreign laws (collectively, the “
Health Care Laws
”).
Neither the Company, nor to the Company’s knowledge, any of its officers, directors, employees or agents have engaged in
activities which are, as applicable, cause for false claims liability, civil penalties, or mandatory or permissive exclusion from
Medicare, Medicaid, or any other state or federal healthcare program. The Company has not received written notice or other correspondence
of any claim, action, suit, audit, survey, proceeding, hearing, enforcement, investigation, arbitration or other action (“
Action
”)
from any court or arbitrator or governmental or regulatory authority or third party alleging that any product operation or activity
is in violation of any Health Care Laws, and, to the Company’s knowledge, no such claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action is threatened. The Company is not a party to and does not have any ongoing
reporting obligations pursuant to any corporate integrity agreement, deferred prosecution agreement, monitoring agreement, consent
decree, settlement order, plan of correction or similar agreement imposed by any governmental or regulatory authority. Additionally,
neither the Company, nor to the Company’s knowledge, any of its employees, officers or directors, has been excluded, suspended
or debarred from participation in any U.S. state or federal health care program or human clinical research or, to the knowledge
of the Company, is subject to a governmental inquiry, investigation, proceeding, or other similar action that could reasonably
be expected to result in debarment, suspension, or exclusion.
(cc)
Except as described in the Registration Statement and the Prospectus
or would not, singly or in the aggregate, result in a Material Adverse Effect, (A) the Company is not in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products, asbestos-containing
materials or mold (collectively, “
Hazardous Materials
”) or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “
Environmental Laws
”),
(B) the Company all permits, authorizations and approvals required under any applicable Environmental Laws and is in compliance
with their requirements, (C) there are no pending or, to the knowledge of the Company threatened, administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company and (D) there are no events or circumstances that would reasonably be expected
to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or Governmental
Entity, against or affecting the Company relating to Hazardous Materials or any Environmental Laws.
(dd)
The Company maintains effective internal control over financial
reporting (as defined under Rule 13-a15 and 15d-15 under the Exchange Act) and a system of internal accounting controls sufficient
to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific
authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP
and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general
or specific authorization; (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences; and (E) the interactive data in eXtensible Business Reporting
Language included or incorporated by reference in the Registration Statement and the Prospectus fairly presents the information
called for in all material respects and is prepared in accordance with the Commission’s rules and guidelines applicable
thereto. Except as described in the Registration Statement and the Prospectus, since the end of the Company’s most recent
audited fiscal year, there has been (1) no material weakness in the Company’s internal control over financial reporting
(whether or not remediated) and (2) no change in the Company’s internal control over financial reporting that has materially
adversely affected, or is reasonably likely to materially adversely affect, the Company’s internal control over financial
reporting.
(ee)
The studies, tests and preclinical and clinical trials conducted
by or, to the Company’s knowledge, on behalf of the Company were and, if still ongoing, are being conducted in all material
respects in accordance with experimental protocols, procedures and controls pursuant to accepted professional scientific standards
and all Authorizations and Applicable Laws, including, without limitation, the Federal Food, Drug and Cosmetic Act and the rules
and regulations promulgated thereunder; the descriptions of the results of such studies, tests and trials contained in the Registration
Statement and the Prospectus are, to the Company’s knowledge, accurate and complete in all material respects and fairly
present the data derived from such studies, tests and trials; except to the extent disclosed in the Registration Statement and
the Prospectus, the Company is not aware of any studies, tests or trials, the results of which the Company believes reasonably
call into question the study, test, or trial results described or referred to in the Registration Statement and the Prospectus
when viewed in the context in which such results are described and the clinical state of development; and, except to the extent
disclosed in the Registration Statement or the Prospectus, the Company has not received any notices or correspondence from the
FDA or any Governmental Entity requiring the termination or suspension of any studies, tests or preclinical or clinical trials
conducted by or on behalf of the Company, other than ordinary course communications with respect to modifications in connection
with the design and implementation of such trials, copies of which communications have been made available to you.
(ff)
All United States federal income tax returns of the Company
required by law to be filed have been filed and all taxes shown by such returns or otherwise assessed, which are due and payable,
have been paid, except assessments against which appeals have been or will be promptly taken and as to which adequate reserves
have been provided in conformity with GAAP. The United States federal income tax returns of the Company through the fiscal year
ended December 31, 2016 have been settled and no assessment in connection therewith has been made against the Company. The Company
has filed all other tax returns that are required to have been filed by it pursuant to applicable foreign, state, local or other
law except insofar as the failure to file such returns would not result in a Material Adverse Effect, and have paid all taxes
due pursuant to such returns or pursuant to any assessment received by the Company, except for such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been established by the Company, or insofar as the failure to pay
such taxes would not result in a Material Adverse Effect. The charges, accruals and reserves on the books of the Company in respect
of any income and corporation tax liability for any years not finally determined are, in conformity with GAAP, adequate to meet
any assessments or re-assessments for additional income tax for any years not finally determined, except to the extent of any
inadequacy that would not result in a Material Adverse Effect.
(gg)
The Company carries or is entitled to the benefits of insurance,
with financially sound and reputable insurers, in such amounts and covering such risks as is generally maintained by companies
in the same or similar business, and all such insurance is in full force and effect. The Company has no reason to believe that
it will not be able (A) to renew its existing insurance coverage as and when such policies expire or (B) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Effect. The Company has not been denied any insurance coverage which it has sought or for
which it has applied.
(hh)
The Company is not required, and upon the issuance and sale
of the Placement Shares as herein contemplated and the application of the net proceeds therefrom as described in the Registration
Statement and the Prospectus will not be required, to register as an “investment company” under the Investment Company
Act of 1940, as amended (the “
Investment Company Act
”).
(ii)
Neither the Company nor any affiliate of the Company has taken,
nor will the Company or any affiliate take, directly or indirectly, any action which is designed, or would be expected, to cause
or result in, or which constitutes, the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Placement Shares or to result in a violation of Regulation M under the Exchange Act.
(jj)
None of the Company or, to the knowledge of the Company, any
director, officer, agent, employee, affiliate or other person acting on behalf of the Company is aware of or has taken any action,
directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder (the “
FCPA
”), including, without limitation, making use of
the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay
or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything
of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the FCPA and the Company has and, to the knowledge
of the Company, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies
and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(kk)
The operations of the Company are and have been conducted at
all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively,
the “
Money Laundering Laws
”); and no action, suit or proceeding by or before any Governmental Entity
involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(ll)
None of the Company, or, to the knowledge of the Company, any
director, officer, agent, employee, affiliate or representative of the Company is an individual or entity (“
Person
”)
currently the subject or target of any sanctions administered or enforced by the United States Government, including, without
limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control, the United Nations Security Council,
the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “
Sanctions
”),
nor is the Company located, organized or resident in a country or territory that is the subject of Sanctions; and the Company
will not directly or indirectly use the proceeds of the sale of the Placement Shares, or lend, contribute or otherwise make available
such proceeds to joint venture partners or other Person, to fund any activities of or business with any Person, or in any country
or territory, that, at the time of such funding, is the subject of Sanctions or in any other manner that will result in a violation
by any Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise)
of Sanctions.
(mm)
Except as disclosed in the Registration Statement and the Prospectus,
the Company (i) does not have any material lending or other relationship with any banking or lending affiliate of any Agent and
(ii) does not intend to use any of the proceeds from the sale of the Placement Shares to repay any outstanding debt owed to any
affiliate of any Agent.
(nn)
Any statistical and market-related data included in the Registration
Statement or the Prospectus are based on or derived from sources that the Company believes, after reasonable inquiry, to be reliable
and accurate and, to the extent required, the Company has obtained the written consent to the use of such data from such sources.
(oo)
The Company has no debt securities or preferred stock that is
rated by any “nationally recognized statistical rating organization” (as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act).
(pp)
The Company has operated its business in a manner compliant
in all material respects with all United States federal, state, local and non-United States privacy, data security and data protection
laws and regulations applicable to the Company’s collection, use, transfer, protection, disposal, disclosure, handling,
storage and analysis of personal data. The Company has been and is in compliance in all material respects with internal policies
and procedures designed to ensure the integrity and security of the data collected, handled or stored in connection with its business;
the Company has been and is in compliance in all material respects with internal policies and procedures designed to ensure compliance
with the Health Care Laws that govern privacy and data security and take, and has taken reasonably appropriate steps designed
to assure compliance with such policies and procedures. The Company has taken reasonable steps to maintain the confidentiality
of its personally identifiable information, protected health information, consumer information and other confidential information
of the Company and any third parties in its possession (“
Sensitive Company Data
”). The tangible or digital
information technology systems (including computers, screens, servers, workstations, routers, hubs, switches, networks, data communications
lines, technical data and hardware), software and telecommunications systems used or held for use by the Company (the “
Company
IT Assets
”) are adequate and operational for, in accordance with their documentation and functional specifications,
the business of the Company as now operated and as currently proposed to be conducted as described in the Registration Statement
and the Prospectus. The Company has used reasonable efforts to establish, and has established, commercially reasonable disaster
recovery and security plans, procedures and facilities for the business consistent with industry standards and practices in all
material respects, including, without limitation, for the Company IT Assets and data held or used by or for the Company. To the
Company’s knowledge, the Company has not suffered or incurred any security breaches, compromises or incidents with respect
to any Company IT Asset or Sensitive Company Data, except where such breaches, compromises or incidents would not reasonably be
expected to, singly or in the aggregate, result in a Material Adverse Effect; and there has been no unauthorized or illegal use
of or access to any Company IT Asset or Sensitive Company Data by any unauthorized third party. The Company has not been required
to notify any individual of any information security breach, compromise or incident involving Sensitive Company Data.
(qq)
Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any
Agent for a brokerage commission, finder’s fee or other like payment in connection with the offering of the Placement Shares
contemplated hereby.
(rr)
The Company acknowledges and agrees that the Agents have informed
the Company that the Agents may, to the extent permitted under the Securities Act and the Exchange Act, purchase and sell shares
of Common Stock for its own account while this Agreement is in effect;
provided
, that (i) no such purchase or sales shall
take place while a Placement Notice is in effect (except to the extent the Agents may engage in sales of Placement Shares purchased
or deemed purchased from the Company as a “riskless principal” or in a similar capacity) and (ii) the Company shall
not be deemed to have authorized or consented to any such purchases or sales by the Agents, except as may be otherwise agreed
by the Company and the Agents.
(ss)
The Company is not a party to any agreement with an agent or
underwriter for any other “at the market” or continuous equity transaction.
(tt)
The Company is not required to register as a “broker”
or “dealer” in accordance with the provisions of the Exchange Act and does not, directly or indirectly through one
or more intermediaries, control or have any other association with (within the meaning of Article I of the By-laws of FINRA) any
member firm of FINRA. No relationship, direct or indirect, exists between or among the Company, on the one hand, and the directors,
officers or shareholders of the Company, on the other hand, which is required by the rules of FINRA to be described in the Registration
Statement and the Prospectus, which is not so described. All of the information (including, but not limited to, information regarding
affiliations, security ownership and trading activity) provided to the Agents or their counsel by the Company, its officers and
directors and the holders of any securities (debt or equity) or warrants, options or rights to acquire any securities of the Company
in connection with the filing to be made and other supplemental information to be provided to FINRA pursuant to FINRA Rule 5110
in connection with the transactions contemplated by this Agreement is true, complete and correct in all material respects.
(uu)
As of the close of trading on Nasdaq on July 31, 2019, the aggregate market value of the outstanding voting and non-voting
common equity (as defined in Rule 405) of the Company held by persons other than affiliates of the Company (pursuant to Rule 144
of the Securities Act, those that directly, or indirectly through one or more intermediaries, control, or are controlled by, or
are under common control with, the Company) (the “
Non-Affiliate Shares
”), was approximately $359,068,195
(calculated by multiplying (x) the price at which the common equity of the Company was last sold on Nasdaq on July 31,
2019 by (y) the number of Non-Affiliate Shares outstanding on July 31, 2019). The Company is not a shell company (as
defined in Rule 405) and has not been a shell company for at least 12 calendar months previously.
Any
certificate signed by any officer of the Company and delivered to the Agents or their counsel in connection with the offering
of the Placement Shares shall be deemed a representation and warranty by the Company, as to matters covered thereby, to the Agents.
7.
Covenants of the Company
. The Company covenants and agrees with the Agents that:
(a)
Registration Statement Amendments
. After the date of this Agreement and during any period in which the Prospectus relating
to any Placement Shares is required to be delivered by the Agents under the Securities Act (including in circumstances where such
requirement may be satisfied pursuant to Rule 172 under the Securities Act or a similar rule); (i) the Company will notify the
Agents promptly of the time when any subsequent amendment to the Registration Statement, other than Incorporated Documents, has
been filed with the Commission and/or has become effective or any subsequent supplement to the Prospectus, other than Incorporated
Documents, has been filed and of any request by the Commission for any amendment or supplement to the Registration Statement or
Prospectus or for additional information; (ii) the Company will prepare and file with the Commission, promptly upon the Agents’
request, any amendments or supplements to the Registration Statement or Prospectus that, in the Agents’ reasonable opinion,
may be necessary or advisable in connection with the distribution of the Placement Shares by the Agents (provided, however, that
the failure of the Agents to make such request shall not relieve the Company of any obligation or liability hereunder, or affect
the Agents’ right to rely on the representations and warranties made by the Company in this Agreement and provided, further,
that the only remedy the Agents shall have with respect to the failure by the Company to make such filing (but without limiting
the Agents’ rights under Section 9 hereof) will be to cease making sales under this Agreement until such amendment or supplement
is filed); (iii) the Company will not file any amendment or supplement to the Registration Statement or Prospectus, other than
Incorporated Documents, relating to the Placement Shares or a security convertible into or exchangeable or exercisable for the
Placement Shares unless a copy thereof has been submitted to the Agents within a reasonable period of time before the filing and
the Agents have not reasonably objected thereto (provided, however, that the failure of the Agents to make such objection shall
not relieve the Company of any obligation or liability hereunder, or affect the Agents’ right to rely on the representations
and warranties made by the Company in this Agreement and provided, further, that the only remedy the Agents shall have with respect
to the Company’s making such filing notwithstanding the Agents’ objection (but without limiting the Agents’
rights under Section 9 hereof) will be to cease making sales under this Agreement) and the Company will furnish to the Agents
at the time of filing thereof a copy of any Incorporated Document, except for those documents available via EDGAR; and (iv) the
Company will cause each amendment or supplement to the Prospectus, other than Incorporated Documents, to be filed with the Commission
as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act and, in the case of any Incorporated Document,
to be filed with the Commission as required pursuant to the Exchange Act, within the time period prescribed.
(b)
Notice of Commission Stop Orders
. The Company will advise the Agents, promptly after it receives notice or obtains knowledge
thereof, of the issuance or threatened issuance by the Commission of any stop order suspending the effectiveness of the Registration
Statement, of the suspension of the qualification of the Placement Shares for offering or sale in any jurisdiction or of the initiation
or threatening of any proceeding for any such purpose; and it will promptly use its commercially reasonable efforts to prevent
the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued. The Company will advise the
Agent promptly after it receives any request by the Commission for any amendments to the Registration Statement or any amendment
or supplements to the Prospectus or for additional information related to the offering of the Placement Shares or for additional
information related to the Registration Statement or the Prospectus.
(c)
Delivery of Prospectus; Subsequent Changes
. During any period in which the Prospectus relating to the Placement Shares
is required to be delivered by the Agents under the Securities Act with respect to the offer and sale of the Placement Shares
(including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act or a similar
rule), the Company will comply with all requirements imposed upon it by the Securities Act, as from time to time in force, and
will file on or before their respective due dates (taking into account any extensions available under the Exchange Act) all reports
and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange Act. If during such period any event occurs as a result
of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or
if during such period it is necessary to amend or supplement the Registration Statement or Prospectus to comply with the Securities
Act, the Company will promptly notify the Designated Agent to suspend the offering of Placement Shares during such period and
the Company will promptly amend or supplement the Registration Statement or Prospectus (at the expense of the Company) so as to
correct such statement or omission or effect such compliance. If the Company has omitted any information from the Registration
Statement pursuant to Rule 430B under the Securities Act, it will use its best efforts to comply with the provisions thereof and
make all requisite filings with the Commission pursuant to said Rule 430B and to notify the Agents promptly of all such filings
if not available on EDGAR.
(d)
Listing of Placement Shares
. During any period in which the Prospectus relating to the Placement Shares is required to
be delivered by the Agents under the Securities Act with respect to the offer and sale of the Placement Shares (including in circumstances
where such requirement may be satisfied pursuant to Rule 172 under the Securities Act or a similar rule), the Company will use
its commercially reasonable efforts to cause the Placement Shares to be listed on Nasdaq. The Company will timely file with Nasdaq
all material documents and notices required by Nasdaq of companies that have or will issue securities that are traded on Nasdaq.
(e)
Delivery of Registration Statement and Prospectus
. The Company will furnish to the Agents and their counsel (at the expense
of the Company) copies of the Registration Statement, the Prospectus (including all Incorporated Documents) and all amendments
and supplements to the Registration Statement or Prospectus that are filed with the Commission during any period in which the
Prospectus relating to the Placement Shares is required to be delivered under the Securities Act (including all Incorporated Documents
filed with the Commission during such period), in each case as soon as reasonably practicable and in such quantities as the Agents
may from time to time reasonably request and, at the Agents’ request, will also furnish copies of the Prospectus to each
exchange or market on which sales of the Placement Shares may be made;
provided
,
however
, that the Company shall
not be required to furnish any document (other than the Prospectus) to the Agents to the extent such document is available on
EDGAR.
(f)
Earnings Statement
. The Company will make generally available to its security holders and to the Agent as soon as practicable,
but in any event not later than 15 days after the end of the Company’s current fiscal quarter, an earnings statement covering
a 12-month period that satisfies the provisions of Section 11(a) of and Rule 158 under the Securities Act.
(g)
Expenses
. The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated
in accordance with the provisions of Section 11 hereunder, will pay or cause to be paid all expenses incident to the performance
of its obligations under this Agreement, including expenses related to (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed and each amendment thereto, of the Prospectus and
any amendments or supplements thereto and of this Agreement and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Placement Shares and any costs associated with electronic delivery of any
of the foregoing by the Agents to investors, (ii) the preparation, issuance and delivery of the Placement Shares, including any
stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Placement Shares,
(iii) the qualification of the Placement Shares under securities laws in accordance with the provisions of Section 7(u)
of this Agreement, including filing fees (provided, however, that any fees or disbursements of counsel for the Agent in connection
therewith shall be paid by the Agent except as set forth in clauses (viii) and (ix) below), (iv) the printing and delivery to
the Agents and their counsel of copies of the Prospectus and any amendments or supplements thereto, and of this Agreement, (v)
the fees and expenses incurred in connection with the listing of the Placement Shares on the Nasdaq Capital Market, (vi) the filing
fees and expenses, if any, owed to the Commission or FINRA and the fees and expenses of any transfer agent or registrar for the
Placement Shares, (vii) the fees and disbursements of the Company’s counsel, accountants and other advisors, (viii) the
fees and associated expenses of the Agents’ outside legal counsel for filings with the FINRA Corporate Financing Department
in an amount not to exceed $10,000 (excluding FINRA filing fees referred to in clause (vi) above and in addition
to the fees and disbursements referred to in clause (ix) below), and (ix) the reasonable fees and disbursements of the Agents’
outside legal counsel in an amount not to exceed $50,000 (in addition to the fees and associated expenses referred to in
clause (viii) above).
(h)
Use of Proceeds
. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use
of Proceeds.”
(i)
Notice of Other Sales
. Without the prior written consent of the Agents, the Company will not, directly or indirectly, offer
to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any shares of Common Stock (other than the Placement
Shares offered pursuant to this Agreement) or securities convertible into or exchangeable or exercisable for shares of Common
Stock, warrants or any rights to purchase or acquire shares of Common Stock during the period beginning on the fifth Trading Day
immediately prior to the date on which any Placement Notice is delivered to Agents hereunder and ending on the second Trading
Day immediately following the final Settlement Date with respect to Placement Shares sold pursuant to such Placement Notice (or,
if the Placement Notice has been terminated or suspended prior to the sale of all Placement Shares covered by a Placement Notice,
the date of such suspension or termination); and will not directly or indirectly in any other “at the market offering”
or continuous equity transaction offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any shares
of Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable
or exercisable for shares of Common Stock, warrants or any rights to purchase or acquire, shares of Common Stock prior to the
later of the termination of this Agreement and the sixtieth day immediately following the final Settlement Date with respect to
Placement Shares sold pursuant to such Placement Notice;
provided
,
however
, that such restrictions will not be required
in connection with the Company’s issuance or sale of (i) shares of Common Stock, options to purchase shares of Common Stock,
other securities under the Company’s existing equity incentive plans, or shares of Common Stock issuable upon the exercise
of options or vesting of other securities, pursuant to any employee or director stock option or benefits plan, stock ownership
plan or dividend reinvestment plan (but not shares of Common Stock subject to a waiver to exceed plan limits in its dividend reinvestment
plan) of the Company whether now in effect or hereafter implemented, (ii) shares of Common Stock issuable upon conversion of securities
or the exercise of warrants, options or other rights in effect or outstanding, and disclosed in filings by the Company available
on EDGAR or otherwise in writing to the Agents and (iii) shares of Common Stock or securities convertible into or exchangeable
for shares of Common Stock as consideration for mergers, acquisitions, other business combinations or strategic alliances occurring
after the date of this Agreement which are not issued for capital raising purposes.
(j)
Change of Circumstances
. The Company will, at any time during a fiscal quarter in which the Company intends to tender a
Placement Notice or sell Placement Shares, advise the Agents promptly after it shall have received notice or obtained knowledge
of any information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document
provided or required to be provided to the Agents pursuant to this Agreement.
(k)
Due Diligence Cooperation
. During the term of this Agreement, the Company will cooperate with any reasonable due diligence
review conducted by the Agents, its affiliates, agents and counsel from time to time in connection with the transactions contemplated
hereby, including providing information and making available documents and senior corporate officers, during regular business
hours and at the Company’s principal offices, as the Agents may reasonably request.
(l)
Required Filings Relating to Placement of Placement Shares
. The Company agrees that on or prior to such dates as the Securities
Act shall require, the Company will (i) file a prospectus supplement with the Commission under the applicable paragraph of Rule
424(b) under the Securities Act, which prospectus supplement will set forth, within the relevant period, the number or amount
of Placement Shares sold through the Agents, the Net Proceeds to the Company and the compensation payable by the Company to the
Agents with respect to such Placement Shares, and (ii) deliver such number of copies of each such prospectus supplement to each
exchange or market on which such sales were effected as may be required by the rules or regulations of such exchange or market;
provided
, that, unless a prospectus supplement containing such information is required to be filed under the Securities
Act, the requirement of this Section 7(l) may be satisfied by Company’s inclusion in the Company’s Form 10-K or Form
10-Q, as applicable, of the number or amount of Placement Shares sold through the Agents, the Net Proceeds to the Company and
the compensation payable by the Company to the Agents with respect to such Placement Shares during the relevant period.
(m)
Representation Dates; Certificate
. On or prior to the date on which the Company first delivers a Placement Notice pursuant
to this Agreement (the “
First Placement Notice Date
”) and each time the Company:
(i)
amends or supplements the Registration Statement or the Prospectus relating to the Placement Shares (other than a prospectus supplement
filed in accordance with Section 7(l) of this Agreement) by means of a post-effective amendment, sticker or supplement but not
by means of incorporation of document(s) by reference into the Registration Statement or the Prospectus relating to the Placement
Shares;
(ii)
files an annual report on Form 10-K under the Exchange Act (including any Form 10-K/A containing amended financial information
or a material amendment to the previously filed Form 10-K);
(iii)
files a quarterly report on Form 10-Q under the Exchange Act; or
(iv)
files a current report on Form 8-K containing amended financial information (other than an earnings release that is “furnished”
pursuant to Item 2.02 or Item 7.01 of Form 8-K) under the Exchange Act (each date of filing of one or more of the documents referred
to in clauses (i) through (iv) shall be a “
Representation Date
”),
the
Company shall furnish the Agents (but in the case of clause (iv) above only if (1) a Placement Notice is pending or in effect
and (2) the Agents request such certificate within three Business Days after the filing of such Form 8-K with the Commission)
with a certificate, in the form attached hereto as
Exhibit 7(m)
(modified, as necessary, to relate to the Registration
Statement and the Prospectus as then amended or supplemented), within two Trading Days of any Representation Date. The requirement
to provide a certificate under this Section 7(m) shall be waived for any Representation Date occurring at a time at which no Placement
Notice is pending or in effect, which waiver shall continue until the earlier to occur of (1) the date the Company delivers a
Placement Notice hereunder (which for such calendar quarter shall be considered a Representation Date) and (2) the next occurring
Representation Date. Notwithstanding the foregoing, if the Company subsequently decides to sell Placement Shares following a Representation
Date on which the Company relied on the waiver referred to in the previous sentence and did not provide the Agents with a certificate
under this Section 7(m), then before the Company delivers a Placement Notice or the Agents sell any Placement Shares pursuant
thereto, the Company shall provide the Agents with a certificate, in the form attached hereto as
Exhibit 7(m)
, dated
the date of such Placement Notice. Within two Trading Days of each Representation Date, the Company shall have furnished to the
Agent such further information, certificates and documents as the Agents may reasonably request.
(n)
Legal Opinions
. On or prior to the First Placement Notice Date and on any date which the Company is obligated to deliver
a certificate pursuant to Section 7(m) for which no waiver is applicable, the Company shall cause to be furnished to the Agents
the written opinion and negative assurance letter of Lowenstein Sandler LLP, counsel to the Company, or such other counsel satisfactory
to the Agents (“
Company Counsel
”), in form and substance satisfactory to the Agent and its counsel,
dated the date that the opinion and negative assurance letter are required to be delivered, modified, as necessary, to relate
to the Registration Statement and the Prospectus as then amended or supplemented;
provided
,
however
, that in lieu
of such opinion and negative assurance letter for subsequent Representation Dates, Company Counsel may furnish the Agents with
a letter to the effect that the Agents may rely on a prior opinion or negative assurance letter delivered by such counsel under
this Section 7(n) to the same extent as if it were dated the date of such letter (except that statements in such prior opinion
or negative assurance letter shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented
at such Representation Date).
(o)
Intellectual Property Opinions
. On or prior to the First Placement Notice Date and on any date which the Company is obligated
to deliver a certificate pursuant to Section 7(m) for which no waiver is applicable, the Company shall cause to be furnished to
the Agents the written opinions of Greenberg Traurig, LLP and Bozicevic, Field and Francis LLP, special counsel for the Company
with respect to intellectual property matters, or such other intellectual property counsel satisfactory to the Agents (“
Intellectual
Property Counsel
”), each in form and substance satisfactory to the Agents and their counsel, dated the date that
each such opinion letter is required to be delivered, modified, as necessary, to relate to the Registration Statement and the
Prospectus as then amended or supplemented;
provided
,
however
, that in lieu of such written opinion for subsequent
Representation Dates, Intellectual Property Counsel may furnish the Agents with a letter to the effect that the Agents may rely
on a prior opinion letter delivered by such counsel under this Section 7(o) to the same extent as if it were dated the date of
such opinion letter (except that statements in such prior opinion letter shall be deemed to relate to the Registration Statement
and the Prospectus as amended or supplemented at such Representation Date).
(p)
Comfort Letter
. On or prior to the First Placement Notice Date and on any date which the Company is obligated to deliver
a certificate pursuant to Section 7(m) for which no waiver is applicable, the Company shall cause its independent registered public
accounting firm (and any other independent accountants whose report is included in the Registration Statement or the Prospectus)
to furnish the Agents letters (the “
Comfort Letters
”), dated the date the Comfort Letter is delivered,
which shall meet the requirements set forth in this Section 7(p);
provided
, that if requested by the Agents, the Company
shall cause a Comfort Letter to be furnished to the Agents within 10 Trading Days of the occurrence of any material transaction
or event that necessitates the filing of additional, pro forma, amended or revised financial statements (including any restatement
of previously issued financial statements). Each Comfort Letter shall be in form and substance satisfactory to the Agents and
each Comfort Letter from the Company’s independent registered public accounting firm shall (i) confirm that they are an
independent registered public accounting firm within the meaning of the Securities Act and the PCAOB, (ii) state, as of such date,
the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants’
“comfort letters” to underwriters in connection with registered public offerings (the first such letter, the “
Initial
Comfort Letter
”) and (iii) update the Initial Comfort Letter with any information that would have been included
in the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement
and the Prospectus, as amended and supplemented to the date of such letter.
(q)
Market Activities
. The Company will not, directly or indirectly, and will cause its officers, directors not to (i) take
any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale of shares of Common Stock or (ii)
sell, bid for, or purchase shares of Common Stock in violation of Regulation M, or pay anyone any compensation for soliciting
purchases of the Placement Shares other than the Agents;
provided
,
however
, that the Company may bid for and purchase
shares of Common Stock in accordance with Rule 10b-18 under the Exchange Act.
(r)
Investment Company Act
. The Company will conduct its affairs in such a manner so as to reasonably ensure that it will not
be or become, at any time prior to the termination of this Agreement, an “investment company,” as such term is defined
in the Investment Company Act.
(s)
Securities
Act and Exchange Act
. The Company will use its commercially reasonable efforts to comply with all requirements imposed upon
it by the Securities Act and the Exchange Act as from time to time in force, so far as necessary to permit the sales of, or dealings
in, the Placement Shares as contemplated by the provisions hereof and the Prospectus.
(t)
No Offer to Sell
. Other than a free writing prospectus
(as defined in Rule 405 under the Securities Act) approved in advance by the Company and the Agents, each Agent in its capacity
as principal or agent hereunder, neither the Agents nor the Company (including its agents and representatives, other than the
Agents in their capacity as such) will make, use, prepare, authorize, approve or refer to any written communication (as defined
in Rule 405 under the Securities Act), required to be filed with the Commission, that constitutes an offer to sell or solicitation
of an offer to buy Placement Shares hereunder.
(u)
Blue Sky and Other Qualifications
. The Company will use
its commercially reasonable efforts, in cooperation with the Agents, to the extent required, to qualify the Placement Shares for
offering and sale, or to obtain an exemption for the Placement Shares to be offered and sold, under the applicable securities
laws of such states and other jurisdictions (domestic or foreign) as the Agents may designate and to maintain such qualifications
and exemptions in effect for so long as required for the distribution of the Placement Shares (but in no event for less than one
year from the date of this Agreement);
provided, however
, that the Company shall not be obligated to file any general consent
to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Placement Shares have been so qualified or exempt, the Company will file such statements
and reports as may be required by the laws of such jurisdiction to continue such qualification or exemption, as the case may be,
in effect for so long as required for the distribution of the Placement Shares (but in no event for less than one year from the
date of this Agreement).
(v)
Sarbanes-Oxley Act
. The Company will maintain and keep
accurate books and records reflecting its assets and maintain internal accounting controls in a manner designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with GAAP and including those policies and procedures that (i) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance
that transactions are recorded as necessary to permit the preparation of the Company’s financial statements in accordance
with GAAP, (iii) that receipts and expenditures of the Company are being made only in accordance with management’s and the
Company’s directors’ authorization, and (iv) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on its financial
statements. The Company will maintain such controls and other procedures, including, without limitation, those required by Sections
302 and 906 of the Sarbanes-Oxley Act, and the applicable regulations thereunder that are designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Commission’s rules and forms, including, without limitation,
controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive
officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding
required disclosure and to ensure that material information relating to the Company is made known to it by others within the Company,
particularly during the period in which such periodic reports are being prepared..
(w)
Emerging Growth Company
. The Company will promptly notify
the Agents if the company ceases to be an Emerging Growth Company at any time prior to the completion of the Agents’ distribution
of the Placement Shares pursuant to this Agreement.
(x)
General Instruction I.B.6. of Form S-3
. If, from and
after the date of this Agreement, the Company is no longer eligible to use Form S-3 (including pursuant to General Instruction
I.B.6.) at the time it files with the Commission an annual report on Form 10-K or any post-effective amendment to the Registration
Statement, then it shall promptly notify the Agents and, within two Business Days after the date of filing of such annual report
on Form 10-K or amendment to the Registration Statement, the Company shall file a new prospectus supplement with the Commission
reflecting the number of shares of Common Stock available to be offered and sold by the Company under this Agreement pursuant
to General Instruction I.B.6. of Form S-3;
provided
,
however
, that the Company may delay the filing of any such
prospectus supplement for up to 30 days if, in the reasonable judgment of the Company, it is in the best interest of the Company
to do so, provided that no Placement Notice is in effect or pending during such time. Until such time as the Company shall have
corrected such misstatement or omission or effected such compliance, the Company shall not notify the Agents to resume the offering
of Placement Shares.
(y)
Tax Indemnity
.
The Company will indemnify and hold harmless the Agents against any documentary, stamp or similar issue tax, including any interest
and penalties, on the issue and sale of the Placement Shares.
(z)
Transfer
Agent
. The Company has engaged and will maintain, at its sole expense, a transfer agent and registrar for the Common Stock.
8.
Conditions to the Agents’ Obligations
. The obligations of the Agents hereunder with respect to a Placement will be
subject to the continuing accuracy and completeness of the representations and warranties made by the Company herein, to the due
performance by the Company of its obligations hereunder, to the completion by the Agents of a due diligence review satisfactory
to the Agents in their reasonable judgment, and to the continuing satisfaction (or waiver by the Agents in their sole discretion)
of the following additional conditions:
(a)
Registration Statement Effective
. The Registration Statement shall be effective and shall be available for all offers and
sales of Placement Shares (i) that have been issued pursuant to all prior Placement Notices and (ii) that will be issued pursuant
to any Placement Notice.
(b)
Prospectus Supplement
. The Company shall have filed with the Commission the Prospectus Supplement pursuant to Rule 424(b)
under the Securities Act not later than the Commission’s close of business on the second Business Day following the date
of this Agreement.
(c)
No Material Notices
. None of the following events shall have occurred and be continuing: (i) receipt by the Company of
any request for additional information from the Commission or any other federal or state governmental authority during the period
of effectiveness of the Registration Statement, the response to which would require any post-effective amendments or supplements
to the Registration Statement or the Prospectus; (ii) the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for
that purpose; (iii) receipt by the Company of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Placement Shares for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; or (iv) the occurrence of any event that makes any material statement made in the Registration Statement or
the Prospectus or any material Incorporated Document untrue in any material respect or that requires the making of any changes
in the Registration Statement, the Prospectus or Incorporated Documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading and, in the case of the Prospectus, so that it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(d)
No Misstatement or Material Omission
. The Agents shall not have advised the Company that the Registration Statement or
Prospectus, or any amendment or supplement thereto, contains an untrue statement of fact that in the Agents’ opinion is
material, or omits to state a fact that in the Agents’ opinion is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
(e)
Material Changes
. Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the
Commission, there shall not have been any material adverse change, on a consolidated basis, in the authorized capital stock of
the Company or any Material Adverse Effect or any development that could reasonably be expected to result in a Material Adverse
Effect, or any downgrading in or withdrawal of the rating assigned to any of the Company’s securities (other than asset
backed securities), if any, by any rating organization or a public announcement by any rating organization that it has under surveillance
or review its rating of any of the Company’s securities (other than asset backed securities), if any, the effect of which,
in the judgment of the Agents (without relieving the Company of any obligation or liability it may otherwise have), is so material
as to make it impracticable or inadvisable to proceed with the offering of the Placement Shares on the terms and in the manner
contemplated in the Prospectus.
(f)
Company Counsel Legal Opinions
. The Agents shall have received the opinions and negative assurance letters, as applicable,
of Company Counsel and Intellectual Property Counsel required to be delivered pursuant to Section 7(n) and Section 7(o), as applicable,
on or before the date on which such delivery of such opinions and negative assurance letters are required pursuant to Section
7(n) and Section 7(o), as applicable.
(g)
Agents Counsel Legal Opinion
. The Agents shall have received from Pepper Hamilton LLP, counsel for the Agents, such opinion
or opinions, on or before the date on which the delivery of the Company Counsel legal opinion is required pursuant to Section
7(n), with respect to such matters as the Agents may reasonably require, and the Company shall have furnished to such counsel
such documents as they may request to enable them to pass upon such matters.
(h)
Comfort Letter
. The Agents shall have received the Comfort Letter required to be delivered pursuant to Section 7(p) on
or before the date on which such delivery of such Comfort Letter is required pursuant to Section 7(p).
(i)
Representation Certificate
. The Agents shall have received the certificate required to be delivered pursuant to Section
7(m) on or before the date on which delivery of such certificate is required pursuant to Section 7(m).
(j)
Secretary’s Certificate
. On or prior to the First Placement Notice Date, the Agents shall have received a certificate,
signed on behalf of the Company by the Secretary of the Company and attested to by an executive officer of the Company, dated
as of such date and in form and substance satisfactory to the Agents and their counsel, certifying as to (i) the amended and restated
certificate of incorporation of the Company, (ii) the amended and restated bylaws of the Company, (iii) the resolutions of the
board of directors of the Company or duly authorized committee thereof authorizing the execution, delivery and performance of
this Agreement and the issuance and sale of the Placement Shares and (iv) the incumbency of the officers of the Company duly authorized
to execute this Agreement and the other documents contemplated by this Agreement (including each of the officers set forth on
Schedule 2
).
(k)
No Suspension
. The Common Stock shall be duly listed, and admitted and authorized for trading, subject to official notice
of issuance, on Nasdaq. Trading in the Common Stock shall not have been suspended on, and the Common Stock shall not have been
delisted from, Nasdaq.
(l)
Other Materials
. On each date on which the Company is required to deliver a certificate pursuant to Section 7(m), the Company
shall have furnished to the Agents such appropriate further information, opinions, certificates, letters and other documents as
the Agents may have reasonably requested. All such information, opinions, certificates, letters and other documents shall have
been in compliance with the provisions hereof. The Company shall have furnished the Agents with conformed copies of such opinions,
certificates, letters and other documents as the Agents may have reasonably requested.
(m)
Securities Act Filings Made
. All filings with the Commission required by Rule 424(b) or Rule 433 under the Securities Act
to have been filed prior to the issuance of any Placement Notice hereunder shall have been made within the applicable time period
prescribed for such filing by Rule 424(b) (without reliance on Rule 424(b)(8) of the Securities Act) or Rule 433, as applicable.
(n)
Approval for Listing
. Either (i) the Placement Shares shall have been approved for listing on Nasdaq, subject only to notice
of issuance, or (ii) the Company shall have filed an application for listing of the Placement Shares on Nasdaq at, or prior to,
the First Placement Notice Date and Nasdaq shall have reviewed such application and not provided any objections thereto.
(o)
FINRA
. FINRA shall have raised no objection to the terms of the offering contemplated hereby and the amount of compensation
allowable or payable to the Agents as described in the Prospectus.
(p)
No Termination Event
. There shall not have occurred any event that would permit the Agents to terminate this Agreement
pursuant to Section 11(a).
9.
Indemnification
and Contribution
.
(a)
Company
Indemnification
. The Company agrees to indemnify and hold harmless the Agents, its affiliates and their respective partners,
members, directors, officers, employees and agents, and each person, if any, who (i) controls the Agents within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or is under common control with the
Agents, in each case from and against any and all losses, claims, liabilities, expenses and damages (including any and all investigative,
legal and other expenses reasonably incurred) in connection with, and any and all amounts paid in settlement (in accordance with
this Section 9) in connection with, any action, suit, investigation or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party (including any governmental or self-regulatory authority,
or otherwise, or any claim asserted or threatened), as and when incurred, to which the Agents, or any such other person may become
subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or damages arise out of or are based, directly or indirectly, on (x) any
untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus (or
any amendment or supplement to the Registration Statement or the Prospectus) or in any free writing prospectus or in any application
or other document executed by or on behalf of the Company or based on written information furnished by or on behalf of the Company
filed in any jurisdiction in order to qualify the Common Stock under the securities laws thereof or filed with the Commission,
(y) the omission or alleged omission to state in any such document a material fact required to be stated therein or necessary
to make the statements therein (solely with respect to the Prospectus, in light of the circumstances under which they were made)
not misleading or (z) any breach by any of the indemnifying parties of any of their respective representations, warranties or
agreements contained in this Agreement;
provided
,
however
, that this indemnity agreement shall not apply to the
extent that such loss, claim, liability, expense or damage arises from the sale of the Placement Shares pursuant to this Agreement
and is caused, directly or indirectly, by an untrue statement or omission, or alleged untrue statement or omission, made in reliance
upon and in conformity with the Agents’ Information. This indemnity agreement will be in addition to any liability that
the Company might otherwise have.
(b)
Agents
Indemnification
. The Agents agree to indemnify and hold harmless the Company and its directors and each officer of the Company
that signed the Registration Statement, and each person, if any, who (i) controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or is under common control with the Company against
any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 9(a), as incurred, but
only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement
(or any amendments thereto) or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with
the Agents’ Information.
(c)
Procedure
.
Any party that proposes to assert the right to be indemnified under this Section 9 will, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this
Section 9, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but
the omission so to notify such indemnifying party will not relieve the indemnifying party from (i) any liability that it might
have to any indemnified party otherwise than under this Section 9 and (ii) any liability that it may have to any indemnified party
under the foregoing provision of this Section 9 unless, and only to the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies
the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that
it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action
from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action,
with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any other
legal expenses except as provided below and except for the reasonable costs of investigation subsequently incurred by the indemnified
party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action,
but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment
of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based
on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying
party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within
a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements
and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying
party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees, disbursements and other charges of more than one separate firm (plus local counsel) admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such fees, disbursements and other charges will be
reimbursed by the indemnifying party promptly after the indemnifying party receives a written invoice relating to such fees, disbursements
and other charges in reasonable detail. An indemnifying party will not, in any event, be liable for any settlement of any action
or claim effected without its written consent. No indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating
to the matters contemplated by this Section 9 (whether or not any indemnified party is a party thereto), unless such settlement,
compromise or consent (1) includes an unconditional release of each indemnified party, in form and substance reasonably satisfactory
to such indemnified party, from all liability arising out of such claim, action or proceeding and (2) does not include a statement
as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d)
Settlement
Without Consent if Failure to Reimburse
.
If an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for reasonable fees and expenses of counsel for which it is entitled to be reimbursed under this Section
9, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 9(a) effected
without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.
(e)
Contribution
.
In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 9 is applicable in accordance with its terms but for any reason is held to be unavailable or insufficient
from the Company or the Agents, the Company and the Agents will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit, investigation or proceeding or any claim asserted, but after deducting any contribution received
by the Company from persons other than the Agents, such as persons who control the Company within the meaning of the Securities
Act, officers of the Company who signed the Registration Statement and directors of the Company, who also may be liable for contribution)
to which the Company and the Agents may be subject in such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Agents on the other hand. The relative benefits received by the Company on the
one hand and the Agents on the other hand shall be deemed to be in the same proportion as the total Net Proceeds from the sale
of the Placement Shares (before deducting expenses) received by the Company bear to the total compensation received by the Agents
from the sale of Placement Shares on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence
is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect
not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand,
and the Agents, on the other hand, with respect to the statements or omission that resulted in such loss, claim, liability, expense
or damage, or action, suit, investigation or proceeding in respect thereof, as well as any other relevant equitable considerations
with respect to such offering. Such relative fault shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information
supplied by the Company or the Agents, the intent of the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the Agents agree that it would not be just and equitable if
contributions pursuant to this Section 9(e) were to be determined by
pro rata
allocation or by any other method of allocation
that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action, suit, investigation or proceeding in respect thereof,
referred to above in this Section 9(e) shall be deemed to include, for the purpose of this Section 9(e), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending any such action, suit, investigation,
proceeding or claim to the extent consistent with this Section 9. Notwithstanding the foregoing provisions of this Section 9(e),
the Agents shall not be required to contribute any amount in excess of the commissions received by it under this Agreement and
no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled
to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9(e), any
person who controls a party to this Agreement within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, any affiliates of the Agents, any partners, members, directors, officers, employees and agents of the Agents and each person
that is controlled by or under common control with the Agents will have the same rights to contribution as that party, and each
officer of the Company who signed the Registration Statement will have the same rights to contribution as the Company, subject
in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim for contribution may be made under this Section 9(e), will notify any
such party or parties from whom contribution may be sought, but the omission to so notify will not relieve that party or parties
from whom contribution may be sought from any other obligation it or they may have under this Section 9(e) except to the extent
that the failure to so notify such other party materially prejudiced the substantive rights or defenses of the party from whom
contribution is sought. Except for a settlement entered into pursuant to the last sentence of Section 9(c) hereof or pursuant
to Section 9(d) hereof, no party will be liable for contribution with respect to any action or claim settled without its written
consent if such consent is required pursuant to Section 9(c) hereof.
10.
Representations
and Agreements to Survive Delivery
. The indemnity and contribution agreements contained in Section 9 of this Agreement and
all representations and warranties of the Company herein or in certificates delivered pursuant hereto shall survive, as of their
respective dates, regardless of (i) any investigation made by or on behalf of the Agents, any controlling persons, or the Company
(or any of their respective officers, directors, employees or controlling persons), (ii) delivery and acceptance of the Placement
Shares and payment therefor or (iii) any termination of this Agreement.
11.
Termination
.
(a) The
Agents shall have the right, by giving notice as hereinafter specified, at any time to terminate this Agreement if (i) any Material
Adverse Effect, or any development that could reasonably be expected to result in a Material Adverse Effect, has occurred that,
in the reasonable judgment of the Agents, may materially impair the ability of the Agents to sell the Placement Shares hereunder,
(ii) the Company shall have failed, refused or been unable to perform any agreement on its part to be performed hereunder;
provided
,
however
, in the case of any failure of the Company to deliver (or cause another person to deliver) any certification, opinion
or letter required under Section 7(m), Section 7(n), Section 7(o) or Section 7(p), the Agents’ right to terminate shall
not arise unless such failure to deliver (or cause to be delivered) continues for more than 15 calendar days from the date such
delivery was required, (iii) any other condition of the Agents’ obligations hereunder is not fulfilled, (iv) any suspension
or limitation of trading in the Placement Shares or in securities generally on Nasdaq shall have occurred, (v) a general banking
moratorium shall have been declared by any of United States federal or New York authorities, or (vi) there shall have occurred
any outbreak or escalation of national or international hostilities or any crisis or calamity, or any change in the United States
or international financial markets, or any substantial change or development involving a prospective substantial change in United
States or international political, financial or economic conditions that, in the judgment of the Agents, may materially impair
the ability of the Agents to sell the Placement Shares hereunder or to enforce contracts for the sale of securities. Any such
termination shall be without liability of any party to any other party except that the provisions of Section 7(g), Section 9,
Section 10, Section 16 and Section 17 hereof shall remain in full force and effect notwithstanding such termination. If the Agents
elect to terminate this Agreement as provided in this Section 11(a), the Agents shall provide the required notice as specified
in Section 12.
(b) The
Company shall have the right, by giving 10 days’ prior notice as hereinafter specified, to terminate this Agreement in its
sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to
any other party except that the provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16 and Section 17 hereof
shall remain in full force and effect notwithstanding such termination.
(c) The
Agents shall have the right, by giving 10 days’ prior notice as hereinafter specified, to terminate this Agreement in their
sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to
any other party except that the provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16 and Section 17 hereof
shall remain in full force and effect notwithstanding such termination.
(d) Unless
earlier terminated pursuant to this Section 11, this Agreement shall automatically terminate upon the issuance and sale of all
of the Placement Shares through the Agents on the terms and subject to the conditions set forth herein;
provided
that the
provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16 and Section 17 hereof shall remain in full force
and effect notwithstanding such termination.
(e) This
Agreement shall remain in full force and effect unless terminated pursuant to Sections 11(a), (b), (c), or (d) above or otherwise
by mutual agreement of the parties;
provided
,
however
, that any such termination by mutual agreement shall in all
cases be deemed to provide that Section 7(g), Section 9, Section 10, Section 11(f), Section 16 and Section 17 shall remain in
full force and effect.
(f) Any
termination of this Agreement shall be effective on the date specified in such notice of termination;
provided, however
,
that such termination shall not be effective until the close of business on the date of receipt of such notice by the Agents or
the Company, as the case may be. If such termination shall occur prior to the Settlement Date for any sale of Placement Shares,
such Placement Shares shall settle in accordance with the provisions of this Agreement. Upon termination of this Agreement, the
Company shall not be required to pay to the Agents any discount or commission with respect to any Placement Shares not otherwise
sold by the Agents under this Agreement;
provided
,
however
, that the Company shall remain obligated to reimburse
the Agents’ expenses pursuant to Section 7(g)
1
.
12.
Notices
.
All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of
this Agreement shall be in writing, unless otherwise specified in this Agreement, and if sent to the Agents, shall be delivered
to:
SVB
Leerink LLC
One
Federal Street, 37
th
Floor
Boston,
Massachusetts 02110
Attention:
Jon Civitarese
E-mail:
jon.civitarese @svbleerink.com
and:
Cantor
Fitzgerald & Co.
499
Park Avenue
New
York, New York 10022
Attention:
Sameer Vasudev
E-mail:
svasudev@cantor.com
with
a copy (which shall not constitute notice) to:
SVB
Leerink LLC
1301
Avenue of the Americas, 12
th
Floor
New
York, New York 10019
Attention:
Stuart R. Nayman, Esq.
E-mail:
stuart.nayman@svbleerink.com
and:
Cantor
Fitzgerald & Co.
499
Park Avenue
New
York, New York 10022
Attention:
General Counsel
Facsimile:
212-829-4708
and
if to the Company, shall be delivered to:
Provention
Bio, Inc.
P.O.
Box 666
Oldwick,
New Jersey 08858
Attention:
Ashleigh Palmer
E-mail:
apalmer@proventionbio.com
with
copies (which shall not constitute notice) to:
Lowenstein
Sandler LLP
1251
Avenue of the Americas
New
York, New York 10020
Attention:
Steven Skolnick
E-mail:
sskolnick@lowenstein.com
Each
party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new
address for such purpose. Each such notice or other communication shall be deemed given (i) when delivered personally on or before
4:30 P.M., New York City time, on a Business Day, or, if such day is not a Business Day, on the next succeeding Business Day,
(ii) by Electronic Notice as set forth in the next paragraph, (iii) on the next Business Day after timely delivery to a nationally-recognized
overnight courier or (iv) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return
receipt requested, postage prepaid). For purposes of this Agreement, “
Business Day
” shall mean any day
on which the Nasdaq and commercial banks in the City of New York are open for business.
An
electronic communication (“
Electronic Notice
”) shall be deemed written notice for purposes of this Section
12 if sent to the electronic mail address specified by the receiving party in Section 12. Electronic Notice shall be deemed received
at the time the party sending Electronic Notice receives actual acknowledgment of receipt from the person whom the notice is sent,
other than via auto-reply. Any party receiving Electronic Notice may request and shall be entitled to receive the notice on paper,
in a nonelectronic form (“
Nonelectronic Notice
”), which shall be sent to the requesting party within
10 days of receipt of the written request for Nonelectronic Notice.
13.
Successors
and Assigns
. This Agreement shall inure to the benefit of and be binding upon the Company and the Agents and their respective
successors and the affiliates, controlling persons, officers, directors and other persons referred to in Section 9 hereof. References
to any of the parties contained in this Agreement shall be deemed to include the successors and permitted assigns of each such
party. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto, the
persons referred to in the preceding sentence and their respective successors and permitted assigns any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Neither party may assign
its rights or obligations under this Agreement without the prior written consent of the other party;
provided, however
,
that the Agents may assign its rights and obligations hereunder to an affiliate of the Agents without obtaining the Company’s
consent, so long as such affiliate is a registered broker-dealer.
14.
Adjustments
for Share Splits
. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted
to take into account any share split, share dividend or similar event effected with respect to the Common Stock.
15.
Entire
Agreement; Amendment; Severability; Waiver
. This Agreement (including all schedules (as amended pursuant to this Agreement)
and exhibits attached hereto and Placement Notices issued pursuant hereto) constitutes the entire agreement and supersedes all
other prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard to the
subject matter hereof. Neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed
by the Company and the Agents;
provided
,
however
, that
Schedule 2
of this Agreement may be amended
by either party from time to time by sending a notice containing a revised
Schedule 2
to the other party in the
manner provided in Section 12 and, upon such amendment, all references herein to
Schedule 2
shall automatically
be deemed to refer to such amended
Schedule 2
. In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of competent jurisdiction,
then such provision shall be given full force and effect to the fullest possible extent that it is valid, legal and enforceable,
and the remainder of the terms and provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision
was not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions
hereof shall be in accordance with the intent of the parties as reflected in this Agreement. No implied waiver by a party shall
arise in the absence of a waiver in writing signed by such party. No failure or delay in exercising any right, power, or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any right, power, or privilege hereunder.
16.
GOVERNING
LAW AND TIME; WAIVER OF JURY TRIAL
. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. EACH PARTY
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
17.
Consent
to Jurisdiction
. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in the City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection with any of the
transactions contemplated hereby, 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 brought
in an inconvenient forum, or that the venue of such suit, action or proceeding is improper. 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 (certified
or registered mail, return receipt requested) to such party at the address in effect for notices under Section 12 of this Agreement
and agrees that such service shall constitute good and sufficient notice of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law.
18.
Construction
.
(a) The
section and exhibit headings herein are for convenience only and shall not affect the construction hereof.
(b) Words
defined in the singular shall have a comparable meaning when used in the plural, and vice versa.
(c) The
words “hereof,” “hereto,” “herein” and “hereunder” and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
(d) Wherever
the word “include,” “includes” or “including” is used in this Agreement, it shall be deemed
to be followed by the words “without limitation.”
(e) References
herein to any gender shall include each other gender.
(f) References
herein to any law, statute, ordinance, code, regulation, rule or other requirement of any governmental authority shall be deemed
to refer to such law, statute, ordinance, code, regulation, rule or other requirement of any governmental authority as amended,
reenacted, supplemented or superseded in whole or in part and in effect from time to time and also to all rules and regulations
promulgated thereunder.
19.
Permitted
Free Writing Prospectuses
. Each of the Company and the Agent represents, warrants and agrees that, unless it obtains the
prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed, it has
not made and will not make any offer relating to the Placement Shares that would constitute an issuer free writing
prospectus, or that would otherwise constitute a free writing prospectus (as defined in Rule 405), required to be filed with
the Commission. Any such free writing prospectus consented to by the Agents or by the Company, as the case may be, is
hereinafter referred to as a “
Permitted Free Writing Prospectus
.” The Company represents and
warrants that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an issuer free writing
prospectus, and that it has complied and will comply in all material respects with the requirements of Rule 433 applicable to
any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record
keeping.
20.
Absence of Fiduciary Relationship
. The Company acknowledges and agrees that:
(a) the
Agents have been retained to act as sales agent in connection with the sale of the Placement Shares, the Agents have acted at
arms’ length and no fiduciary or advisory relationship between the Company or any of its respective affiliates, stockholders
(or other equity holders), creditors or employees or any other party, on the one hand, and the Agents, on the other hand, has
been or will be created in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Agents
have advised or is advising the Company on other matters and the Agents have no duties or obligations to the Company with respect
to the transactions contemplated by this Agreement except the obligations expressly set forth herein;
(b)
the Company is capable of evaluating, and understanding and understands and accepts, the terms, risks and conditions of the
transactions contemplated by this Agreement;
(c)
neither the Agents nor their affiliates have provided any legal, accounting, regulatory or tax advice with respect to the
transactions contemplated by this Agreement and they have consulted their own legal, accounting, regulatory and tax advisors
to the extent their have deemed appropriate;
(d)
the Company has been advised and is aware that the Agents and their affiliates are engaged in a broad range of transactions
which may involve interests that differ from those of the Company and that the Agents and their affiliates have no obligation
to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship or
otherwise; and
(e)
the Company waives, to the fullest extent permitted by law, any claims it may have against the Agents or their affiliates for
breach of fiduciary duty or alleged breach of fiduciary duty in connection with the transactions contemplated by this
Agreement and agrees that the Agents and their affiliates shall have no liability (whether direct or indirect) to the Company
in respect of such a fiduciary claim or to any person asserting a fiduciary duty claim on behalf of or in right of the
Company, including stockholders (or other equity holders), creditors or employees of the Company.
21.
Counterparts
.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile
or electronic transmission.
22.
Use
of Information
. The Agents may not provide any information gained in connection with this Agreement and the transactions
contemplated by this Agreement, including due diligence, to any third party other than its legal counsel advising it on this Agreement
and the transactions contemplated by this Agreement unless expressly approved by the Company in writing.
23.
Agents’
Information
. As used in this Agreement, “
Agents’ Information
” means solely the following information
in the Registration Statement and the Prospectus: the eighth and ninth paragraphs under the heading “Plan of Distribution”
in the Prospectus Supplement.
All
references in this Agreement to the Registration Statement, the Prospectus or any amendment or supplement to any of the foregoing
shall be deemed to include the copy filed with the Commission pursuant to EDGAR. All references in this Agreement to financial
statements and schedules and other information that is “contained,” “included” or “stated”
in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to mean and include
all such financial statements and schedules and other information that is incorporated by reference in the Registration Statement
or the Prospectus, as the case may be.
All
references in this Agreement to “supplements” to the Prospectus shall include any supplements, “wrappers”
or similar materials prepared in connection with any offering, sale or private placement of any Placement Shares by the Agents
outside of the United States.
[Remainder
of Page Intentionally Blank]
If
the foregoing correctly sets forth the understanding among the Company, SVB Leerink and Cantor Fitzgerald, please so indicate
in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among the Company, SVB
Leerink and Cantor Fitzgerald.
|
|
Very
truly yours,
|
|
|
|
|
|
|
PROVENTION
BIO, INC.
|
|
|
|
|
|
|
By:
|
/s/
Andrew Drechsler
|
|
|
Name:
|
Andrew Drechsler
|
|
|
Title:
|
Chief
Financial Officer
|
|
|
ACCEPTED
as of the date
|
|
|
first-above
written:
|
|
|
|
|
|
|
SVB
LEERINK LLC
|
|
|
|
|
|
|
By:
|
/s/
Jon Civitarese
|
|
|
Name:
|
Jon
Civitarese
|
|
|
Title:
|
Managing Director
|
|
|
|
|
|
|
CANTOR
FITZGERALD & CO.
|
|
|
|
|
|
|
By:
|
/s/
Bala Murty
|
|
|
Name:
|
Bala
Murty
|
|
|
Title:
|
COO, IB
|
SCHEDULE
1
FORM
OF PLACEMENT NOTICE
|
From:
|
[
]
|
|
|
[TITLE]
|
|
|
Provention
Bio, Inc.
|
|
Cc:
|
[
]
|
|
To:
|
[Designated
Agent] (the “
Designated Agent
”)
|
|
Subject:
|
SVB
Leerink and Cantor Fitzgerald—At the Market Offering—Placement Notice
|
Ladies
and Gentlemen:
Pursuant
to the terms and subject to the conditions contained in the Sales Agreement, dated August 2, 2019 (the “
Agreement
”),
along Provention Bio, Inc., a Delaware corporation (the “
Company
”), SVB Leerink LLC and Cantor Fitzgerald
& Co., I hereby request on behalf of the Company that the Designated Agent sell up to [ ] shares of common stock,
$0.0001 par value per share, of the Company (the “
Shares
”), at a minimum market price of $ per share[;
provided
that no more than [ ] Shares shall be sold in any one Trading Day (as such term is defined in Section
3 of the Agreement)]. Sales should begin [on the date of this Placement Notice] and end on [DATE] [until all Shares that are the
subject of this Placement Notice are sold].
SCHEDULE
2
The
Company
Ashleigh
Palmer, Chief Executive Officer
Andrew
Dreschler, Chief Financial Officer
SVB
Leerink LLC
Rahul
Chaudhary
Jon
Civitarese
Brendan
Griffin
Sean
Pitt
Patrick
Morley
Sam
Spector
Stuart
Nayman
Eric
Olson
Cantor
Fitzgerald & Co.
Sameer
Vasudev (svasudev@cantor.com with a copy to CFControlledEquityOffering@cantor.com)
SCHEDULE
3
Compensation
The
Company shall pay the Designated Agent compensation in cash equal to 3% of the gross proceeds from the sales of Placement Shares
pursuant to the terms of the Sales Agreement of which this
Schedule 3
forms a part.
Exhibit
7(m)
OFFICERS’
CERTIFICATE
Each
of [●], the duly qualified and elected Chief Executive Officer of Provention Bio, Inc., a Delaware corporation (the “
Company
”),
and [●], the duly qualified and elected Chief Financial Officer of the Company, does hereby certify in his respective capacity
and on behalf of the Company, pursuant to Section 7(m) of the Sales Agreement, dated August 2, 2019 (the “
Sales
Agreement
”), among the Company, SVB Leerink LLC and Cantor Fitzgerald & Co., that, after due inquiry, to the
best of the knowledge of the undersigned:
(i) The
representations and warranties of the Company in Section 6 of the Sales Agreement (A) to the extent such representations and warranties
are subject to qualifications and exceptions contained therein relating to materiality or Material Adverse Effect, are true and
correct on and as of the date hereof with the same force and effect as if expressly made on and as of the date hereof, and (B)
to the extent such representations and warranties are not subject to any qualifications or exceptions relating to materiality
or Material Adverse Effect, are true and correct in all material respects as of the date hereof as if made on and as of the date
hereof with the same force and effect as if expressly made on and as of the date hereof.
(ii) The
Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied pursuant to the
Sales Agreement at or prior to the date hereof.
(iii) As
of the date hereof, (A) the Registration Statement complies in all material respects with the requirements of the Securities Act
and does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, (B) the Prospectus complies in all material respects with the
requirements of the Securities Act does not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were
made, not misleading and (C) no event has occurred as a result of which it is necessary to amend or supplement the Registration
Statement or the Prospectus in order to make the statements therein not untrue or misleading or for clauses (A) and (B) above,
to be true and correct.
(iv) There
has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change,
in the condition (financial or otherwise), earnings, results of operations, business, properties, operations, assets, liabilities
or prospects of the Company, whether or not arising from transactions in the ordinary course of business, since the date as of
which information is given in the Prospectus, as amended or supplemented to the date hereof.
(v) The
Company does not possess any material non-public information.
(vi) The
maximum amount of Placement Shares that may be sold pursuant to the Sales Agreement has been duly authorized by the Company’s
board of directors or a duly authorized committee thereof pursuant to a resolution or unanimous written consent in accordance
with the Company’s amended and restated articles of incorporation, amended and restated bylaws and applicable law.
Capitalized
terms used but not defined herein shall have the meanings ascribed to them in the Sales Agreement.
IN
WITNESS WHEREOF, each of the undersigned, in such individual’s respective capacity as Chief Executive Officer or Chief Financial
Officer of the Company, has executed this Officers’ Certificate on behalf of the Company.
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
Date:
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
Chief Financial Officer
|
|
|
Date:
|
|
[
Company
Signature Page to Officers’ Certificate
]
Exhibit
4.5
|
PROVENTION
BIO, INC., as Issuer
and
●,
as Trustee
INDENTURE
Dated
as of ●
Senior
Debt Securities
|
CROSS
REFERENCE SHEET
1
Between
Provisions
of the Trust Indenture Act of 1939 and the Indenture to be dated as of _________, 20___ between PROVENTION BIO, INC.. and ___________________,
as Trustee:
|
Section
of the Act
|
|
Section
of Indenture
|
|
310(a)(1) and (2)
|
|
5.08
|
|
310(a)(3) and (4)
|
|
Inapplicable
|
|
310(b)
|
|
5.09(a), (b) and (d)
|
|
310(c)
|
|
Inapplicable
|
|
311(a)
|
|
Inapplicable
|
|
311(b)
|
|
Inapplicable
|
|
311(c)
|
|
Inapplicable
|
|
312(a)
|
|
3.05
|
|
312(b)
|
|
3.05
|
|
312(c)
|
|
4.02(c)
|
|
313(a)
|
|
5.12
|
|
313(b)(1)
|
|
5.12
|
|
313(b)(2)
|
|
5.12
|
|
313(c)
|
|
5.12
|
|
313(d)
|
|
5.12
|
|
314(a)
|
|
3.06
|
|
314(b)
|
|
Inapplicable
|
|
314(c)(1) and (2)
|
|
10.05
|
|
314(c)(3)
|
|
Inapplicable
|
|
314(d)
|
|
Inapplicable
|
|
314(e)
|
|
10.05
|
|
314(f)
|
|
Inapplicable
|
|
315(a), (c) and (d)
|
|
5.01
|
|
315(b)
|
|
4.11
|
|
315(e)
|
|
4.12
|
|
316(a)(1)
|
|
4.09
|
|
316(a)(2)
|
|
Not required
|
|
316(a) (last sentence)
|
|
6.04
|
|
316(b)
|
|
4.07
|
|
317(a)
|
|
4.02
|
|
317(b)
|
|
3.03(a) and (b)
|
|
318(a)
|
|
10.07
|
|
1
|
This Cross Reference Sheet is not part of the
Indenture.
|
TABLE
OF CONTENTS
|
|
|
Page
|
|
|
|
|
|
Article 1
|
DEFINITIONS
|
1
|
|
|
|
|
|
Section 1.01
|
Certain Terms Defined
|
1
|
|
|
|
|
|
Article 2
|
SECURITIES
|
8
|
|
|
|
|
|
Section 2.01
|
Forms Generally
|
8
|
|
Section 2.02
|
Form of Trustee’s Certification of Authentication
|
8
|
|
Section 2.03
|
Amount Unlimited; Issuable in Series
|
9
|
|
Section 2.04
|
Authentication and Delivery of Securities
|
10
|
|
Section 2.05
|
Execution of Securities
|
11
|
|
Section 2.06
|
Certificate of Authentication
|
12
|
|
Section 2.07
|
Denomination and Date of Securities; Payments
of Interest
|
12
|
|
Section 2.08
|
Registration, Transfer and Exchange
|
12
|
|
Section 2.09
|
Mutilated, Defaced, Destroyed, Lost and Stolen
Securities
|
15
|
|
Section 2.10
|
Cancellation of Securities; Destruction Thereof
|
16
|
|
Section 2.11
|
Temporary Securities
|
16
|
|
Section 2.12
|
Computation of Interest
|
16
|
|
Section 2.13
|
CUSIP Numbers
|
17
|
|
|
|
|
|
Article 3
|
COVENANTS OF THE ISSUER AND THE TRUSTEE
|
17
|
|
|
|
|
|
Section 3.01
|
Payment of Principal and Interest
|
17
|
|
Section 3.02
|
Offices for Payments, etc
|
17
|
|
Section 3.03
|
Paying Agents
|
18
|
|
Section 3.04
|
Certificate of the Issuer
|
19
|
|
Section 3.05
|
List of Securityholders
|
19
|
|
Section 3.06
|
Reports by the Issuer
|
19
|
|
Section 3.07
|
Corporate Existence
|
20
|
|
Section 3.08
|
Restrictions on Mergers, Sales and Consolidations
|
20
|
|
Section 3.09
|
Further Assurances
|
20
|
TABLE
OF CONTENTS
(continued)
|
Article 4
|
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
|
20
|
|
|
|
|
|
Section 4.01
|
Event of Default Defined; Acceleration of Maturity;
Waiver of Default
|
20
|
|
Section 4.02
|
Collection of Indebtedness by Trustee; Trustee
May Prove Debt
|
22
|
|
Section 4.03
|
Application of Proceeds
|
24
|
|
Section 4.04
|
Suits for Enforcement
|
25
|
|
Section 4.05
|
Restoration of Rights on Abandonment of Proceedings
|
25
|
|
Section 4.06
|
Limitations on Suits by Securityholder
|
26
|
|
Section 4.07
|
Unconditional Right of Securityholders to Institute
Certain Suits
|
26
|
|
Section 4.08
|
Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default
|
26
|
|
Section 4.09
|
Control by Securityholders
|
26
|
|
Section 4.10
|
Waiver of Past Defaults
|
27
|
|
Section 4.11
|
Trustee to Give Notice of Default, But May Withhold
in Certain Circumstances
|
27
|
|
Section 4.12
|
Right of Court to Require Filing of Undertaking
to Pay Costs
|
27
|
|
|
|
|
|
Article 5
|
CONCERNING THE TRUSTEE
|
28
|
|
|
|
|
|
Section 5.01
|
Duties and Responsibilities of the Trustee
|
28
|
|
Section 5.02
|
Certain Rights of the Trustee
|
29
|
|
Section 5.03
|
Trustee Not Responsible for Recitals, Disposition
of Securities or Application of Proceeds Thereof
|
30
|
|
Section 5.04
|
Trustee and Agents May Hold Securities; Collections,
etc
|
31
|
|
Section 5.05
|
Monies Held by Trustee
|
31
|
|
Section 5.06
|
Compensation and Indemnification of Trustee
and Its Prior Claim
|
31
|
|
Section 5.07
|
Right of Trustee to Rely on Officers’
Certificate, etc
|
32
|
|
Section 5.08
|
Persons Eligible for Appointment as Trustee
|
32
|
|
Section 5.09
|
Resignation and Removal; Appointment of Successor
Trustee
|
32
|
|
Section 5.10
|
Acceptance of Appointment by Successor
|
33
|
|
Section 5.11
|
Merger, Conversion, Consolidation or Succession
to Business of Trustee
|
34
|
|
Section 5.12
|
Reports to the Trustee
|
34
|
TABLE
OF CONTENTS
(continued)
|
Article 6
|
CONCERNING THE SECURITYHOLDERS
|
35
|
|
|
|
|
|
Section 6.01
|
Evidence of Action Taken by Securityholders
|
35
|
|
Section 6.02
|
Proof of Execution of Instruments and of Holding
of Securities; Record Date
|
35
|
|
Section 6.03
|
Holders to be Treated as Owners
|
35
|
|
Section 6.04
|
Securities Owned by Issuer Deemed Not Outstanding
|
36
|
|
Section 6.05
|
Right of Revocation of Action Taken
|
36
|
|
|
|
|
|
Article 7
|
SUPPLEMENTAL INDENTURES
|
36
|
|
|
|
|
|
Section 7.01
|
Supplemental Indentures Without Consent of Securityholders
|
36
|
|
Section 7.02
|
Supplemental Indentures With Consent of Securityholders
|
38
|
|
Section 7.03
|
Effect of Supplemental Indenture
|
39
|
|
Section 7.04
|
Documents to Be Given to Trustee
|
39
|
|
Section 7.05
|
Notation on Securities in Respect of Supplemental
Indentures
|
39
|
|
|
|
|
|
Article 8
|
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
|
40
|
|
|
|
|
|
Section 8.01
|
Issuer May Consolidate, etc., on Certain Terms
|
40
|
|
Section 8.02
|
Successor Corporation Substituted
|
40
|
|
|
|
|
|
Article 9
|
DISCHARGE OF INDENTURE
|
41
|
|
|
|
|
|
Section 9.01
|
Defeasance Within One Year of Payment
|
41
|
|
Section 9.02
|
Defeasance
|
42
|
|
Section 9.03
|
Covenant Defeasance
|
42
|
|
Section 9.04
|
Application of Trust Money
|
43
|
|
Section 9.05
|
Repayment to Issuer
|
44
|
|
|
|
|
|
Article 10
|
MISCELLANEOUS PROVISIONS
|
44
|
|
|
|
|
|
Section 10.01
|
Incorporators, Stockholders, Officers and Directors
Exempt from Individual Liability
|
44
|
|
Section 10.02
|
Provisions of Indenture for the Sole Benefit
of Parties and Securityholders
|
44
|
|
Section 10.03
|
Successors and Assigns of Issuer Bound by Indenture
|
44
|
|
Section 10.04
|
Notices and Demands on Issuer, Trustee and Securityholders
|
45
|
|
Section 10.05
|
Officers’ Certificates and Opinions of
Counsel; Statements to be Contained Therein
|
45
|
|
Section 10.06
|
Payments Due on Saturdays, Sundays and Holidays
|
46
|
|
Section 10.07
|
Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939
|
46
|
|
Section 10.08
|
New York Law to Govern
|
46
|
TABLE
OF CONTENTS
(continued)
|
Section
10.09
|
Counterparts
|
46
|
|
Section 10.10
|
Effect of Headings
|
46
|
|
|
|
|
|
Article 11
|
REDEMPTION OF SECURITIES
|
47
|
|
|
|
|
|
Section 11.01
|
Applicability of Article
|
47
|
|
Section 11.02
|
Notice of Redemption; Partial Redemptions
|
47
|
|
Section 11.03
|
Payment of Securities Called for Redemption
|
48
|
|
Section 11.04
|
Exclusion of Certain Securities from Eligibility
for Selection for Redemption
|
49
|
|
Section 11.05
|
Conversion Arrangement On Call For Redemption
|
49
|
|
|
|
|
|
Article 12
|
CONVERSION OF SECURITIES
|
49
|
|
|
|
|
|
Section 12.01
|
Applicability of Article
|
49
|
|
Section 12.02
|
Right of Securityholders to Convert Securities
|
50
|
|
Section 12.03
|
Issuance of Shares of Capital Stock on Conversion
|
50
|
|
Section 12.04
|
No Payment or Adjustment for Interest or Dividends
|
51
|
|
Section 12.05
|
Adjustment of Conversion Rate
|
51
|
|
Section 12.06
|
No Fractional Shares to Be Issued
|
55
|
|
Section 12.07
|
Preservation of Conversion Rights Upon Consolidation,
Merger, Sale or Conveyance
|
55
|
|
Section 12.08
|
Notice to Security Holders of a Series Prior
to Taking Certain Types of Action
|
56
|
|
Section 12.09
|
Covenant to Reserve Shares for Issuance on Conversion
of Securities
|
57
|
|
Section 12.10
|
Compliance with Governmental Requirements
|
57
|
|
Section 12.11
|
Payment of Taxes Upon Certificates for Shares
Issued Upon Conversion
|
57
|
|
Section 12.12
|
Trustee’s Duties with Respect to Conversion
Provisions
|
57
|
THIS
INDENTURE, dated as of ,
between PROVENTION BIO, INC., a Delaware corporation (the “
Issuer
”) and ●, a ● corporation, as
trustee (the “
Trustee
”).
W
I T N E S S E T H:
WHEREAS,
the Issuer has duly authorized the issue from time to time of its senior debentures, notes or other evidences of indebtedness
to be issued in one or more series (the “Securities”) up to such principal amount or amounts as may from time to time
be authorized in accordance with the terms of this Indenture and to provide, among other things, for the authentication, delivery
and administration thereof, the Issuer has duly authorized the execution and delivery of this Indenture; and
WHEREAS,
all things necessary to make this Indenture a valid indenture and agreement according to its terms have been done;
NOW,
THEREFORE:
In
consideration of the premises and the purchases of the Securities by the Holders thereof, the Issuer and the Trustee mutually
covenant and agree for the equal and proportionate benefit of the respective Holders from time to time of the Securities as follows:
Article
1
DEFINITIONS
Section
1.01
Certain Terms Defined
. The following terms (except as otherwise expressly provided or unless the context otherwise
clearly requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings
specified in this Section. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939 or the definitions
of which in the Securities Act of 1933 are referred to in the Trust Indenture Act of 1939, as amended, including terms defined
therein by reference to the Securities Act of 1933, as amended, (except as herein otherwise expressly provided or unless the context
otherwise clearly requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities
Act as in force at the date of this Indenture. All accounting terms used herein and not expressly defined shall have the meanings
assigned to such terms in accordance with GAAP. The words “herein”, “hereof” and “hereunder”
and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.
The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular.
“
Affiliate
”
of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition, “control” when used with respect to
any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.
“
Authorized
Newspaper
” means a newspaper in the English language or in an official language of the country of publication, customarily
printed on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in the place
in connection with which the term is used or in the financial community of such place. If, because of temporary suspension of
publication or general circulation of any newspaper or for any other reason, it is impossible or impracticable to make any publication
of any notice required by this Indenture in the manner herein provided, such publication or other notice in lieu thereof which
is made at the written direction of the Issuer by the Trustee shall constitute a sufficient publication of such notice.
“
Board
of Directors
” means either the Board of Directors of the Issuer or any committee of such Board duly authorized to act
hereunder.
“
Business
Day
” means, with respect to any Security, a day that in the city (or in all of the cities, if more than one) in which
amounts are payable, as specified in the form of such Security, is not a day on which banking institutions are authorized by law
or regulation to close.
“
Capitalized
Lease
” means, as applied to any Person, any lease of any property (whether real, personal, or mixed) of which the discounted
present value of the rental obligations of such Person as lessee, in conformity with GAAP, is required to be capitalized on the
balance sheet of such Person; and “
Capitalized Lease Obligation
” is defined to mean the rental obligations,
as aforesaid, under such lease.
“
Capital
Stock
” means any and all shares, interests, participations or other equivalents (however designated, whether voting
or non-voting) of the Issuer’s capital stock or other ownership interests, whether now outstanding or issued after the date
of this Indenture, including, without limitation, all Common Stock and Preferred Stock.
“
Closing
Price
” on any day when used with respect to any class of Capital Stock means the closing sale price per share (or if
no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the
average bid and the average ask prices) on that date as reported by The Nasdaq Capital Market or, if such Capital Stock
is not listed on The Nasdaq Capital Market, then on the principal U.S. national or regional securities exchange on which
such Capital Stock is then listed. If such Capital Stock is not listed on either The Nasdaq Capital Market or on any U.S.
national or regional securities exchange on the relevant date, the Closing Price will be the last quoted bid price for the Company’s
Common Stock in the over-the-counter market on the relevant date as reported by the OTC Markets Group Inc. or similar organization.
In the event that no such quotation is available for any day, the Board of Directors shall be entitled to determine in good faith
the current market price on the basis of such quotations as it considers appropriate.
“
Commission
”
means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934,
or if at any time after the execution and delivery of this Indenture such Commission is not existing and performing the duties
now assigned to it under the Trust Indenture Act, then the body performing such duties on such date.
“
Common
Stock
” means any and all shares, interests, participations or other equivalents (however designated, whether voting
or non-voting) of the Issuer’s common stock, par value $0.001 per share, whether now outstanding or issued after the date
of the Indenture, including, without limitation, all series and classes of such common stock.
“
Corporate
Trust Office
” means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular
time, be principally administered, which office is, at the date as of which this Indenture is dated, located at ●.
“
Currency
Agreement
” means any foreign exchange contract, currency swap agreement, or other similar agreement or arrangement designed
to protect against the fluctuation in currency values.
“
Default
”
means any Event of Default as defined in Section 4.01 and any event that is, or after notice or passage of time or both would
be, an Event of Default.
“
Depositary
”
means, with respect to the Securities of any series issuable or issued in the form of one or more Registered Global Securities,
the Person designated as Depositary by the Issuer pursuant to Section 2.03 until a successor Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter “Depositary” shall mean or include each Person
who is then a Depositary hereunder, and if at any time there is more than one such Person, “Depositary” as used with
respect to the Securities of any such series shall mean the Depositary with respect to the Registered Global Securities of that
series.
“
Determination
Date
” has the meaning specified in Section 12.05.
“
Event
of Default
” has the meaning specified in Section 4.01.
“
GAAP
”
means generally accepted accounting principles in the United States of America as in effect as of the date of determination, including,
without limitation, those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the accounting profession. All ratios and computations
contained in this Indenture shall be computed in conformity with GAAP applied on a consistent basis.
“
Guarantee
”
means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise,
of such Person:
(i)
to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities,
or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or
(ii)
entered into for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or in part);
provided
,
that the term “
Guarantee
” shall not include endorsements for collection or deposit in the ordinary course of
business. The term “
Guarantee
” used as a verb has a corresponding meaning.
“
Holder
”,
“
Securityholder
” or other similar terms mean the registered holder of any Security.
“
Indebtedness
”
means, with respect to any Person at any date of determination (without duplication):
(i)
all indebtedness of such Person for borrowed money;
(ii)
all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments, in each case, for value received
or settlement of claims;
(iii)
all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations
with respect thereto);
(iv)
all obligations of such Person to pay the deferred and unpaid purchase price of property or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of business);
(v)
all obligations of such Person as lessee under Capitalized Leases;
(vi)
all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by
such Person;
provided
that the amount of such Indebtedness shall be the lesser of:
(1)
the fair market value of such asset at such date of determination; and
(2)
the amount of such Indebtedness;
(vii)
all Indebtedness of other Persons to the extent Guaranteed by such Person; and
(viii)
to the extent not otherwise included in this definition, obligations under Currency Agreements and Interest Rate Agreements.
Notwithstanding
the foregoing, in no event shall the term “Indebtedness” be deemed to include letters of credit or bonds that secure
performance or surety bonds or similar instruments that are issued in the ordinary course of business.
The
amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations
as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving
rise to the obligation; provided that:
(x)
the amount outstanding at any time of any Indebtedness issued with original issue discount is the face amount of such Indebtedness
less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity
with GAAP; and
(y)
Indebtedness shall not include any liability for federal, state, local, or other taxes.
“
Indenture
”
means this instrument as originally executed and delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, and shall include the forms and terms of particular series of Securities established as contemplated hereunder.
“
Interest
”
means, when used with respect to non-interest bearing Securities, interest payable after maturity. “Interest Rate Agreement”
means any obligation of any Person pursuant to any interest rate swap, cap, collar or similar arrangement providing protection
against fluctuations in interest rates. For purposes of the Indenture, the amount of such obligation shall be the amount determined
in respect thereof as of the end of the then most recently ended fiscal quarter of such Person, based on the assumption that such
obligation had terminated at the end of such fiscal quarter, and in making such determination, if any agreement relating to such
obligation provides for the netting of amounts payable by and to such Person thereunder or if any such agreement provides for
the simultaneous payment of amounts by and to such Person, then in each such case, the amount of such obligation shall be the
net amount so determined, plus any premium due upon default by such Person.
“
Issuer
”
means the Person identified as “Issuer” in the first paragraph hereof and, subject to Article 8, its successors and
assigns.
“
Lien
”
means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, or any other
type of preferential arrangement that has the practical effect of creating a security interest, in respect of such asset. For
the purposes of this Indenture, the Issuer shall be deemed to own subject to a Lien any asset that it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating
to such asset.
“
Officers’
Certificate
” means a certificate signed by the chairman of the Issuer’s Board of Directors, its president or any
vice president, and by its treasurer, any assistant treasurer, its secretary or any assistant secretary of the Issuer, and delivered
to the Trustee. Each such certificate shall comply with Section 314 of the Trust Indenture Act of 1939 and include the statements
provided for in Section 10.05.
“
Opinion
of Counsel
” means an opinion in writing signed by legal counsel who may be an employee of or counsel to the Issuer and
who shall be satisfactory to the Trustee. Each such opinion shall comply with Section 314 of the Trust Indenture Act of 1939 and
include the statements provided for in Section 10.05, if and to the extent required hereby.
“
Original
Issue Date
” of any Security (or portion thereof) means the earlier of (i) the date of such Security or (ii) the date
of any Security (or portion thereof) for which such Security was issued (directly or indirectly) on registration of transfer,
exchange or substitution.
“
Original
Issue Discount Security
” means any Security that provides for an amount less than the Principal amount thereof to be
due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 4.01.
“
Outstanding
”,
when used with reference to Securities, shall, subject to the provisions of Section 6.04, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture, except:
(i)
Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;
(ii)
Securities, or portions thereof, for the payment or redemption of which monies in the necessary amount shall have been deposited
in trust with the Trustee or with any paying agent (other than the Issuer) or shall have been set aside, segregated and held in
trust by the Issuer for the Holders of such Securities (if the Issuer shall act as its own paying agent), provided that if such
Securities, or portions thereof, are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given
as herein provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and
(iii)
Securities in substitution for which other Securities shall have been authenticated and delivered, or which shall have been paid,
pursuant to the terms of Section 2.09 (except with respect to any such Security as to which proof satisfactory to the Trustee
is presented that such Security is held by a person in whose hands such Security is a legal, valid and binding obligation of the
Issuer).
In
determining whether the Holders of the requisite Principal amount of Outstanding Securities of any or all series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder, the Principal amount of an Original Issue Discount
Security that shall be deemed to be Outstanding for such purposes shall be the amount of the Principal thereof that would be due
and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section
4.01.
“
Person
”
means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision thereof or any other entity.
“
Preferred
Stock
” means any and all shares, interests, participations or other equivalents (however designated, whether voting
or non-voting) of the Issuer’s preferred stock, par value $0.001 per share, whether now outstanding or issued after the
date of the Indenture, including, without limitation, all series and classes of such preferred stock.
“
Principal
”
means, with respect to the Securities or any Security or any portion thereof, the principal amount of such Securities, Security
or portion thereof, and shall be deemed to include “and premium, if any”.
“
record
date
” as used with respect to any interest payment date (except a date for payment of defaulted interest), has the meaning
specified in Section 2.07.
“
Registered
Global Security
” means a Security evidencing all or a part of a series of Registered Securities, issued to the Depositary
for such series in accordance with Section 2.04, and bearing the legend prescribed in Section 2.04.
“
Registered
Security
” means any Security registered on the register maintained by the Issuer pursuant to Section 2.08.
“
Responsible
Officer
” when used with respect to the Trustee means any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer
of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the administration of this Indenture.
“
Security
”
or “
Securities
” has the meaning stated in the first recital of this Indenture, or, as the case may be, Securities
that have been authenticated and delivered under this Indenture.
“
Subsidiary
”
means, with respect to any Person, any corporation, association or other business entity of which more than 50% of all votes represented
by all classes of outstanding Voting Stock is owned, directly or indirectly, by such Person and one or more other Subsidiaries
of such Person.
“
Trustee
”
means the Person identified as “
Trustee
” in the first paragraph hereof and, subject to the provisions of Article
5, shall also include any successor trustee.
“
Trust
Indenture Act of 1939
” (except as otherwise provided in Section 7.01 and 7.02) means the Trust Indenture Act of 1939
as in force at the date as of which this Indenture was originally executed.
“
UCC
”
means the Uniform Commercial Code, as in effect in each applicable jurisdiction.
“
Unregistered
Security
” means any Security other than a Registered Security.
“
U.S.
Government Obligations
” means securities that are (i) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged or (ii) obligations of an agency of instrumentality of the United States of America
the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, and
shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government
Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for
the account of the holder of a depository receipt; provided that (except as required by law) such custodian is not authorized
to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian
in respect of the U.S. Government Obligation or the specific payment of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt.
“
Voting
Stock
” means, with respect to any Person, capital stock of any class or kind ordinarily having the power to vote for
the election of directors, managers or other voting members of the governing body of such Person.
“
vice
president
” when used with respect to the Issuer or the Trustee, means any vice president, whether or not designated
by a number or a word or words added before or after the title of “
vice president
”.
“
Wholly-Owned
”
is defined to mean, with respect to any Subsidiary of any Person, such Subsidiary if all of the outstanding common stock or other
similar equity ownership interests (but not including preferred stock) in such Subsidiary (other than any director’s qualifying
shares or investments by foreign nationals mandated by applicable law) is owned directly or indirectly by such Person.
“
Yield
to Maturity
” means the yield to maturity on a series of securities, calculated at the time of issuance of such series,
or, if applicable, at the most recent redetermination of interest on such series, and calculated in accordance with accepted financial
practice.
Article
2
SECURITIES
Section
2.01
Forms Generally
. The Securities of each series shall be substantially in such form (not inconsistent with this Indenture)
as shall be established by or pursuant to a resolution of the Board of Directors or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or legends, not inconsistent with the provisions
of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto, or with any rules
of any securities exchange or to conform to general usage, all as may be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. The Issuer shall furnish any such legends to the Trustee in writing.
The
definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.
Section
2.02
Form of Trustee’s Certification of Authentication
. The Trustee’s certificate of authentication on all
Securities shall be in substantially the following form:
This
is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.
|
|
●,
|
|
|
as Trustee
|
|
|
|
|
|
|
By:
|
|
|
|
|
Authorized Signatory:
|
Section
2.03
Amount Unlimited; Issuable in Series
. The aggregate Principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The
Securities may be issued in one or more series. There shall be established in or pursuant to a resolution of the Board of Directors
and set forth in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series:
(a)
the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities);
(b)
any limit upon the aggregate Principal amount of the Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Securities of the series pursuant to Section 2.08, 2.09, 2.11 or Section 12.03);
(c)
the date or dates on which the Principal of the Securities of the series is payable;
(d)
the rate or rates at which the Securities of the series shall bear interest, if any, or the method by which such rate shall be
determined, the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be
payable and the record dates for the determination of Holders to whom interest is payable;
(e)
the place or places where the Principal of and any interest on Securities of the series shall be payable (if other than as provided
in Section 3.02);
(f)
the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the series
may be redeemed, in whole or in part, at the option of the Issuer;
(g)
the obligation, if any, of the Issuer to redeem, purchase or repay Securities of the series at the option of a Holder thereof
and the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the
series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;
(h)
the obligation, if any, of the Issuer to permit the conversion of the Securities of such series into Capital Stock, and the terms
and conditions upon which such conversion shall be effected (including, without limitation, the initial conversion price or rate,
the conversion period and any other provision in addition to or in lieu of those set forth in this Indenture relative to such
obligation);
(i)
if other than denominations of $1,000 and any multiple thereof, the denominations in which Securities of the series shall be issuable;
(j)
if other than the Principal amount thereof, the portion of the Principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof pursuant to Section 4.01 or provable in bankruptcy pursuant to Section
4.02;
(k)
if the Securities of the series are issuable in whole or in part as one or more Registered Global Securities, the identity of
the Depositary for such Registered Global Security or Securities;
(l)
any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture); and
(m)
any trustees, authenticating or paying agents, transfer agents or registrar or any other agents with respect to the Securities
of such series.
All
Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided
in or pursuant to such resolution of the Board of Directors or in any such indenture supplemental hereto.
Section
2.04
Authentication and Delivery of Securities
. At any time and from time to time after the execution and delivery of this
Indenture, the Issuer may deliver Securities of any series executed by the Issuer to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver such Securities to or upon the written order of the Issuer, such order to be signed by
both (a) the chairman of its Board of Directors, its president or any vice president and by its treasurer, any assistant treasurer,
its secretary or any assistant secretary, without any further action by the Issuer. In authenticating such Securities and accepting
the additional responsibilities under this Indenture in relation to such Securities the Trustee shall receive, and (subject to
Section 5.01) shall be fully protected in relying upon:
(a)
a certified copy of any resolution or resolutions of the Board of Directors authorizing the action taken pursuant to the resolution
or resolutions delivered under clause (b) below;
(b)
a copy of any resolution or resolutions of the Board of Directors relating to such series, in each case certified by the secretary
or an assistant secretary of the Issuer;
(c)
an executed supplemental indenture, if any, and the documentation required to be delivered pursuant to Section 7.04;
(d)
an Officers’ Certificate setting forth the form and terms of the Securities as required pursuant to Section 2.01 and 2.03,
respectively and prepared in accordance with Section 10.05;
(e)
an Opinion of Counsel, prepared in accordance with Section 10.05, to the effect:
(i)
that the form or forms and terms of such Securities have been established by or pursuant to a resolution of the Board of Directors
or by a supplemental indenture as permitted by Section 2.01 and 2.03 in conformity with the provisions of this Indenture; and
(ii)
that such Securities, when authenticated and delivered by the Trustee and issued by the Issuer in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Issuer enforceable against
the Issuer in accordance with their terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws now or hereafter in effect relating to creditors’ rights
generally, and general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at
law).
The
Trustee shall have the right to decline to authenticate and deliver any Securities under this section if the Trustee, being advised
by counsel, determines that such action may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of
directors or board of trustees, executive committee, or a trust committee of directors or trustees or Responsible Officers shall
determine that such action would expose the Trustee to personal liability.
If
the Issuer shall establish pursuant to Section 2.03 that the Securities of a series or a portion thereof are to be issued in the
form of one or more Registered Global Securities, then the Issuer shall execute (in accordance with Section 2.05) and the Trustee
shall authenticate and make available for delivery one or more Registered Global Securities that (i) shall represent and shall
be denominated in an amount equal to the aggregate Principal amount of all of the Securities of such series issued in such form
and not yet canceled, (ii) shall be registered in the name of the Depositary for such Registered Global Security or Securities
or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or its custodian or pursuant to
such Depositary’s instructions and (iv) shall bear a legend substantially to the following effect: “Unless and until
it is exchanged in whole or in part for Securities in definitive registered form, this Security may not be transferred except
as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee
of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.”
Section
2.05
Execution of Securities
. The Securities shall be signed on behalf of the Issuer by the chairman of its Board of Directors,
its president, any vice president, its treasurer or any assistant treasurer, under its corporate seal and attested by its secretary
or any assistant secretary. Such signatures may be the manual or facsimile signatures of the present or any future such officers.
The seal of the Issuer may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced
on the Securities. Typographical and other minor errors or defects in any such reproduction of the seal or any such signature
shall not affect the validity or enforceability of any Security that has been duly authenticated and delivered by the Trustee.
In
case any officer of the Issuer who shall have signed any of the Securities shall cease to be such officer before the Security
so signed shall be authenticated and delivered by the Trustee or disposed of by the Issuer, such Security nevertheless may be
authenticated and delivered or disposed of as though the person who signed such Security had not ceased to be such officer of
the Issuer; and any Security may be signed on behalf of the Issuer by such persons as, at the actual date of the execution of
such Security, shall be the proper officers of the Issuer, although at the date of the execution and delivery of this Indenture
any such person was not such an officer.
Section
2.06
Certificate of Authentication
. Only such Securities as shall bear thereon a certificate of authentication substantially
in the form hereinbefore recited, executed by the Trustee by the manual signature of one of its authorized signatories, shall
be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee upon
any Security executed by the Issuer shall be conclusive evidence that the Security so authenticated has been duly authenticated
and delivered hereunder and that the Holder is entitled to the benefits of this Indenture.
Section
2.07
Denomination and Date of Securities; Payments of Interest
. The Securities shall be issuable as registered securities
without coupons and in denominations as shall be specified as contemplated by Section 2.03. In the absence of any such specification
with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any
multiple thereof. The Securities shall be numbered, lettered, or otherwise distinguished in such manner or in accordance with
such plan as the officers of the Issuer executing the same may determine as evidenced by the execution and authentication thereof.
Each
Security shall be dated the date of its authentication, shall bear interest, if any, from the date and shall be payable on the
dates, in each case, which shall be specified as contemplated by Section 2.03.
The
person in whose name any Security of any series is registered at the close of business on any record date applicable to a particular
series with respect to any interest payment date for such series shall be entitled to receive the interest, if any, payable on
such interest payment date notwithstanding any transfer or exchange of such Security subsequent to the record date and prior to
such interest payment date, except if and to the extent the Issuer shall default in the payment of the interest due on such interest
payment date for such series, in which case such defaulted interest shall be paid to the persons in whose names Outstanding Securities
for such series are registered at the close of business on a subsequent record date (which shall be not less than five Business
Days prior to the date of payment of such defaulted interest) established by notice given by mail by or on behalf of the Issuer
to the Holders of Securities not less than 15 days preceding such subsequent record date. The term “
record date
”
as used with respect to any interest payment date (except a date for payment of defaulted interest) shall mean the date specified
as such in the terms of the Securities of any particular series, or, if no such date is so specified, if such interest payment
date is the first day of a calendar month, the fifteenth day of the next preceding calendar month or, if such interest payment
date is the fifteenth day of a calendar month, the first day of such calendar month, whether or not such record date is a Business
Day.
Section
2.08
Registration, Transfer and Exchange
. The Issuer will keep or cause to be kept at each office or agency to be maintained
for the purpose as provided in Section 3.02 a register or registers in which, subject to such reasonable regulations as it may
prescribe, it will register, and will register the transfer of, Securities as in this Article provided. Such register shall be
in written form in the English language or in any other form capable of being converted into such form within a reasonable time.
At all reasonable times such register or registers shall be open for inspection by the Trustee.
At
the option of the Holder thereof, Registered Securities of any series (other than a Registered Global Security, except as set
forth below) may be exchanged for a Registered Security or Registered Securities of such series and tenor having authorized denominations
and an equal aggregate Principal amount, upon surrender of such Registered Securities to be exchanged at the agency of the Issuer
that shall be maintained for such purpose in accordance with Section 3.02 and upon payment, if the Issuer shall so require, of
the charges hereinafter provided. If the Securities of any series are issued in both registered and unregistered form, except
as otherwise established pursuant to Section 2.03, at the option of the Holder thereof, Unregistered Securities of any series
may be exchanged for Registered Securities of such series and tenor having authorized denominations and an equal aggregate Principal
amount, upon surrender of such Unregistered Securities to be exchanged at the agency of the Issuer that shall be maintained for
such purpose in accordance with Section 3.02 and upon payment, if the Issuer shall so require, of the charges hereinafter provided.
At the option of the Holder thereof, if Unregistered Securities of any series, maturity date, interest rate and Original Issue
Date are issued in more than one authorized denomination, except as otherwise established pursuant to Section 2.03, such Unregistered
Securities may be exchanged for Unregistered Securities of such series and tenor having authorized denominations and an equal
aggregate Principal amount, upon surrender of such Unregistered Securities to be exchanged at the agency of the Issuer that shall
be maintained for such purpose in accordance with Section 3.02 and upon payment, if the Issuer shall so require, of the charges
hereinafter provided. Registered Securities of any series may not be exchanged for Unregistered Securities of such series. Whenever
any Securities are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and make available
for delivery, the Securities which the Holder making the exchange is entitled to receive.
All
Registered Securities presented for registration of transfer, exchange, redemption, conversion or payment shall be duly endorsed
by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the Holder or his attorney duly authorized in writing.
The
Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection
with any exchange or registration of transfer of Securities. No service charge shall be made for any such transaction.
Notwithstanding
any other provision of this Section 2.08, unless and until it is exchanged in whole or in part for Securities in definitive registered
form, a Registered Global Security representing all or a portion of the Securities of a series may not be transferred except as
a whole by the Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a
nominee of such successor Depositary.
If
at any time the Depositary for any Registered Global Securities of any series notifies the Issuer that it is unwilling or unable
to continue as Depositary for such Registered Global Securities or if at any time the Depositary for such Registered Global Securities
shall no longer be eligible under applicable law, the Issuer shall appoint a successor Depositary eligible under applicable law
with respect to such Registered Global Securities. If a successor Depositary eligible under applicable law for such Registered
Global Securities is not appointed by the Issuer within 90 days after the Issuer receives such notice or becomes aware of such
ineligibility, the Issuer will execute, and the Trustee, upon receipt of the Issuer’s order for the authentication and delivery
of definitive Registered Securities of such series and tenor, will authenticate and make available for delivery Registered Securities
of such series and tenor, in any authorized denominations, in an aggregate Principal amount equal to the Principal amount of such
Registered Global Securities, in exchange for such Registered Global Securities.
The
Issuer may at any time and in its sole discretion determine that any Registered Global Securities of any series shall no longer
be maintained in global form. In such event, or in the event that there shall have occurred and be continuing an Event of Default
with respect to a series of Securities, the Issuer will, upon the request of any Holder, execute, and the Trustee, upon receipt
of the Issuer’s order for the authentication and delivery of definitive Registered Securities of such series and tenor,
will authenticate and make available for delivery, Registered Securities of such series and tenor in any authorized denominations,
in an aggregate Principal amount equal to the Principal amount of such Registered Global Securities, in exchange for such Registered
Global Securities.
Any
time the Registered Securities of any series are not in the form of Registered Global Securities pursuant to the preceding two
paragraphs, the Issuer agrees to supply the Trustee with a reasonable supply of certificated Registered Securities without the
legend required by Section 2.04 and the Trustee agrees to hold such Registered Securities in safekeeping until authenticated and
delivered pursuant to the terms of this Indenture.
If
established by the Issuer pursuant to Section 2.03 with respect to any Registered Global Security, the Depositary for such Registered
Global Security may surrender such Registered Global Security in exchange in whole or in part for Registered Securities of the
same series and tenor in definitive registered form on such terms as are acceptable to the Issuer and such Depositary. Thereupon,
the Issuer shall execute, and the Trustee shall authenticate and make available for delivery, without service charge,
(i)
to the Person specified by such Depositary new Registered Securities of the same series and tenor, of any authorized denominations
as requested by such Person, in an aggregate Principal amount equal to and in exchange for such Person’s beneficial interest
in the Registered Global Security; and
(ii)
to such Depositary a new Registered Global Security in a denomination equal to the difference, if any, between the Principal amount
of the surrendered Registered Global Security and the aggregate Principal amount of Registered Securities authenticated and delivered
pursuant to clause (i) above.
Registered
Securities issued in exchange for a Registered Global Security pursuant to this Section 2.08 shall be registered in such names
and in such authorized denominations as the Depositary for such Registered Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee or an agent of the Issuer or the Trustee. The Trustee
or such agent shall deliver such Securities to or as directed by the Persons in whose names such Securities are so registered.
All
Securities issued upon any transfer or exchange of Securities shall be valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange.
Notwithstanding
anything herein or in the forms or terms of any Securities to the contrary, none of the Issuer, the Trustee or any agent of the
Issuer or the Trustee shall be required to exchange any Unregistered Security for a Registered Security if such exchange would
result in adverse Federal income tax consequences to the Issuer (such as, for example, the inability of the Issuer to deduct from
its income, as computed for Federal income tax purposes, the interest payable on the Unregistered Securities) under then applicable
United States Federal income tax laws. The Trustee and any such agent shall be entitled to rely on an Officers’ Certificate
or an Opinion of Counsel in determining such result.
Neither
the Registrar nor the Issuer shall be required (i) to issue, authenticate, register the transfer of or exchange Securities of
any series for a period of 15 days before the mailing of a notice of redemption of such Securities to be redeemed or (ii) to register
the transfer of or exchange any Security selected for redemption in whole or in part.
Section
2.09
Mutilated, Defaced, Destroyed, Lost and Stolen Securities
. In case any temporary or definitive Security shall become
mutilated or defaced and shall be surrendered to the Trustee, the Issuer shall execute, and the Trustee shall authenticate and
deliver, a new Security of the same series, bearing a number not contemporaneously outstanding, in exchange and substitution for
the mutilated or defaced Security. If the Holder of any Security claims that the Security has been lost, destroyed or wrongfully
taken, the Issuer shall execute, and the Trustee shall authenticate and deliver, a new Security of the same series, bearing a
number not contemporaneously outstanding, in exchange and substitution for the lost, destroyed or wrongfully taken Security, if
the applicant so requests before the Issuer has notice that the Security has been acquired by a protected purchaser, and the applicant
furnishes to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as may be required
by them to indemnify and defend and to save each of them harmless and the applicant satisfies other reasonable requirements imposed
by the Issuer.
Upon
the issuance of any substitute Security, the Issuer may require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee and its
counsel) connected therewith. In case any Security which has matured or is about to mature or has been called for redemption in
full shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer may instead of issuing a substitute Security,
pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated or defaced Security), if
the applicant for such payment shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or taking, the applicant shall also furnish to the Issuer and the Trustee and any agent of the Issuer or the Trustee
evidence to their satisfaction of the destruction, loss or wrongful taking of such Security and of the ownership thereof.
Every
substitute Security of any series issued pursuant to the provisions of this section by virtue of the fact that any such Security
is destroyed, lost or stolen shall constitute an additional contractual obligation of the Issuer, whether or not the destroyed,
lost or wrongfully taken Security shall be at any time enforceable by anyone and shall be entitled to all the benefits of (but
shall be subject to all the limitations of rights set forth in) this Indenture equally and proportionately with any and all other
Securities of such series duly authenticated and delivered hereunder. All Securities shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are exclusive with respect to the replacement or payment
of mutilated, defaced or destroyed, lost or wrongfully taken Securities and shall preclude any and all other rights or remedies.
Section
2.10
Cancellation of Securities; Destruction Thereof
. All Securities surrendered for payment, redemption, repurchase, conversion,
registration of transfer or exchange, if surrendered to the Issuer or any agent of the Issuer or the Trustee, shall be delivered
to the Trustee for cancellation or, if surrendered to the Trustee, shall be canceled by it; and no Securities shall be issued
in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall dispose of canceled
Securities held by it in accordance with the record retention policies of the Trustee in effect from time to time and, if such
canceled certificates are destroyed, shall deliver a certificate of destruction to the Issuer. If the Issuer shall acquire any
of the Securities, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such
Securities unless and until the same are delivered to the Trustee for cancellation.
Section
2.11
Temporary Securities
. Pending the preparation of definitive Securities for any series, the Issuer may execute and
the Trustee shall authenticate and deliver temporary Securities for such series (printed, lithographed, typewritten or otherwise
reproduced, in each case in form satisfactory to the Trustee). Temporary Securities of any series shall be issuable as registered
Securities without coupons, of any authorized denomination, and substantially in the form of the definitive Securities of such
series but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined
by the Issuer with the concurrence of the Trustee. Temporary Securities may contain such reference to any provisions of this Indenture
as may be appropriate. Every temporary Security shall be executed by the Issuer and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like effect, as the definitive Securities. Without unreasonable delay
the Issuer shall execute and shall furnish definitive Securities of such series and thereupon temporary Securities of such series
may be surrendered in exchange therefor without charge at each office or agency to be maintained by the Issuer for that purpose
pursuant to Section 3.02, and the Trustee shall authenticate and deliver in exchange for such temporary Securities of such series
a like aggregate Principal amount of definitive Securities of the same series of authorized denominations. Until so exchanged,
the temporary Securities of any series shall be entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section
2.12
Computation of Interest
. Except as otherwise specified in the Securities of a series, interest shall be computed on
the basis of a 360-day year of twelve 30-day months.
Section
2.13
CUSIP Numbers
. The Issuer in issuing the Securities may use “CUSIP” numbers (if then generally in use),
and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that
any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities
or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will
notify the Trustee of any change in the “CUSIP” numbers.
Article
3
COVENANTS OF THE ISSUER AND THE TRUSTEE
Section
3.01
Payment of Principal and Interest
. The Issuer covenants and agrees for the benefit of each series of Securities that
it will duly and punctually pay or cause to be paid the Principal of, and interest on, each of the Securities of such series at
the place or places, at the respective times and in the manner provided in such Securities. Each installment of interest on the
Securities of any series may be paid by mailing checks for such interest payable to or upon the written order of the Holders of
Securities entitled thereto as they shall appear on the registry books of the Issuer.
Notwithstanding
any provisions of this Indenture and the Securities of any series to the contrary, if the Issuer and a Holder of any Registered
Security so agree or if expressly provided pursuant to Section 2.03, payments of interest on, and any portion of the Principal
of, such Holder’s Registered Security shall be made by the paying agent, upon receipt from the Issuer of immediately available
funds by 11:00 a.m., New York City time (or such other time as may be agreed to between the Issuer and the paying agent) or the
Issuer, directly to the Holder of such Security (by wire transfer of Federal funds or immediately available funds or otherwise)
if the Holder has delivered written instructions to the Trustee 15 days prior to such payment date requesting that such payment
will be so made and designating the bank account to which such payments shall be so made and, in the case of payments of Principal,
surrenders the same to the Trustee. The Trustee shall be entitled to rely on the last instruction delivered by the Holder pursuant
to this Section 3.01 unless a new instruction is delivered 15 days prior to a payment date. The Issuer will indemnify and hold
each of the Trustee and any paying agent harmless against any loss, liability or expense (including attorneys’ fees and
expenses) resulting from any act or omission to act on the part of the Issuer or any such Holder in connection with any such agreement
or from making any payment in accordance with any such agreement.
Section
3.02
Offices for Payments, etc
. So long as any of the Securities remain outstanding, the Issuer will maintain in the Borough
of Manhattan, The City of New York an office or agency (n) where the Securities may be presented for payment, (o) where the Securities
may be presented for registration of transfer and for exchange as in this Indenture provided, (p) where notices and demands to
or upon the Issuer in respect of the Securities or of this Indenture may be served and (q) for Securities of each series that
is convertible, where such Securities may be presented for conversion. The Issuer will give to the Trustee written notice of the
location of any such office or agency and of any change of location thereof. Unless otherwise specified in accordance with Section
2.03, the Issuer hereby initially designates the Corporate Trust Office of Trustee as the office to be maintained by it for each
such purpose. In case the Issuer shall fail to so designate or maintain any such office or agency or shall fail to give such notice
of the location or of any change in the location thereof, presentations and demands may be made and notices may be served at the
Corporate Trust Office.
Section
3.03
Paying Agents
. Whenever the Issuer shall appoint a paying agent other than the Trustee with respect to the Securities
of any series, it will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree
with the Trustee, subject to the provisions of this Section:
(a)
that it will hold all sums received by it as such agent for the payment of the Principal of or interest on the Securities of such
series (whether such sums have been paid to it by the Issuer or by any other obligor on the Securities of such series) in trust
for the benefit of the Holders of the Securities of such series or of the Trustee;
(b)
that it will give the Trustee notice of any failure by the Issuer (or by any other obligor on the Securities of such series) to
make any payment of the Principal of or interest on the Securities of such series when the same shall be due and payable; and
during the continuance of the failure referred to in clause Section 3.03(b) above.
The
Issuer will, on or prior to each due date of the Principal of or interest on the Securities of such series, deposit with the paying
agent a sum sufficient to pay such Principal or interest so becoming due, and (unless such paying agent is the Trustee) the Issuer
will promptly notify the Trustee of any failure to take such action.
If
the Issuer shall act as its own paying agent with respect to the Securities of any Series, it will, on or before each due date
of the Principal of or interest on the Securities of such series, set aside, segregate and hold in trust for the benefit of the
Holders of the Securities of such series a sum sufficient to pay such Principal or interest so becoming due. The Issuer will promptly
notify the Trustee of any failure to take such action.
Whenever
the Issuer shall have one or more paying agents for any series of Securities, it will, on or before each due date of the Principal
of or interest on any Securities of such series, deposit with the paying agent or agents for the Securities of such series a sum,
by 11:00 a.m. New York City time in immediately available funds on the payment date, sufficient to pay the Principal or interest
so becoming due with respect to the Securities of such series, and (unless such paying agent is the Trustee) the Issuer will promptly
notify the Trustee in writing of any failure so to act.
Anything
in this section to the contrary notwithstanding, the Issuer may at any time, for the purpose of obtaining a satisfaction and discharge
with respect to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be paid to the Trustee
all sums held in trust for any such series by the Issuer or any paying agent hereunder, as required by this Section, such sums
to be held by the Trustee upon the trusts herein contained.
Anything
in this Section 3.03 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 3.03 is
subject to the provisions of Section 9.05.
Section
3.04
Certificate of the Issuer
. Within 120 days after the close of the fiscal year ended ●, and within 120 days after
the close of each fiscal year thereafter, the Issuer will furnish to the Trustee a brief certificate (which need not comply with
Section 10.05) from the principal executive, financial or accounting officer of the Issuer as to his or her knowledge of the Issuer’s
compliance with all conditions and covenants under the Indenture (such compliance to be determined without regard to any period
of grace or requirement of notice provided under the Indenture).
At
the time such certificate is filed, the Issuer will also file with the Trustee a letter or statement of the independent accountants
who shall have certified the financial statements of the Issuer for its preceding fiscal year to the effect that, in making the
examination necessary for certification of such financial statements, they have obtained no knowledge of any default by the Issuer
in the performance or fulfillment of any covenant, agreement or condition contained in this Indenture, which default remains uncured
at the date of such letter or statement, or, if they shall have obtained knowledge of any such uncured default, specifying in
such letter or statement such default or defaults and the nature and status thereof, it being understood that such accountants
shall not be liable directly or indirectly for failure to obtain knowledge of any such default or defaults, and that nothing contained
in this Section 3.04 shall be construed to require such accountants to make any investigation beyond the scope required in connection
with such examination.
Section
3.05
List of Securityholders
. If and so long as the Trustee shall not be the Security registrar for the Securities of any
series, the Issuer will furnish or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require
of the names and addresses of the Holders of the Securities of such series pursuant to Section 312 of the Trust Indenture Act
of 1939 (a) semi-annually not more than 10 days after each record date for the payment of interest on such Securities, as hereinabove
specified, as of such record date and on dates to be determined pursuant to Section 2.03 for non-interest bearing Securities in
each year and (b) at such other times as the Trustee may request in writing, within 30 days after receipt by the Issuer of any
such request as of a date not more than 10 days prior to the time such information is furnished.
Section
3.06
Reports by the Issuer
. The Issuer covenants to:
(a)
file, whether or not required to do so under applicable law, with the Trustee, within 15 days after the Issuer files the same
with the Commission:
(i)
copies of the annual reports and of the information, documents, and other reports which the Issuer files with the Commission pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; and
(ii)
such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants
provided for in this Indenture as the Issuer may from time to time file with the Commission; and
(b)
transmit to the Securityholders, in the manner and to the extent provided in Section 10.04, such summaries of any information,
documents and reports required to be filed with the Trustee pursuant to the provisions of subdivision (a) of this Section 3.06
as may be required by the rules and regulations of the Commission.
Delivery
of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of
such shall not constitute constructive notice of any information contained therein or determinable from information contained
therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers’ Certificates).
Section
3.07
Corporate Existence
. So long as any of the Securities remain unpaid, the Issuer will at all times (except as otherwise
provided or permitted elsewhere in this Indenture) do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence.
Section
3.08
Restrictions on Mergers, Sales and Consolidations
. So long as any of the Securities remain unpaid, the Issuer will
not consolidate or merge with or sell, convey or lease all or substantially all of its property to any other corporation except
as permitted in Article 8 hereof.
Section
3.09
Further Assurances
. From time to time whenever requested by the Trustee, the Issuer will execute and deliver such
further instruments and assurances and do such further acts as may be reasonably necessary or proper to carry out more effectually
the purposes of this Indenture or to secure the rights and remedies hereunder of the Holders of the Securities of any series.
Article
4
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
Section
4.01
Event of Default Defined; Acceleration of Maturity; Waiver of Default
. “
Event of Default
” with
respect to Securities of any series wherever used herein, means any one of the following events which shall have occurred and
be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative
or governmental body):
(a)
default by the Issuer in the payment of any installment of interest upon any of the Securities of such series as and when the
same shall become due and payable, and continuance of such default for a period of 30 days;
(b)
default by the Issuer in the payment of all or any part of the Principal on any of the Securities of such series as and when the
same shall become due and payable either at maturity, upon redemption, by declaration or otherwise, and continuance of such default
for a period of five days;
(c)
default by the Issuer in the performance, or breach by the Issuer, of any of its covenants or agreements in respect of the Securities
of such series (other than a covenant or agreement in respect of the Securities of such series a default in whose performance
or whose breach is elsewhere in this section specifically dealt with), and continuance of such default or breach for a period
of 30 consecutive days after there has been given, by registered or certified mail, to the Issuer by the Trustee or to the Issuer
and the Trustee by the Holders of at least 25% in Principal amount of the Outstanding Securities of all series affected thereby,
a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a notice of
default hereunder;
(d)
the entry by a court having jurisdiction in the premises of a decree or order for relief in respect of the Issuer in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or the appointment of a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Issuer or for any substantial part of the
Issuer’s property and assets or the ordering of the winding up or liquidation of the Issuer’s affairs, and the continuance
of any such decree or order unstayed and in effect for a period of 90 consecutive days;
(e)
the commencement by the Issuer of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator
(or similar official) of the Issuer or for any substantial part of the Issuer’s property, or the making of any general assignment
by the Issuer for the benefit of creditors; or
(f)
any other Event of Default provided in the supplemental indenture or resolution of the Board of Directors under which such series
of Securities is issued or in the form of Security for such series.
If
an Event of Default described in clauses 4.01(a), 4.01(b), 4.01(c) or 4.01(f) occurs and is continuing, then, and in each and
every such case, unless the Principal of all of the Securities of such series shall have already become due and payable, either
the Trustee or the Holders of not less than 25% in aggregate Principal amount of the Securities of any affected series then Outstanding
hereunder (each such series voting as a separate class) by notice in writing to the Issuer (and to the Trustee if given by Securityholders),
may declare the entire Principal (or, if the Securities of such series are Original Issue Discount Securities, such portion of
the Principal amount as may be specified in the terms of such series) of all Securities of such series and the interest accrued
thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.
If an Event of Default described in clauses Section 4.01(d) or Section 4.01(e) occurs and is continuing, then the Principal amount
of all the Securities then Outstanding and interest accrued thereon, if any, shall be and become immediately due and payable,
without any notice or other action by any Holder or the Trustee, to the full extent permitted by applicable law.
The
foregoing provisions, however, are subject to the condition that if, at any time after the Principal (or, if the Securities are
Original Issue Discount Securities, such portion of the Principal as may be specified in the terms thereof) of the Securities
of any series (or of all the Securities, as the case may be) shall have been so declared due and payable, and before any judgment
or decree for the payment of the monies due shall have been obtained or entered as hereinafter provided, the Issuer shall pay
or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of such
series (or of all the Securities, as the case may be) and the Principal of any and all Securities of such series (or of all the
Securities, as the case may be) which shall have become due otherwise than by acceleration (with interest upon such Principal
and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at
the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of such series (or at the respective rates of interest or Yields to Maturity of all the Securities, as the case may
be) to the date of such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee,
its agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee except
as a result of negligence or bad faith, and if any and all Events of Default under the Indenture, other than the non-payment of
the Principal of Securities which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as
provided herein, then and in every such case the Holders of a majority in aggregate Principal amount of all the then Outstanding
Securities of all such series that have been accelerated, each such series voting as a separate class, by written notice to the
Issuer and to the Trustee, may waive all defaults with respect to such series (or with respect to all the Securities, as the case
may be) and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend
to or shall affect any subsequent default or shall impair any right consequent thereon.
For
all purposes under this Indenture, if a portion of the Principal of any Original Issue Discount Securities shall have been accelerated
and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration
has been rescinded and annulled, the Principal amount of such Original Issue Discount Securities shall be deemed, for all purposes
hereunder, to be such Portion of the Principal thereof as shall be due and payable as a result of such acceleration, and payment
of such portion of the Principal thereof as shall be due and payable as a result of such acceleration, together with interest,
if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities.
Section
4.02
Collection of Indebtedness by Trustee; Trustee May Prove Debt
. The Issuer covenants that (h) in case default shall
be made in the payment of any installment of interest on any of the Securities of any series when such interest shall have become
due and payable, and such default shall have continued for a period of 30 days or (i) in case default shall be made in the payment
of all or any part of the Principal of any of the Securities of any series when the same shall have become due and payable, whether
upon maturity of the Securities of such series or upon any redemption or by declaration or otherwise, then in each case upon demand
of the Trustee, the Issuer will pay to the Trustee for the benefit of the Holders of the Securities of such series (x) the whole
amount that then shall have become due and payable on all Securities of such series for Principal or interest, as the case may
be (with interest to the date of such payment upon the overdue Principal and, to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in the Securities of such series) and (y) in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee
and each predecessor Trustee, their respective agents and counsel, and any expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee except as a result of its negligence or bad faith.
Until
such demand is made by the Trustee, the Issuer may pay the Principal of and interest on the Securities of any series to the registered
Holders, whether or not the Principal of and interest on the Securities of such series be overdue.
In
case the Issuer shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums
so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment
or final decree against the Issuer or other obligor upon such Securities and collect in the manner provided by law out of the
property of the Issuer or other obligor upon such Securities, wherever situated, the monies adjudged or decreed to be payable.
In
case there shall be pending proceedings relative to the Issuer or any other obligor upon the Securities under Title 11 of the
United States Code or any other applicable Federal or state bankruptcy, insolvency or other similar law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for
or taken possession of the Issuer or its property or such other obligor, or in case of any other comparable judicial proceedings
relative to the Issuer or other obligor upon the Securities of any series, or to the creditors or property of the Issuer or such
other obligor, the Trustee, irrespective of whether the Principal of any Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise:
(a)
to file and prove a claim or claims for the whole amount of Principal and interest (or, if the Securities of any series are Original
Issue Discount Securities, such portion of the Principal amount as may be specified in the terms of such series) owing and unpaid
in respect of the Securities of any series, and to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee,
and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Securityholders allowed
in any judicial proceedings relative to the Issuer or other obligor upon the Securities of any series, or to the creditors or
property of the Issuer or such other obligor;
(b)
unless prohibited by applicable law and regulations, to vote on behalf of the Holders of the Securities of any series in any election
of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or
person performing similar functions in comparable proceedings; and
(c)
to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute all amounts received
with respect to the claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver, or liquidator,
custodian or other similar official is hereby authorized by each of the Securityholders to make payments to the Trustee, and,
in the event that the Trustee shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such
amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith and all other amounts due to the Trustee or any predecessor
Trustee pursuant to Section 5.06.
Nothing
herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf
of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any series
or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any
such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar person.
All
rights of action and of asserting claims under this Indenture, or under any of the Securities, may be enforced by the Trustee
without the possession of any of the Securities or the production thereof on any trial or other proceedings relative thereto,
and any such action or proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Securities in respect
of which such action was taken.
In
any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture
to which the Trustee shall be a party) the Trustee shall be held to represent all the Holders of the Securities in respect to
which such action was taken, and it shall not be necessary to make any Holders of such Securities parties to any such proceedings.
Section
4.03
Application of Proceeds
. Any monies collected by the Trustee pursuant to this Article in respect of any series shall
be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such monies on
account of Principal or interest, upon presentation of the several Securities in respect of which monies have been collected and
stamping (or otherwise noting) thereon the payment, or issuing Securities of such series in reduced Principal amounts in exchange
for the presented Securities of like series if only partially paid, or upon surrender thereof if fully paid:
FIRST:
To the payment of costs and expenses applicable to such series in respect of which monies have been collected, including reasonable
compensation to the Trustee and each predecessor Trustee and their respective agents and attorneys and of all expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith, and
all other amounts due to the Trustee or any predecessor Trustee pursuant to Section 5.06;
SECOND:
In case the Principal of the Securities of such series in respect of which monies have been collected shall not have become and
be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity of
the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the
overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in such Securities, such payments to be made ratably to the persons entitled thereto, without discrimination
or preference;
THIRD:
In case the Principal of the Securities of such series in respect of which monies have been collected shall have become and shall
be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for Principal
and interest, with interest upon the overdue Principal, and (to the extent that such interest has been collected by the Trustee)
upon overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of such series; and in case such monies shall be insufficient to pay in full
the whole amount so due and unpaid upon the Securities of such series, then to the payment of such Principal and interest or yield
to maturity, without preference or priority of Principal over interest or yield to maturity, or of interest or yield to maturity
over Principal, or of any installment of interest over any other installment of interest, or of any Security of such series over
any other Security of such series, ratably to the aggregate of such Principal and accrued and unpaid interest or yield to maturity;
and
FOURTH:
To the payment of the remainder, if any, to the Issuer or any other person lawfully entitled thereto.
Section
4.04
Suits for Enforcement
. In case an Event of Default has occurred, has not been waived and is continuing, the Trustee
may proceed to protect and enforce the rights vested in it by this Indenture, either at law or in equity or in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any
power granted in this Indenture or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by
law.
Section
4.05
Restoration of Rights on Abandonment of Proceedings
. In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee, then and in every such case the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee and the Securityholders shall continue
as though no such proceedings had been taken.
Section
4.06
Limitations on Suits by Securityholder
. No Holder of any Security of any series shall have any right by virtue or
by availing of any provision of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise
upon or under or with respect to this Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder, unless such Holder previously shall have given to the Trustee written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided, and unless also the Holders of not less than
25% in aggregate Principal amount of the Securities of such series then outstanding shall have made written request upon the Trustee
to institute such action or proceedings in respect of such Event of Default in its own name as trustee hereunder and shall have
offered to the Trustee indemnity satisfactory to the Trustee against the costs, expenses and liabilities to be incurred therein
or thereby and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute
any such action or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant
to Section 4.09; it being understood and intended, and being expressly covenanted by the Holder of every Security with every other
Holder and the Trustee, that no one or more Holders of Securities of any series shall have any right in any manner whatever by
virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other such Holder of
Securities, or to obtain or seek to obtain priority over or preference to any other such Holder or to enforce any right under
this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders of Securities
of the applicable series. For the protection and enforcement of the provisions of this Section, each and every Securityholder
and the Trustee shall be entitled to such relief as can be given either at law or in equity.
Section
4.07
Unconditional Right of Securityholders to Institute Certain Suits
. Notwithstanding any other provision in this Indenture
and any provision of any Security, the right of any Holder of any Security to receive payment of the Principal of or interest
on such Security on or after the respective due dates expressed in such Security, or to institute suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
Section
4.08
Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default
. Except as provided in Section 4.06, no right
or remedy herein conferred upon or reserved to the Trustee or to the Securityholders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
No
delay or omission of the Trustee or of any Securityholder to exercise any right or power accruing upon any Event of Default occurring
and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Event of Default
or an acquiescence therein; and, subject to Section 4.06, every power and remedy given by this Indenture or by law to the Trustee
or to the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by
the Securityholders.
Section
4.09
Control by Securityholders
. The Holders of a majority in aggregate Principal amount of the Securities of each series
affected (with each series voting as a separate class) at the time outstanding shall have the right to direct the time, method,
and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee with respect to the Securities of such series by this Indenture; provided that such direction shall not be otherwise
than in accordance with law and the provisions of this Indenture and provided further that (subject to the provisions of Section
5.01) the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall
determine that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of
directors, the executive committee, or a trust committee of directors or Responsible Officers of the Trustee shall determine that
the action or proceedings so directed would subject the Trustee to personal liability or if the Trustee in good faith shall so
determine that the actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests
of Holders of the Securities of all series so affected not joining in the giving of said direction.
Nothing
in this Indenture shall impair the right of the Trustee to take any action which is not inconsistent with such direction or directions
by Securityholders.
Section
4.10
Waiver of Past Defaults
. Prior to a declaration of the acceleration of the maturity of the Securities of any series
as provided in Section 4.01, the Holders of a majority in aggregate Principal amount of the Securities of such series at the time
Outstanding (each such series voting as a separate class) may on behalf of the Holders of all the Securities of such series waive
an existing default or Event of Default, except a default in the payment of Principal of or interest on any Security as specified
in clauses (a) or (b) of Section 4.01 or in respect of a covenant or provision hereof which cannot be modified or amended without
the consent of each Holder affected as provided in Section 7.02. In the case of any such waiver, the Issuer, the Trustee and the
Holders of the Securities of each series affected shall be restored to their former positions and rights hereunder, respectively.
Upon
any such waiver, such default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured, and not to have occurred for every purpose of this Indenture; but
no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.
Section
4.11
Trustee to Give Notice of Default, But May Withhold in Certain Circumstances
. The Trustee shall give to the Securityholders
of any series, as the names and addresses of such Holders appear on the registry books, notice by mail of all defaults known to
Responsible Officers of the Trustee which have occurred with respect to such series, such notice to be transmitted within 90 days
after the occurrence thereof, unless such defaults shall have been cured before the giving of such notice (the term “default”
or “defaults” for the purposes of this section being hereby defined to mean any event or condition which is, or with
notice or lapse of time or both would become, an Event of Default);
provided
that, except in the case of default in the
payment of the Principal of or interest on any of the Securities of such series, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee, or a trust committee of directors or trustees and/or
Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders
of such series.
Section
4.12
Right of Court to Require Filing of Undertaking to Pay Costs
. All parties to this Indenture agree, and each Holder
of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses,
against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such
party litigant; provided that the provisions of this Section 4.12 shall not apply to (i) any suit instituted by the Trustee, (ii)
any suit instituted by any Securityholder or group of Securityholders of any series holding in the aggregate more than 10% in
aggregate Principal amount of the Securities of such series or (iii) any suit instituted by a Holder pursuant to Section 4.07.
Article
5
CONCERNING THE TRUSTEE
Section
5.01
Duties and Responsibilities of the Trustee
. With respect to the Holders of any series of Securities issued hereunder,
the Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect to such series, undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture. In case an Event of Default with respect to the Securities
of a series has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person’s own affairs.
(a)
Prior to the occurrence of an Event of Default with respect to the Securities of any series and after the curing or waiving of
all such Events of Default with respect to such series which may have occurred:
(i)
the duties and obligations of the Trustee with respect to the Securities of any Series shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against
the Trustee; and
(ii)
in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of any such statements, certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture.
(b)
No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i)
this subsection (b) shall not be construed to limit the effect of subsection (a) of this Section 5.01;
(ii)
the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers
of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and
(iii)
the Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Holders relating to the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture.
None
of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there shall
be reasonable ground for believing that the repayment of such funds or adequate indemnity against such liability is not reasonably
assured to it.
The
provisions of this Section 5.01 are in furtherance of and subject to Sections 315 and 316 of the Trust Indenture Act of 1939.
Whether
or not therein expressly provided, every provision of this Indenture relating to the conduct of, affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this Section 5.01.
Section
5.02
Certain Rights of the Trustee
. In furtherance of and subject to the Trust Indenture Act of 1939, and subject to Section
5.01:
(a)
In the absence of bad faith on its part, the Trustee may conclusively rely and shall be protected in acting or refraining from
acting upon any resolution, Officers’ Certificate or any other certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, coupon, security or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b)
any request, direction, order or demand of the Issuer mentioned herein shall be sufficiently evidenced by an Officers’ Certificate
(unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may
be evidenced to the Trustee by a copy thereof certified by the secretary or an assistant secretary of the Issuer;
(c)
the Trustee may consult with counsel of its selection and any advice or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(d)
the Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall
have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred
by it in connection with such request, order or direction;
(e)
the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture;
(f)
prior to the occurrence of an Event of Default hereunder and after the curing or waiving of all Events of Default, the Trustee
shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond, debenture, note, coupon, security, or other paper
or document unless requested in writing so to do by the Holders of not less than a majority in aggregate Principal amount of the
Securities of all series affected then outstanding; provided that, if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require indemnity
satisfactory to it against such expenses or liabilities as a condition to proceeding, and the reasonable expenses of every such
investigation shall be paid by the Issuer or, if paid by the Trustee or any predecessor trustee, shall be repaid by the Issuer
upon demand;
(g)
the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Trustee shall not be responsible for any misconduct or negligence on the
part of any such agent or attorney appointed with due care by it hereunder;
(h)
the Trustee shall not be liable for any action taken, suffered or omitted in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this Indenture;
(i)
the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee
at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture;
(j)
the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to
be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent,
custodian and other Person employed to act hereunder; and
(k)
the Trustee may request that the Issuer deliver an Officers’ Certificate setting forth the names of individuals and/or titles
of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may
be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in
any such certificate previously delivered and not superseded.
Section
5.03
Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof
. The recitals contained
herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the
Issuer, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture or the Securities. The Trustee shall not be accountable for the use or application by
the Issuer of any of the Securities or of the proceeds thereof.
Section
5.04
Trustee and Agents May Hold Securities; Collections, etc
. The Trustee or any agent of the Issuer or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were
not the Trustee or such agent and may otherwise deal with the Issuer and receive, collect, hold and retain collections from the
Issuer with the same rights it would have if it were not the Trustee or such agent.
Section
5.05
Monies Held by Trustee
. All monies received by the Trustee in trust hereunder need not be segregated from other funds
except to the extent required by mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or the Trustee shall
be under any liability for interest on any monies received by it hereunder.
Section
5.06
Compensation and Indemnification of Trustee and Its Prior Claim
. The Issuer covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation as shall be agreed in writing from time to time by
the Issuer and the Trustee (which shall not be limited by any provision of law in regard to the compensation of a trustee of an
express trust) and the Issuer covenants and agrees to pay or reimburse the Trustee and each predecessor Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any of the provisions
of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all agents and
other persons not regularly in its employ) except to the extent any such expense, disbursement or advance may arise from its negligence
or bad faith. The Issuer also covenants and agrees to indemnify the Trustee and each predecessor Trustee for, and to hold it harmless
against, any loss, liability or expense arising out of or in connection with the acceptance or administration of this Indenture
or the trusts hereunder and the performance of its duties hereunder, including the costs and expenses of defending itself against
or investigating any claim of liability (whether asserted by the Issuer, a Holder or any other Person) in the premises, except
to the extent such loss, liability or expense is due to the negligence or bad faith of the Trustee or such predecessor Trustee.
The obligations of the Issuer under this section to compensate and indemnify the Trustee and each predecessor Trustee and to pay
or reimburse the Trustee and each predecessor Trustee for expenses, disbursements and advances shall constitute additional indebtedness
hereunder and shall survive the satisfaction and discharge of this Indenture or the resignation or removal of the Trustee. Such
additional indebtedness shall be a senior claim and lien to that of the Securities upon all property and funds held or collected
by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Securities, and the Securities
are hereby subordinated to such senior claim. The parties agree that if the Trustee renders services following an Event of Default
under Section 4.01(d) or 4.01(e), compensation for such services is intended to constitute administrative expense under any bankruptcy
law.
Section
5.07
Right of Trustee to Rely on Officers’ Certificate, etc
. Subject to Section 5.01 and 5.02, whenever in the administration
of the trusts of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior
to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers’ Certificate delivered to the Trustee, and such certificate, in the absence of negligence or
bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under
the provisions of this Indenture upon the faith thereof.
Section
5.08
Persons Eligible for Appointment as Trustee
. The Trustee for each series of Securities hereunder shall at all times
be a corporation which is eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act of 1939 and
which has (or which is a Wholly-Owned Subsidiary, directly or indirectly, of a bank holding company which has) a combined capital
and surplus of $50,000,000. If such corporation or holding company publishes reports of condition at least annually, pursuant
to law or to the requirements of a Federal, State or District of Columbia supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation or holding company shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
Section
5.09
Resignation and Removal; Appointment of Successor Trustee
. (a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign with respect to one or more or all series of Securities by giving written notice of resignation to the
Issuer. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees with respect
to the applicable series by written instrument in duplicate, executed by authority of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or trustees. If no successor Trustee
shall have been so appointed with respect to any series and have accepted appointment within 30 days after the mailing of such
notice of resignation, the resigning Trustee may petition, at the expense of the Issuer, any court of competent jurisdiction for
the appointment of a successor Trustee, or any Securityholder who has been a bona fide Holder of a Security or Securities of the
applicable series for at least six months may, subject to the provisions of Section 4.12, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor Trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, appoint a successor Trustee.
(b)
In case at any time any of the following shall occur:
(i)
the Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture Act of 1939 with respect to any
series of Securities after written request therefor by the Issuer or by any Securityholder who has been a bona fide Holder of
a Security or Securities of such series for at least six months;
(ii)
the Trustee shall cease to be eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act of 1939
and shall fail to resign after written request therefor by the Issuer or by any Securityholder; or
(iii)
the Trustee shall become incapable of acting with respect to any series of Securities, or shall be adjudged a bankrupt or insolvent,
or a receiver or liquidator of the Trustee or of its property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such
case, the Issuer may remove the Trustee with respect to the applicable series of Securities and appoint a successor trustee for
such series by written instrument, in duplicate, executed by order of the Board of Directors of the Issuer, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the successor Trustee, or, subject to Section 315(e) of
the Trust Indenture Act of 1939, any Securityholder who has been a bona fide Holder of a Security or Securities of such series
for at least six months may on behalf of himself and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor trustee with respect to such series. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.
(c)
The Holders of a majority in aggregate Principal amount of the Securities of each series at the time outstanding may at any time
remove the Trustee with respect to Securities of such series and appoint a successor Trustee with respect to the Securities of
such series by delivering to the Trustee so removed, to the successor Trustee so appointed and to the Issuer the evidence provided
in Section 6.01 of the action in that regard taken by the Securityholders.
(d)
Any resignation or removal of the Trustee with respect to any series and any appointment of a successor trustee with respect to
such series pursuant to any of the provisions of this Section 5.09 shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 5.10.
Section
5.10
Acceptance of Appointment by Successor
. Any successor Trustee appointed as provided in Section 5.09 shall execute
and deliver to the Issuer and to its predecessor Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee with respect to all or any applicable series shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as if originally named as Trustee for such series hereunder.
On the written request of the Issuer or of the successor Trustee, upon payment of its charges then unpaid, the Trustee ceasing
to act shall, subject to Section 5.06, pay over to the successor Trustee all monies at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor Trustee all such rights, powers, duties and obligations. Upon
request of any such successor Trustee, the Issuer shall execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor Trustee all such rights and powers. Any Trustee ceasing to act shall, nevertheless,
retain a prior claim upon all property or funds held or collected by such Trustee to secure any amounts then due it pursuant to
the provisions of Section 5.06.
If
a successor Trustee is appointed with respect to the Securities of one or more (but not all) series, the Issuer, the predecessor
Trustee and each successor Trustee with respect to the Securities of any applicable series shall execute and deliver an indenture
supplemental hereto which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the predecessor Trustee with respect to the Securities of any series as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor Trustee, and shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees
of the same trust and that each such Trustee shall be Trustee of a trust or trusts under separate indentures.
Upon
acceptance of appointment by any successor Trustee as provided in this Section 5.10, the Issuer shall mail notice thereof by first-class
mail to the Holders of Securities of any series for which such successor Trustee is acting as Trustee at their last addresses
as they shall appear in the Security register. If the acceptance of appointment is substantially contemporaneous with the resignation,
then the notice called for by the preceding sentence may be combined with the notice called for by Section 5.09. If the Issuer
fails to mail such notice within 10 days after acceptance of appointment by the successor Trustee, the successor Trustee shall
cause such notice to be mailed at the expense of the Issuer.
Section
5.11
Merger, Conversion, Consolidation or Succession to Business of Trustee
. Any corporation into which the Trustee may
be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation
to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be eligible under the provisions
of Section 5.08, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
In
case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Securities of
any series shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication
of any predecessor Trustee and deliver such Securities so authenticated; and, in case at that time any of the Securities of any
series shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor Trustee; and in all such cases such certificate shall have the full
force which it is anywhere in the Securities of such series or in this Indenture provided that the certificate of the Trustee
shall have; provided, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate
Securities of any series in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion
or consolidation.
Section
5.12
Reports to the Trustee
. The Trustee shall transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.
If required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within sixty days after each May 15 following the
date of the initial issuance of Securities under this Indenture deliver to Holders a brief report, dated as of such May 15, which
complies with the provisions of such Section 313(a).
A
copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange,
if any, upon which the Securities are listed, with the Commission and with the Issuer. The Issuer will promptly notify the Trustee
when the Securities are listed on any stock exchange and of any delisting thereof.
Article
6
CONCERNING THE SECURITYHOLDERS
Section
6.01
Evidence of Action Taken by Securityholders
. Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by a specified percentage in Principal amount of the Securityholders
of any or all series may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such
specified percentage of Securityholders in person or by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments are delivered to the Trustee. Proof of execution
of any instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject
to Section 5.01 and 5.02) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Article.
Section
6.02
Proof of Execution of Instruments and of Holding of Securities; Record Date
. Subject to Section 5.01 and 5.02, the
execution of any instrument by a Securityholder or his agent or proxy may be proved by the certificate of any notary public or
other officer authorized to take acknowledgment of deeds, that the Person executing such instrument acknowledged to such notary
public or other such officer the execution thereof, or by an affidavit of a witness to such execution sworn to before any such
notary public or other officer. Where such execution is by an officer of a corporation or association or a member of a partnership
on behalf of such corporation, association or partnership, as the case may be, or by any other Person acting in a representative
capacity, such certificate or affidavit shall also constitute sufficient proof of such Person’s authority. The holding of
Securities shall be proved by the Security register or by a certificate of the registrar thereof. The Issuer may set a record
date for purposes of determining the identity of Holders of Securities of any series entitled to vote or consent to any action
referred to in Section 6.01, which record date may be set at any time or from time to time by notice to the Trustee, for any date
or dates (in the case of any adjournment or reconsideration) not more than 60 days nor less than five days prior to the proposed
date of such vote or consent, and thereafter, notwithstanding any other provisions hereof, only Holders of Securities of such
series of record on such record date shall be entitled to so vote or give such consent or revoke such vote or consent.
Section
6.03
Holders to be Treated as Owners
. Prior to due presentment of a Security for registration of transfer, the Issuer,
the Trustee and any agent of the Issuer or the Trustee may deem and treat the person in whose name any Security shall be registered
upon the Security register for such series as the absolute owner of such Security (whether or not such Security shall be overdue
and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or on account
of the Principal of and, subject to the provisions of this Indenture, interest on such Security and for all other purposes, and
neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be affected by any notice to the contrary.
All such payments so made to any such person, or upon his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any such Security.
Section
6.04
Securities Owned by Issuer Deemed Not Outstanding
. In determining whether the Holders of the requisite aggregate Principal
amount of Outstanding Securities of any or all series have concurred in any direction, consent or waiver under this Indenture,
Securities which are owned by the Issuer or any other obligor on the Securities with respect to which such determination is being
made or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the
Issuer or any other obligor on the Securities with respect to which such determination is being made shall be disregarded and
deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver only Securities as to which the Trustee has received
written notice are so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect
to such Securities and that the pledgee is not the Issuer or any other obligor upon the Securities or any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities.
In case of a dispute as to such right, the advice of counsel shall be full protection in respect of any decision made by the Trustee
in accordance with such advice. Upon request of the Trustee, the Issuer shall furnish to the Trustee promptly an Officers’
Certificate listing and identifying all Securities, if any, known by the Issuer to be owned or held by or for the account of any
of the above-described persons; and, subject to Section 5.01 and 5.02, the Trustee shall be entitled to accept such Officers’
Certificate as conclusive evidence of the facts therein set forth and of the fact that all Securities not listed therein are Outstanding
for the purpose of any such determination.
Section
6.05
Right of Revocation of Action Taken
. At any time prior to (but not after) the evidencing to the Trustee, as provided
in Section 6.01, of the taking of any action by the Holders of the percentage in aggregate Principal amount of the Securities
of any or all series, as the case may be, specified in this Indenture in connection with such action, any Holder of a Security
the serial number of which is shown by the evidence to be included among the serial numbers of the Securities the Holders of which
have consented to such action may, by filing written notice at the Corporate Trust Office and upon proof of holding as provided
in this Article, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the Holder
of any Security shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Security and of
any Securities issued in exchange or substitution therefor, irrespective of whether or not any notation in regard thereto is made
upon any such Security. Any action taken by the Holders of the percentage in aggregate Principal amount of the Securities of any
or all series, as the case may be, specified in this Indenture in connection with such action shall be conclusively binding upon
the Issuer, the Trustee and the Holders of all the Securities affected by such action.
Article
7
SUPPLEMENTAL INDENTURES
Section
7.01
Supplemental Indentures Without Consent of Securityholders
. The Issuer, when authorized by a resolution of its Board
of Directors certified to the Trustee, and the Trustee may from time to time and at any time enter into an indenture or indentures
supplemental hereto for one or more of the following purposes:
(a)
to evidence the succession of another corporation to the Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer pursuant to Article 8;
(b)
(i) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein or in any supplemental indenture, (ii) to conform the terms
of Securities to the description thereof in the prospectus and prospectus supplement (or similar offering document) offering such
Securities or (iii) to make such other provisions in regard to matters or questions arising under this Indenture or under any
supplemental indenture as the Board of Directors may deem necessary or desirable and which shall not adversely affect the interests
of the Holders of the Securities in any material respect;
(c)
to establish the form or terms of Securities of any series as permitted by Section 2.01 and 2.03;
(d)
to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Section 5.10;
(e)
to comply with any requirements of the Commission in connection with the qualification of this Indenture under the Trust Indenture
Act of 1939;
(f)
to provide for uncertificated or Unregistered Securities and to make all appropriate changes for such purpose;
(g)
to make any change that would not reasonably be expected to adversely affect the rights of any Holder in any material respect;
(h)
to add to the covenants of the Issuer such new covenants, restrictions, conditions or provisions as its Board of Directors shall
consider to be for the protection of the Holders of Securities, and with respect to which the Trustee has received an Opinion
of Counsel to a similar effect, and to make the occurrence, or the occurrence and continuance, of a default in any such additional
covenants, restrictions, conditions or provisions an Event of Default; provided, that in respect of any such additional covenant,
restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon
such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the right
of the Holders of a majority in aggregate Principal amount of the Securities of such series to waive such an Event of Default;
or
(i)
to make any change so long as no Securities are Outstanding.
The
Trustee is hereby authorized to join with the Issuer in the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage
or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental indenture which
affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
Any
supplemental indenture authorized by the provisions of this section may be executed without the consent of the Holders of any
of the Securities at the time outstanding, notwithstanding any of the provisions of Section 7.02.
Section
7.02
Supplemental Indentures With Consent of Securityholders
. With the consent (evidenced as provided in Article 6) of
the Holders of not less than a majority in aggregate Principal amount of the Securities at the time Outstanding of all series
affected by such supplemental indenture (voting as one class), the Issuer, when authorized by a resolution of its Board of Directors,
and the Trustee may, from time to time and at any time, enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the Securities of each such series; provided, that no such
supplemental indenture shall without the consent of each Holder affected thereby:
(a)
change the stated maturity of the Principal of, or the time of payment of any installment of interest on, such Holder’s
Security;
(b)
reduce the Principal thereof or the rate of interest thereon, or any premium payable with respect thereto;
(c)
change any place of payment where, or the currency in which, any Security or any premium or the interest thereon is payable;
(d)
change the provisions for calculating any redemption or repurchase price, including the definitions relating thereto;
(e)
make any change to Section 4.07 or Section 4.10 (except to include other provisions subject to Section 4.10);
(f)
reduce the percentage in Principal amount of outstanding Securities of the relevant series the consent of whose Holders is required
for any such supplemental indenture, for any waiver of compliance with any provisions of this Indenture or any defaults and their
consequences provided for in this Indenture;
(g)
alter or impair the right to convert any Security at the rate and upon the terms provided in Article 12;
(h)
waive a default in the payment of Principal of or interest on any Security of such Holder (except pursuant to a rescission of
acceleration pursuant to Section 4.01);
(i)
adversely affect the rights of such Holder under any mandatory redemption or repurchase provision or any right of redemption or
repurchase at the option of such Holder;
(j)
modify any of the provisions of this Section 7.02, except to increase any such percentage or to provide that certain other provisions
of this Indenture cannot be modified or waived without the consent of the Holder of each outstanding Security affected thereby;
or
(k)
change or waive any provision that, pursuant to a board resolution or indenture supplemental hereto establishing the terms of
one or more series of Securities, is prohibited to be so changed or waived.
Upon
the written request of the Issuer, accompanied by a copy of a resolution of the Board of Directors certified by the secretary
or an assistant secretary of the Issuer authorizing the execution of any such supplemental indenture, and upon the filing with
the Trustee of evidence of the consent of Securityholders as aforesaid and other documents, if any, required by Section 6.01,
the Trustee shall join with the Issuer in the execution of such supplemental indenture unless such supplemental indenture affects
the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion,
but shall not be obligated to, enter into such supplemental indenture.
It
shall not be necessary for the consent of the Securityholders under this section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.
Promptly
after the execution by the Issuer and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the
Issuer shall mail a notice thereof by first class mail to the Holders of Securities of each series affected thereby at their addresses
as they shall appear on the registry books of the Issuer, setting forth in general terms the substance of such supplemental indenture.
Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity
of any such supplemental indenture.
Section
7.03
Effect of Supplemental Indenture
. Upon the execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations
of rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
Section
7.04
Documents to Be Given to Trustee
. The Trustee, subject to the provisions of Section 5.01 and 5.02, may receive an
Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant
to this Article 7 complies with the applicable provisions of this Indenture.
Section
7.05
Notation on Securities in Respect of Supplemental Indentures
. Securities of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of this Article may bear a notation in form approved
by the Trustee for such series as to any matter provided for by such supplemental indenture or as to any action taken at any such
meeting. If the Issuer or the Trustee shall so determine, new Securities of any series so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture
may be prepared by the Issuer, authenticated by the Trustee and delivered in exchange for the Securities of such series then outstanding.
Article
8
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section
8.01
Issuer May Consolidate, etc., on Certain Terms
. The Issuer covenants that it will not merge or consolidate with any
other Person or sell, convey, transfer, lease or otherwise dispose of all or substantially all of its property and assets to any
Person (other than a consolidation with or merger with or into or a sale, conveyance, transfer, lease or other disposition to
a Wholly-Owned Subsidiary with a positive net worth;
provided
that, in connection with any such merger of the Issuer with
a Wholly-Owned Subsidiary, no consideration (other than common stock) in the surviving person or the Issuer shall be issued or
distributed to the stockholders of the Issuer), unless (xiv) either (x) the Issuer shall be the continuing corporation, or the
successor corporation or (y) the Person formed by such consolidation or into which the Issuer is merged or that acquires by sale
or conveyance substantially all the assets of the Issuer (if other than the Issuer) shall be a corporation or limited liability
company organized and validly existing under the laws of the United States of America or any jurisdiction thereof and shall expressly
assume the due and punctual payment of the Principal of and interest on all the Securities, according to their tenor, and the
due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed or observed
by the Issuer, by supplemental indenture satisfactory to the Trustee, executed and delivered to the Trustee by such Person, (xv)
immediately after giving effect to such transaction, no default or Event of Default shall have occurred and be continuing and
(xvi) the Issuer delivers to the Trustee an Officers’ Certificate and Opinion of Counsel, in each case stating that such
consolidation, merger or transfer and such supplemental indenture complies with this Section 8.01 and that all conditions precedent
provided for herein relating to such transaction have been complied with;
provided
,
however
, that the foregoing
limitations shall not apply if, in the good faith determination of the Board of Directors, whose determination shall be evidenced
by a board resolution certified to the Trustee, the principal purpose of such transaction is to change the state of incorporation
of the Issuer; and
provided further
that any such transaction shall not have as one of its purposes the evasion of the
foregoing limitations.
Section
8.02
Successor Corporation Substituted
. In case of any such consolidation, merger, sale, conveyance, transfer, lease or
other disposition, and following such an assumption by the successor Person, such successor Person shall succeed to and be substituted
for the Issuer, with the same effect as if it had been named herein. Such successor Person may cause to be signed, and may issue
either in its own name or in the name of the Issuer prior to such succession any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Issuer and delivered to the Trustee; and, upon the order of such successor Person
instead of the Issuer and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee, pursuant
to the terms hereof, shall authenticate and shall deliver any Securities which previously shall have been signed and delivered
by the officers of the Issuer to the Trustee for authentication, and any Securities which such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All of the Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms
of this Indenture as though all of such Securities had been issued at the date of the execution hereof.
In
case of any such consolidation, merger, sale, conveyance, transfer, lease or other disposition, such changes in phraseology and
form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate.
Upon
the assumption by the successor Person in the manner described in this Article, the Issuer shall be discharged from all obligations
and covenants under this Indenture and the Securities.
Article
9
DISCHARGE OF INDENTURE
Section
9.01
Defeasance Within One Year of Payment
. Except as otherwise provided in this Section 9.01, the Issuer may terminate
its obligations under the Securities of any series and this Indenture with respect to Securities of such series if:
(a)
all Securities of such series previously authenticated and delivered (other than destroyed, lost or wrongfully taken Securities
of such series that have been replaced or Securities of such series for whose payment money or securities have theretofore been
held in trust and thereafter repaid to the Issuer, as provided in Section 9.05) have been delivered to the Trustee for cancellation
and the Issuer has paid all sums payable by it hereunder; or
(b)
(xviii) (A) the Securities of such series mature within one year or all of them are to be called for redemption within one year
under arrangements satisfactory to the Trustee for giving the notice of redemption, (B) the Issuer irrevocably deposits in trust
with the Trustee, as trust funds solely for the benefit of the Holders of such Securities for that purpose, money or U.S. Government
Obligations or a combination thereof sufficient (unless such funds consist solely of money, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification thereof delivered to the Trustee), without consideration
of any reinvestment and after payment of all Federal, state and local taxes or other charges and assessments in respect thereof
payable by the Trustee, to pay Principal of and interest on the Securities of such series to maturity or redemption, as the case
may be, and to pay all other sums payable by it hereunder and (C) the Issuer delivers to the Trustee an Officers’ Certificate
and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the satisfaction
and discharge of this Indenture with respect to the Securities of such series have been complied with.
With
respect to the foregoing clause (i), only the Issuer’s obligations under Sections 5.06 and 9.05 in respect of the Securities
of such series shall survive. With respect to the foregoing clause (ii), only the Issuer’s obligations in Section 2.03 through
2.11, 3.02, 5.06, 5.09 and 9.05 in respect of the Securities of such series shall survive until such Securities of such series
are no longer outstanding. Thereafter, only the Issuer’s obligations in Section 5.06 and 9.05 in respect of the Securities
of such series shall survive. After any such irrevocable deposit, the Trustee shall acknowledge in writing the discharge of the
Issuer’s obligations under the Securities of such series and this Indenture with respect to the Securities of such series
except for those surviving obligations specified above.
Section
9.02
Defeasance
. Except as provided below, the Issuer will be deemed to have paid and will be discharged from any and all
obligations in respect of the Securities of any series and the provisions of this Indenture will no longer be in effect with respect
to the Securities of such series (and the Trustee, at the expense of the Issuer, shall execute instruments in form and substance
satisfactory to the Issuer and the Trustee acknowledging the same) if the following conditions shall have been satisfied:
(a)
the Issuer has irrevocably deposited in trust with the Trustee as trust funds specifically pledged as security for, and dedicated
solely to, Holders of the Securities of such series, for payment of the Principal of and interest on the Securities of such series,
money or U.S. Government Obligations or a combination thereof sufficient (unless such funds consist solely of money, in the opinion
of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the
Trustee) without consideration of any reinvestment and after payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, to pay and discharge the Principal of and accrued interest on the outstanding
Securities of such series to maturity or earlier redemption (irrevocably provided for under arrangements satisfactory to the Trustee),
as the case may be;
(b)
such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other material
agreement or instrument to which the Issuer is a party or by which it is bound;
(c)
no default or Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date
of such deposit;
(d)
the Issuer shall have delivered to the Trustee (1) either (x) a ruling directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders of the Securities of such series will not recognize income, gain or loss for Federal income
tax purposes as a result of the Issuer’s exercise of its option under this Section 9.02 and will be subject to federal income
tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance
had not occurred or (y) an Opinion of Counsel to the same effect as the ruling described in clause (x) above and based upon a
change in law and (2) an Opinion of Counsel to the effect that the Holders of the Securities of such series have a valid security
interest in the trust funds subject to no prior liens under the UCC; and
(e)
the Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance contemplated by this Section 9.02 of the Securities of such
series have been complied with.
The
Issuer’s obligations in Section 2.03 through 2.11, 3.02, 5.06, 5.09 and 9.05 with respect to the Securities of such series
shall survive until such Securities are no longer outstanding. Thereafter, only the Issuer’s obligations in Section 5.06
and 9.05 shall survive.
Section
9.03
Covenant Defeasance
. The Issuer may omit to comply with any term, provision or condition set forth in Section 3.04,
3.06 or 3.08 (or any other specific covenant relating to the Securities of any series provided for in a Board Resolution or supplemental
indenture pursuant to Section 2.03 which may by its terms be defeased pursuant to this Section 9.03), and such omission shall
be deemed not to be an Event of Default under clause (c) of Section 4.01, with respect to the outstanding Securities of such series
if:
(a)
the Issuer has irrevocably deposited in trust with the Trustee as trust funds solely for the benefit of the Holders of the Securities
of such series, for payment of the Principal of and interest, if any, on the Securities of such series, money or U.S. Government
Obligations or a combination thereof in an amount sufficient (unless such funds consist solely of money, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee) without
consideration of any reinvestment and after payment of all Federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, to pay and discharge the Principal of and interest on the outstanding Securities of such
series to maturity or earlier redemption (irrevocably provided for under arrangements satisfactory to the Trustee), as the case
may be;
(b)
such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other material
agreement or instrument to which the Issuer is a party or by which it is bound;
(c)
no default or Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date
of such deposit;
(d)
the Issuer has delivered to the Trustee an Opinion of Counsel to the effect that (A) the Holders of the Securities of such series
have a valid security interest in the trust funds subject to no prior liens under the UCC and (B) such Holders will not recognize
income, gain or loss for Federal income tax purposes as a result of such deposit and covenant defeasance and will be subject to
federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit
and defeasance had not occurred; and
(e)
the Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the covenant defeasance contemplated by this Section 9.03 of the Securities
of such series have been complied with.
Section
9.04
Application of Trust Money
. Subject to Section 9.05, the Trustee or Paying Agent shall hold in trust money or U.S.
Government Obligations deposited with it pursuant to 9.01, 9.02, or 9.03, as the case may be, in respect of the Securities of
any series and shall apply the deposited money and the proceeds from deposited U.S. Government Obligations in accordance with
the Securities of such series and this Indenture to the payment of Principal of and interest on the Securities of such series;
provided that such money need not be segregated from other funds except to the extent required by law. The Issuer shall pay and
indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited
pursuant to 9.01, 9.02, or 9.03, as the case may be, or the Principal and interest received in respect thereof, other than any
such tax, fee or other charge that by law is for the account of the Holders.
Section
9.05
Repayment to Issuer
. Subject to Section 5.06, 9.01, the Trustee and the Paying Agent shall promptly pay to the Issuer
upon request set forth in an Officers’ Certificate any money held by them at any time and not required to make payments
hereunder and thereupon shall be relieved from all liability with respect to such money. Subject to applicable escheat or abandoned
property laws, the Trustee and the Paying Agent shall pay to the Issuer upon written request any money held by them and required
to make payments hereunder under this Indenture that remains unclaimed for two years;
provided
that the Trustee or such
Paying Agent before being required to make any payment shall cause to be published at the expense of the Issuer once in an Authorized
Newspaper or mail to each Holder entitled to such money at such Holder’s address (as set forth in the register) notice that
such money remains unclaimed and that after a date specified therein (which shall be at least 30 days from the date of such publication
or mailing) any unclaimed balance of such money then remaining will be repaid to the Issuer. After payment to the Issuer, Holders
entitled to such money must look to the Issuer for payment as general creditors unless an abandoned property law designates another
Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease.
Article
10
MISCELLANEOUS PROVISIONS
Section
10.01
Incorporators, Stockholders, Officers and Directors Exempt from Individual Liability
. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture or in any Security, or because of any indebtedness evidenced thereby,
shall be had against any incorporator, as such, or against any past, present or future stockholder, officer, director or employee,
as such, of the Issuer or of any successor Person thereof, either directly or through the Issuer or any successor Person thereof,
under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities by the Holders
thereof and as part of the consideration for the issue of the Securities.
Section
10.02
Provisions of Indenture for the Sole Benefit of Parties and Securityholders
. Nothing in this Indenture or in the
Securities, expressed or implied, shall give or be construed to give to any person, firm or corporation, other than the parties
hereto and their successors and the Holders of the Securities, any legal or equitable right, remedy or claim under this Indenture
or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties
hereto and their successors and of the Holders of the Securities.
Section
10.03
Successors and Assigns of Issuer Bound by Indenture
. All the covenants, stipulations, promises and agreements contained
in this Indenture by or on behalf of the Issuer shall bind its successors and assigns, whether so expressed or not.
Section
10.04
Notices and Demands on Issuer, Trustee and Securityholders
. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the Holders of Securities to or on the Issuer may be given
or served by being deposited postage prepaid, first-class mail (except as otherwise specifically provided herein) addressed (until
another address of the Issuer is filed by the Issuer with the Trustee) to Provention Bio, Inc.at P.O. Box 666, Oldwick, New Jersey
08858, Attention: Chief Financial Officer. Any notice, direction, request or demand by the Issuer or any Securityholder to or
upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made at the Corporate
Trust Office.
Where
this Indenture provides for notice to Holders, such notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder entitled thereto, at such Holder’s last address as
it appears in the Security register. In any case where notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other
Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the person entitled to
receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice
by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
In
case, by reason of the suspension of or irregularities in regular mail service, it shall be impracticable to mail notice to the
Issuer and Securityholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner
of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice.
Section
10.05
Officers’ Certificates and Opinions of Counsel; Statements to be Contained Therein
. Upon any application or
demand by the Issuer to the Trustee to take any action under any of the provisions of this Indenture, the Issuer shall furnish
to the Trustee an Officers’ Certificate stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions
precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each
certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition
or covenant provided for in this Indenture shall include (a) a statement that the person making such certificate or opinion has
read such covenant or condition, (b) a brief statement as to the nature and scope of the examination or investigation upon which
the statements or opinions contained in such certificate or opinion are based, (c) a statement that, in the opinion of such person,
he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with and (d) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
Any
certificate, statement or opinion of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of or representations by counsel, unless such officer knows that the certificate or opinion or representations with
respect to the matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise
of reasonable care should know that the same are erroneous. Any certificate, statement or opinion of counsel may be based, insofar
as it relates to factual matters, information with respect to which is in the possession of the Issuer, upon the certificate,
statement or opinion of or representations by an officer or officers of the Issuer, unless such counsel knows that the certificate,
statement or opinion or representations with respect to the matters upon which his certificate, statement or opinion may be based
as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous.
Any
certificate, statement or opinion of an officer of the Issuer or of counsel may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant or firm of accountants in the employ of the Issuer,
unless such officer or counsel, as the case may be, knows that the certificate or opinion or representations with respect to the
accounting matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise
of reasonable care should know that the same are erroneous.
Any
certificate or opinion of any independent firm of public accountants filed with the Trustee shall contain a statement that such
firm is independent.
Section
10.06
Payments Due on Saturdays, Sundays and Holidays
. If the date of maturity of interest on or Principal of the Securities
of any series or the date fixed for redemption or repayment of any such Security shall not be a Business Day, then payment of
interest or Principal need not be made on such date, but may be made on the next succeeding Business Day with the same force and
effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after
such date.
Section
10.07
Conflict of Any Provision of Indenture with Trust Indenture Act of 1939
. If and to the extent that any provision
of this Indenture limits, qualifies or conflicts with another provision incorporated in this Indenture by operation of Sections
310 to 317, inclusive, of the Trust Indenture Act of 1939, such incorporated provision shall control.
Section
10.08
New York Law to Govern
. This Indenture and each Security shall be deemed to be a contract under the laws of the State
of New York, and for all purposes shall be construed in accordance with the laws of such State.
Section
10.09
Counterparts
. This Indenture may be executed in any number of counterparts, each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
Section
10.10
Effect of Headings
. The Article and Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Article
11
REDEMPTION OF SECURITIES
Section
11.01
Applicability of Article
. The provisions of this Article shall be applicable to the Securities of any series which
are redeemable before their maturity except as otherwise specified as contemplated by Section 2.03 for Securities of such series.
Section
11.02
Notice of Redemption; Partial Redemptions
. Notice of redemption to the Holders of Securities of any series to be
redeemed as a whole or in part at the option of the Issuer shall be given by mailing notice of such redemption by first class
mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to such Holders of Securities
of such series at their last addresses as they shall appear upon the registry books. Any notice which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice. Failure
to give notice by mail, or any defect in the notice to the Holder of any Security of a series designated for redemption as a whole
or in part shall not affect the validity of the proceedings for the redemption of any other Security of such series.
The
notice of redemption to each such Holder shall specify the CUSIP numbers of such Securities to be redeemed, the Principal amount
of each Security of such series held by such Holder to be redeemed, the date fixed for redemption, the redemption price, the place
or places of payment, that payment will be made upon presentation and surrender of such Securities, that interest accrued to the
date fixed for redemption will be paid as specified in such notice and that on and after said date interest thereon or on the
portions thereof to be redeemed will cease to accrue. In case any Security of a series is to be redeemed in part only the notice
of redemption shall state the portion of the Principal amount thereof to be redeemed, the method the Trustee shall use to determine
such Securities to be redeemed as specified in the last paragraph of this Section 11.02, if applicable, and shall state that on
and after the date fixed for redemption, upon surrender of such Security, a new Security or Securities of such series in Principal
amount equal to the unredeemed portion thereof will be issued.
The
notice of redemption of Securities of any series to be redeemed at the option of the Issuer shall be given by the Issuer or, at
the Issuer’s written request, by the Trustee in the name and at the expense of the Issuer.
By
11:00 a.m. (New York City time) on the redemption date specified in the notice of redemption given as provided in this Section,
the Issuer will deposit with the Trustee or with one or more paying agents (or, if the Issuer is acting as its own paying agent,
set aside, segregate and hold in trust as provided in Section 3.03) an amount of money sufficient to redeem on the redemption
date all the Securities of such series so called for redemption at the appropriate redemption price, together with accrued interest
to the date fixed for redemption. If less than all the outstanding Securities of a series are to be redeemed, the Issuer will
deliver to the Trustee at least 70 days (unless a shorter period shall be satisfactory to the Trustee) prior to the date fixed
for redemption an Officers’ Certificate stating the aggregate Principal amount of Securities to be redeemed.
In
the case of the redemption of all of the Securities of a series outstanding, the Issuer shall notify the Trustee in writing of
the redemption date 45 days (unless a shorter period shall be satisfactory to the Trustee) prior to the redemption date.
If
less than all the Securities of a series are to be redeemed, the Trustee shall select, pro rata or by lot or in such manner as
it shall deem appropriate and fair, Securities of such series to be redeemed in whole or in part. Securities of a series may be
redeemed in part in multiples equal to the minimum authorized denomination for Securities of such series or any multiple thereof.
The Trustee shall promptly notify the Issuer in writing of the Securities of such series selected for redemption and, in the case
of any Securities of such series selected for partial redemption, the Principal amount thereof to be redeemed. For all purposes
of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities of any series
shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the Principal amount of such
Security which has been or is to be redeemed.
Section
11.03
Payment of Securities Called for Redemption
. If notice of redemption has been given as above provided, the Securities
or portions of Securities specified in such notice shall become due and payable on the date and at the place stated in such notice
at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after said date
(unless the Issuer shall default in the payment of such Securities at the redemption price, together with interest accrued to
said date) interest on the Securities or portions of Securities so called for redemption shall cease to accrue and, except as
provided in Section 5.05 and 9.04, such Securities shall cease from and after the date fixed for redemption to be entitled to
any benefit or security under this Indenture, and the Holders thereof shall have no right in respect of such Securities except
the right to receive the redemption price thereof and unpaid interest to the date fixed for redemption. On presentation and surrender
of such Securities at a place of payment specified in said notice, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together with interest accrued thereon to the date fixed for
redemption; provided that any semiannual payment of interest becoming due on the date fixed for redemption shall be payable to
the Holders of such Securities registered as such on the relevant record date subject to the terms and provisions of Section 2.07
hereof.
If
any Security called for redemption shall not be so paid upon surrender thereof for redemption, the Principal shall, until paid
or duly provided for, bear interest from the date fixed for redemption at the rate of interest or Yield to Maturity (in the case
of an Original Issue Discount Security) borne by the Security.
Upon
presentation of any Security redeemed in part only, the Issuer shall execute and the Trustee shall authenticate and deliver to
or on the order of the Holder thereof, at the expense of the Issuer, a new Security or Securities of such series, of authorized
denominations, in Principal amount equal to the unredeemed portion of the Security so presented, pursuant to Section 2.04, 2.05
and 2.06.
Section
11.04
Exclusion of Certain Securities from Eligibility for Selection for Redemption
. Securities shall be excluded from
eligibility for selection for redemption if they are identified by registration and certificate number in a written statement
signed by an authorized officer of the Issuer and delivered to the Trustee at least 40 days prior to the last date on which notice
of redemption may be given as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer
or (b) an entity specifically identified in such written statement directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuer.
Section
11.05
Conversion Arrangement On Call For Redemption
. In connection with any redemption of Securities, the Issuer shall
deposit the amount due in connection with such redemption as required by Section 11.02 or it may arrange for the purchase and
conversion of any Securities called for redemption by an agreement with one or more investment bankers or other purchasers to
purchase such Securities and to make the deposit required of it by Section 11.02 on its behalf by paying to the Trustee or the
Paying Agent in trust for the Securityholders, on or before 10:00 a.m. New York time on the redemption date, an amount no less
than the redemption price, together with interest, if any, accrued to the redemption date of such Securities, in immediately available
funds. Notwithstanding anytime to the contrary contained in this Article 11, the obligation of the Issuer to pay the redemption
price of such Securities, including all accrued interest, if any, shall be deemed to be satisfied and discharged to the extent
such amount is so paid by such purchasers. If such an agreement is entered into, any Securities not duly surrendered for conversion
by the Holders thereof may, at the option of the Issuer, be deemed, to the fullest extent permitted by law, acquired by such purchasers
from such Holders and (notwithstanding anything to the contrary contained in Article 12) surrendered by such purchasers for conversion,
all as of immediately prior to the close of business on the last day on which Securities of such series called for redemption
may be converted in accordance with this Indenture and the terms of such Securities, subject to payment of the above amount aforesaid.
The Trustee or the Paying Agent shall hold and pay to the Securityholders whose Securities are selected for redemption any such
amount paid to it in the same manner as it would monies deposited with it by the Issuer for the redemption of Securities. Without
the Trustee’s and the Paying Agent’s prior written consent, no arrangement between the Issuer and such purchasers
for the purchase and conversion of any Securities shall increase or otherwise affect any of the powers, duties, responsibilities
or obligations of the Trustee as set forth in this Indenture, and the Issuer agrees to indemnify the Trustee from, and hold it
harmless against, any loss, liability or expense arising out of or in connection with any such arrangement for the purchase and
conversion of any Securities between the Issuer and such purchasers, including the costs and expenses incurred by the Trustee
and the Paying Agent in the defense of any claim or liability arising out of or in connection with the exercise or performance
of any of its powers, duties, responsibilities or obligations under this Indenture.
Article
12
CONVERSION OF SECURITIES
Section
12.01
Applicability of Article
. Securities of any series which are convertible into Capital Stock at the option of the
Securityholder shall be convertible in accordance with their terms and (unless otherwise specified as contemplated by Section
2.03 for Securities of any series) in accordance with this Article. Each reference in this Article 12 to “a Security”
or “the Securities” refers to the Securities of the particular series that is convertible into Capital Stock. Each
reference in this Article to “Capital Stock” into which Securities of any series are convertible refers to the class
of Capital Stock into which the Securities of such series are convertible in accordance with their terms (as specified as contemplated
by Section 2.03). If more than one series of Securities with conversion privileges are outstanding at any time, the provisions
of this Article 12 shall be applied separately to each such series.
Section
12.02
Right of Securityholders to Convert Securities
. Subject to and upon compliance with the terms of the Securities and
the provisions of Section 11.05 and this Article 12, at the option of the Holder thereof, any Security of any series of any authorized
denomination, or any portion of the Principal amount thereof which is $1,000 or any integral multiple of $1,000, may, at any time
during the period specified in the Securities of such series, or in case such Security or portion thereof shall have been called
for redemption, then in respect of such Security or portion thereof until and including, but not after (unless the Issuer shall
default in payment due upon the redemption thereof) the close of business on the Business Day prior to the date fixed for redemption
except that in the case of redemption at the option of the Securityholder, if specified in the terms of such Securities, such
right shall terminate upon receipt of written notice of the exercise of such option, be converted into duly authorized, validly
issued, fully paid and nonassessable shares of Capital Stock, as specified in such Security, at the conversion rate for each $1,000
Principal amount of Securities (such initial conversion rate reflecting an initial conversion price specified in such Security)
in effect on the conversion date, or, in case an adjustment in the conversion rate has taken place pursuant to the provisions
of Section 12.05, then at the applicable conversion rate as so adjusted, upon surrender of the Security or Securities, the Principal
amount of which is so to be converted, to the Issuer at any time during usual business hours at the office or agency to be maintained
by it in accordance with the provisions of Section 3.02, accompanied by a written notice of election to convert as provided in
Section 12.03 and, if so required by the Issuer and the Trustee, by a written instrument or instruments of transfer in form satisfactory
to the Issuer and the Trustee duly executed by the registered Holder or his attorney duly authorized in writing. All Securities
surrendered for conversion shall, if surrendered to the Issuer or any conversion agent, be delivered to the Trustee for cancellation
and cancelled by it, or shall, if surrendered to the Trustee, be cancelled by it, as provided in Section 2.10.
The
initial conversion price or conversion rate in respect of a series of Securities shall be as specified in the Securities of such
series. The conversion price or conversion rate will be subject to adjustment on the terms set forth in Section 12.05 or such
other or different terms, if any, as may be specified by Section 2.03 for Securities of such series. Provisions of this Indenture
that apply to conversion of all of a Security also apply to conversion of a portion of it.
Section
12.03
Issuance of Shares of Capital Stock on Conversion
. As promptly as practicable after the surrender, as herein provided,
of any Security or Securities for conversion, the Issuer shall deliver or cause to be delivered at its said office or agency to
or upon the written order of the Holder of the Security or Securities so surrendered a certificate or certificates representing
the number of duly authorized, validly issued, fully paid and nonassessable shares of Capital Stock into which such Security or
Securities may be converted in accordance with the terms thereof and the provisions of this Article 12. Prior to delivery of such
certificate or certificates, the Issuer shall require a written notice at its said office or agency from the Holder of the Security
or Securities so surrendered stating that the Holder irrevocably elects to convert such Security or Securities, or, if less than
the entire Principal amount thereof is to be converted, stating the portion thereof to be converted. Such notice shall also state
the name or names (with address and social security or other taxpayer identification number) in which said certificate or certificates
are to be issued. Such conversion shall be deemed to have been made at the time that such Security or Securities shall have been
surrendered for conversion and such notice shall have been received by the Issuer or the Trustee, the rights of the Holder of
such Security or Securities as a Securityholder shall cease at such time, the person or persons entitled to receive the shares
of Capital Stock upon conversion of such Security or Securities shall be treated for all purposes as having become the record
holder or holders of such shares of Capital Stock at such time and such conversion shall be at the conversion rate in effect at
such time. In the case of any Security of any series which is converted in part only, upon such conversion, the Issuer shall execute
and the Trustee shall authenticate and deliver to the Holder thereof, as requested by such Holder, a new Security or Securities
of such series of authorized denominations in aggregate Principal amount equal to the unconverted portion of such Security.
If
the last day on which a Security may be converted is not a Business Day in a place where a conversion agent is located, the Security
may be surrendered to that conversion agent on the next succeeding day that is a Business Day.
The
Issuer will not be required to deliver certificates for shares of Capital Stock upon conversion while its stock transfer books
are closed for a meeting of shareholders or for the payment of dividends or for any other purpose, but certificates for shares
of Capital Stock shall be delivered as soon as the stock transfer books shall again be opened.
Section
12.04
No Payment or Adjustment for Interest or Dividends
. Unless otherwise specified as contemplated by Section 2.03 for
Securities of such series, Securities surrendered for conversion during the period from the close of business on any regular record
date (or special record date for payment of defaulted interest) next preceding any interest payment date to the opening of business
on such interest payment date (except Securities called for redemption on a redemption date within such period) when surrendered
for conversion must be accompanied by payment of an amount equal to the interest thereon which the registered Holder is to receive
on such interest payment date. Payment of interest shall be made, as of such interest payment date or such date, as the case may
be, to the Holder of record of the Securities as of such regular, or special record date, as applicable. Except where Securities
surrendered for conversion must be accompanied by payment as described above, no interest on converted Securities will be payable
by the Issuer on any interest payment date subsequent to the date of conversion. No other payment or adjustment for interest or
dividends is to be made upon conversion. Notwithstanding the foregoing, upon conversion of any Original Issue Discount Security,
the fixed number of shares of Capital Stock into which such Security is convertible delivered by the Issuer to the Holder thereof
shall be applied, first, to pay the accrued original issue discount attributable to the period from the date of issuance to the
date of conversion of such Security, and, second, to pay the balance of the Principal amount of such Security.
Section
12.05
Adjustment of Conversion Rate
. Unless otherwise specified as contemplated by Section 2.03 for Securities of such
series, the conversion rate for Securities in effect at any time shall be subject to adjustment as follows:
(a)
In case the Issuer shall (i) declare a dividend or make a distribution on the class of Capital Stock into which Securities of
such series are convertible in shares of its Capital Stock, (ii) subdivide the outstanding shares of the class of Capital Stock
into which Securities of such series are convertible into a greater number of shares, (iii) combine the outstanding shares of
the class of Capital Stock into which Securities of such series are convertible into a smaller number of shares or (iv) issue
by reclassification of the shares of the class of Capital Stock into which Securities of such series are convertible (including
any such reclassification in connection with a consolidation or merger in which the Issuer is the continuing corporation) any
shares, the conversion rate for the Securities of such series in effect at the time of the record subdivision, combination or
reclassification, shall be proportionately adjusted so that the Holder of any Security of such series surrendered for conversion
after such time shall be entitled to receive the number and kind of shares which he would have owned or have been entitled to
receive had such Security been converted immediately prior to such time. Similar adjustments shall be made whenever any event
listed above shall occur.
(b)
In case the Issuer shall fix a record date for the issuance of rights or warrants to all holders of the class of Capital Stock
into which Securities of such series are convertible entitling them (for a period expiring within 45 days after such record date)
to subscribe for or purchase shares of such class of Capital Stock (or securities convertible into shares of such class of Capital
Stock) at a price per share (or, in the case of a right or warrant to purchase securities convertible into such class of Capital
Stock, having a conversion price per share, after adding thereto the exercise price, computed on the basis of the maximum number
of shares of such class of Capital Stock issuable upon conversion of such convertible securities, per share of such class of Capital
Stock, so issuable) less than the current market price per share of such class of Capital Stock (as defined in subsection (e)
below) on the date on which such issuance was declared or otherwise announced by the Issuer (the “
Determination Date
”),
the number of shares of such class of Capital Stock into which each $1,000 Principal amount of Securities shall be convertible
after such record date shall be determined by multiplying the number of shares of such class of Capital Stock into which such
Principal amount of Securities was convertible immediately prior to such record date by a fraction, of which the numerator shall
be the number of shares of such class of Capital Stock outstanding on the Determination Date plus the number of additional shares
of such class of Capital Stock offered for subscription or purchase (or in the case of a right or warrant to purchase securities
convertible into such class of Capital Stock, the aggregate number of additional shares of such class of Capital Stock into which
the convertible securities so offered are initially convertible), and of which the denominator shall be the number of shares of
such class of Capital Stock outstanding on the Determination Date plus the number of shares of such class of Capital Stock obtained
by dividing the aggregate offering price of the total number of shares so offered (or, in the case of a right or warrant to purchase
securities convertible into such class of Capital Stock, the aggregate initial conversion price of the convertible securities
so offered, after adding thereto the aggregate exercise price of such rights or warrants computed on the basis of the maximum
number of shares of such class of Capital Stock issuable upon conversion of such convertible securities) by such current market
price. Shares of such class of Capital Stock of the Issuer owned by or held for the account of the Issuer shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is
fixed; and to the extent that shares of such class of Capital Stock are not delivered (or securities convertible into shares of
such class of Capital Stock are not delivered) after the expiration of such rights or warrants (or, in the case of rights or warrants
to purchase securities convertible into such class of Capital Stock once exercised, the expiration of the conversion right of
such securities) the conversion rate shall be readjusted to the conversion rate which would then be in effect had the adjustments
made upon the issuance of such rights or warrants (or securities convertible into shares) been made upon the basis of delivery
of only the number of shares actually delivered. In the event that such rights or warrants are not so issued, the conversion rate
shall again be adjusted to be the conversion rate which would then be in effect if such record date had not been fixed.
(c)
In case the Issuer shall fix a record date for the making of a distribution to all holders of the class of Capital Stock into
which Securities of such series are convertible (including any such distribution made in connection with a consolidation or merger
in which the Issuer is the continuing corporation) of evidences of its indebtedness or assets (excluding any cash dividends paid
from retained earnings and dividends payable in Capital Stock for which adjustment is made pursuant to subsection (a) above or
(d) below) or subscription rights or warrants (excluding subscription rights or warrants to purchase the class of Capital Stock
into which Securities of such series are convertible), the number of shares of such class of Capital Stock into which each $1,000
Principal amount of Securities of such series shall be convertible after such record date shall be determined by multiplying the
number of shares of such class of Capital Stock into which such Principal amount of Securities was convertible immediately prior
to such record date by a fraction, of which the numerator shall be the fair market value of the assets of the Issuer, after deducting
therefrom all liabilities of the Issuer and all preferences (including accrued but unpaid dividends) in respect of classes of
Capital Stock having a preference with respect to the assets of the Issuer over such class of Capital Stock (all as determined
by the Board of Directors, whose determination shall be conclusive, and described in a certificate signed by chairman of the Issuer’s
Board of Directors, its president, any vice president, its treasurer, any assistant treasurer, its secretary or any assistant
secretary, filed with the Trustee and each conversion agent) on such record date, and of which the denominator shall be such fair
market value after deducting therefrom such liabilities and preferences, less the fair market value (as determined by the Board
of Directors, whose determination shall be conclusive, and described in a statement filed with the Trustee and each conversion
agent) of the assets or evidences of indebtedness, so distributed or of such subscription rights or warrants applicable, so distributed.
Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such distribution is not
so made, the conversion rate shall again be adjusted to the conversion rate which would then be in effect if such record date
had not been fixed.
(d)
In case the Issuer shall, by dividend or otherwise, distribute to all holders of its Capital Stock cash (excluding any dividend
or distribution in connection with the liquidation, dissolution or winding up of the Issuer, whether voluntary or involuntary),
then, in such case, unless the Issuer elects to reserve such cash for distribution to the Holders of the Securities upon the conversion
of the Securities so that any such Holder converting Securities will receive upon such conversion, in addition to the shares of
Capital Stock to which such Holder is entitled, the amount of cash which such Holder would have received if such Holder had, immediately
prior to the record date for such distribution of cash, converted its Securities into Capital Stock, the conversion rate shall
be adjusted so that the same shall equal the rate determined by multiplying the conversion rate in effect immediately prior to
the record date by a fraction of which the denominator shall be the current market price of the Capital Stock (determined as provided
in Section 12.05(e) on the record date less the amount of cash so distributed (and not excluded as provided above) applicable
to one share of Capital Stock and the numerator shall be such current market price of the Capital Stock (determined as provided
in Section 12.05(e)), such adjustment to be effective immediately prior to the opening of business on the day following the record
date; provided, however, that in the event the portion of the cash so distributed applicable to one share of Capital Stock is
equal to or greater than the current market price of the Capital Stock (determined as provided in Section 12.05(e)) on the record
date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Securityholder shall have the right to
receive upon conversion the amount of cash such Holder would have received had such Holder converted each Security on the record
date. If such dividend or distribution is not so paid or made, the conversion rate shall again be adjusted to be the conversion
rate which would then be in effect if such dividend or distribution had not been declared.
(e)
For the purpose of any computation under subsections (b) and (d) above and Section 12.06, the current market price per share of
the Capital Stock on any date as of which such price is to be computed shall mean the average of the Closing Prices for the 30
consecutive Business Days commencing 45 Business Days before such date.
(f)
No adjustment in the conversion rate shall be required unless such adjustment would require a cumulative increase or decrease
of at least 1% in such rate;
provided
,
however
, that any adjustments which by reason of this subsection (f) are
not required to be made shall be carried forward and taken into account in any subsequent adjustment; and
provided further
,
that adjustments shall be required and made in accordance with the provisions of this Article 12 (other than this subsection (f))
not later than such time as may be required in order to preserve the tax-free nature of a States income tax purposes to the Holders
of Securities or the class of Capital Stock into which such Securities are convertible. All calculations under this Article 12
shall be made to the nearest cent or to the nearest one-thousandth of a share, as the case may be. Anything in this Section 12.05
to the contrary notwithstanding, the Issuer shall be entitled to make such adjustments in the conversion rate, in addition to
those required by this Section 12.05, as it in its discretion shall determine to be advisable in order that any stock dividend,
subdivision of shares, distribution of rights to purchase stock or securities, or distribution of securities convertible into
or exchangeable for stock hereafter made by the Issuer to its shareholders shall not be taxable for United States income tax purposes.
(g)
Whenever the conversion rate is adjusted, as herein provided, the Issuer shall promptly file with the Trustee and with the office
or agency maintained by the Issuer for the conversion of Securities of such series pursuant to Section 3.02, a certificate of
a firm of independent public accountants of recognized national standing selected by the Board of Directors (who may be the regular
accountants employed by the Issuer) setting forth the conversion rate after such adjustment and setting forth a brief statement
of the facts requiring such adjustment and a computation thereof. Such certificate shall be conclusive evidence of the correctness
of such adjustment. Neither the Trustee nor any conversion agent shall be under any duty or responsibility with respect to any
such certificate or any facts or computations set forth therein, except to exhibit said certificate from time to time to any Securityholder
of such series desiring to inspect the same. The Issuer shall promptly cause a notice setting forth the adjusted conversion rate
to be mailed to the Holders of Securities of such series, as their names and addresses appear upon the register of the Issuer.
(h)
In the event that at any time, as a result of shares of any other class of Capital Stock becoming issuable in exchange or substitution
for or in lieu of shares of the class of Capital Stock into which such Securities are convertible or as a result of an adjustment
made pursuant to subsection (a) above, the Holder of any Security of such series thereafter surrendered for conversion shall become
entitled to receive any shares of the Issuer other than shares of the class of Capital Stock into which the Issuer of such series
are convertible, thereafter the number of such other shares so receivable upon conversion of any Security shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the
class of Capital Stock into which the Securities of such series are convertible contained in subsections (a) to (f), inclusive,
above, and the provisions of this Article 12 with respect to the class of Capital Stock into which the Securities of such series
are convertible shall apply on like terms to any such other shares.
(i)
The conversion rate with respect to any Original Issue Discount Security, the terms of which provide for convertibility, shall
not be adjusted during the term of such Original Issue Discount Security for accrued original issue discount.
(j)
In the event that the Securities of any series are convertible into more than one class of Capital Stock, the provisions of this
Section 12.05 shall apply separately to events affecting each such class.
Section
12.06
No Fractional Shares to Be Issued
. No fractional shares of Capital Stock shall be issued upon conversions of Securities.
If more than one Security of any series shall be surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate Principal amount of the
Securities of such series (or specified portions thereof to the extent permitted hereby) so surrendered. Instead of a fraction
of a share of Capital Stock which would otherwise be issuable upon conversion of any Security or Securities (or specified portions
thereof), the Issuer shall pay a cash adjustment in respect of such fraction of a share in an amount equal to the same fractional
interest of the current market price (as defined in Section 12.05) per share of Capital Stock on the Business Day next preceding
the day of conversion.
Section
12.07
Preservation of Conversion Rights Upon Consolidation, Merger, Sale or Conveyance
. In case of any consolidation of
the Issuer with, or merger of the Issuer into, any other corporation (other than a consolidation or merger in which the Issuer
is the continuing corporation), or in the case of any sale or transfer of all or substantially all of the assets of the Issuer,
the corporation formed by such consolidation or the corporation into which the Issuer shall have been merged or the corporation
which shall have acquired such assets, as the case may be, shall execute and deliver to the Trustee, a supplemental indenture,
subject to the provisions of Article 7 and 8 as they relate to supplemental indentures, providing that the Holder of each Security
then Outstanding of a series which was convertible into Capital Stock shall have the right thereafter to convert such Security
into the kind and amount of shares of stock and other securities and property, including cash, receivable upon such consolidation,
merger, sale or transfer by a holder of the number of shares of Capital Stock of the Issuer into which such Securities might have
been converted immediately prior to such consolidation, merger, sale or transfer. Such supplemental indenture shall conform to
the provisions of the Trust Indenture Act of 1939 as then in effect and shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article 12. Neither the Trustee nor any conversion agent
shall be under any responsibility to determine the correctness of any provision contained in any such supplemental indenture relating
either to the kind or amount of shares of stock or other securities or property receivable by Securityholders upon the conversion
of their Securities after any such consolidation, merger, sale or transfer, or to any adjustment to be made with respect there
to and, subject to the provisions of Article 5, may accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, an Opinion of Counsel with respect thereto. If in the case of any such consolidation, merger,
sale or transfer, the stock or other securities and property receivable by a Holder of the Securities includes stock or other
securities and property of a corporation other than the successor or purchasing corporation, then such supplemental indenture
shall also be executed by such other corporation and shall contain such additional provisions to protect the interests of the
Holders of the Securities as the Board of Directors shall reasonably consider necessary. The above provisions of this Section
12.07 shall similarly apply to successive consolidations, mergers, sales or transfers.
Section
12.08
Notice to Security Holders of a Series Prior to Taking Certain Types of Action
. With respect to the Securities of
any series, in case:
(a)
the Issuer shall authorize the issuance to all holders of the class of Capital Stock into which Securities of such series are
convertible of rights or warrants to subscribe for or purchase shares of its Capital Stock or of any other right;
(b)
the Issuer shall authorize the distribution to all holders of the class of Capital Stock into which Securities of such series
are convertible of evidences of its indebtedness or assets (except for the exclusions with respect to certain dividends set forth
in Section 12.05(c));
(c)
of any subdivision, combination or reclassification of the class of Capital Stock into which Securities of such series are convertible
or of any consolidation or merger to which the Issuer is a party and for which approval by the shareholders of the Issuer is required,
or of the sale or transfer of all or substantially all of the assets of the Issuer; or
(d)
of the voluntary or involuntary dissolution, liquidation or winding up of the Issuer;
then
the Issuer shall cause to be filed with the Trustee and at the office or agency maintained for the purpose of conversion of Securities
of such series pursuant to Section 3.02, and shall cause to be mailed to the Holders of Securities of such series, at their last
addresses as they shall appear upon the register of the Issuer, at least 10 days prior to the applicable record date hereinafter
specified, a notice stating (i) the date as of which the holders of such class of Capital Stock to be entitled to receive any
such rights, warrants or distribution are to be determined, or (ii) the date on which any such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation, winding up or other action is expected to become effective, and
the date as of which it is expected that holders of record of such class of Capital Stock shall be entitled to exchange their
Capital Stock of such class for securities or other property, if any, deliverable upon such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation, winding up or other action. The failure to give the notice required
by this Section 12.08 or any defect therein shall not affect the legality or validity of any distribution, right, warrant, subdivision,
combination, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation, winding up or other action, or
the vote upon any of the foregoing. Such notice shall also be published by and at the expense of the Issuer not later than the
aforesaid filing date at least once in an Authorized Newspaper.
Section
12.09
Covenant to Reserve Shares for Issuance on Conversion of Securities
. The Issuer covenants that at all times it will
reserve and keep available out of each class of its authorized Capital Stock, free from preemptive rights, solely for the purpose
of issue upon conversion of Securities of any series as herein provided, such number of shares of Capital Stock of such class
as shall then be issuable upon the conversion of all Outstanding Securities of such series. The Issuer covenants that an shares
of Capital Stock which shall be so issuable shall, when issued or delivered, be duly and validly issued shares of the class of
authorized Capital Stock into which Securities of such series are convertible, and shall be fully paid and nonassessable, free
of all liens and charges and not subject to preemptive rights and that, upon conversion, the appropriate capital stock accounts
of the Issuer will be duly credited.
Section
12.10
Compliance with Governmental Requirements
. The Issuer covenants that if any shares of Capital Stock required to be
reserved for purposes of conversion of Securities hereunder require registration or listing with or approval of any governmental
authority under any Federal or State law, pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, or any national or regional securities exchange on which such Capital Stock is listed at the time of delivery
of any shares of such Capital Stock, before such shares may be issued upon conversion, the Issuer will use reasonable efforts
to cause such shares to be duly registered, listed or approved, as the case may be.
Section
12.11
Payment of Taxes Upon Certificates for Shares Issued Upon Conversion
. The issuance of certificates for shares of
Capital Stock upon the conversion of Securities shall be made without charge to the converting Securityholders for any tax (including,
without limitation, all documentary and stamp taxes) in respect of the issuance and delivery of such certificates, and such certificates
shall be issued in the respective names of, or in such names as may be directed by, the Holders of the Securities converted; provided,
however, that the Issuer shall not be required to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any such certificate in a name other than that of the Holder of the Security converted, and the Issuer
shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof
shall have paid to the Issuer the amount of such tax or shall have established to the satisfaction of the Issuer that such tax
has been paid.
Section
12.12
Trustee’s Duties with Respect to Conversion Provisions
. The Trustee and any conversion agent shall not at any
time be under any duty or responsibility to any Securityholder to determine whether any facts exist which may require any adjustment
of the conversion rate or conversion price, or with respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. Neither
the Trustee nor any conversion agent shall be accountable with respect to the registration under securities laws, listing, validity
or value (or the kind or amount) of any shares of Capital Stock, or of any other securities or property, which may at any time
be issued or delivered upon the conversion of any Security; and neither the Trustee nor any conversion agent makes any representation
with respect thereto. Neither the Trustee nor any conversion agent shall be responsible for any failure of the Issuer to make
any cash payment or to issue, transfer or deliver any shares of stock or stock certificates or other securities or property upon
the surrender of any Security for the purpose of conversion; and the Trustee, subject to the provisions of Article 5, and any
conversion agent shall not be responsible for any failure of the Issuer to comply with any of the covenants of the Issuer contained
in this Article 12.
IN
WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, as of the first date written above.
|
|
PROVENTION
BIO, INC.,as Issuer
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
|
●,
as Trustee
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
FORM
OF NOTE
UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“
DTC
”),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
PROVENTION
BIO, INC.
● % Senior Note Due ●
No.
● CUSIP No.: ●
$
●
PROVENTION
BIO, INC., a Delaware corporation (“
Issuer
”, which term includes any successor corporation), for value received
promises to pay to CEDE & CO. or its registered assigns, the principal sum of ● on ●.
Interest
Payment Dates: ● and ● (each, an “
Interest Payment Date
”), commencing on ●. Interest Record
Dates: ● and ● (each, an “
Interest Record Date
”).
Reference
is made to the further provisions of this Security contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN
WITNESS WHEREOF, the Issuer has caused this Security to be signed manually or by facsimile by its duly authorized officer.
|
|
PROVENTION BIO, INC.
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
This
is one of the series designated herein and referred to in the within-mentioned Indenture.
|
|
●,
as Trustee
|
|
|
|
|
|
|
By:
|
|
|
|
|
Authorized Signatory
|
(REVERSE
OF SECURITY)
PROVENTION
BIO, INC.
●%
Senior Note Due ●
1.
Interest.
PROVENTION
BIO, INC., a Delaware corporation (the “Issuer”), promises to pay interest on the Principal amount of this Security
at the rate per annum shown above. Cash interest on the Securities will accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from ●. The Issuer will pay interest semi-annually in arrears on each Interest
Payment Date, commencing ●. Interest will be computed on the basis of a 360-day year of twelve 30-day months.
The
Issuer shall pay interest on overdue Principal from time to time on demand at the rate borne by the Securities and on overdue
installments of interest (without regard to any applicable grace periods) to the extent lawful.
2.
Method of Payment.
The
Issuer shall pay interest on the Securities (except defaulted interest) to the persons who are the registered Holders at the close
of business on the Interest Record Date immediately preceding the Interest Payment Date notwithstanding any transfer or exchange
of such Security subsequent to such Interest Record Date and prior to such Interest Payment Date. Holders must surrender Securities
to the Trustee to collect Principal payments. The Issuer shall pay Principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts (“
U.S. Legal Tender
”). However,
the payments of interest, and any portion of the Principal (other than interest payable at maturity or on any redemption or repayment
date or the final payment of Principal) shall be made by the Paying Agent, upon receipt from the Issuer of immediately available
funds by 11:00 a.m., New York City time (or such other time as may be agreed to between the Issuer and the Paying Agent or the
Issuer), directly to a Holder (by Federal funds wire transfer or otherwise) if the Holder has delivered written instructions to
the Trustee 15 days prior to such payment date requesting that such payment will be so made and designating the bank account to
which such payments shall be so made and in the case of payments of Principal surrenders the same to the Trustee in exchange for
a Security or Securities aggregating the same principal amount as the unredeemed Principal amount of the Securities surrendered.
3.
Paying Agent.
Initially,
● (the “
Trustee
”) will act as Paying Agent. The Issuer may change any Paying Agent without notice to
the Holders.
4.
Indenture.
The
Issuer issued the Securities under an Indenture, dated as of ● (the “
Indenture
”), between the Issuer
and the Trustee. Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act
of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the “
TIA
”), as in effect on the date of the Indenture until such
time as the Indenture is qualified under the TIA, and thereafter as in effect on the date on which the Indenture is qualified
under the TIA. Notwithstanding anything to the contrary herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and the TIA for a statement of them. To the extent the terms of the Indenture and this Security
are inconsistent, the terms of the Indenture shall govern.
5.
Denominations; Transfer; Exchange.
The
Securities are in registered form, without coupons, in denominations of $1,000 and multiples of $1,000. A Holder shall register
the transfer of or exchange Securities in accordance with the Indenture. The Issuer may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents and to pay certain transfer taxes or similar governmental charges payable
in connection therewith as permitted by the Indenture. The Issuer need not issue, authenticate, register the transfer of or exchange
any Securities or portions thereof for a period of fifteen (15) days before such series is selected for redemption, nor need the
Issuer register the transfer or exchange of any security selected for redemption in whole or in part.
6.
Persons Deemed Owners.
The
registered Holder of a Security shall be treated as the owner of it for all purposes.
7.
Unclaimed Funds.
If
funds for the payment of Principal or interest remain unclaimed for two years, the Trustee and the Paying Agent will repay the
funds to the Issuer at its written request. After that, all liability of the Trustee and such Paying Agent with respect to such
funds shall cease.
8.
Legal Defeasance and Covenant Defeasance.
The
Issuer may be discharged from its obligations under the Securities and under the Indenture with respect to the Securities except
for certain provisions thereof, and may be discharged from obligations to comply with certain covenants contained in the Securities
and in the Indenture with respect to the Securities, in each case upon satisfaction of certain conditions specified in the Indenture.
9.
Amendment; Supplement; Waiver.
Subject
to certain exceptions, the Securities and the provisions of the Indenture relating to the Securities may be amended or supplemented
with the written consent of the Holders of at least a majority in aggregate Principal amount of the Securities then outstanding,
and any existing Default or Event of Default or compliance with certain provisions may be waived with the consent of the Holders
of a majority in aggregate Principal amount of the Securities then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Indenture and the Securities to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Securities in addition to or in place of certificated Securities or comply with any
requirements of the Commission in connection with the qualification of the Indenture under the Trust Indenture Act, or make any
other change that does not adversely affect the rights of any Holder of a Security.
10.
Defaults and Remedies.
If
an Event of Default (other than certain bankruptcy Events of Default with respect to the Issuer) occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate Principal amount of Securities then outstanding may declare all of the Securities
to be due and payable immediately in the manner and with the effect provided in the Indenture. If a bankruptcy Event of Default
with respect to the Issuer occurs and is continuing, all the Securities shall be immediately due and payable immediately in the
manner and with the effect provided in the Indenture without any notice or other action on the part of the Trustee or any Holder.
Holders of Securities may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee is not
obligated to enforce the Indenture or the Securities unless it has received indemnity satisfactory to it. The Indenture permits,
subject to certain limitations therein provided, Holders of a majority in aggregate Principal amount of the Securities then outstanding
to direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of Securities notice of certain
continuing Defaults or Events of Default if it determines that withholding notice is in their interest.
11.
Conversion.
Reference
is made to the Indenture, including, without limitation, provisions giving the Holder of this Security the right to convert this
Security into Capital Stock of the Issuer on the terms and subject to the limitations as more fully specified in the Indenture.
The initial conversion rate for this Security is ●. This conversion rate is subject to modification as provided in the Indenture.
Such further provisions shall for all purposes have the same effect as though fully set forth at this place.
12.
Trustee Dealings with Issuer.
The
Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise
deal with the Issuer as if it were not the Trustee.
13.
No Recourse Against Others.
No
stockholder, director, officer, employee or incorporator, as such, of the Issuer or any successor Person thereof shall have any
liability for any obligation under the Securities or the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Security by accepting a Security waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Securities.
14.
Authentication.
This
Security shall not be valid until the Trustee manually signs the certificate of authentication on this Security.
15.
Abbreviations and Defined Terms.
Customary
abbreviations may be used in the name of a Holder of a Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian),
and U/G/M/A (= Uniform Gifts to Minors Act).
16.
CUSIP Numbers.
Pursuant
to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the Securities. No representation is made as to the accuracy
of such numbers as printed on the Securities and reliance may be placed only on the other identification numbers printed hereon.
17.
Governing Law.
The
laws of the State of New York shall govern the Indenture and this Security thereof.
ASSIGNMENT
FORM
|
I
or we assign and transfer this Security to
|
|
(Print
or type name, address and zip code of assignee or transferee)
|
|
(Insert Social Security
or other identifying number of assignee or transferee)
|
and
irrevocably appoint ___________________ agent to transfer this Security on the books of the Issuer. The agent may substitute another
to act for him.
|
Dated:
|
|
|
Signed:
|
|
|
|
|
|
|
(Signed exactly as name appears on the other
side of this Security)
|
|
Signature
Guarantee:
|
|
|
|
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor program reasonably acceptable to the Trustee)
|
Exhibit
4.6
PROVENTION
BIO, INC., as Issuer
and
●,
as Trustee
INDENTURE
Dated
as of ●
Subordinated
Debt Securities
CROSS
REFERENCE SHEET
1
Between
Provisions
of the Trust Indenture Act of 1939 and the Indenture to be dated as of _________, 20___ between PROVENTION BIO, INC. and ___________________,
as Trustee:
|
Section
of the Act
|
|
Section
of Indenture
|
|
310(a)(1)
and (2)
|
|
5.08
|
|
310(a)(3)
and (4)
|
|
Inapplicable
|
|
310(b)
|
|
5.09(a),
(b) and (d)
|
|
310(c)
|
|
Inapplicable
|
|
311(a)
|
|
Inapplicable
|
|
311(b)
|
|
Inapplicable
|
|
311(c)
|
|
Inapplicable
|
|
312(a)
|
|
3.05
|
|
312(b)
|
|
3.05
|
|
312(c)
|
|
4.02(c)
|
|
313(a)
|
|
5.12
|
|
313(b)(1)
|
|
5.12
|
|
313(b)(2)
|
|
5.12
|
|
313(c)
|
|
5.12
|
|
313(d)
|
|
5.12
|
|
314(a)
|
|
3.06
|
|
314(b)
|
|
Inapplicable
|
|
314(c)(1)
and (2)
|
|
10.05
|
|
314(c)(3)
|
|
Inapplicable
|
|
314(d)
|
|
Inapplicable
|
|
314(e)
|
|
10.05
|
|
314(f)
|
|
Inapplicable
|
|
315(a),
(c) and (d)
|
|
5.01
|
|
315(b)
|
|
4.11
|
|
315(e)
|
|
4.12
|
|
316(a)(1)
|
|
4.09
|
|
316(a)(2)
|
|
Not
required
|
|
316(a)
(last sentence)
|
|
6.04
|
|
316(b)
|
|
4.07
|
|
317(a)
|
|
4.02
|
|
317(b)
|
|
3.03(a)
and (b)
|
|
318(a)
|
|
10.07
|
1
This Cross Reference Sheet is not part of the Indenture.
Table
of Contents
(continued)
|
|
|
Page
|
|
|
|
|
|
ARTICLE
1 DEFINITIONS
|
1
|
|
Section
1.01
|
Certain
Terms Defined
|
1
|
|
|
|
|
|
ARTICLE
2 SECURITIES
|
8
|
|
Section
2.01
|
Forms
Generally
|
8
|
|
Section
2.02
|
Form
of Trustee’s Certification of Authentication
|
9
|
|
Section
2.03
|
Amount
Unlimited; Issuable in Series
|
9
|
|
Section
2.04
|
Authentication
and Delivery of Securities
|
10
|
|
Section
2.05
|
Execution
of Securities
|
12
|
|
Section
2.06
|
Certificate
of Authentication
|
12
|
|
Section
2.07
|
Denomination
and Date of Securities; Payments of Interest
|
12
|
|
Section
2.08
|
Registration,
Transfer and Exchange
|
13
|
|
Section
2.09
|
Mutilated,
Defaced, Destroyed, Lost and Stolen Securities
|
15
|
|
Section
2.10
|
Cancellation
of Securities; Destruction Thereof
|
16
|
|
Section
2.11
|
Temporary
Securities
|
16
|
|
Section
2.12
|
Computation
of Interest
|
17
|
|
Section
2.13
|
CUSIP
Numbers
|
17
|
|
|
|
|
|
ARTICLE
3 COVENANTS OF THE ISSUER AND THE TRUSTEE
|
17
|
|
Section
3.01
|
Payment
of Principal and Interest
|
17
|
|
Section
3.02
|
Offices
for Payments, etc
|
18
|
|
Section
3.03
|
Paying
Agents
|
18
|
|
Section
3.04
|
Certificate
of the Issuer
|
19
|
|
Section
3.05
|
List
of Securityholders
|
19
|
|
Section
3.06
|
Reports
by the Issuer
|
20
|
|
Section
3.07
|
Corporate
Existence
|
20
|
|
Section
3.08
|
Restrictions
on Mergers, Sales and Consolidations
|
20
|
|
Section
3.09
|
Further
Assurances
|
20
|
|
|
|
|
|
ARTICLE
4 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
|
21
|
|
Section
4.01
|
Event
of Default Defined; Acceleration of Maturity; Waiver of Default
|
21
|
Table
of Contents
(continued)
|
|
|
Page
|
|
|
|
|
|
Section
4.02
|
Collection
of Indebtedness by Trustee; Trustee May Prove Debt
|
23
|
|
Section
4.03
|
Application
of Proceeds
|
25
|
|
Section
4.04
|
Suits
for Enforcement
|
26
|
|
Section
4.05
|
Restoration
of Rights on Abandonment of Proceedings
|
26
|
|
Section
4.06
|
Limitations
on Suits by Securityholder
|
26
|
|
Section
4.07
|
Unconditional
Right of Securityholders to Institute Certain Suits
|
27
|
|
Section
4.08
|
Powers
and Remedies Cumulative; Delay or Omission Not Waiver of Default
|
27
|
|
Section
4.09
|
Control
by Securityholders
|
27
|
|
Section
4.10
|
Waiver
of Past Defaults
|
28
|
|
Section
4.11
|
Trustee
to Give Notice of Default, But May Withhold in Certain Circumstances
|
28
|
|
Section
4.12
|
Right
of Court to Require Filing of Undertaking to Pay Costs
|
28
|
|
|
|
|
|
ARTICLE
5 CONCERNING THE TRUSTEE
|
29
|
|
Section
5.01
|
Duties
and Responsibilities of the Trustee
|
29
|
|
Section
5.02
|
Certain
Rights of the Trustee
|
30
|
|
Section
5.03
|
Trustee
Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof
|
31
|
|
Section
5.04
|
Trustee
and Agents May Hold Securities; Collections, etc
|
31
|
|
Section
5.05
|
Monies
Held by Trustee
|
32
|
|
Section
5.06
|
Compensation
and Indemnification of Trustee and Its Prior Claim
|
32
|
|
Section
5.07
|
Right
of Trustee to Rely on Officers’ Certificate, etc
|
32
|
|
Section
5.08
|
Persons
Eligible for Appointment as Trustee
|
33
|
|
Section
5.09
|
Resignation
and Removal; Appointment of Successor Trustee
|
33
|
|
Section
5.10
|
Acceptance
of Appointment by Successor
|
34
|
|
Section
5.11
|
Merger,
Conversion, Consolidation or Succession to Business of Trustee
|
35
|
|
Section
5.12
|
Reports
to the Trustee
|
35
|
Table
of Contents
(continued)
|
|
|
Page
|
|
|
|
|
|
ARTICLE
6 CONCERNING THE SECURITYHOLDERS
|
35
|
|
Section
6.01
|
Evidence
of Action Taken by Securityholders
|
36
|
|
Section
6.02
|
Proof
of Execution of Instruments and of Holding of Securities; Record Date
|
36
|
|
Section
6.03
|
Holders
to be Treated as Owners
|
36
|
|
Section
6.04
|
Securities
Owned by Issuer Deemed Not Outstanding
|
36
|
|
Section
6.05
|
Right
of Revocation of Action Taken
|
37
|
|
|
|
|
|
ARTICLE
7 SUPPLEMENTAL INDENTURES
|
37
|
|
Section
7.01
|
Supplemental
Indentures Without Consent of Securityholders
|
37
|
|
Section
7.02
|
Supplemental
Indentures With Consent of Securityholders
|
39
|
|
Section
7.03
|
Effect
of Supplemental Indenture
|
40
|
|
Section
7.04
|
Documents
to Be Given to Trustee
|
40
|
|
Section
7.05
|
Notation
on Securities in Respect of Supplemental Indentures
|
41
|
|
|
|
|
|
ARTICLE
8 CONSOLIDATION, MERGER, SALE OR CONVEYANCE
|
41
|
|
Section
8.01
|
Issuer
May Consolidate, etc
|
41
|
|
Section
8.02
|
Successor
Corporation Substituted
|
41
|
|
|
|
|
|
ARTICLE
9 DISCHARGE OF INDENTURE
|
42
|
|
Section
9.01
|
Defeasance
Within One Year of Payment
|
42
|
|
Section
9.02
|
Defeasance
|
43
|
|
Section
9.03
|
Covenant
Defeasance
|
44
|
|
Section
9.04
|
Application
of Trust Money
|
44
|
|
Section
9.05
|
Repayment
to Issuer
|
45
|
|
|
|
|
|
ARTICLE
10 MISCELLANEOUS PROVISIONS
|
45
|
|
Section
10.01
|
Incorporators,
Stockholders, Officers and Directors Exempt from Individual Liability
|
45
|
|
Section
10.02
|
Provisions
of Indenture for the Sole Benefit of Parties and Securityholders
|
45
|
|
Section
10.03
|
Successors
and Assigns of Issuer Bound by Indenture
|
46
|
|
Section
10.04
|
Notices
and Demands on Issuer, Trustee and Securityholders
|
46
|
Table
of Contents
(continued)
|
|
|
Page
|
|
|
|
|
|
Section
10.05
|
Officers’
Certificates and Opinions of Counsel; Statements to be Contained Therein
|
46
|
|
Section
10.06
|
Payments
Due on Saturdays, Sundays and Holidays
|
47
|
|
Section
10.07
|
Conflict
of Any Provision of Indenture with Trust Indenture Act of 1939
|
47
|
|
Section
10.08
|
New
York Law to Govern
|
47
|
|
Section
10.09
|
Counterparts
|
47
|
|
Section
10.10
|
Effect
of Headings
|
47
|
|
|
|
|
|
ARTICLE
11 REDEMPTION OF SECURITIES
|
48
|
|
Section
11.01
|
Applicability
of Article
|
48
|
|
Section
11.02
|
Notice
of Redemption; Partial Redemptions
|
48
|
|
Section
11.03
|
Payment
of Securities Called for Redemption
|
49
|
|
Section
11.04
|
Exclusion
of Certain Securities from Eligibility for Selection for Redemption
|
49
|
|
Section
11.05
|
Conversion
Arrangement On Call For Redemption
|
50
|
|
|
|
|
|
ARTICLE
12 CONVERSION OF SECURITIES
|
50
|
|
Section
12.01
|
Applicability
of Article
|
50
|
|
Section
12.02
|
Right
of Securityholders to Convert Securities
|
51
|
|
Section
12.03
|
Issuance
of Shares of Capital Stock on Conversion
|
51
|
|
Section
12.04
|
No
Payment or Adjustment for Interest or Dividends
|
52
|
|
Section
12.05
|
Adjustment
of Conversion Rate
|
52
|
|
Section
12.06
|
No
Fractional Shares to Be Issued
|
56
|
|
Section
12.07
|
Preservation
of Conversion Rights Upon Consolidation, Merger, Sale or Conveyance
|
56
|
|
Section
12.08
|
Notice
to Security Holders of a Series Prior to Taking Certain Types of Action
|
57
|
|
Section
12.09
|
Covenant
to Reserve Shares for Issuance on Conversion of Securities
|
58
|
|
Section
12.10
|
Compliance
with Governmental Requirements
|
58
|
|
Section
12.11
|
Payment
of Taxes Upon Certificates for Shares Issued Upon Conversion
|
58
|
|
Section
12.12
|
Trustee’s
Duties with Respect to Conversion Provisions
|
58
|
|
|
|
|
|
ARTICLE
13 SUBORDINATION OF SECURITIES
|
59
|
|
Section
13.01
|
Agreement
Of Subordination
|
59
|
Table
of Contents
(continued)
|
|
|
Page
|
|
|
|
|
|
Section
13.02
|
Payments
to Holders
|
59
|
|
Section
13.03
|
Subrogation
Of Securities
|
61
|
|
Section
13.04
|
Authorization
By Holders
|
61
|
|
Section
13.05
|
Notice
to Trustee
|
62
|
|
Section
13.06
|
Trustee’s
Relation to Senior Indebtedness
|
62
|
|
Section
13.07
|
No
Impairment Of Subordination
|
62
|
|
Section
13.08
|
Rights
Of Trustee
|
62
|
THIS
INDENTURE, dated as of , between PROVENTION BIO, INC., a Delaware corporation (the “
Issuer
”) and ●, a
● corporation, as trustee (the “
Trustee
”).
W
I T N E S S E T H:
WHEREAS,
the Issuer has duly authorized the issue from time to time of its unsecured debentures, notes or other evidences of indebtedness
to be issued in one or more series (the “
Securities
”) up to such principal amount or amounts as may from time
to time be authorized in accordance with the terms of this Indenture and to provide, among other things, for the authentication,
delivery and administration thereof, the Issuer has duly authorized the execution and delivery of this Indenture; and
WHEREAS,
all things necessary to make this Indenture a valid indenture and agreement according to its terms have been done;
NOW,
THEREFORE:
In
consideration of the premises and the purchases of the Securities by the Holders thereof, the Issuer and the Trustee mutually
covenant and agree for the equal and proportionate benefit of the respective Holders from time to time of the Securities as follows:
ARTICLE
1
DEFINITIONS
Section
1.01
Certain Terms Defined
. The following terms (except as otherwise expressly provided or unless the context otherwise
clearly requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings
specified in this Section. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939 or the definitions
of which in the Securities Act of 1933 are referred to in the Trust Indenture Act of 1939, as amended, including terms defined
therein by reference to the Securities Act of 1933, as amended, (except as herein otherwise expressly provided or unless the context
otherwise clearly requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities
Act as in force at the date of this Indenture. All accounting terms used herein and not expressly defined shall have the meanings
assigned to such terms in accordance with GAAP. The words “herein”, “hereof” and “hereunder”
and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.
The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular.
“
Affiliate
”
of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition, “control” when used with respect to
any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.
“
Authorized
Newspaper
” means a newspaper in the English language or in an official language of the country of publication, customarily
printed on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in the place
in connection with which the term is used or in the financial community of such place. If, because of temporary suspension of
publication or general circulation of any newspaper or for any other reason, it is impossible or impracticable to make any publication
of any notice required by this Indenture in the manner herein provided, such publication or other notice in lieu thereof which
is made at the written direction of the Issuer by the Trustee shall constitute a sufficient publication of such notice.
“
Board
of Directors
” means either the Board of Directors of the Issuer or any committee of such Board duly authorized to act
hereunder.
“
Business
Day
” means, with respect to any Security, a day that in the city (or in all of the cities, if more than one) in which
amounts are payable, as specified in the form of such Security, is not a day on which banking institutions are authorized by law
or regulation to close.
“
Capitalized
Lease
” means, as applied to any Person, any lease of any property (whether real, personal, or mixed) of which the discounted
present value of the rental obligations of such Person as lessee, in conformity with GAAP, is required to be capitalized on the
balance sheet of such Person; and “
Capitalized Lease Obligation
” is defined to mean the rental obligations,
as aforesaid, under such lease.
“
Capital
Stock
” means any and all shares, interests, participations or other equivalents (however designated, whether voting
or non-voting) of the Issuer’s capital stock or other ownership interests, whether now outstanding or issued after the date
of this Indenture, including, without limitation, all Common Stock and Preferred Stock.
“
Closing
Price
” on any day when used with respect to any class of Capital Stock means the closing sale price per share (or if
no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the
average bid and the average ask prices) on that date as reported by The Nasdaq Capital Market or, if such Capital Stock
is not listed on The Nasdaq Capital Market, then on the principal U.S. national or regional securities exchange on which
such Capital Stock is then listed. If such Capital Stock is not listed on either The Nasdaq Capital Market or on any U.S.
national or regional securities exchange on the relevant date, the Closing Price will be the last quoted bid price for the Company’s
Common Stock in the over-the-counter market on the relevant date as reported by the OTC Markets Group Inc. or similar organization.
In the event that no such quotation is available for any day, the Board of Directors shall be entitled to determine in good faith
the current market price on the basis of such quotations as it considers appropriate.
“
Commission
”
means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934,
or if at any time after the execution and delivery of this Indenture such Commission is not existing and performing the duties
now assigned to it under the Trust Indenture Act, then the body performing such duties on such date.
“
Common
Stock
” means any and all shares, interests, participations or other equivalents (however designated, whether voting
or non-voting) of the Issuer’s common stock, par value $0.001 per share, whether now outstanding or issued after the date
of the Indenture, including, without limitation, all series and classes of such common stock.
“
Corporate
Trust Office
” means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular
time, be principally administered, which office is, at the date as of which this Indenture is dated, located at ●.
“
Currency
Agreement
” means any foreign exchange contract, currency swap agreement, or other similar agreement or arrangement designed
to protect against the fluctuation in currency values.
“
Default
”
means any Event of Default as defined in Section 4.01 and any event that is, or after notice or passage of time or both would
be, an Event of Default.
“
Depositary
”
means, with respect to the Securities of any series issuable or issued in the form of one or more Registered Global Securities,
the Person designated as Depositary by the Issuer pursuant to Section 2.03 until a successor Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter “Depositary” shall mean or include each Person
who is then a Depositary hereunder, and if at any time there is more than one such Person, “Depositary” as used with
respect to the Securities of any such series shall mean the Depositary with respect to the Registered Global Securities of that
series.
“
Determination
Date
” has the meaning specified in Section 12.05.
“
Event
of Default
” has the meaning specified in Section 4.01.
“
GAAP
”
means generally accepted accounting principles in the United States of America as in effect as of the date of determination, including,
without limitation, those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the accounting profession. All ratios and computations
contained in this Indenture shall be computed in conformity with GAAP applied on a consistent basis.
“
Guarantee
”
means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise,
of such Person:
(i)
to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities,
or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or
(ii)
entered into for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or in part);
provided
,
that the term “
Guarantee
” shall not include endorsements for collection or deposit in the ordinary course of
business. The term “
Guarantee
” used as a verb has a corresponding meaning.
“
Holder
”,
“
Securityholder
” or other similar terms mean the registered holder of any Security.
“
Indebtedness
”
means, with respect to any Person at any date of determination (without duplication):
(i)
all indebtedness of such Person for borrowed money;
(ii)
all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments, in each case, for value received
or settlement of claims;
(iii)
all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations
with respect thereto);
(iv)
all obligations of such Person to pay the deferred and unpaid purchase price of property or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of business);
(v)
all obligations of such Person as lessee under Capitalized Leases;
(vi)
all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by
such Person;
provided
that the amount of such Indebtedness shall be the lesser of:
(1)
the fair market value of such asset at such date of determination; and
(2)
amount of such Indebtedness;
(vii)
all Indebtedness of other Persons to the extent Guaranteed by such Person; and
(viii)
to the extent not otherwise included in this definition, obligations under Currency Agreements and Interest Rate Agreements.
Notwithstanding
the foregoing, in no event shall the term “Indebtedness” be deemed to include letters of credit or bonds that secure
performance or surety bonds or similar instruments that are issued in the ordinary course of business.
The
amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations
as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving
rise to the obligation; provided that:
(x)
the amount outstanding at any time of any Indebtedness issued with original issue discount is the face amount of such Indebtedness
less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity
with GAAP; and
(y)
Indebtedness shall not include any liability for federal, state, local, or other taxes.
“
Indenture
”
means this instrument as originally executed and delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, and shall include the forms and terms of particular series of Securities established as contemplated hereunder.
“
Interest
”
means, when used with respect to non-interest bearing Securities, interest payable after maturity. “Interest Rate Agreement”
means any obligation of any Person pursuant to any interest rate swap, cap, collar or similar arrangement providing protection
against fluctuations in interest rates. For purposes of the Indenture, the amount of such obligation shall be the amount determined
in respect thereof as of the end of the then most recently ended fiscal quarter of such Person, based on the assumption that such
obligation had terminated at the end of such fiscal quarter, and in making such determination, if any agreement relating to such
obligation provides for the netting of amounts payable by and to such Person thereunder or if any such agreement provides for
the simultaneous payment of amounts by and to such Person, then in each such case, the amount of such obligation shall be the
net amount so determined, plus any premium due upon default by such Person.
“
Issuer
”
means the Person identified as “Issuer” in the first paragraph hereof and, subject to Article 8, its successors and
assigns.
“
Lien
”
means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, or any other
type of preferential arrangement that has the practical effect of creating a security interest, in respect of such asset. For
the purposes of this Indenture, the Issuer shall be deemed to own subject to a Lien any asset that it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating
to such asset.
“
Officers’
Certificate
” means a certificate signed by the chairman of the Issuer’s Board of Directors, its president or any
vice president, and by its treasurer, any assistant treasurer, its secretary or any assistant secretary of the Issuer, and delivered
to the Trustee. Each such certificate shall comply with Section 314 of the Trust Indenture Act of 1939 and include the statements
provided for in Section 10.05.
“
Opinion
of Counsel
” means an opinion in writing signed by legal counsel who may be an employee of or counsel to the Issuer and
who shall be satisfactory to the Trustee. Each such opinion shall comply with Section 314 of the Trust Indenture Act of 1939 and
include the statements provided for in Section 10.05, if and to the extent required hereby.
“
Original
Issue Date
” of any Security (or portion thereof) means the earlier of (i) the date of such Security or (ii) the date
of any Security (or portion thereof) for which such Security was issued (directly or indirectly) on registration of transfer,
exchange or substitution.
“
Original
Issue Discount Security
” means any Security that provides for an amount less than the Principal amount thereof to be
due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 4.01.
“
Outstanding
”,
when used with reference to Securities, shall, subject to the provisions of Section 6.04, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture, except:
(i)
Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;
(ii)
Securities, or portions thereof, for the payment or redemption of which monies in the necessary amount shall have been deposited
in trust with the Trustee or with any paying agent (other than the Issuer) or shall have been set aside, segregated and held in
trust by the Issuer for the Holders of such Securities (if the Issuer shall act as its own paying agent), provided that if such
Securities, or portions thereof, are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given
as herein provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and
(iii)
Securities in substitution for which other Securities shall have been authenticated and delivered, or which shall have been paid,
pursuant to the terms of Section 2.09 (except with respect to any such Security as to which proof satisfactory to the Trustee
is presented that such Security is held by a person in whose hands such Security is a legal, valid and binding obligation of the
Issuer).
In
determining whether the Holders of the requisite Principal amount of Outstanding Securities of any or all series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder, the Principal amount of an Original Issue Discount
Security that shall be deemed to be Outstanding for such purposes shall be the amount of the Principal thereof that would be due
and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section
4.01.
“
Person
”
means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision thereof or any other entity.
“
Preferred
Stock
” means any and all shares, interests, participations or other equivalents (however designated, whether voting
or non-voting) of the Issuer’s preferred stock, par value $0.001 per share, whether now outstanding or issued after the
date of the Indenture, including, without limitation, all series and classes of such preferred stock.
“
Principal
”
means, with respect to the Securities or any Security or any portion thereof, the principal amount of such Securities, Security
or portion thereof, and shall be deemed to include “and premium, if any”.
“
record
date
” as used with respect to any interest payment date (except a date for payment of defaulted interest), has the meaning
specified in Section 2.07.
“
Registered
Global Security
” means a Security evidencing all or a part of a series of Registered Securities, issued to the Depositary
for such series in accordance with Section 2.04, and bearing the legend prescribed in Section 2.04.
“
Registered
Security
” means any Security registered on the register maintained by the Issuer pursuant to Section 2.08.
“
Responsible
Officer
” when used with respect to the Trustee means any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer
of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the administration of this Indenture.
“
Security
”
or “
Securities
” has the meaning stated in the first recital of this Indenture, or, as the case may be, Securities
that have been authenticated and delivered under this Indenture.
“
Senior
Indebtedness
” of the Issuer means (a) all Indebtedness of the Issuer, whether currently outstanding or hereafter issued,
unless, by the terms of the instrument creating or evidencing such Indebtedness, it is provided that such Indebtedness is not
superior in right of payment to the Securities, and (b) any modifications, refunding, deferrals, renewals or extensions of any
such Indebtedness or securities, notes or other evidence of Indebtedness issued in exchange for such Indebtedness; provided that
in no event shall “Senior Indebtedness” include (i) Indebtedness of the Issuer owed or owing to any Subsidiary of
the Issuer or any officer, director or employee of the Issuer or any Subsidiary of the Issuer, (ii) Indebtedness to trade creditors
or (iii) any liability for taxes owned or owing by the Issuer.
“
Subsidiary
”
means, with respect to any Person, any corporation, association or other business entity of which more than 50% of all votes represented
by all classes of outstanding Voting Stock is owned, directly or indirectly, by such Person and one or more other Subsidiaries
of such Person.
“
Trustee
”
means the Person identified as “
Trustee
” in the first paragraph hereof and, subject to the provisions of Article
5, shall also include any successor trustee.
“
Trust
Indenture Act of 1939
” (except as otherwise provided in Section 7.01 and Section 7.02) means the Trust Indenture Act
of 1939 as in force at the date as of which this Indenture was originally executed.
“
UCC
”
means the Uniform Commercial Code, as in effect in each applicable jurisdiction. “Unregistered Security” means any
Security other than a Registered Security.
“
U.S.
Government Obligations
” means securities that are (i) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged or (ii) obligations of an agency of instrumentality of the United States of America
the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, and
shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government
Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for
the account of the holder of a depository receipt; provided that (except as required by law) such custodian is not authorized
to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian
in respect of the U.S. Government Obligation or the specific payment of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt.
“
Voting
Stock
” means, with respect to any Person, capital stock of any class or kind ordinarily having the power to vote for
the election of directors, managers or other voting members of the governing body of such Person.
“
vice
president
” when used with respect to the Issuer or the Trustee, means any vice president, whether or not designated
by a number or a word or words added before or after the title of “
vice president
”.
“
Wholly-Owned
”
is defined to mean, with respect to any Subsidiary of any Person, such Subsidiary if all of the outstanding common stock or other
similar equity ownership interests (but not including preferred stock) in such Subsidiary (other than any director’s qualifying
shares or investments by foreign nationals mandated by applicable law) is owned directly or indirectly by such Person.
“
Yield
to Maturity
” means the yield to maturity on a series of securities, calculated at the time of issuance of such series,
or, if applicable, at the most recent redetermination of interest on such series, and calculated in accordance with accepted financial
practice.
ARTICLE
2
SECURITIES
Section
2.01
Forms Generally
. The Securities of each series shall be substantially in such form (not inconsistent with this Indenture)
as shall be established by or pursuant to a resolution of the Board of Directors or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or legends, not inconsistent with the provisions
of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto, or with any rules
of any securities exchange or to conform to general usage, all as may be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. The Issuer shall furnish any such legends to the Trustee in writing.
The
definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.
Section
2.02
Form of Trustee’s Certification of Authentication
. The Trustee’s certificate of authentication on all
Securities shall be in substantially the following form:
This
is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.
|
●,
|
|
|
|
as
Trustee
|
|
|
|
|
|
By:
|
|
|
|
|
Authorized
Signatory:
|
|
Section
2.03
Amount Unlimited; Issuable in Series
. The aggregate Principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The
Securities may be issued in one or more series. There shall be established in or pursuant to a resolution of the Board of Directors
and set forth in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series:
(a)
the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities);
(b)
any limit upon the aggregate Principal amount of the Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Securities of the series pursuant to Section 2.08, Section 2.09, Section 2.11 or Section 12.03);
(c)
the date or dates on which the Principal of the Securities of the series is payable;
(d)
the rate or rates at which the Securities of the series shall bear interest, if any, or the method by which such rate shall be
determined, the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be
payable and the record dates for the determination of Holders to whom interest is payable;
(e)
the place or places where the Principal of and any interest on Securities of the series shall be payable (if other than as provided
in Section 3.02);
(f)
the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the series
may be redeemed, in whole or in part, at the option of the Issuer;
(g)
the obligation, if any, of the Issuer to redeem, purchase or repay Securities of the series at the option of a Holder thereof
and the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the
series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;
(h)
the obligation, if any, of the Issuer to permit the conversion of the Securities of such series into Capital Stock, and the terms
and conditions upon which such conversion shall be effected (including, without limitation, the initial conversion price or rate,
the conversion period and any other provision in addition to or in lieu of those set forth in this Indenture relative to such
obligation);
(i)
if other than denominations of $1,000 and any multiple thereof, the denominations in which Securities of the series shall be issuable;
(j)
if other than the Principal amount thereof, the portion of the Principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof pursuant to Section 4.01 or provable in bankruptcy pursuant to Section
4.02;
(k)
if the Securities of the series are issuable in whole or in part as one or more Registered Global Securities, the identity of
the Depositary for such Registered Global Security or Securities;
(l)
any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture);
(m)
any trustees, authenticating or paying agents, transfer agents or registrar or any other agents with respect to the Securities
of such series; and
(n)
the extent to which payments on the Securities will be subordinated to the payment of Senior Indebtedness of the Issuer.
All
Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided
in or pursuant to such resolution of the Board of Directors or in any such indenture supplemental hereto.
Section
2.04
Authentication and Delivery of Securities
. At any time and from time to time after the execution and delivery of this
Indenture, the Issuer may deliver Securities of any series executed by the Issuer to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver such Securities to or upon the written order of the Issuer, such order to be signed by
both (a) the chairman of its Board of Directors, its president or any vice president and by its treasurer, any assistant treasurer,
its secretary or any assistant secretary, without any further action by the Issuer. In authenticating such Securities and accepting
the additional responsibilities under this Indenture in relation to such Securities the Trustee shall receive, and (subject to
Section 5.01) shall be fully protected in relying upon:
(a)
a certified copy of any resolution or resolutions of the Board of Directors authorizing the action taken pursuant to the resolution
or resolutions delivered under clause (b) below;
(b)
a copy of any resolution or resolutions of the Board of Directors relating to such series, in each case certified by the secretary
or an assistant secretary of the Issuer;
(c)
an executed supplemental indenture, if any, and the documentation required to be delivered pursuant to Section 7.04;
(d)
an Officers’ Certificate setting forth the form and terms of the Securities as required pursuant to Section 2.01 and Section
2.03, respectively and prepared in accordance with Section 10.05;
(e)
an Opinion of Counsel, prepared in accordance with Section 10.05, to the effect:
(i)
that the form or forms and terms of such Securities have been established by or pursuant to a resolution of the Board of Directors
or by a supplemental indenture as permitted by Section 2.01 and Section 2.03 in conformity with the provisions of this Indenture;
and
(ii)
that such Securities, when authenticated and delivered by the Trustee and issued by the Issuer in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Issuer enforceable against
the Issuer in accordance with their terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws now or hereafter in effect relating to creditors’ rights
generally, and general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at
law).
The
Trustee shall have the right to decline to authenticate and deliver any Securities under this section if the Trustee, being advised
by counsel, determines that such action may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of
directors or board of trustees, executive committee, or a trust committee of directors or trustees or Responsible Officers shall
determine that such action would expose the Trustee to personal liability.
If
the Issuer shall establish pursuant to Section 2.03 that the Securities of a series or a portion thereof are to be issued in the
form of one or more Registered Global Securities, then the Issuer shall execute (in accordance with Section 2.05) and the Trustee
shall authenticate and make available for delivery one or more Registered Global Securities that (i) shall represent and shall
be denominated in an amount equal to the aggregate Principal amount of all of the Securities of such series issued in such form
and not yet canceled, (ii) shall be registered in the name of the Depositary for such Registered Global Security or Securities
or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or its custodian or pursuant to
such Depositary’s instructions and (iv) shall bear a legend substantially to the following effect: “Unless and until
it is exchanged in whole or in part for Securities in definitive registered form, this Security may not be transferred except
as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee
of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.”
Section
2.05
Execution of Securities
. The Securities shall be signed on behalf of the Issuer by the chairman of its Board of Directors,
its president, any vice president, its treasurer or any assistant treasurer, under its corporate seal and attested by its secretary
or any assistant secretary. Such signatures may be the manual or facsimile signatures of the present or any future such officers.
The seal of the Issuer may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced
on the Securities. Typographical and other minor errors or defects in any such reproduction of the seal or any such signature
shall not affect the validity or enforceability of any Security that has been duly authenticated and delivered by the Trustee.
In
case any officer of the Issuer who shall have signed any of the Securities shall cease to be such officer before the Security
so signed shall be authenticated and delivered by the Trustee or disposed of by the Issuer, such Security nevertheless may be
authenticated and delivered or disposed of as though the person who signed such Security had not ceased to be such officer of
the Issuer; and any Security may be signed on behalf of the Issuer by such persons as, at the actual date of the execution of
such Security, shall be the proper officers of the Issuer, although at the date of the execution and delivery of this Indenture
any such person was not such an officer.
Section
2.06
Certificate of Authentication
. Only such Securities as shall bear thereon a certificate of authentication substantially
in the form hereinbefore recited, executed by the Trustee by the manual signature of one of its authorized signatories, shall
be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee upon
any Security executed by the Issuer shall be conclusive evidence that the Security so authenticated has been duly authenticated
and delivered hereunder and that the Holder is entitled to the benefits of this Indenture.
Section
2.07
Denomination and Date of Securities; Payments of Interest
. The Securities shall be issuable as registered securities
without coupons and in denominations as shall be specified as contemplated by Section 2.03. In the absence of any such specification
with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any
multiple thereof. The Securities shall be numbered, lettered, or otherwise distinguished in such manner or in accordance with
such plan as the officers of the Issuer executing the same may determine as evidenced by the execution and authentication thereof.
Each
Security shall be dated the date of its authentication, shall bear interest, if any, from the date and shall be payable on the
dates, in each case, which shall be specified as contemplated by Section 2.03.
The
person in whose name any Security of any series is registered at the close of business on any record date applicable to a particular
series with respect to any interest payment date for such series shall be entitled to receive the interest, if any, payable on
such interest payment date notwithstanding any transfer or exchange of such Security subsequent to the record date and prior to
such interest payment date, except if and to the extent the Issuer shall default in the payment of the interest due on such interest
payment date for such series, in which case such defaulted interest shall be paid to the persons in whose names Outstanding Securities
for such series are registered at the close of business on a subsequent record date (which shall be not less than five Business
Days prior to the date of payment of such defaulted interest) established by notice given by mail by or on behalf of the Issuer
to the Holders of Securities not less than 15 days preceding such subsequent record date. The term “
record date
”
as used with respect to any interest payment date (except a date for payment of defaulted interest) shall mean the date specified
as such in the terms of the Securities of any particular series, or, if no such date is so specified, if such interest payment
date is the first day of a calendar month, the fifteenth day of the next preceding calendar month or, if such interest payment
date is the fifteenth day of a calendar month, the first day of such calendar month, whether or not such record date is a Business
Day.
Section
2.08
Registration, Transfer and Exchange
. The Issuer will keep or cause to be kept at each office or agency to be maintained
for the purpose as provided in Section 3.02 a register or registers in which, subject to such reasonable regulations as it may
prescribe, it will register, and will register the transfer of, Securities as in this Article provided. Such register shall be
in written form in the English language or in any other form capable of being converted into such form within a reasonable time.
At all reasonable times such register or registers shall be open for inspection by the Trustee.
At
the option of the Holder thereof, Registered Securities of any series (other than a Registered Global Security, except as set
forth below) may be exchanged for a Registered Security or Registered Securities of such series and tenor having authorized denominations
and an equal aggregate Principal amount, upon surrender of such Registered Securities to be exchanged at the agency of the Issuer
that shall be maintained for such purpose in accordance with Section 3.02 and upon payment, if the Issuer shall so require, of
the charges hereinafter provided. If the Securities of any series are issued in both registered and unregistered form, except
as otherwise established pursuant to Section 2.03, at the option of the Holder thereof, Unregistered Securities of any series
may be exchanged for Registered Securities of such series and tenor having authorized denominations and an equal aggregate Principal
amount, upon surrender of such Unregistered Securities to be exchanged at the agency of the Issuer that shall be maintained for
such purpose in accordance with Section 3.02 and upon payment, if the Issuer shall so require, of the charges hereinafter provided.
At the option of the Holder thereof, if Unregistered Securities of any series, maturity date, interest rate and Original Issue
Date are issued in more than one authorized denomination, except as otherwise established pursuant to Section 2.03, such Unregistered
Securities may be exchanged for Unregistered Securities of such series and tenor having authorized denominations and an equal
aggregate Principal amount, upon surrender of such Unregistered Securities to be exchanged at the agency of the Issuer that shall
be maintained for such purpose in accordance with Section 3.02 and upon payment, if the Issuer shall so require, of the charges
hereinafter provided. Registered Securities of any series may not be exchanged for Unregistered Securities of such series. Whenever
any Securities are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and make available
for delivery, the Securities which the Holder making the exchange is entitled to receive.
All
Registered Securities presented for registration of transfer, exchange, redemption, conversion or payment shall be duly endorsed
by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the Holder or his attorney duly authorized in writing.
The
Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection
with any exchange or registration of transfer of Securities. No service charge shall be made for any such transaction.
Notwithstanding
any other provision of this Section 2.08, unless and until it is exchanged in whole or in part for Securities in definitive registered
form, a Registered Global Security representing all or a portion of the Securities of a series may not be transferred except as
a whole by the Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a
nominee of such successor Depositary.
If
at any time the Depositary for any Registered Global Securities of any series notifies the Issuer that it is unwilling or unable
to continue as Depositary for such Registered Global Securities or if at any time the Depositary for such Registered Global Securities
shall no longer be eligible under applicable law, the Issuer shall appoint a successor Depositary eligible under applicable law
with respect to such Registered Global Securities. If a successor Depositary eligible under applicable law for such Registered
Global Securities is not appointed by the Issuer within 90 days after the Issuer receives such notice or becomes aware of such
ineligibility, the Issuer will execute, and the Trustee, upon receipt of the Issuer’s order for the authentication and delivery
of definitive Registered Securities of such series and tenor, will authenticate and make available for delivery Registered Securities
of such series and tenor, in any authorized denominations, in an aggregate Principal amount equal to the Principal amount of such
Registered Global Securities, in exchange for such Registered Global Securities.
The
Issuer may at any time and in its sole discretion determine that any Registered Global Securities of any series shall no longer
be maintained in global form. In such event, or in the event that there shall have occurred and be continuing an Event of Default
with respect to a series of Securities, the Issuer will, upon the request of any Holder, execute, and the Trustee, upon receipt
of the Issuer’s order for the authentication and delivery of definitive Registered Securities of such series and tenor,
will authenticate and make available for delivery, Registered Securities of such series and tenor in any authorized denominations,
in an aggregate Principal amount equal to the Principal amount of such Registered Global Securities, in exchange for such Registered
Global Securities.
Any
time the Registered Securities of any series are not in the form of Registered Global Securities pursuant to the preceding two
paragraphs, the Issuer agrees to supply the Trustee with a reasonable supply of certificated Registered Securities without the
legend required by Section 2.04 and the Trustee agrees to hold such Registered Securities in safekeeping until authenticated and
delivered pursuant to the terms of this Indenture.
If
established by the Issuer pursuant to Section 2.03 with respect to any Registered Global Security, the Depositary for such Registered
Global Security may surrender such Registered Global Security in exchange in whole or in part for Registered Securities of the
same series and tenor in definitive registered form on such terms as are acceptable to the Issuer and such Depositary. Thereupon,
the Issuer shall execute, and the Trustee shall authenticate and make available for delivery, without service charge,
(i)
to the Person specified by such Depositary new Registered Securities of the same series and tenor, of any authorized denominations
as requested by such Person, in an aggregate Principal amount equal to and in exchange for such Person’s beneficial interest
in the Registered Global Security; and
(ii)
to such Depositary a new Registered Global Security in a denomination equal to the difference, if any, between the Principal amount
of the surrendered Registered Global Security and the aggregate Principal amount of Registered Securities authenticated and delivered
pursuant to clause (i) above.
Registered
Securities issued in exchange for a Registered Global Security pursuant to this Section 2.08 shall be registered in such names
and in such authorized denominations as the Depositary for such Registered Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee or an agent of the Issuer or the Trustee. The Trustee
or such agent shall deliver such Securities to or as directed by the Persons in whose names such Securities are so registered.
All
Securities issued upon any transfer or exchange of Securities shall be valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange.
Notwithstanding
anything herein or in the forms or terms of any Securities to the contrary, none of the Issuer, the Trustee or any agent of the
Issuer or the Trustee shall be required to exchange any Unregistered Security for a Registered Security if such exchange would
result in adverse Federal income tax consequences to the Issuer (such as, for example, the inability of the Issuer to deduct from
its income, as computed for Federal income tax purposes, the interest payable on the Unregistered Securities) under then applicable
United States Federal income tax laws. The Trustee and any such agent shall be entitled to rely on an Officers’ Certificate
or an Opinion of Counsel in determining such result.
Neither
the Registrar nor the Issuer shall be required (i) to issue, authenticate, register the transfer of or exchange Securities of
any series for a period of 15 days before the mailing of a notice of redemption of such Securities to be redeemed or (ii) to register
the transfer of or exchange any Security selected for redemption in whole or in part.
Section
2.09
Mutilated, Defaced, Destroyed, Lost and Stolen Securities
. In case any temporary or definitive Security shall become
mutilated or defaced and shall be surrendered to the Trustee, the Issuer shall execute, and the Trustee shall authenticate and
deliver, a new Security of the same series, bearing a number not contemporaneously outstanding, in exchange and substitution for
the mutilated or defaced Security. If the Holder of any Security claims that the Security has been lost, destroyed or wrongfully
taken, the Issuer shall execute, and the Trustee shall authenticate and deliver, a new Security of the same series, bearing a
number not contemporaneously outstanding, in exchange and substitution for the lost, destroyed or wrongfully taken Security, if
the applicant so requests before the Issuer has notice that the Security has been acquired by a protected purchaser, and the applicant
furnishes to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as may be required
by them to indemnify and defend and to save each of them harmless and the applicant satisfies other reasonable requirements imposed
by the Issuer.
Upon
the issuance of any substitute Security, the Issuer may require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee and its
counsel) connected therewith. In case any Security which has matured or is about to mature or has been called for redemption in
full shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer may instead of issuing a substitute Security,
pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated or defaced Security), if
the applicant for such payment shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or taking, the applicant shall also furnish to the Issuer and the Trustee and any agent of the Issuer or the Trustee
evidence to their satisfaction of the destruction, loss or wrongful taking of such Security and of the ownership thereof.
Every
substitute Security of any series issued pursuant to the provisions of this section by virtue of the fact that any such Security
is destroyed, lost or stolen shall constitute an additional contractual obligation of the Issuer, whether or not the destroyed,
lost or wrongfully taken Security shall be at any time enforceable by anyone and shall be entitled to all the benefits of (but
shall be subject to all the limitations of rights set forth in) this Indenture equally and proportionately with any and all other
Securities of such series duly authenticated and delivered hereunder. All Securities shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are exclusive with respect to the replacement or payment
of mutilated, defaced or destroyed, lost or wrongfully taken Securities and shall preclude any and all other rights or remedies.
Section
2.10
Cancellation of Securities; Destruction Thereof
. All Securities surrendered for payment, redemption, repurchase, conversion,
registration of transfer or exchange, if surrendered to the Issuer or any agent of the Issuer or the Trustee, shall be delivered
to the Trustee for cancellation or, if surrendered to the Trustee, shall be canceled by it; and no Securities shall be issued
in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall dispose of canceled
Securities held by it in accordance with the record retention policies of the Trustee in effect from time to time and, if such
canceled certificates are destroyed, shall deliver a certificate of destruction to the Issuer. If the Issuer shall acquire any
of the Securities, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such
Securities unless and until the same are delivered to the Trustee for cancellation.
Section
2.11
Temporary Securities
. Pending the preparation of definitive Securities for any series, the Issuer may execute and
the Trustee shall authenticate and deliver temporary Securities for such series (printed, lithographed, typewritten or otherwise
reproduced, in each case in form satisfactory to the Trustee). Temporary Securities of any series shall be issuable as registered
Securities without coupons, of any authorized denomination, and substantially in the form of the definitive Securities of such
series but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined
by the Issuer with the concurrence of the Trustee. Temporary Securities may contain such reference to any provisions of this Indenture
as may be appropriate. Every temporary Security shall be executed by the Issuer and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like effect, as the definitive Securities. Without unreasonable delay
the Issuer shall execute and shall furnish definitive Securities of such series and thereupon temporary Securities of such series
may be surrendered in exchange therefor without charge at each office or agency to be maintained by the Issuer for that purpose
pursuant to Section 3.02, and the Trustee shall authenticate and deliver in exchange for such temporary Securities of such series
a like aggregate Principal amount of definitive Securities of the same series of authorized denominations. Until so exchanged,
the temporary Securities of any series shall be entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section
2.12
Computation of Interest
. Except as otherwise specified in the Securities of a series, interest shall be computed on
the basis of a 360-day year of twelve 30-day months.
Section
2.13
CUSIP Numbers
. The Issuer in issuing the Securities may use “CUSIP” numbers (if then generally in use),
and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that
any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities
or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will
notify the Trustee of any change in the “CUSIP” numbers.
ARTICLE
3
COVENANTS
OF THE ISSUER AND THE TRUSTEE
Section
3.01
Payment of Principal and Interest
. The Issuer covenants and agrees for the benefit of each series of Securities that
it will duly and punctually pay or cause to be paid the Principal of, and interest on, each of the Securities of such series at
the place or places, at the respective times and in the manner provided in such Securities. Each installment of interest on the
Securities of any series may be paid by mailing checks for such interest payable to or upon the written order of the Holders of
Securities entitled thereto as they shall appear on the registry books of the Issuer.
Notwithstanding
any provisions of this Indenture and the Securities of any series to the contrary, if the Issuer and a Holder of any Registered
Security so agree or if expressly provided pursuant to Section 2.03, payments of interest on, and any portion of the Principal
of, such Holder’s Registered Security shall be made by the paying agent, upon receipt from the Issuer of immediately available
funds by 11:00 a.m., New York City time (or such other time as may be agreed to between the Issuer and the paying agent) or the
Issuer, directly to the Holder of such Security (by wire transfer of Federal funds or immediately available funds or otherwise)
if the Holder has delivered written instructions to the Trustee 15 days prior to such payment date requesting that such payment
will be so made and designating the bank account to which such payments shall be so made and, in the case of payments of Principal,
surrenders the same to the Trustee. The Trustee shall be entitled to rely on the last instruction delivered by the Holder pursuant
to this Section 3.01 unless a new instruction is delivered 15 days prior to a payment date. The Issuer will indemnify and hold
each of the Trustee and any paying agent harmless against any loss, liability or expense (including attorneys’ fees and
expenses) resulting from any act or omission to act on the part of the Issuer or any such Holder in connection with any such agreement
or from making any payment in accordance with any such agreement.
Section
3.02
Offices for Payments, etc
. So long as any of the Securities remain outstanding, the Issuer will maintain in the Borough
of Manhattan, The City of New York an office or agency (o) where the Securities may be presented for payment, (p) where the Securities
may be presented for registration of transfer and for exchange as in this Indenture provided, (q) where notices and demands to
or upon the Issuer in respect of the Securities or of this Indenture may be served and (r) for Securities of each series that
is convertible, where such Securities may be presented for conversion. The Issuer will give to the Trustee written notice of the
location of any such office or agency and of any change of location thereof. Unless otherwise specified in accordance with Section
2.03, the Issuer hereby initially designates the Corporate Trust Office of Trustee as the office to be maintained by it for each
such purpose. In case the Issuer shall fail to so designate or maintain any such office or agency or shall fail to give such notice
of the location or of any change in the location thereof, presentations and demands may be made and notices may be served at the
Corporate Trust Office.
Section
3.03
Paying Agents
. Whenever the Issuer shall appoint a paying agent other than the Trustee with respect to the Securities
of any series, it will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree
with the Trustee, subject to the provisions of this Section:
(a)
that it will hold all sums received by it as such agent for the payment of the Principal of or interest on the Securities of such
series (whether such sums have been paid to it by the Issuer or by any other obligor on the Securities of such series) in trust
for the benefit of the Holders of the Securities of such series or of the Trustee;
(b)
that it will give the Trustee notice of any failure by the Issuer (or by any other obligor on the Securities of such series) to
make any payment of the Principal of or interest on the Securities of such series when the same shall be due and payable; and
during the continuance of the failure referred to in clause Section 3.03(b) above.
The
Issuer will, on or prior to each due date of the Principal of or interest on the Securities of such series, deposit with the paying
agent a sum sufficient to pay such Principal or interest so becoming due, and (unless such paying agent is the Trustee) the Issuer
will promptly notify the Trustee of any failure to take such action.
If
the Issuer shall act as its own paying agent with respect to the Securities of any Series, it will, on or before each due date
of the Principal of or interest on the Securities of such series, set aside, segregate and hold in trust for the benefit of the
Holders of the Securities of such series a sum sufficient to pay such Principal or interest so becoming due. The Issuer will promptly
notify the Trustee of any failure to take such action.
Whenever
the Issuer shall have one or more paying agents for any series of Securities, it will, on or before each due date of the Principal
of or interest on any Securities of such series, deposit with the paying agent or agents for the Securities of such series a sum,
by 11:00 a.m. New York City time in immediately available funds on the payment date, sufficient to pay the Principal or interest
so becoming due with respect to the Securities of such series, and (unless such paying agent is the Trustee) the Issuer will promptly
notify the Trustee in writing of any failure so to act.
Anything
in this section to the contrary notwithstanding, the Issuer may at any time, for the purpose of obtaining a satisfaction and discharge
with respect to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be paid to the Trustee
all sums held in trust for any such series by the Issuer or any paying agent hereunder, as required by this Section, such sums
to be held by the Trustee upon the trusts herein contained.
Anything
in this Section 3.03 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 3.03 is
subject to the provisions of Section 9.05.
Section
3.04
Certificate of the Issuer
. Within 120 days after the close of the fiscal year ended ●, and within 120 days after
the close of each fiscal year thereafter, the Issuer will furnish to the Trustee a brief certificate (which need not comply with
Section 10.05) from the principal executive, financial or accounting officer of the Issuer as to his or her knowledge of the Issuer’s
compliance with all conditions and covenants under the Indenture (such compliance to be determined without regard to any period
of grace or requirement of notice provided under the Indenture).
At
the time such certificate is filed, the Issuer will also file with the Trustee a letter or statement of the independent accountants
who shall have certified the financial statements of the Issuer for its preceding fiscal year to the effect that, in making the
examination necessary for certification of such financial statements, they have obtained no knowledge of any default by the Issuer
in the performance or fulfillment of any covenant, agreement or condition contained in this Indenture, which default remains uncured
at the date of such letter or statement, or, if they shall have obtained knowledge of any such uncured default, specifying in
such letter or statement such default or defaults and the nature and status thereof, it being understood that such accountants
shall not be liable directly or indirectly for failure to obtain knowledge of any such default or defaults, and that nothing contained
in this Section 3.04 shall be construed to require such accountants to make any investigation beyond the scope required in connection
with such examination.
Section
3.05
List of Securityholders
. If and so long as the Trustee shall not be the Security registrar for the Securities of any
series, the Issuer will furnish or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require
of the names and addresses of the Holders of the Securities of such series pursuant to Section 312 of the Trust Indenture Act
of 1939 (a) semi-annually not more than 10 days after each record date for the payment of interest on such Securities, as hereinabove
specified, as of such record date and on dates to be determined pursuant to Section 2.03 for non-interest bearing Securities in
each year and (b) at such other times as the Trustee may request in writing, within 30 days after receipt by the Issuer of any
such request as of a date not more than 10 days prior to the time such information is furnished.
Section
3.06
Reports by the Issuer
. The Issuer covenants to:
(a)
file, whether or not required to do so under applicable law, with the Trustee, within 15 days after the Issuer files the same
with the Commission:
(i)
copies of the annual reports and of the information, documents, and other reports which the Issuer files with the Commission pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; and
(ii)
such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants
provided for in this Indenture as the Issuer may from time to time file with the Commission; and
(b)
transmit to the Securityholders, in the manner and to the extent provided in Section 10.04, such summaries of any information,
documents and reports required to be filed with the Trustee pursuant to the provisions of subdivision (a) of this Section 3.06
as may be required by the rules and regulations of the Commission.
Delivery
of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of
such shall not constitute constructive notice of any information contained therein or determinable from information contained
therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers’ Certificates).
Section
3.07
Corporate Existence
. So long as any of the Securities remain unpaid, the Issuer will at all times (except as otherwise
provided or permitted elsewhere in this Indenture) do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence.
Section
3.08
Restrictions on Mergers, Sales and Consolidations
. So long as any of the Securities remain unpaid, the Issuer will
not consolidate or merge with or sell, convey or lease all or substantially all of its property to any other corporation except
as permitted in Article 8 hereof.
Section
3.09
Further Assurances
. From time to time whenever requested by the Trustee, the Issuer will execute and deliver such
further instruments and assurances and do such further acts as may be reasonably necessary or proper to carry out more effectually
the purposes of this Indenture or to secure the rights and remedies hereunder of the Holders of the Securities of any series.
ARTICLE
4
REMEDIES
OF THE TRUSTEE AND SECURITYHOLDERS
ON
EVENT OF DEFAULT
Section
4.01
Event of Default Defined; Acceleration of Maturity; Waiver of Default
. “
Event of Default
” with
respect to Securities of any series wherever used herein, means any one of the following events which shall have occurred and
be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative
or governmental body):
(a)
default by the Issuer in the payment of any installment of interest upon any of the Securities of such series as and when the
same shall become due and payable, and continuance of such default for a period of 30 days;
(b)
default by the Issuer in the payment of all or any part of the Principal on any of the Securities of such series as and when the
same shall become due and payable either at maturity, upon redemption, by declaration or otherwise, and continuance of such default
for a period of five days;
(c)
default by the Issuer in the performance, or breach by the Issuer, of any of its covenants or agreements in respect of the Securities
of such series (other than a covenant or agreement in respect of the Securities of such series a default in whose performance
or whose breach is elsewhere in this section specifically dealt with), and continuance of such default or breach for a period
of 30 consecutive days after there has been given, by registered or certified mail, to the Issuer by the Trustee or to the Issuer
and the Trustee by the Holders of at least 25% in Principal amount of the Outstanding Securities of all series affected thereby,
a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a notice of
default hereunder;
(d)
the entry by a court having jurisdiction in the premises of a decree or order for relief in respect of the Issuer in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or the appointment of a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Issuer or for any substantial part of the
Issuer’s property and assets or the ordering of the winding up or liquidation of the Issuer’s affairs, and the continuance
of any such decree or order unstayed and in effect for a period of 90 consecutive days;
(e)
the commencement by the Issuer of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator
(or similar official) of the Issuer or for any substantial part of the Issuer’s property, or the making of any general assignment
by the Issuer for the benefit of creditors; or
(f)
any other Event of Default provided in the supplemental indenture or resolution of the Board of Directors under which such series
of Securities is issued or in the form of Security for such series.
If
an Event of Default described in clauses 4.01(a), 4.01(b), 4.01(c) or 4.01(f) occurs and is continuing, then, and in each and
every such case, unless the Principal of all of the Securities of such series shall have already become due and payable, either
the Trustee or the Holders of not less than 25% in aggregate Principal amount of the Securities of any affected series then Outstanding
hereunder (each such series voting as a separate class) by notice in writing to the Issuer (and to the Trustee if given by Securityholders),
may declare the entire Principal (or, if the Securities of such series are Original Issue Discount Securities, such portion of
the Principal amount as may be specified in the terms of such series) of all Securities of such series and the interest accrued
thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.
If an Event of Default described in clauses Section 4.01(d) or Section 4.01(e) occurs and is continuing, then the Principal amount
of all the Securities then Outstanding and interest accrued thereon, if any, shall be and become immediately due and payable,
without any notice or other action by any Holder or the Trustee, to the full extent permitted by applicable law.
The
foregoing provisions, however, are subject to the condition that if, at any time after the Principal (or, if the Securities are
Original Issue Discount Securities, such portion of the Principal as may be specified in the terms thereof) of the Securities
of any series (or of all the Securities, as the case may be) shall have been so declared due and payable, and before any judgment
or decree for the payment of the monies due shall have been obtained or entered as hereinafter provided, the Issuer shall pay
or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of such
series (or of all the Securities, as the case may be) and the Principal of any and all Securities of such series (or of all the
Securities, as the case may be) which shall have become due otherwise than by acceleration (with interest upon such Principal
and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at
the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of such series (or at the respective rates of interest or Yields to Maturity of all the Securities, as the case may
be) to the date of such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee,
its agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee except
as a result of negligence or bad faith, and if any and all Events of Default under the Indenture, other than the non-payment of
the Principal of Securities which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as
provided herein, then and in every such case the Holders of a majority in aggregate Principal amount of all the then Outstanding
Securities of all such series that have been accelerated, each such series voting as a separate class, by written notice to the
Issuer and to the Trustee, may waive all defaults with respect to such series (or with respect to all the Securities, as the case
may be) and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend
to or shall affect any subsequent default or shall impair any right consequent thereon.
For
all purposes under this Indenture, if a portion of the Principal of any Original Issue Discount Securities shall have been accelerated
and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration
has been rescinded and annulled, the Principal amount of such Original Issue Discount Securities shall be deemed, for all purposes
hereunder, to be such Portion of the Principal thereof as shall be due and payable as a result of such acceleration, and payment
of such portion of the Principal thereof as shall be due and payable as a result of such acceleration, together with interest,
if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities.
Section
4.02
Collection of Indebtedness by Trustee; Trustee May Prove Debt
. The Issuer covenants that (h) in case default shall
be made in the payment of any installment of interest on any of the Securities of any series when such interest shall have become
due and payable, and such default shall have continued for a period of 30 days or (i) in case default shall be made in the payment
of all or any part of the Principal of any of the Securities of any series when the same shall have become due and payable, whether
upon maturity of the Securities of such series or upon any redemption or by declaration or otherwise, then in each case upon demand
of the Trustee, the Issuer will pay to the Trustee for the benefit of the Holders of the Securities of such series (x) the whole
amount that then shall have become due and payable on all Securities of such series for Principal or interest, as the case may
be (with interest to the date of such payment upon the overdue Principal and, to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in the Securities of such series) and (y) in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee
and each predecessor Trustee, their respective agents and counsel, and any expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee except as a result of its negligence or bad faith.
Until
such demand is made by the Trustee, the Issuer may pay the Principal of and interest on the Securities of any series to the registered
Holders, whether or not the Principal of and interest on the Securities of such series be overdue.
In
case the Issuer shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums
so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment
or final decree against the Issuer or other obligor upon such Securities and collect in the manner provided by law out of the
property of the Issuer or other obligor upon such Securities, wherever situated, the monies adjudged or decreed to be payable.
In
case there shall be pending proceedings relative to the Issuer or any other obligor upon the Securities under Title 11 of the
United States Code or any other applicable Federal or state bankruptcy, insolvency or other similar law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for
or taken possession of the Issuer or its property or such other obligor, or in case of any other comparable judicial proceedings
relative to the Issuer or other obligor upon the Securities of any series, or to the creditors or property of the Issuer or such
other obligor, the Trustee, irrespective of whether the Principal of any Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise:
(a)
to file and prove a claim or claims for the whole amount of Principal and interest (or, if the Securities of any series are Original
Issue Discount Securities, such portion of the Principal amount as may be specified in the terms of such series) owing and unpaid
in respect of the Securities of any series, and to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee,
and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Securityholders allowed
in any judicial proceedings relative to the Issuer or other obligor upon the Securities of any series, or to the creditors or
property of the Issuer or such other obligor;
(b)
unless prohibited by applicable law and regulations, to vote on behalf of the Holders of the Securities of any series in any election
of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or
person performing similar functions in comparable proceedings; and
(c)
to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute all amounts received
with respect to the claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver, or liquidator,
custodian or other similar official is hereby authorized by each of the Securityholders to make payments to the Trustee, and,
in the event that the Trustee shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such
amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith and all other amounts due to the Trustee or any predecessor
Trustee pursuant to Section 5.06.
Nothing
herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf
of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any series
or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any
such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar person.
All
rights of action and of asserting claims under this Indenture, or under any of the Securities, may be enforced by the Trustee
without the possession of any of the Securities or the production thereof on any trial or other proceedings relative thereto,
and any such action or proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Securities in respect
of which such action was taken.
In
any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture
to which the Trustee shall be a party) the Trustee shall be held to represent all the Holders of the Securities in respect to
which such action was taken, and it shall not be necessary to make any Holders of such Securities parties to any such proceedings.
Section
4.03
Application of Proceeds
. Any monies collected by the Trustee pursuant to this Article in respect of any series shall
be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such monies on
account of Principal or interest, upon presentation of the several Securities in respect of which monies have been collected and
stamping (or otherwise noting) thereon the payment, or issuing Securities of such series in reduced Principal amounts in exchange
for the presented Securities of like series if only partially paid, or upon surrender thereof if fully paid:
FIRST:
To the payment of costs and expenses applicable to such series in respect of which monies have been collected, including reasonable
compensation to the Trustee and each predecessor Trustee and their respective agents and attorneys and of all expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith, and
all other amounts due to the Trustee or any predecessor Trustee pursuant to Section 5.06;
SECOND:
In case the Principal of the Securities of such series in respect of which monies have been collected shall not have become and
be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity of
the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the
overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in such Securities, such payments to be made ratably to the persons entitled thereto, without discrimination
or preference;
THIRD:
In case the Principal of the Securities of such series in respect of which monies have been collected shall have become and shall
be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for Principal
and interest, with interest upon the overdue Principal, and (to the extent that such interest has been collected by the Trustee)
upon overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of such series; and in case such monies shall be insufficient to pay in full
the whole amount so due and unpaid upon the Securities of such series, then to the payment of such Principal and interest or yield
to maturity, without preference or priority of Principal over interest or yield to maturity, or of interest or yield to maturity
over Principal, or of any installment of interest over any other installment of interest, or of any Security of such series over
any other Security of such series, ratably to the aggregate of such Principal and accrued and unpaid interest or yield to maturity;
and
FOURTH:
To the payment of the remainder, if any, to the Issuer or any other person lawfully entitled thereto.
Section
4.04
Suits for Enforcement.
In case an Event of Default has occurred, has not been waived and is continuing, the Trustee
may proceed to protect and enforce the rights vested in it by this Indenture, either at law or in equity or in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any
power granted in this Indenture or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by
law.
Section
4.05
Restoration of Rights on Abandonment of Proceedings
. In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee, then and in every such case the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee and the Securityholders shall continue
as though no such proceedings had been taken.
Section
4.06
Limitations on Suits by Securityholder
. No Holder of any Security of any series shall have any right by virtue or
by availing of any provision of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise
upon or under or with respect to this Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder, unless such Holder previously shall have given to the Trustee written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided, and unless also the Holders of not less than
25% in aggregate Principal amount of the Securities of such series then outstanding shall have made written request upon the Trustee
to institute such action or proceedings in respect of such Event of Default in its own name as trustee hereunder and shall have
offered to the Trustee indemnity satisfactory to the Trustee against the costs, expenses and liabilities to be incurred therein
or thereby and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute
any such action or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant
to Section 4.09; it being understood and intended, and being expressly covenanted by the Holder of every Security with every other
Holder and the Trustee, that no one or more Holders of Securities of any series shall have any right in any manner whatever by
virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other such Holder of
Securities, or to obtain or seek to obtain priority over or preference to any other such Holder or to enforce any right under
this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders of Securities
of the applicable series. For the protection and enforcement of the provisions of this Section, each and every Securityholder
and the Trustee shall be entitled to such relief as can be given either at law or in equity.
Section
4.07
Unconditional Right of Securityholders to Institute Certain Suits
. Notwithstanding any other provision in this Indenture
and any provision of any Security, the right of any Holder of any Security to receive payment of the Principal of or interest
on such Security on or after the respective due dates expressed in such Security, or to institute suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
Section
4.08
Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default
. Except as provided in Section 4.06, no right
or remedy herein conferred upon or reserved to the Trustee or to the Securityholders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
No
delay or omission of the Trustee or of any Securityholder to exercise any right or power accruing upon any Event of Default occurring
and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Event of Default
or an acquiescence therein; and, subject to Section 4.06, every power and remedy given by this Indenture or by law to the Trustee
or to the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by
the Securityholders.
Section
4.09
Control by Securityholders
. The Holders of a majority in aggregate Principal amount of the Securities of each series
affected (with each series voting as a separate class) at the time outstanding shall have the right to direct the time, method,
and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee with respect to the Securities of such series by this Indenture; provided that such direction shall not be otherwise
than in accordance with law and the provisions of this Indenture and provided further that (subject to the provisions of Section
5.01) the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall
determine that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of
directors, the executive committee, or a trust committee of directors or Responsible Officers of the Trustee shall determine that
the action or proceedings so directed would subject the Trustee to personal liability or if the Trustee in good faith shall so
determine that the actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests
of Holders of the Securities of all series so affected not joining in the giving of said direction.
Nothing
in this Indenture shall impair the right of the Trustee to take any action which is not inconsistent with such direction or directions
by Securityholders.
Section
4.10
Waiver of Past Defaults
. Prior to a declaration of the acceleration of the maturity of the Securities of any series
as provided in Section 4.01, the Holders of a majority in aggregate Principal amount of the Securities of such series at the time
Outstanding (each such series voting as a separate class) may on behalf of the Holders of all the Securities of such series waive
an existing default or Event of Default, except a default in the payment of Principal of or interest on any Security as specified
in clauses (a) or (b) of Section 4.01 or in respect of a covenant or provision hereof which cannot be modified or amended without
the consent of each Holder affected as provided in Section 7.02. In the case of any such waiver, the Issuer, the Trustee and the
Holders of the Securities of each series affected shall be restored to their former positions and rights hereunder, respectively.
Upon
any such waiver, such default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured, and not to have occurred for every purpose of this Indenture; but
no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.
Section
4.11
Trustee to Give Notice of Default, But May Withhold in Certain Circumstances
. The Trustee shall give to the Securityholders
of any series, as the names and addresses of such Holders appear on the registry books, notice by mail of all defaults known to
Responsible Officers of the Trustee which have occurred with respect to such series, such notice to be transmitted within 90 days
after the occurrence thereof, unless such defaults shall have been cured before the giving of such notice (the term “default”
or “defaults” for the purposes of this section being hereby defined to mean any event or condition which is, or with
notice or lapse of time or both would become, an Event of Default); provided that, except in the case of default in the payment
of the Principal of or interest on any of the Securities of such series, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee, or a trust committee of directors or trustees and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders
of such series.
Section
4.12
Right of Court to Require Filing of Undertaking to Pay Costs
. All parties to this Indenture agree, and each Holder
of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses,
against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such
party litigant;
provided
that the provisions of this Section 4.12 shall not apply to (i) any suit instituted by the Trustee,
(ii) any suit instituted by any Securityholder or group of Securityholders of any series holding in the aggregate more than 10%
in aggregate Principal amount of the Securities of such series or (iii) any suit instituted by a Holder pursuant to Section 4.07.
ARTICLE
5
CONCERNING
THE TRUSTEE
Section
5.01
Duties and Responsibilities of the Trustee
. With respect to the Holders of any series of Securities issued hereunder,
the Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect to such series, undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture. In case an Event of Default with respect to the Securities
of a series has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person’s own affairs.
(a)
Prior to the occurrence of an Event of Default with respect to the Securities of any series and after the curing or waiving of
all such Events of Default with respect to such series which may have occurred:
(i)
the duties and obligations of the Trustee with respect to the Securities of any Series shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against
the Trustee; and
(ii)
in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of any such statements, certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture.
(b)
No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i)
this subsection (b) shall not be construed to limit the effect of subsection (a) of this Section 5.01;
(ii)
the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers
of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and
(iii)
the Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Holders relating to the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture.
None
of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there shall
be reasonable ground for believing that the repayment of such funds or adequate indemnity against such liability is not reasonably
assured to it.
The
provisions of this Section 5.01 are in furtherance of and subject to Sections 315 and 316 of the Trust Indenture Act of 1939.
Whether
or not therein expressly provided, every provision of this Indenture relating to the conduct of, affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this Section 5.01.
Section
5.02
Certain Rights of the Trustee
. In furtherance of and subject to the Trust Indenture Act of 1939, and subject to Section
5.01:
(a)
In the absence of bad faith on its part, the Trustee may conclusively rely and shall be protected in acting or refraining from
acting upon any resolution, Officers’ Certificate or any other certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, coupon, security or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b)
any request, direction, order or demand of the Issuer mentioned herein shall be sufficiently evidenced by an Officers’ Certificate
(unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may
be evidenced to the Trustee by a copy thereof certified by the secretary or an assistant secretary of the Issuer;
(c)
the Trustee may consult with counsel of its selection and any advice or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(d)
the Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall
have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred
by it in connection with such request, order or direction;
(e)
the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture;
(f)
prior to the occurrence of an Event of Default hereunder and after the curing or waiving of all Events of Default, the Trustee
shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond, debenture, note, coupon, security, or other paper
or document unless requested in writing so to do by the Holders of not less than a majority in aggregate Principal amount of the
Securities of all series affected then outstanding; provided that, if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require indemnity
satisfactory to it against such expenses or liabilities as a condition to proceeding, and the reasonable expenses of every such
investigation shall be paid by the Issuer or, if paid by the Trustee or any predecessor trustee, shall be repaid by the Issuer
upon demand;
(g)
the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Trustee shall not be responsible for any misconduct or negligence on the
part of any such agent or attorney appointed with due care by it hereunder;
(h)
the Trustee shall not be liable for any action taken, suffered or omitted in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this Indenture;
(i)
the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee
at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture;
(j)
the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to
be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent,
custodian and other Person employed to act hereunder; and
(k)
the Trustee may request that the Issuer deliver an Officers’ Certificate setting forth the names of individuals and/or titles
of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may
be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in
any such certificate previously delivered and not superseded.
Section
5.03
Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof
. The recitals contained
herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the
Issuer, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture or the Securities. The Trustee shall not be accountable for the use or application by
the Issuer of any of the Securities or of the proceeds thereof.
Section
5.04
Trustee and Agents May Hold Securities; Collections, etc
. The Trustee or any agent of the Issuer or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were
not the Trustee or such agent and may otherwise deal with the Issuer and receive, collect, hold and retain collections from the
Issuer with the same rights it would have if it were not the Trustee or such agent.
Section
5.05
Monies Held by Trustee
. All monies received by the Trustee in trust hereunder need not be segregated from other funds
except to the extent required by mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or the Trustee shall
be under any liability for interest on any monies received by it hereunder.
Section
5.06
Compensation and Indemnification of Trustee and Its Prior Claim
. The Issuer covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation as shall be agreed in writing from time to time by
the Issuer and the Trustee (which shall not be limited by any provision of law in regard to the compensation of a trustee of an
express trust) and the Issuer covenants and agrees to pay or reimburse the Trustee and each predecessor Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any of the provisions
of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all agents and
other persons not regularly in its employ) except to the extent any such expense, disbursement or advance may arise from its negligence
or bad faith. The Issuer also covenants and agrees to indemnify the Trustee and each predecessor Trustee for, and to hold it harmless
against, any loss, liability or expense arising out of or in connection with the acceptance or administration of this Indenture
or the trusts hereunder and the performance of its duties hereunder, including the costs and expenses of defending itself against
or investigating any claim of liability (whether asserted by the Issuer, a Holder or any other Person) in the premises, except
to the extent such loss, liability or expense is due to the negligence or bad faith of the Trustee or such predecessor Trustee.
The obligations of the Issuer under this section to compensate and indemnify the Trustee and each predecessor Trustee and to pay
or reimburse the Trustee and each predecessor Trustee for expenses, disbursements and advances shall constitute additional indebtedness
hereunder and shall survive the satisfaction and discharge of this Indenture or the resignation or removal of the Trustee. Such
additional indebtedness shall be a senior claim and lien to that of the Securities upon all property and funds held or collected
by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Securities, and the Securities
are hereby subordinated to such senior claim. The parties agree that if the Trustee renders services following an Event of Default
under Section 4.01(d) or (e), compensation for such services is intended to constitute administrative expense under any bankruptcy
law.
Section
5.07
Right of Trustee to Rely on Officers’ Certificate, etc
. Subject to Section 5.01 and Section 5.02, whenever in
the administration of the trusts of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers’ Certificate delivered to the Trustee, and such certificate, in the absence
of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or
omitted by it under the provisions of this Indenture upon the faith thereof.
Section
5.08
Persons Eligible for Appointment as Trustee
. The Trustee for each series of Securities hereunder shall at all times
be a corporation which is eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act of 1939 and
which has (or which is a Wholly-Owned Subsidiary, directly or indirectly, of a bank holding company which has) a combined capital
and surplus of $50,000,000. If such corporation or holding company publishes reports of condition at least annually, pursuant
to law or to the requirements of a Federal, State or District of Columbia supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation or holding company shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
Section
5.09
Resignation and Removal; Appointment of Successor Trustee
. (a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign with respect to one or more or all series of Securities by giving written notice of resignation to the
Issuer. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees with respect
to the applicable series by written instrument in duplicate, executed by authority of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or trustees. If no successor Trustee
shall have been so appointed with respect to any series and have accepted appointment within 30 days after the mailing of such
notice of resignation, the resigning Trustee may petition, at the expense of the Issuer, any court of competent jurisdiction for
the appointment of a successor Trustee, or any Securityholder who has been a bona fide Holder of a Security or Securities of the
applicable series for at least six months may, subject to the provisions of Section 4.12, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor Trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, appoint a successor Trustee.
(b)
In case at any time any of the following shall occur:
(i)
the Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture Act of 1939 with respect to any
series of Securities after written request therefor by the Issuer or by any Securityholder who has been a bona fide Holder of
a Security or Securities of such series for at least six months;
(ii)
the Trustee shall cease to be eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act of 1939
and shall fail to resign after written request therefor by the Issuer or by any Securityholder; or
(iii)
the Trustee shall become incapable of acting with respect to any series of Securities, or shall be adjudged a bankrupt or insolvent,
or a receiver or liquidator of the Trustee or of its property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such
case, the Issuer may remove the Trustee with respect to the applicable series of Securities and appoint a successor trustee for
such series by written instrument, in duplicate, executed by order of the Board of Directors of the Issuer, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the successor Trustee, or, subject to Section 315(e) of
the Trust Indenture Act of 1939, any Securityholder who has been a bona fide Holder of a Security or Securities of
such
series for at least six months may on behalf of himself and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor trustee with respect to such series. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.
(c)
The Holders of a majority in aggregate Principal amount of the Securities of each series at the time outstanding may at any time
remove the Trustee with respect to Securities of such series and appoint a successor Trustee with respect to the Securities of
such series by delivering to the Trustee so removed, to the successor Trustee so appointed and to the Issuer the evidence provided
in Section 6.01 of the action in that regard taken by the Securityholders.
(d)
Any resignation or removal of the Trustee with respect to any series and any appointment of a successor trustee with respect to
such series pursuant to any of the provisions of this Section 5.09 shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 5.10.
Section
5.10
Acceptance of Appointment by Successor
. Any successor Trustee appointed as provided in Section 5.09 shall execute
and deliver to the Issuer and to its predecessor Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee with respect to all or any applicable series shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as if originally named as Trustee for such series hereunder.
On the written request of the Issuer or of the successor Trustee, upon payment of its charges then unpaid, the Trustee ceasing
to act shall, subject to Section 5.06, pay over to the successor Trustee all monies at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor Trustee all such rights, powers, duties and obligations. Upon
request of any such successor Trustee, the Issuer shall execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor Trustee all such rights and powers. Any Trustee ceasing to act shall, nevertheless,
retain a prior claim upon all property or funds held or collected by such Trustee to secure any amounts then due it pursuant to
the provisions of Section 5.06.
If
a successor Trustee is appointed with respect to the Securities of one or more (but not all) series, the Issuer, the predecessor
Trustee and each successor Trustee with respect to the Securities of any applicable series shall execute and deliver an indenture
supplemental hereto which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the predecessor Trustee with respect to the Securities of any series as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor Trustee, and shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees
of the same trust and that each such Trustee shall be Trustee of a trust or trusts under separate indentures.
Upon
acceptance of appointment by any successor Trustee as provided in this Section 5.10, the Issuer shall mail notice thereof by first-class
mail to the Holders of Securities of any series for which such successor Trustee is acting as Trustee at their last addresses
as they shall appear in the Security register. If the acceptance of appointment is substantially contemporaneous with the resignation,
then the notice called for by the preceding sentence may be combined with the notice called for by Section 5.09. If the Issuer
fails to mail such notice within 10 days after acceptance of appointment by the successor Trustee, the successor Trustee shall
cause such notice to be mailed at the expense of the Issuer.
Section
5.11
Merger, Conversion, Consolidation or Succession to Business of Trustee
. Any corporation into which the Trustee may
be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation
to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be eligible under the provisions
of Section 5.08, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
In
case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Securities of
any series shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication
of any predecessor Trustee and deliver such Securities so authenticated; and, in case at that time any of the Securities of any
series shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor Trustee; and in all such cases such certificate shall have the full
force which it is anywhere in the Securities of such series or in this Indenture provided that the certificate of the Trustee
shall have; provided, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate
Securities of any series in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion
or consolidation.
Section
5.12
Reports to the Trustee
. The Trustee shall transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.
If required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within sixty days after each May 15 following the
date of the initial issuance of Securities under this Indenture deliver to Holders a brief report, dated as of such May 15, which
complies with the provisions of such Section 313(a).
A
copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange,
if any, upon which the Securities are listed, with the Commission and with the Issuer. The Issuer will promptly notify the Trustee
when the Securities are listed on any stock exchange and of any delisting thereof.
ARTICLE
6
CONCERNING
THE SECURITYHOLDERS
Section
6.01
Evidence of Action Taken by Securityholders
. Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by a specified percentage in Principal amount of the Securityholders
of any or all series may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such
specified percentage of Securityholders in person or by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments are delivered to the Trustee. Proof of execution
of any instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject
to Section 5.01 and Section 5.02) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Article.
Section
6.02
Proof of Execution of Instruments and of Holding of Securities; Record Date
. Subject to Section 5.01 and Section 5.02,
the execution of any instrument by a Securityholder or his agent or proxy may be proved by the certificate of any notary public
or other officer authorized to take acknowledgment of deeds, that the Person executing such instrument acknowledged to such notary
public or other such officer the execution thereof, or by an affidavit of a witness to such execution sworn to before any such
notary public or other officer. Where such execution is by an officer of a corporation or association or a member of a partnership
on behalf of such corporation, association or partnership, as the case may be, or by any other Person acting in a representative
capacity, such certificate or affidavit shall also constitute sufficient proof of such Person’s authority. The holding of
Securities shall be proved by the Security register or by a certificate of the registrar thereof. The Issuer may set a record
date for purposes of determining the identity of Holders of Securities of any series entitled to vote or consent to any action
referred to in Section 6.01, which record date may be set at any time or from time to time by notice to the Trustee, for any date
or dates (in the case of any adjournment or reconsideration) not more than 60 days nor less than five days prior to the proposed
date of such vote or consent, and thereafter, notwithstanding any other provisions hereof, only Holders of Securities of such
series of record on such record date shall be entitled to so vote or give such consent or revoke such vote or consent.
Section
6.03
Holders to be Treated as Owners
. Prior to due presentment of a Security for registration of transfer, the Issuer,
the Trustee and any agent of the Issuer or the Trustee may deem and treat the person in whose name any Security shall be registered
upon the Security register for such series as the absolute owner of such Security (whether or not such Security shall be overdue
and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or on account
of the Principal of and, subject to the provisions of this Indenture, interest on such Security and for all other purposes, and
neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be affected by any notice to the contrary.
All such payments so made to any such person, or upon his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any such Security.
Section
6.04
Securities Owned by Issuer Deemed Not Outstanding
. In determining whether the Holders of the requisite aggregate Principal
amount of Outstanding Securities of any or all series have concurred in any direction, consent or waiver under this Indenture,
Securities which are owned by the Issuer or any other obligor on the Securities with respect to which such determination is being
made or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the
Issuer or any other obligor on the Securities with respect to which such determination is being made shall be disregarded and
deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver only Securities as to which the Trustee has received
written notice are so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect
to such Securities and that the pledgee is not the Issuer or any other obligor upon the Securities or any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities.
In case of a dispute as to such right, the advice of counsel shall be full protection in respect of any decision made by the Trustee
in accordance with such advice. Upon request of the Trustee, the Issuer shall furnish to the Trustee promptly an Officers’
Certificate listing and identifying all Securities, if any, known by the Issuer to be owned or held by or for the account of any
of the above-described persons; and, subject to Section 5.01 and Section 5.02, the Trustee shall be entitled to accept such Officers’
Certificate as conclusive evidence of the facts therein set forth and of the fact that all Securities not listed therein are Outstanding
for the purpose of any such determination.
Section
6.05
Right of Revocation of Action Taken
. At any time prior to (but not after) the evidencing to the Trustee, as provided
in Section 6.01, of the taking of any action by the Holders of the percentage in aggregate Principal amount of the Securities
of any or all series, as the case may be, specified in this Indenture in connection with such action, any Holder of a Security
the serial number of which is shown by the evidence to be included among the serial numbers of the Securities the Holders of which
have consented to such action may, by filing written notice at the Corporate Trust Office and upon proof of holding as provided
in this Article, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the Holder
of any Security shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Security and of
any Securities issued in exchange or substitution therefor, irrespective of whether or not any notation in regard thereto is made
upon any such Security. Any action taken by the Holders of the percentage in aggregate Principal amount of the Securities of any
or all series, as the case may be, specified in this Indenture in connection with such action shall be conclusively binding upon
the Issuer, the Trustee and the Holders of all the Securities affected by such action.
ARTICLE
7
SUPPLEMENTAL
INDENTURES
Section
7.01
Supplemental Indentures Without Consent of Securityholders
. The Issuer, when authorized by a resolution of its Board
of Directors certified to the Trustee, and the Trustee may from time to time and at any time enter into an indenture or indentures
supplemental hereto for one or more of the following purposes:
(a)
to evidence the succession of another corporation to the Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer pursuant to Article 8;
(b)
(i) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein or in any supplemental indenture, (ii) to conform the terms
of Securities to the description thereof in the prospectus and prospectus supplement (or similar offering document) offering such
Securities or (iii) to make such other provisions in regard to matters or questions arising under this Indenture or under any
supplemental indenture as the Board of Directors may deem necessary or desirable and which shall not adversely affect the interests
of the Holders of the Securities in any material respect;
(c)
to establish the form or terms of Securities of any series as permitted by Section 2.01 and Section 2.03;
(d)
to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Section 5.10;
(e)
to comply with any requirements of the Commission in connection with the qualification of this Indenture under the Trust Indenture
Act of 1939;
(f)
to provide for uncertificated or Unregistered Securities and to make all appropriate changes for such purpose;
(g)
to make any change that would not reasonably be expected to adversely affect the rights of any Holder in any material respect;
(h)
to add to the covenants of the Issuer such new covenants, restrictions, conditions or provisions as its Board of Directors shall
consider to be for the protection of the Holders of Securities, and with respect to which the Trustee has received an Opinion
of Counsel to a similar effect, and to make the occurrence, or the occurrence and continuance, of a default in any such additional
covenants, restrictions, conditions or provisions an Event of Default; provided, that in respect of any such additional covenant,
restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon
such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the right
of the Holders of a majority in aggregate Principal amount of the Securities of such series to waive such an Event of Default;
or
(i)
to make any change so long as no Securities are Outstanding.
The
Trustee is hereby authorized to join with the Issuer in the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage
or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental indenture which
affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
Any
supplemental indenture authorized by the provisions of this section may be executed without the consent of the Holders of any
of the Securities at the time outstanding, notwithstanding any of the provisions of Section 7.02.
Section
7.02
Supplemental Indentures With Consent of Securityholders
. With the consent (evidenced as provided in Article 6) of
the Holders of not less than a majority in aggregate Principal amount of the Securities at the time Outstanding of all series
affected by such supplemental indenture (voting as one class), the Issuer, when authorized by a resolution of its Board of Directors,
and the Trustee may, from time to time and at any time, enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the Securities of each such series; provided, that no such
supplemental indenture shall without the consent of each Holder affected thereby:
(i)
change the stated maturity of the Principal of, or the time of payment of any installment of interest on, such Holder’s
Security;
(ii)
reduce the Principal thereof or the rate of interest thereon, or any premium payable with respect thereto;
(iii)
change any place of payment where, or the currency in which, any Security or any premium or the interest thereon is payable;
(iv)
change the provisions for calculating any redemption or repurchase price, including the definitions relating thereto;
(v)
make any change to Section 4.07 or Section 4.10 (except to include other provisions subject to Section 4.10);
(vi)
reduce the percentage in Principal amount of outstanding Securities of the relevant series the consent of whose Holders is required
for any such supplemental indenture, for any waiver of compliance with any provisions of this Indenture or any defaults and their
consequences provided for in this Indenture;
(vii)
alter or impair the right to convert any Security at the rate and upon the terms provided in Article 12;
(viii)
waive a default in the payment of Principal of or interest on any Security of such Holder (except pursuant to a rescission of
acceleration pursuant to Section 4.01);
(ix)
adversely affect the rights of such Holder under any mandatory redemption or repurchase provision or any right of redemption or
repurchase at the option of such Holder;
(x)
modify any of the provisions of this Section 7.02, except to increase any such percentage or to provide that certain other provisions
of this Indenture cannot be modified or waived without the consent of the Holder of each outstanding Security affected thereby;
(xi)
modify Article 13 of this Indenture or the definition of “Senior Indebtedness” in Article 1 hereof in a manner adverse
to Holders of any series of Securities; or
(xii)
change or waive any provision that, pursuant to a board resolution or indenture supplemental hereto establishing the terms of
one or more series of Securities, is prohibited to be so changed or waived.
Upon
the written request of the Issuer, accompanied by a copy of a resolution of the Board of Directors certified by the secretary
or an assistant secretary of the Issuer authorizing the execution of any such supplemental indenture, and upon the filing with
the Trustee of evidence of the consent of Securityholders as aforesaid and other documents, if any, required by Section 6.01,
the Trustee shall join with the Issuer in the execution of such supplemental indenture unless such supplemental indenture affects
the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion,
but shall not be obligated to, enter into such supplemental indenture.
It
shall not be necessary for the consent of the Securityholders under this section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.
Promptly
after the execution by the Issuer and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the
Issuer shall mail a notice thereof by first class mail to the Holders of Securities of each series affected thereby at their addresses
as they shall appear on the registry books of the Issuer, setting forth in general terms the substance of such supplemental indenture.
Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity
of any such supplemental indenture.
Section
7.03
Effect of Supplemental Indenture
. Upon the execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations
of rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
Section
7.04
Documents to Be Given to Trustee
. The Trustee, subject to the provisions of Section 5.01 and Section 5.02, may receive
an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant
to this Article 7 complies with the applicable provisions of this Indenture.
Section
7.05
Notation on Securities in Respect of Supplemental Indentures
. Securities of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of this Article may bear a notation in form approved
by the Trustee for such series as to any matter provided for by such supplemental indenture or as to any action taken at any such
meeting. If the Issuer or the Trustee shall so determine, new Securities of any series so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture
may be prepared by the Issuer, authenticated by the Trustee and delivered in exchange for the Securities of such series then outstanding.
ARTICLE
8
CONSOLIDATION,
MERGER, SALE OR CONVEYANCE
Section
8.01
Issuer May Consolidate, etc., on Certain Terms
. The Issuer covenants that it will not merge or consolidate with any
other Person or sell, convey, transfer, lease or otherwise dispose of all or substantially all of its property and assets to any
Person (other than a consolidation with or merger with or into or a sale, conveyance, transfer, lease or other disposition to
a Wholly-Owned Subsidiary with a positive net worth;
provided
that, in connection with any such merger of the Issuer with
a Wholly-Owned Subsidiary, no consideration (other than common stock) in the surviving person or the Issuer shall be issued or
distributed to the stockholders of the Issuer), unless (xv) either (x) the Issuer shall be the continuing corporation, or the
successor corporation or (y) the Person formed by such consolidation or into which the Issuer is merged or that acquires by sale
or conveyance substantially all the assets of the Issuer (if other than the Issuer) shall be a corporation or limited liability
company organized and validly existing under the laws of the United States of America or any jurisdiction thereof and shall expressly
assume the due and punctual payment of the Principal of and interest on all the Securities, according to their tenor, and the
due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed or observed
by the Issuer, by supplemental indenture satisfactory to the Trustee, executed and delivered to the Trustee by such Person, (xvi)
immediately after giving effect to such transaction, no default or Event of Default shall have occurred and be continuing and
(xvii) the Issuer delivers to the Trustee an Officers’ Certificate and Opinion of Counsel, in each case stating that such
consolidation, merger or transfer and such supplemental indenture complies with this Section 8.01 and that all conditions precedent
provided for herein relating to such transaction have been complied with;
provided
, however, that the foregoing limitations
shall not apply if, in the good faith determination of the Board of Directors, whose determination shall be evidenced by a board
resolution certified to the Trustee, the principal purpose of such transaction is to change the state of incorporation of the
Issuer; and
provided further
that any such transaction shall not have as one of its purposes the evasion of the foregoing
limitations.
Section
8.02
Successor Corporation Substituted
. In case of any such consolidation, merger, sale, conveyance, transfer, lease or
other disposition, and following such an assumption by the successor Person, such successor Person shall succeed to and be substituted
for the Issuer, with the same effect as if it had been named herein. Such successor Person may cause to be signed, and may issue
either in its own name or in the name of the Issuer prior to such succession any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Issuer and delivered to the Trustee; and, upon the order of such successor Person
instead of the Issuer and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee, pursuant
to the terms hereof, shall authenticate and shall deliver any Securities which previously shall have been signed and delivered
by the officers of the Issuer to the Trustee for authentication, and any Securities which such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All of the Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms
of this Indenture as though all of such Securities had been issued at the date of the execution hereof.
In
case of any such consolidation, merger, sale, conveyance, transfer, lease or other disposition, such changes in phraseology and
form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate.
Upon
the assumption by the successor Person in the manner described in this Article, the Issuer shall be discharged from all obligations
and covenants under this Indenture and the Securities.
ARTICLE
9
DISCHARGE
OF INDENTURE
Section
9.01
Defeasance Within One Year of Payment
. Except as otherwise provided in this Section 9.01, the Issuer may terminate
its obligations under the Securities of any series and this Indenture with respect to Securities of such series if:
(i)
all Securities of such series previously authenticated and delivered (other than destroyed, lost or wrongfully taken Securities
of such series that have been replaced or Securities of such series for whose payment money or securities have theretofore been
held in trust and thereafter repaid to the Issuer, as provided in Section 9.05) have been delivered to the Trustee for cancellation
and the Issuer has paid all sums payable by it hereunder; or
(ii)
(A) the Securities of such series mature within one year or all of them are to be called for redemption within one year under
arrangements satisfactory to the Trustee for giving the notice of redemption, (B) the Issuer irrevocably deposits in trust with
the Trustee, as trust funds solely for the benefit of the Holders of such Securities for that purpose, money or U.S. Government
Obligations or a combination thereof sufficient (unless such funds consist solely of money, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification thereof delivered to the Trustee), without consideration
of any reinvestment and after payment of all Federal, state and local taxes or other charges and assessments in respect thereof
payable by the Trustee, to pay Principal of and interest on the Securities of such series to maturity or redemption, as the case
may be, and to pay all other sums payable by it hereunder and (C) the Issuer delivers to the Trustee an Officers’ Certificate
and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the satisfaction
and discharge of this Indenture with respect to the Securities of such series have been complied with.
With
respect to the foregoing clause (i), only the Issuer’s obligations under Sections 5.06 and 9.05 in respect of the Securities
of such series shall survive. With respect to the foregoing clause (ii), only the Issuer’s obligations in Sections 2.03
through 2.11, 3.02, 5.06, 5.09 and 9.05 in respect of the Securities of such series shall survive until such Securities of such
series are no longer outstanding. Thereafter, only the Issuer’s obligations in Sections 5.06 and 9.05 in respect of the
Securities of such series shall survive. After any such irrevocable deposit, the Trustee shall acknowledge in writing the discharge
of the Issuer’s obligations under the Securities of such series and this Indenture with respect to the Securities of such
series except for those surviving obligations specified above.
Section
9.02
Defeasance
. Except as provided below, the Issuer will be deemed to have paid and will be discharged from any and all
obligations in respect of the Securities of any series and the provisions of this Indenture will no longer be in effect with respect
to the Securities of such series (and the Trustee, at the expense of the Issuer, shall execute instruments in form and substance
satisfactory to the Issuer and the Trustee acknowledging the same) if the following conditions shall have been satisfied:
(i)
the Issuer has irrevocably deposited in trust with the Trustee as trust funds specifically pledged as security for, and dedicated
solely to, Holders of the Securities of such series, for payment of the Principal of and interest on the Securities of such series,
money or U.S. Government Obligations or a combination thereof sufficient (unless such funds consist solely of money, in the opinion
of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the
Trustee) without consideration of any reinvestment and after payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, to pay and discharge the Principal of and accrued interest on the outstanding
Securities of such series to maturity or earlier redemption (irrevocably provided for under arrangements satisfactory to the Trustee),
as the case may be;
(ii)
such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other material
agreement or instrument to which the Issuer is a party or by which it is bound;
(iii)
no default or Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date
of such deposit;
(iv)
the Issuer shall have delivered to the Trustee (1) either (x) a ruling directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders of the Securities of such series will not recognize income, gain or loss for Federal income
tax purposes as a result of the Issuer’s exercise of its option under this Section 9.02 and will be subject to federal income
tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance
had not occurred or (y) an Opinion of Counsel to the same effect as the ruling described in clause (x) above and based upon a
change in law and (2) an Opinion of Counsel to the effect that the Holders of the Securities of such series have a valid security
interest in the trust funds subject to no prior liens under the UCC; and
(v)
the Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance contemplated by this Section 9.02 of the Securities of such
series have been complied with.
The
Issuer’s obligations in Sections 2.03 through 2.11, 3.02, 5.06, 5.09 and 9.05 with respect to the Securities of such series
shall survive until such Securities are no longer outstanding. Thereafter, only the Issuer’s obligations in Sections 5.06
and 9.05 shall survive.
Section
9.03
Covenant Defeasance
. The Issuer may omit to comply with any term, provision or condition set forth in Sections 3.04,
3.06 or 3.08 (or any other specific covenant relating to the Securities of any series provided for in a Board Resolution or supplemental
indenture pursuant to Section 2.03 which may by its terms be defeased pursuant to this Section 9.03), and such omission shall
be deemed not to be an Event of Default under clause (c) of Section 4.01, with respect to the outstanding Securities of such series
if:
(i)
the Issuer has irrevocably deposited in trust with the Trustee as trust funds solely for the benefit of the Holders of the Securities
of such series, for payment of the Principal of and interest, if any, on the Securities of such series, money or U.S. Government
Obligations or a combination thereof in an amount sufficient (unless such funds consist solely of money, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee) without
consideration of any reinvestment and after payment of all Federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, to pay and discharge the Principal of and interest on the outstanding Securities of such
series to maturity or earlier redemption (irrevocably provided for under arrangements satisfactory to the Trustee), as the case
may be;
(ii)
such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other material
agreement or instrument to which the Issuer is a party or by which it is bound;
(iii)
no default or Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date
of such deposit;
(iv)
the Issuer has delivered to the Trustee an Opinion of Counsel to the effect that (A) the Holders of the Securities of such series
have a valid security interest in the trust funds subject to no prior liens under the UCC and (B) such Holders will not recognize
income, gain or loss for Federal income tax purposes as a result of such deposit and covenant defeasance and will be subject to
federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit
and defeasance had not occurred; and
(v)
the Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the covenant defeasance contemplated by this Section 9.03 of the Securities
of such series have been complied with.
Section
9.04
Application of Trust Money
. Subject to Section 9.05, the Trustee or Paying Agent shall hold in trust money or U.S.
Government Obligations deposited with it pursuant to 9.01, 9.02, 9.03, as the case may be, in respect of the Securities of any
series and shall apply the deposited money and the proceeds from deposited U.S. Government Obligations in accordance with the
Securities of such series and this Indenture to the payment of Principal of and interest on the Securities of such series; provided
that such money need not be segregated from other funds except to the extent required by law. The Issuer shall pay and indemnify
the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant
to 9.01, 9.02, 9.03, as the case may be, or the Principal and interest received in respect thereof, other than any such tax, fee
or other charge that by law is for the account of the Holders.
Section
9.05
Repayment to Issuer
. Subject to Sections 5.06 and 9.01, the Trustee and the Paying Agent shall promptly pay to the
Issuer upon request set forth in an Officers’ Certificate any money held by them at any time and not required to make payments
hereunder and thereupon shall be relieved from all liability with respect to such money. Subject to applicable escheat or abandoned
property laws, the Trustee and the Paying Agent shall pay to the Issuer upon written request any money held by them and required
to make payments hereunder under this Indenture that remains unclaimed for two years;
provided
that the Trustee or such
Paying Agent before being required to make any payment shall cause to be published at the expense of the Issuer once in an Authorized
Newspaper or mail to each Holder entitled to such money at such Holder’s address (as set forth in the register) notice that
such money remains unclaimed and that after a date specified therein (which shall be at least 30 days from the date of such publication
or mailing) any unclaimed balance of such money then remaining will be repaid to the Issuer. After payment to the Issuer, Holders
entitled to such money must look to the Issuer for payment as unsecured general creditors unless an abandoned property law designates
another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease.
ARTICLE
10
MISCELLANEOUS
PROVISIONS
Section
10.01
Incorporators, Stockholders, Officers and Directors Exempt from Individual Liability
. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture or in any Security, or because of any indebtedness evidenced thereby,
shall be had against any incorporator, as such, or against any past, present or future stockholder, officer, director or employee,
as such, of the Issuer or of any successor Person thereof, either directly or through the Issuer or any successor Person thereof,
under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities by the Holders
thereof and as part of the consideration for the issue of the Securities.
Section
10.02
Provisions of Indenture for the Sole Benefit of Parties and Securityholders
. Nothing in this Indenture or in the
Securities, expressed or implied, shall give or be construed to give to any person, firm or corporation, other than the parties
hereto and their successors and the Holders of the Securities, any legal or equitable right, remedy or claim under this Indenture
or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties
hereto and their successors and of the Holders of the Securities.
Section
10.03
Successors and Assigns of Issuer Bound by Indenture
. All the covenants, stipulations, promises and agreements contained
in this Indenture by or on behalf of the Issuer shall bind its successors and assigns, whether so expressed or not.
Section
10.04
Notices and Demands on Issuer, Trustee and Securityholders
. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the Holders of Securities to or on the Issuer may be given
or served by being deposited postage prepaid, first-class mail (except as otherwise specifically provided herein) addressed (until
another address of the Issuer is filed by the Issuer with the Trustee) to Provention Bio, Inc. at P.O. Box 666, Oldwick, New Jersey
08858, Attention: Chief Financial Officer. Any notice, direction, request or demand by the Issuer or any Securityholder to or
upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made at the Corporate
Trust Office.
Where
this Indenture provides for notice to Holders, such notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder entitled thereto, at such Holder’s last address as
it appears in the Security register. In any case where notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other
Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the person entitled to
receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice
by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
In
case, by reason of the suspension of or irregularities in regular mail service, it shall be impracticable to mail notice to the
Issuer and Securityholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner
of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice.
Section
10.05
Officers’ Certificates and Opinions of Counsel; Statements to be Contained Therein
. Upon any application or
demand by the Issuer to the Trustee to take any action under any of the provisions of this Indenture, the Issuer shall furnish
to the Trustee an Officers’ Certificate stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions
precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each
certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition
or covenant provided for in this Indenture shall include (a) a statement that the person making such certificate or opinion has
read such covenant or condition, (b) a brief statement as to the nature and scope of the examination or investigation upon which
the statements or opinions contained in such certificate or opinion are based, (c) a statement that, in the opinion of such person,
he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with and (d) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
Any
certificate, statement or opinion of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of or representations by counsel, unless such officer knows that the certificate or opinion or representations with
respect to the matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise
of reasonable care should know that the same are erroneous. Any certificate, statement or opinion of counsel may be based, insofar
as it relates to factual matters, information with respect to which is in the possession of the Issuer, upon the certificate,
statement or opinion of or representations by an officer or officers of the Issuer, unless such counsel knows that the certificate,
statement or opinion or representations with respect to the matters upon which his certificate, statement or opinion may be based
as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous.
Any
certificate, statement or opinion of an officer of the Issuer or of counsel may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant or firm of accountants in the employ of the Issuer,
unless such officer or counsel, as the case may be, knows that the certificate or opinion or representations with respect to the
accounting matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise
of reasonable care should know that the same are erroneous.
Any
certificate or opinion of any independent firm of public accountants filed with the Trustee shall contain a statement that such
firm is independent.
Section
10.06
Payments Due on Saturdays, Sundays and Holidays
. If the date of maturity of interest on or Principal of the Securities
of any series or the date fixed for redemption or repayment of any such Security shall not be a Business Day, then payment of
interest or Principal need not be made on such date, but may be made on the next succeeding Business Day with the same force and
effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after
such date.
Section
10.07
Conflict of Any Provision of Indenture with Trust Indenture Act of 1939
. If and to the extent that any provision
of this Indenture limits, qualifies or conflicts with another provision incorporated in this Indenture by operation of Sections
310 to 317, inclusive, of the Trust Indenture Act of 1939, such incorporated provision shall control.
Section
10.08
New York Law to Govern
. This Indenture and each Security shall be deemed to be a contract under the laws of the State
of New York, and for all purposes shall be construed in accordance with the laws of such State.
Section
10.09
Counterparts
. This Indenture may be executed in any number of counterparts, each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
Section
10.10
Effect of Headings
. The Article and Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
ARTICLE
11
REDEMPTION
OF SECURITIES
Section
11.01
Applicability of Article
. The provisions of this Article shall be applicable to the Securities of any series which
are redeemable before their maturity except as otherwise specified as contemplated by Section 2.03 for Securities of such series.
Section
11.02
Notice of Redemption; Partial Redemptions
. Notice of redemption to the Holders of Securities of any series to be
redeemed as a whole or in part at the option of the Issuer shall be given by mailing notice of such redemption by first class
mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to such Holders of Securities
of such series at their last addresses as they shall appear upon the registry books. Any notice which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice. Failure
to give notice by mail, or any defect in the notice to the Holder of any Security of a series designated for redemption as a whole
or in part shall not affect the validity of the proceedings for the redemption of any other Security of such series.
The
notice of redemption to each such Holder shall specify the CUSIP numbers of such Securities to be redeemed, the Principal amount
of each Security of such series held by such Holder to be redeemed, the date fixed for redemption, the redemption price, the place
or places of payment, that payment will be made upon presentation and surrender of such Securities, that interest accrued to the
date fixed for redemption will be paid as specified in such notice and that on and after said date interest thereon or on the
portions thereof to be redeemed will cease to accrue. In case any Security of a series is to be redeemed in part only the notice
of redemption shall state the portion of the Principal amount thereof to be redeemed, the method the Trustee shall use to determine
such Securities to be redeemed as specified in the last paragraph of this Section 11.02, if applicable, and shall state that on
and after the date fixed for redemption, upon surrender of such Security, a new Security or Securities of such series in Principal
amount equal to the unredeemed portion thereof will be issued.
The
notice of redemption of Securities of any series to be redeemed at the option of the Issuer shall be given by the Issuer or, at
the Issuer’s written request, by the Trustee in the name and at the expense of the Issuer.
By
11:00 a.m. (New York City time) on the redemption date specified in the notice of redemption given as provided in this Section,
the Issuer will deposit with the Trustee or with one or more paying agents (or, if the Issuer is acting as its own paying agent,
set aside, segregate and hold in trust as provided in Section 3.03) an amount of money sufficient to redeem on the redemption
date all the Securities of such series so called for redemption at the appropriate redemption price, together with accrued interest
to the date fixed for redemption. If less than all the outstanding Securities of a series are to be redeemed, the Issuer will
deliver to the Trustee at least 70 days (unless a shorter period shall be satisfactory to the Trustee) prior to the date fixed
for redemption an Officers’ Certificate stating the aggregate Principal amount of Securities to be redeemed.
In
the case of the redemption of all of the Securities of a series outstanding, the Issuer shall notify the Trustee in writing of
the redemption date 45 days (unless a shorter period shall be satisfactory to the Trustee) prior to the redemption date.
If
less than all the Securities of a series are to be redeemed, the Trustee shall select, pro rata or by lot or in such manner as
it shall deem appropriate and fair, Securities of such series to be redeemed in whole or in part. Securities of a series may be
redeemed in part in multiples equal to the minimum authorized denomination for Securities of such series or any multiple thereof.
The Trustee shall promptly notify the Issuer in writing of the Securities of such series selected for redemption and, in the case
of any Securities of such series selected for partial redemption, the Principal amount thereof to be redeemed. For all purposes
of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities of any series
shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the Principal amount of such
Security which has been or is to be redeemed.
Section
11.03
Payment of Securities Called for Redemption
. If notice of redemption has been given as above provided, the Securities
or portions of Securities specified in such notice shall become due and payable on the date and at the place stated in such notice
at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after said date
(unless the Issuer shall default in the payment of such Securities at the redemption price, together with interest accrued to
said date) interest on the Securities or portions of Securities so called for redemption shall cease to accrue and, except as
provided in Section 5.05 and Section 9.04, such Securities shall cease from and after the date fixed for redemption to be entitled
to any benefit or security under this Indenture, and the Holders thereof shall have no right in respect of such Securities except
the right to receive the redemption price thereof and unpaid interest to the date fixed for redemption. On presentation and surrender
of such Securities at a place of payment specified in said notice, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together with interest accrued thereon to the date fixed for
redemption; provided that any semiannual payment of interest becoming due on the date fixed for redemption shall be payable to
the Holders of such Securities registered as such on the relevant record date subject to the terms and provisions of Section 2.07
hereof.
If
any Security called for redemption shall not be so paid upon surrender thereof for redemption, the Principal shall, until paid
or duly provided for, bear interest from the date fixed for redemption at the rate of interest or Yield to Maturity (in the case
of an Original Issue Discount Security) borne by the Security.
Upon
presentation of any Security redeemed in part only, the Issuer shall execute and the Trustee shall authenticate and deliver to
or on the order of the Holder thereof, at the expense of the Issuer, a new Security or Securities of such series, of authorized
denominations, in Principal amount equal to the unredeemed portion of the Security so presented, pursuant to Sections 2.04, 2.05
and 2.06.
Section
11.04
Exclusion of Certain Securities from Eligibility for Selection for Redemption
. Securities shall be excluded from
eligibility for selection for redemption if they are identified by registration and certificate number in a written statement
signed by an authorized officer of the Issuer and delivered to the Trustee at least 40 days prior to the last date on which notice
of redemption may be given as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer
or (b) an entity specifically identified in such written statement directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuer.
Section
11.05
Conversion Arrangement On Call For Redemption
. In connection with any redemption of Securities, the Issuer shall
deposit the amount due in connection with such redemption as required by Section 11.02 or it may arrange for the purchase and
conversion of any Securities called for redemption by an agreement with one or more investment bankers or other purchasers to
purchase such Securities and to make the deposit required of it by Section 11.02 on its behalf by paying to the Trustee or the
Paying Agent in trust for the Securityholders, on or before 10:00 a.m. New York time on the redemption date, an amount no less
than the redemption price, together with interest, if any, accrued to the redemption date of such Securities, in immediately available
funds. Notwithstanding anytime to the contrary contained in this Article 11, the obligation of the Issuer to pay the redemption
price of such Securities, including all accrued interest, if any, shall be deemed to be satisfied and discharged to the extent
such amount is so paid by such purchasers. If such an agreement is entered into, any Securities not duly surrendered for conversion
by the Holders thereof may, at the option of the Issuer, be deemed, to the fullest extent permitted by law, acquired by such purchasers
from such Holders and (notwithstanding anything to the contrary contained in Article 12) surrendered by such purchasers for conversion,
all as of immediately prior to the close of business on the last day on which Securities of such series called for redemption
may be converted in accordance with this Indenture and the terms of such Securities, subject to payment of the above amount aforesaid.
The Trustee or the Paying Agent shall hold and pay to the Securityholders whose Securities are selected for redemption any such
amount paid to it in the same manner as it would monies deposited with it by the Issuer for the redemption of Securities. Without
the Trustee’s and the Paying Agent’s prior written consent, no arrangement between the Issuer and such purchasers
for the purchase and conversion of any Securities shall increase or otherwise affect any of the powers, duties, responsibilities
or obligations of the Trustee as set forth in this Indenture, and the Issuer agrees to indemnify the Trustee from, and hold it
harmless against, any loss, liability or expense arising out of or in connection with any such arrangement for the purchase and
conversion of any Securities between the Issuer and such purchasers, including the costs and expenses incurred by the Trustee
and the Paying Agent in the defense of any claim or liability arising out of or in connection with the exercise or performance
of any of its powers, duties, responsibilities or obligations under this Indenture.
ARTICLE
12
CONVERSION
OF SECURITIES
Section
12.01
Applicability of Article
. Securities of any series which are convertible into Capital Stock at the option of the
Securityholder shall be convertible in accordance with their terms and (unless otherwise specified as contemplated by Section
2.03 for Securities of any series) in accordance with this Article. Each reference in this Article 12 to “a Security”
or “the Securities” refers to the Securities of the particular series that is convertible into Capital Stock. Each
reference in this Article to “Capital Stock” into which Securities of any series are convertible refers to the class
of Capital Stock into which the Securities of such series are convertible in accordance with their terms (as specified as contemplated
by Section 2.03). If more than one series of Securities with conversion privileges are outstanding at any time, the provisions
of this Article 12 shall be applied separately to each such series.
Section
12.02
Right of Securityholders to Convert Securities
. Subject to and upon compliance with the terms of the Securities and
the provisions of Section 11.05 and this Article 12, at the option of the Holder thereof, any Security of any series of any authorized
denomination, or any portion of the Principal amount thereof which is $1,000 or any integral multiple of $1,000, may, at any time
during the period specified in the Securities of such series, or in case such Security or portion thereof shall have been called
for redemption, then in respect of such Security or portion thereof until and including, but not after (unless the Issuer shall
default in payment due upon the redemption thereof) the close of business on the Business Day prior to the date fixed for redemption
except that in the case of redemption at the option of the Securityholder, if specified in the terms of such Securities, such
right shall terminate upon receipt of written notice of the exercise of such option, be converted into duly authorized, validly
issued, fully paid and nonassessable shares of Capital Stock, as specified in such Security, at the conversion rate for each $1,000
Principal amount of Securities (such initial conversion rate reflecting an initial conversion price specified in such Security)
in effect on the conversion date, or, in case an adjustment in the conversion rate has taken place pursuant to the provisions
of Section 12.05, then at the applicable conversion rate as so adjusted, upon surrender of the Security or Securities, the Principal
amount of which is so to be converted, to the Issuer at any time during usual business hours at the office or agency to be maintained
by it in accordance with the provisions of Section 3.02, accompanied by a written notice of election to convert as provided in
Section 12.03 and, if so required by the Issuer and the Trustee, by a written instrument or instruments of transfer in form satisfactory
to the Issuer and the Trustee duly executed by the registered Holder or his attorney duly authorized in writing. All Securities
surrendered for conversion shall, if surrendered to the Issuer or any conversion agent, be delivered to the Trustee for cancellation
and cancelled by it, or shall, if surrendered to the Trustee, be cancelled by it, as provided in Section 2.10.
The
initial conversion price or conversion rate in respect of a series of Securities shall be as specified in the Securities of such
series. The conversion price or conversion rate will be subject to adjustment on the terms set forth in Section 12.05 or such
other or different terms, if any, as may be specified by Section 2.03 for Securities of such series. Provisions of this Indenture
that apply to conversion of all of a Security also apply to conversion of a portion of it.
Section
12.03
Issuance of Shares of Capital Stock on Conversion
. As promptly as practicable after the surrender, as herein provided,
of any Security or Securities for conversion, the Issuer shall deliver or cause to be delivered at its said office or agency to
or upon the written order of the Holder of the Security or Securities so surrendered a certificate or certificates representing
the number of duly authorized, validly issued, fully paid and nonassessable shares of Capital Stock into which such Security or
Securities may be converted in accordance with the terms thereof and the provisions of this Article 12. Prior to delivery of such
certificate or certificates, the Issuer shall require a written notice at its said office or agency from the Holder of the Security
or Securities so surrendered stating that the Holder irrevocably elects to convert such Security or Securities, or, if less than
the entire Principal amount thereof is to be converted, stating the portion thereof to be converted. Such notice shall also state
the name or names (with address and social security or other taxpayer identification number) in which said certificate or certificates
are to be issued. Such conversion shall be deemed to have been made at the time that such Security or Securities shall have been
surrendered for conversion and such notice shall have been received by the Issuer or the Trustee, the rights of the Holder of
such Security or Securities as a Securityholder shall cease at such time, the person or persons entitled to receive the shares
of Capital Stock upon conversion of such Security or Securities shall be treated for all purposes as having become the record
holder or holders of such shares of Capital Stock at such time and such conversion shall be at the conversion rate in effect at
such time. In the case of any Security of any series which is converted in part only, upon such conversion, the Issuer shall execute
and the Trustee shall authenticate and deliver to the Holder thereof, as requested by such Holder, a new Security or Securities
of such series of authorized denominations in aggregate Principal amount equal to the unconverted portion of such Security.
If
the last day on which a Security may be converted is not a Business Day in a place where a conversion agent is located, the Security
may be surrendered to that conversion agent on the next succeeding day that is a Business Day.
The
Issuer will not be required to deliver certificates for shares of Capital Stock upon conversion while its stock transfer books
are closed for a meeting of shareholders or for the payment of dividends or for any other purpose, but certificates for shares
of Capital Stock shall be delivered as soon as the stock transfer books shall again be opened.
Section
12.04
No Payment or Adjustment for Interest or Dividends
. Unless otherwise specified as contemplated by Section 2.03 for
Securities of such series, Securities surrendered for conversion during the period from the close of business on any regular record
date (or special record date for payment of defaulted interest) next preceding any interest payment date to the opening of business
on such interest payment date (except Securities called for redemption on a redemption date within such period) when surrendered
for conversion must be accompanied by payment of an amount equal to the interest thereon which the registered Holder is to receive
on such interest payment date. Payment of interest shall be made, as of such interest payment date or such date, as the case may
be, to the Holder of record of the Securities as of such regular, or special record date, as applicable. Except where Securities
surrendered for conversion must be accompanied by payment as described above, no interest on converted Securities will be payable
by the Issuer on any interest payment date subsequent to the date of conversion. No other payment or adjustment for interest or
dividends is to be made upon conversion. Notwithstanding the foregoing, upon conversion of any Original Issue Discount Security,
the fixed number of shares of Capital Stock into which such Security is convertible delivered by the Issuer to the Holder thereof
shall be applied, first, to pay the accrued original issue discount attributable to the period from the date of issuance to the
date of conversion of such Security, and, second, to pay the balance of the Principal amount of such Security.
Section
12.05
Adjustment of Conversion Rate
. Unless otherwise specified as contemplated by Section 2.03 for Securities of such
series, the conversion rate for Securities in effect at any time shall be subject to adjustment as follows:
(a)
In case the Issuer shall (i) declare a dividend or make a distribution on the class of Capital Stock into which Securities of
such series are convertible in shares of its Capital Stock, (ii) subdivide the outstanding shares of the class of Capital Stock
into which Securities of such series are convertible into a greater number of shares, (iii)combine the outstanding shares of the
class of Capital Stock into which Securities of such series are convertible into a smaller number of shares or (iv) issue by reclassification
of the shares of the class of Capital Stock into which Securities of such series are convertible (including any such reclassification
in connection with a consolidation or merger in which the Issuer is the continuing corporation) any shares, the conversion rate
for the Securities of such series in effect at the time of the record subdivision, combination or reclassification, shall be proportionately
adjusted so that the Holder of any Security of such series surrendered for conversion after such time shall be entitled to receive
the number and kind of shares which he would have owned or have been entitled to receive had such Security been converted immediately
prior to such time. Similar adjustments shall be made whenever any event listed above shall occur.
(b)
In case the Issuer shall fix a record date for the issuance of rights or warrants to all holders of the class of Capital Stock
into which Securities of such series are convertible entitling them (for a period expiring within 45 days after such record date)
to subscribe for or purchase shares of such class of Capital Stock (or securities convertible into shares of such class of Capital
Stock) at a price per share (or, in the case of a right or warrant to purchase securities convertible into such class of Capital
Stock, having a conversion price per share, after adding thereto the exercise price, computed on the basis of the maximum number
of shares of such class of Capital Stock issuable upon conversion of such convertible securities, per share of such class of Capital
Stock, so issuable) less than the current market price per share of such class of Capital Stock (as defined in subsection (e)
below) on the date on which such issuance was declared or otherwise announced by the Issuer (the “
Determination Date
”),
the number of shares of such class of Capital Stock into which each $1,000 Principal amount of Securities shall be convertible
after such record date shall be determined by multiplying the number of shares of such class of Capital Stock into which such
Principal amount of Securities was convertible immediately prior to such record date by a fraction, of which the numerator shall
be the number of shares of such class of Capital Stock outstanding on the Determination Date plus the number of additional shares
of such class of Capital Stock offered for subscription or purchase (or in the case of a right or warrant to purchase securities
convertible into such class of Capital Stock, the aggregate number of additional shares of such class of Capital Stock into which
the convertible securities so offered are initially convertible), and of which the denominator shall be the number of shares of
such class of Capital Stock outstanding on the Determination Date plus the number of shares of such class of Capital Stock obtained
by dividing the aggregate offering price of the total number of shares so offered (or, in the case of a right or warrant to purchase
securities convertible into such class of Capital Stock, the aggregate initial conversion price of the convertible securities
so offered, after adding thereto the aggregate exercise price of such rights or warrants computed on the basis of the maximum
number of shares of such class of Capital Stock issuable upon conversion of such convertible securities) by such current market
price. Shares of such class of Capital Stock of the Issuer owned by or held for the account of the Issuer shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is
fixed; and to the extent that shares of such class of Capital Stock are not delivered (or securities convertible into shares of
such class of Capital Stock are not delivered) after the expiration of such rights or warrants (or, in the case of rights or warrants
to purchase securities convertible into such class of Capital Stock once exercised, the expiration of the conversion right of
such securities) the conversion rate shall be readjusted to the conversion rate which would then be in effect had the adjustments
made upon the issuance of such rights or warrants (or securities convertible into shares) been made upon the basis of delivery
of only the number of shares actually delivered. In the event that such rights or warrants are not so issued, the conversion rate
shall again be adjusted to be the conversion rate which would then be in effect if such record date had not been fixed.
(c)
In case the Issuer shall fix a record date for the making of a distribution to all holders of the class of Capital Stock into
which Securities of such series are convertible (including any such distribution made in connection with a consolidation or merger
in which the Issuer is the continuing corporation) of evidences of its indebtedness or assets (excluding any cash dividends paid
from retained earnings and dividends payable in Capital Stock for which adjustment is made pursuant to subsection (a) above or
(d) below) or subscription rights or warrants (excluding subscription rights or warrants to purchase the class of Capital Stock
into which Securities of such series are convertible), the number of shares of such class of Capital Stock into which each $1,000
Principal amount of Securities of such series shall be convertible after such record date shall be determined by multiplying the
number of shares of such class of Capital Stock into which such Principal amount of Securities was convertible immediately prior
to such record date by a fraction, of which the numerator shall be the fair market value of the assets of the Issuer, after deducting
therefrom all liabilities of the Issuer and all preferences (including accrued but unpaid dividends) in respect of classes of
Capital Stock having a preference with respect to the assets of the Issuer over such class of Capital Stock (all as determined
by the Board of Directors, whose determination shall be conclusive, and described in a certificate signed by chairman of the Issuer’s
Board of Directors, its president, any vice president, its treasurer, any assistant treasurer, its secretary or any assistant
secretary, filed with the Trustee and each conversion agent) on such record date, and of which the denominator shall be such fair
market value after deducting therefrom such liabilities and preferences, less the fair market value (as determined by the Board
of Directors, whose determination shall be conclusive, and described in a statement filed with the Trustee and each conversion
agent) of the assets or evidences of indebtedness, so distributed or of such subscription rights or warrants applicable, so distributed.
Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such distribution is not
so made, the conversion rate shall again be adjusted to the conversion rate which would then be in effect if such record date
had not been fixed.
(d)
In case the Issuer shall, by dividend or otherwise, distribute to all holders of its Capital Stock cash (excluding any dividend
or distribution in connection with the liquidation, dissolution or winding up of the Issuer, whether voluntary or involuntary),
then, in such case, unless the Issuer elects to reserve such cash for distribution to the Holders of the Securities upon the conversion
of the Securities so that any such Holder converting Securities will receive upon such conversion, in addition to the shares of
Capital Stock to which such Holder is entitled, the amount of cash which such Holder would have received if such Holder had, immediately
prior to the record date for such distribution of cash, converted its Securities into Capital Stock, the conversion rate shall
be adjusted so that the same shall equal the rate determined by multiplying the conversion rate in effect immediately prior to
the record date by a fraction of which the denominator shall be the current market price of the Capital Stock (determined as provided
in Section 12.05(e) on the record date less the amount of cash so distributed (and not excluded as provided above) applicable
to one share of Capital Stock and the numerator shall be such current market price of the Capital Stock (determined as provided
in Section 12.05(e)), such adjustment to be effective immediately prior to the opening of business on the day following the record
date; provided, however, that in the event the portion of the cash so distributed applicable to one share of Capital Stock is
equal to or greater than the current market price of the Capital Stock (determined as provided in (e)Section 12.05(e)) on the
record date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Securityholder shall have the
right to receive upon conversion the amount of cash such Holder would have received had such Holder converted each Security on
the record date. If such dividend or distribution is not so paid or made, the conversion rate shall again be adjusted to be the
conversion rate which would then be in effect if such dividend or distribution had not been declared.
(e)
For the purpose of any computation under subsections (b) and (d) above and Section 12.06, the current market price per share of
the Capital Stock on any date as of which such price is to be computed shall mean the average of the Closing Prices for the 30
consecutive Business Days commencing 45 Business Days before such date.
(f)
No adjustment in the conversion rate shall be required unless such adjustment would require a cumulative increase or decrease
of at least 1% in such rate; provided, however, that any adjustments which by reason of this subsection (f) are not required to
be made shall be carried forward and taken into account in any subsequent adjustment; and
provided further
, that adjustments
shall be required and made in accordance with the provisions of this Article 12 (other than this subsection (f)) not later than
such time as may be required in order to preserve the tax-free nature of a States income tax purposes to the Holders of Securities
or the class of Capital Stock into which such Securities are convertible. All calculations under this Article 12 shall be made
to the nearest cent or to the nearest one-thousandth of a share, as the case may be. Anything in this Section 12.05 to the contrary
notwithstanding, the Issuer shall be entitled to make such adjustments in the conversion rate, in addition to those required by
this Section 12.05, as it in its discretion shall determine to be advisable in order that any stock dividend, subdivision of shares,
distribution of rights to purchase stock or securities, or distribution of securities convertible into or exchangeable for stock
hereafter made by the Issuer to its shareholders shall not be taxable for United States income tax purposes.
(g)
Whenever the conversion rate is adjusted, as herein provided, the Issuer shall promptly file with the Trustee and with the office
or agency maintained by the Issuer for the conversion of Securities of such series pursuant to Section 3.02, a certificate of
a firm of independent public accountants of recognized national standing selected by the Board of Directors (who may be the regular
accountants employed by the Issuer) setting forth the conversion rate after such adjustment and setting forth a brief statement
of the facts requiring such adjustment and a computation thereof. Such certificate shall be conclusive evidence of the correctness
of such adjustment. Neither the Trustee nor any conversion agent shall be under any duty or responsibility with respect to any
such certificate or any facts or computations set forth therein, except to exhibit said certificate from time to time to any Securityholder
of such series desiring to inspect the same. The Issuer shall promptly cause a notice setting forth the adjusted conversion rate
to be mailed to the Holders of Securities of such series, as their names and addresses appear upon the register of the Issuer.
(h)
In the event that at any time, as a result of shares of any other class of Capital Stock becoming issuable in exchange or substitution
for or in lieu of shares of the class of Capital Stock into which such Securities are convertible or as a result of an adjustment
made pursuant to subsection (a) above, the Holder of any Security of such series thereafter surrendered for conversion shall become
entitled to receive any shares of the Issuer other than shares of the class of Capital Stock into which the Issuer of such series
are convertible, thereafter the number of such other shares so receivable upon conversion of any Security shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the
class of Capital Stock into which the Securities of such series are convertible contained in subsections (a) to (f), inclusive,
above, and the provisions of this Article 12 with respect to the class of Capital Stock into which the Securities of such series
are convertible shall apply on like terms to any such other shares.
(i)
The conversion rate with respect to any Original Issue Discount Security, the terms of which provide for convertibility, shall
not be adjusted during the term of such Original Issue Discount Security for accrued original issue discount.
(j)
In the event that the Securities of any series are convertible into more than one class of Capital Stock, the provisions of this
Section 12.05 shall apply separately to events affecting each such class.
Section
12.06
No Fractional Shares to Be Issued
. No fractional shares of Capital Stock shall be issued upon conversions of Securities.
If more than one Security of any series shall be surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate Principal amount of the
Securities of such series (or specified portions thereof to the extent permitted hereby) so surrendered. Instead of a fraction
of a share of Capital Stock which would otherwise be issuable upon conversion of any Security or Securities (or specified portions
thereof), the Issuer shall pay a cash adjustment in respect of such fraction of a share in an amount equal to the same fractional
interest of the current market price (as defined in Section 12.05) per share of Capital Stock on the Business Day next preceding
the day of conversion.
Section
12.07
Preservation of Conversion Rights Upon Consolidation, Merger, Sale or Conveyance
. In case of any consolidation of
the Issuer with, or merger of the Issuer into, any other corporation (other than a consolidation or merger in which the Issuer
is the continuing corporation), or in the case of any sale or transfer of all or substantially all of the assets of the Issuer,
the corporation formed by such consolidation or the corporation into which the Issuer shall have been merged or the corporation
which shall have acquired such assets, as the case may be, shall execute and deliver to the Trustee, a supplemental indenture,
subject to the provisions of Article 12and ARTICLE 8 as they relate to supplemental indentures, providing that the Holder of each
Security then Outstanding of a series which was convertible into Capital Stock shall have the right thereafter to convert such
Security into the kind and amount of shares of stock and other securities and property, including cash, receivable upon such consolidation,
merger, sale or transfer by a holder of the number of shares of Capital Stock of the Issuer into which such Securities might have
been converted immediately prior to such consolidation, merger, sale or transfer. Such supplemental indenture shall conform to
the provisions of the Trust Indenture Act of 1939 as then in effect and shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article 12. Neither the Trustee nor any conversion agent
shall be under any responsibility to determine the correctness of any provision contained in any such supplemental indenture relating
either to the kind or amount of shares of stock or other securities or property receivable by Securityholders upon the conversion
of their Securities after any such consolidation, merger, sale or transfer, or to any adjustment to be made with respect there
to and, subject to the provisions of Article 5, may accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, an Opinion of Counsel with respect thereto. If in the case of any such consolidation, merger,
sale or transfer, the stock or other securities and property receivable by a Holder of the Securities includes stock or other
securities and property of a corporation other than the successor or purchasing corporation, then such supplemental indenture
shall also be executed by such other corporation and shall contain such additional provisions to protect the interests of the
Holders of the Securities as the Board of Directors shall reasonably consider necessary. The above provisions of this Section
12.07 shall similarly apply to successive consolidations, mergers, sales or transfers.
Section
12.08 Notice to Security Holders of a Series Prior to Taking Certain Types of Action. With respect to the Securities of any series,
in case:
(a)
the Issuer shall authorize the issuance to all holders of the class of Capital Stock into which Securities of such series are
convertible of rights or warrants to subscribe for or purchase shares of its Capital Stock or of any other right;
(b)
the Issuer shall authorize the distribution to all holders of the class of Capital Stock into which Securities of such series
are convertible of evidences of its indebtedness or assets (except for the exclusions with respect to certain dividends set forth
in Section 12.05(c));
(c)
of any subdivision, combination or reclassification of the class of Capital Stock into which Securities of such series are convertible
or of any consolidation or merger to which the Issuer is a party and for which approval by the shareholders of the Issuer is required,
or of the sale or transfer of all or substantially all of the assets of the Issuer; or
(d)
of the voluntary or involuntary dissolution, liquidation or winding up of the Issuer;
then
the Issuer shall cause to be filed with the Trustee and at the office or agency maintained for the purpose of conversion of Securities
of such series pursuant to Section 3.02, and shall cause to be mailed to the Holders of Securities of such series, at their last
addresses as they shall appear upon the register of the Issuer, at least 10 days prior to the applicable record date hereinafter
specified, a notice stating (i) the date as of which the holders of such class of Capital Stock to be entitled to receive any
such rights, warrants or distribution are to be determined, or (ii) the date on which any such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation, winding up or other action is expected to become effective, and
the date as of which it is expected that holders of record of such class of Capital Stock shall be entitled to exchange their
Capital Stock of such class for securities or other property, if any, deliverable upon such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation, winding up or other action. The failure to give the notice required
by this Section 12.08 or any defect therein shall not affect the legality or validity of any distribution, right, warrant, subdivision,
combination, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation, winding up or other action, or
the vote upon any of the foregoing. Such notice shall also be published by and at the expense of the Issuer not later than the
aforesaid filing date at least once in an Authorized Newspaper.
Section
12.09
Covenant to Reserve Shares for Issuance on Conversion of Securities
. The Issuer covenants that at all times it will
reserve and keep available out of each class of its authorized Capital Stock, free from preemptive rights, solely for the purpose
of issue upon conversion of Securities of any series as herein provided, such number of shares of Capital Stock of such class
as shall then be issuable upon the conversion of all Outstanding Securities of such series. The Issuer covenants that an shares
of Capital Stock which shall be so issuable shall, when issued or delivered, be duly and validly issued shares of the class of
authorized Capital Stock into which Securities of such series are convertible, and shall be fully paid and nonassessable, free
of all liens and charges and not subject to preemptive rights and that, upon conversion, the appropriate capital stock accounts
of the Issuer will be duly credited.
Section
12.10
Compliance with Governmental Requirements
. The Issuer covenants that if any shares of Capital Stock required to be
reserved for purposes of conversion of Securities hereunder require registration or listing with or approval of any governmental
authority under any Federal or State law, pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, or any national or regional securities exchange on which such Capital Stock is listed at the time of delivery
of any shares of such Capital Stock, before such shares may be issued upon conversion, the Issuer will use reasonable efforts
to cause such shares to be duly registered, listed or approved, as the case may be.
Section
12.11
Payment of Taxes Upon Certificates for Shares Issued Upon Conversion
. The issuance of certificates for shares of
Capital Stock upon the conversion of Securities shall be made without charge to the converting Securityholders for any tax (including,
without limitation, all documentary and stamp taxes) in respect of the issuance and delivery of such certificates, and such certificates
shall be issued in the respective names of, or in such names as may be directed by, the Holders of the Securities converted; provided,
however, that the Issuer shall not be required to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any such certificate in a name other than that of the Holder of the Security converted, and the Issuer
shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof
shall have paid to the Issuer the amount of such tax or shall have established to the satisfaction of the Issuer that such tax
has been paid.
Section
12.12
Trustee’s Duties with Respect to Conversion Provisions
. The Trustee and any conversion agent shall not at any
time be under any duty or responsibility to any Securityholder to determine whether any facts exist which may require any adjustment
of the conversion rate or conversion price, or with respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. Neither
the Trustee nor any conversion agent shall be accountable with respect to the registration under securities laws, listing, validity
or value (or the kind or amount) of any shares of Capital Stock, or of any other securities or property, which may at any time
be issued or delivered upon the conversion of any Security; and neither the Trustee nor any conversion agent makes any representation
with respect thereto. Neither the Trustee nor any conversion agent shall be responsible for any failure of the Issuer to make
any cash payment or to issue, transfer or deliver any shares of stock or stock certificates or other securities or property upon
the surrender of any Security for the purpose of conversion; and the Trustee, subject to the provisions of Article 5, and any
conversion agent shall not be responsible for any failure of the Issuer to comply with any of the covenants of the Issuer contained
in this Article 12.
ARTICLE
13
SUBORDINATION
OF SECURITIES
Section
13.01
Agreement Of Subordination.
The Issuer covenants and agrees, and each Holder of Securities issued hereunder by his
acceptance thereof likewise covenants and agrees, that all Securities shall be issued subject to the provisions of this ARTICLE
13; and each Holder, whether upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by such
provisions.
The
payment of the principal of, premium, if any, and interest on all Securities issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and subject in right of payment to the prior payment in full of all Senior Indebtedness,
whether outstanding at the date of this Indenture or thereafter incurred.
The
provisions of this ARTICLE 13 define the subordination of the Securities, as obligations of the Issuer, with respect to Senior
Indebtedness of the Issuer, as defined for the Issuer.
No
provision of this ARTICLE 13 shall prevent the occurrence of any default or Event of Default hereunder.
Section
13.02
Payments to Holders
. In the event and during the continuation of any default in the payment of principal, premium,
interest or any other payment due on any Senior Indebtedness of the Issuer continuing beyond the period of grace, if any, specified
in the instrument or lease evidencing such Senior Indebtedness of the Issuer, then, unless and until such default shall have been
cured or waived or shall have ceased to exist, no payment shall be made by the Issuer with respect to the principal of, or premium,
if any, or interest on the Securities, except payments made pursuant to Article 9 hereof from amounts deposited with the Trustee
pursuant thereto prior to the happening of such default.
Upon
any payment by the Issuer, or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding-up or liquidation or reorganization of the Issuer, whether voluntary or involuntary
or in bankruptcy, insolvency, receivership or other proceedings, all amounts due or to become due upon all Senior Indebtedness
of the Issuer shall first be paid in full, or payment thereof provided for in money in accordance with its terms, before any payment
is made on account of principal (including, if applicable, any cash due upon conversion the Securities), premium, if any, or interest
on the Securities (except payments made pursuant to ARTICLE 9 hereof from amounts deposited with the Trustee pursuant thereto
prior to the happening of such dissolution, winding-up, liquidation or reorganization); and upon any such dissolution or winding-up
or liquidation or reorganization any payment by the Issuer, or distribution of assets of the Issuer of any kind or character,
whether in cash, property or securities, to which the holders of the Securities or the Trustee would be entitled, except for the
provisions of this ARTICLE 13, shall (except as aforesaid) be paid by the Issuer or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the holders of the Securities or by the Trustee under
this Indenture if received by them or it, directly to the holders of Senior Indebtedness of the Issuer (pro rata to such holders
on the basis of the respective amounts of Senior Indebtedness of the Issuer held by such holders, as calculated by the Issuer)
or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness of the Issuer may have been issued, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness of the Issuer in full, in money or money’s worth, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness of the Issuer, before any payment or distribution is made
to the holders of the Securities or to the Trustee.
In
the event that, notwithstanding the foregoing, any payment or distribution of assets of the Issuer of any kind or character, whether
in cash, property or securities, prohibited by the foregoing, shall be received by the Trustee or the holders of the Securities
before all Senior Indebtedness of the Issuer is paid in full, or provision is made for such payment in money in accordance with
its terms, such payment or distribution shall be held in trust for the benefit of and shall be paid over or delivered to the holders
of Senior Indebtedness of the Issuer or their representative or representatives, or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing any Senior Indebtedness of the Issuer may have been issued, as their respective interests
may appear, as calculated by the Issuer, for application to the payment of all Senior Indebtedness of the Issuer remaining unpaid
to the extent necessary to pay all Senior Indebtedness of the Issuer in full in money in accordance with its terms, after giving
effect to any concurrent payment or distribution to or for the holders of such Senior Indebtedness.
For
purposes of this ARTICLE 13, the words, “cash, property or securities” shall not be deemed to include shares of stock
of the Issuer as reorganized or readjusted, or securities of the Issuer or any other corporation provided for by a plan of reorganization
or readjustment, the payment of which is subordinated at least to the extent provided in this ARTICLE 13 with respect to the Securities
to the payment of all Senior Indebtedness of the Issuer which may at the time be outstanding; provided that (i) the Senior Indebtedness
of the Issuer is assumed by the new corporation, if any, resulting from any such reorganization or readjustment, and (ii) the
rights of the holders of the Senior Indebtedness of the Issuer (other than leases) and of leases which are assumed are not, without
the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Issuer with, or the merger
of the Issuer into, another corporation or the liquidation or dissolution of the Issuer following the conveyance or transfer of
its property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided for
in ARTICLE 8 hereof shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section
13.02 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions
stated in ARTICLE 8 hereof. Nothing in this Section 13.02 shall apply to claims of, or payments to, the Trustee under or pursuant
to Section 5.06.
Section
13.03
Subrogation Of Securities
. Subject to the payment in full of all Senior Indebtedness of the Issuer, the rights of
the holders of the Securities shall be subrogated to the rights of the holders of Senior Indebtedness of the Issuer to receive
payments or distributions of cash, property or securities of the Issuer applicable to the Senior Indebtedness of the Issuer until
principal (including, if applicable, any cash due upon conversion the Securities), premium, if any, and interest on the Securities
on the Securities shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to the holders
of the Senior Indebtedness of the Issuer of any cash, property or securities to which the holders of the Securities or the Trustee
would be entitled except for the provisions of this ARTICLE 13 to or for the benefit of the holders of Senior Indebtedness of
the Issuer by holders of the Securities or the Trustee, shall, as between the Issuer, its creditors other than holders of Senior
Indebtedness of the Issuer, and the holders of the Securities, be deemed to be a payment by the Issuer to or on account of the
Senior Indebtedness of the Issuer. It is understood that the provisions of this ARTICLE 13 are and are intended solely for the
purpose of defining the relative rights of the holders of the Securities, on the one hand, and the holders of the Senior Indebtedness
of the Issuer, on the other hand.
Nothing
contained in this ARTICLE 13 or elsewhere in this Indenture or in the Securities is intended to or shall impair, as between the
Issuer, its creditors other than the holders of its Senior Indebtedness, and the holders of the Securities, the obligation of
the Issuer, which is absolute and unconditional, to pay to the holders of the Securities the principal (including, if applicable,
any cash due upon conversion the Securities), premium, if any, and interest on the Securities as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the holders of the Securities
and creditors of the Issuer other than the holders of its Senior Indebtedness, nor shall anything herein or therein prevent the
Trustee or the holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this ARTICLE 13 of the holders of Senior Indebtedness of the Issuer in respect
of cash, property or securities of the Issuer received upon the exercise of any such remedy.
Upon
any payment or distribution of assets of the Issuer referred to in this ARTICLE 13, the Trustee, subject to the provisions of
Section 5.01, and the holders of the Securities shall be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or reorganization proceedings are pending, or a certificate of
the receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, delivered
to the Trustee or to the holders of the Securities, for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of the Issuer, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this ARTICLE 13.
Section
13.04
Authorization By Holders
. Each holder of a Security by his or her acceptance thereof authorizes and directs the Trustee
on his or her behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this ARTICLE
13 appoints the Trustee his attorney-in-fact for any and all such purposes.
Section
13.05
Notice to Trustee
. The Issuer shall give promptly written notice to a Responsible Officer of the Trustee of any fact
known to the Issuer which would prohibit the making of any payment of monies to or by the Trustee in respect of the Securities
pursuant to the provisions of this ARTICLE 13. Notwithstanding the provisions of this ARTICLE 13 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any
payment of amounts to or by the Trustee in respect of the Securities pursuant to the provisions of this ARTICLE 13, unless and
until a Responsible Officer of the Trustee shall have received written notice thereof at the Corporate Trust Office of the Trustee
from the Issuer or a holder or holders of Senior Indebtedness or from any trustee therefor; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 5.01, shall be entitled in all respects to assume that no such
facts exist;
provided
that if on a date not fewer than three Business Days prior to the date upon which by the terms hereof
any such amounts may become payable for any purpose (including, without limitation, the payment of principal (including, if applicable,
any cash due upon conversion of the Securities), premium, if any, and interest on any Security) the Trustee shall not have received,
with respect to such monies, the notice provided for in this Section 13.05, then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such amounts and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be received by it on or after such prior date. Notwithstanding
anything to the contrary hereinbefore set forth, nothing shall prevent any payment or delivery by the Issuer or the Trustee to
the Holders of amounts in connection with a redemption of Securities if (i) notice of such redemption has been given pursuant
to ARTICLE 11 or Section 9.01 hereof prior to the receipt by the Trustee of written notice as aforesaid, and (ii) such notice
of redemption is given not earlier than 60 days before the redemption date.
The
Trustee conclusively shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be
a holder of Senior Indebtedness of the Issuer (or a trustee on behalf of such holder) to establish that such notice has been given
by a holder of Senior Indebtedness of the Issuer or a trustee on behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness
of the Issuer to participate in any payment or distribution pursuant to this ARTICLE 13, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness of the Issuer held by such
Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent
to the rights of such Person under this ARTICLE 13, and if such evidence is not furnished the Trustee may defer any payment to
such Person pending judicial determination as to the right of such Person to receive such payment.
Section
13.06
Trustee’s Relation to Senior Indebtedness
. The Trustee in its individual capacity shall be entitled to all
the rights set forth in this ARTICLE 13 in respect of any Senior Indebtedness of the Issuer at any time held by it, to the same
extent as any other holder of Senior Indebtedness of the Issuer and nothing elsewhere in this Indenture shall deprive the Trustee
of any of its rights as such holder.
With
respect to the holders of Senior Indebtedness of the Issuer, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this ARTICLE 13, and no implied covenants or obligations with respect
to the holders of Senior Indebtedness of the Issuer shall be read into this Indenture against the Trustee. The Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of the Issuer and the Trustee shall not be liable to
any holder of Senior Indebtedness of the Issuer if it shall pay over or deliver to holders of Securities, the Issuer or any other
Person money or assets to which any holder of Senior Indebtedness of the Issuer shall be entitled by virtue of this ARTICLE 13
or otherwise.
Section
13.07
No Impairment Of Subordination
. No right of any present or future holder of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Issuer
or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Issuer with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof which any such holder may have or otherwise be charged with.
Section
13.08
Rights Of Trustee
. Nothing in this ARTICLE 13 shall apply to claims of or payments to, the Trustee pursuant to Section
5.06.
IN
WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, as of the first date written above.
PROVENTION
BIO, INC., as Issuer
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
|
●,
as Trustee
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
FORM
OF NOTE
UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“
DTC
”),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
PROVENTION
BIO, INC.
●
% Subordinated Note Due ●
No.
● CUSIP No.: ●
$
●
PROVENTION
BIO, INC., a Delaware corporation (“
Issuer
”, which term includes any successor corporation), for value received
promises to pay to CEDE & CO. or its registered assigns, the principal sum of ● on ●.
Interest
Payment Dates: ● and ● (each, an “
Interest Payment Date
”), commencing on ●. Interest Record
Dates: ● and ● (each, an “
Interest Record Date
”).
Reference
is made to the further provisions of this Security contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN
WITNESS WHEREOF, the Issuer has caused this Security to be signed manually or by facsimile by its duly authorized officer.
PROVENTION
BIO, INC.
This
is one of the series designated herein and referred to in the within-mentioned Indenture.
●,
as Trustee
(REVERSE
OF SECURITY)
PROVENTION
BIO, INC.
●%
Subordinated Note Due ●
1.
Interest
.
PROVENTION
BIO, INC., a Delaware corporation (the “
Issuer
”), promises to pay interest on the Principal amount of this
Security at the rate per annum shown above. Cash interest on the Securities will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from ●. The Issuer will pay interest semi-annually in arrears on each Interest
Payment Date, commencing ●. Interest will be computed on the basis of a 360-day year of twelve 30-day months.
The
Issuer shall pay interest on overdue Principal from time to time on demand at the rate borne by the Securities and on overdue
installments of interest (without regard to any applicable grace periods) to the extent lawful.
2.
Method of Payment
.
The
Issuer shall pay interest on the Securities (except defaulted interest) to the persons who are the registered Holders at the close
of business on the Interest Record Date immediately preceding the Interest Payment Date notwithstanding any transfer or exchange
of such Security subsequent to such Interest Record Date and prior to such Interest Payment Date. Holders must surrender Securities
to the Trustee to collect Principal payments. The Issuer shall pay Principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts (“
U.S. Legal Tender
”). However,
the payments of interest, and any portion of the Principal (other than interest payable at maturity or on any redemption or repayment
date or the final payment of Principal) shall be made by the Paying Agent, upon receipt from the Issuer of immediately available
funds by 11:00 a.m., New York City time (or such other time as may be agreed to between the Issuer and the Paying Agent or the
Issuer), directly to a Holder (by Federal funds wire transfer or otherwise) if the Holder has delivered written instructions to
the Trustee 15 days prior to such payment date requesting that such payment will be so made and designating the bank account to
which such payments shall be so made and in the case of payments of Principal surrenders the same to the Trustee in exchange for
a Security or Securities aggregating the same principal amount as the unredeemed Principal amount of the Securities surrendered.
3.
Paying Agent
.
Initially,
● (the “
Trustee
”) will act as Paying Agent. The Issuer may change any Paying Agent without notice to
the Holders.
4.
Indenture
.
The
Issuer issued the Securities under an Indenture, dated as of ● (the “
Indenture
”), between the Issuer
and the Trustee. Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act
of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the “
TIA
”), as in effect on the date of the Indenture until such
time as the Indenture is qualified under the TIA, and thereafter as in effect on the date on which the Indenture is qualified
under the TIA. Notwithstanding anything to the contrary herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and the TIA for a statement of them. To the extent the terms of the Indenture and this Security
are inconsistent, the terms of the Indenture shall govern.
5.
Subordination
.
The
indebtedness of the Issuer evidenced by this Security, including the Principal hereof and interest hereon, is, to the extent and
in the manner set forth in the Indenture, subordinate and junior in right of payment to the Company’s obligations to holders
of Senior Indebtedness of the Issuer and each Holder of this Security, by acceptance hereof, agrees to and shall be bound by such
provisions of the Indenture and all other provisions of the Indenture.
6.
Denominations; Transfer; Exchange
.
The
Securities are in registered form, without coupons, in denominations of $1,000 and multiples of $1,000. A Holder shall register
the transfer of or exchange Securities in accordance with the Indenture. The Issuer may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents and to pay certain transfer taxes or similar governmental charges payable
in connection therewith as permitted by the Indenture. The Issuer need not issue, authenticate, register the transfer of or exchange
any Securities or portions thereof for a period of fifteen (15) days before such series is selected for redemption, nor need the
Issuer register the transfer or exchange of any security selected for redemption in whole or in part.
7.
Persons Deemed Owners
.
The
registered Holder of a Security shall be treated as the owner of it for all purposes.
8.
Unclaimed Funds
.
If
funds for the payment of Principal or interest remain unclaimed for two years, the Trustee and the Paying Agent will repay the
funds to the Issuer at its written request. After that, all liability of the Trustee and such Paying Agent with respect to such
funds shall cease.
9.
Legal Defeasance and Covenant Defeasance
.
The
Issuer may be discharged from its obligations under the Securities and under the Indenture with respect to the Securities except
for certain provisions thereof, and may be discharged from obligations to comply with certain covenants contained in the Securities
and in the Indenture with respect to the Securities, in each case upon satisfaction of certain conditions specified in the Indenture.
10.
Amendment; Supplement; Waiver
.
Subject
to certain exceptions, the Securities and the provisions of the Indenture relating to the Securities may be amended or supplemented
with the written consent of the Holders of at least a majority in aggregate Principal amount of the Securities then outstanding,
and any existing Default or Event of Default or compliance with certain provisions may be waived with the consent of the Holders
of a majority in aggregate Principal amount of the Securities then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Indenture and the Securities to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Securities in addition to or in place of certificated Securities or comply with any
requirements of the Commission in connection with the qualification of the Indenture under the Trust Indenture Act, or make any
other change that does not adversely affect the rights of any Holder of a Security.
11.
Defaults and Remedies
.
If
an Event of Default (other than certain bankruptcy Events of Default with respect to the Issuer) occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate Principal amount of Securities then outstanding may declare all of the Securities
to be due and payable immediately in the manner and with the effect provided in the Indenture. If a bankruptcy Event of Default
with respect to the Issuer occurs and is continuing, all the Securities shall be immediately due and payable immediately in the
manner and with the effect provided in the Indenture without any notice or other action on the part of the Trustee or any Holder.
Holders of Securities may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee is not
obligated to enforce the Indenture or the Securities unless it has received indemnity satisfactory to it. The Indenture permits,
subject to certain limitations therein provided, Holders of a majority in aggregate Principal amount of the Securities then outstanding
to direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of Securities notice of certain
continuing Defaults or Events of Default if it determines that withholding notice is in their interest.
12.
Conversion
.
Reference
is made to the Indenture, including, without limitation, provisions giving the Holder of this Security the right to convert this
Security into Capital Stock of the Issuer on the terms and subject to the limitations as more fully specified in the Indenture.
The initial conversion rate for this Security is ●. This conversion rate is subject to modification as provided in the Indenture.
Such further provisions shall for all purposes have the same effect as though fully set forth at this place.
13.
Trustee Dealings with Issuer
.
The
Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise
deal with the Issuer as if it were not the Trustee.
14.
No Recourse Against Others
.
No
stockholder, director, officer, employee or incorporator, as such, of the Issuer or any successor Person thereof shall have any
liability for any obligation under the Securities or the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Security by accepting a Security waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Securities.
15.
Authentication
.
This
Security shall not be valid until the Trustee manually signs the certificate of authentication on this Security.
16.
Abbreviations and Defined Terms
.
Customary
abbreviations may be used in the name of a Holder of a Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian),
and U/G/M/A (= Uniform Gifts to Minors Act).
17.
CUSIP Numbers
.
Pursuant
to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the Securities. No representation is made as to the accuracy
of such numbers as printed on the Securities and reliance may be placed only on the other identification numbers printed hereon.
18.
Governing Law
.
The
laws of the State of New York shall govern the Indenture and this Security thereof.
ASSIGNMENT
FORM
|
I
or we assign and transfer this Security to
|
|
(Print
or type name, address and zip code of assignee or transferee)
|
|
(Insert
Social Security or other identifying number of assignee or transferee)
|
and
irrevocably appoint ___________________ agent to transfer this Security on the books of the Issuer. The agent may substitute another
to act for him.
|
Dated:
|
|
Signed:
(Signed exactly as name appears on the other side of this Security)
|
|
Signature
Guarantee:
|
|
|
|
|
|
Participant
in a recognized Signature Guarantee Medallion Program (or other signature guarantor program reasonably acceptable to the Trustee)
|
Exhibit
5.1
August
2, 2019
Provention
Bio, Inc.
P.O.
Box 666
Oldwick,
New Jersey 08858
Re:
Shelf Registration Statement on Form S-3
Ladies
and Gentlemen:
This
opinion is being furnished to you in connection with the Registration Statement on Form S-3 (the “Registration Statement”),
including the base prospectus that is part of the Registration Statement (the “Prospectus”) and the sales agreement
prospectus that is part of the Registration Statement (the “ATM Prospectus”), filed by Provention Bio, Inc., a Delaware
corporation (the “Company”), with the Securities and Exchange Commission (the “Commission”) on August
2, 2019 under the Securities Act of 1933, as amended (the “Securities Act”).
The
Prospectus provides that it will be supplemented in the future by one or more prospectus supplements (each, a “Prospectus
Supplement”). The Prospectus, as supplemented by the various Prospectus Supplements, will provide for the issuance and sale
by the Company from time to time of up to $200,000,000 aggregate offering price of (i) shares of the Company’s common stock,
par value $0.0001 per share (the “Common Stock”), (ii) shares of the Company’s preferred stock, par value $0.0001
per share (the “Preferred Stock”), in one or more series or classes, (iii) warrants to purchase shares of Common Stock
or Preferred Stock (the “Warrants”), (iv) the Company’s senior debt securities and subordinated debt securities
(collectively, the “Debt Securities”), which may be issued pursuant to a senior debt indenture (the “Senior
Debt Indenture”) between the Company and the trustee to be named therein (the “Senior Debt Trustee”) and a subordinated
debt indenture (the “Subordinated Debt Indenture,” and together with the Senior Debt Indenture, the “Indentures”)
between the Company and the trustee to be named therein (the “Subordinated Debt Trustee” and, together with the Senior
Debt Trustee, the “Trustees”), (v) subscription rights to purchase Common Stock or Debt Securities (the “Subscription
Rights”) or (vi) units composed of any of the foregoing (the “Units”). The Common Stock, Preferred Stock, Warrants,
Debt Securities, Subscription Rights and Units are collectively referred to herein as the “Securities.” The Warrants
may be issued pursuant to a warrant agreement (the “Warrant Agreement”) between the Company and a bank or trust company
as warrant agent. Any Preferred Stock may be exchangeable for and/or convertible into shares of Common Stock or another series
of Preferred Stock. Any Debt Securities may be exchangeable and/or convertible into shares of Common Stock or Preferred Stock.
The Units may be issued pursuant to a Unit Agreement (the “Unit Agreement”) between the Company and a bank or trust
company as unit agent. The Securities are being registered for offering and sale from time to time pursuant to Rule 415 under
the Securities Act.
The
ATM Prospectus relates to the sale by the Company of shares of Common Stock having an aggregate offering price of up to
$50,000,000 (the “ATM Shares”) under a sales agreement dated as of August 2, 2019, (the “Sales Agreement”)
among the Company, SVB Leerink LLC and Cantor Fitzgerald & Co.
In
rendering our opinions set forth below, we have reviewed the Registration Statement and the exhibits thereto. We have also reviewed
such corporate documents and records of the Company, such certificates of public officials and officers of the Company and such
other matters as we have deemed necessary or appropriate for purposes of this opinion. In our examination, we have assumed: (i)
the authenticity of original documents and the genuineness of all signatures; (ii) the conformity to the originals of all documents
submitted to us as copies; (iii) the truth, accuracy and completeness of the information, representations and warranties contained
in the instruments, documents, certificates and records we have reviewed; and (iv) the legal capacity for all purposes relevant
hereto of all natural persons and, with respect to all parties to agreements or instruments relevant hereto other than the Company,
that such parties had the requisite power and authority (corporate or otherwise) to execute, deliver and perform such agreements
or instruments, that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise),
executed and delivered by such parties and that such agreements or instruments are the valid, binding and enforceable obligations
of such parties. As to any facts material to the opinions expressed herein that were not independently established or verified,
we have relied upon oral or written statements and representations of officers and other representatives of the Company.
Based
on the foregoing, and subject to the assumptions, limitations and qualifications set forth herein, we are of the opinion that:
1.
With respect to shares of Common Stock (other than the ATM Shares), when (a) the issuance and the terms of the sale of the shares
of Common Stock have been duly authorized by the Board of Directors of the Company in conformity with the Company’s certificate
of incorporation and bylaws; (b) such shares have been issued and delivered against payment of the purchase price therefor in
an amount in excess of the par value thereof, in accordance with the applicable definitive purchase, underwriting or similar agreement,
and as contemplated by the Registration Statement, the Prospectus and the related Prospectus Supplement; and (c) to the extent
such shares of Common Stock are to be issued upon the conversion, exchange or exercise of any Preferred Stock, Warrants or Debt
Securities, when such shares have been duly issued and delivered as contemplated by the terms of the applicable Preferred Stock,
the Warrant Agreement relating to such Warrants or the Indenture relating to such Debt Securities, respectively, the shares of
Common Stock will be validly issued, fully paid and nonassessable.
2.
With respect to the ATM Shares, (a) when the Registration Statement has become effective under the Securities Act, and (b) when
the ATM Shares have been issued and sold in accordance with the Sales Agreement, and as described in the Registration Statement
and ATM Prospectus, the ATM Shares will be validly issued, fully paid and nonassessable.
3.
With respect to any particular series of shares of Preferred
Stock, when (a) the issuance and the terms of the sale of the shares of Preferred Stock have been duly authorized by the Board
of Directors of the Company in conformity with the Company’s certificate of incorporation and bylaws; (b) an appropriate
certificate of designation relating to a series of the Preferred Stock to be sold under the Registration Statement has been duly
authorized and adopted and filed with the Secretary of State of Delaware; (c) the terms of issuance and sale of shares of such
series of Preferred Stock have been duly established in conformity with the Company’s certificate of incorporation and bylaws
so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon the
Company and comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the
Company or any of its property; (d) such shares have been issued and delivered against payment of the purchase price therefor
in an amount in excess of the par value thereof, in accordance with the applicable definitive purchase, underwriting or similar
agreement, and as contemplated by the Registration Statement, the Prospectus and the related Prospectus Supplement; and (e) to
the extent such shares of Preferred Stock are to be issued upon the conversion, exchange or exercise of any Preferred Stock, Warrants
or Debt Securities, when such shares have been duly issued and delivered as contemplated by the terms of the applicable Preferred
Stock, the Warrant Agreement relating to such Warrants or the Indenture relating to such Debt Securities, respectively, the shares
of Preferred Stock will be validly issued, fully paid and nonassessable.
4.
With respect to Warrants, when (a) the issuance and the terms
of the sale of the Warrants have been duly authorized by the Board of Directors of the Company; (b) the terms of the Warrants
and of their issuance and sale have been duly established so as not to violate any applicable law or result in a default under
or breach of any agreement or instrument binding upon the Company and comply with any requirement or restriction imposed by any
court or governmental body having jurisdiction over the Company or any of its property; (c) the Warrants and the applicable Warrant
Agreement relating to the Warrants, if any, have been duly executed and countersigned and the Warrants have been issued and sold
in accordance with the applicable definitive purchase, underwriting or similar agreement, as contemplated by the Registration
Statement, the Prospectus and the related Prospectus Supplement; and (d) the Company has received the applicable consideration
for the Warrants as contemplated by the Registration Statement, the Prospectus and the related Prospectus Supplement(s), the Warrants
will constitute valid and binding obligations of the Company.
5.
With respect to Debt Securities, when (a) the issuance and the
terms of the sale of the Debt Securities have been duly authorized by the Board of Directors of the Company; (b) the terms of
the Debt Securities and of their issuance and sale have been duly established so as not to violate any applicable law or result
in a default under or breach of any agreement or instrument binding upon the Company and comply with any requirement or restriction
imposed by any court or governmental body having jurisdiction over the Company or any of its property; (c) the Debt Securities
and the applicable Indenture relating to the Debt Securities have been duly executed and countersigned and in the case of the
Indenture, duly authenticated by the Trustee, and the Debt Securities have been issued and sold as contemplated by the Registration
Statement, the Prospectus and the related Prospectus Supplement; and (d) the Company has received the applicable consideration
for the Debt Securities as contemplated by the Registration Statement, the Prospectus and the related Prospectus Supplement(s),
the Debt Securities will constitute valid and binding obligations of the Company.
6.
With respect to the Subscription Rights, when both: (a) the
issuance and the terms of the sale of the Subscription Rights have been duly authorized by the Board of Directors of the Company;
(b) the terms of the Subscription Rights and of their issuance and sale have been duly established so as not to violate any applicable
law or result in a default under or breach of any agreement or instrument binding upon the Company and comply with any requirement
or restriction imposed by any court or governmental body having jurisdiction over the Company or any of its property; and (c)
the agreement(s) relating to the Subscription Rights have been duly authorized and validly executed and delivered by the Company,
then the Subscription Rights will be valid and binding obligations of the Company, enforceable against the Company in accordance
with their terms.
7.
With respect to Units, when (a) the issuance and the terms of
the sale of the Units have been duly authorized by the Board of Directors of the Company; (b) the terms of the Units and of their
issuance and sale have been duly established so as not to violate any applicable law or result in a default under or breach of
any agreement or instrument binding upon the Company and comply with any requirement or restriction imposed by any court or governmental
body having jurisdiction over the Company or any of its property; (c) the Unit Agreement and the Units have been duly executed
and countersigned and the Units have been issued and sold in accordance with the applicable Unit Agreement, as contemplated by
the Registration Statement, the Prospectus and the related Prospectus Supplement; and (d) the Company has received the applicable
consideration for the Units as contemplated by the Registration Statement, the Prospectus and the related Prospectus Supplement(s),
the Units will constitute valid and binding obligations of the Company.
In
rendering the opinions set forth above, we have assumed that (i) the Registration Statement (and any applicable post-effective
amendment thereto) will have become effective under the Securities Act, a Prospectus Supplement will have been prepared and filed
with the Commission describing the Securities offered thereby and such Securities will have been issued and sold in accordance
with the terms of such Prospectus Supplement and in compliance with all applicable laws; and (ii) a definitive purchase, underwriting
or similar agreement with respect to such Securities (if applicable) will have been duly authorized, executed and delivered by
the Company and the other parties thereto; (iii) the Securities will be duly authorized by all necessary corporate action by the
Company and any agreement pursuant to which such Securities may be issued will be duly authorized, executed and delivered by the
Company and the other parties thereto; (iv) the Company is and will remain duly organized, validly existing and in good standing
under applicable state law; and (v) the Company has reserved a sufficient number of shares of its duly authorized, but unissued,
Common Stock and Preferred Stock as is necessary to provide for the issuance of the shares of Common Stock and Preferred Stock
pursuant to the Registration Statement.
The
opinions set forth above are subject to the following exceptions, limitations and qualifications: (i) the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights and remedies of creditors; (ii) the effect of general principles of equity, including without limitation,
concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or
injunctive relief, regardless of whether enforcement is considered in a proceeding in equity or at law, and the discretion of
the court before which any proceeding therefor may be brought; and (iii) the unenforceability under certain circumstances under
law or court decisions of provisions providing for the indemnification of, or contribution to, a party with respect to liability
where such indemnification or contribution is contrary to public policy. We express no opinion concerning the enforceability of
any waiver of rights or defenses with respect to stay, extension or usury laws. Our opinion expressed herein is also subject to
the qualification that no term or provision shall be included in any certificate of designation relating to any series of the
Preferred Stock, Warrant Agreement, Indenture, Unit Agreement or any other agreement or instrument pursuant to which any of the
Securities are to be issued that would affect the validity of such opinion.
Our
opinion is limited to the federal laws of the United States, the General Corporation Law of the State of Delaware (including reported
judicial decisions interpreting the General Corporation Law of the State of Delaware) and the State of New York. We express no
opinion as to the effect of the law of any other jurisdiction. Our opinion is rendered as of the date hereof, and we assume no
obligation to advise you of changes in law or fact (or the effect thereof on the opinions expressed herein) that hereafter may
come to our attention.
We
hereby consent to the inclusion of this opinion as Exhibit 5.1 to the Registration Statement and to the references to our firm
therein and in the Prospectus and in any Prospectus Supplement under the caption “Legal Matters.” In giving our consent,
we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations thereunder.
Very
truly yours,
|
/s/
Lowenstein Sandler LLP
|
|
|
LOWENSTEIN
SANDLER LLP
|
|
Exhibit
23.1
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
consent to the incorporation by reference in this Registration Statement of Provention Bio, Inc. on Form S-3 to be filed on or
about August 2, 2019 of our report dated March 19, 2019, on our audits of the financial statements as of December 31, 2018 and
2017 and for each of the years ended December 31, 2018 and 2017, and for the period from October 4, 2016 (inception) through December
31, 2016, which report was included in the Annual Report on Form 10-K filed March 19, 2019. We also consent to the reference to
our firm under the caption “Experts” in this Registration Statement.
/s/
EisnerAmper LLP
EISNERAMPER
LLP
Iselin,
New Jersey
August
2, 2019