Exhibit 1.1
MABVAX THERAPEUTICS HOLDINGS, INC.
1,342,858 Shares of Common Stock
1,000,000 Shares of Series G Convertible Preferred
Stock
UNDERWRITING AGREEMENT
May 15, 2017
Laidlaw & Company (UK) Ltd.
546 Fifth Avenue, Fifth Floor
New York, NY 10036
Ladies and Gentlemen:
MabVax Therapeutics Holdings, Inc., a Delaware
corporation (the “
Company
”),
proposes, subject to the terms and conditions stated herein, to
issue and sell to Laidlaw & Company (UK) Ltd. (the
“
Underwriter
”),
an aggregate of (i) 1,342,858
authorized but unissued shares (the
“
Firm
Shares
”) of common stock,
par value $0.01 per share (the “
Common
Stock
”), of the Company
and (ii) 1,000,000
authorized but unissued shares (the
“
Preferred
Shares
”) of preferred
stock, par value $0.01 per share, designated as Series G Preferred
Stock (the “Preferred Stock”), to have the relative
rights, preferences, limitations and designations set forth in the
Certificate of Designation filed as an exhibit to the Registration
Statement (as defined below) (the “Certificate of
Designations”), and to be convertible into an aggregate of
1,000,000 shares of Common Stock (the “
Conversion
Shares
”). The Company
also proposes to sell to the Underwriter, upon the terms and
conditions set forth in Section 4 hereof, up to an additional
201,428
shares of Common Stock (the
“
Option
Shares
”). The Firm Shares
and the Option Shares are hereinafter collectively referred to as
the “
Shares
”).
The Shares, the Preferred Shares and the Conversion Shares are
collectively referred to as the “
Securities
.”
The
Company and the Underwriter hereby confirm their agreement as
follows:
1.
Registration
Statement and Prospectus
.
The Company has prepared and filed with the
Securities and Exchange Commission (the “
Commission
”)
a registration statement covering the Securities on Form S-1 (File
No. 333-216016) under the Securities Act of 1933, as amended (the
“
Securities
Act
”), and the rules and
regulations (the “
Rules and
Regulations
”) of the
Commission thereunder and such amendments to such registration
statement (including post effective amendments) as may have been
required to the date of this Agreement. Such registration
statement, as amended (including any post effective amendments),
has been declared effective by the Commission. Such registration
statement, including amendments thereto (including post effective
amendments thereto)
and all documents and information deemed
to be a part of the Registration Statement through incorporation by
reference or otherwise
at the time of
effectiveness thereof (the “
Effective
Time
”), the exhibits and
any schedules thereto at the Effective Time or thereafter during
the period of effectiveness and the documents and information
otherwise deemed to be a part thereof or included therein by the
Securities Act or otherwise pursuant to the Rules and Regulations
at the Effective Time or thereafter during the period of
effectiveness, is herein called the “
Registration
Statement
.”
If the
Company has filed or files an abbreviated registration statement
pursuant to Rule 462(b) under the Securities Act (the
“
Rule 462
Registration Statement
”), then any reference herein to
the term Registration Statement shall include such Rule 462
Registration Statement. Any preliminary prospectus included in the
Registration Statement or filed with the Commission pursuant to
Rule 424(a) under the Securities Act is hereinafter called a
“
Preliminary
Prospectus
.” The Preliminary Prospectus relating to
the Securities that was included in the Registration Statement
immediately prior to the pricing of the offering contemplated
hereby is hereinafter called the “
Pricing
Prospectus
.”
The
Company is filing with the Commission pursuant to Rule 424 under
the Securities Act a final prospectus relating to the Securities,
which includes the information permitted to be omitted therefrom at
the Effective Time by Rule 430A under the Securities Act. Such
final prospectus, as so filed, is hereinafter called the
“
Final
Prospectus
.” The Final Prospectus, the Pricing
Prospectus and any preliminary prospectus in the form in which they
were included in the Registration Statement or filed with the
Commission pursuant to Rule 424 under the Securities Act is
hereinafter called a “
Prospectus
.”
2.
Representations
and Warranties of the Company Regarding the Offering.
(a)
The
Company represents and warrants to, and agrees with, the
Underwriter, as of the date hereof and as of the Closing Date (as
defined in Section 4(c) below) and as of each Option Closing Date
(as defined in Section 4(b) below), as follows:
(i)
No
Material Misstatements or Omissions
. At each time of effectiveness, at the date
hereof, at the Closing Date, and at each Option Closing Date, if
any, the Registration Statement and any post-effective amendment
thereto complied or will comply in all material respects with the
requirements of the Securities Act and the Rules and Regulations
and did not, does not, and will not, as the case may be, 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. The Time of Sale Disclosure
Package (as defined below) as of the date hereof and at the Closing
Date and on each Option Closing Date, any roadshow or investor
presentations delivered to and approved by the Underwriter for use
in connection with the marketing of the offering of the Securities
(the “
Marketing
Materials
”), if any, and
the Final Prospectus, as amended or supplemented, as of its date,
at the time of filing pursuant to Rule 424(b) under the Securities
Act, at the Closing Date, and at each Option Closing Date, if any,
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, in the
light of the circumstances under which they were made, not
misleading. The representations and warranties set forth in the two
immediately preceding sentences shall not apply to statements in or
omissions from the Registration Statement, the Time of Sale
Disclosure Package or any Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by
the Underwriter specifically for use in the preparation thereof,
which written information is described in Section 7(f).
The
Registration Statement contains all exhibits and schedules required
to be filed by the Securities Act or the Rules and Regulations.
No order preventing or suspending the
effectiveness or use of the Registration Statement or any
Prospectus is in effect and no proceedings for such purpose have
been instituted or are pending, or, to the knowledge of the
Company, are contemplated or threatened by the Commission.
“
Time of Sale
Disclosure Package
” means
the Prospectus most recently filed with the Commission before the
time of this Agreement and the description of the transaction
provided by the Underwriter, if any, in the form included on
Schedule
II
.
(ii)
Marketing
Materials
. The Company has not distributed any prospectus or
other offering material in connection with the offering and sale of
the
Securities
other than the
Time of Sale Disclosure Package and the
Marketing Materials
. At the time of filing
of the Registration Statement and at the date hereof, the Company
was an “ineligible issuer,” as defined in Rule 405
under the Securities Act and an “excluded issuer” as
defined in Rule 164 under the Securities Act. As a result, the
Company is not eligible to use any “issuer free writing
prospectus”
as defined in Rule
433 under the Securities Act
in connection with the offering
of the Securities.
(iii)
Financial
Statements
. The financial
statements of the Company, together with the related notes,
included in the Registration Statement, the Time of Sale Disclosure
Package and the Final Prospectus comply in all material respects
with the applicable requirements of the Securities Act and the
Securities Exchange Act of 1934, as amended (the
“
Exchange
Act
”), and the rules and
regulations of the Commission thereunder and fairly present the
financial condition of the Company as of the dates indicated and
the results of operations and changes in cash flows for the periods
therein specified in conformity with U.S. generally accepted
accounting principles (“
GAAP
”)
consistently applied throughout the periods involved. No other
financial statements, pro forma financial information or schedules
are required under the Securities Act, the Exchange Act or the
Rules and Regulations to be included in the Registration Statement,
the Time of Sale Disclosure Package or the Final
Prospectus.
(iv)
Independent
Accountants.
To the
Company’s knowledge, CohnReznick LLP, which has expressed its
opinion with respect to the financial statements and schedules
included as a part of the Registration Statement and included in
the Registration Statement, the Time of Sale Disclosure Package and
the Final Prospectus, is an independent registered public
accounting firm with respect to the Company within the meaning of
the Securities Act and the Rules and
Regulations.
(v)
Accounting
Controls.
The Company and its subsidiaries maintain systems
of “internal control over financial reporting” (as
defined under Rules 13a-15 and 15d-15 under the Exchange Act) that
comply with the requirements of the Exchange Act and have been
designed by, or under the supervision of, their respective
principal executive and principal financial officers, or persons
performing similar functions, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with GAAP, including, but not limited to, internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization; (iv) 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 (v) the interactive data in
eXtensible Business Reporting Language included or incorporated by
references in
the Registration
Statement, the Time of Sale Disclosure Package and the Final
Prospectus fairly present the information called for in all
material respects and are prepared in accordance with the
Commission’s rules and guidelines applicable thereto. Since
the date of the latest audited financial statements included in the
Registration Statement, the Time of Sale Disclosure Package and the
Final Prospectus, there has been no change in the Company’s
internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the
Company’s internal control over financial
reporting.
(vi)
Forward-Looking
Statements
. The Company had a reasonable basis for, and made
in good faith, each “forward-looking statement” (within
the meaning of Section 27A of the Securities Act or Section 21E of
the Exchange Act) contained or incorporated by reference in the
Registration Statement, the Time of Sale Disclosure Package, the
Final Prospectus or the Marketing Materials.
(vii)
Statistical
and Marketing-Related Data
. All statistical or
market-related data included or incorporated by reference in the
Registration Statement, the Time of Sale Disclosure Package or the
Final Prospectus, or included in the Marketing Materials, are based
on or derived from sources that the Company reasonably believes to
be reliable and accurate, and the Company has obtained the written
consent to the use of such data from such sources, to the extent
required.
(viii)
Approval
of Listing
. The Common Stock is
registered pursuant to Section 12(b) of the Exchange Act and is
approved for listing on The NASDAQ Capital Market
(“
NASDAQ
”).
There is no action
pending by the
Company or, to the Company’s knowledge, NASDAQ
to
delist the Common Stock from NASDAQ, nor has the Company received
any notification that the
Nasdaq
is contemplating terminating such
listing. When issued, the Shares will be listed on
NASDAQ.
(ix)
Absence
of Manipulation
. The Company has not taken, directly or
indirectly, any action that is designed to or that has constituted
or that would reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the
Securities
.
(x)
Investment
Company Act
. The Company is not
and, after giving effect to the offering and sale of the Securities
and the application of the net proceeds thereof, will not be an
“investment company,” as such term is defined in the
Investment Company Act of 1940, as amended.
3.
Representations
and Warranties Regarding the Company.
(a)
The
Company represents and warrants to, and agrees with, the
Underwriter, as of the date hereof and as of the Closing Date and
as of each Option Closing Date, as follows:
(i)
Good
Standing
. Each of the Company
and its subsidiaries has been duly organized and is validly
existing as a corporation or other entity in good standing under
the laws of its jurisdiction of organization. Each of the Company
and its subsidiaries has the power and authority (corporate or
otherwise) to own its properties and conduct its business as
currently being carried on and as described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus,
and is duly qualified to do business as a foreign corporation or
other entity in good standing in each jurisdiction in which it owns
or leases real property or in which the conduct of its business
makes such qualification necessary, except where the failure to so
qualify would not have or be reasonably likely to result in a
material adverse effect upon the business, prospects, properties,
operations, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries, taken as a whole,
or in its ability to perform its obligations under this Agreement
(“
Material Adverse
Effect
”).
(ii)
Authorization
.
The Company has the power and authority to (i) enter into this
Agreement,
(ii)
authorize, issue and sell the Shares,
the Preferred Shares and the Conversion Shares as contemplated by
this Agreement. This Agreement
has
been duly authorized by the Company and when
executed and delivered by the Company, will constitute the valid,
legal and binding obligations of the Company, enforceable against
the Company in accordance with its terms, except as rights to
indemnity hereunder may be limited by federal or state securities
laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
the rights of creditors generally and subject to general principles
of equity.
(iii)
Contracts
.
The execution, delivery and performance of this
Agreement
and
the consummation of the transactions herein contemplated will not
(A) result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any law, order, rule
or regulation to which the Company or any subsidiary is subject, or
by which any property or asset of the Company or any subsidiary is
bound or affected, (B) conflict with, result in any violation or
breach of, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to
others any right of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) (a
“
Default Acceleration
Event
”) of, any
agreement, lease, credit facility, debt, note, bond, mortgage,
indenture or other instrument (the “
Contracts
”)
or obligation or other understanding to which the Company or any
subsidiary is a party or by which any property or asset of the
Company or any subsidiary is bound or affected, except to the
extent that such conflict, default, or Default Acceleration Event
not reasonably likely to result in a Material Adverse Effect, or
(C) result in a breach or violation of any of the terms and
provisions of, or constitute a default under, the Company’s
Certificate of Incorporation or by-laws.
(iv)
No
Violations of Governing Documents
. Neither the Company nor any of its subsidiaries
is in violation, breach or default under its certificate of
incorporation, by-laws or other equivalent organizational or
governing documents.
(v)
Consents
.
No consents, approvals, orders,
authorizations or filings are required on the part of the Company
in connection with (i) the execution, delivery or performance of
this Agreement, and (ii) the issue and sale of the Securities,
except (A) the registration under the Securities Act of the
Securities, which has been effected, (B) such consents, approvals,
authorizations, registrations or qualifications as may be required
under state or foreign securities or Blue Sky laws and the rules of
the Financial Industry Regulatory Authority, Inc.
(“
FINRA
”) in connection
with the purchase and distribution of the Securities by the
Underwriter, (C) the filing of the Certificate of Designation with
the Secretary of State of Delaware (which has occurred on or prior
to the date hereof), (D) such consents and approvals as have been
obtained and are in full force and effect, (E) filing of a Listing
of Additional Shares Application with The NASDAQ Stock Market, (F)
such consents and approvals as described in the Registration
Statement and (G) such consents, approvals, orders, authorizations
and filings the failure of which to make or obtain is not
reasonably likely to result in a Material Adverse
Effect.
(vi)
Capitalization
.
The
Company has an authorized capitalization as set forth in
the Registration Statement, the Time of Sale Disclosure Package and
the Final Prospectus. All of the issued and outstanding shares of
capital stock of the Company are duly authorized and validly
issued, fully paid and nonassessable, and have been issued in
compliance with all applicable securities laws,
and conform to the description thereof in the
Registration Statement, the Time of Sale Disclosure Package and the
Final Prospectus. All of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and, except as set forth
in the Registration Statement, the Time of Sale Disclosure Package
and the Final Prospectus, are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims. Except for the issuances of options or restricted stock in
the ordinary course of business, since the respective dates as of
which information is provided in the Registration Statement, the
Time of Sale Disclosure Package or the Final Prospectus, the
Company has not entered into or granted any
convertible or
exchangeable securities, options, warrants, agreements, contracts
or other rights in existence to purchase or acquire from the
Company any shares of the capital stock of the Company. The Shares,
when issued and paid for as provided herein, will be duly
authorized and validly issued, fully paid and nonassessable, will
be issued in compliance with all applicable securities laws, and
will be free of preemptive, registration or similar
rights
and
will conform to the description of the capital stock of the Company
contained in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus. The Preferred Shares, when
issued and paid for as provided herein, will be duly authorized and
validly issued, fully paid and nonassessable, will have the
relative rights, preferences, privileges and limitations set forth
in the Certificate of Designation, will be issued in compliance
with all applicable securities laws, and will be free of
preemptive, registration or similar rights and will conform to the
description of the Preferred Stock contained in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus.
The Conversion Shares, when issued, paid for and delivered upon due
conversion of the Preferred Stock, will be duly authorized and
validly issued, fully paid and nonassessable, will be issued in
compliance with all applicable securities laws, and will be free of
preemptive, registration or similar rights. The Conversion Shares,
have been reserved for issuance. The Preferred Shares, when issued,
will conform in all material respects to the descriptions thereof
set forth in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectus.
(vii)
Taxes
.
Each of the Company and its subsidiaries has (a) filed all foreign,
federal, state and local tax returns (as hereinafter defined)
required to be filed with taxing authorities prior to the date
hereof or has duly obtained extensions of time for the filing
thereof and (b) paid all taxes (as hereinafter defined) shown as
due and payable on such returns that were filed and has paid all
taxes imposed on or assessed against the Company or such respective
subsidiary. The provisions for taxes payable, if any, shown on the
financial statements included in the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectus are
sufficient for all accrued and unpaid taxes, whether or not
disputed, and for all periods to and including the dates of such
consolidated financial statements. To the knowledge of the Company,
no issues have been raised (and are currently pending) by any
taxing authority in connection with any of the returns or taxes
asserted as due from the Company or its subsidiaries, and no
waivers of statutes of limitation with respect to the returns or
collection of taxes have been given by or requested from the
Company or its subsidiaries. The term “
taxes
” mean all federal,
state, local, foreign, and other net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits,
license, lease, service, service use, withholding, payroll,
employment, excise, severance, stamp, occupation, premium,
property, windfall profits, customs, duties or other taxes, fees,
assessments, or charges of any kind whatever, together with any
interest and any penalties, additions to tax, or additional amounts
with respect thereto. The term “
returns
” means all
returns, declarations, reports, statements, and other documents
required to be filed in respect to taxes.
(viii)
Material
Change
. Since the respective
dates as of which information is given in the Registration
Statement, the Time of Sale Disclosure Package or the Final
Prospectus, (a) neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions other than in
the ordinary course of business, (b) the Company has not declared
or paid any dividends or made any distribution of any kind with
respect to its capital stock; (c) there has not been any change in
the capital stock of the Company or any of its subsidiaries (other
than a change in the number of outstanding shares of Common Stock
due to the issuance of shares upon the exercise of outstanding
options or warrants, upon the conversion of outstanding shares of
preferred stock or other convertible securities
or the
issuance of restricted stock awards or restricted stock units under
the Company’s existing stock awards plan,
or any new grants thereof in the ordinary course
of business), (d) there has not been any material change in the
Company’s long-term or short-term debt, and (e) there has not
been the occurrence of any Material Adverse
Effect.
(ix)
Absence
of Proceedings
. There is not
pending or, to the knowledge of the Company, threatened, any
action, suit or proceeding to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject before or by any
court or governmental agency, authority or body, or any arbitrator
or mediator, which is reasonably likely to result in a Material
Adverse Effect.
(x)
Permits
.
The Company and each of its subsidiaries holds, and is in
compliance with, all franchises, grants, authorizations, licenses,
permits, easements, consents, certificates and orders
(“
Permits
”)
of any governmental or self-regulatory agency, authority or body
(including, without limitation, those administered by the Food and
Drug Administration of the U.S. Department of Health and Human
Services (the “
FDA
”) or by any foreign, federal, state or
local governmental or regulatory authority performing functions
similar to those performed by the FDA) required for the conduct of
its business, and all such Permits are in full force and
effect,
in each case except where the failure to hold, or
comply with, any of them is not reasonably likely to result in a
Material Adverse Effect or adversely affect the consummation of the
transactions contemplated by this Agreement
.
(xi)
Good
Title
. The Company and its
subsidiaries have good and marketable title to all property
(whether real or personal) described in the Registration Statement,
the Time of Sale Disclosure Package and the Final Prospectus as
being owned by them that are material to the business of the
Company, in each case free and clear of all liens, claims, security
interests, other encumbrances or defects, except those that are not
reasonably likely to result in a Material Adverse Effect. The
property held under lease by the Company and its subsidiaries is
held by them under valid, subsisting and enforceable leases with
only such exceptions with respect to any particular lease as do not
interfere in any material respect with the conduct of the business
of the Company and its subsidiaries.
(xii)
Intellectual
Property
. The Company and each
of its subsidiaries owns or possesses or has right to use all
patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations,
copyrights, licenses, inventions, trade secrets and similar rights
(“
Intellectual
Property
”) necessary for
the conduct of the business of the Company and its subsidiaries as
currently carried on and as described in the Registration
Statement, the Time of Sale Disclosure Package and the Final
Prospectus. To the knowledge of the Company, no action or use by
the Company or any of its subsidiaries involves or gives rise to
any infringement of, or license or similar fees for, any
Intellectual Property of others,
except where such action,
use, license or fee is not reasonably likely to result in a
Material Adverse Effect. N
either the
Company nor any of its subsidiaries has received any notice
alleging any such infringement or fee.
(xiii)
Employment
Matters
. There is (A) no unfair labor practice complaint
pending against the Company, or any of its subsidiaries, nor to the
Company’s knowledge, threatened against it or any of its
subsidiaries, before the National Labor Relations Board, any state
or local labor relation board or any foreign labor relations board,
and no grievance or arbitration proceeding arising out of or under
any collective bargaining agreement is so pending against the
Company or any of its subsidiaries, or, to the Company’s
knowledge, threatened against it and (B) no labor disturbance by
the employees of the Company or any of its subsidiaries exists or,
to the Company’s knowledge, is imminent, and the Company is
not aware of any existing or imminent labor disturbance by the
employees of any of its or its subsidiaries principal suppliers,
manufacturers, customers or contractors, that could reasonably be
expected, singularly or in the aggregate, to have a Material
Adverse Effect. The Company is not aware that any key employee or
significant group of employees of the Company or any subsidiary
plans to terminate employment with the Company or any such
subsidiary.
(xiv)
ERISA
Compliance
. No “prohibited transaction” (as
defined in Section 406 of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder (“
ERISA
”), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time
(the “
Code
”)) or
“accumulated funding deficiency” (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(b) of
ERISA (other than events with respect to which the thirty (30)-day
notice requirement under Section 4043 of ERISA has been waived) has
occurred or could reasonably be expected to occur with respect to
any employee benefit plan of the Company or any of its subsidiaries
which would reasonably be expected to, singularly or in the
aggregate, have a Material Adverse Effect. Each employee benefit
plan of the Company or any of its subsidiaries is in compliance in
all material respects with applicable law, including ERISA and the
Code. The Company and its subsidiaries have not incurred and could
not reasonably be expected to incur liability under Title IV of
ERISA with respect to the termination of, or withdrawal from, any
pension plan (as defined in ERISA). Each pension plan for which the
Company or any of its subsidiaries would have any liability that is
intended to be qualified under Section 401(a) of the Code is so
qualified, and, to the Company’s knowledge, nothing has
occurred, whether by action or by failure to act, which could,
singularly or in the aggregate, cause the loss of such
qualification.
(xv)
Environmental
Matters
. The Company and its subsidiaries are in compliance
with all foreign, federal, state and local rules, laws and
regulations relating to the use, treatment, storage and disposal of
hazardous or toxic substances or waste and protection of health and
safety or the environment which are applicable to their businesses
(“
Environmental
Laws
”), except where the failure to comply has not had
and would not reasonably be expected to have, singularly or in the
aggregate, a Material Adverse Effect. There has been no storage,
generation, transportation, handling, treatment, disposal,
discharge, emission, or other release of any kind of toxic or other
wastes or other hazardous substances by, due to, or caused by the
Company or any of its subsidiaries (or, to the Company’s
knowledge, any other entity for whose acts or omissions the Company
or any of its subsidiaries is or may otherwise be liable) upon any
of the property now or previously owned or leased by the Company or
any of its subsidiaries, or upon any other property, in violation
of any law, statute, ordinance, rule, regulation, order, judgment,
decree or permit or which would, under any law, statute, ordinance,
rule (including rule of common law), regulation, order, judgment,
decree or permit, give rise to any liability, except for any
violation or liability which has not had and would not reasonably
be expected to have, singularly or in the aggregate, a Material
Adverse Effect; and there has been no disposal, discharge, emission
or other release of any kind onto such property or into the
environment surrounding such property of any toxic or other wastes
or other hazardous substances with respect to which the Company or
any of its subsidiaries has knowledge. In the ordinary course of
business, the Company and its subsidiaries conduct periodic reviews
of the effect of Environmental Laws on their business and assets,
in the course of which they identify and evaluate associated costs
and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws or Governmental Permits
issued thereunder, any related constraints on operating activities
and any potential liabilities to third parties). On the basis of
such reviews, the Company has reasonably concluded that such
associated costs and liabilities would not have, singularly or in
the aggregate, a Material Adverse Effect.
(xvi)
SOX
Compliance
. The Company is in compliance in all material
respects with all applicable provisions of the Sarbanes-Oxley Act
of 2002 and all rules and regulations promulgated thereunder or
implementing the provisions thereof.
(xvii)
Certain
Regulatory Matters
. The clinical, pre-clinical and other
studies and tests conducted by or on behalf of or sponsored by the
Company or its subsidiaries that are described or referred to in
the Registration Statement, the Time of Sale Disclosure Package and
the Final Prospectus were and, if still pending, are being
conducted in accordance in all material respects with all statutes,
laws, rules and regulations, as applicable (including, without
limitation, those administered by the FDA or by any foreign,
federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA). The
descriptions of the results of such studies and tests that are
described or referred to in the Registration Statement, the Time of
Sale Disclosure Package and the Final Prospectus are accurate and
complete in all material respects and fairly present the published
data derived from such studies and tests, and each of the Company
and its subsidiaries has no knowledge of other studies or tests the
results of which are materially inconsistent with or otherwise call
into question the results described or referred to in the
Registration Statement, the Time of Sale Disclosure Package and the
Final Prospectus. Except as described in the Registration
Statement, the Time of Sale Disclosure Package and the Final
Prospectus, neither the Company nor its subsidiaries has received
any notices or other correspondence from the FDA or any other
foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the
FDA with respect to any ongoing clinical or pre-clinical studies or
tests requiring the termination or suspension of such studies or
tests. For the avoidance of doubt, the Company makes no
representation or warranty that the results of any studies, tests
or preclinical or clinical trials conducted by or on behalf of the
Company will be sufficient to obtain governmental approval from the
FDA or any foreign, state or local governmental body exercising
comparable authority. The Company has established and administers a
compliance program applicable to the Company and its subsidiaries,
to assist the Company, its subsidiaries and their directors,
officers and employees of the Company and its subsidiaries in
complying with applicable regulatory guidelines (including, without
limitation, those administered by the FDA and any other foreign,
federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA). Except
as would not be reasonably expected to result in a Material Adverse
Effect, neither the Company nor any of its subsidiaries has failed
to file with the applicable regulatory authorities (excluding the
FDA or any foreign, federal, state or local governmental or
regulatory authority performing functions similar to those
performed by the FDA) any filing, declaration, listing,
registration, report or submission that is required to be so filed.
Neither the Company nor any of its subsidiaries has failed to file
with the FDA or any foreign, federal, state or local governmental
or regulatory authority performing functions similar to those
performed by the FDA, any filing, declaration, listing,
registration, report or submission that is required to be so filed.
All such filings were in material compliance with applicable laws
when filed and no deficiencies have been asserted by any applicable
regulatory authority (including, without limitation, the FDA or any
foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the
FDA) with respect to any such filings, declarations, listings,
registrations, reports or submissions.
(xviii)
Money
Laundering Laws
. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance
in all material respects 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 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 or any
of its subsidiaries with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company,
threatened.
(xix)
Foreign
Corrupt Practices Act
. Neither the Company nor any of its
subsidiaries, nor any director or officer of the Company or any
subsidiary, nor, to the knowledge of the Company, any employee,
representative, agent, affiliate of the Company or any of its
subsidiaries or any other person acting on behalf of the Company or
any of its subsidiaries, 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 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.
(xx)
OFAC
.
Neither the Company nor any of its subsidiaries, nor any director
or officer of the Company or any subsidiary, nor, to the knowledge
of the Company, any employee, representative, agent, affiliate of
the Company or any of its subsidiaries or any other person acting
on behalf of the Company or any of its subsidiaries is currently
subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“
OFAC
”); and the Company
will not directly or indirectly use the proceeds of the offering of
the Securities contemplated hereby, or lend, contribute or
otherwise make available such proceeds to any person or entity, for
the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(xxi)
Insurance
.
The Company and each of its subsidiaries carries, or is covered by,
insurance in such amounts and covering such risks as is adequate
for the conduct of its business and the value of its properties and
as is customary for companies engaged in similar businesses in
similar industries.
(xxii)
Books
and Records
. The minute books of the Company and each of its
subsidiaries have been made available to the Underwriter and
counsel for the Underwriter, and such books (i) contain a complete
summary of all meetings and actions of the board of directors
(including each board committee) and stockholders of the Company
(or analogous governing bodies and interest holders, as
applicable), and each of its subsidiaries since the time of its
respective incorporation or organization through the date of the
latest meeting and action, and (ii) accurately in all material
respects reflect all transactions referred to in such
minutes.
(xxiii)
No
Violation
. Neither the Company nor any its subsidiaries nor,
to its knowledge, any other party is in violation, breach or
default of any Contract that has resulted in or could reasonably be
expected to result in a Material Adverse Effect.
(xxiv)
Continued
Business
. No supplier, customer, distributor or sales agent
of the Company or any subsidiary has notified the Company or any
subsidiary that it intends to discontinue or decrease the rate of
business done with the Company or any subsidiary, except where such
discontinuation or decrease has not resulted in and could not
reasonably be expected to result in a Material Adverse
Effect.
(xxv)
No
Finder’s Fee
. There are no claims, payments,
issuances, arrangements or understandings for services in the
nature of a finder’s, consulting or origination fee with
respect to the introduction of the Company to the Underwriter or
the sale of the Securities hereunder or any other arrangements,
agreements, understandings, payments or issuances with respect to
the Company that may affect the Underwriter’s compensation,
as determined by FINRA.
(xxvi)
No
Fees.
Except as disclosed to the Underwriter in writing, the
Company has not made any direct or indirect payments (in cash,
securities or otherwise) to (i) any person, as a finder’s
fee, investing fee or otherwise, in consideration of such person
raising capital for the Company or introducing to the Company
persons who provided capital to the Company, (ii) any FINRA member,
or (iii) any person or entity that has any direct or indirect
affiliation or association with any FINRA member within the
12-month period prior to the date on which the Registration
Statement was filed with the Commission (“
Filing Date
”) or
thereafter.
(xxvii)
Proceeds
.
None of the net proceeds of the offering will be paid by the
Company to any participating FINRA member or any affiliate or
associate of any participating FINRA member, except as specifically
authorized herein.
(xxviii)
No
FINRA Affiliations
. To the Company’s knowledge and
except as disclosed to the Underwriter in writing, no (i) officer
or director of the Company or its subsidiaries, (ii) owner of 5% or
more of any class of the Company’s securities or (iii) owner
of any amount of the Company’s unregistered securities
acquired within the 180-day period prior to the Filing Date, has
any direct or indirect affiliation or association with any FINRA
member. The Company will advise the Underwriter
and counsel to the Underwriter
if it
becomes aware that any officer or director of the Company or its
subsidiaries or any owner of 5% or more of any class of the
Company’s securities is or becomes an affiliate or associated
person of a FINRA member participating in the
offering.
(xxix)
No
Financial Advisor
. Other than the Underwriter, no person has
the right to act as an underwriter or as a financial advisor to the
Company in connection with the transactions contemplated
hereby.
(xxx)
Certain
Statements
. The statements set forth in the Registration
Statement, the Time of Sale Disclosure Package and the Final
Prospectus under the captions “Business—License and
Development Agreements” and “Business—Government
Regulation,” insofar as they purport to describe the
provisions of the laws and documents referred to therein, are
accurate, complete and fair in all material respects, and under the
caption “Description of Securities” insofar as they
purport to constitute a summary of (i) the terms of the
Company’s outstanding securities, (ii) the terms of the
Shares and the Preferred Shares, and (iii) the terms of the
documents referred to therein are accurate, complete and fair in
all material respects.
(xxxi)
No
Registration Rights
. Except as described in the Registration
Statement, the Time of Sale Disclosure Package and the Final
Prospectus, there are no contracts, agreements or understandings
between the Company and any person granting such person the right
(other than rights which have been waived in writing or otherwise
satisfied) to require the Company to file a registration statement
under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by
the Company under the Securities Act.
(xxxii)
Prior
Sales of Securities
. Except as set forth in the Registration
Statement, the Time of Sale Disclosure Package and the Final
Prospectus, the Company has not sold or issued any shares of Common
Stock during the six-month period preceding the date hereof,
including any sales pursuant to Rule 144A under, or Regulations D
or S of, the Securities Act, other than shares issued pursuant to
employee benefit plans, stock option plans or other employee
compensation plans or pursuant to outstanding preferred stock,
options, rights or warrants or other outstanding convertible
securities.
(b)
Any
certificate signed by any officer of the Company and delivered to
the Underwriter or to counsel for the Underwriter shall be deemed a
representation and warranty by the Company to the Underwriter as to
the matters covered thereby.
4.
Purchase,
Sale and Delivery of Shares.
(a)
On the basis of the representations, warranties
and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to issue and sell
to the Underwriter, and the Underwriter agrees to purchase from the
Company the respective numbers of Firm Shares and Preferred Shares
set forth opposite the name of the Underwriter in
Schedule I
hereto.
The purchase price to
be paid by the Underwriter to the Company for each Firm Share shall
be shall be $1.6275 per Firm Share with respect to investors
introduced to the Company by the Underwriter. The purchase price to
be paid by the Underwriter to the Company for each Firm Share shall
be $1.75 for each Firm Share with respect to certain other
investors (the “
Other
Investors
”). The purchase
price to be paid by the Underwriter to the Company for each
Preferred Share purchased by Other Investors shall be $1.75 for
each Preferred Share. Notwithstanding the foregoing, if the Other
Investors participate in the Offering for a minimum aggregate
amount of $2,000,000, the Underwriter shall receive a flat fee of
$100,000 (but, for the avoidance of doubt, will not receive any
underwriting discount with respect to the public offering price of
the Firm Shares sold to such Other Investors)
.
(b)
The
Company hereby grants to the Underwriter the option to purchase
some or all of the Option Shares and, upon the basis
of the warranties and representations
and subject to the terms and conditions herein set forth, the
Underwriter shall have the right to purchase all or any portion of
the Option Shares as may be necessary to cover over-allotments made
in connection with the transactions contemplated hereby. The
purchase price to be paid by the Underwriter for the Option Shares
shall be
$1.6275 per
share.
This option may be
exercised by the Underwriter at any time and from time to time on
or before the forty-fifth (45
th
)
day following the date hereof, by written notice to the Company
(the “
Option
Notice
”). The Option
Notice shall set forth the aggregate number of Option Shares
as to which the option is being
exercised, and the date and time when the Option Shares are to be
delivered (such date and time being herein referred to as the
“
Option Closing
Date
”);
provided
,
however
, that the Option Closing Date shall not be
earlier than the Closing Date (as defined below) nor earlier than
the first business day after the date on which the option shall
have been exercised nor later than the fifth business day after the
date on which the option shall have been exercised unless the
Company and the Underwriter otherwise agree.
(c)
Payment
of the purchase price for and delivery of the Option Shares shall
be made on an Option Closing Date in the same manner and at the
same office as the payment for the Firm Shares and Preferred
Shares, as set forth in subparagraph (d) below.
(d)
The
Firm Shares and Preferred Shares will be delivered by the Company
to the Underwriter against payment of the purchase price therefor
by wire transfer of same day funds payable to the order of the
Company at the offices of Laidlaw & Company (UK) Ltd., 546
Fifth Avenue, Fifth Floor, New York, NY 10036, or such other
location as may be mutually acceptable, at 9:00 a.m. Eastern Time,
on the third (or if the Firm Shares
and Preferred Shares
are priced,
as contemplated by Rule 15c6-1(c)
under the Exchange Act, after 4:30 p.m. Eastern time, the fourth)
full business day following the date hereof, or at such other time
and date as the Underwriter and the Company determine pursuant to
Rule 15c6-1(a) under the Exchange Act, or, in the case of the
Option Shares, at such date and time set forth in the Option
Notice. The time and date of delivery of the Firm Shares and
Preferred Shares is referred to herein as the
“
Closing
Date
.” On the Closing
Date, the Company shall deliver the Firm Shares and Preferred
Shares, which shall be registered in the name or names and shall be
in such denominations as the Underwriter may request at least one
(1) business day before the Closing Date.
5.
Covenants.
(a)
The
Company covenants and agrees with the Underwriter as
follows:
(i)
The
Company shall prepare the Final Prospectus in a form approved by
the Underwriter and file such Final Prospectus 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 execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by the Rules and
Regulations.
(ii)
During
the period beginning on the date hereof and ending on the later of
the Closing Date or such date as determined by the Underwriter the
Final Prospectus is no longer required by law to be delivered in
connection with sales by an underwriter or dealer (the
“
Prospectus Delivery
Period
”), prior to
amending or supplementing the Registration Statement, including any
Rule 462 Registration Statement, the Time of Sale Disclosure
Package or the Final Prospectus, the Company shall furnish to the
Underwriter for review and comment a copy of each such proposed
amendment or supplement, and the Company shall not file any such
proposed amendment or supplement to which the Underwriter
reasonably objects.
(iii)
From
the date of this Agreement until the end of the Prospectus Delivery
Period, the Company shall promptly advise the Underwriter in
writing (A) of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission, (B) of
the time and date of any filing of any post-effective amendment to
the Registration Statement or any amendment or supplement to the
Time of Sale Disclosure Package or the Final Prospectus, (C) of the
time and date that any post-effective amendment to the Registration
Statement becomes effective and (D) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending its
use or the use of the Time of Sale Disclosure Package or the Final
Prospectus, or of any proceedings to remove, suspend or terminate
from listing or quotation the Common Stock from any securities
exchange upon which it is listed for trading or included or
designated for quotation, or of the threatening or initiation of
any proceedings for any of such purposes. If the Commission shall
enter any such stop order at any time during the Prospectus
Delivery Period, the Company will use its reasonable efforts to
obtain the lifting of such order at the earliest possible moment.
Additionally, the Company agrees that it shall comply with the
provisions of Rules 424(b),
430A, 430B or
430C
as applicable, under the
Securities Act and will use its reasonable efforts to confirm that
any filings made by the Company under Rule 424(b) or Rule 433 were
received in a timely manner by the Commission (without reliance on
Rule 424(b)(8) or 164(b) of the Securities
Act).
(iv)
(A)
During the Prospectus Delivery Period, the Company will comply with
all requirements imposed upon it by the Securities Act, as now and
hereafter amended, and by the Rules and Regulations, as from time
to time in force, and by the Exchange Act, as now and hereafter
amended, so far as necessary to permit the continuance of sales of
or dealings in the Securities as contemplated by the provisions
hereof, the Time of Sale Disclosure Package, the Registration
Statement and the Final Prospectus. If during the Prospectus
Delivery Period any event occurs the result of which would cause
the Final Prospectus (or if the Final Prospectus is not yet
available to prospective purchasers, the Time of Sale Disclosure
Package ) to 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 or appropriate in the opinion
of the Company or its counsel or the Underwriter or counsel to the
Underwriter to amend the Registration Statement or supplement the
Final Prospectus (or if the Final Prospectus is not yet available
to prospective purchasers, the Time of
Sale Disclosure
Package ) to comply with the Securities Act, the Company will
promptly notify the
Underwriter
, allow the
Underwriter
the opportunity to provide
reasonable comments on such amendment, prospectus supplement or
document, and will amend the Registration Statement or supplement
the Final Prospectus (or if the
Final
Prospectus is not yet available to prospective purchasers, the Time
of Sale Disclosure Package) or file such document (at the expense
of the Company) so as to correct such statement or omission or
effect such compliance.
(v)
The
Company shall take or cause to be taken all necessary action to
qualify the Securities for sale under the securities laws of such
jurisdictions as the Underwriter reasonably designates and to
continue such qualifications in effect so long as required for the
distribution of the Securities, except that the Company shall not
be required in connection therewith to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified, to execute a general consent to
service of process in any state or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not
otherwise subject.
(vi)
The
Company will furnish to the Underwriter and counsel to the
Underwriter copies of the Registration Statement and each
Prospectus, and all amendments and supplements to such documents,
in each case as soon as available and in such quantities as the
Underwriter may from time to time reasonably request.
(vii)
The
Company will make generally available to its security holders as
soon as practicable, but in any event not later than 15 months
after the end of the Company’s current fiscal quarter, an
earnings statement (which need not be audited) covering a 12-month
period that shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Rules and
Regulations.
(viii)
The
Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, will pay or cause to
be paid (A) all expenses (including transfer taxes allocated to the
respective transferees) incurred in connection with the delivery to
the Underwriter of the Securities (including all fees and expenses
of the registrar and transfer agent of the Shares, the Conversion
Shares and the registrar and transfer agent of the Preferred Shares
(if other than the Company), and the cost of preparing and printing
stock certificates), (B) all expenses and fees (including, without
limitation, fees and expenses of the Company’s counsel) in
connection with the preparation, printing, filing, delivery, and
shipping of the Registration Statement (including the financial
statements therein and all amendments, schedules, and exhibits
thereto), the Securities, the Time of Sale Disclosure Package, any
Prospectus, the Final Prospectus, and any amendment thereof or
supplement thereto, (C) the reasonable filing fees and reasonable
disbursements of counsel to the Underwriter incident to any
required review and approval by FINRA, of the terms of the sale of
the Securities, (D) listing fees, if any, and (E) all other costs
and expenses incident to the performance of the Company’s
obligations hereunder that are not otherwise specifically provided
for herein. The Company will reimburse the Underwriter for the
Underwriter’s reasonable out-of-pocket expenses, including
legal fees and disbursements, in connection with the purchase and
sale of the Securities contemplated hereby up to an aggregate of
$80,000 (including amounts payable pursuant to clause (C)). If this
Agreement is terminated by the Company or the Underwriter in
accordance with the provisions of Section 9, the Company will
reimburse the Underwriter for all actual accountable and documented
expenses (including, but not limited to, reasonable fees and
disbursements of counsel, travel expenses, postage, facsimile and
telephone charges) incurred by the Underwriter in connection with
its investigation, preparing to market and marketing the Securities
or in contemplation of performing its obligations hereunder but in
no event more than $50,000 in the aggregate.
(ix)
The
Company intends to apply the net proceeds from the sale of the
Securities to be sold by it hereunder for the purposes set forth in
the Registration Statement, the Time of Sale Disclosure Package and
the Final Prospectus.
(x)
The
Company has not taken and will not take, directly or indirectly,
during the Prospectus Delivery Period, any action designed to or
which might reasonably be expected to cause or result in, or that
has constituted, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Securities.
(xi)
The
Company hereby agrees that, without the prior written consent of
the
Underwriter
, it will not,
during the period ending 90 days after the date hereof
(“
Lock-Up
Period
”), (i) offer, pledge, issue, sell, contract to
sell, purchase, contract to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock
or any securities convertible into or exercisable or exchangeable
for Common Stock; or (ii)
enter into
any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of the
Common Stock, whether any such transaction described in
clause
(i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise; or
(iii) file any registration statement with the Commission relating
to the offering of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock.
The restrictions contained in the preceding sentence shall not
apply to (1) the Securities to be sold hereunder, (2) the issuance
of Common Stock upon the exercise of options or warrants or the
conversion of outstanding preferred stock or other outstanding
convertible securities disclosed as outstanding in the Registration
Statement (excluding exhibits thereto), the Time of Sale Disclosure
Package, and the Final Prospectus, or (3) the issuance of employee
stock options not exercisable during the Lock-Up Period and the
grant of restricted stock awards or restricted stock units or
shares of Common Stock pursuant to equity incentive plans described
in the Registration Statement (excluding exhibits thereto), the
Time of Sale Disclosure Package, and the Final
Prospectus.
(xii)
To
engage and maintain, at its expense, a registrar and transfer agent
for the Common Stock and the Preferred Stock (if other than the
Company)
.
(xiii)
To
not take, directly or indirectly, any action designed to cause or
result in, or that has constituted or might reasonably be expected
to constitute, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any securities of the
Company to facilitate the sale or resale of the
Securities.
6.
Conditions
of the Underwriter’s Obligation.
The obligation of the Underwriter hereunder to
purchase the
Shares
is subject
to the accuracy, as of the date hereof and at all times
through
the Closing Date, and on each Option Closing Date
(as if made on the Closing Date or such Option Closing Date, as
applicable
), of and compliance with
all representations, warranties and agreements of the Company
contained herein, the performance by the Company of its obligations
hereunder and the following additional
conditions:
(a)
If
filing of the Final Prospectus, or any amendment or supplement
thereto, or any Issuer Free Writing Prospectus, is required under
the Securities Act or the Rules and Regulations, the Company shall
have filed the Final Prospectus (or such amendment or supplement)
or such Issuer Free Writing Prospectus with the Commission in the
manner and within the time period so required (without reliance on
Rule 424(b)(8) or 164(b) under the Securities Act); the
Registration Statement shall remain effective; no stop order
suspending the effectiveness of the Registration Statement or any
part thereof, any Rule 462 Registration Statement, or any amendment
thereof, nor suspending or preventing the use of the Time of Sale
Disclosure Package, any Prospectus or the Final Prospectus shall
have been issued; no proceedings for the issuance of such an order
shall have been initiated or threatened by the Commission; any
request of the Commission or the Underwriter for additional
information (to be included in the Registration Statement, the Time
of Sale Disclosure Package, any Prospectus, the Final Prospectus or
otherwise) shall have been complied with to the satisfaction of the
Underwriter.
(b)
FINRA
shall have raised no objection to the fairness and reasonableness
of the underwriting terms and arrangements.
(c)
The
Underwriter shall not have
reasonably determined, and
advised the Company, that the
Registration Statement, the Time of Sale Disclosure Package, any
Prospectus, the Final Prospectus, or any amendment thereof or
supplement thereto, contains an untrue statement of fact
which
, in the reasonable opinion of the
Underwriter
,
is material, or omits to state a fact
which
, in the reasonable opinion of the
Underwriter
,
is material and is required to be stated therein
or necessary to make the statements therein not
misleading.
(d)
On
or after the date hereof (i) no downgrading shall have occurred in
the rating accorded any of the Company’s securities by any
“nationally recognized statistical organization,” as
that term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of
the Company’s securities.
(e)
On
the Closing Date and on each Option Closing Date, there shall have
been furnished to the Underwriter the opinion and negative
assurance letters of Sichenzia Ross Ference Kesner LLP, counsel to
the Company, dated the Closing Date or the Option Closing Date, as
applicable, and addressed to the Underwriter, in form and substance
reasonably satisfactory to the Underwriter.
(f)
On
the Closing Date and on each Option Closing Date, there shall have
been furnished to the Underwriter the opinion of Jones Day,
intellectual property counsel to the Company, dated the Closing
Date or the Option Closing Date, as applicable, and addressed to
the Underwriter, in form and substance reasonably satisfactory to
the Underwriter.
(g)
On
the Closing Date and on each Option Closing Date, there shall have
been furnished to the Underwriter the opinion of Mintz Levin Cohn
Ferris Glovsky and Popeo PC, general counsel to the Company, dated
the Closing Date or the Option Closing Date, as applicable, and
addressed to the Underwriter, in form and substance reasonably
satisfactory to the Underwriter.
(h)
On
the Closing Date and on each Option Closing Date, there shall have
been furnished to the Underwriter the negative assurance letter of
Sheppard Mullin Richter & Hampton LLP, counsel to the
Underwriter, dated the Closing Date or the Option Closing Date, as
applicable, and addressed to the Underwriter, in form and substance
reasonably satisfactory to the Underwriter.
(i)
The
Underwriter shall have received a letter of CohnReznick LLP, on the
date hereof and on the Closing Date and on each Option Closing
Date, addressed to the Underwriter, confirming that they are
independent public accountants within the meaning of the Securities
Act and are in compliance with the applicable requirements relating
to the qualifications of accountants under Rule 2-01 of Regulation
S-X of the Commission, and confirming, as of the date of each such
letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified
financial information is given in the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectus, as of a
date not prior to the date hereof or more than five days prior to
the date of such letter), the conclusions and findings of said firm
with respect to the financial information and other matters
required by the Underwriter.
(j)
On
the Closing Date and on each Option Closing Date, there shall have
been furnished to the Underwriter a certificate, dated the Closing
Date and on each Option Closing Date and addressed to the
Underwriter, signed by the chief executive officer and the chief
financial officer of the Company, in their capacity as officers of
the Company, to the effect that:
(i)
The
representations and warranties of the Company in this Agreement
that are qualified by materiality or by reference to any Material
Adverse Effect are true and correct in all respects, and all other
representations and warranties of the Company in this Agreement are
true and correct, in all material respects, as if made at and as of
the Closing Date and on the Option Closing Date, and the Company
has complied in all material respects with all the agreements and
satisfied all the conditions on its part required to be performed
or satisfied at or prior to the Closing Date or on the Option
Closing Date, as applicable;
(ii)
No
stop order or other order (A) suspending the effectiveness of the
Registration Statement or any part thereof or any amendment
thereof, (B) suspending the qualification of the
Securities
for
offering or sale, or (C) suspending or preventing the use of the
Time of Sale Disclosure Package, any Prospectus or the Final
Prospectus, has been issued, and no proceeding for that purpose has
been instituted or, to their knowledge, is contemplated by the
Commission or any state or regulatory body; and
(iii)
There
has been no occurrence of any event resulting or reasonably likely
to result in a Material Adverse Effect during the period from and
after the date of this Agreement and prior to the Closing Date
or on the Option Closing Date, as
applicable
.
(k)
On
or before the date hereof, the Underwriter shall have received duly
executed lock-up agreement, in the form set forth on
Exhibit A
hereto, by and between the Underwriter
and each of the parties specified in
Schedule III
.
(l)
The
Certificate of Designation shall have been filed with the Secretary
of State of Delaware and shall be effective; a filed copy of the
Certificate of Designation shall have been provided to the
Underwriter and its counsel.
(m)
Nasdaq
shall have approved the listing of the Shares and the Conversion
Shares, subject to official notice of issuance and satisfactory
evidence thereof shall have been provided to the Underwriter and
its counsel.
(n)
The
Company shall have furnished to the Underwriter and its counsel
such additional documents, certificates and evidence as the
Underwriter or its counsel may have reasonably
requested.
If any condition specified in this Section 6 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may
be terminated by the Underwriter by notice to the Company at any
time at or prior to the Closing Date or
on the Option Closing Date, as applicable,
and such termination shall be without liability of any party to any
other party, except that Section 5(a)(viii), Section 7 and Section
8 shall survive any such termination and remain in full force and
effect.
7.
Indemnification
and Contribution
.
(a)
The Company agrees to indemnify, defend and hold
harmless the Underwriter, its affiliates, directors and officers
and employees, and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any losses,
claims, damages or liabilities to which the Underwriter or such
person may become subject, under the Securities Act or otherwise
(including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) an untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a
part of the Registration Statement at the time of effectiveness and
at any subsequent time pursuant to Rules 430A and 430B of the Rules
and Regulations, or arise out of or are based upon the omission
from the Registration Statement, or alleged omission to state
therein, a material fact required to be stated therein or necessary
to make the statements therein not misleading (ii) an untrue
statement or alleged untrue statement of a material fact contained
in the Time of Sale Disclosure Package, any Prospectus, the Final
Prospectus, or any amendment or supplement thereto, or the
Marketing Materials or in any other materials used in connection
with the offering of the
Securities
, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, (iii) in whole or in part, any inaccuracy in the
representations and warranties of the Company contained herein, or
(iv) in whole or in part, any failure of the Company to perform its
obligations hereunder or under law, and will reimburse the
Underwriter for any legal or other expenses reasonably incurred by
it in connection with evaluating, investigating or defending
against such loss, claim, damage, liability or action;
provided,
however
, that the Company shall
not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon
an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the Time of
Sale Disclosure Package, any Prospectus, the Final Prospectus, or
any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by the
Underwriter specifically for use in the preparation thereof, which
written information is described in Section
7(f).
(b)
The
Underwriter will indemnify, defend and hold harmless the Company,
its affiliates, directors, officers and
employees, and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any losses,
claims, damages or liabilities to which the Company may become
subject, under the Securities Act or otherwise (including in
settlement of any litigation, if such settlement is effected with
the written consent of the Underwriter), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, the Time of Sale Disclosure Package, any Prospectus, the
Final Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made
in the Registration Statement, the Time of Sale Disclosure Package,
any Prospectus, the Final Prospectus, or any amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to the Company by the Underwriter
specifically for use in the preparation thereof, which written
information is described in Section 7(f), and will reimburse the
Company for any legal or other expenses reasonably incurred by the
Company in connection with evaluating, investigating, and defending
against any such loss, claim, damage, liability or action.
The obligation of the Underwriter to
indemnify the Company (including any controlling person, director
or officer thereof) shall be limited to the amount of the
underwriting discount applicable to the Shares and the Preferred
Shares to be purchased by the Underwriter hereunder actually
received by the Underwriter.
(c)
Promptly
after receipt by an indemnified party under subsection (a) or (b)
above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the
failure to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have to any
indemnified party except to the extent such indemnifying party has
been materially prejudiced by such failure. In case any such action
shall be brought against any indemnified party, and it shall notify
the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the
extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of the
indemnifying party’s election so to assume the defense
thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in
connection with the defense thereof;
provided
,
however
, that if (i) 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, (ii) 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 (iii) 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, the indemnified party shall have the
right to employ a single counsel to represent it in any claim in
respect of which indemnity may be sought under subsection (a) or
(b) of this Section 7, in which event the reasonable fees and
expenses of such separate counsel shall be borne by the
indemnifying party or parties and reimbursed to the indemnified
party as incurred.
The
indemnifying party under this Section 7 shall not be liable for any
settlement of any proceeding effected without its written consent,
but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or
expense by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of
judgment in any pending or threatened action, suit or proceeding in
respect of which any indemnified party is a party or could be named
and indemnity was or would be sought hereunder by such indemnified
party, unless such settlement, compromise or consent (a) includes
an unconditional release of such indemnified party from all
liability for claims that are the subject matter of such action,
suit or proceeding and (b) 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)
If the indemnification provided for in this
Section 7 is unavailable or insufficient to hold harmless an
indemnified party under subsection (a) or (b) above, then each
indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of the losses, claims,
damages or liabilities referred to in subsection (a) or (b) above,
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the
Underwriter on the other from the offering and sale of the
Shares
or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriter on the
other in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriter on the
other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discount received by the
Underwriter, in each case as set forth in the table on the cover
page of the Final Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
supplied by the Company or the Underwriter and the parties’
relevant intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The
Company and the Underwriter agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were to
be determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable
considerations referred to in the first sentence of this subsection
(d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending against any
action or claim that is the subject of this subsection (d).
Notwithstanding the provisions of this subsection
(d),
no Underwriter shall be required to contribute any
amount in excess of the amount of the underwriting discount
applicable to the Shares and the Preferred Shares to be purchased
by the Underwriter hereunder actually received by the Underwriter.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such
fraudulent
misrepresentation.
(e)
The
obligations of the Company under this Section 7 shall be in
addition to any liability that the Company may otherwise have and
the benefits of such obligations shall extend, upon the same terms
and conditions, to each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act; and the obligations of the
Underwriter under this Section 7 shall be in addition to any
liability that the Underwriter may otherwise have and the benefits
of such obligations shall extend, upon the same terms and
conditions, to the Company, and its officers, directors and each
person who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act.
(f)
For
purposes of this Agreement, the Underwriter confirms, and the
Company acknowledges, that there is no information concerning the
Underwriter furnished in writing to the Company by the Underwriter
specifically for preparation of or inclusion in the Registration
Statement, the Time of Sale Disclosure Package, any Prospectus or
the Final Prospectus, other than the statement set forth in the
last paragraph on the cover page of the Prospectus, the marketing
and legal names of the Underwriter, and the statements set forth in
the “Underwriting” section of the Registration
Statement, the Time of Sale Disclosure Package, and the Final
Prospectus only insofar as such statements relate to the amount of
selling concession and re-allowance, if any, or to over-allotment,
stabilization and related activities that may be undertaken by the
Underwriter.
8.
Representations
and Agreements to Survive Delivery
. All representations, warranties, and agreements
of the Company contained
herein or in certificates delivered pursuant
hereto, including, but not limited to, the agreements of the
Underwriter and the Company contained in Section 5(a)(viii) and
Section 7 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the
Underwriter or any controlling persons thereof, or the Company or
any of its officers, directors, or controlling persons, and shall
survive delivery of, and payment for, the
Shares and
Preferred Shares
to and by the
Underwriter hereunder.
9.
Termination
of this Agreement
.
(a)
The
Underwriter
shall have the right to terminate this Agreement
by giving notice to the Company as hereinafter specified at any
time at or prior to the Closing Date or any Option Closing Date (as
to the Option Shares to be purchased on such Option Closing Date
only), if in the discretion of the
Underwriter
, (i) there has occurred any material adverse
change in the securities markets or any event, act or occurrence
that has materially disrupted, or in the opinion of the
Underwriter
, will in the future
materially disrupt, the securities markets or there shall be such a
material adverse change in general financial, political or economic
conditions or the effect of international conditions on the
financial markets in the United States is such as to make it, in
the judgment of the
Underwriter
, inadvisable or impracticable to market the
Shares or Preferred Shares
or
enforce contracts for the sale of the
Shares
and Preferred Shares
,
(ii)
trading in the Company’s Common Stock shall have been
suspended by the Commission, NASDAQ or the OTCQB or trading in
securities generally on the Nasdaq Stock Market, the NYSE or the
NYSE MKT shall have been suspended, (iii) minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for
securities shall have been required, on the Nasdaq Stock Market,
the NYSE or NYSE MKT, by such exchange or by order of the
Commission or any other governmental authority having jurisdiction,
(iv) a banking moratorium shall have been declared by federal or
state authorities, (v) there shall have occurred any attack on,
outbreak or escalation of hostilities or act of terrorism involving
the United States, any declaration by the United States of a
national emergency or war, any substantial change or development
involving a prospective substantial change in United States or
international political, financial or economic conditions or any
other calamity or crisis, or (vi) the Company suffers any loss by
strike, fire, flood, earthquake, accident or other calamity,
whether or not covered by insurance, or (vii) in the judgment of
the
Underwriter
, there has
been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the
Registration Statement, the Time of Sale Disclosure Package or the
Final Prospectus, any material adverse change in the assets,
properties, condition, financial or otherwise, or in the results of
operations, business affairs or business prospects of the Company
and its subsidiaries considered as a whole, whether or not arising
in the ordinary course of business. Any such termination shall be
without liability of any party to any other party except that the
provisions of Section 5(a)(viii) and Section 7 hereof shall at all
times be effective and shall survive such
termination.
(b)
If
the
Underwriter
elects to
terminate this Agreement as provided in this Section, the Company
shall be notified promptly by the
Underwriter
by telephone, confirmed by
letter.
10.
[RESERVED]
11.
Notices
.
Except as otherwise provided herein, all communications hereunder
shall be in writing and, if to the Underwriter, shall be mailed,
delivered or telecopied to Laidlaw & Company (UK) Ltd., 546
Fifth Avenue, Fifth Floor, New York, New York 10036, telecopy
number: 857-930-4535, Attention: Managing Director; and if to the
Company, shall be mailed, delivered or telecopied to it at MabVax
Therapeutics Holdings, Inc., 11535 Sorrento Valley Road, Suite 400,
San Diego, CA 92121, telecopy number: 858-792-7375, Attention: J.
David Hansen, Chairman, President and CEO; or in each case to such
other address as the person to be notified may have requested in
writing. Any 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.
12.
Persons
Entitled to Benefit of Agreement
. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors
and assigns and the controlling persons, officers and directors
referred to in Section 7. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation
any legal or equitable remedy or claim under or in respect of this
Agreement or any provision herein contained. The term
“successors and assigns” as herein used shall not
include any purchaser, as such purchaser, of any of the Shares and
Preferred Shares from the Underwriter.
13.
Absence of
Fiduciary Relationship
. The
Company acknowledges and agrees that: (a) the Underwriter has been
retained solely to act as underwriter in connection with the sale
of the Shares and Preferred Shares and that no fiduciary, advisory
or agency relationship between the Company and the Underwriter has
been created in respect of any of the transactions contemplated by
this Agreement, irrespective of whether the Underwriter has advised
or is advising the Company on other matters; (b) the price and
other terms of the Shares and Preferred Shares set forth in this
Agreement were established by the Company following discussions and
arms-length negotiations with the Underwriter and 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) it has been advised that the Underwriter and
its affiliates are engaged in a broad range of transactions that
may involve interests that differ from those of the Company and
that the Underwriter has no obligation to disclose such interest
and transactions to the Company by virtue of any fiduciary,
advisory or agency relationship; and (d) it has been advised that
the Underwriter is acting, in respect of the transactions
contemplated by this Agreement, solely for the benefit of the
Underwriter, and not on behalf of the Company.
14.
Amendments
and Waivers
. No supplement,
modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. The failure
of a party to exercise any right or remedy shall not be deemed or
constitute a waiver of such right or remedy in the future. No
waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provision hereof
(regardless of whether similar), nor shall any such waiver be
deemed or constitute a continuing waiver unless otherwise expressly
provided.
15.
Partial
Unenforceability
. The
invalidity or unenforceability of any section, paragraph, clause or
provision of this Agreement shall not affect the validity or
enforceability of any other section, paragraph, clause or
provision.
16.
Governing
Law
. This Agreement shall be
governed by and construed in accordance with the laws of the State
of New York.
17.
Submission
to Jurisdiction
. The Company
irrevocably (a) submits to the jurisdiction of the Supreme Court of
the State of New York, New York county, or in the United States
District Court for the Southern District of New York for the
purpose of any suit, action, or other proceeding arising out of
this Agreement, or any of the agreements or transactions
contemplated by this Agreement, the Registration Statement, the
Time of Sale Disclosure Package, any Prospectus and the Final
Prospectus (each a “
Proceeding
”),
(b) agrees that all claims in respect of any Proceeding may be
heard and determined in any such court, (c) waives, to the fullest
extent permitted by law, any immunity from jurisdiction of any such
court or from any legal process therein, (d) agrees not to commence
any Proceeding other than in such courts, and (e) waives, to the
fullest extent permitted by law, any claim that such Proceeding is
brought in an inconvenient forum. THE COMPANY (ON BEHALF OF ITSELF
AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS
RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON,
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION
STATEMENT, THE TIME OF SALE DISCLOSURE PACKAGE, ANY PROSPECTUS AND
THE FINAL PROSPECTUS.
18.
Counterparts.
This Agreement may be executed and
delivered (including by facsimile transmission or electronic mail)
in one or more counterparts and, if executed in more than one
counterpart, the executed counterparts shall each be deemed to be
an original and all such counterparts shall together constitute one
and the same instrument.
[
Signature
Page Follows
]
Please
sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement
between the Company and the Underwriter in accordance with its
terms.
|
|
Very truly yours,
MABVAX THERAPEUTICS HOLDINGS, INC.
By:
/s/ J. David
Hansen
Name: J. David Hansen
Title: Chairman, President and CEO
|
Confirmed as of the date first above-
mentioned.
LAIDLAW & COMPANY (UK) LTD.
By:
/s/ Hugh
Regan
Name:
Hugh Regan
Title:
Executive Director
[Signature
page to Underwriting Agreement]
-21-
SCHEDULE I
|
Name
|
Number
of
Preferred
Shares
to be
Purchased
|
Number
of
Firm
Shares
to be
Purchased
|
Number
of
Option
Shares
to be
Purchased
|
|
Laidlaw
& Company (UK) Ltd.
|
1,000,000
|
1,342,858
|
201,428
|
|
Total
|
1,000,000
|
1,342,858
|
201,428
|
SCHEDULE II
Final Term Sheet
|
Issuer:
|
MabVax
Therapeutics Holdings, Inc. (the
“Company”)
|
|
Symbol:
|
MBVX
|
|
Securities:
|
1,342,858
shares of common stock, par value $0.01 per share (the
“Common Stock”), of the Company and 1,000,000 shares of
the Series G Preferred Stock, par value $0.01 per share (the
“Preferred Stock”) of the Company.
|
|
|
|
|
Public
offering price:
|
$1.75
per share of Common Stock or $1.75 per share of Preferred
Stock.
|
|
Underwriting
discount:
|
$0.1225
per share of Common Stock with respect to investors introduced to
the Company by Laidlaw & Company (UK) Ltd.
(“Laidlaw”). Laidlaw will also receive a fee of
$100,000 if certain investors participate in the offering in the
aggregate minimum amount of $2,000,000 (in lieu of any underwriting
discount).
|
|
Overallotment
option:
|
Up to
an additional 201,428 shares of Common Stock at a price of $1.75
per share.
|
|
Expected
net proceeds:
|
Approximately
$3.4 million ($3.8 million if the overallotment option is exercised
in full) (after deducting the underwriting discount and estimated
offering expenses payable by the Company)
|
|
Trade
date:
|
May 16,
2017
|
|
Settlement
date:
|
May 19,
2017
|
|
Underwriter:
|
Laidlaw
& Company (UK) Ltd.
|
SCHEDULE
I
II
List of officers, directors and
stockholders executing lock-up
agreements
J. David Hansen
Kenneth M.
Cohen
Jeffrey F.
Eisenberg
Robert E.
Hoffman
Philip O. Livingston,
M.D.
Paul V.
Maier
Jeffrey V. Ravetch, M.D.,
Ph.D.
Thomas C.
Varvaro
Gregory P. Hanson, CMA,
MBA
Paul W. Maffuid,
Ph.D.
Paul
Resnick, M.D., MBA
EXHIBIT A
Form of Lock-Up Agreement
_______,
2017
Laidlaw & Company (UK) Ltd.
546 Fifth Avenue, Fifth Floor
New York, NY 10036
Ladies
and Gentlemen:
The
undersigned understands that you (the “
Underwriter
”) propose to
enter into an Underwriting Agreement (the “
Underwriting
Agreement
”) with MabVax
Therapeutics Holdings, Inc., a Delaware corporation (the
“
Company
”), relating to a
proposed offering of securities of the Company (the
“
Offering
”) including
shares of the Common Stock, par value $0.01 per share (the
“
Common
Stock
”) and shares of preferred stock convertible into
shares of Common Stock. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the
Underwriting Agreement.
In
consideration of the foregoing, and in order to induce you to
participate the Offering, and for other good and valuable
consideration receipt of which is hereby acknowledged, the
undersigned hereby agrees that, without the prior written consent
of the Underwriter (which consent may be withheld in its sole
discretion), the undersigned will not, during the period (the
“
Lock-Up
Period
”) beginning on the date hereof and ending on
the date 90 days after the date of the final prospectus relating to
the Offering (the “
Final Prospectus
”), (1)
offer, pledge, announce the intention to sell, sell, contract to
sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or
indirectly, or file (or participate in the filing of) a
registration statement with the Securities and Exchange Commission
in respect of, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for shares of
Common Stock (including without limitation, shares of Common Stock
which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and
Exchange Commission and securities which may be issued upon
exercise of a stock option or warrant), (2) enter into any swap or
other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the shares of, whether any
such transaction described in clause (1) or (2) above is to be
settled by delivery of shares of Common Stock or such other
securities, in cash or otherwise, (3) make any demand for or
exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable or
exchangeable for shares of Common Stock, or (4) publicly announce
an intention to effect any transaction specific in clause (1), (2)
or (3) above.
Notwithstanding the
foregoing, the restrictions set forth in clause (1) and (2) above
shall not apply to (a) transfers (i) as a bona fide gift or gifts,
provided that the donee or donees thereof agree to be bound in
writing by the restrictions set forth herein, or (ii) to any trust
for the direct or indirect benefit of the undersigned or the
immediate family of the undersigned, provided that the trustee of
the trust agrees to be bound in writing by the restrictions set
forth herein, and provided further that any such transfer shall not
involve a disposition for value, (b) the acquisition or exercise of
any stock option issued pursuant to the Company’s existing
stock option plan, including any exercise effected by the delivery
of shares of Common Stock of the Company held by the undersigned,
or (c) the purchase or sale of the Company’s securities
pursuant to a plan, contract or instruction that satisfies all of
the requirements of Rule 10b5-1(c)(1)(i)(B) that was in effect
prior to the date hereof. For purposes of this Lock-Up Agreement,
“immediate family” shall mean any relationship by
blood, marriage or adoption, not more remote than first cousin.
Additionally, and notwithstanding anything to the contrary herein,
the restrictions set forth herein shall not apply to
[_____]
1
shares of common stock subject to a
restricted stock grant that will vest on April 4,
2017.
________________
The
foregoing restrictions are expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which
is designed to or reasonably expected to lead to or result in a
sale or disposition of shares of Common Stock even if such
securities would be disposed of by someone other than the
undersigned. Such prohibited hedging or other transactions would
include without limitation any short sale or any purchase, sale or
grant of any right (including without limitation any put option or
put equivalent position or call option or call equivalent position)
with respect to any of the shares of Common Stock or with respect
to any security that includes, relates to, or derives any
significant part of its value from such shares.
The
undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Agreement. All
authority herein conferred or agreed to be conferred and any
obligations of the undersigned shall be binding upon the
successors, assigns, heirs or personal representatives of the
undersigned.
The
undersigned also agrees and consents to the entry of stop transfer
instructions with the Company’s transfer agent and registrar
or depositary against the transfer of the undersigned’s
shares of Common Stock except in compliance with the foregoing
restrictions.
The
undersigned understands that, if the Underwriting Agreement does
not become effective, or if the Underwriting Agreement (other than
the provisions thereof which survive termination) shall terminate
or be terminated prior to payment for and delivery of the
securities to be sold thereunder, the undersigned shall be released
from all obligations under this Lock-Up Agreement.
This
Lock-Up Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the
conflict of laws principles thereof.
|
|
Very
truly yours,
________________________________
Name:
|
Exhibit
3.1
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
THE
0% SERIES G CONVERTIBLE PREFERRED STOCK OF
MABVAX THERAPEUTICS HOLDINGS, INC.
I, J.
David Hansen, hereby certify that I am the President and Chief
Executive Officer of MabVax Therapeutics Holdings, Inc. (the
“
Company
”), a
corporation organized and existing under the Delaware General
Corporation Law (the “
DGCL
”), and further do hereby
certify:
That
pursuant to the authority expressly conferred upon the Board of
Directors of the Company (the “
Board
”) by the Company’s
Certificate of Incorporation, as amended (the “
Certificate of Incorporation
”),
the Board on May 12, 2017, adopted the following resolutions
creating a series of shares of Preferred Stock designated as 0%
Series G Convertible Preferred Stock, none of which shares have
been issued, which, following filing of this Certificate of
Designations with the Secretary of State of the State of Delaware,
this Certificate of Designations shall be effective as of May 15,
2017:
RESOLVED, that the
Board designates the 0% Series G Convertible Preferred Stock and
the number of shares constituting such series, and fixes the
rights, powers, preferences, privileges and restrictions relating
to such series in addition to any set forth in the Certificate of
Incorporation as follows:
TERMS OF SERIES G CONVERTIBLE PREFERRED STOCK
1.
Designation and
Number of Shares
. There shall
hereby be created and established a series of preferred stock of
the Company designated as “0% Series G Convertible Preferred
Stock” (the “
Preferred
Shares
”). The authorized
number of Preferred Shares shall be Five Million (5,000,000)
shares. Each Preferred Share shall have $0.01 par value (the
“
Par
Value
”). Capitalized
terms not defined herein shall have the meaning as set forth in
Section
24
below.
2.
Ranking
.
The rights of all such shares of capital stock of the Company (the
“
Junior
Stock
”), other than the
Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred
Stock, and Series F Preferred Stock, shall be subject to the
rights, powers, preferences and privileges of the Preferred Shares.
In the event of the merger or consolidation of the Company with or
into another corporation, the Preferred Shares shall maintain their
relative rights, powers, designations, privileges and preferences
provided for herein and no such merger or consolidation shall
result inconsistent therewith.
3.
Dividends
.
In addition to Sections
5(a)
and
11
below, from and after the first date of
issuance of any Preferred Shares (the “
Initial Issuance
Date
”), each holder of a
Preferred Share (each, a “
Holder
” and collectively, the
“
Holders
”) shall be entitled to receive dividends
(“
Dividends
”) when and as declared by the Board, from
time to time, in its sole discretion, which Dividends shall be paid
by the Company out of funds legally available therefor, payable,
subject to the conditions and other terms hereof, in cash as if
such Holders had converted the Preferred Shares into Common Stock
(without regard to any limitations on conversion) and had held such
shares of Common Stock on the record date for such dividends and
distributions. Payments under the preceding sentence shall be made
concurrently with the dividend or distribution to the holders of
Common Stock.
4.
Conversion
.
Each Preferred Share shall be convertible into validly issued,
fully paid and non-assessable shares of Common Stock (as defined
below) on the terms and conditions set forth in this
Section
4
.
(a)
Holder’s
Conversion Right
. Subject to
the provisions of Section 4(e), at any time or times on or after
the Initial Issuance Date, each Holder shall be entitled to convert
any whole number of Preferred Shares into validly issued, fully
paid and non-assessable shares of Common Stock in accordance with
Section
4
(c)
at
the Conversion Rate (as defined below).
(b)
Conversion
Rate
. The number of validly
issued, fully paid and non-assessable shares of Common Stock
issuable upon conversion of each Preferred Share pursuant to
Section
4
(a)
shall be determined according to the
following formula (the “
Conversion
Rate
”):
Base Amount
Conversion
Price
No
fractional shares of Common Stock are to be issued upon the
conversion of any Preferred Shares. If the issuance would result in
the issuance of a fraction of a share of Common Stock, the Company
shall round such fraction of a share of Common Stock up to the
nearest whole share.
(c)
Mechanics of
Conversion
. The conversion of
each Preferred Share shall be conducted in the following
manner:
(i)
Holder’s
Conversion
. To convert a
Preferred Share into validly issued, fully paid and non-assessable
shares of Common Stock on any date (a “
Conversion
Date
”), a Holder shall
deliver (whether via facsimile or otherwise), for receipt on or
prior to 11:59 p.m., New York time, on such date, a copy of an
executed notice of conversion of the share(s) of Preferred Shares
subject to such conversion in the form attached hereto
as
Exhibit
I
(the
“
Conversion
Notice
”) to the Company.
If required by Section
4
(c)
(vi)
, within
five (5) Trading Days following a conversion of any such Preferred
Shares as aforesaid, such Holder shall surrender to a nationally
recognized overnight delivery service for delivery to the Company
the original certificates representing the share(s) of Preferred
Shares (the “
Preferred Share
Certificates
”) so
converted as aforesaid.
(ii)
Company’s
Response
. On or before the
first (1
st
) Trading Day following the date of receipt of a
Conversion Notice, the Company shall transmit by facsimile an
acknowledgment of confirmation, in the form attached hereto
as
Exhibit
II
, of receipt of such
Conversion Notice to such Holder and the Transfer Agent, which
confirmation shall constitute an instruction to the Transfer Agent
to process such Conversion Notice in accordance with the terms
herein. On or before the second (2
nd
) Trading
Day following the date of receipt by the Company of such Conversion
Notice, the Company shall (1) provided that the Transfer Agent is
participating in DTC Fast Automated Securities Transfer Program,
credit such aggregate number of shares of Common Stock to which
such Holder shall be entitled to such Holder’s or its
designee’s balance account with DTC through its
Deposit/Withdrawal at Custodian system, or (2) if the Transfer
Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and deliver (via reputable overnight
courier) to the address as specified in such Conversion Notice, a
certificate, registered in the name of such Holder or its designee,
for the number of shares of Common Stock to which such Holder shall
be entitled. If the number of Preferred Shares represented by the
Preferred Share Certificate(s) submitted for conversion pursuant to
Section
4
(c)
(vi)
is
greater than the number of Preferred Shares being converted, then
the Company shall if requested by such Holder, as soon as
practicable and in no event later than three (3) Trading Days after
receipt of the Preferred Share Certificate(s) and at its own
expense, issue and deliver to such Holder (or its designee) a new
Preferred Share Certificate representing the number of Preferred
Shares not converted.
(iii)
Record
Holder
. The Person or Persons entitled to receive the shares
of Common Stock issuable upon a conversion of Preferred Shares
shall be treated for all purposes as the record holder or holders
of such shares of Common Stock on the Conversion Date.
(iv)
Company’s
Failure to Timely Convert
. If
the Company shall fail, for any reason or for no reason, to issue
to a Holder within three (3) Trading Days after the Company’s
receipt of a Conversion Notice (whether via facsimile or otherwise)
(the “
Share Delivery
Deadline
”), a
certificate for the number of shares of Common Stock to which such
Holder is entitled and register such shares of Common Stock on the
Company’s share register or to credit such Holder’s or
its designee’s balance account with DTC for such number of
shares of Common Stock to which such Holder is entitled upon such
Holder’s conversion of any Preferred Shares (as the case may
be) (a “
Conversion
Failure
”), then, in
addition to all other remedies available to such Holder, such
Holder, upon written notice to the Company, may void its Conversion
Notice with respect to, and retain or have returned (as the case
may be) any Preferred Shares that have not been converted pursuant
to such Holder’s Conversion Notice, provided that the voiding
of a Conversion Notice shall not affect the Company’s
obligations to make any payments which have accrued prior to the
date of such notice pursuant to the terms of this Certificate of
Designations or otherwise and (y) the Company shall pay in cash to
such Holder on each day after such third (3
rd
) Trading
Day that the issuance of such shares of Common Stock is not timely
effected an amount equal to 1.5% of the product of (A) the
aggregate number of shares of Common Stock not issued to such
Holder on a timely basis and to which the Holder is entitled and
(B) the Closing Sale Price of the Common Stock on the Trading Day
immediately preceding the last possible date on which the Company
could have issued such shares of Common Stock to the Holder without
violating Section
4(c)
.
In addition to the foregoing, if within three (3) Trading Days
after the Company’s receipt of a Conversion Notice (whether
via facsimile or otherwise), the Company shall fail to issue and
deliver a certificate to such Holder and register such shares of
Common Stock on the Company’s share register or credit such
Holder’s or its designee’s balance account with DTC for
the number of shares of Common Stock to which such Holder is
entitled upon such Holder’s conversion hereunder (as the case
may be), and if on or after such third (3
rd
) Trading
Day such Holder (or any other Person in respect, or on behalf, of
such Holder) purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by such
Holder of all or any portion of the number of shares of Common
Stock, or a sale of a number of shares of Common Stock equal to all
or any portion of the number of shares of Common Stock, issuable
upon such conversion that such Holder so anticipated receiving from
the Company, then, in addition to all other remedies available to
such Holder, the Company shall, within three (3) Business Days
after such Holder’s request and in such Holder’s
discretion, either (i) pay cash to such Holder in an amount equal
to such Holder’s total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the
shares of Common Stock so purchased (including, without limitation,
by any other Person in respect, or on behalf, of such Holder) (the
“
Buy-In
Price
”), at which point
the Company’s obligation to so issue and deliver such
certificate or credit such Holder’s balance account with DTC
for the number of shares of Common Stock to which such Holder is
entitled upon such Holder’s conversion hereunder (as the case
may be) (and to issue such shares of Common Stock) shall terminate,
or (ii) promptly honor its obligation to so issue and deliver to
such Holder a certificate or certificates representing such shares
of Common Stock or credit such Holder’s balance account with
DTC for the number of shares of Common Stock to which such Holder
is entitled upon such Holder’s conversion hereunder (as the
case may be) and pay cash to such Holder in an amount equal to the
excess (if any) of the Buy-In Price over the product of (A) such
number of shares of Common Stock multiplied by (B) the lowest
Closing Sale Price of the Common Stock on any Trading Day during
the period commencing on the date of the applicable Conversion
Notice and ending on the date of such issuance and payment under
this clause (ii).
(v)
Pro Rata Conversion;
Disputes
. In the event the
Company receives a Conversion Notice from more than one Holder for
the same Conversion Date and the Company can convert some, but not
all, of such Preferred Shares submitted for conversion, the Company
shall convert from each Holder electing to have Preferred Shares
converted on such date a pro rata amount of such Holder’s
Preferred Shares submitted for conversion on such date based on the
number of Preferred Shares submitted for conversion on such date by
such Holder relative to the aggregate
number of Preferred Shares submitted for
conversion on such date. In the event of a dispute as to the number
of shares of Common Stock issuable to a Holder in connection with a
conversion of Preferred Shares, the Company shall issue to such
Holder the number of shares of Common Stock not in dispute and
resolve such dispute in accordance with
Section
22
.
(vi)
Book-Entry
.
Notwithstanding anything to the contrary set forth in this
Section
4
, upon conversion of any Preferred Shares in
accordance with the terms hereof, no Holder thereof shall be
required to physically surrender the certificate representing the
Preferred Shares to the Company following conversion thereof unless
(A) the full or remaining number of Preferred Shares represented by
the certificate are being converted (in which event such
certificate(s) shall be delivered to the Company as contemplated by
this Section
4
(c)
(vi)
) or (B)
such Holder has provided the Company with prior written notice
(which notice may be included in a Conversion Notice) requesting
reissuance of Preferred Shares upon physical surrender of any
Preferred Shares. Each Holder and the Company shall maintain
records showing the number of Preferred Shares so converted by such
Holder and the dates of such conversions or shall use such other
method, reasonably satisfactory to such Holder and the Company, so
as not to require physical surrender of the certificate
representing the Preferred Shares upon each such conversion. In the
event of any dispute or discrepancy, such records of such Holder
establishing the number of Preferred Shares to which the record
holder is entitled shall be controlling and determinative in the
absence of manifest error. A Holder and any transferee or assignee,
by acceptance of a certificate, acknowledge and agree that, by
reason of the provisions of this paragraph, following conversion of
any Preferred Shares, the number of Preferred Shares represented by
such certificate may be less than the number of Preferred Shares
stated on the face thereof. Each certificate for Preferred Shares
shall bear the following legend:
ANY TRANSFEREE OR ASSIGNEE OF THIS CERTIFICATE SHOULD CAREFULLY
REVIEW THE TERMS OF THE CORPORATION’S CERTIFICATE OF
DESIGNATIONS RELATING TO THE SHARES OF SERIES G PREFERRED STOCK
REPRESENTED BY THIS CERTIFICATE, INCLUDING
SECTION
4
(c)
(vi)
THEREOF. THE NUMBER OF SHARES OF SERIES G
PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN
THE NUMBER OF SHARES OF SERIES G PREFERRED STOCK STATED ON THE FACE
HEREOF PURSUANT TO SECTION
4
(c)
(vi)
OF
THE CERTIFICATE OF DESIGNATIONS RELATING TO THE SHARES OF SERIES G
PREFERRED STOCK REPRESENTED BY THIS
CERTIFICATE.
(d)
Taxes
.
The Company shall pay any and all documentary, stamp, transfer (but
only in respect of the registered holder thereof), issuance and
other similar taxes that may be payable with respect to the
issuance and delivery of shares of Common Stock upon the conversion
of Preferred Shares.
(e)
Limitation
on Beneficial Ownership.
Notwithstanding anything to
the contrary contained in this Certificate of Designations, the
Preferred Shares held by a Holder shall not be convertible by such
Holder, and the Company shall not effect any conversion of any
Preferred Shares held by such Holder, to the extent (but only to
the extent) that such Holder or any of its affiliates would
beneficially own in excess of 4.99% (the “
Maximum Percentage
”) of the
Common Stock. To the extent the above limitation applies, the
determination of whether the Preferred Shares held by such Holder
shall be convertible (vis-à-vis other convertible, exercisable
or exchangeable securities owned by such Holder or any of its
affiliates) and of which such securities shall be convertible,
exercisable or exchangeable (as among all such securities owned by
such Holder and its affiliates) shall, subject to such Maximum
Percentage limitation, be determined on the basis of the first
submission to the Company for conversion, exercise or exchange (as
the case may be). No prior inability of a Holder to convert
Preferred Shares, or of the Company to issue shares of Common Stock
to such Holder, pursuant to this Section 4(e) shall have any effect
on the applicability of the provisions of this Section
4(e) with respect to any subsequent determination of
convertibility or issuance (as the case may be). For purposes of
this Section 4(e), beneficial ownership and all determinations and
calculations (including, without limitation, with respect to
calculations of percentage ownership) shall be determined in
accordance with Section 13(d) of the 1934 Act and the rules and
regulations promulgated thereunder. The provisions of this Section
4(e) shall be implemented in a manner otherwise than in strict
conformity with the terms of this Section 4(e) to correct this
Section 4(e) (or any portion hereof) which may be defective or
inconsistent with the intended Maximum Percentage beneficial
ownership limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such
Maximum Percentage limitation. The limitations contained in this
Section 4(e) shall apply to a successor holder of Preferred Shares.
The holders of Common Stock shall be third party beneficiaries of
this Section 4(e) and the Company may not waive this Section 4(e).
For any reason at any time, upon the written or oral request of a
Holder, the Company shall within two (2) Business Days confirm
orally and in writing to such Holder the number of shares of Common
Stock then outstanding, including by virtue of any prior conversion
or exercise of convertible or exercisable securities into Common
Stock, including, without limitation, pursuant to this Certificate
of Designations. By written notice to the Company, any Holder may
increase or decrease the Maximum Percentage to any other percentage
not in excess of 9.99% specified in such notice; provided that (i)
any such increase will not be effective until the 61st day after
such notice is delivered to the Company, and (ii) any such increase
or decrease will apply only to such Holder sending such notice and
not to any other Holder. For purposes hereof, in determining the
number of outstanding shares of Common Stock, the Holder may rely
on the number of outstanding shares of Common Stock as reflected in
(1) the Company’s most recent Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, Current Report on Form 8-K or other
public filing with the Securities and Exchange Commission, as the
case may be, (2) a more recent public announcement by the Company,
or (3) any other notice by the Company setting forth the number of
shares of Common Stock outstanding. For any reason at any time,
upon the written or oral request of a holder of Preferred Shares,
the Company shall within three (3) Business Days confirm orally and
in writing to such holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including the
Preferred Shares, by the Holder and its Affiliates since the date
as of which such number of outstanding shares of Common Stock was
reported, that in any event are convertible or exercisable, as the
case may be, into shares of the Company’s Common Stock within
60 days’ of such calculation and that are not subject to a
limitation on conversion or exercise analogous to the limitation
contained herein. The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 4(e) to correct this
paragraph (or any portion hereof) that may be defective or
inconsistent with the intended beneficial ownership limitation
herein contained or to make changes or supplements necessary or
desirable to properly give effect to such limitation.
5.
Rights Upon Issuance
of Purchase Rights and Other Corporate Events
.
(a)
Purchase
Rights
. In addition to any
adjustments pursuant to Section
7
below, if at any time the Company grants,
issues or sells any Options, Convertible Securities or rights to
purchase stock, warrants, securities or other property pro rata to
all of the record holders of any class of Common Stock (the
“
Purchase
Rights
”), then each
Holder will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which such
Holder could have acquired if such Holder had held the number of
shares of Common Stock acquirable upon complete conversion of all
the Preferred Shares (without taking into account any limitations
or restrictions on the convertibility of the Preferred Shares) held
by such Holder immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights, or,
if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided, however, to the extent that such
Holder’s right to participate in any such Purchase Right
would result in such Holder exceeding the Maximum Percentage, then
such Holder shall not be entitled to participate in such Purchase
Right to such extent (or beneficial ownership of such shares of
Common Stock as a result of such Purchase Right to such extent) and
such Purchase Right to such extent shall be held in abeyance for
such Holder until such time, if ever, as its right thereto would
not result in such Holder exceeding the Maximum
Percentage).
(b)
Other Corporate
Events
. In addition to and not
in substitution for any other rights hereunder, prior to the
consummation of any Fundamental Transaction pursuant to which
holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for
shares of Common Stock (a “
Corporate
Event
”), the Company
shall make appropriate provision to insure that each Holder will
thereafter have the right to receive upon a conversion of all the
Preferred Shares held by such Holder (i) in addition to the shares
of Common Stock receivable upon such conversion, such securities or
other assets to which such Holder would have been entitled with
respect to such shares of Common Stock had such shares of Common
Stock been held by such Holder upon the consummation of such
Corporate Event (without taking into account any limitations or
restrictions on the convertibility of the Preferred Shares
contained in this Certificate of Designations) or (ii) in lieu of
the shares of Common Stock otherwise receivable upon such
conversion, such securities or other assets received by the holders
of shares of Common Stock in connection with the consummation of
such Corporate Event in such amounts as such Holder would have been
entitled to receive had the Preferred Shares held by such Holder
initially been issued with conversion rights for the form of such
consideration (as opposed to shares of Common Stock) at a
conversion rate for such consideration commensurate with the
Conversion Rate. The provisions of this
Section
5(b)
shall apply similarly and equally to
successive Corporate Events and shall be applied without regard to
any limitations on the conversion of the Preferred Shares contained
in this Certificate of Designations.
6.
Rights Upon
Fundamental Transactions
. Upon
the occurrence of any Fundamental Transaction, the Successor Entity
shall succeed to, and be substituted for (so that from and after
the date of such Fundamental Transaction, the provisions of this
Certificate of Designations referring to the “Company”
shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the
obligations of the Company under this Certificate of Designations
with the same effect as if such Successor Entity had been named as
the Company herein and therein. In addition to the foregoing, upon
consummation of a Fundamental Transaction, the Successor Entity
shall deliver to each Holder confirmation that there shall be
issued upon conversion of the Preferred Shares at any time after
the consummation of such Fundamental Transaction, in lieu of the
shares of Common Stock (or other securities, cash, assets or other
property (except such items still issuable under
Sections
5
and
11
, which
shall continue to be receivable thereafter)) issuable upon the
conversion of the Preferred Shares prior to such Fundamental
Transaction, such shares of the Successor Entity (including its
Parent Entity) or other consideration which each Holder would have
been entitled to receive upon the happening of such Fundamental
Transaction had all the Preferred Shares held by each Holder been
converted immediately prior to such Fundamental Transaction
(without regard to any limitations on the conversion of the
Preferred Shares contained in this Certificate of Designations), as
adjusted in accordance with the provisions of this Certificate of
Designations. The provisions of this
Section
6
shall
apply similarly and equally to successive Fundamental Transactions
and shall be applied without regard to any limitations on the
conversion of the Preferred Shares.
7.
Rights Upon Issuance
of Other Securities
.
(a) Intentionally
Omitted.
(b) Adjustment of Conversion
Price upon Subdivision or Combination of Common Stock. Without
limiting any provision of Sections
5
and
11
, if the
Company at any time on or after the Initial Issuance Date
subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common
Stock into a greater number of shares, the Conversion Price in
effect immediately prior to such subdivision will be
proportionately reduced. Without limiting any provision of
Sections
5
and
11
, if the
Company at any time on or after the Initial Issuance Date combines
(by combination, reverse stock split or otherwise) one or more
classes of its outstanding shares of Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior
to such combination will be proportionately increased. Any
adjustment pursuant to this Section
7
(b)
shall become effective immediately after
the effective date of such subdivision or combination. If any event
requiring an adjustment under this Section
7
(b)
occurs during the period that a Conversion
Price is calculated hereunder, then the calculation of such
Conversion Price shall be adjusted appropriately to reflect such
event.
(c) Other Events. In the event
that the Company (or any Subsidiary) shall take any action to which
the provisions hereof are not strictly applicable, or, if
applicable, would not operate to protect any Holder from dilution
or if any event occurs of the type contemplated by the provisions
of this Section
7
but
not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom
stock rights or other rights with equity features), then the Board
shall in good faith determine and implement an appropriate
adjustment in the Conversion Price so as to protect the rights of
such Holder, provided that no such adjustment pursuant to this
Section
7
(c)
will increase the Conversion Price as
otherwise determined pursuant to this
Section
7
, provided
further that if such Holder does not accept such adjustments as
appropriately protecting its interests hereunder against such
dilution, then the Board and such Holder shall agree, in good
faith, upon an independent investment bank of nationally recognized
standing to make such appropriate adjustments, whose determination
shall be final and binding and whose fees and expenses shall be
borne by the Company.
(d) Calculations. All
calculations under this Section
7
shall
be made by rounding to the nearest one-hundred thousandth of a cent
or the nearest 1/100
th
of a
share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of
any such shares shall be considered an issue or sale of Common
Stock.
8.
Authorized
Shares
.
(a)
Reservation
.
The Company shall initially reserve out of its authorized and
unissued Common Stock a number of shares of Common Stock equal to
100% of the Conversion Rate with respect to the Base Amount of each
Preferred Share as of the Initial Issuance Date (without taking
into account any limitations on the conversion of such Preferred
Shares set forth in herein) issuable pursuant to the terms of this
Certificate of Designations from the Initial Issuance Date through
the second anniversary of the Initial Issuance Date assuming
(without taking into account any limitations on the issuance of
securities set forth herein). So long as any of the Preferred
Shares are outstanding, the Company shall take all action necessary
to reserve and keep available out of its authorized and unissued
shares of Common Stock, solely for the purpose of effecting the
conversion of the Preferred Shares, as of any given date, 100% of
the number of shares of Common Stock as shall from time to time be
necessary to effect the conversion of all of the Preferred Shares
issued as of the Initial Issuance Date, without taking into account
any limitations on the issuance of securities set forth herein),
provided that at no time shall the number of shares of Common Stock
so available be less than the number of shares required to be
reserved by the previous sentence (without regard to any
limitations on conversions contained in this Certificate of
Designations) (the “
Required
Amount
”). The initial
number of shares of Common Stock reserved for conversions of the
Preferred Shares and each increase in the number of shares so
reserved shall be allocated pro rata among
the Holders based on the number of Preferred
Shares held by each Holder on the Initial Issuance Date or increase
in the number of reserved shares (as the case may be) (the
“
Authorized Share
Allocation
”). In the
event a Holder shall sell or otherwise transfer any of such
Holder’s Preferred Shares, each transferee shall be allocated
a pro rata portion of such Holder’s Authorized Share
Allocation. Any shares of Common Stock reserved and allocated to
any Person which ceases to hold any Preferred Shares shall be
allocated to the remaining Holders of Preferred Shares, pro rata
based on the number of Preferred Shares then held by such
Holders.
(b)
Insufficient
Authorized Shares
. If,
notwithstanding Section
8
(a)
and
not in limitation thereof, at any time while any of the Preferred
Shares remain outstanding the Company does not have a sufficient
number of authorized and unissued shares of Common Stock to satisfy
its obligation to have available for issuance upon conversion of
the Preferred Shares at least a number of shares of Common Stock
equal to the Required Amount (an “
Authorized Share
Failure
”), then the
Company shall promptly take all action necessary to increase the
Company’s authorized shares of Common Stock to an amount
sufficient to allow the Company to reserve and have available the
Required Amount for all of the Preferred Shares then outstanding.
Without limiting the generality of the foregoing sentence, as soon
as practicable after the date of the occurrence of an Authorized
Share Failure, but in no event later than ninety (90) days after
the occurrence of such Authorized Share Failure, the Company shall
hold a meeting of its stockholders or conduct a consent
solicitation for the approval of an increase in the number of
authorized shares of Common Stock. In connection with such meeting,
the Company shall provide each stockholder with a proxy statement
and shall use its commercially reasonable efforts to solicit its
stockholders’ approval of such increase in authorized shares
of Common Stock and to cause its Board to recommend to the
stockholders that they approve such proposal. In the event that the
Company is prohibited from issuing shares of Common Stock upon a
conversion of any Preferred Share due to the failure by the Company
to have sufficient shares of Common Stock available out of the
authorized but unissued shares of Common Stock (such unavailable
number of shares of Common Stock, the “
Authorization Failure
Shares
”), in lieu of
delivering such Authorization Failure Shares to such Holder of such
Preferred Shares, the Company shall pay cash in exchange for the
cancellation of such Preferred Shares convertible into such
Authorized Failure Shares at a price equal to the sum of (i) the
product of (x) such number of Authorization Failure Shares and (y)
the Closing Sale Price on the Trading Day immediately preceding the
date such Holder delivers the applicable Conversion Notice with
respect to such Authorization Failure Shares to the Company and
(ii) to the extent such Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by such Holder of Authorization Failure
Shares, any brokerage commissions and other out-of-pocket expenses,
if any, of such Holder incurred in connection
therewith.
9.
Voting
Rights
. Except as
otherwise expressly required by law, each Holder shall be entitled
to vote on all matters submitted to shareholders of the Company and
shall be entitled to the number of votes for its Preferred Shares
owned at the record date for the determination of shareholders
entitled to vote on such matter or, if no such record date is
established, at the date such vote is taken or any written consent
of shareholders is solicited, equal to the number of shares of
Common Stock into which such Preferred Shares held are convertible,
but not in excess of the conversion limitations set forth in
Section 4(e) herein. Except as otherwise required by law, the
Holders of the Preferred Shares shall vote together with the
holders of Common Stock on all matters and shall not vote as a
separate class.
10.
Liquidation,
Dissolution, Winding-Up
. In
the event of a Liquidation Event, the Holders shall be entitled to
receive in cash out of the assets of the Company, whether from
capital or from earnings available for distribution to its
shareholders (the “
Liquidation
Funds
”), before any
amount shall be paid to the holders of any of shares of Junior
Stock, a preferential amount in cash equal to (and not more than)
the Par Value; provided, however, that, if the Liquidation Funds
are insufficient to pay the full amount due to the Holders and
holders of shares of Parity Stock (stock ranking equal to the
Preferred Shares), then each Holder and each holder of Parity Stock
shall receive a percentage of the Liquidation Funds equal to the
full amount of Liquidation Funds payable to such Holder and such
holder of Parity Stock as a liquidation preference, in accordance
with their respective certificate of designation (or equivalent),
as a percentage of the full amount of Liquidation Funds payable to
all holders of Preferred Shares and all holders of shares of Parity
Stock. To the extent necessary, the Company shall cause such
actions to be taken by each of its Subsidiaries so as to enable, to
the maximum extent permitted by law, the proceeds of a Liquidation
Event to be distributed to the Holders in accordance with this
Section 10. All the preferential amounts to be paid to the Holders
under this Section 10 shall be paid or set apart for payment before
the payment or setting apart for payment of any amount for, or the
distribution of any Liquidation Funds of the Company to the holders
of shares of Junior Stock in connection with a Liquidation Event as
to which this Section 10 applies.
11.
Participation
.
In addition to any adjustments pursuant to
Section
7(b)
, the
Holders shall, as holders of Preferred Shares, be entitled to
receive such dividends paid and distributions made to the holders
of shares of Common Stock to the same extent as if such Holders had
converted each Preferred Share held by each of them into shares of
Common Stock (without regard to any limitations on conversion
herein or elsewhere) and had held such shares of Common Stock on
the record date for such dividends and distributions. Payments
under the preceding sentence shall be made concurrently with the
dividend or distribution to the holders of shares of Common Stock
(provided, however, to the extent that a Holder’s right to
participate in any such dividend or distribution would result in
such Holder exceeding the Maximum Percentage, then such Holder
shall not be entitled to participate in such dividend or
distribution to such extent (or the beneficial ownership of any
such shares of Common Stock as a result of such dividend or
distribution to such extent) and such dividend or distribution to
such extent shall be held in abeyance for the benefit of such
Holder until such time, if ever, as its right thereto would not
result in such Holder exceeding the Maximum
Percentage).
12.
Vote to Change the
Terms of or Issue Preferred Shares
. In addition to any other rights provided by
law, except where the vote or written consent of the holders of a
greater number of shares is required by law or by another provision
of the Certificate of Incorporation, without first obtaining the
affirmative vote at a meeting duly called for such purpose or the
written consent without a meeting of the Holders of Preferred
Shares representing a majority of Preferred Shares outstanding on
such date (the “
Required
Holders
”), voting
together as a single class, the Company shall not: (a) amend or
repeal any provision of, or add any provision to, its Certificate
of Incorporation or bylaws, or file any certificate of designations
or articles of amendment of any series of shares of preferred
stock, if such action would adversely alter or change in any
respect the preferences, rights, privileges or powers, or
restrictions provided for the benefit, of the Preferred Shares,
regardless of whether any such action shall be by means of
amendment to the Certificate of Incorporation or by merger,
consolidation or otherwise; (b) increase or decrease (other than by
conversion) the authorized number of Preferred Shares; (c) issue
any Preferred Shares after the Initial Issuance Date; or (d)
without limiting any provision of Section
16
, whether
or not prohibited by the terms of the Preferred Shares, circumvent
a right of the Preferred Shares.
13.
Intentionally
Omitted
.
14.
Lost or Stolen
Certificates
. Upon receipt by
the Company of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of any certificates
representing Preferred Shares (as to which a written certification
and the indemnification contemplated below shall suffice as such
evidence), and, in the case of loss, theft or destruction, of an
indemnification undertaking by the applicable Holder to the Company
in customary and reasonable form and, in the case of mutilation,
upon surrender and cancellation of the certificate(s), the Company
shall execute and deliver new certificate(s) of like tenor and
date.
15.
Remedies,
Characterizations, Other Obligations, Breaches and Injunctive
Relief.
The remedies
provided in this Certificate of Designations shall be cumulative
and in addition to all other remedies available under this
Certificate of Designations, at law or in equity (including a
decree of specific performance and/or other injunctive relief), and
no remedy contained herein shall be deemed a waiver of compliance
with the provisions giving rise to such remedy. Nothing herein
shall limit any Holder’s right to pursue actual and
consequential damages for any failure by the Company to comply with
the terms of this Certificate of Designations. The Company
covenants to each Holder that there shall be no characterization
concerning this instrument other than as expressly provided herein.
Amounts set forth or provided for herein with respect to payments,
conversion and the like (and the computation thereof) shall be the
amounts to be received by a Holder and shall not, except as
expressly provided herein, be subject to any other obligation of
the Company (or the performance thereof). The Company acknowledges
that a breach by it of its obligations hereunder will cause
irreparable harm to the Holders and that the remedy at law for any
such breach may be inadequate. The Company therefore agrees that,
in the event of any such breach or threatened breach, each Holder
shall be entitled, in addition to all other available remedies, to
an injunction restraining any such breach or any such threatened
breach, without the necessity of showing economic loss and without
any bond or other security being required. The Company shall
provide all information and documentation to a Holder that is
requested by such Holder to enable such Holder to confirm the
Company’s compliance with the terms and conditions of this
Certificate of Designations.
16.
Noncircumvention
.
The Company hereby covenants and agrees that the Company will not,
by amendment of its Certificate of Incorporation, bylaws or through
any reorganization, transfer of assets, consolidation, merger,
scheme of arrangement, dissolution, issue or sale of securities, or
any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Certificate of
Designations, and will at all times in good faith carry out all the
provisions of this Certificate of Designations and take all action
as may be required to protect the rights of the Holders. Without
limiting the generality of the foregoing or any other provision of
this Certificate of Designations, the Company (i) shall not
increase the par value of any shares of Common Stock receivable
upon the conversion of any Preferred Shares above the Conversion
Price then in effect, (ii) shall take all such actions as may
be necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable shares of Common
Stock upon the conversion of Preferred Shares and (iii) shall, so
long as any Preferred Shares are outstanding, take all action
necessary to reserve and keep available out of its authorized and
unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the Preferred Shares, the maximum
number of shares of Common Stock as shall from time to time be
necessary to effect the conversion of the Preferred Shares then
outstanding (without regard to any limitations on conversion
contained herein).
17.
Failure or Indulgence
Not Waiver
. No failure or
delay on the part of a Holder in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any
other right, power or privilege. No waiver shall be effective
unless it is in writing and signed by an authorized representative
of the waiving party. This Certificate of Designations shall be
deemed to be jointly drafted by the Company and all Holders and
shall not be construed against any Person as the drafter
hereof.
18.
Notices
.
The Company shall provide each Holder of Preferred Shares with
prompt written notice of all actions taken pursuant to the terms of
this Certificate of Designations, including in reasonable detail a
description of such action and the reason therefor. Whenever notice
is required to be given under this Certificate of Designations,
unless otherwise provided herein. Without limiting the generality
of the foregoing, the Company shall give written notice to each
Holder (i) promptly following any adjustment of the Conversion
Price, setting forth in reasonable detail, and certifying, the
calculation of such adjustment and (ii) at least fifteen (15) days
prior to the date on which the Company closes its books or takes a
record (A) with respect to any dividend or distribution upon the
Common Stock, (B) with respect to any grant, issuances, or sales of
any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property to all holders of shares of
Common Stock as a class or (C) for determining rights to vote with
respect to any Fundamental Transaction, dissolution or liquidation,
provided, in each case, that such information shall be made known
to the public prior to, or simultaneously with, such notice being
provided to any Holder.
19.
Transfer of Preferred
Shares
. The Holder may
transfer some or all of its Preferred Shares without the consent of
the Company.
20.
Preferred Shares
Register
. The Company shall
maintain at its principal executive offices (or such other office
or agency of the Company as it may designate by notice to the
Holders), a register for the Preferred Shares, in which the Company
shall record the name, address and facsimile number of the Persons
in whose name the Preferred Shares have been issued, as well as the
name and address of each transferee. The Company may treat the
Person in whose name any Preferred Shares is registered on the
register as the owner and holder thereof for all purposes,
notwithstanding any notice to the contrary, but in all events
recognizing any properly made transfers.
21.
Stockholder Matters;
Amendment
.
(a) Stockholder Matters. Any
stockholder action, approval or consent required, desired or
otherwise sought by the Company pursuant to the DGCL, the
Certificate of Incorporation, this Certificate of Designations or
otherwise with respect to the issuance of Preferred Shares may be
effected by written consent of the Company’s stockholders or
at a duly called meeting of the Company’s stockholders, all
in accordance with the applicable rules and regulations of the
DGCL. This provision is intended to comply
with the applicable sections of the DGCL
permitting stockholder action, approval and consent affected by
written consent in lieu of a meeting.
(b)
Amendment. This Certificate of Designations or
any provision hereof may be amended by obtaining the affirmative
vote at a meeting duly called for such purpose, or written consent
without a meeting in accordance with the DGCL, of the Required
Holders, voting separate as a single class, and with such other
stockholder approval, if any, as may then be required pursuant to
the DGCL and the Certificate of Incorporation.
22.
Dispute
Resolution
.
(a)
Disputes Over Closing
Bid Price, Closing Sale Price, Conversion Price or Fair Market
Value.
(i) In
the case of a dispute relating to a Closing Bid Price, a Closing
Sale Price, a Conversion Price or fair market value (as the case
may be) (including, without limitation, a dispute relating to the
determination of any of the foregoing), the Company or such
applicable Holder (as the case may be) shall submit the dispute via
facsimile (I) within two (2) Business Days after delivery of the
applicable notice giving rise to such dispute to the Company or
such Holder (as the case may be) or (II) if no notice gave rise to
such dispute, at any time after such Holder learned of the
circumstances giving rise to such dispute. If such Holder and the
Company are unable to resolve such dispute relating to such Closing
Bid Price, such Closing Sale Price, such Conversion Price, or such
fair market value (as the case may be) by 5:00 p.m. (New York time)
on the third (3
rd
) Business
Day following such delivery by the Company or such Holder (as the
case may be) of such dispute to the Company or such Holder (as the
case may be), then such Holder shall select an independent,
reputable investment bank to resolve such dispute.
(ii) Such Holder and the Company shall each
deliver to such investment bank (x) a copy of the initial dispute
submission so delivered in accordance with the first sentence of
this Section
22(a)
and
(y) written documentation supporting its position with respect to
such dispute, in each case, no later than 5:00 p.m. (New York time)
by the fifth (5
th
) Business
Day immediately following the date on which such Holder selected
such investment bank (the “
Dispute Submission
Deadline
”) (the
documents referred to in the immediately preceding clauses (x) and
(y) are collectively referred to herein as the
“
Required Dispute
Documentation
”) (it
being understood and agreed that if either such Holder or the
Company fails to so deliver all of the Required Dispute
Documentation by the Dispute Submission Deadline, then the party
who fails to so submit all of the Required Dispute Documentation
shall no longer be entitled to (and hereby waives its right to)
deliver or submit any written documentation or other support to
such investment bank with respect to such dispute and such
investment bank shall resolve such dispute based solely on the
Required Dispute Documentation that was delivered to such
investment bank prior to the Dispute Submission Deadline). Unless
otherwise agreed to in writing by both the Company and such Holder
or otherwise requested by such investment bank, neither the Company
nor such Holder shall be entitled to deliver or submit any written
documentation or other support to such investment bank in
connection with such dispute (other than the Required Dispute
Documentation).
(iii)
The Company and such Holder shall cause such investment bank to
determine the resolution of such dispute and notify the Company and
such Holder of such resolution no later than ten (10) Business Days
immediately following the Dispute Submission Deadline. The fees and
expenses of such investment bank shall be borne solely by the
Company, and such investment bank’s resolution of such
dispute shall be final and binding upon all parties absent manifest
error.
(b) Disputes
Over Arithmetic Calculation of the Conversion Rate.
(i) In
the case of a dispute as to the arithmetic calculation of a
Conversion Rate, the Company or such Holder (as the case may be)
shall submit the disputed arithmetic calculation via facsimile (i)
within two (2) Business Days after delivery of the applicable
notice giving rise to such dispute to the Company or such Holder
(as the case may be) or (ii) if no notice gave rise to such
dispute, at any time after such Holder learned of the circumstances
giving rise to such dispute. If such Holder and the Company are
unable to resolve such disputed arithmetic calculation of such
Conversion Rate by 5:00 p.m. (New York time) on the third
(3
rd
) Business Day following
such delivery by the Company or such Holder (as the case may be) of
such disputed arithmetic calculation, then such Holder shall select
an independent, reputable accountant or accounting firm to perform
such disputed arithmetic calculation.
(ii) Such Holder and the Company shall each
deliver to such accountant or accounting firm (as the case may be)
(x) a copy of the initial dispute submission so delivered in
accordance with the first sentence of this
Section
22(a)
and (y) written documentation supporting
its position with respect to such disputed arithmetic calculation,
in each case, no later than 5:00 p.m. (New York time) by the fifth
(5
th
) Business Day immediately following the date on
which such Holder selected such accountant or accounting firm (as
the case may be) (the “
Submission
Deadline
”) (the
documents referred to in the immediately preceding clauses (x) and
(y) are collectively referred to herein as the
“
Required
Documentation
”) (it
being understood and agreed that if either such Holder or the
Company fails to so deliver all of the Required Documentation by
the Submission Deadline, then the party who fails to so submit all
of the Required Documentation shall no longer be entitled to (and
hereby waives its right to) deliver or submit any written
documentation or other support to such accountant or accounting
firm (as the case may be) with respect to such disputed arithmetic
calculation and such accountant or accounting firm (as the case may
be) shall perform such disputed arithmetic calculation based solely
on the Required Documentation that was delivered to such accountant
or accounting firm (as the case may be) prior to the Submission
Deadline). Unless otherwise agreed to in writing by both the
Company and such Holder or otherwise requested by such accountant
or accounting firm (as the case may be), neither the Company nor
such Holder shall be entitled to deliver or submit any written
documentation or other support to such accountant or accounting
firm (as the case may be) in connection with such disputed
arithmetic calculation of the Conversion Rate (other than the
Required Documentation).
(iii)
The Company and such Holder shall cause such accountant or
accounting firm (as the case may be) to perform such disputed
arithmetic calculation and notify the Company and such Holder of
the results no later than ten (10) Business Days immediately
following the Submission Deadline. The fees and expenses of such
accountant or accounting firm (as the case may be) shall be borne
solely by the Company, and such accountant’s or accounting
firm’s (as the case may be) arithmetic calculation shall be
final and binding upon all parties absent manifest
error.
(c) Miscellaneous. The Company
expressly acknowledges and agrees that (i) this
Section
22
constitutes an agreement to arbitrate
between the Company and such Holder (and constitutes an arbitration
agreement) under § 7501, et seq. of the New York Civil
Practice Law and Rules (“
CPLR
”) and that each party shall be entitled to
compel arbitration pursuant to CPLR § 7503(a) in order to
compel compliance with this Section
22
, (ii) the
terms of this Certificate of Designations shall serve as the basis
for the selected investment bank’s resolution of the
applicable dispute, such investment bank shall be entitled (and is
hereby expressly authorized) to make all findings, determinations
and the like that such investment bank determines are required to
be made by such investment bank in connection with its resolution
of such dispute and in resolving such dispute such investment bank
shall apply such findings, determinations and the
like
to the terms of this
Certificate of Designations, (iii) the terms of this Certificate of
Designations shall serve as the basis for the selected
accountant’s or accounting firm’s performance of the
applicable arithmetic calculation, (iv) for clarification purposes
and without implication that the contrary would otherwise be true,
disputes relating to matters described in
Section
22(a)
shall be governed by
Section
22(a)
and not
by Section
22(b)
, (v)
such Holder (and only such Holder), in its sole discretion, shall
have the right to submit any dispute described in this
Section
22
to
any state or federal court sitting in The City of New York, Borough
of Manhattan in lieu of utilizing the procedures set forth in this
Section
22
and
(vi) nothing in this Section
22
shall limit such Holder from obtaining any
injunctive relief or other equitable remedies (including, without
limitation, with respect to any matters described in
Section
22(a)
or Section
22(b)
).
23.
Certain Defined
Terms
. For purposes of this
Certificate of Designations, the following terms shall have the
following meanings:
(a) “
1934
Act
”
means
the Securities Exchange Act of
1934, as amended.
(b) “
Base
Amount
” means, with respect to each Preferred Share,
as of the applicable date of determination, the sum of (1) the
Stated Value thereof, plus (2) the Unpaid Dividend Amount thereon
as of such date of determination.
(c) “
Bloomberg
”
means Bloomberg, L.P.
(d) “
Business
Day
” means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York are
authorized or required by law to remain closed.
(e) “
Closing Bid
Price
” and
“
Closing Sale
Price
” means, for any
security as of any date, the last closing bid price and last
closing trade price, respectively, for such security on the
Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not
designate the closing bid price or the closing trade price (as the
case may be) then the last bid price or last trade price,
respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not
the principal securities exchange or trading market for such
security, the last closing bid price or last trade price,
respectively, of such security on the principal securities exchange
or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the last
closing bid price or last trade price, respectively, of such
security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg, or, if no closing
bid price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask
prices, respectively, of any market makers for such security as
reported in the “pink sheets” by OTC Markets Group Inc.
(formerly Pink Sheets LLC). If the Closing Bid Price or the Closing
Sale Price cannot be calculated for a security on a particular date
on any of the foregoing bases, the Closing Bid Price or the Closing
Sale Price (as the case may be) of such security on such date shall
be the fair market value as mutually determined by the Company and
the applicable Holder. If the Company and such Holder are unable to
agree upon the fair market value of such security, then such
dispute shall be resolved in accordance with the procedures in
Section
22
. All such
determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar
transaction during such period.
(f) “
Common
Stock
” means (i) the Company’s shares of
common stock, $0.01 par value per share, and (ii) any capital stock
into which such common stock shall have been changed or any share
capital resulting from a reclassification of such common
stock.
(g) “
Conversion
Price
” means, with respect to each Preferred Share, as
of any Conversion Date or other applicable date of determination,
$1.75, subject to adjustment as provided herein.
(h) “
Convertible
Securities
” means any stock or other security (other
than Options) that is at any time and under any circumstances,
directly or indirectly, convertible into, exercisable or
exchangeable for, or which otherwise entitles the holder thereof to
acquire, any shares of Common Stock.
(i) “
Eligible
Market
” means The New York Stock Exchange, the NYSE
MKT, The Nasdaq Global Select Market, The Nasdaq Global Market, The
Nasdaq Capital Market, the Over-the-Counter Bulletin Board, the
OTCQB Marketplace or the OTCQX (or any successor
thereto).
(j) “
Fundamental
Transaction
” means that (i) the Company or any of its
Subsidiaries shall, directly or indirectly, in one or more related
transactions, (1) consolidate or merge with or into (whether or not
the Company or any of its Subsidiaries is the surviving
corporation) any other Person unless immediately following the
closing of such transaction or series of related transactions the
Persons holding more than 50% of the Voting Stock of the Company
prior to such closing continue to hold more than 50% of the Voting
Stock of the Company following such closing, or (2) sell, lease,
license, assign, transfer, convey or otherwise dispose of all or
substantially all of its respective properties or assets to any
other Person, or (3) assist any other Person in making a purchase,
tender or exchange offer that is accepted by the holders of more
than 50% of the outstanding shares of Voting Stock of the Company
(not including any shares of Voting Stock of the Company held by
the Person or Persons making or party to, or associated or
affiliated with the Persons making or party to, such purchase,
tender or exchange offer), or (4) consummate a stock or share
purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with any other Person whereby such other
Person acquires more than 50% of the outstanding shares of Voting
Stock of the Company (not including any shares of Voting Stock of
the Company held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making
or party to, such stock or share purchase agreement or other
business combination) excluding any equity financing transaction in
which shares of Voting Stock are issued, or (5) reorganize,
recapitalize or reclassify the Common Stock, or (ii) any
“person” or “group” (as these terms are
used for purposes of Sections 13(d) and 14(d) of the 1934 Act and
the rules and regulations promulgated thereunder) is or shall
become the “beneficial owner” (as defined in Rule 13d-3
under the 1934 Act), directly or indirectly, of 50% of the
aggregate ordinary voting power represented by issued and
outstanding Voting Stock of the Company.
(k) “
Options
”
means any rights, warrants or options to subscribe for or purchase
shares of Common Stock or Convertible Securities.
(l) “
Parent
Entity
” of a Person means an entity that, directly or
indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible
Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market
capitalization as of the date of consummation of the Fundamental
Transaction.
(m) “
Person
”
means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated
organization, any other entity or a government or any department or
agency thereof.
(n) “
Principal
Market
” means The NASDAQ Capital Market.
(o) “
SEC
”
means the Securities and Exchange Commission or the successor
thereto.
(p) “
Stated
Value
” shall mean $1.75 per share, subject to
adjustment for stock splits, stock dividends, recapitalizations,
reorganizations, reclassifications, combinations, subdivisions or
other similar events occurring after the Initial Issuance Date with
respect to the Preferred Shares.
(q) “
Subsidiaries
”
means any Person in which the Company, directly or indirectly, (I)
owns any of the outstanding capital stock or holds any equity or
similar interest of such Person or (II) controls or operates all or
any part of the business, operations or administration of such
Person.
(r) “
Successor
Entity
” means the Person (or, if so elected by the
Required Holders, the Parent Entity) formed by, resulting from or
surviving any Fundamental Transaction or the Person (or, if so
elected by the Required Holders, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.
(s) “
Trading
Day
” means, as applicable, (x) with respect to all
price determinations relating to the Common Stock, any day on which
the Common Stock is traded on the Principal Market, or, if the
Principal Market is not the principal trading market for the Common
Stock, then on the principal securities exchange or securities
market on which the Common Stock is then traded, provided that
“Trading Day” shall not include any day on which the
Common Stock is scheduled to trade on such exchange or market for
less than 4.5 hours or any day that the Common Stock is suspended
from trading during the final hour of trading on such exchange or
market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during
the hour ending at 4:00:00 p.m., New York time) unless such day is
otherwise designated as a Trading Day in writing by the Required
Holders or (y) with respect to all determinations other than price
determinations relating to the Common Stock, any day on which The
NASDAQ Stock Market (or any successor thereto) is open for trading
of securities.
(t) “
Unpaid
Dividend Amount
” means, as of the applicable date of
determination, with respect to each Preferred Share, all declared
and unpaid Dividends on such Preferred Share.
(u) “
Voting
Stock
” of a Person means capital stock of such Person
of the class or classes pursuant to which the holders thereof have
the general voting power to elect, or the general power to appoint,
at least a majority of the board of directors, managers, trustees
or other similar governing body of such Person (irrespective of
whether or not at the time capital stock of any other class or
classes shall have or might have voting power by reason of the
happening of any contingency).
24.
Disclosure
.
Upon receipt or delivery by the Company of any notice in accordance
with the terms of this Certificate of Designations, unless the
Company has in good faith determined that the matters relating to
such notice do not constitute material, non-public information
relating to the Company or any of its Subsidiaries, the Company
shall simultaneously with any such receipt or delivery publicly
disclose such material, non-public information on a Current Report
on Form 8-K or otherwise. In the event that the Company believes
that a notice contains material, non-public information relating to
the Company or any of its Subsidiaries, the Company so shall
indicate to each Holder contemporaneously with delivery of such
notice, and in the absence of any such indication, each Holder
shall be allowed to presume that all matters relating to such
notice do not constitute material, non-public information relating
to the Company or its Subsidiaries.
* * * *
*
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations of Series G Convertible Preferred Stock of MabVax
Therapeutics Holdings, Inc. to be signed by its President and Chief
Executive Officer on this 15
th
day of May,
2017.
|
|
By:
/s/ J. David
Hansen
Name:
J. David Hansen
Title: President
and Chief Executive Officer
|
EXHIBIT I
MABVAX THERAPEUTICS HOLDINGS, INC.
CONVERSION NOTICE
Reference is made
to the Certificate of Designations, Preferences and Rights of the
Series G Convertible Preferred Stock of MabVax Therapeutics
Holdings, Inc. (the “
Certificate of Designations
”). In
accordance with and pursuant to the Certificate of Designations,
the undersigned hereby elects to convert the number of shares of
Series G Convertible Preferred Stock, $0.01 par value per share
(the “
Preferred
Shares
”), of MabVax Therapeutics Holdings, Inc., a
Delaware corporation (the “
Company
”), indicated below into
shares of common stock, $0.01 par value per share (the
“
Common Stock
”),
of the Company, as of the date specified below.
Date of
Conversion:
Number
of Preferred Shares to be converted:
Share
certificate no(s). of Preferred Shares to be
converted:
Tax ID
Number (If applicable):
Conversion
Price:_________________________________________________________
Number
of shares of Common Stock to be issued:
Please
issue the shares of Common Stock into which the Preferred Shares
are being converted in the following name and to the following
address:
Issue
to:
Address:
_________________________________________
Telephone Number:
________________________________
Facsimile
Number:
Holder:
By:
Title:
Dated:_____________________________
Account
Number (if electronic book entry transfer):
Transaction Code
Number (if electronic book entry transfer):
EXHIBIT II
ACKNOWLEDGMENT
The
Company hereby acknowledges this Conversion Notice and hereby
directs
[ ]
to issue the above indicated number of shares of Common Stock in
accordance with the Irrevocable Transfer Agent Instructions dated
__________, 201_ from the Company and acknowledged and agreed to by
[ ].
MABVAX THERAPEUTICS HOLDINGS, INC.
By:
Name:
Title:
