UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 1,
2018
MABVAX THERAPEUTICS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware
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000-31265
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93-0987903
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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11535 Sorrento Valley Rd., Suite 400
San Diego, CA 92121
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code:
(858) 259-9405
N/A
(Former name or former address, if changed since last
report.)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth
company as defined in as defined in Rule 405 of the Securities Act
of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. [
]
Item
1.01
Entry
into a Material Definitive Agreement.
On
February 2 and February 3, 2018, MabVax Therapeutics Holdings, Inc.
(the “Company”) entered into separate purchase
agreements (the “Purchase Agreements”) with accredited
investors (the “Investors”) pursuant to which it agreed
to sell an aggregate of $
2,100,000
worth of shares of common stock,
par value $0.01 per share (the “Common Stock”) at a
purchase price of $0.75 per share (or, at the election of any
Investor who, as a result of receiving common stock would hold in
excess of 4.99% of our issued and outstanding Common Stock, shares
of our newly designated
0% Series M Convertible
Preferred Stock (the “Series M Preferred
Stock”)
) and a three year warrant to purchase shares
of Common Stock equal to seventy percent (70%) of such number of
shares of Common Stock purchased (or, if Series M Preferred Stock,
seventy percent (70%) of the shares of Common Stock issuable upon
conversion of the Series M Preferred Stock) (the
“Warrants”). Of the Purchase Agreements accepted,
Investors elected $
1,400,000
to be in the form
of shares of
Series M Preferred Stock.
The net proceeds of the private placement were $2,050,000 after
transaction costs of $50,000. Neither the Series M Preferred Stock
nor the warrants will be separately listed on any securities
exchange or other trading market. No bank was used for this
transaction.
The
Warrants are exercisable, at any time on or after the sixth month
anniversary of the closing date, at a price of $0.90 per share,
subject to adjustment, and expire three years
from the initial exercise date
. The holders
may, subject to certain limitations, exercise the Warrants on a
cashless basis
if not registered under
the Securities Act of 1933, as amended, within 120 days of
issuance
. The Company is prohibited from effecting an
exercise of any Warrant to the extent that, as a result of any such
exercise, the holder would beneficially own more than 9.99% of the
number of shares of Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon
exercise of such Warrant.
The
shares and Warrants were offered and sold solely to
“accredited investors” in reliance on the exemption
from registration afforded by Rule 506 of Regulation D and Section
4(a)(2) of the Securities Act of 1933, as amended (the
“Securities Act”). The Company entered into separate
registration rights agreements (the “Registration Rights
Agreements”) with each of the Investors, pursuant to which
the Company agreed to undertake to file a registration statement to
register the resale of the shares within thirty (30) days following
the closing date, to cause such registration statement to be
declared effective as set forth therein and to maintain the
effectiveness of the registration statement until all of such
shares of Common Stock have been sold or are otherwise able to be
sold pursuant to Rule 144 under the Securities Act, without any
restrictions.
The
foregoing descriptions of the Purchase Agreements, Warrants and the
Registration Rights Agreements are not complete and are qualified
in their entireties by reference to the full text of the form of
Purchase Agreement, the form of the Warrant and the form of
Registration Rights Agreement, copies of which are filed as Exhibit
10.1, Exhibit 4.1 and Exhibit 10.2, respectively, to this Report
and are incorporated by reference herein.
Item
3.02
Unregistered
Sales of Equity Securities.
Reference
is made to the disclosure set forth under Item 1.01 above, which is
incorporated by reference, in its entirety, into this Item
3.02.
Item
5.03
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On February 1, 2018, the Company filed a Certificate of
Designations, Preferences and Rights of the 0% Series M Convertible
Preferred Stock (the “Certificate of Designations”)
with the Delaware Secretary of State, designating 10,000 shares of
preferred stock as Series M Preferred Stock.
The shares of Series M Preferred Stock are convertible into shares
of Common Stock based on a conversion calculation equal to the
stated value of the Series M Preferred Stock, plus all accrued and
unpaid dividends, if any, on such Series M Preferred Stock, as of
such date of determination, divided by the conversion price. The
stated value of each share of Series M Preferred Stock is $300 and
the initial conversion price is $0.75 per share, each subject to
adjustment for stock splits, stock dividends, recapitalizations,
combinations, subdivisions or other similar events.
In the event of a liquidation, dissolution or winding up of the
Company, each share of Series M Preferred Stock will be entitled to
a per share preferential payment equal to the greater of the stated
value on the date of such payment and the amount per share such
holder would receive if such holder converted such Series M
Preferred Stock into Common Stock immediately prior to the date of
such payment.
All shares of capital
stock will be junior in rank to Series M Preferred Stock with
respect to the preferences as to dividends, distributions and
payments upon the liquidation, dissolution and winding-up of the
Company, except for the Company’s Series I Preferred Stock,
Series J Preferred Stock, Series K Preferred Stock and Series L
Preferred Stock.
The holders of
Series M Preferred Stock will be entitled to receive dividends if
and when declared by our board of directors. The Series M Preferred
Stock shall participate on an “as converted” basis,
with all dividends declared on our common stock. In
addition, if we grant, issue or sell any rights to purchase our
securities pro rata to all our record holders of our common stock,
each holder will be entitled to acquire such securities applicable
to the granted purchase rights as if the holder had held the number
of shares of common stock acquirable upon complete conversion of
all Series M Preferred Stock then held.
We are prohibited from effecting a conversion of the Series M
Preferred Stock to the extent that, as a result of such conversion,
the holder would beneficially own more than 4.99% of the number of
shares of common stock outstanding immediately after giving effect
to the issuance of shares of common stock upon conversion of the
Series M Preferred Stock, which beneficial ownership limitation may
be increased by the holder up to, but not exceeding, 9.99%. Each
holder is entitled to vote on all matters submitted to stockholders
of the Company, and shall have the number of votes equal to the
number of shares of common stock issuable upon conversion of such
holder’s Series M Preferred Stock, but not in excess of the
beneficial ownership limitations.
The foregoing description of the Series M Preferred Stock is not
complete and is qualified in its entirety by reference to the full
text of the Form of Certificate of Designations, a copy of which is
filed as Exhibit 3.1 to this report and is incorporated by
reference herein.
On
February 1, 2018, the Board of Directors approved a 1-for-3 reverse
stock split (the “Reverse Split”) for the purpose of
increasing the market price of our Common Stock in order to regain
compliance with the NASDAQ Capital Market’s $1.00 minimum
closing bid price continued listing requirement. The
Company’s stockholders had previously approved a reverse
split
ratio of not less than 1-for-2
and not more than 1-for-20 at any time prior to September 28, 2018,
with the exact ratio to be set at a whole number within this range
as determined by the Board of Directors.
The Company intends
to effectuate the reverse split as promptly as practicable, subject
to approval by NASDAQ. There is no guarantee when or if the
Reverse Split will be effective.
On
February 6, 2018, the Company issued a press release announcing the
offering and the Reverse Split. A copy of the press release is
attached hereto as Exhibit 99.1 to this report and incorporated
herein by reference.
Item
9.01
Financial
Statements and Exhibits.
(d)
Exhibits
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Form of
Certificate of Designations, Preferences and Rights of the 0%
Series M Convertible Preferred Stock
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Form of
Warrant
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Form of Purchase
Agreement
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Form of
Registration Rights Agreement
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Press Release
dated February 6, 2018
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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MABVAX THERAPEUTICS HOLDINGS, INC.
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Dated: February 6, 2018
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/s/ J. David Hansen
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J. David Hansen
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President and Chief Executive Officer
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Exhibit 3.1
CERTIFICATE OF DESIGNATION OF RIGHTS, POWERS, PREFERENCES,
PRIVILEGES AND RESTRICTIONS OF THE
0% SERIES M CONVERTIBLE PREFERRED STOCK OF
MABVAX THERAPEUTICS HOLDINGS, INC.
I,
David J. Hansen, hereby certify that I am the 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 January 30, 2018 adopted the following resolutions
creating a series of shares of Preferred Stock designated as 0%
Series M Convertible Preferred Stock, none of which shares has been
issued:
RESOLVED, that the
Board designates the 0% Series M 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 Articles of
Incorporation as follows:
TERMS OF SERIES M CONVERTIBLE PREFERRED STOCK
1.
Designation and Number of
Shares
. There shall hereby be created and established by
this Certificate of Designation of Rights, Powers, Preferences,
Privileges and Restrictions (this “
Certificate of Designation
”) a
series of preferred stock of the Company designated as “0%
Series M Convertible Preferred Stock” (the
“
Preferred
Shares
”). The authorized number of Preferred Shares
shall be Ten Thousand (10,000) shares
.
Each Preferred Share shall have $0.01 par value. Capitalized terms
not defined herein shall have the meaning as set forth in
Section
23
below or in the Purchase
Agreement.
2.
Ranking
. Except to the extent
that the Majority in Interest, including the Lead Investor (the
“
Required
Holders
”) expressly consent to the creation of Parity
Stock (as defined below) or Senior Preferred Stock (as defined
below) in accordance with Section 12, all shares of capital stock
of the Company, other than outstanding shares of Series I
Convertible Preferred Stock through Series L Convertible Preferred
Stock, shall be junior in rank to all Preferred Shares with respect
to the preferences as to dividends, distributions and payments upon
the liquidation, dissolution and winding-up of the Company (such
junior stock is referred to herein collectively as
“
Junior Stock
”).
The rights of all such shares of capital stock of the Company shall
be subject to the rights, powers, preferences and privileges of the
Preferred Shares. Without limiting any other provision of this
Certificate of Designation, without the prior express consent of
the Required Holders, voting separate as a single class, the
Company shall not hereafter authorize or issue any additional or
other shares of capital stock that is (i) of senior rank to the
Preferred Shares in respect of the preferences as to dividends,
distributions and payments upon the liquidation, dissolution and
winding-up of the Company (collectively, the “
Senior Preferred Stock
”), (ii) of
pari passu rank to the Preferred Shares in respect of the
preferences as to dividends, distributions and payments upon the
liquidation, dissolution and winding-up of the Company
(collectively, the “
Parity
Stock
”) or (iii) any Junior Stock having a maturity
date (or any other date requiring redemption or repayment of such
shares of Junior Stock) that is prior to the date on which any
Preferred Shares remain outstanding. 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 on the Stated Value of such Preferred
Share.
4.
Conversion
. Each Preferred
Share shall be convertible into validly issued, fully paid and
non-assessable shares of Common Stock (“
Conversion Shares
”) 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
”):
Stated Value
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,
e-mail or otherwise), for receipt on or prior to 11:59 p.m., New
York time, on such date, a copy of an executed conversion notice 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 no Conversion Date is
specified in a Notice of Conversion, the Conversion Date shall be
the date that such Notice of Conversion to the Company is deemed
delivered hereunder. 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 delivery 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 for the Company’s Common Stock (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 delivery by the Company of such
Conversion Notice, the Company shall 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 and Withdrawal at Custodian system. No
ink-original Conversion Notice shall be required, nor shall any
medallion guarantee (or other type of guarantee or notarization) of
any Conversion Notice form be required.
The calculations and entries set
forth in the Conversion Notice shall control in the absence of
manifest or mathematical error. 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 two (2) 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 two (2)
Trading Days after the Company’s delivery of a Conversion
Notice (whether via facsimile, e-mail or otherwise) (the
“
Share Delivery
Deadline
”),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, (x) 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 that have accrued prior to the date of such notice
pursuant to the terms of this Certificate of Designation or
otherwise and (y) the Company shall pay in cash to such Holder on
each day after such second (2
nd
) Trading Day that
the issuance of such shares of Common Stock is not timely effected
an amount equal to 1.0 % 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 two (2) Trading Days
after the Company’s receipt of a Conversion Notice (whether
via facsimile, e-mail or otherwise), the Company shall fail to
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 second
(2
nd
)
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
two (2) 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 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 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)
Obligation
Absolute
. The Company’s obligation to issue and
deliver the Common Stock upon conversion of Preferred Shares in
accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by a Holder to enforce the
same, any waiver or consent with respect to any provision hereof,
the recovery of any judgment against any Person or any action to
enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by such
Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by such Holder or any other
person, and irrespective of any other circumstance which might
otherwise limit such obligation of the Company to such Holder in
connection with the issuance of such Conversion Shares ;
provided
,
however
, that such
delivery shall not operate as a waiver by the Company of any such
action that the Company may have against such Holder. In the event
a Holder shall elect to convert any or all of the Stated Value of
its Series M Preferred Stock, the Company may not refuse conversion
based on any claim that such Holder or any one associated or
affiliated with such Holder has been engaged in any violation of
law, agreement or for any other reason, unless an injunction from a
court, on notice to Holder, restraining and/or enjoining conversion
of all or part of the Series M Preferred Stock of such Holder shall
have been sought and obtained, and the Company posts a surety bond
for the benefit of such Holder in the amount of 150% of the Stated
Value of Series M Preferred Stock which is subject to the
injunction, which bond shall remain in effect until the completion
of arbitration/litigation of the underlying dispute and the
proceeds of which shall be payable to such Holder to the extent it
obtains judgment. In the absence of such injunction, the Company
shall issue Preferred Shares and, if applicable, cash, upon a
properly noticed conversion.
(vi)
Certificate Surrender
.
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 the Company
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.
(vii)
Transfer
Taxes and Expenses
. The issuance of Conversion Shares on
conversion of this Series M Preferred Stock shall be made without
charge to any Holder for any documentary stamp or similar taxes
that may be payable in respect of the issue or delivery of such
Conversion Shares, provided that the Company shall not be required
to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such Conversion Shares
upon conversion in a name other than that of the Holders of such
shares of Series M Preferred Stock and the Company shall not be
required to issue or deliver such Conversion Shares unless or until
the Person or Persons requesting the issuance thereof shall have
paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has
been paid. The Company shall pay all Transfer Agent fees required
for same-day processing of any Notice of Conversion and all fees to
the Depository Trust Company (or another established clearing
corporation performing similar functions) required for same-day
electronic delivery of the Conversion Shares.
(d)
Limitation on Beneficial
Ownership
. Notwithstanding anything to the contrary set
forth in this Certificate of Designation, at no time may all or a
portion of the Series M Preferred Stock be converted if the number
of shares of Common Stock to be issued pursuant to such conversion
would exceed, when aggregated with all other shares of Common Stock
owned by the Holder at such time, the number of shares of Common
Stock that would result in the Holder beneficially owning (as
determined in accordance with Section 13(d) of the 1934 Act and the
rules thereunder) more than 4.99% of all of the Common Stock
outstanding at such time (the “
4.99% Beneficial Ownership
Limitation
”);
provided
,
however
, that, upon the Holder
providing the Company with sixty-one (61) days’ advance
notice (the “
4.99% Waiver
Notice
”) that the Holder would like to waive this
Section 4(e) with regard to any or all shares of Common Stock
issuable upon conversion of the Preferred Shares, this Section 4(e)
will be of no force or effect with regard to all or a portion of
the Series M Preferred Stock referenced in the 4.99% Waiver Notice
but shall in no event waive the 9.99% Beneficial Ownership
Limitation described below. Notwithstanding anything to the
contrary set forth in this Certificate of Designation, at no time
may all or a portion of the Preferred Shares be converted if the
number of shares of Common Stock to be issued pursuant to such
conversion, when aggregated with all other shares of Common Stock
owned by the Holder at such time, would result in the Holder
beneficially owning (as determined in accordance with Section 13(d)
of the 1934 Act and the rules thereunder) in excess of 9.99% of the
then-issued and outstanding shares of Common Stock outstanding at
such time (the “
9.99%
Beneficial Ownership Limitation
” and the lower of the
9.99% Beneficial Ownership Limitation and the 4.99% Beneficial
Ownership Limitation then in effect, the “
Maximum Percentage
”)). By written
notice to the Company, a holder of Preferred Shares may from time
to time decrease the Maximum Percentage to any other percentage
specified in such notice. 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 two (2) 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
61 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 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 that 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 ensure 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 Designation) 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
Designation.
6.
Rights Upon Fundamental
Transactions
.
(a)
Assumption
. The Company shall
not enter into or be party to a Fundamental Transaction unless:
(i) the Successor Entity assumes in writing all of the
obligations of the Company under this Certificate of Designation
and the other Transaction Documents in accordance with the
provisions of this Section 6 pursuant to written agreements in form
and substance satisfactory to the Required Holders and approved by
the Required Holders prior to such Fundamental Transaction,
including agreements to deliver to each holder of Preferred Shares
in exchange for such Preferred Shares a security of the Successor
Entity evidenced by a written instrument substantially similar in
form and substance to this Certificate of Designation, including,
without limitation, having a stated value and dividend rate equal
to the stated value and dividend rate of the Preferred Shares held
by the Holders and having similar ranking to the Preferred Shares,
and reasonably satisfactory to the Required Holders and
(ii) the Successor Entity (including its Parent Entity) is a
publicly traded corporation whose shares of common stock are quoted
on or listed for trading on an Eligible Market. 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
Designation and the other Transaction Documents 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 Designation and the other Transaction Documents 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 publicly traded common stock (or their equivalent) of the
Successor Entity (including its Parent Entity) that 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 Designation),
as adjusted in accordance with the provisions of this Certificate
of Designation. 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 Purchase 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 Purchase 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
,
however
, 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,
other than a return thereof to the Company’s treasury for
cancellation, shall be considered an issue or sale of Common
Stock.
(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 Stated Value of each Preferred Share as of
the Initial Issuance Date (assuming for purposes hereof, that all
the Preferred Shares issuable pursuant to the Purchase Agreement
have been issued, such Preferred Shares are convertible at the
Conversion Price and 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 Designation
from the Initial Issuance Date through the second anniversary of
the Initial Issuance Date assuming (assuming for purposes hereof,
that all the Preferred Shares issuable pursuant to the Purchase
Agreement have been issued and 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 or issuable pursuant to the
Purchase Agreement assuming for purposes hereof, that all the
Preferred Shares issuable pursuant to the Purchase Agreement have
been issued and 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 Designation) (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 who 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 shareholders
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 or consent solicitation, the Company shall
provide each shareholder with a proxy statement or information
statement, as relevant, and shall use its commercial best efforts
to solicit its shareholders’ approval of such increase in
authorized shares of Common Stock and to cause its Board to
recommend to the shareholders that they approve such proposal.
Nothing contained in this Section 8 shall limit any obligations of
the Company under any provision of the Purchase Agreement. 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 and subject to the Maximum
Percentage, each holder of Preferred Shares shall be entitled to
vote on all matters submitted to shareholders of the Company and
shall be entitled to the number of votes for each Preferred Share
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 such Preferred Shares are convertible into (voting as
a class with Common Stock) based on a per share price equal to
$0.75, representing $0.02 over the consolidated closing bid price
of the Common Stock on The NASDAQ Stock Market LLC on the date
prior to execution of the Purchase Agreement;
provided
,
however
, in no event shall have
a Holder have the right to vote any shares of Common Stock in
excess of the conversion limitations set forth in Section 4(e)
herein. Except as otherwise required by law, the holders of
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, an amount per Preferred Share equal to the greater of (A)
the Stated Value thereof on the date of such payment and (B) the
amount per share such Holder would receive if such Holder converted
such Preferred Shares into Common Stock immediately prior to the
date of such payment;
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, 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 Articles 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 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 Articles
of Incorporation or bylaws, or file any certificate of designation
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 Articles of Incorporation or by merger,
consolidation or otherwise; (b) increase or decrease (other than by
conversion) the authorized number of Preferred Shares; (c) without
limiting any provision of Section 2, create or authorize (by
reclassification or otherwise) any new class or series of shares
that has a preference over or is on a parity with the Preferred
Shares with respect to dividends or the distribution of assets on
the liquidation, dissolution or winding-up of the Company; (d)
purchase, repurchase or redeem any shares of capital stock of the
Company junior in rank to the Preferred Shares (other than pursuant
to equity incentive agreements (that have in good faith been
approved by the Board) with employees giving the Company the right
to repurchase shares upon the termination of services); (e) without
limiting any provision of Section 2, pay dividends or make any
other distribution on any shares of any capital stock of the
Company junior in rank to the Preferred Shares; or (f) 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 Designation shall be cumulative and
in addition to all other remedies available under this Certificate
of Designation and any of the other Transaction Documents, 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
Designation. 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
Designation.
16.
Noncircumvention
. The Company
hereby covenants and agrees that the Company will not, by amendment
of its Articles 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 Designation,
and will at all times in good faith carry out all of the provisions
of this Certificate of Designation 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 Designation, 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
Designation 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
Designation, including in reasonable detail a description of such
action and the reason therefor. Whenever notice is required to be
given under this Certificate of Designation, unless otherwise
provided herein, such notice must be in writing and shall be given
in accordance with the Purchase Agreement. 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
.
Subject to the restrictions set forth in Purchase Agreement, a
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 and
provide notice to the Holders thereof), 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, address,
facsimile number and tax identification number 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.
Shareholder Matters;
Amendment
.
(a)
Shareholder Matters
. Any
shareholder action, approval or consent required, desired or
otherwise sought by the Company pursuant to the NRS, the Articles
of Incorporation, this Certificate of Designation or otherwise with
respect to the issuance of Preferred Shares may be effected by
written consent of the Company’s shareholders or at a duly
called meeting of the Company’s shareholders, all in
accordance with the applicable rules and regulations of the NRS.
This provision is intended to comply with the applicable sections
of the NRS permitting shareholder action, approval and consent
affected by written consent in lieu of a meeting.
(b)
Amendment
. This Certificate of
Designation 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 NRS, of
the Required Holders, voting separate as a single class, and with
such other shareholder approval, if any, as may then be required
pursuant to the NRS and the Articles of Incorporation.
(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 (A) 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 (B) 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, such
fair market value by 5:00 p.m. (New York time) on the second
(2
nd
)
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
(A) a copy of the initial dispute submission so delivered in
accordance with the first sentence of this Section 22(a) and (B)
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 (A) and (B) 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 use their respective commercial best
efforts to 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 second (2
nd
) 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 use their respective commercial best
efforts to 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) a dispute relating to a Conversion Price includes, without
limitation, disputes as to whether an agreement, instrument,
security or the like constitutes and Option or Convertible Security
(iii) the terms of this Certificate of Designation and each other
applicable Transaction Document 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 Designation and any other applicable
Transaction Documents, (iv) the terms of this Certificate of
Designation and each other applicable Transaction Document shall
serve as the basis for the selected accountant’s or
accounting firm’s performance of the applicable arithmetic
calculation, (v) 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), (vi) 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 (vii)
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 Designation, the following terms
shall have the following meanings:
(a)
“
1934
Act
”
means
the Securities Exchange Act of
1934, as amended.
(b)
“
Affiliate
” as applied to any
Person, means any other Person directly or indirectly controlling,
controlled by, or under common control with, that Person. For the
purposes of this definition, “
control
” (including, with
correlative meanings, the terms “
controlling
”, “
controlled by
” and
“
under common control
with
”), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract
or otherwise. For purposes of this definition, a Person shall be
deemed to be “
controlled by
” a Person
if such latter Person possesses, directly or indirectly, power to
vote 10% or more of the securities having ordinary voting power for
the election of directors of such former Person.
(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 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 by OTC Markets
Group Inc. 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, par value $0.01 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, $0.75, 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 OTCQX, the OTCQB or the Principal
Market (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, (A) consolidate or merge with or into (whether
or not the Company or any of its Subsidiaries is the surviving
corporation) any other Person, or (B) 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 (C)
allow any other Person to make 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 (D)
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), or
(E) 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)
“
Holder Pro Rata
Amount
” means, with
respect to any Holder, a fraction (i) the numerator of which
is the number of Preferred Shares issued to such Holder pursuant to
the Purchase Agreement on the Initial Issuance Date and (ii) the
denominator of which is the number of Preferred Shares issued to
all Holders pursuant to the Purchase Agreement on the Initial
Issuance Date.
(l)
“
Liquidation Event
” means, whether
in a single transaction or series of transactions, the voluntary or
involuntary liquidation, dissolution or winding-up of the Company
or such Subsidiaries the assets of which constitute all or
substantially all of the assets of the business of the Company and
its Subsidiaries, taken as a whole.
(m)
“
Options
” means any rights,
warrants or options to subscribe for or purchase shares of Common
Stock or Convertible Securities.
(n)
“
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.
(o)
“
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.
(p)
“
Purchase Agreement
” means that
certain Securities Purchase Agreement by and among the Company and
the initial holders of Preferred Shares, dated as of the Purchase
Date, as may be amended from time in accordance with the terms
thereof.
(q)
“
Purchase Date
” means the Closing
Date (as defined in the Purchase Agreement).
(r)
“
Principal Market
” means The NASDAQ
Capital Market.
(s)
“
Qualified Transaction
” means one
or more acquisitions by the Company of any business, assets, stock,
licenses, interests or properties (including, without limitation,
intellectual property rights) approved by the stockholders of the
Company or any acquisition involving assets, shares of capital
stock, any purchase, merger, consolidation, recapitalization, or
reorganization or involving any licensing, royalties, sharing
arrangement or otherwise which
requires the filing by the Company of a Current
Report on Form 8-K with the inclusion of audited financial
statements of the target.
(t)
“
Securities
” shall have the meaning ascribed to it in
the Purchase Agreement.
(u)
“
Stated Value
” shall mean $300 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.
(v)
“
Subsidiaries
”
shall have the meaning as set forth in the Purchase
Agreement.
(w)
“
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.
(x)
“
Trading Day
” means, as applicable,
(i) 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 (ii) with respect to all
determinations other than price determinations relating to the
Common Stock, any day on which The New York Stock Exchange (or any
successor thereto) is open for trading of securities.
(y)
“
Transaction Documents
” shall have
the meaning ascribed to it in the Purchase Agreement.
(z)
“
“
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 Designation, 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. Nothing contained in this Section 24 shall limit any
obligations of the Company, or any rights of any Holder, under the
Purchase Agreement.
* * * *
*
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation of Series M Convertible Preferred Stock of MabVax
Therapeutics Holdings, Inc. to be signed by its Chief Executive
Officer on this __ day of January 2018.
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MABVAX
THERAPEUTICS HOLDINGS, INC.
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By:
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Name:
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David
J. Hansen
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Title:
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Chief
Executive Officer
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EXHIBIT I
MABVAX THERAPUTICS HOLDINGS, INC.
CONVERSION NOTICE
Reference is made
to the Certificate of Designation of Rights, Powers, Preferences,
Privileges and Restrictions of the 0% Series M Convertible
Preferred Stock of MabVax Therapeutics Holdings, Inc. (the
“
Certificate of
Designation
”). In accordance with and pursuant to the
Certificate of Designation, the undersigned hereby elects to
convert the number of shares of 0% Series M 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 DTC
Instructions:
Account
Number:
Transaction Code
Number:
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 __________, 2018 from the Company and
acknowledged and agreed to by _______________.
MABVAX
THERAPEUTICS HOLDINGS, INC.
Name:
Title:
Exhibit
4.1
For
U.S. Persons:
[NEITHER]
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS
EXERCISABLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND
APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. TO THE
EXTENT PERMITTED BY APPLICABLE SECURITIES LAWS, THIS SECURITY [AND
THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY] MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION
THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE
501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
For
Non-U.S. Persons:
THESE
SECURITIES [AND THE SECURITIES FOR WHICH THIS SECURITY IS
EXERCISABLE WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO
ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”)
PURSUANT TO REGULATION S UNDER THE 1933 ACT. ACCORDINGLY, NONE OF
THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN
REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS,
AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE
UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS
DEFINED IN REGULATION S PROMULGATED UNDER THE SECURITIES ACT)
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION,
HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN ACCORDANCE WITH THE 1933 ACT.
FORM
OF COMMON STOCK PURCHASE WARRANT MABVAX THERAPEUTICS HOLDINGS,
INC.
Warrant Shares:
[
]
Initial Issuance
Date: January [ ], 2018
THIS
COMMON STOCK PURCHASE WARRANT (the “
Warrant
”) certifies that,
for value received,
[
]
or its assigns (the
“
Holder
”)
is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on
or after the six month anniversary of the Initial Issuance Date
(the “
Initial
Exercise Date
”) and on or prior to the close of
business on the thirty six (36) month anniversary of the Initial
Exercise Date (the “
Termination Date
”) but
not thereafter, to subscribe for and purchase from
MABVAX THERAPEUTICS HOLDINGS, INC.
, a
Delaware corporation (the “
Company
”), up to
[ ]
shares (as subject to
adjustment hereunder, the “
Warrant Shares
”) of
Common Stock. The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in
Section 2(b).
Section 1
.
Definitions
. Capitalized terms
used and not otherwise defined herein shall have the meanings set
forth in that certain Securities Purchase Agreement (the
“
Purchase
Agreement
”), dated January [ ], 2018, among the
Company and the Holder.
Section
2
.
Exercise
.
a)
Exercise
of the purchase rights represented by this Warrant may be made, in
whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to
the Company (or such other office or agency of the Company as it
may designate by notice in writing to the registered Holder at the
address of the Holder appearing on the books of the Company) of a
duly executed facsimile copy of the Notice of Exercise Form annexed
hereto. Within two (2) Trading Days following the date of exercise
as aforesaid, the Holder shall deliver the aggregate Exercise Price
for the shares specified in the applicable Notice of Exercise by
wire transfer or cashier’s check drawn on a United States
bank unless the cashless exercise procedure specified in Section
2(c) below is specified in the applicable Notice of Exercise.
Notwithstanding anything herein to the contrary (although the
Holder may surrender the Warrant to, and receive a replacement
Warrant from, the Company), the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date the final Notice of Exercise is
delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
No ink-original Notice of Exercise shall be required, nor shall any
medallion guarantee (or other type of guarantee or notarization) of
any Notice of Exercise be required. The Holder and the Company
shall maintain records showing the number of Warrant Shares
purchased and the date of such purchases. The Company shall deliver
any objection to any Notice of Exercise Form within one (1) Trading
Day of delivery of such notice. Notwithstanding anything to the
contrary herein, all rules and requirements of the Company’s
transfer agent shall govern and supersede anything herein.
The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason
of the provisions of this paragraph, following the purchase of a
portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be
less than the amount stated on the face hereof.
b)
Exercise
Price
. The initial exercise price per share of the Common
Stock under this Warrant shall be
$0.90
, (the “
Initial Exercise Price
”)
subject to adjustment hereunder (as adjusted, the
“
Exercise
Price
”), payable, subject to Section 2(c) below, in
immediately available funds.
c)
Cashless
Exercise
. If at any time after the four (4) month
anniversary of the Initial Issuance Date, provided there is no
effective registration statement registering, or no current
prospectus available for the resale of the Warrant Shares by the
Holder, then after the Initial Exercise Date, this Warrant may also
be exercised at the Holder’s election, in whole or in part,
at such time by means of a “cashless exercise” in which
the Holder shall be entitled to receive a number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:
(A) =
the VWAP on the Trading Day immediately preceding the date on which
Holder elects to exercise this Warrant by means of a
“cashless exercise,” as set forth in the applicable
Notice of Exercise;
(B) =
the Exercise Price of this Warrant, as adjusted hereunder;
and
(X) =
the number of Warrant Shares that would be issuable upon exercise
of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise rather than a
cashless exercise.
If
Warrant Shares are issued in such a cashless exercise, the parties
acknowledge and agree that in accordance with Section 3(a)(9) of
the Securities Act, the Warrant Shares shall take on the
characteristics of the Warrants being exercised, and the holding
period of the Warrant Shares being issued may be tacked on to the
holding period of this Warrant. The Company agrees not to take any
position contrary to this Section 2(c).
Notwithstanding
anything herein to the contrary, on the Termination Date, unless
the Holder notifies the Company otherwise, if there is no effective
Registration Statement registering, or no current prospectus
available for, the resale of the Warrant Shares by the Holder and
the Exercise Price is greater than the VWAP on the Trading Day
immediately preceding the date on which the Warrant would otherwise
expire, then this Warrant shall be automatically exercised via
cashless exercise pursuant to this Section 2(c). In the event the
issuance of Warrant Shares upon such automatic exercise would cause
the Holder to exceed the Beneficial Ownership Limitation, then the
delivery of such Warrant Shares shall be held in abeyance until
such time as the Holder notifies the Company that it may receive
any or all of such Warrant Shares without exceeding the Beneficial
Ownership Limitation.
d)
Mechanics of
Exercise
.
(a)
Delivery
of Certificates Upon Exercise
. Certificates for shares
purchased hereunder shall be transmitted by the Company’s
transfer agent for its Common Stock (the “
Transfer
Agent”) to the
Holder by crediting the account of the Holder’s prime broker
with The Depository Trust Company through its Deposit or Withdrawal
at Custodian system (“
DWAC
”) if the Company is
then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by the Holder or
(B) this Warrant is being exercised via cashless exercise and Rule
144 is available, and otherwise by physical delivery to the address
specified by the Holder in the Notice of Exercise by the date that
is the later to occur of (A) two (2) Trading Days after the
delivery to the Company of the Notice of Exercise, and (B) one (1)
Trading Day after the payment of the aggregate Exercise Price as
set forth above (including by cashless exercise, if permitted)
(such date, the “
Warrant Share Delivery
Date
”). The Warrant Shares shall be deemed to have
been issued, and Holder or any other person so designated to be
named therein shall be deemed to have become a holder of record of
such shares for all purposes, as of the date the Warrant has been
exercised, with payment to the Company of the Exercise Price (or by
cashless exercise, if permitted) and all taxes required to be paid
by the Holder, if any, pursuant to Section 2(d)(vi) prior to the
issuance of such shares, having been paid. The Company understands
that a delay in the delivery of the Warrant Shares after the
Warrant Share Delivery Date could
result in economic
loss to the Holder. As compensation to the Holder for such loss,
the Company agrees to pay (as liquidated damages and not as a
penalty) to the Holder for late issuance of Warrant Shares upon
exercise of this Warrant the proportionate amount of $10 per
Trading Day (increasing to $20 per Trading Day after the fifth
(5
th
) Trading Day) after the
Warrant Share Delivery Date for each $1,000 of Exercise Price of
Warrant Shares for which this Warrant is exercised which are not
timely delivered. The Company shall pay any payments incurred under
this Section in immediately available funds upon demand.
Furthermore, in addition to any other remedies which may be
available to the Holder, in the event that the Company fails for
any reason to effect delivery of the Warrant Shares by the Warrant
Share Delivery Date, the Holder may revoke all or part of the
relevant Warrant exercise by delivery of a notice to such effect to
the Company, whereupon the Company and the Holder shall each be
restored to their respective positions immediately prior to the
exercise of the relevant portion of this Warrant, except that the
liquidated damages described above shall be payable through the
date notice of revocation or rescission is given to the
Company.
i.
Delivery of New Warrants Upon
Exercise
. If this Warrant shall have been exercised in part,
the Company shall, at the request of a Holder and upon surrender of
this Warrant certificate, at the time of delivery of the
certificate or certificates representing Warrant Shares, deliver to
the Holder a new Warrant evidencing the rights of the Holder to
purchase the unpurchased Warrant Shares called for by this Warrant,
which new Warrant shall in all other respects be identical with
this Warrant.
ii.
Rescission
Rights
. If the Company fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates
representing the Warrant Shares pursuant to Section 2(d)(i) by the
Warrant Share Delivery Date, then the Holder will have the right,
at any time prior to issuance of such Warrant Shares, to rescind
such exercise.
iii.
Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon
Exercise
. In addition to any other rights available to the
Holder, if the Company fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates
representing the Warrant Shares pursuant to an exercise on or
before the Warrant Share Delivery Date, and if after such date the
Holder is required by its broker to purchase (in an open market
transaction or otherwise) or the Holder’s brokerage firm
otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a
“
Buy-In
”), then the
Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2)
the price at which the sell order giving rise to such purchase
obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored (in which
case such exercise shall be deemed rescinded) or deliver to the
Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy- In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under
clause (A) of the
immediately preceding sentence the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of
the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant as required
pursuant to the terms hereof.
iv.
No Fractional Shares or Scrip
.
No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. As to any fraction of
a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay
a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up
to the next whole share.
v.
Charges,
Taxes and Expenses
. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance
of such certificate, all of which taxes and expenses shall be paid
by the Company, and such certificates shall be issued in the name
of the Holder or in such name or names as may be directed by the
Holder;
provided
,
however
, that in
the event certificates for Warrant Shares are to be issued in a
name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment
Form attached hereto duly executed by the Holder and the Company
may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.
The Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Exercise and all fees to the Depository
Trust Company (or another established clearing corporation
performing similar functions) required for same-day electronic
delivery of the Warrant Shares.
vi.
Closing
of Books
. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
e)
Holder’s Exercise
Limitations
. (i) The Company shall not effect any exercise
of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to
the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder
(together with the Holder’s Affiliates, and any other Persons
acting as a group together with the Holder or any of the
Holder’s Affiliates (such Persons, “
Attribution Parties
”)),
would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below). For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates and Attribution Parties shall
include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being
made, but shall exclude the number of shares of Common Stock which
would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of
its Affiliates or Attribution Parties and (ii) exercise or
conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other
Common Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained
herein beneficially
owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for
purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within one Trading Day
confirm orally and in writing to the 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 this Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The
“
Beneficial
Ownership Limitation
” shall be 9.99% of the number of
shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon
exercise of this Warrant. The Holder, upon notice to the Company,
may increase or decrease the Beneficial Ownership Limitation
provisions of this Section 2(e), provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of
shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock upon exercise of
this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial
Ownership Limitation will not be effective until the 61
st
day after such notice is delivered to
the Company. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity
with the terms of this Section 2(e) to correct this paragraph (or
any portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation herein contained or to
make changes or supplements necessary or desirable to properly give
effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of this
Warrant.
Section 3
.
Certain
Adjustments
.
a)
Stock
Dividends and Splits
. If the Company, at any time while this
Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock
or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon
exercise of this Warrant or pursuant to any of the other
Transaction Documents), (ii) subdivides outstanding shares of
Common Stock into a larger number of shares,
(iii)
combines (including
by way of reverse stock split) outstanding shares of Common Stock
into
a smaller number of
shares, or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case
the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of
this Warrant shall remain unchanged. Any adjustment made pursuant
to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to
receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.
b)
Subsequent Rights Offerings
. In
addition to any adjustments pursuant to Section 3(a) above, if at
any time the Company grants, issues or sells any Common Stock
Equivalents or rights to purchase stock, warrants, securities or
other property pro rata to all of the record holders of any class
of shares of Common Stock (the “
Purchase Rights
”), then
the Holder will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of
shares of Common Stock acquirable upon complete exercise of this
Warrant (without regard to any limitations on exercise hereof,
including without limitation, the Beneficial Ownership Limitation)
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 shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership
Limitation, then the 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 the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
c)
Pro
Rata Distributions
. During such time as this Warrant is
outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a
dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a
“
Distribution
”), at any
time after the issuance of this Warrant, then, in each such case,
the Holder shall be entitled to participate in such Distribution to
the extent that the Holder exercises this Warrant immediately
before the date of which a record is taken for such Distribution,
or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the
participation in such Distribution.
d)
Fundamental Transaction
. If, at
any time while this Warrant is outstanding, (i) the Company,
directly or indirectly, in one or more related transactions effects
any merger or consolidation of the Company with or into another
Person, (ii) the Company, directly or indirectly, effects any sale,
lease, license, assignment, transfer, conveyance or other
disposition of all or substantially all of its assets in one or a
series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders
of Common Stock are permitted to sell, tender or exchange their
shares for other securities, cash or property and has been accepted
by the holders of 50% or more of the outstanding Common Stock, (iv)
the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or
recapitalization of the Common
Stock or any
compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash
or property, or (v) the Company, directly or indirectly, in one or
more related transactions consummates a stock or share purchase
agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person or group of Persons whereby
such other Person or group acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of
Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making
or party to, such stock or share purchase agreement or other
business combination) (each a “
Fundamental
Transaction
”), then, upon any subsequent exercise of
this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any
limitation in Section 2(e) on the exercise of this Warrant), the
number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “
Alternate Consideration
”)
receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such
Fundamental Transaction. The Company shall cause any successor
entity in a Fundamental Transaction in which the Company is not the
survivor (the “
Successor Entity
”) to
assume in writing all of the obligations of the Company under this
Warrant and the other Transaction Documents in accordance with the
provisions of this Section 3(e) pursuant to written agreements and
shall, at the option of the Holder, deliver to the Holder in
exchange for this Warrant a security of the Successor Entity
evidenced by a written instrument substantially similar in form and
substance to this Warrant which is exercisable for a corresponding
number of shares of capital stock of such Successor Entity (or its
parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies
the exercise price hereunder to such shares of capital stock (but
taking into account the relative value of the shares of Common
Stock pursuant to such Fundamental Transaction and the value of
such shares of capital stock, such number of shares of capital
stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction), and which is
reasonably satisfactory in form and substance to the Holder. Upon
the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and
after the date of such Fundamental Transaction, the provisions of
this Warrant and the other Transaction Documents 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 Warrant and
the other Transaction Documents with the same effect as if such
Successor Entity had been named as the Company herein.
e)
Calculations
.
All calculations under this Section 3 shall be made to the nearest
cent or the nearest whole share, as the case may be. For purposes
of this Section 3, the number of shares
of Common Stock
deemed to be issued and outstanding as of a given date shall be the
sum of the number of shares of Common Stock (excluding treasury
shares, if any) issued and outstanding.
f)
Notice to
Holder.
i.
Adjustment
to Exercise Price
. Whenever the Exercise Price is adjusted
pursuant to any provision of this Section 3, the Company shall
promptly mail to the Holder a notice setting forth the Exercise
Price after such adjustment and any resulting adjustment to the
number of Warrant Shares and setting forth a brief statement of the
facts requiring such adjustment.
ii.
Notice to Allow Exercise by
Holder
. If (A) the Company shall declare a dividend (or any
other distribution in whatever form) on the Common Stock, (B) the
Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock, (C) the Company shall authorize the
granting to all holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital stock of any class
or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially
all of the assets of the Company, or any compulsory share exchange
whereby the Common Stock is converted into other securities, or (E)
the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, to the extent that such information
constitutes material non-public information (as determined in good
faith by the Company) the Company shall follow the procedure
described in the Purchase Agreement and shall deliver to the Holder
at its last address as it shall appear upon the Warrant Register of
the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of
such dividend, distribution, redemption, rights or warrants, or if
a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected that
holders of the Common Stock of record shall be entitled to exchange
their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange; provided that the failure
to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to
be specified in such notice. To the extent that any notice provided
hereunder constitutes, or contains, material, non- public
information regarding the Company or any of the Subsidiaries, the
Company shall simultaneously file such notice with the Commission
SEC pursuant to a Current Report on Form 8-K. The Holder shall
remain entitled to exercise this Warrant during the period
commencing on the date of such notice to the effective date of the
event triggering such notice except as may otherwise be expressly
set forth herein.
Section
4
.
Transfer of
Warrant
.
a)
Transferability
.
Subject to compliance with any applicable securities laws and the
provisions of the Purchase Agreement, this Warrant and all rights
hereunder (including, without limitation, any registration rights)
are transferable, in whole or in part, upon surrender of this
Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by the
Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee
or assignees, as applicable, and in the denomination or
denominations specified in such instrument of assignment, and shall
issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be
cancelled. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant
to the Company unless the Holder has assigned this Warrant in full,
in which case, the Holder shall surrender this Warrant to the
Company within three (3) Trading Days of the date on which the
Holder delivers an assignment form to the Company assigning this
Warrant in full. The Warrant, if properly assigned in accordance
herewith, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.
b)
New Warrants
. This Warrant may
be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written
notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which
may be involved in such division or combination, the Company shall
execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with
such notice. All Warrants issued on transfers or exchanges shall be
dated the initial issuance date of this Warrant and shall be
identical with this Warrant except as to the number of Warrant
Shares issuable pursuant thereto.
c)
Warrant
Register
. The Company shall register this Warrant, upon
records to be maintained by the Company or its transfer agent for
that purpose (the “
Warrant Register
”), in
the name of the record Holder hereof from time to time. The Company
may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent
actual notice to the contrary.
Section 5
.
Certain Definitions
. For
purposes of this Warrant, the following terms shall have the
following meanings:
(a)
“
Affiliate
”
shall mean as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition,
“control” (including, with correlative meanings, the
terms “controlling”, “controlled by” and
“under common control with”), as applied to any Person,
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting securities or
by contract or otherwise. For purposes of this definition, a Person
shall be deemed to be “
controlled by
” a Person
if such latter Person possesses, directly or indirectly, power to
vote 10% or more of the securities having ordinary voting power for
the election of directors of such former Person
(b)
“
Bloomberg
” means Bloomberg
Financial Markets.
(c)
“
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.
(d)
“
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 the 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 the OTC Markets Group
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 Holder.
All such determinations to be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar
transaction during the applicable calculation period.
(e)
“
Common Stock
” means (i) the
Company’s shares of Common Stock, $0.01 par value per share,
and (ii) any share capital into which such Common Stock shall have
been changed or any share capital resulting from a reclassification
of such Common Stock.
(f)
“
Common
Stock Equivalents
” means any securities of the Company
or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation,
any debt, preferred stock, right, option, warrant or other
instrument that is at any time convertible into or exercisable or
exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock
(g)
“
Person
”
means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated
organization, any other entity and a government or any department
or agency thereof.
(h)
“
Principal
Market
” means The NASDAQ Capital Market or the
principal securities exchange or securities market on which the
Common Stock is then quoted or traded.
(i)
“
Rule
144
” means Rule 144 promulgated by the SEC pursuant to
the Securities Act, as such Rule may be amended or interpreted from
time to time, or any similar rule or regulation hereafter adopted
by the Commission having substantially the same purpose and effect
as such Rule
(j)
“
Subsidiary
”
means any subsidiary of the Company including any direct or
indirect subsidiary of the Company formed or acquired after the
date hereof.
(k)
“
Trading
Day
” means any day on which the Common Stock are
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 are then traded;
provided
that “Trading Day”
shall not include any day on which the Common Stock are scheduled
to trade on such exchange or market for less than 4.5 hours or any
day that the Common Stock are 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).
(l)
“
VWAP
”
means, for any security as of any date, the dollar volume-weighted
average price for such security on the Principal Market (or, if the
Principal Market is not the principal trading market for such
security, then on the principal securities exchange or securities
market on which such security is then traded) during the period
beginning at 9:30:01 a.m., New York time, and ending at 4:00:00
p.m., New York time, as reported by Bloomberg through its
“HP” function set to “weighted average” or,
if the foregoing does not apply, the dollar volume-weighted average
price of such security in the over-the-counter market on the
electronic bulletin board for such security during the period
beginning at 9:30:01 a.m., New York time, and ending at 4:00:00
p.m., New York time, as reported by Bloomberg, or, if no dollar
volume- weighted average price is reported for such security by
Bloomberg for such hours, the average of the highest closing bid
price and the lowest closing ask price of any of the market makers
for such security as reported in the “pink sheets” by
OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP
cannot be calculated for such security on such date on any of the
foregoing bases, the VWAP of such security on such date shall be
the fair market value as mutually determined by the Company and
such Holder. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination or
other similar transaction during such period
Section
6
.
Miscellaneous
.
a)
No
Rights as Stockholder Until Exercise
. This Warrant does not
entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set
forth in Section 2(d)(i).
b)
Loss,
Theft, Destruction or Mutilation of Warrant
. The Company
covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.
c)
Saturdays,
Sundays, Holidays, etc
. If the last or appointed day for the
taking of any action or the expiration of any right required or
granted herein shall not be a Trading Day, then, such action may be
taken or such right may be exercised on the next succeeding Trading
Day.
(i)
The
Company covenants that, during the period the Warrant is
outstanding, it will reserve from its authorized and unissued
Common Stock 100% of the maximum number of shares for the issuance
of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance
of this Warrant shall constitute full authority to its officers who
are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares
upon the exercise of the purchase rights under this Warrant. The
Company will take all such reasonable action as may be necessary to
assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any
requirements of the Principal Market upon which the Common Stock
may be listed. The Company covenants that all Warrant Shares which
may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights
represented by this Warrant and payment for such Warrant Shares in
accordance herewith,
be duly authorized,
validly issued, fully paid and non-assessable and free from all
taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).
(ii)
Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations
under this Warrant.
(iii)
Before
taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction
thereof.
e)
Jurisdiction
.
All questions concerning governing law, jurisdiction, venue and the
construction, validity, enforcement and interpretation of this
Warrant shall be determined in accordance with the provisions of
the Purchase Agreement.
f)
Restrictions
.
The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, or unless exercised in
a cashless exercise when Rule 144 is available, and the Holder does
not utilize cashless exercise, will have restrictions upon resale
imposed by state and federal securities laws.
g)
Non-waiver
and Expenses
. No course of dealing or any delay or failure
to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s
rights, powers or remedies. Without limiting any other provision of
this Warrant or the Purchase Agreement, if the Company
intentionally and knowingly fails to comply with any provision of
this Warrant, which results in any material damages to the Holder,
the Company shall pay to the Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not
limited to, reasonable attorneys’ fees, including those of
appellate proceedings, incurred by the Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its
rights, powers or remedies hereunder.
h)
Notices
.
Any notice, request or other document required or permitted to be
given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Purchase
Agreement.
i)
Limitation
of Liability
. No provision hereof, in the absence of any
affirmative action by the Holder to exercise this Warrant to
purchase Warrant Shares, and no enumeration
herein of the
rights or privileges of the Holder, shall give rise to any
liability of the Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the
Company.
j)
Remedies
. The Holder, in
addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this
Warrant and hereby agrees to waive and not to assert the defense in
any action for specific performance that a remedy at law would be
adequate.
k)
Successors
and Assigns
. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted
assigns of the Company and the successors and permitted assigns of
Holder. The provisions of this Warrant are intended to be for the
benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant
Shares.
l)
Amendment
.
This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holders of
not less than a majority of the then outstanding Warrants issued
pursuant to the Purchase Agreement.
m)
Severability
.
Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be
prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the
remaining provisions of this Warrant.
n)
Headings
.
The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of
this Warrant.
********************
(Signature Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized as of the date first above
indicated.
|
MABVAX
THERAPEUTICS HOLDINGS, INC.
|
|
By:
Name:
Title:
|
NOTICE
OF EXERCISE
TO:
MABVAX THERAPEUTICS
HOLDINGS, INC.
(1)
The
undersigned hereby elects to purchase ____________ Warrant
Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the
exercise price in full, together with all applicable transfer
taxes, if any.
(2)
Payment shall take
the form of (check applicable box): [ ] in lawful money of the
United States; or
[ ] [if
permitted] the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number
of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).
(3)
Please
issue a certificate or certificates representing said Warrant
Shares in the name of the undersigned or in such other name as is
specified below:
(4)
After
giving effect to this Notice of Exercise, the undersigned will not
have exceeded the Beneficial Ownership Limitation.
The
Warrant Shares shall be delivered to the following DWAC Account
Number or by physical delivery of a certificate to:
__________________________________
__________________________________
__________________________________
[SIGNATURE OF
HOLDER]
Name of Investing
Entity:
__________________________________
Signature of Authorized Signatory of Investing
Entity
:
__________________________________
Name of Authorized
Signatory:
__________________________________
Title of Authorized
Signatory:
__________________________________
Date:
__________________________________
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute this form and supply required
information. Do not use this form to exercise the
warrant.)
MABVAX
THERAPEUTICS HOLDINGS, INC.
FOR
VALUE RECEIVED, [ _____ ] all of or
[ _____ ]
shares of the foregoing Warrant and all rights evidenced thereby
are hereby assigned to
__________________________________
whose address is
__________________________________
___________________.
__________________________________
___________________
Dated:
______________
,
_____
Holder’s
Signature:
__________________________________
Holder’s
Address:
__________________________________
__________________________________
Signature
Guaranteed:
__________________________________
NOTE:
The signature to this Assignment Form must correspond with the name
as it appears on the face of the Warrant, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a
bank or trust company. Officers of corporations and those acting in
a fiduciary or other representative capacity should file proper
evidence of authority to assign the foregoing Warrant.
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this
“
Agreement
”)
is dated as of January __, 2018 between MabVax Therapeutics
Holdings, Inc., a Delaware corporation (the
“
Company
”),
and each purchaser identified on the signature pages hereto (each,
including its successors and permitted assigns, a
“
Purchaser
”
and collectively, the “
Purchasers
”).
PREAMBLE
WHEREAS, subject to the terms and conditions set
forth in this Agreement and pursuant to Section 4(a)(2) of the
Securities Act of 1933, as amended (the “
Securities
Act
”), and Rule 506
promulgated thereunder or Regulation S promulgated under the
Securities Act, the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires
to purchase from the Company, securities of the Company as more
fully described in this Agreement (the “
Offering
”).
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company
and each Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1
Definitions
.
In addition to the terms defined elsewhere in this Agreement, for
all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:
“
Accredited
Investor
” shall have the
meaning ascribed to it in Section 3.2(c).
“
Affiliate
”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed
under Rule 405 under the Securities Act.
“
Board of
Directors
” means the
board of directors of the Company.
“
Business
Day
” means any day except
any Saturday, any Sunday, any day which is a federal legal holiday
in the United States or any day on which banking institutions in
the State of New York are authorized or required by law or other
governmental action to close.
“
Certificate of
Designation
” means the
Certificate of Designations, Preferences and Rights of the
Preferred Shares to be filed prior to the Closing by the Company
with the Secretary of State of Delaware, in the form of
Exhibit
A
attached
hereto.
“
Closing
”
means the closing of the purchase and sale of the Securities
pursuant to Section 2.1.
“
Closing
Date
” means the Trading
Day on which all of the Transaction Documents have been executed
and delivered by the applicable parties thereto, and all conditions
precedent to (i) the Purchasers’ obligations to pay the
Subscription Amount at such Closing and (ii) the Company’s
obligations to deliver the Securities to be issued and sold at such
Closing, in each case, have been satisfied or waived, but in no
event later than the third Trading Day following the date hereof in
the case of such Closing.
“
Commission
”
means the United States Securities and Exchange
Commission.
“
Common
Stock
” means the common
stock of the Company, $0.01 par value per share, and any other
class of securities into which such securities may hereafter be
reclassified or changed.
“
Company
Counsel
” means such firm
or firms as may from time to time provide legal services to the
Company.
“
Conversion
Shares
” means the shares
of the Company’s Common Stock issuable upon conversion of the
Preferred Shares.
“
Exchange
Act
” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“
FCPA
”
means the Foreign Corrupt Practices Act of 1977, as
amended.
“
GAAP
”
shall have the meaning ascribed to such term in Section
3.1(g).
“
Liens
”
means a lien, charge pledge, security interest, encumbrance, right
of first refusal, preemptive right or other
restriction.
“
Majority in
Interest
” shall have the
meaning ascribed to such term in Section 5.5.
“
Material Adverse
Effect
” shall have the
meaning assigned to such term in Section
3.1(b).
“
Maximum Rate
” shall have
the meaning ascribed to such term in Section 5.21.
“
Offering
”
shall have the meaning ascribed to such term in the
Preamble.
“
Per Unit Purchase
Price
” equals $0.75 per
Unit, subject to adjustment for reverse and forward stock splits,
stock dividends, and other similar transactions affecting the
Common Stock that occur after the date of this Agreement and prior
to Closing.
“
Person
”
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any
kind.
“
Preferred
Shares
” means the
Company’s newly designated Series M Convertible Preferred
Stock, par value $0.01 per share, which are convertible into shares
of Common Stock, with such rights and designations as set forth in
the form of Certificate of Designations.
“
Proceeding
”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or
partial proceeding, such as a deposition), whether commenced or
threatened.
“
Registration Rights
Agreement
” means the
Registration Rights Agreement, dated the date hereof, among the
Company and the Purchasers, in the form of
Exhibit C
attached hereto.
“
Registration
Statement
” means a
registration statement meeting the requirements set forth in the
Registration Rights Agreement and covering the resale of the Shares
and Warrant Shares by each Purchaser as provided for in the
Registration Rights Agreement.
“
Required
Approvals
” shall have the
meaning ascribed to such term in Section
3.1(e).
“
Rule
144
” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“
SEC
Reports
” shall
mean
all reports, schedules, forms, statements and other
documents filed by the Company under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the three (3)
months preceding the date hereof, including the exhibits thereto
and documents incorporated by reference therein, which have been
available on EDGAR not less than five (5) days before the Closing
Date
.
“
Securities
”
means the Units, Shares, Conversion Shares, the Warrants and the
Warrant Shares.
“
Securities
Act
” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
“
Securities Laws
” means
the securities laws of the United States or any state thereof and
the rules and regulations promulgated thereunder.
“
Shares
”
means the shares of Common Stock or, at the election of each
Purchaser, Preferred Shares delivered to the Purchasers, as the
case may be, pursuant to this Agreement in connection with the
Closing.
“
Short
Sales
” means all
“short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the
location and/or reservation of borrowable shares of Common
Stock).
“
Subscription
Amount
” means, as to each
Purchaser at the Closing, the aggregate amount of cash
consideration to be paid for Units purchased hereunder at the
Closing as specified below such Purchaser’s name on the
signature page of this Agreement and next to the heading
“Subscription Amount,” in United States dollars and in
immediately available funds.
“
Subsidiary
”
means any subsidiary of the Company and shall, where applicable and
with regard to future events, also include any direct or indirect
subsidiary of the Company formed or acquired after the date
hereof.
“
Termination Date
” shall
have the meaning ascribed to such term in Section 2.1.
“
Trading Day
” means a day
on which the principal Trading Market is open for trading;
provided, that in the event that the Common Stock is not listed or
quoted for trading on a Trading Market on the date in question,
then Trading Day shall mean a Business Day.
“
Trading Market
” means any
of the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the NYSE MKT,
the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange, the OTC Bulletin
Board, the OTCQB or the OTCQX (or any successors to any of the
foregoing).
“
Transaction
Documents
” means this
Agreement, the Certificate of Designations, the Registration Rights
Agreement, the Warrants, all exhibits and schedules thereto and
hereto and any other documents or agreements executed in connection
with the transactions contemplated hereunder.
“
Transfer
Agent
” means
Computershare Trust Company, N.A. Its address is 250 Royall Street,
Canton, MA 02021, and any successor transfer agent of the
Company.
“
Unit Purchase
Price
” shall have the
meaning ascribed to such term in Section 2.1.
“
VWAP
”
means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time)), (b) if the OTC Bulletin Board is not a
Trading Market, the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the OTC
Bulletin Board, (c) if the Common Stock is not then listed or
quoted for trading on the OTC Bulletin Board and if prices for the
Common Stock are then reported on the OTCQX, OTCQB or OTC Pink
Marketplace maintained by the OTC Markets Group, Inc. (or a similar
organization or agency succeeding to its functions of reporting
prices), the volume weighted average price of the Common Stock on
the first such facility (or a similar organization or agency
succeeding to its functions of reporting prices), or (d) in
all other cases, the fair market value of a share of Common Stock
as determined by an independent appraiser selected in good faith by
the Purchasers of a majority in interest of the Securities then
outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
“
Warrants
”
means, collectively, the Common Stock purchase warrants delivered
to the Purchasers at the Closing in the form of
Exhibit B
attached hereto.
“
Warrant
Shares
” means the shares
of Common Stock issuable upon exercise of the Warrants,
provided that any share of Common Stock issued upon exercise of the
Warrants shall not constitute an issued Warrant Share for purposes
of this Agreement after such share has been irrevocably sold
pursuant to an effective registration statement under the
Securities Act or pursuant to Rule 144 without further restrictions
or conditions to transfer pursuant to Rule 144
.
ARTICLE II.
PURCHASE AND SALE
2.1
Closing
.
On one or more Closing Dates, upon the terms and subject to the
conditions set forth herein, substantially concurrent with the
execution and delivery of this Agreement by the parties hereto, the
Company agrees to sell, and each of the Purchasers, severally and
not jointly, agrees to purchase the Units for an aggregate
purchase price up to a maximum of $2,750,000
(“
Purchase
Price
”), each consisting
of one share of Common Stock (or, at the election of any Purchaser
who, as a result of the ownership of the Common Stock would hold in
excess of 4.99% of the Company’s issued and outstanding
Common Stock, the equivalent amount of Preferred Shares) together
with Warrants to purchase in the aggregate shares of Common Stock
equal to seventy percent (70%) of the subscribed Shares (in the
event a Purchaser elects to receive Preferred Shares, seventy
percent (70%) of the Conversion Shares) (each such purchase and
sale being the “
Closing
”),
at the Per Unit Purchase Price. Prior to the Closing, each
Purchaser shall deliver to the Company,
inter
alia
,
such Purchaser’s Subscription Amount as set forth on the
signature page hereto executed by such Purchaser by a wire transfer
of immediately available funds, and the Company shall, on the
Closing Date, cause the Company to deliver to each
Purchaser,
inter
alia
,
a certificate representing the number of Shares and Warrants
purchased by each such Purchaser at the Closing as determined
pursuant to Section 2.2(a). The Company and each Purchaser shall
also deliver the other items set forth in Section 2.2 deliverable
at the Closing. Upon satisfaction of the covenants and conditions
set forth in Sections 2.2 and 2.3, the Closings shall occur at the
offices of Company Counsel or such other location as the parties
shall mutually agree.
Notwithstanding anything herein to the
contrary, each Closing Date shall occur on or before February 28,
2018 (such outside date, “
Termination Date
”). If
any Closing is not held on or before the Termination Date, (i) all
subscription documents executed by the Company or a Purchaser shall
be returned to the Company or such Purchaser, as applicable, and
(ii) each Subscription Amount shall be returned, without interest
or deduction to the Purchaser who delivered such Subscription
Amount. If a Closing is not held on or before the Termination Date,
the Company shall cause all subscription documents and funds to be
returned, without interest or deduction to each prospective
Purchaser.
2.2
Deliveries
.
(a) On
the Closing Date, the Company shall deliver or cause to be
delivered to the Purchasers the following:
(i)
this Agreement and the Registration Rights Agreement each duly
executed by the Company, to the Purchasers;
(ii)
certificates evidencing a number of applicable Shares equal to such
Purchaser’s Subscription Amount divided by the Unit Purchase
Price registered in the name of such Purchaser;
(iii)
a Warrant registered in the name of such Purchaser to purchase up
to a number of shares of Common Stock equal to 70% of such
Purchaser’s shares of Common Stock purchased (or, if
Preferred Shares elected, Conversion Shares) on the date hereof,
with an exercise price equal to $0.90, subject to adjustment
therein; and
(iv)
file stamped evidence from the Secretary of State of the State of
Delaware of the Certificate of Designation.
(b) On
or prior to the applicable Closing Date, each Purchaser shall
deliver or cause to be delivered to the Company the
following:
(i)
such
Purchaser’s Subscription Amount by wire transfer to the
account previously specified by the Company; and
(ii)
this
Agreement and the Registration Rights Agreement each duly executed
by the Purchaser
2.3
Closing
Conditions
.
(a) The
obligations of the Company hereunder in connection with the
Closing, unless waived by a Majority in Interest, are subject to
the following conditions being met:
(i) the
accuracy in all material respects when made and on the Closing Date
of the representations and warranties of the Purchasers contained
herein (unless as of a specific date therein in which case they
shall be accurate as of such date);
(ii) all
conditions, obligations, covenants and agreements of each Purchaser
under this Agreement required to be performed at or prior to the
Closing Date shall have been performed in all material respects;
and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b)
of this Agreement.
(b)
The
respective independent obligations of a Purchaser hereunder in
connection with the Closing, unless waived by such Purchaser, are
subject to the following conditions being met:
(i) the
accuracy in all material respects (when made and on the Closing
Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein in which case they
shall be accurate as of such date);
(ii) all
Required Approvals, obligations, covenants and agreements of the
Company under this Agreement required to be performed at or prior
to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement; and
(iv) there
shall have been no Material Adverse Effect with respect to the
Company since the date hereof and the Closing Date.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1
Representations
and Warranties of the Company
.
Except as set forth in the SEC Reports, which shall be deemed a
part hereof, the Company hereby makes the following representations
and warranties to each Purchaser as of the date of this Agreement
and as of the Closing Date:
(a)
Subsidiaries
.
All of the direct and indirect subsidiaries of the Company are set
forth in the SEC Reports. The Company owns, directly or indirectly,
a majority of the capital stock or other equity interests of each
Subsidiary free and clear of any Liens, subject to restrictions
under applicable laws, and all of the issued and outstanding shares
of capital stock of each Subsidiary are validly issued and are
fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities.
(b)
Organization
and Qualification
. The
Company and each of the Subsidiaries is an entity duly incorporated
or otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization,
with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in
violation or default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and
the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, could not reasonably be expected to result in: (i) a
material adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material adverse effect on the
results of operations, assets, business, prospects or condition
(financial or otherwise) of the Company and the Subsidiaries, taken
as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a
timely basis its obligations under any Transaction Document (any of
(i), (ii) or (iii), a “
Material Adverse
Effect
”) and to the best
of the Company’s knowledge no Proceeding has been instituted
in any such jurisdiction revoking, limiting or curtailing or
seeking to revoke, limit or curtail such power and authority or
qualification.
(c)
Authorization;
Enforcement
. The Company
has the requisite corporate power and authority to enter into and
to consummate the transactions contemplated by this Agreement and
each of the other Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder. The execution and
delivery of each of this Agreement and the other Transaction
Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of the Company and
no further action is required by the Company, the Board of
Directors or the Company’s stockholders in connection
herewith or therewith other than in connection with the Required
Approvals. This Agreement and each other Transaction Document
to which it is a party has been (or upon delivery will have been)
duly executed by the Company and, when delivered in accordance with
the terms hereof and thereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other laws of general
application affecting enforcement of creditors’ rights
generally, and (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable
remedies.
(d)
No
Conflicts
. The execution,
delivery and performance by the Company of this Agreement and the
other Transaction Documents to which it is a party, the issuance
and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not:
(i) conflict with or violate any provision of the Company’s
or any Subsidiary’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, (ii) conflict
with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) by the Company or any
Subsidiary under, result in the creation of any Lien upon any of
the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) 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, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including Securities Laws), or
by which any property or asset of the Company or a Subsidiary is
bound or affected; except in the case of each of clauses (ii) and
(iii), such as reasonably be expected to result in a Material
Adverse Effect.
(e)
Filings,
Consents and Approvals
.
T
he
Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing
or registration with, any court or other provincial or foreign or
domestic federal, state, local or other governmental authority or
other Person in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.5 of this
Agreement, (ii) the filing with the Commission pursuant to the
Registration Rights Agreement, (iii)
the notice and/or
application(s) to each applicable Trading Market for the issuance
and sale of the Securities and the listing of the Shares and
Underlying Shares (as defined below) for trading thereon in the
time and manner required thereby, all of which shall have been
effectuated prior to the Closing, (iv) the filing of the
Certificate of Designation with the Secretary of State of the State
of Delaware, (v)
the
filing of a Form D with the Commission and (vi) the consent of the
lead investor in the May 17, 2017 public offering (collectively,
the “
Required
Approvals
”).
(f)
Issuance
of the Securities
. The
Securities are restricted securities and have been duly authorized
and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid
and nonassessable, free and clear of all Liens other than
restrictions on transfer provided for under the Securities Act, the
Exchange Act, in the Transaction Documents and as provided
herein.
(g)
Form
8-K; Financial Statements
.
T
he Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company
under the Securities Act and the Exchange Act, including pursuant
to Sections 12(b), 12(g), 13(a) or 15(d) thereof, for the six (6)
months preceding the date hereof.
The
Form 8-K described in Section 4.3, upon its filing, will comply in
all material respects with the requirements of the Exchange Act,
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 in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
latest audited financial statements of the Company included in the
SEC Reports, if any, comply in all material respects with
applicable accounting requirements and the rules and regulations of
the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in
accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods
involved (“
GAAP
”),
except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP and are subject to
normal, immaterial, year-end audit adjustments, and fairly present
in all material respects the financial position of the Company and
its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(h)
Certain
Fees
. There are no brokerage or
finder’s fees or commissions that are or will be payable by
the Company or any Subsidiary to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or
other Person with respect to the transactions contemplated by the
Transaction Documents. The Purchasers shall have no obligation with
respect to any fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions
contemplated by the Transaction Documents
3.2
Representations
and Warranties of the Purchasers
. Each Purchaser, for itself and for no
other Purchaser, hereby represents and warrants as of the date
hereof and as of the Closing Date to the Company as follows (unless
as of a specific date therein):
(a)
Organization;
Authority
.
Such
Purchaser is either an individual or an entity duly incorporated or
formed, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power
and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry
out its obligations hereunder and thereunder. The execution and
delivery of the Transaction Documents and performance by such
Purchaser of the transactions contemplated by the Transaction
Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as
applicable, on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance
with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited
by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by
applicable law. If such Purchaser is an entity, the address of its
principal place of business is as set forth on the signature page
hereto, and if such Purchaser is an individual, the address of its
principal residence is as set forth on the signature page
hereto.
(b)
Understandings
or Arrangements
. Such Purchaser understands that the
Securities are “restricted securities” and have not
been registered under the Securities Act or any applicable state
securities law and is acquiring the Securities as principal for its
own account and not with a view to or for distributing or reselling
such Securities or any part thereof in violation of the Securities
Act or any applicable state securities law, has no present
intention of distributing any of such Securities in violation of
the Securities Act or any applicable state securities law and has
no direct or indirect arrangement or understandings with any other
persons to distribute or regarding the distribution of such
Securities in violation of the Securities Act or any applicable
state securities law (this representation and warranty not limiting
such Purchaser’s right to sell the Securities pursuant to a
registration statement or otherwise in compliance with applicable
federal and state securities laws). Such Purchaser is acquiring the
Securities hereunder in the ordinary course of its
business.
(c)
Purchaser
Status
.
At the
time such Purchaser was offered the Securities, it was, and as of
the date hereof it is, and on each date on which it exercises any
Warrants it will be either: (i) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3),
(a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act. Such Purchaser is not required to
be registered as a broker-dealer under Section 15 of the Exchange
Act. Such Purchaser has the authority and is duly and legally
qualified to purchase and own the Securities. Such Purchaser is
able to bear the risk of such investment for an indefinite period
and to afford a complete loss thereof. Such Purchaser has provided
the information in the Accredited Investor Questionnaire attached
hereto as
Exhibit D
(the “
Investor
Questionnaire
”). The information set forth on the
signature pages hereto and the Investor Questionnaire regarding
such Purchaser is true and complete in all respects. Except as
disclosed in the Investor Questionnaire, such Purchaser has had no
position, office or other material relationship within the past
three years with the Company or Persons (as defined below) known to
such Purchaser to be affiliates of the Company, and is not a member
of the Financial Industry Regulatory Authority or an
“associated person” (as such term is defined under the
FINRA Membership and Registration Rules Section
1011).
(d)
Experience
of Such Purchaser
.
Such Purchaser, either alone or together with its representatives,
has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. Such Purchaser
is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete
loss of such investment.
(e)
Information
on Company
. Such Purchaser has been furnished with or has
had access to the EDGAR Website of the Commission to the
Company’s filings made with the Commission during the period
from the date that is two (2) years preceding the date hereof
through the tenth business day preceding the Closing Date in which
such Purchaser purchases Securities hereunder, including but not
limited to the Risk Factor section of the Company’s filings
and reports made with the Commission. In addition,
such Purchaser may have received in writing from the Company such
other information concerning its operations, financial condition
and other matters as such Purchaser has requested, identified
thereon as OTHER WRITTEN INFORMATION (such other information is
collectively, the “
Other Written
Information
”), and considered all factors such
Purchaser deems material in deciding on the advisability of
investing in the Securities. Such Purchaser was afforded
(i) the opportunity to ask such questions as such Purchaser deemed
necessary of, and to receive answers from, representatives of the
Company concerning the merits and risks of acquiring the
Securities; (ii) the right of access to information about the
Company and its financial condition, results of operations,
business, properties, management and prospects sufficient to enable
such Purchaser to evaluate the Securities; and (iii) the
opportunity to obtain such additional information that the Company
possesses or can acquire without unreasonable effort or expense
that is necessary to make an informed investment decision with
respect to acquiring the Securities.
(f)
Certain
Transactions and Confidentiality
.
Such Purchaser understands and
agrees that the Securities have not been registered under the
Securities Act or any applicable state securities laws, by reason
of their issuance in a transaction that does not require
registration under the Securities Act, and that such Securities
must be held indefinitely unless a subsequent disposition is
registered under the Securities Act or any applicable state
securities laws or is exempt from such registration. Such Purchaser
understands and agrees that the Securities are being offered and
sold to such Purchaser in reliance on specific exemptions from the
registration requirements of United States federal and state
securities laws and regulations and that the Company is relying in
part upon the truth and accuracy of, and such Purchaser’s
compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth
herein in order to determine the availability of such exemptions
and the eligibility of such Purchaser to acquire the
Securities.
(g)
Communication
of Offer
. Such Purchaser is not purchasing the Securities as
a result of any “general solicitation” or
“general advertising,” as such terms are defined in
Regulation D, which includes, but is not limited to, any
advertisement, article, notice or other communication regarding the
Securities published in any newspaper, magazine or similar media or
on the internet or broadcast over television, radio or the internet
or presented at any seminar or any other general solicitation or
general advertisement.
(h)
No Governmental Review.
Such
Purchaser understands that no United States federal or state agency
or any other governmental or state agency has passed on or made
recommendations or endorsement of the Securities or the suitability
of the investment in the Securities nor have such authorities
passed upon or endorsed the merits of the offering of the
Securities.
(i)
No Conflicts
. The
execution, delivery and performance of this Agreement and
performance under the other Transaction Documents and the
consummation by such Purchaser of the transactions contemplated
hereby and thereby or relating hereto or thereto do not and will
not (i) result in a violation of such Purchaser’s charter
documents, bylaws or other organizational documents, if applicable,
(ii) conflict with nor constitute a default (or an event which with
notice or lapse of time or both would become a default) under any
agreement to which such Purchaser is a party, nor (iii) result in a
violation of any law, rule, or regulation, or any order, judgment
or decree of any court or governmental agency applicable to such
Purchaser or its properties (except for such conflicts, defaults
and violations as would not, individually or in the aggregate, have
a material adverse effect on such Purchaser). Such Purchaser is not
required to obtain any consent, authorization or order of, or make
any filing or registration with, any court or governmental agency
in order for it to execute, deliver or perform any of its
obligations under this Agreement or perform under the other
Transaction Documents nor to purchase the Securities in accordance
with the terms hereof, provided that for purposes of the
representation made in this sentence, such Purchaser is assuming
and relying upon the accuracy of the relevant representations and
agreements of the Company herein.
(j)
Certain Transactions and
Confidentiality
. Other than consummating the transactions
contemplated hereunder, such Purchaser has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser, executed any purchases or
sales, including Short Sales, of the securities of the Company
during the period commencing as of the time that such Purchaser
first received a written term sheet of the Offering from the
Company setting forth the material terms of the transactions
contemplated hereunder and ending immediately prior to the
execution hereof. Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such
Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s assets,
the representation set forth above shall only apply with respect to
the portion of assets managed by the portfolio manager that made
the investment decision to purchase the Securities covered by this
Agreement. Other than to other Persons party to this Agreement,
such Purchaser has maintained the confidentiality of all
disclosures made to it in connection with this transaction
(including the existence and terms of this transaction).
Notwithstanding the foregoing, for avoidance of doubt, nothing
contained herein shall constitute a representation or warranty, or
preclude any actions, with respect to the identification of the
availability of, or securing of, available shares to borrow in
order to effect Short Sales or similar transactions after the
Closing Date.
(k)
Pre-Existing
Relationships
.
The
Purchaser represents and warrants that: (i) the Purchaser has a
prior substantial pre-existing relationship with the Company, the
Purchaser is not investing in the Offering in connection with or as
a result of any registration statement filed with the SEC by the
Company and (ii) no Securities were offered or sold to it by
means of any form of general solicitation or general advertising,
and in connection therewith, the Purchaser did not (A) receive or
review any advertisement, article, notice or other communication
published in a newspaper or magazine or similar media or broadcast
over television or radio, whether closed circuit, or generally
available; or (B) attend any seminar meeting or industry investor
conference whose attendees were invited by any general solicitation
or general advertising; or (C) observe any website or filing of the
Company with the Commission in which any offering of securities by
the Company was described and as a result learned of any offering
of securities by the Company.
(l)
Non-U.S. Person
. To
the extent the Purchaser is not a U.S. Person (a “Reg S
Person”), such Purchaser hereby represents that the
representations contained in paragraphs (1) through (6) of this
Section 3.2(l) are true and correct with respect to such
Purchaser.
(1) (i)
the issuance and sale to such Reg S Person of the Securities is
intended to be exempt from the registration requirements of the
Securities Act, pursuant to the provisions of Regulation S; (ii) it
is not a “U.S. Person,” as such term is defined in
Regulation S, and is not acquiring the Securities for the account
or benefit of any U.S. Person; and (iii) the offer and sale of the
Securities has not taken place, and is not taking place, within the
United States of America or its territories or possessions. Such
Reg S Person acknowledges that the offer and sale of the Securities
has taken place, and is taking place in an “offshore
transaction,” as such term is defined in Regulation
S.
(2)
Such
Reg S Person acknowledges and agrees that, pursuant to the
provisions of Regulation S, the
Securities
cannot be sold, assigned, transferred, conveyed,
pledged or otherwise disposed of to any U.S. Person or within the
United States of America or its territories or possessions for a
period of one year from and after the Closing Date, unless
such
Securities
are registered
for sale in the United States pursuant to an effective registration
statement under the Securities Act or another exemption from such
registration is available. Such Reg S Person acknowledges that it
has not engaged in any hedging transactions with regard to
the
Securities
.
(3)
Such
Reg S Person consents to the placement of a legend on any
certificate, note or other document evidencing the Securities and
understands that the Company shall be required to refuse to
register any transfer of securities not made in accordance with
applicable U.S. securities laws.
(4)
Such
Reg S Person is not a “distributor” of securities, as
that term is defined in Regulation S, nor a dealer in
securities.
(5)
Such
Reg S Person understands that the
Securities
have not been registered under the Securities Act,
or the securities laws of any state and are subject to substantial
restrictions on resale or transfer. The
Securities
are “restricted
securities” within the meaning of Regulation S and Rule 144,
promulgated under the Securities Act.
(6)
Such
Reg S Person makes the representations, declarations and warranties
as contained in this Section 3.2(l) with the intent that the same
shall be relied upon by the Company in determining its suitability
as a purchaser of such Securities.
(m)
Survival
. The
foregoing representations and warranties shall survive the Closing
Date.
The
Company acknowledges and agrees that the representations contained
in Section 3.2 shall not modify, amend or affect such
Purchaser’s right to rely on the Company’s
representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction
Document or any other document or instrument executed and/or
delivered in connection with this Agreement or the consummation of
the transaction contemplated hereby.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1
Transfer
Restrictions
.
(a)
Securities
Laws
. The Securities may only
be disposed of in compliance with state and federal securities
laws. In connection with any transfer of Securities other
than pursuant to an effective registration statement or Rule 144,
to the Company or to an Affiliate of a Purchaser or in connection
with a pledge as contemplated in Section 4.1(c), the Company may
require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to
the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred
Securities under the Securities Act. As a condition of such
transfer, any such transferee shall agree in writing to be bound by
the terms of this Agreement, and the Registration Rights Agreement,
and shall have the rights and obligations of a Purchaser under this
Agreement and the other Transaction Documents.
(b)
Legend
.
The Purchasers
agree
to the
imprinting, so long as is required by this Section 4.1, of a legend
on any of the Securities in the following form:
For U.S. Persons:
[NEITHER]
THIS SECURITY [NOR THE SECURITIES [FOR] WHICH THIS SECURITY IS
EXERCISABLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND
APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. TO
THE EXTENT PERMITTED BY APPLICABLE SECURITIES LAWS, THIS SECURITY
[AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY] MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION
THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE
501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
For
Non-U.S. Persons:
THESE
SECURITIES [AND THE SECURITIES FOR WHICH THIS SECURITY IS
EXERCISABLE] WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO
ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”)
PURSUANT TO REGULATION S UNDER THE 1933 ACT. ACCORDINGLY, NONE OF
THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN
REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS,
AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE
UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS
DEFINED IN REGULATION S PROMULGATED UNDER THE SECURITIES ACT)
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION,
HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN ACCORDANCE WITH THE 1933 ACT.
(c)
Pledge
.
The Company acknowledges and agrees that a Purchaser may from time
to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or
all of the Securities to a financial institution that is an
“accredited investor” as defined in Rule 501(a) under
the Securities Act and who agrees to be bound by the provisions of
this Agreement and the Registration Rights Agreement and, if
required under the terms of such arrangement, such Purchaser may
transfer pledge or secure Securities to the pledgees or secured
parties. Such a pledge or transfer would not be subject to approval
of the Company and no legal opinion of legal counsel of the
pledgee, secured party or pledgor shall be required in connection
therewith. Further, no notice shall be required of such pledge. At
such Purchaser’s expense, the Company will execute and
deliver such reasonable documentation as a pledgee or secured party
of Securities may reasonably request in connection with a pledge or
transfer of the Securities including, if the Securities are subject
to registration pursuant to the Registration Rights Agreement, the
preparation and filing of any required prospectus supplement under
Rule 424(b)(3) under the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of
selling stockholders thereunder.
(d)
Company
will accept an opinion of counsel to Purchaser (reasonably
acceptable to Company and Transfer Agent) and upon acceptance by
Transfer Agent, certificates evidencing the Conversion Shares and
the Warrant Shares (collectively, the “Underlying
Shares”) shall not contain any legend (including the legend
set forth in Section 4.1(b) hereof): (i) while a registration
statement (including the Registration Statement) covering the
resale of such security is effective under the Securities Act, (ii)
following any sale of such Underlying Shares pursuant to Rule 144
(assuming cashless exercise of the Warrants, solely with respect to
any Warrant Shares), (iii) if such Underlying Shares are eligible
for sale under Rule 144 (assuming cashless exercise of the
Warrants, solely with respect to any Warrant Shares), or (iv) if
such legend is not required under applicable requirements of the
Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission), unless
counsel to the Company shall have rendered such opinion. The
Company shall cause its counsel to issue a legal opinion to the
Transfer Agent or the Purchaser promptly after the Effective Date
if required by the Transfer Agent to effect the removal of the
legend hereunder.
4.2
Conversion/Exercise
Procedures
. The form of Notice
of Exercise included in the Warrants and the form of Conversion
Notice included in the Certificate of Designation, as the case may
be, set forth the totality of the procedures required of the
Purchasers in order to exercise the Warrants or convert the
Preferred Shares, as applicable. Without limiting the preceding
sentences, no ink-original Notice of Exercise or Conversion Notice
shall be required, nor shall any medallion guarantee (or other type
of guarantee or notarization) of any Notice of Exercise or
Conversion Notice form be required in order to exercise the
Warrants or convert the Preferred Shares. No additional legal
opinion, other information or instructions shall be required of the
Purchasers to exercise their Warrants or convert their Preferred
Shares. The Company shall honor exercises of the Warrants and
conversion of the Preferred Shares and shall deliver the underlying
shares of Common Stock in accordance with the terms, conditions and
time periods set forth in the Transaction
Documents.
4.3
Securities
Laws Disclosure; Publicity
.
The Company shall, by 9:00 a.m.
(New York City time) on the third (3d) Trading Day immediately
following the Closing Date, issue a press release disclosing the
material terms of the transactions contemplated hereby, and shall
file a Current Report on Form 8-K including the Transaction
Documents as exhibits thereto within the time period required by
the Exchange Act. From and after the issuance of such press release
and Form 8-K, the Company represents to the Purchasers that it
shall have publicly disclosed all material, non-public information
delivered to any of the Purchasers by the Company or any of its
Subsidiaries, or any of their respective officers, directors,
employees or agents in connection with the transactions
contemplated by the Transaction Documents existing as of the
Closing Date. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Purchaser, or include the name of
any Purchaser in any filing with the Commission or any regulatory
agency or Trading Market unless the name of such Purchaser is
already included in the body of the Transaction Documents, without
the prior written consent of such Purchaser, except: (a) as
required by federal securities law in connection with the filing of
final Transaction Documents with the Commission, (b) pursuant to
the Registration Rights Agreement and (c) to the extent such
disclosure is required by law or Trading Market
regulations).
4.4
Use
of Proceeds
. The Company
will use the net proceeds to the Company from the sale of the
Shares and Warrants hereunder for general corporate purposes and
working capital.
4.5
Form D;
Blue Sky Filings
. The
Company agrees to timely file a Form D with respect to the sale of
the Securities by the Company under this Agreement as required
under Regulation D. The Company shall take such action as the
Company shall reasonably determine is necessary in order to obtain
an exemption for, or to qualify the Securities for, sale to the
Purchasers at the Closing under applicable securities or
“Blue Sky” laws of the states of the United States, and
shall provide evidence of such actions promptly upon request of any
Purchaser.
4.6
Certain
Transactions and Confidentiality
. Each Purchaser, severally and not jointly with
the other Purchasers, covenants that neither it, nor any Affiliate
acting on its behalf or pursuant to any understanding with it will
execute any purchases or sales, including Short Sales, of any of
the Company’s securities during the period commencing with
the execution of this Agreement and ending at such time that the
transactions contemplated by this Agreement are first publicly
disclosed or required to be disclosed, whichever occurs first, in
the Form 8-K described in Section 4.3. Each Purchaser,
severally and not jointly with the other Purchasers, covenants that
until such time as the transactions contemplated by this Agreement
are publicly disclosed or required to be publicly disclosed,
whichever occurs first, by the Company in such Form 8-K, such
Purchaser will maintain the confidentiality of the existence and
terms of this transaction and the information included in the
Transaction Documents. Notwithstanding the foregoing, and
notwithstanding anything contained in this Agreement to the
contrary, the Company expressly acknowledges and agrees that (i) no
Purchaser makes any representation, warranty or covenant hereby
that it will not engage in effecting transactions in any securities
of the Company after the time that the transactions contemplated by
this Agreement are required to be disclosed in the Form 8-K
described in Section 4.3, (ii) no Purchaser shall be restricted or
prohibited from effecting any transactions in any securities of the
Company in accordance with applicable Securities Laws from and
after the time that the transactions contemplated by this Agreement
are first disclosed or required to be disclosed, whichever occurs
first, in the Form 8-K described in Section 4.5, and (iii) no
Purchaser shall have any duty of confidentiality to the Company or
its Subsidiaries after the filing of such Form 8-K or after the
date such Form 8-K is required to have been filed, whichever occurs
first. Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such
Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s assets,
the covenant set forth above shall only apply with respect to the
portion of assets managed by the portfolio manager that made the
investment decision to purchase the Securities covered by this
Agreement.
ARTICLE V.
MISCELLANEOUS
5.1
Termination
.
This Agreement may be terminated by any Purchaser, as to such
Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other
Purchasers, by written notice given at any time to the Company,
prior to the occurrence of a Closing with respect to such
Purchaser’s Subscription Agreement. In the event of any
termination by a Purchaser under this Section 5.1, the Company
shall promptly (and in any event within two (2) Business Days of
such termination) refund such Purchaser’s entire subscription
amount.
5.2
Fees
and Expenses
. Except as
expressly set forth in the Transaction Documents, each party shall
pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery
and performance of this Agreement. Except as set forth in the
Warrants, the Company shall pay all Transfer Agent fees, stamp
taxes and other similar taxes and duties levied in connection with
the delivery of any Securities to the
Purchasers.
5.3
Entire
Agreement
. The
Transaction Documents, together with the exhibits and schedules
thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and thereof and supersede all
prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged
into such documents, exhibits and schedules.
5.4
Notices
.
All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable
air courier service with charges prepaid, or (iv) transmitted by
hand delivery, telegram, or facsimile, addressed as set forth below
or to such other address as such party shall have specified most
recently by written notice. Any notice or other communication
required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with
accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on
a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the second business
day following the date of mailing by express courier service,
prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Company, to: MabVax
Therapeutics Holdings, Inc., 11535 Sorrento Valley Road, Suite 400,
San Diego, CA 92121, Attn: Chief Financial Officer
, with a
copy by fax only to (which shall not constitute notice): Company
Counsel, and (ii) if to the Purchasers, to: the addresses and fax
numbers indicated on the signature pages hereto.
5.5
Amendments;
Waivers
.
No
provision of this Agreement may be waived, modified, supplemented
or amended except in a written instrument signed, in the case of an
amendment, by the Company and the Purchasers holding at least a
majority of the component of the affected Securities (Shares or
Warrants) purchased hereunder and which are materially adversely
affected by such waiver, modification, supplement or amendment then
outstanding (such majority being the “Majority in
Interest”) or, in the case of a waiver, by the party against
whom enforcement of any such waived provision is sought. No waiver
of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right
hereunder in any manner impair the exercise of any such right.
As employed herein,
“consent” shall mean consent of the Majority in
Interest on the date such consent is requested or
required.
5.6
Headings
.
The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.7
Successors
and Assigns
. This
Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of each Purchaser
(other than by merger). Any Purchaser may assign any or all
of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Securities, provided that such
transferee agrees in writing to be bound, with respect to the
transferred Securities, by the provisions of the Transaction
Documents that apply to the
“Purchasers.”
5.8
No
Third-Party Beneficiaries
. This Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof
be enforced by, any other Person, except as otherwise provided for
herein.
5.9
Governing
Law
. All questions
concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or
its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York. Each party hereto and each individual signing any
Transaction Document on behalf of the Company hereby irrevocably
submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for
the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it,
he or she is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper or is an
inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other
manner permitted by law. If either party shall commence an
action or proceeding to enforce any provisions of the Transaction
Documents, then, the prevailing party in such action, suit or
proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses
incurred with the investigation, preparation and prosecution of
such action or proceeding.
5.10
Survival
.
The representations and warranties contained herein shall survive
the Closing and the delivery of the Securities at the Closings for
the applicable statute of limitations.
5.11
Execution
.
This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to each other party, it being
understood that the parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a
“.pdf” format data file, such signature shall create a
valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect
as if such facsimile or “.pdf” signature page were an
original thereof.
5.12
Severability
.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their
commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or
unenforceable.
5.13
Rescission
and Withdrawal Right
.
Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) any of the other Transaction
Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does
not timely perform its related obligations within the periods
therein provided, then such Purchaser may rescind or withdraw, in
its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights; provided,
however, that in the case of a rescission of an exercise of a
Warrant, the applicable Purchaser shall be required to return any
Warrant Shares subject to any such rescinded exercise notice
concurrently with the return to such Purchaser of the aggregate
exercise price paid to the Company for such Warrant Shares and the
restoration of such Purchaser’s right to acquire such Warrant
Shares pursuant to such Purchaser’s Warrant (including,
issuance of a replacement warrant certificate evidencing such
restored right).
5.14
Replacement
of Securities
. If any
certificate or instrument evidencing any Securities is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon surrender and
cancellation thereof (in the case of mutilation), or in lieu of and
substitution therefor, a new certificate or instrument, but only
upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft, destruction
, or mutilation, and of the
ownership of such Security
. The
applicant for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs
(including customary indemnity and bonds) associated with the
issuance of such replacement Securities.
5.15
Remedies
.
In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific
performance under the Transaction Documents. The parties
agree that monetary damages may not be adequate compensation for
any loss incurred by reason of any breach of obligations contained
in the Transaction Documents and hereby agree to waive and not to
assert in any action for specific performance of any such
obligation the defense that a remedy at law would be
adequate.
5.16
Payment
Set Aside
. To the extent
that the Company makes a payment or payments to any Purchaser
pursuant to any Transaction Document or a Purchaser enforces or
exercises its rights thereunder, and such payment or payments or
the proceeds of such enforcement or exercise or any part thereof
are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the
extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.
5.17
Legal
Representation
. Each Purchaser acknowledges that it has been
represented by independent legal counsel in the preparation of the
Agreement. Each Purchaser recognizes and acknowledges that counsel
to the Company has represented other shareholders of the Company,
and may, in the future, represent others in connection with various
legal matters and each Purchaser waives any conflicts of interest
and other allegations that it has not been represented by its own
counsel
.
5.18
Saturdays,
Sundays, Holidays, etc.
If the last or appointed day for the taking of
any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken
or such right may be exercised on the next succeeding Business
Day.
5.19
Construction
.
The parties agree that each of them and/or their respective counsel
have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the
Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in
any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Common Stock that occur after the
date of this Agreement.
5.20
Usury
. To the extent it may
lawfully do so, the Company hereby agrees not to insist upon or
plead or in any manner whatsoever claim, and will resist any and
all efforts to be compelled to take the benefit or advantage of,
usury laws wherever enacted, now or at any time hereafter in force,
in connection with any claim, action or proceeding that may be
brought by any Purchaser in order to enforce any right or remedy
under any Transaction Document. Notwithstanding any provision to
the contrary contained in any Transaction Document, it is expressly
agreed and provided that the total liability of the Company under
the Transaction Documents for payments in the nature of interest
shall not exceed the maximum lawful rate authorized under
applicable law (the “
Maximum Rate
”), and,
without limiting the foregoing, in no event shall any rate of
interest or default interest, or both of them, when aggregated with
any other sums in the nature of interest that the Company may be
obligated to pay under the Transaction Documents exceed such
Maximum Rate. It is agreed that if the maximum contract rate of
interest allowed by law and applicable to the Transaction Documents
is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate
of interest allowed by law will be the Maximum Rate applicable to
the Transaction Documents from the Closing Date thereof forward,
unless such application is precluded by applicable law. If under
any circumstances whatsoever, interest in excess of the Maximum
Rate is paid by the Company to any Purchaser with respect to
indebtedness evidenced by the Transaction Documents, such excess
shall be applied by such Purchaser to the unpaid principal balance
of any such indebtedness or be refunded to the Company, the manner
of handling such excess to be at such Purchaser’s
election.
5.21
WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT
PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY
JURY.
5.22
Equitable
Adjustment
. Trading volume
amounts, price/volume amounts and similar figures in the
Transaction Documents shall be equitably adjusted (but without
duplication) to offset the effect of stock splits, similar events
and as otherwise described in this Agreement and
Warrants.
(Signature Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.
MABVAX THERAPEUTICS HOLDINGS, INC.
|
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Address for Notice:
|
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11535 Sorrento Valley Road, Suite 400
San Diego, CA 92121
|
By:
|
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|
Name:
|
|
|
|
Title:
|
|
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|
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|
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With a copy to (which shall not constitute notice):
|
|
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Harvey
J. Kesner, Esq.
Sichenzia
Ross Ference Kesner LLP
1185
Avenue of the Americas, 37
th
Floor
New
York, NY 10036
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER
SIGNATURE PAGES TO MABVAX THERAPEUTICS HOLDINGS, INC.
SECURITIES
PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.
Name of
Purchaser:
________________________________________________________________
Signature
of Authorized Signatory of Purchaser:
__________________________________________
Name of
Authorized Signatory:
_______________________________________________________
Title
of Authorized Signatory:
________________________________________________________
Address
for Delivery of Securities to Purchaser (if not same as address for
notice):
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Subscription
Amount:
US$________________
□
Shares of Common Stock at $0.75 per Unit:
___________________
OR
□
Shares of Series M Preferred Stock at $0.75 per
Unit:
___________________
PLUS
Warrants:
___________________
EIN
Number, if applicable, will be provided under separate
cover.
EXHIBITS
Exhibit
A
Form of Certificate
of Designation
Exhibit
B
Form of
Warrant
Exhibit
C
Registration Rights
Agreement
Exhibit
D
Form of Investor
Questionnaire
EXHIBIT D
ACCREDITED INVESTOR QUESTIONNAIRE
IN CONNECTION WITH INVESTMENT IN UNITS OF MABVAX THERAPEUTICS
HOLDINGS, INC.,
A DELAWARE CORPORATION
PURSUANT TO SECURITIES PURCHASE AGREEMENT DATED , 2018
To:
MabVax Therapeutics
Holdings, Inc.
11535
Sorrento Valley Road, Suite 400
San
Diego, CA 92121
Fax:
[ ]
INSTRUCTIONS
PLEASE
ANSWER ALL QUESTIONS. If the appropriate answer is
“None” or “Not Applicable”, so state.
Please print or type your answers to all questions. Attach
additional sheets if necessary to complete your answers to any
item.
Your
answers will be kept strictly confidential at all times. However,
MabVax Therapeutics Holdings, Inc. (collectively, the
“Company”) may present this Questionnaire to such
parties as it deems appropriate in order to assure itself that the
offer and sale of securities of the Company will not result in a
violation of the registration provisions of the Securities Act of
1933, as amended, or a violation of the securities laws of any
state.
1.
Please provide the
following information:
Name of additional
purchaser:
(Please
complete information in Question 5)
Date of
birth, or if other than an individual, year of organization or
incorporation:
2.
Residence address,
or if other than an individual, principal office
address:
Taxpayer
Identification
Number:
Business telephone
number:
4. Send mail
to:
Residence
______
Business
_______
5.
With respect to
tenants in common, joint tenants and tenants by the entirety,
complete only if information differs from that above:
Taxpayer
Identification
Number:
Business telephone
number:
Send Mail
to:
Residence
_______
Business
_______
6.
Please describe
your present or most recent business or occupation and indicate
such information as the nature of your employment, how long you
have been employed there, the principal business of your employer,
the principal activities under your management or supervision and
the scope (e.g. dollar volume, industry rank, etc.) of such
activities:
7.
Please state
whether you (i) are associated with or affiliated with a member of
the Financial Industry Regulatory Association, Inc.
(“FINRA”), (ii) are an owner of stock or other
securities of FINRA member (other than stock or other securities
purchased on the open market), or (iii) have made a subordinated
loan to any FINRA member:
If you
answered yes to any of (i) – (iii) above, please indicate the
applicable answer and briefly describe the facts
below:
8A.
Applicable to
Individuals ONLY. Please answer the following questions concerning
your financial condition as an “accredited investor”
(within the meaning of Rule 501 of Regulation D). If the purchaser
is more than one individual, each individual must initial an answer
where the question indicates a “yes” or
“no” response and must answer any other question fully,
indicating to which individual such answer applies. If the
purchaser is purchasing jointly with his or her spouse, one answer
may be indicated for the couple as a whole:
8.1
Does your net
worth* (or joint net worth with your spouse) exceed
$1,000,000?
8.2
Did you have an
individual income** in excess of $200,000 or joint income together
with your spouse in excess of $300,000 in each of the two most
recent years and do you reasonably expect to reach the same income
level in the current year?
8.3
Are you an
executive officer of the Company?
* For
purposes hereof, net worth shall be deemed to include ALL of your
assets, liquid or illiquid MINUS any liabilities.
** For
purposes hereof, the term “income” is not limited to
“adjusted gross income” as that term is defined for
federal income tax purposes, but rather includes certain items of
income which are deducted in computing “adjusted gross
income”. For investors who are salaried employees, the gross
salary of such investor, minus any significant expenses personally
incurred by such investor in connection with earning the salary,
plus any income from any other source including unearned income, is
a fair measure of “income” for purposes hereof. For
investors who are self-employed, “income” is generally
construed to mean total revenues received during the calendar year
minus significant expenses incurred in connection with earning such
revenues.
8.B
Applicable to
Corporations, Partnerships, Trusts, Limited Liability Companies and
other Entities ONLY:
The
purchaser is an accredited investor because the purchaser falls
within at least one of the following categories (Check all
appropriate lines):
___
(i) a bank as
defined in Section 3(a)(2) of the Act or a savings and loan
association or other institution as defined in Section 3(a)(5)(A)
of the Act whether acting in its individual or fiduciary
capacity;
___
(ii) a
broker-dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934, as amended;
___
(iii) an insurance
company as defined in Section 2(13) of the Act;
___
(iv) an investment
company registered under the Investment Company Act of 1940, as
amended (the “Investment Act”) or a business
development company as defined in Section 2(a)(48) of the
Investment Act;
___
(v) a Small
Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958, as amended;
___
(vi) a plan
established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, where such plan has
total assets in excess of $5,000,000;
___
(vii) an employee
benefit plan within the meaning of Title 1 of the Employee
Retirement Income Security Act of 1974, as amended (the
“Employee Act”), where the investment decision is made
by a plan fiduciary, as defined in Section 3(21) of the Employee
Act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or an employee
benefit plan that has total assets in excess of $5,000,000, or a
self-directed plan the investment decisions of which are made
solely by persons that are accredited investors;
___
(viii) a private
business development company, as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940, as amended;
___
(ix) an
organization described in Section 501(c)(3) of the Internal Revenue
Code, a corporation, a Massachusetts or similar business trust, or
a partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of
$5,000,000;
___
(x) a trust, with
total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is
directed by a “sophisticated” person, as described in
Rule 506(b)(2)(ii) promulgated under the Act, who has such
knowledge and experience in financial and business matters that he
or she is capable of evaluating the merits and risks of the
prospective investment;
___
(xi) an entity in
which all of the equity investors are persons or entities described
above (“accredited investors”). ALL EQUITY OWNERS MUST
COMPLETE “EXHIBIT A” ATTACHED HERETO.
9.A
Do you have
sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks
associated with investing in the Company?
ANSWER
QUESTION 9B ONLY IF THE ANSWER TO QUESTION 9A WAS
“NO.”
9.B
If the answer to
Question 9A was “NO,” do you have a financial or
investment adviser (a) that is acting in the capacity as a
purchaser representative and (b) who has sufficient knowledge and
experience in financial and business matters so as to be capable of
evaluating the merits and risks associated with investing in the
Company?
If you
have a financial or investment adviser(s), please identify each
such person and indicate his or her business address and telephone
number in the space below. (Each such person must complete, and you
must review and acknowledge, a separate Purchaser Representative
Questionnaire which will be supplied at your request).
10.
You have the right,
will be afforded an opportunity, and are encouraged to investigate
the Company and review relevant factors and documents pertaining to
the officers of the Company, and the Company and its business and
to ask questions of a qualified representative of the Company
regarding this investment and the properties, operations, and
methods of doing business of the Company.
Have you or has your purchaser
representative, if any, conducted any such investigation, sought
such documents or asked questions of a qualified representative of
the Company regarding this investment and the properties,
operations, and methods of doing business of the
Company?
If so,
have you completed your investigation and/or received satisfactory
answers to your questions?
11.
Do you understand
the nature of an investment in the Company and the risks associated
with such an investment?
12.
Do you understand
that there is no guarantee of any financial return on this
investment and that you will be exposed to the risk of losing your
entire investment?
13.
Do you understand
that this investment is not liquid?
14.
Do you have
adequate means of providing for your current needs and personal
contingencies in view of the fact that this is not a liquid
investment?
15.
Are you aware of
the Company’s business affairs and financial condition, and
have you acquired all such information about the Company as you
deem necessary and appropriate to enable you to reach an informed
and knowledgeable decision to acquire the Interests?
16.
Do you have a
“pre-existing relationship” with the Company or any of
the officers of the Company?
(For
purposes hereof, “pre-existing relationship” means any
relationship consisting of personal or business contacts of a
nature and duration such as would enable a reasonably prudent
investor to be aware of the character, business acumen, and general
business and financial circumstances of the person with whom such
relationship exists.)
If so,
please name the individual or other person with whom you have a
pre-existing relationship and describe the
relationship:
______________________________________________________________________________
______________________________________________________________________________
17.
Exceptions
to the representations and warranties made in Section 3.2 of the
Securities Purchase Agreement (if no exceptions, write
“none” – if left blank, the response will be
deemed to be “none”):
___________________________________________________
_____________________________________________________________________________
Dated:
_______________, 2018
If
purchaser is one or more individuals (all individuals must
sign):
(Type
or print name of prospective purchaser)
Signature
of prospective purchaser
Social
Security Number
(Type
or print name of additional purchaser)
Signature
of spouse, joint tenant, tenant in common or other signature, if
required
Social
Security Number
Annex A
Definition of Accredited Investor
The
securities will only be sold to investors who represent in writing
in the Securities Purchase Agreement that they are accredited
investors, as defined in Regulation D, Rule 501 under the Act which
definition is set forth below:
1.
A natural person
whose net worth, or joint net worth with spouse, at the time of
purchase exceeds $1 million (excluding home); or
2.
A natural person
whose individual gross income exceeded $200,000 or whose joint
income with that person’s spouse exceeded $300,000 in each of
the last two years, and who reasonably expects to exceed such
income level in the current year; or
3.
A trust with total
assets in excess of $5 million, not formed for the specific purpose
of acquiring the securities offered, whose purchase is directed by
a sophisticated person described in Regulation D; or
4.
A director or
executive officer of the Company; or
5.
The investor is an
entity, all of the owners of which are accredited investors;
or
6.
(a) bank as defined
in Section 3(a)(2) of the Act, or any savings and loan association
or other institution as defined in Section 3(a)(5)(A) of the Act,
(b) any broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, (c) an insurance Company as
defined in Section 2(13) of the Act, (d) an investment Company
registered under the Investment Company Act of 1940 or a business
development Company as defined in Section 2(a)(48) of such Act, (e)
a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958, (f) an employee benefit plan
established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political
subdivisions, if such plan has total assets in excess of $5
million, (g) an employee benefit plan within the meaning of Title I
of the Employee Retirement Income Securities Act of 1974, and the
employee benefit plan has assets in excess of $5 million, or the
investment decision is made by a plan fiduciary, as defined in
Section 3(21) of such act, that is either a bank, savings and loan
institution, insurance Company, or registered investment advisor,
or, if a self-directed plan, with an investment decisions made
solely by persons that are accredited investors, (h) a private
business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940, or (i) an organization
described in Section 501(c)(3) of the Internal Revenue code,
corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the
securities offered, with assets in excess of $5
million.
EXHIBIT
“A” TO ACCREDITED INVESTOR QUESTIONNAIRE
ACCREDITED
CORPORATIONS, PARTNERSHIPS, LIMITED LIABILITY COMPANIES, TRUSTS OR
OTHER ENTITIES INITIALING QUESTION 8B(xi) MUST PROVIDE THE
FOLLOWING INFORMATION.
I
hereby certify that set forth below is a complete list of all
equity owners in __________________ [NAME OF ENTITY], a
[TYPE OF ENTITY] formed pursuant to the laws of the State
of
. I also certify that
EACH
SUCH OWNER HAS INITIALED THE SPACE OPPOSITE HIS OR HER NAME
and that each such owner understands that by initialing that space
he or she is representing that he or she is an accredited
individual investor satisfying the test for accredited individual
investors indicated under “Type of Accredited
Investor.”
__________________________________________
signature of
authorized corporate officer, general partner or
trustee
Name of Equity
Owner
Type
of Accredited Investor
1
1
Indicate which
Subparagraph of 8.1 - 8.3 the equity owner satisfies.
Exhibit
10.2
REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this “
Agreement
”) is made as of
January , 2018, among MabVax Therapeutics Holdings, Inc., a
Delaware corporation (the “
Company
”) and the
investor signatory hereto (the “
Investor
”). Capitalized
terms not otherwise defined herein shall have the meaning ascribed
to them in the Purchase Agreement (as defined below).
R
E C I T A L S
WHEREAS, the
Company and the Investor are parties to a Securities Purchase
Agreement (the “
Purchase Agreement
”),
dated as of the date hereof, as such may be amended and
supplemented from time to time;
WHEREAS, the
Investor’s obligations under the Purchase Agreement are
conditioned upon certain registration rights under the Securities
Act of 1933, as amended (the “
Securities Act
”);
and
WHEREAS, the
Investor and the Company desire to provide for the rights of
registration under the Securities Act as are provided herein upon
the execution and delivery of this Agreement by the Investor and
the Company.
NOW,
THEREFORE, in consideration of the promises, covenants and
conditions set forth herein, the parties hereto hereby agree as
follows:
1.1
Definitions
. As used in this
Agreement, the following terms shall have the meanings set forth
below:
(a)
“
Commission
” means the
United States Securities and Exchange
Commission. per
share.
(b)
“
Common
Stock
” means the Company’s common stock, $0.01
par value per share.
(c)
“
Effectiveness
Date
” means the date that is the later of ninety 90
days after the Trigger Date or such date that the
Commission’s Exchange Act Section 8(a) examination (NY-9830
MabVax Therapeutics Holdings, Inc.) is deemed closed and no longer
pending.
(d)
“
Exchange
Act
” means the Securities Exchange Act of 1934, as
amended.
(e)
“
Filing
Date
” means the date that is thirty (30) days after
the Trigger Date.
(f)
“
Investor
” means any
person owning Registrable Securities who becomes party to this
Agreement by executing a counterpart signature page hereto, or
other agreement in writing to be bound by the terms hereof, which
is accepted by the Company.
(f)
The terms
“
register
,”
“registered
” and
“
registration
” refer to a
registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities
Act, and the declaration or ordering of effectiveness of such
registration statement or document.
(g)
“
Registrable Securities
”
means 100% of the Underlying Shares (as defined in the Purchase
Agreement) issued pursuant to the Purchase Agreement;
provided
,
however
, that Registrable
Securities shall not include any securities of the Company that
have previously been registered and remain subject to a currently
effective registration statement or which have been sold to the
public either pursuant to a registration statement or Rule 144, or
which have been sold in a private transaction in which the
transferor’s rights under this Section 1 are not assigned, or
which may be sold immediately without registration under the
Securities Act and without restriction or imitation pursuant to
Rule 144 and without the requirement to be in compliance with Rule
144(c)(1).
(h)
“
Rule 144
” means Rule 144
as promulgated by the Commission under the Securities Act, as such
Rule may be amended from time to time, or any similar successor
rule that may be promulgated by the Commission.
(i)
“
Rule 415
” means Rule 415
as promulgated by the Commission under the Securities Act, as such
Rule may be amended from time to time, or any similar successor
rule that may be promulgated by the Commission.
(j)
“
Trigger Date
” means the
closing of the transactions contemplated by the Purchase
Agreement.
1.2
Company
Registration
.
(a)
On or prior to the
Filing Date, the Company shall prepare and file with the Commission
a registration statement covering the Registrable Securities for an
offering to be made on a continuous basis pursuant to Rule 415. The
registration statement shall be on Form S-1 or, if the Company is
so eligible, on Form S-3 (except if the Company is not then
eligible to register for resale the Registrable Securities on Form
S-1 or Form S-3, as the case may be, in which case such
registration shall be on another appropriate form in accordance
herewith) and shall contain (unless otherwise directed by the
Investor) substantially the “
Plan of Distribution
”
attached hereto as
Annex
A
. The Company shall cause the registration statement to
become effective and remain effective as provided herein. The
Company shall use its reasonable best efforts to cause the
registration statement to be declared effective under the
Securities Act as soon as possible and, in any event, by the
Effectiveness Date. The Company shall use its reasonable best
efforts to keep the registration statement continuously effective
under the Securities Act until all Registrable Securities covered
by such registration statement have been sold, or may be sold
without the requirement to be in compliance with Rule 144(c)(1) and
otherwise without restriction or limitation pursuant to Rule 144,
as determined by the counsel to the Company (the
“
Effectiveness
Period
”).
(b)
The Company shall
pay to the Investor a fee equal to 1% of the Investor’s
investment, payable in cash, for every thirty (30) day period, up
to a maximum of 12%, (i)
following the
Filing Date that the registration statement has not been filed and
(ii) following the Effectiveness Date that the registration
statement has not been declared effective;
provided
,
however
, that the Company shall
not be obligated to pay any such liquidated damages if (i) the
Registrable Securities that would other be covered by the
registration statement may be sold without the requirement to be in
compliance with Rule 144(c)(1) and otherwise without restriction or
limitation pursuant to Rule 144 under the Securities Act or (ii)
the Company is unable to fulfill its registration obligations as a
result of rules, regulations, positions or releases issued or
actions taken by the Commission pursuant to its authority with
respect to “Rule 415”, and the Company registers at
such time the maximum number of shares of Common Stock permissible
upon consultation with the staff of the Commission.
(c)
If during the
Effectiveness Period, the number of Registrable Securities at any
time exceeds 100% of the number of shares of Common Stock then
registered in a registration statement, the Company shall file as
soon as reasonably practicable an additional registration statement
covering the resale of not less than the number of such Registrable
Securities.
(d)
The Company shall
bear and pay all expenses incurred in connection with any
registration, filing or qualification of Registrable Securities
with respect to the registrations pursuant to this Section 1.2 for
each Investor, including (without limitation) all registration,
filing and qualification fees, printer’s fees, accounting
fees and fees and disbursements of counsel for the Company, but
excluding any brokerage or underwriting fees, discounts and
commissions relating to Registrable Securities and fees and
disbursements of counsel for the Investor.
(e)
If at any time
during the Effectiveness Period there is not an effective
Registration Statement covering all of the Registrable Securities,
then the Company shall notify each Investor in writing at least
fifteen (15) days prior to the filing of any registration statement
under the Securities Act, in connection with a public offering of
shares of Common Stock (including, but not limited to, registration
statements relating to secondary offerings of securities of the
Company but excluding any registration statements (i) on Form S-4
or S-8 (or any successor or substantially similar form), or of any
employee stock option, stock purchase or compensation plan or of
securities issued or issuable pursuant to any such plan, or a
dividend reinvestment plan,
(ii) otherwise
relating to any employee, benefit plan or corporate reorganization
or other transactions covered by Rule 145 promulgated under the
Securities Act, (iii) on any registration form which does not
permit secondary sales or does not include substantially the same
information as would be required to be included in a registration
statement covering the resale of the Registrable Securities. In the
event an Investor desires to include in any such registration
statement all or any part of the Registrable Securities held by
such Investor, the Investor shall within ten (10) days after the
above-described notice from the Company, so notify the Company in
writing, including the number of such Registrable Securities such
Investor wishes to include in such registration statement. If an
Investor decides not to include all of its Registrable Securities
in any registration statement thereafter filed by the Company such
Investor shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration statement
or registration statements as may be filed by the Company with
respect to the offering of the securities, all upon the terms and
conditions set forth herein.
1.3
Obligations of the Company
.
Whenever required under this Section 1 to effect the registration
of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
(a)
Prepare and file
with the Commission a registration statement with respect to such
Registrable Securities and use its reasonable best efforts to cause
such registration statement to become effective and to keep such
registration statement effective during the Effectiveness
Period;
(b)
Prepare and file
with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection with
such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement;
(c)
Furnish to the
Investor such numbers of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable
Securities owned by them (provided that the Company would not be
required to print such prospectuses if readily available to
Investor from any electronic service, such as on the EDGAR filing
database maintained at www.sec.gov);
(d)
Use its reasonable
best efforts to register and qualify the securities covered by such
registration statement under such other securities’ or blue
sky laws of such jurisdictions as shall be reasonably requested by
the Investor; provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any
such states or jurisdictions;
(e)
In the event of any
underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering (each
Investor participating in such underwriting shall also enter into
and perform its obligations under such an agreement);
(f)
Promptly notify
each Investor holding Registrable Securities covered by such
registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act,
within one business day, (i) of the effectiveness of such
registration statement, or (ii) of the happening of any event as a
result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then
existing;
(g)
Cause all such
Registrable Securities registered pursuant hereto to be listed on
each securities exchange or nationally recognized quotation system
on which similar securities issued by the Company are then listed;
and
(h)
Provide a transfer
agent and registrar for all Registrable Securities registered
pursuant hereunder and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such
registration.
1.4
Furnish Information
. It shall
be a condition precedent to the Company’s obligations to take
any action pursuant to this Section 1 with respect to the
Registrable Securities of any selling Investor that such Investor
shall furnish to the Company such information regarding such
Investor, the Registrable Securities held by such Investor, and the
intended method of disposition of such securities in the form
attached to this Agreement as Annex B, or as otherwise reasonably
required by the Company or the managing underwriters, if any, to
effect the registration of such Investor’s Registrable
Securities.
1.5
Delay of Registration
. No
Investor shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the
result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.6
Indemnification
.
(a)
To the extent
permitted by law, the Company will indemnify and hold harmless each
Investor, any underwriter (as defined in the Securities Act) for
such Investor and each person, if any, who controls such Investor
or underwriter within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages or liabilities
(joint or several) to which any of the foregoing persons may become
subject under the Securities Act, the Exchange Act or other federal
or state securities law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively, a “
Violation
”): (i) any
untrue statement or alleged untrue statement of a material fact
contained in a registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments
or supplements thereto (collectively, the “
Filings
”), (ii) the
omission or alleged omission to state in the Filings a material
fact required to be stated therein, or necessary to make the
statements therein not misleading, or (iii) any violation or
alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any state
securities law; and the Company will pay any legal or other
expenses reasonably incurred by any person to be indemnified
pursuant to this Section 1.6(a) in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided
,
however
, that the
indemnity agreement contained in this Section 1.6(a) shall not
apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any
such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation that occurs in reliance
upon and in conformity with written information furnished expressly
for use in connection with such registration by any such Investor,
underwriter or controlling person.
(b)
To the extent
permitted by law, each Investor will indemnify and hold harmless
the Company, each of its directors, each of its officers who has
signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act or
the Exchange Act, any underwriter, any other Investor selling
securities in such registration statement and any controlling
person of any such underwriter or other Investor, against any
losses, claims, damages or liabilities (joint or several) to which
any of the foregoing persons may become subject under the
Securities Act, the Exchange Act or other federal or state
securities law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are
based
upon any Violation,
in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written
information furnished by such Investor expressly for use in
connection with such registration; and each such Investor will pay
any legal or other expenses reasonably incurred by any person to be
indemnified pursuant to this Section 1.6(b) in connection with
investigating or defending any such loss, claim, damage, liability
or action;
provided
,
however
, that the indemnity
agreement contained in this Section 1.6(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the
consent of the Investor (which consent shall not be unreasonably
withheld);
provided
,
however
, in no event shall any
indemnity under this subsection 1.6(b) exceed the net proceeds
received by such Investor upon the sale of the Registrable
Securities giving rise to such indemnification
obligation.
(c)
Promptly after
receipt by an indemnified party under this Section 1.6 of notice of
the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 1.6, deliver
to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties;
provided
,
however
, that an indemnified
party (together with all other indemnified parties that may be
represented without conflict by one counsel) shall have the right
to retain one separate counsel, with the fees and expenses to be
paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to
deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action, if
materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified
party under this Section 1.6, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than
under this Section 1.6.
(d)
If the
indemnification provided for in Sections 1.6(a) and (b) is held by
a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, claim, damage or
expense referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of
such loss, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party
on the one hand and of the indemnified party on the other in
connection with the statements or omissions or alleged statements
or omissions that resulted in such loss, liability, claim or
expense as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified
party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact
relates to information supplied by the indemnifying party or by the
indemnified party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission. In no event shall any Investor
be required to contribute an amount in excess of the net proceeds
received by such Investor upon the sale of the Registrable
Securities giving rise to such indemnification
obligation.
(e)
The obligations of
the Company and Investor under this Section 1.6 shall survive the
completion of any offering of Registrable Securities in a
registration statement under this Section 1, and
otherwise.
1.7
Reports Under Securities Exchange
Act
. With a view to making available the benefits of certain
rules and regulations of the Commission, including Rule 144, that
may at any time permit an Investor to sell securities of the
Company to the public without registration or pursuant to a
registration on Form S-1 or Form S-3, until all Registrable
Securities have been sold by the Investor, the Company agrees
to:
(a)
make and keep
public information available, as those terms are understood and
defined in Rule 144;
(b)
use reasonable best
efforts to file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities
Act and the Exchange Act; and
(c)
furnish to any
Investor, so long as the Investor owns any Registrable Securities,
forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144 the
Securities Act and the Exchange Act (at any time after it has
become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant
to Form S-1 or Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested in
availing any Investor of any rule or regulation of the Commission
that permits the selling of any such securities without
registration or pursuant to such form.
1.8
Transfer or Assignment of Registration
Rights
. The rights to cause the Company to register
Registrable Securities pursuant to this Section 1 may be
transferred or assigned, but only with all related obligations, by
an Investor to a transferee or assignee who (a) acquires at least
25,000 shares of Common Stock (or such equivalent amount of
Preferred Shares) (subject to appropriate adjustment for stock
splits, stock dividends and combinations) from such transferring
Investor, unless waived in writing by the Company, or (b) holds
Registrable Securities immediately prior to such transfer or
assignment;
provided
, that
in the case of (a), (i) prior to such transfer or assignment, the
Company is furnished with written notice stating the name and
address of such transferee or assignee and identifying the
securities with respect to which such registration rights are being
transferred or assigned, (ii) such transferee or assignee agrees in
writing to be bound by and subject to the terms and conditions of
this Agreement and (iii) such transfer or assignment shall be
effective only if immediately following such transfer or assignment
the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act.
(a)
Each certificate
representing Shares and/or Underlying Shares held by the Investor
shall be endorsed with the following legend:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY
SUCH SECURITIES.”
(b)
The legend set
forth above shall be removed, and the Company shall issue a
certificate without such legend to the transferee of the Shares
and/or Underlying Shares represented thereby, if, unless otherwise
required by state securities laws, (i) such Shares and/or
Underlying Shares have been sold under an effective registration
statement under the Securities Act, (ii) in connection with a sale,
assignment or other transfer, such holder provides the Company with
an opinion of counsel, reasonably acceptable to the Company, to the
effect that such sale, assignment or transfer is being made
pursuant to an exemption from the registration requirements of the
Securities Act, or (iii) such holder provides the Company with
reasonable assurance that the Shares and/or Underlying Shares are
being sold, assigned or transferred pursuant to Rule 144 or Rule
144A under the Securities Act.
3.1
Governing Law
. The parties
hereby agree that any dispute which may arise between them arising
out of or in connection with this Agreement shall be adjudicated
only before a federal court located in the State of New York and
they hereby submit to the exclusive jurisdiction of the federal and
state courts of the State of New York with respect to any action or
legal proceeding commenced by any party, and irrevocably waive any
objection they now or hereafter may have respecting the venue of
any such action or proceeding brought in such a court or respecting
the fact that such court is an inconvenient forum, relating to or
arising out of this Agreement or any acts or omissions relating to
the registration of the securities hereunder, and consent to the
service of process in any such action or legal proceeding by means
of registered or certified mail, return receipt requested, in care
of the address set forth below or such other address as the
undersigned shall furnish in writing to the other.
3.2
WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT
PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY
3.3
Waivers and Amendments
. This
Agreement may be terminated and any term of this Agreement may be
amended or waived (either generally or in a particular instance and
either retroactively or prospectively) with the written consent of
the Company and the Investor. Notwithstanding the foregoing,
additional parties may be added as Investors under this Agreement,
and the definition of Registrable Securities expanded, with the
written consent of the Company and the Investor. No such amendment
or waiver shall reduce the aforesaid percentage of the Registrable
Securities, the holders of which are required to consent to any
termination, amendment or waiver without the consent of the record
holders of all of the Registrable Securities. Any termination,
amendment or waiver effected in accordance with this Section 3.3
shall be binding upon each holder of Registrable Securities then
outstanding, each future holder of all such Registrable Securities
and the Company.
3.4
Successors and Assigns
. Except
as otherwise expressly provided herein, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the
parties hereto.
3.5
Entire Agreement
. This
Agreement constitutes the full and entire understanding and
agreement among the parties with regard to the subject matter
hereof, and no party shall be liable or bound to any other party in
any manner by any warranties, representations or covenants except
as specifically set forth herein.
3.6
Notices
. All notices and other
communications required or permitted under this Agreement shall be
in writing and shall be delivered personally by hand or by
overnight courier, mailed by United States first-class mail,
postage prepaid, sent by facsimile or sent by electronic mail
directed (a) if to an Investor, at such Investor’s address,
facsimile number or electronic mail address set forth in the
Company’s records, or at such other address, facsimile number
or electronic mail address as such Investor may designate by ten
(10) days’ advance written notice to the other parties hereto
or (b) if to the Company, to its address, facsimile number or
electronic mail address set forth on its signature page to this
Agreement and directed to the attention of its President, or at
such other address, facsimile number or electronic mail address as
the Company may designate by ten (10) days’ advance written
notice to the other parties hereto. All such notices and other
communications shall be effective or deemed given upon delivery, on
the date that is three (3) days following the date of mailing, upon
confirmation of facsimile transfer or upon confirmation of
electronic mail delivery.
3.7
Interpretation
. The words
“include,” “includes” and
“including” when used herein shall be deemed in each
case to be followed by the words “without limitation.”
The titles and subtitles used in this Agreement are used for
convenience only and are not considered in construing or
interpreting this Agreement.
3.8
Severability
. If one or more
provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this
Agreement, and the balance of the Agreement shall be interpreted as
if such provision were so excluded, and shall be enforceable in
accordance with its terms.
3.9
Counterparts
. This Agreement
may be executed in any number of counterparts, each of which shall
be an original, but all of which together shall constitute one
instrument.
3.10
Telecopy
Execution and Delivery
. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more
parties hereto, and an executed copy of this Agreement may be
delivered by one or more parties hereto by facsimile or similar
electronic transmission device pursuant to which the signature of
or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all
purposes. At the request of any party hereto, all parties hereto
agree to execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, as of the date, month and
year first set forth above.
MABVAX
THERAPEUTICS HOLDINGS, INC.
[COMPANY
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
IN
WITNESS WHEREOF, the undersigned Investor has executed this
Agreement as of the date, month and year that such Investor became
the owner of Registrable Securities.
“Investor”
By:
Name
Title:
Address:
[INVESTOR
COUNTERPART SIGNATURE PAGE TO REGISTRATION RIGHTS
AGREEMENT]
Annex A
Plan of Distribution
Each
selling stockholder of the common stock and any of their pledgees,
assignees and successors-in-interest may, from time to time, sell
any or all of their shares of common stock on The NASDAQ Capital
Market or any other stock exchange, market or trading facility on
which the shares are traded or in private transactions. These sales
may be at fixed or negotiated prices. A selling stockholder may use
any one or more of the following methods when selling
shares:
●
ordinary brokerage
transactions and transactions in which the broker-dealer solicits
purchasers;
●
block trades in
which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
●
purchases by a
broker-dealer as principal and resale by the broker-dealer for its
account;
●
an exchange
distribution in accordance with the rules of the applicable
exchange;
●
privately
negotiated transactions;
●
settlement of short
sales entered into after the effective date of the registration
statement of which this prospectus is a part;
●
broker-dealers may
agree with the selling stockholders to sell a specified number of
such shares at a stipulated price per share;
●
through the writing
or settlement of options or other hedging transactions, whether
through an options exchange or otherwise;
●
a combination of
any such methods of sale; or
●
any other method
permitted pursuant to applicable law.
The
selling stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended, if available, rather than under
this prospectus.
Broker-dealers
engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated, but, except as set forth in
a supplement to this prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in
compliance with FINRA Rule 2440; and in the case of a principal
transaction a markup or markdown in compliance with FINRA
IM-2440.
In
connection with the sale of the common stock or interests therein,
the selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn
engage in short sales of the common stock in the course of hedging
the positions they assume. The selling stockholders may also sell
shares of the common stock short and deliver these securities to
close out their short positions, or loan or pledge the common stock
to broker-dealers that in turn may sell these securities. The
selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or
the creation of one or more derivative securities which require the
delivery to such broker-dealer or other financial institution of
shares offered by this prospectus, which shares such broker-dealer
or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be
“underwriters” within the meaning of the Securities Act
of 1933, as amended, in connection with such sales. In such event,
any commissions received by such broker- dealers or agents and any
profit on the resale of the shares purchased by them may be deemed
to be underwriting commissions or discounts under the Securities
Act of 1933, as amended. Each selling stockholder has informed us
that it does not have any written or oral agreement or
understanding, directly or indirectly, with any person to
distribute the common stock.
We are
required to pay certain fees and expenses incurred by us incident
to the registration of the shares. We have agreed to indemnify the
selling stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act of
1933, as amended.
Because
selling stockholders may be deemed to be “underwriters”
within the meaning of the Securities Act of 1933, as amended, they
will be subject to the prospectus delivery requirements of the
Securities Act of 1933, as amended, including Rule 172 thereunder.
In addition, any securities covered by this prospectus which
qualify for sale pursuant to Rule 144 under the Securities Act of
1933, as amended may be sold under Rule 144 rather than under this
prospectus. There is no underwriter or coordinating broker acting
in connection with the proposed sale of the resale shares by the
selling stockholders.
We
agreed to keep this prospectus effective until the earlier of (i)
the date on which the shares may be resold by the selling
stockholders without registration and without the requirement to be
in compliance with Rule 144(c)(1) and otherwise without restriction
or limitation pursuant to Rule 144 or (ii) all of the shares have
been sold pursuant to this prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale
shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In
addition, in certain states, the resale shares may not be sold
unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or
qualification requirement is available and is complied
with.
Under
applicable rules and regulations under the Securities Exchange Act
of 1934, as amended, any person engaged in the distribution of the
resale shares may not simultaneously engage in market making
activities with respect to the common stock for the applicable
restricted period, as defined in Regulation M, prior to the
commencement of the distribution. In addition, the selling
stockholders will be subject to applicable provisions of the
Securities Exchange Act of
1934, as amended,
and the rules and regulations thereunder, including Regulation M,
which may limit the timing of purchases and sales of shares of the
common stock by the selling stockholders or any other person. We
will make copies of this prospectus available to the selling
stockholders and have informed them of the need to deliver a copy
of this prospectus to each purchaser at or prior to the time of the
sale (including by compliance with Rule 172 under the Securities
Act of 1933, as amended).
Annex B
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of common stock (the
“
Registrable
Securities
”) of MabVax Therapeutics Holdings, Inc., a
Delaware corporation (the “
Company
”), understands
that the Company has filed or intends to file with the Securities
and Exchange Commission (the “
Commission
”) a
registration statement (the “
Registration Statement
”)
for the registration and resale under Rule 415 of the Securities
Act of 1933, as amended (the “
Securities Act
”), of the
Registrable Securities, in accordance with the terms of the
Registration Rights Agreement (the “
Registration Rights
Agreement
”) to which this document is annexed. A copy
of the Registration Rights Agreement is available from the Company
upon request at the address set forth below. All capitalized terms
not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement.
Certain
legal consequences arise from being named as a selling
securityholder in the Registration Statement and the related
prospectus. Accordingly, holders and beneficial owners of
Registrable Securities are advised to consult their own securities
law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and
the related prospectus.
NOTICE
The
undersigned beneficial owner (the “
Selling Securityholder
”)
of Registrable Securities hereby elects to include the Registrable
Securities owned by it in the Registration Statement.
The
undersigned hereby provides the following information to the
Company and represents and warrants that such information is
accurate:
QUESTIONNAIRE
1.
Name.
(a)
Full Legal Name of
Selling Securityholder
(b)
Full Legal Name of
Registered Holder (if not the same as (a) above) through which
Registrable Securities are held:
(c)
Full Legal Name of
Natural Control Person (which means a natural person who directly
or indirectly alone or with others has power to vote or dispose of
the securities covered by this Questionnaire):
2.
Address
for Notices to Selling Securityholder:
Telephone:
|
Fax:
|
Contact
Person:
|
(a)
Are you a
broker-dealer?
(b)
If
“yes” to Section 3(a), did you receive your Registrable
Securities as compensation for investment banking services to the
Company?
Note:
If “no” to Section 3(b), the Commission’s staff
has indicated that you should be identified as an underwriter in
the Registration Statement.
(c)
Are you an
affiliate of a broker-dealer?
(d)
If you are an
affiliate of a broker-dealer, do you certify that you purchased the
Registrable Securities in the ordinary course of business, and at
the time of the purchase of the Registrable Securities to be
resold, you had no agreements or understandings, directly or
indirectly, with any person to distribute the Registrable
Securities?
Note:
If “no” to Section 3(d), the Commission’s staff
has indicated that you should be identified as an underwriter in
the Registration Statement.
4.
Beneficial
Ownership of Securities of the Company Owned by the Selling
Securityholder.
Except as set forth below in this Item 4, the undersigned is not
the beneficial or registered owner of any securities of the Company
other than the securities issuable pursuant to the Purchase
Agreement.
(a)
Type and Amount of
other securities beneficially owned by the Selling
Securityholder:
5.
Relationships
with the Company:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (owners
of 5% of more of the equity securities of the undersigned) has held
any position or office or has had any other material relationship
with the Company (or its predecessors or affiliates) during the
past three years.
State
any exceptions here:
The
undersigned agrees to promptly notify the Company of any
inaccuracies or changes in the information provided herein that may
occur subsequent to the date hereof at any time while the
Registration Statement remains effective.
By
signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to Items 1 through 5
and the inclusion of such information in the Registration Statement
and the related prospectus and any amendments or supplements
thereto. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or
amendment of the Registration Statement and the related
prospectus.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered
either in person or by its duly authorized agent.
Date:
Beneficial
Owner:
By:_
Name:
Title:
[SIGNATURE
PAGE FOR SELLING SECURITYHOLDER NOTICE AND
QUESTIONNAIRE]
Exhibit 99.1
MabVax
Therapeutics Closes $2.1 Million Private Placement
Financing
SAN DIEGO (February 6, 2018)
–
MabVax Therapeutics
Holdings, Inc.
(the “Company”)
(Nasdaq: MBVX), a clinical-stage biotechnology
company focused on the development of antibody-based products to
address unmet medical need
s in
the treatment of cancer, announced today
the closing of a
private financing for a total of $2.1 million. The Company entered
into separate purchase agreements with accredited investors
pursuant to which it agreed to sell an aggregate of $2.1 million
worth of shares of common stock, par value $0.01 per share at a
purchase price of $0.75 per share (or, at the election of any
investor who, as a result of receiving common stock would hold in
excess of 4.99% of the Company’s issued and outstanding
common stock, shares of its newly designated
0% Series M Convertible
Preferred Stock
) and a three year warrant to purchase shares
of common stock equal to 70% of such number of shares of common
stock purchased (or, if Series M Preferred Stock, 70% of the shares
of common stock issuable upon conversion of the Series M Preferred
Stock). Of the purchase agreements accepted, investors elected $1.4
of shares of Series M Preferred Stock.
The
warrants are exercisable, at any time on or after the sixth month
anniversary of the closing date, at a price of $0.90 per share,
subject to adjustment, and expire three years from the initial
exercise date, or 42 months from the initial issuance date. The
holders may, subject to certain limitations, exercise the warrants
on a cashless basis if not registered under the Securities Act of
1933, as amended, within 120 days of issuance. The Company is
prohibited from effecting an exercise of any warrant issued in the
financing to the extent that, as a result of any such exercise, the
holder would beneficially own more than 9.99% of the number of
shares of common stock outstanding immediately after giving effect
to the issuance of shares of common stock upon exercise of such
warrant.
The
gross proceeds of the private placement were $2.1 million before
transaction costs of $50,000. Neither the Series M Preferred Stock
nor the warrants will be separately listed on any securities
exchange or other trading market. No bank was used for this
transaction.
On
February 1, 2018, the Board of Directors approved a 1-for-3 reverse
stock split (the “Reverse Split”) for the purpose of
increasing the market price of the Company’s Common Stock in
order to regain compliance with the NASDAQ Capital Market’s
$1.00 minimum closing bid price continued listing requirement. The
Company’s stockholders had previously approved a reverse
split
ratio of not less than 1-for-2
and not more than 1-for-20 at any time prior to September 28, 2018,
with the exact ratio to be set at a whole number within this range
as determined by the Board of Directors.
The Company intends
to effectuate the reverse split as promptly as practicable, subject
to approval by NASDAQ. There is no guarantee when or if the
Reverse Split will be effective.
“We
are very pleased to have closed this financing at an important time
for MabVax. We are grateful to our core set of loyal stockholders
who have provided continued and invaluable support of the Company
through their investments over the last three years, and who are
committed to providing the operating capital to help the Company
reach key, potentially transformational, milestones in our research
and clinical programs,” stated
President and CEO,
David Hansen
. “Importantly, we remain on track to
announce in the first quarter of this year interim results from two
currently ongoing clinical trials, and potentially one or more
strategic transaction in the first part of this
year.”
The
Company’s two clinical programs are its phase 1 clinical
program for HuMab MVT-5873 in combination with first line
chemotherapy in the treatment of pancreatic cancer, and the phase 1
clinical program for its radioimmunotherapy product
MVT-1075.
Hansen
added, “Our clinical trial of MVT-5873 in combination with
first line chemotherapy has continued to yield encouraging results.
Therefore, we intend to allocate a portion of the funds raised to
continue patient enrollment at the current treatment level to
continue to confirm results seen to date. The funds will also
provide valuable operational runway enabling the Company to execute
on our efforts to finalize one or more partnering transactions
although no assurance can be given that any transactions currently
under discussion will close. We believe that both our clinical
programs and our partnering discussions have the potential to drive
significant value in MabVax.”
This
press release shall not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of
these securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction.
About MabVax:
MabVax Therapeutics Holdings, Inc. is a clinical-stage
biotechnology company with a fully human antibody discovery
platform focused on the rapid translation into clinical development
of products to address unmet medical needs in the treatment of
cancer. Our antibody MVT-5873, is a fully human IgG1 monoclonal
antibody (mAb) that targets sialyl Lewis A (sLea), an epitope on
CA19-9, and is currently in Phase 1 clinical trials as a
therapeutic agent for patients with pancreatic cancer and other
CA19-9 positive tumors. CA19-9 is expressed in over 90% of
pancreatic cancers and in other diseases including small cell lung
and GI cancers. CA19-9 plays an important role in tumor adhesion
and metastasis, and is a marker of an aggressive cancer phenotype.
CA19-9 serum levels are considered a valuable adjunct in the
diagnosis, prognosis and treatment monitoring of pancreatic cancer.
With our collaborators including Memorial Sloan Kettering Cancer
Center, Sarah Cannon Research Institute, Honor Health and Imaging
Endpoints, we have treated over 50 patients with either our
therapeutic antibody designated as MVT-5873 or our PET imaging
diagnostic product designated as MVT-2163 in Phase 1 clinical
studies, and demonstrated early safety and specificity for the
target. Patient dosing has commenced for our lead development
program in Phase 1 clinical study of the Company's
radioimmunotherapy product MVT-1075. Our HuMab-Tn program is our
most advanced research program and expands the potential to provide
treatment for unmet therapeutic need for the treatment of ovarian
and triple negative breast cancers. For additional information,
please visit the Company's website,
www.mabvax.com
.
Forward Looking Statements:
This
press release contains "forward-looking statements" regarding
matters that are not historical facts, including statements
relating to the Company's financing, reverse split, and clinical
trials of MVT-1075 and MVT-5873 in combination with chemotherapy.
We have no assurance that all the research and product development
pipeline will be fully developed by the Company. Because such
statements are subject to risks and uncertainties, actual results
may differ materially from those expressed or implied by such
forward-looking statements. Words such as "anticipates," "plans,"
"expects," "intends," "will," "potential," "hope" and similar
expressions are intended to identify forward-looking statements.
These forward-looking statements are based upon current
expectations of the Company and involve assumptions that may never
materialize or may prove to be incorrect. Actual results and the
timing of events could differ materially from those anticipated in
such forward-looking statements because of various risks and
uncertainties. Detailed information regarding factors that may
cause actual results to differ materially from the results
expressed or implied by statements in this press release relating
to the Company may be found in the Company's periodic filings with
the Securities and Exchange Commission, including the factors
described in the section entitled "Risk Factors" in its annual
report on Form 10-K for the fiscal year ended December 31, 2016, as
amended and supplemented from time to time and the Company's
Quarter Reports on Form 10-Q and other filings submitted by the
Company to the SEC, copies of which may be obtained from the SEC's
website at
www.sec.gov
.The
parties do not undertake any obligation to update forward-looking
statements contained in this press release.
Investor Contact:
Jenene Thomas
Jenene Thomas Communications, LLC
Phone: +1 (908) 938-1475
Email:
MBVX@jtcir.com
Media Contact
Travis
Kruse, Ph.D.
Russo
Partners LLC
Phone:
212-845-4272
Email:
travis.kruse@russopartnersllc.com
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