INVESTMENT AGREEMENT
EXHIBIT 10.2
This INVESTMENT AGREEMENT (this “Investment Agreement”) is made as of September 17, 2014 by and between CASI Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and Spectrum Pharmaceuticals Cayman, L.P., an Exempted Limited Partnership organized under the laws of the Cayman Islands (the “Investor”).
WHEREAS, the Company is offering for sale to the Investor, on the terms and conditions set forth herein, 2,176,755 shares ( the “Shares”) of common stock of the Company, par value $0.01 per share (the “Common Stock”), which represents 8.05% of the outstanding shares of common stock of the Company on the date hereof immediately prior to entering into this Investment Agreement (the “Yield Percentage”), and 6.71% of the outstanding shares of Common Stock on the date hereof immediately following the issuance of the Shares pursuant to this Investment Agreement (the “Target Percentage”) at a price per share equal to the consolidated closing bid price as reported on the Nasdaq Capital Market (or such other principal exchange upon which the Company’s Common Stock is quoted, the “Trading Market”) as of the date hereof;
WHEREAS, in consideration for such Shares, the Investor is granting to the Company a license to develop and commercialize ZEVALIN® for use in the Field in the Licensee Territory, as such license and defined term are set forth in that certain License Agreement between the Company and Investor of even date herewith (the “License”); and
WHEREAS, simultaneously herewith, the Company is entering into an Investment Agreement and License Agreement with an affiliate of the Investor, which together with the Investor are referred to herein and only for the purposes of the rights and obligations under this Investment Agreement as the “Investor Group.”
NOW, THEREFORE, in consideration of the covenants, representations and warranties herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE
1
PURCHASE AND SALE OF SHARES
1.3 Closing. The purchase and delivery of the Shares to be purchased by the Investor shall take place at the offices of Xxxxxx & Xxxxxx LLP, 000 00xx Xxxxxx XX, Xxxxxxxxxx XX 00000, at a closing (the “Closing”) on the date hereof (the “Closing Date”). At the Closing, (i) the Company will deliver or cause to be delivered to the Investor (A) the Shares evidenced by a stock certificate, (B) a legal opinion of counsel to the Company, substantially in the form of Exhibit A attached hereto, and (C) this Investment Agreement and the License, each duly executed by the Company, and (ii) the Investor will deliver or cause to be delivered to the Company this Investment Agreement and the License, each duly executed by the Investor. This Investment Agreement, the License Agreement and any other documents or agreements executed in connection with the transactions contemplated hereby or thereby shall be referred to as the “Transaction Documents.”
(a) the offering and sale of the Shares has not been reviewed or approved by the Nasdaq Stock Market or the Securities and Exchange Commission (the “SEC”) by reason of the parties’ intention that the offering be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) by virtue of the provisions of Section 4(2) of the Securities Act;
(b) the Company did not offer the Shares to the Investor by way of general solicitation or general advertising;
(c) the issuance of the Common Stock has not been qualified under any state securities laws in reliance upon exemptions therefrom;
(d) the Shares have not been registered under the Securities Act and must be held indefinitely unless they are subsequently registered under the Securities Act or such sale is permitted pursuant to an available exemption from such registration requirement; and
(e) subject to the terms of Section 3.2(b), the certificate representing the Shares shall bear a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND COMPLIANCE WITH SUCH STATE SECURITIES LAWS, (II) IN COMPLIANCE WITH RULE 144 UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR (III) UPON THE DELIVERY TO CASI PHARMACEUTICALS, INC. (THE “COMPANY”) OF AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND/ OR COMPLIANCE IS NOT REQUIRED. NOTWITHSTANDING THE FOREGOING, THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE LOAN OR FINANCING ARRANGEMENT SECURED BY THESE SECURITIES.”
ARTICLE
2
REPRESENTATIONS AND WARRANTIES
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(a) The Shares to be acquired by the Investor pursuant to this Investment Agreement are being acquired for its own account and without a view to the distribution of the Shares or any interest therein in violation of the Securities Act. Nothing contained herein shall be deemed a representation or warranty by the Investor to hold the Shares for any period of time.
(b) The Investor is an “Accredited Investor” as such term is defined in Regulation D under the Securities Act.
(c) The Investor has been provided the opportunity to ask questions concerning the terms and conditions of the offering and sale of the Shares and has been supplied all additional information requested by it.
(d) The Investor has all requisite corporate power and authority to enter into the Transaction Documents and to carry out the transactions contemplated thereby. The execution and delivery of each of the Transaction Documents and the consummation of the transactions contemplated hereby and thereby by the Investor have been duly authorized by all corporate action on the part of the Investor and no further consent or action is required by the Investor, its Board of Directors or its stockholders. Each Transaction Document has been duly executed and delivered by the Investor and, assuming the due execution and delivery by the Company, constitutes 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 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.
(e) At no time prior to the date of this Agreement has any of the Investor, or to the Investor’s knowledge, its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any (i) “short sale” (as such term is defined in Rule 200 of Regulation SHO of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock, and the Investor will not engage in short sales during the term of this Agreement.
(a) Subsidiaries. The Company has two subsidiaries, Miikana Therapeutics, Inc., a Delaware corporation and CASI Pharmaceuticals (Beijing) Co., Ltd., an enterprise with foreign investment established in the People’s Republic of China (collectively, the “Subsidiaries”). The Company has no other direct or indirect subsidiaries. The Company directly owns all of the capital stock or other equity interests of each Subsidiary free and clear of any liens, 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.
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(t) S-3 Eligibility. The Company is eligible to register the resale of the Shares on Form S-3.
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ARTICLE
3
INVESTOR RIGHTS AND COVENANTS
3.1 Future Contingent Stock Purchase Right.
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(h) Designation of Non-Convertible Preferred Stock. On or prior to the Closing Date, the Company shall designate a series of non-voting, non-convertible preferred stock (the “Non-Convertible Preferred Stock”) by filing the Certificate of Designations of Series A Preferred Stock, in the form attached hereto as Exhibit B (the “Certificate of Designation”) with the Delaware Secretary of State. Promptly following the Closing Date (and in any event within 2 business days), the Company shall deliver to the Investor a certified copy of the Certificate of Designation evidencing its proper filing with the Delaware Secretary of State. The Company agrees to reserve a sufficient number of shares of Non-Convertible Preferred Stock to allow for the issuance of the maximum number of shares of Non-Convertible Preferred Stock that could be issued upon exercise of the Contingent Purchase Right pursuant to Section 3.1(g). The Non-Convertible Preferred Stock shall remain non-convertible unless and until the Company’s stockholders approve the conversion of the Non-Convertible Preferred Stock to Common Stock in accordance with Section 3.1(i), at which time it shall automatically convert into Common Stock upon the terms set forth in the Certificate of Designation.
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(a) Investor shall not, prior to the first anniversary of the date of this Agreement, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of (other than transfers to an affiliate of Investor subject to the requirements for affiliate transfers described below), directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares. Thereafter, the Shares may only be disposed of pursuant to an effective registration statement under the Securities Act or pursuant to an available exemption from the registration requirements of the Securities Act, and in compliance with any applicable state securities laws. The Company hereby consents to and agrees to register on the books of the Company and with its transfer agent, without any requirement for a legal opinion (unless otherwise required by its transfer agent), any transfer of Shares by Investor to an affiliate of Investor, provided that the transfer does not involve a disposition for value and transferee agrees to be bound by all of the applicable provisions of the Transaction Documents, including the representations of the Investor, and certifies to the Company that it is an “accredited investor” as defined in Rule 501(a) under the Securities Act. The Company acknowledges and agrees that the Investor may from time to time pledge or grant a security interest in some or all of the Shares in connection with a bona fide loan or financing agreement with a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, the Investor may transfer pledged or secured Shares 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, but such legal opinion may be required in connection with a subsequent transfer following default by the Investor transferee of the pledge. Investor shall provide notice to the Company of such pledge or transfer. At the Investor’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Shares may reasonably request in connection with a pledge or transfer of the Shares (provided that 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 therein shall be at the Company’s expense).
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(b) Certificates evidencing the Shares shall not contain any legend (including the legend set forth in Section 1.4(e)), (i) while a registration statement (including the Resale Registration Statement) covering the resale of such Shares is effective under the Securities Act, or (ii) following any sale of such Shares pursuant to Rule 144, or (iii) if such Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Shares and without volume or manner-of-sale restrictions, 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 SEC). The Company shall instruct the Company’s transfer agent promptly after the effective date if required by the Company’s transfer agent to effect the removal of the legend hereunder. The Company agrees that following the effective date or at such time as such legend is no longer required under this Section 3.2(b), it will, no later than five trading days following the delivery by the Investor to the Company or the Company’s transfer agent of a certificate representing Shares, as the case may be, issued with a restrictive legend, deliver or cause to be delivered to the Investor a certificate representing such Shares that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section 3.2. To the extent eligible, certificates for Shares subject to legend removal hereunder, and for which the original certificate has been delivered to the transfer agent, shall be transmitted by the transfer agent of the Company to the Investor by crediting the account of the Investor’s prime broker with the Depository Trust Company System.
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3.3 Board Seat for Investor Group Nominee.
(a) The Company agrees to:
(i) immediately upon the Investor Group’s request, (i) cause its Board of Directors (the “Board”) to increase the number of directors on the Board by one (1) director and (ii) appoint a person nominated by the Investor Group (the “Investor Group Nominee”) as provided in this Section 3.3(a) to the Board, subject to the reasonable approval of the Board, which approval shall not be unreasonably withheld, conditioned or delayed;
(ii) at each meeting of stockholders for election of directors at which the position to be occupied under this Investment Agreement by an Investor Group Nominee on the Board is to be determined by stockholder election, (1) cause an Investor Group Nominee to nominated by the Board for election as a director, subject to the considerations described in clause (a)(1); (2) recommend to its stockholders the election of, and use its best efforts to cause the election to, the Board, including soliciting proxies for the election of the Investor Group Nominee to the same extent as it does, consistent with past practice, for any other Board nominee for election as a director; and (3) request each then current member of the Board to vote as a stockholder for approval of the Investor Group Nominee.
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(b) Should for any reason the Board fail to nominate the Investor Group Nominee, without limiting any other rights or remedies of Investor, the right of the Investor Group to nominate an Investor Group Nominee shall remain in effect and the Investor Group shall have the right to re-propose one or more Investor Group Nominees to which this Investment Agreement shall then apply.
(c) Any Investor Group Nominee shall not be nominated for election or appointed to the Board unless he or she acknowledges and agrees to be bound by the principles set forth in the Company’s Code of Ethics, and all other Company policies generally applicable to members of the Board as now in effect or hereafter amended.
(d) In the event of the death, disability, resignation or removal of the Investor Group Nominee, the Company shall cause the prompt election to the Board of a replacement director designated by the Investor Group, subject to the fulfillment of its fiduciary duties and the requirements set forth in this Section 3.3, to fill the resulting vacancy, and such individual shall then be deemed an Investor Group Nominee for all purposes under this Investment Agreement.
(e) So long as the Investor Group Nominee serves as a director on the Board, the Investor Group Nominee shall be subject to and abide by the Company’s policies and procedures regarding trading in the Company’s securities, including those involving blackout windows on trading, in each case, to the same extent as other directors.
(f) If at any time the Investor and its affiliates no longer beneficially own in the aggregate at least 50% of the number of shares of Common Stock originally issued to the Investor Group on the Closing Date (as adjusted for any stock splits, recapitalizations and similar transactions, its “Qualifying Ownership Interest”), the Investor will have no further rights under this Section 3.3, and, at the written request of the Board, shall use its reasonable best efforts to cause the Investor Group Nominee to resign from the Board within fifteen (15) calendar days thereafter. The Investor shall inform the Company if and when the Investor and its affiliates cease to hold its Qualifying Ownership Interest.
(g) Any Investor Group Nominee then serving as a director shall be entitled to the same compensation and indemnification in connection with his or her role as a director as the other members of the Board (including Board committees, if applicable), and upon such Investor Group Nominee’s resignation or failure to stand for re-election, such Investor Group Nominee shall be entitled to the same indemnification as any other former director of the Board.
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(a) Within 90 days after the date hereof, the Company shall prepare and file with the SEC a registration statement on Form S-3 (or such other form if, at such time, the Company is not eligible to utilize such Form S-3) covering the resale of all of the Registrable Securities from time to time on a continuous basis pursuant to Rule 415 of the Securities Act (the “Resale Registration Statement” including the base prospectus contained therein, the “Prospectus”). For purposes of this Section 4.2, “Registrable Securities” shall mean the Shares and any shares of Common Stock issuable with respect to the Shares by way of a stock dividend, stock split or other distribution, or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization; provided that such Registrable Securities shall cease to be Registrable Securities when (i) a registration statement covering such securities has been declared effective by the SEC and such securities have been disposed of pursuant to such effective registration statement, (ii) such securities have been sold under circumstances in which all of the applicable conditions of Rule 144 (or any similar provisions then in force) under the Securities Act were met, (iii) such securities are otherwise transferred and such securities may be resold without subsequent registration under the Securities Act, or (iv) such securities shall have ceased to be outstanding.
(b) Not less than ten (10) trading days prior to the initial filing of the Resale Registration Statement and not less than five (5) trading days prior to the filing of any related prospectus or any amendment or supplement thereto, the Company shall (i) furnish to the Investor copies of all such documents proposed to be filed, which documents will be subject to the review and reasonable comments of the Investor, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to any inquiries from Investor and its advisors. The Company shall permit counsel designated by the Investor to review such Resale Registration Statement, related prospectus, and any amendment or supplement thereto (as well as all requests for acceleration or effectiveness thereof) within the time periods referenced above and shall use reasonable best efforts to reflect in such documents any comments as such counsel may reasonably propose and will not request acceleration of the Resale Registration Statement without prior notice to such counsel.
(c) Upon filing the Resale Registration Statement, the Company shall use its reasonable best efforts to cause such Resale Registration Statement to be declared effective by the SEC as soon as practicable thereafter, including the filing of amendments and post-effective amendments and supplements to such Resale Registration Statement. The Company shall otherwise comply with all rules and regulations of the SEC and other governmental and regulatory authorities applicable to the registration of such Registrable Securities and the effectiveness of the Resale Registration Statement.
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(d) The Company shall maintain such Resale Registration Statement and shall comply with its other obligations under this Section 4.2 until the earlier to occur of (i) such time as the Investor Group owns no Registrable Securities and (ii) such time as the Registrable Securities may be resold by the Investor pursuant to Rule 144 of the Securities Act without the requirement for the Company to be in compliance with the current public information required under such Rule and without volume or manner-of-sale restrictions. To the extent that the Company fails to maintain an effective Resale Registration Statement for an excess of 10 consecutive or 20 aggregate trading days during any 12-month period, and the Investor suffers losses as a result of such failure, the Investor shall be entitled to seek specific performance or compensatory damages as set forth in this Agreement.
(e) The Company shall promptly notify the Investor of the effectiveness of the Resale Registration Statement and each post-effective amendment thereto. Additionally, the Company will promptly notify the Investor upon the occurrence of any of the following events in respect of the Resale Registration Statement or related prospectus: (i) receipt of any request for additional information by the SEC or any other governmental entity during the period of effectiveness of the Resale Registration Statement or amendments or supplements to the Resale Registration Statement or any related prospectus; (ii) the issuance by the SEC or any other governmental entity of any stop order suspending the effectiveness of the Resale Registration Statement or the initiation of any proceedings for that purpose and the Company will promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued; (iii) receipt of any notification with respect to the suspension of the qualification or exemption from qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose; (iv) the happening of any event that, in the reasonable determination of the Company and its counsel, makes any statement made in the Resale Registration Statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Resale Registration Statement, related prospectus or documents so that (or the Company otherwise becomes aware of any statement included in the Resale Registration Statement, related prospectus or document that is untrue in any material respect or that requires the making of any changes in the Resale Registration Statement, related prospectus or document so that), in the case of the Resale Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (v) the Company’s reasonable determination that a post-effective amendment to the Resale Registration Statement would be appropriate (in which event the Company will promptly make available to the Investor any such supplement or amendment to the Resale Registration Statement and, as applicable, the related prospectus). In the event of any suspension of Investor’s ability to sell Shares pursuant to the Resale Registration Statement as a result of the foregoing (a “Suspension”), the Company will use its best efforts to cause the use of the prospectus so suspended to be resumed as soon as reasonably practicable after notice of a Suspension to the Investor and such Suspension shall be subject to the liquidated damages provisions set forth in Section 4.2(d) above.
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(f) The Company shall furnish to the Investor with respect to the Registrable Securities registered under the Resale Registration Statement such number of copies of the prospectus (including preliminary and supplemental prospectuses and prospectus amendments) as the Investor may reasonably request, in order to facilitate the public sale or other disposition of all or any of the Registrable Securities by the Investor.
(g) The Company shall file documents required of the Company for normal blue sky clearance in states as shall be reasonably appropriate in the opinion of the Company and its legal counsel; provided, however, that the Company shall not be required to qualify to do business or consent to general service of process in any jurisdiction in which it would not otherwise be required to qualify but for this Section 4.2(g).
(h) All expenses incident to the Company’s compliance with this Section 4.2, including, without limitation, all registration and filing fees, fees and expenses of compliance with securities laws, printing expenses, filing expenses, and fees and disbursements of the Company’s counsel and independent registered public accountants will be borne by the Company.
(i) The Company shall, at the reasonable request of the Investor, prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Resale Registration Statement and any prospectus used in connection with the Resale Registration Statement as may be necessary in order to make reasonable changes to the plan of distribution set forth in such Resale Registration Statement.
(j) Notwithstanding anything herein to the contrary, the Investor’s rights under this Section 4.2 shall be automatically assignable by the Investor to any permitted transferee of all or any portion of such Registrable Securities, to the extent of the Registrable Securities so transferred, if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to such registration rights are being transferred or assigned, and (iii) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing to be bound by the provisions of Section 4.2 of this Investment Agreement. In the event that the Investor transfers all or any portion of its Registrable Securities pursuant to this Section 4.2(j), the Company shall have ten (10) business days following the receipt of such notice to file any amendments or supplements necessary to keep the Resale Registration Statement current and effective pursuant to Rule 415. Upon any such assignment, all of the transferring Investor’s rights under this Investment Agreement with respect to such transferred securities shall inure to the benefit of the transferee.
(k) Each time the Company issues or has issued an aggregate of more than 75,000 shares of Common Stock upon exercise of the Contingent Purchase Right (subject to adjustment for stock splits, recapitalizations and similar transactions) in one or more transactions, then the Company shall follow the procedures set forth in this Article IV with respect to the registration of such additional shares under the Securities Act.
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(a) Each of the parties (in such capacity, an “Indemnitor”) will indemnify and hold harmless the other and all of the other party’s directors, officers, stockholders, partners, employees and agents (collectively, the “Indemnitees”) from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Indemnitee may suffer or incur as a result of or relating to: (i) any misrepresentation, breach or inaccuracy, or any allegation by a third party that, if true, would constitute a breach or inaccuracy, of any of the representations, warranties, covenants or agreements made by the other party in this Investment Agreement or in the other Transaction Documents; or (ii) any cause of action, suit or claim brought or made against such Indemnitee and arising solely out of or solely resulting from the execution, delivery, performance or enforcement of this Investment Agreement or any of the other Transaction Documents and without causation by any other activity, obligation, condition or liability pertaining to the Indemnitee.
(b) The Company further agrees to indemnify and hold harmless the Investor and its Indemnitees, any investment banking firm acting as an underwriter for the Investor, its affiliates and representatives, and broker/dealer acting on behalf of the Investor, its affiliates and representatives, from and against any losses, claims, damages or liabilities to which such Investor, affiliates and representatives may become jointly and severally, or jointly or severally, subject (under the Securities Act or otherwise) insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon (i) any untrue or alleged untrue statement of a material fact contained in any preliminary prospectus or final prospectus related to any registration statement, or in any amendments or supplements to a registration statement or any such preliminary prospectus or final prospectus, or in a registration statement, (ii) any failure by the Company to fulfill any undertaking included in a registration statement or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any other law or any rule promulgated thereunder, in each case related to the offer or sale of the Registrable Securities, and the Company will reimburse such indemnified person for any reasonable legal expense or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim; provided, however, that the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of, or is based upon, an untrue statement made in such registration statement solely in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Investor specifically for use in preparation of such registration statement.
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(a) Each of the parties agrees not to disclose to any Third Party the terms and conditions of the Transaction Documents without the prior approval of the other party, except to advisors (including consultants, financial advisors, attorneys and accountants), potential and existing investors and acquirers on a need to know basis, in each case under circumstances that reasonably protect the confidentiality thereof, or to the extent necessary to comply with the terms of agreements with Third Parties, or to the extent required by Applicable Law, including securities laws. Notwithstanding the foregoing, the parties shall agree upon a joint press release to announce the execution of the Transaction Documents, each party may disclose to Third Parties the information contained in such press release without the need for further approval by the other. For purposes of this Section 4.5, (i) “Applicable Laws” shall mean, with respect to a party’s activities under the Transaction Documents, any and all laws, ordinances, orders, rules, rulings, directives and regulations of any kind whatsoever of any governmental or regulatory authority within the applicable jurisdiction applicable to such party’s activities, and (ii) “Third Party” shall mean any person other than the parties to this Investment Agreement or their respective affiliates.
(b) The parties acknowledge the importance of supporting each other’s efforts to publicly disclose certain information in connection with the Transaction Documents, beyond what may be strictly required by Applicable Law and the rules of a recognized stock exchange, and each party may make such disclosures from time to time with the approval of the other party, which approval shall not be unreasonably withheld, conditioned or delayed. When Investor elects to make any such public disclosure under this Section 4.5(b), it will give the Company reasonable notice to review and comment on such statement, it being understood that if the Company does not notify Investor in writing within a three (3) business day period or such shorter period if required by Applicable Law of any reasonable objections, as contemplated in this Section 4.5(b), such disclosure shall be deemed approved, and in any event the Company shall work diligently and reasonably to agree on the text of any proposed disclosure in an expeditious manner. The principles to be observed in such disclosures shall be accuracy, compliance with Applicable Law and regulatory guidance documents, reasonable sensitivity to potential negative reactions of applicable regulatory authorities and the need to keep investors and others informed regarding the requesting party’s business, including as required by the rules of a recognized stock exchange.
5.3 Governing Law. This Investment Agreement shall be governed by and construed in accordance with the local law, and not the law of conflicts, of the State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have executed this Investment Agreement as of the date first written above.
COMPANY: | |
CASI PHARMACEUTICALS, inc., | |
a Delaware corporation |
By: | /s/ Xxx X. Xxx | ||
Name: | Xxx X. Xxx, Ph.D | ||
Title: | Chief Executive Officer |
Address: | 0000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000 | |
Xxxxxxxxx, Xxxxxxxx 00000 XXX |
Attention: Xxxxxxx X. Xx | |
Facsimile No.: 000-000-0000 |
INVESTOR: | |
SPECTRUM PHARMACEUTICALS CAYMAN, L.P., | |
an Exempted Limited Partnership organized under the laws of the Cayman Islands |
By: | Spectrum Pharmaceuticals International Holdings, LLC | |
Its: | General Partner |
By: | Spectrum Pharmaceuticals, Inc. | |
Its: | Managing Member |
By: | /s/ Xxxxxx X. Xxxxxxxxx | |
Name: Xxxxxx X. Xxxxxxxxx, MD | ||
Title: Chairman and CEO |
Address: | c/o Spectrum Pharmaceuticals, Inc. | |
00000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000 | ||
Xxxxxxxxx, Xxxxxx 00000 XXX |
Attention: Legal Department | |
Facsimile No.: 000-000-0000 |
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EXHIBIT A
FORM OF LEGAL OPINION
(See Attached)
EXHIBIT B
CERTIFICATE OF DESIGNATIONS
OF
series A preferred stock
Of
CASI PHARMACEUTICALS, INC.
CASI Pharmaceuticals, Inc., a Delaware corporation (the Corporation ), in accordance with the provisions of Section 151 of the Delaware General Corporation Law, does hereby certify that the following resolution was duly adopted by the Board of Directors of the Corporation on September __, 2014:
RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of Directors of the Corporation (the Board of Directors ) by the provisions of Article FOURTH of the Certificate of Incorporation of the Corporation (as amended, the “Certificate of Incorporation”), there is hereby created, out of the 5,000,000 shares of preferred stock, par value $1.00 per share, of the Corporation authorized in Article FOURTH of the Certificate of Incorporation, a series of the preferred stock consisting of 100,000 shares, which series shall have the following powers, designations, preferences and relative, participating, optional or other rights, and the following qualifications, limitations and restrictions (in addition to any powers, designations, preferences and relative, participating, optional or other rights, and any qualifications, limitations and restrictions, set forth in the Certificate of Incorporation which are applicable to the preferred stock of the Corporation):
Section 1. Designation and Amount. There is hereby created out of the authorized and unissued shares of preferred stock of the Corporation a series of preferred stock designated as the 8% Convertible Preferred Stock, Series A (the “Series A Preferred Stock”). The authorized number of shares of Series A Preferred Stock shall be100,000 shares
Section 2. Definitions. As used herein with respect to the Series A Preferred Stock, in addition to those terms defined herein, the following terms shall have the following meanings:
(a) “Business Day” shall mean any day except Saturday, Sunday and any day on which banking institutions in the State of Maryland generally are authorized or required by law or other governmental actions to close.
(b) “Closing Sales Price” means, with respect to a particular day, the closing sale price or, if no closing sale price is reported, the last reported sale price per share of Common Stock on such day on the NASDAQ Capital Market or such other national securities exchange or automated quotation system on which the Common Stock is then listed or authorized for quotation or, if the Common Stock is not so listed or authorized for quotation, an amount determined in good faith by the Board of Directors to be the fair value of a share of the Common Stock, which amount shall be and reasonably acceptable to the holders of a majority of the outstanding shares of Series A Preferred Stock.
(c) “Conversion Factor” initially means 100, as may be adjusted from time to time in accordance with Section 14(b).
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(d) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(e) “Corporation” means CASI Pharmaceuticals, Inc., a Delaware corporation.
(f) “Dividend Payment Date” means March 31, June 30, September 30 and December 31 of each year.
(g) “Dividend Period” means the quarterly period commencing on and including the first day of the calendar quarter and ending and including the last day of the calendar quarter on which the corresponding Dividend Payment Date occurs, other than the Initial Dividend Period.
(h) “Holder” or “holder” means a holder of record of the Series A Preferred Stock.
(i) “Initial Dividend Period” means the period commencing on the first day upon which a share of Series A Preferred Stock shall be issued and ending on the last day of that calendar quarter.
(j) “Issue Date” means the date on which the first share of Series A Preferred Stock is issued by the Corporation.
(k) “Junior Stock” means the Common Stock and any other class or series of capital stock of the Corporation now or hereafter authorized, issued or outstanding that, by its terms, does not expressly provide that it ranks pari passu with or senior to the Series A Preferred Stock with respect to dividend rights and rights upon liquidation, dissolution and winding up of the Corporation.
(l) “Liquidation Parity Stock” means Parity Stock the terms of which expressly provide that it will rank pari passu with the Series A Preferred Stock as to rights upon liquidation, dissolution and winding up of the Corporation.
(m) “Liquidation Preference” means, with respect to each share of Series A Preferred Stock, one times the Series A Stated Value.
(n) “Parity Stock” means any class or series of capital stock of the Corporation hereafter authorized, issued or outstanding that, by its terms, expressly provides that it ranks pari passu with the Series A Preferred Stock with respect to dividend rights and rights upon liquidation, dissolution and winding up of the Corporation (without regard to whether dividends accrue cumulatively or non-cumulatively).
(o) “Person” means any individual, corporation, general partnership, limited partnership, limited liability partnership, joint venture, association, joint-stock corporation, trust, limited liability corporation, unincorporated organization, other entity or government or any agency or political subdivision thereof.
(p) “Proposal” means the proposal to be submitted to the Stockholders Meeting, for the purpose of seeking approval of the stockholders of the Corporation for the issuance and sale of the securities pursuant to the Investment Agreement (including the issuance of all shares of Common Stock issuable upon the full conversion of the Series A Preferred Stock).
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(q) “Record Date” means the date as determined by the Board of Directors of the Corporation for determining Holders of Series A Preferred Stock entitled to receive a dividend or to vote on any matter to which Holders are entitled to vote.
(r) “Senior Stock” means any class or series of capital stock of the Corporation hereafter authorized, issued or outstanding that, by its terms, expressly provides that it ranks senior to the Series A Preferred Stock with respect to dividend rights or rights upon liquidation, dissolution and winding up of the Corporation.
(s) “Series A Preferred Stock” shall have the meaning ascribed to such term in Section 1 hereto.
(t) “Series A Stated Value” means (i) the average of the Closing Sales Price of the Common Stock for the ten Trading Days immediately prior to the Issue Date multiplied by (ii) 100.
(u) “Stockholder Approval” means the approval of the Proposal by the stockholders of the Corporation at the Stockholders Meeting in accordance with applicable law, the Corporation’s Certificate of Incorporation and Bylaws and the applicable requirements of the NASDAQ Capital Market.
(v) “Stockholders Meeting” means a meeting of the stockholders of the Corporation, for the purpose of voting on the Proposal.
(w) “Trading Day” means any day on which the NASDAQ Stock Market (or such other successor national securities exchange or automated quotation system on which the Common Stock is then listed or authorized for quotation) is open for the transaction of business.
(x) “Transfer Agent” means the Corporation’s duly appointed transfer agent, registrar, conversion and dividend disbursing agent for the Series A Preferred Stock and transfer agent and registrar for any shares of Common Stock issued upon conversion of the Series A Preferred Stock, or any successor duly appointed by the Corporation.
Section 3. Ranking. The Series A Preferred Stock shall rank, with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Corporation, (a) senior to all Junior Stock, (b) on parity with all Parity Stock and (c) junior to all Senior Stock.
(a) Commencing with the Initial Dividend Period, each Holder of Series A Preferred Stock, in preference and priority to the holders of all other classes or series of Junior Stock, shall be entitled to receive, out of assets legally available therefor and as declared by the Board or an authorized committee thereof, with respect to each share of Series A Preferred Stock then outstanding and held by such Holder, dividends, commencing from the date of issuance of such share of Series A Preferred Stock, at the rate of eight percent (8%) per annum of the Series A Stated Value per share of Series A Preferred Stock (the “Series A Preferred Dividends”). The Series A Preferred Dividends shall be cumulative, whether or not earned or declared, and shall be paid quarterly in arrears on the last day of March, June, September and December in each year, commencing September 30, 2014.
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(b) In the event that the Corporation shall at any time pay a dividend on the Common Stock (other than a dividend payable solely in shares of Common Stock) or any other class or series of capital stock of the Corporation, the Corporation shall, at the same time, pay to each holder of Series A Preferred Stock a dividend equal to the dividend that would have been payable to such holder if the shares of Series A Preferred Stock held by such holder had been converted into Common Stock on the date of determination of holders of Common Stock entitled to receive such dividends.
Section 5. Liquidation Preference.
(a) Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), after the satisfaction in full of the debts of the Corporation, upon Liquidation, each Holder of Series A Preferred Stock shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether capital or surplus) available for distribution to shareholders of the Corporation, subject to the prior rights of holders of any Senior Stock, the Liquidation Preference for each outstanding share of Series A Preferred Stock held by such Holder, plus any accrued but unpaid dividends, in preference to the holders of, and before any payment or distribution is made on (or any setting apart for any payment or distribution), any Junior Stock, including, without limitation, on any Common Stock. After the payment to the Holders of the Liquidation Preference for each outstanding share of Series A Preferred Stock, such Holders shall not be entitled to convert any Series A Preferred Stock into Common Stock and shall not be entitled to any further participation in distributions of, and shall have no right or claim to, any of the remaining assets of the Corporation in respect of the Series A Preferred Stock.
(b) The term “Liquidation” shall also include (i) the sale, lease, transfer, exclusive license, exchange, conveyance or other disposition for cash, securities or other property of all or substantially all the assets of the Corporation or (ii) the merger, consolidation or share exchange of the Corporation into or with any other Person (other than one in which stockholders of the Corporation own a majority by voting power of the outstanding shares of the surviving or acquiring corporation). The Holders’ entitlement to their liquidation preference shall not be abrogated or diminished in the event part of the consideration is subject to escrow in connection with a Liquidation.
(c) In the event the assets of the Corporation legally available for distribution to the Holders of the Series A Preferred Stock upon any Liquidation shall be insufficient to pay in full all amounts to which such Holders are entitled pursuant to Section 5(a), no such distribution shall be made on account of any Liquidation Parity Stock upon such Liquidation unless proportionate distributable amounts shall be paid with equal priority on account of the Series A Preferred Stock, ratably, in proportion to the full distributable amounts for which Holders of the Series A Preferred Stock and holders of any Liquidation Parity Stock are entitled upon such Liquidation.
(d) All distributions made with respect to the Series A Preferred Stock in connection with any Liquidation shall be made pro rata to the Holders.
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Section 6. Automatic Conversion. Prior to the Stockholder Approval, the Series A Preferred Stock shall not be convertible. Upon the Stockholder Approval, the shares of Series A Preferred Stock then outstanding shall automatically convert, without any action on the part of the Holder thereof and without payment of any additional consideration other than the payment of par value for the shares, into such number of fully paid and nonassessable whole shares of Common Stock as is obtained by multiplying the number of shares to be converted by the applicable Conversion Factor. The Corporation shall provide prompt written notice to the Holders of Series A Preferred Stock of any conversion effected pursuant to this Section 6 but in no event more than two Business Days after the effective date of such conversion. From and after any conversion effected pursuant to this Section 6, the Holders of the Series A Preferred Stock shall have the right to receive the shares of Common Stock to which they are entitled upon surrender of the certificate or certificates representing the shares of Series A Preferred Stock so converted to the Corporation at its principal office (or such other office or agency of the Corporation as the Corporation may designate by notice in writing to the Holders of the Series A Preferred Stock) along with a check for the par value of the shares. Upon such surrender, the Corporation shall pay to the Holder in cash all accrued and unpaid Series A Dividends to the date of the automatic conversion. The Corporation covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series A Preferred Stock, as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders, not less than such aggregate number of shares of the Common Stock as shall be issuable upon the conversion of the then outstanding shares of Series A Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable. The issuance of certificates for shares of the Common Stock on conversion of the Series A 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 certificates.
Section 7. No Fractional Shares Upon Conversion. No fractional shares of Common Stock shall be issued upon conversion of the Series A Preferred Stock. Upon any conversion, all fractional share interests to which a Holder may be entitled shall be aggregated into whole shares of Common Stock with cash being paid for any fractional interest that may remain after such aggregation. The Corporation shall pay cash equal to such fraction multiplied by the average, rounded to the nearest one ten thousandth, of the Closing Sales Prices of the Company’s Common Stock for the three Trading Days immediately preceding the conversion.
(a) At any time after the date that is 18 months following the Issue Date, if not previously converted into Common Stock, the Holders of not less than a majority of the outstanding shares of Series A Preferred Stock shall have the right to elect to have, out of funds legally available therefor, all (but not less than all) of the then outstanding shares of Series A Preferred Stock redeemed by the Corporation (a “Series A Redemption”) for a price per share equal to the Liquidation Preference for such Share, plus all unpaid accrued and accumulated dividends on such share (the “Series A Redemption Price”). Any such Series A Redemption shall occur not more than sixty (60) days following receipt by the Corporation of a written election notice (the “Series A Election Notice”) from the Holders of not less than a majority of the outstanding shares of Series A Preferred Stock. Upon receipt of a Series A Election Notice, all Holders of Series A Preferred Stock shall be deemed to have elected to have all of their shares redeemed pursuant to this Section 8 and such election shall bind all Holders of Series A Preferred Stock. In exchange for the surrender to the Corporation by the respective Holders of shares of Series A Preferred Stock of their certificate or certificates representing such shares in accordance with Section 8(c) below, the aggregate Series A Redemption Price for all shares held by each Holder of shares shall be payable in cash in immediately available funds to the respective Holders of the Series A Preferred Stock on the applicable Series A Redemption Date and the Corporation shall contribute all of its assets to the payment of the Series A Redemption Price, and to no other corporate purpose, except to the extent prohibited by applicable Delaware law. If the Corporation fails to pay in full the amount hereunder on the date such amount is due in accordance with this Section, the Corporation will pay interest thereon at a rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law, accruing daily from such date until the amount, plus all such interest thereon, is paid in full.
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(b) As promptly as practicable, but in no event later than ten (10) days, following receipt of a Series A Election Notice, the Corporation shall send written notice (the “Series A Redemption Notice”) of its receipt of a Series A Election Notice to each Holder of record of Series A Preferred Stock. Each Series A Redemption Notice shall state:
(i) the number of Shares of Series A Preferred Stock held by the Holder that the Corporation shall redeem on the Series A Redemption Date specified in the Series A Redemption Notice;
(ii) the date of the closing of the redemption, which pursuant to Section 8(a) shall be no later than sixty (60) days following receipt by the Corporation of the Series A Election Notice (the applicable date, the “Series A Redemption Date”) and the Series A Redemption Price; and
(iii) the manner and place designated for surrender by the Holder to the Corporation of his, her or its certificate or certificates representing the Shares of Series A Preferred Stock to be redeemed.
(c) On or before the Series A Redemption Date, each Holder of shares of Series A Preferred Stock shall surrender the certificate or certificates representing such Shares to the Corporation, in the manner and place designated in the Series A Redemption Notice, duly assigned or endorsed for transfer to the Corporation (or accompanied by duly executed stock powers relating thereto), or, in the event the certificate or certificates are lost, stolen or missing, shall deliver an affidavit of loss, in the manner and place designated in the Series A Redemption Notice. Each surrendered certificate shall be canceled and retired and the Corporation shall thereafter make payment of the applicable Series A Redemption Price by certified check or wire transfer to the holder of record of such certificate.
(d) If on the applicable Series A Redemption Date, the Series A Redemption Price is paid (or tendered for payment) for any of the shares to be redeemed on such Series A Redemption Date, then on such date all rights of the Holder in the shares so redeemed and paid or tendered, including any rights to dividends on such shares, shall cease, and such shares shall no longer be deemed issued and outstanding.
(a) Holders of the Series A Preferred Stock shall have no voting rights except as set forth in this Section 9 and as otherwise required by Delaware law as in effect from time to time. Except as otherwise provided in this Section 9, in exercising any such voting rights, each Holder shall be entitled to one vote for each share of Series A Preferred Stock held by such Holder.
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(b) So long as any shares of Series A Preferred Stock remain outstanding, unless a greater percentage shall then be required by law, the affirmative vote or written consent of the Holders of at least two-thirds of all of the shares of Series A Preferred Stock at the time outstanding, voting separately as a class, shall be required to:
(i) amend, alter or repeal any provision of the Corporation’s Certificate of Incorporation (including this Certificate of Designations creating the Series A Preferred Stock), if the amendment, alteration or repeal of the Certificate of Incorporation would adversely affect the rights, preferences, powers or privileges of the Series A Preferred Stock;
(ii) create, authorize, issue or increase the authorized or issued amount of any class or series of any of the Corporation’s equity securities, or any warrants, options or other rights convertible or exchangeable into any class or series of any of the Corporation’s equity securities, which would constitute Senior Stock or Parity Stock or reclassify any authorized stock of the Corporation into any such stock, or create, authorize or issue any obligation or security convertible into, exchangeable or exercisable for, or evidencing the right to purchase any such stock; or
(iii) enter into or consummate any (A) reclassification of the outstanding shares of Common Stock (other than a change in par value, or from no par value to par value, or from par value to no par value), (B) consolidation, merger or share exchange of the Corporation with or into another Person or any merger, consolidation or share exchange of another Person with or into the Corporation (other than a consolidation, merger or share exchange in which the Corporation is the resulting or surviving entity and which does not result in any reclassification of the outstanding shares of Common Stock), or (C) sale, lease or other disposition to another Person of all or substantially all of the assets of the Corporation (computed on a consolidated basis), other than to one or more of the Corporation’s subsidiaries (any of the foregoing, a “Reorganization Event”); provided, however, that the Holders will have no right to vote under this Section 9 regarding the Corporation’s entry into or consummation of a Reorganization Event if, upon the consummation of the Reorganization Event, (I) the Series A Preferred Stock remains outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is not the resulting or surviving entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, and (II) such Series A Preferred Stock remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the Series A Preferred Stock, taken as a whole.
Notwithstanding the foregoing, except as otherwise required by law, the Corporation may, without the consent of any Holder, (x) authorize, increase the authorized amount of, or issue Parity Stock (provided that dividend rights are noncumulative) and Junior Stock or (y) increase the amount of authorized shares of Series A Preferred Stock or issue any additional shares of Series A Preferred Stock pursuant to the terms of those two certain Investment Agreements between the Corporation and the parties thereto dated September 17, 2014; provided, however, that with respect to clause (x), such Parity Stock or Junior Stock, as the case may be, does not rank senior or pari passu to the Series A Preferred Stock as to dividend rights or rights upon Liquidation of the Corporation.
(c) Holders of shares of Common Stock acquired upon the conversion of shares of Series A Preferred Stock shall be entitled to the same voting rights as each other holder of Common Stock except that such holders may not vote upon the Proposal in accordance with Rule 5635 of the listing rules of The NASDAQ Stock Market LLC for Stockholder Approval.
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Section 10. No Preemptive Rights. The Holders of Series A Preferred Stock shall have no preemptive rights with respect to any shares of the Corporation’s capital stock or any of its other securities convertible into or carrying rights or options to purchase any such capital stock.
Section 11. No Sinking Fund. No sinking fund shall be established for and no sinking fund provisions shall apply to the Series A Preferred Stock.
Section 12. Compliance with Applicable Law. Declaration by the Board of Directors and payment by the Corporation of dividends to holders of the Series A Preferred Stock shall be subject in all respects to any and all restrictions and limitations placed on dividends or other distributions by the Corporation under (i) laws, regulations and regulatory conditions or limitations applicable to or regarding the Corporation from time to time and (ii) other regulatory restrictions applicable to the Corporation from time to time in effect.
Section 13. Form. Shares of Series A Preferred Stock may be issued, at the option of the Corporation, in the form of physical certificates or in book entry form through the direct registration system of the Transfer Agent.
(a) Notices. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of such Holder appearing on the books of the Corporation, or if no such facsimile number or address appears on the books of the Corporation, at the principal place of business of such Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Section prior to 5:30 p.m. (Pacific time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile on a day that is not a Trading Day or later than 5:30 p.m. (Pacific time) on any Trading Day, (iii) the next Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
(b) The Liquidation Preference and Conversion Factor shall be subject to adjustment whenever there shall occur a stock split, combination, reclassification, stock dividend or distribution, exchange or other similar event. Such adjustments shall be made in such manner and at such time as the Board of Directors of the Corporation in good faith determines to be equitable in the circumstances, any such determination to be evidenced in a resolution. Upon any such equitable adjustment, the Corporation shall promptly deliver to the Transfer Agent and each Holder an Officers Certificate attaching and certifying the resolution of the Board of Directors, describing in reasonable detail the event requiring the adjustment and the method of calculation thereof and specifying the increased or decreased Liquidation Preference, Conversion Factor and/ or annual dividend rate in effect following such adjustment.
(c) All issued shares of Series A Preferred Stock shall be deemed outstanding except (i) from the date of surrender of certificates representing Series A Preferred Stock, all shares of Series A Preferred Stock converted into shares of Common Stock; and (ii) from the date of registration of transfer, all shares of Series A Preferred Stock held of record by the Corporation or any subsidiary of the Corporation.
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(d) The headings of the various sections and subsections contained herein are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
(e) Except as may otherwise be required by law, the Series A Preferred Stock shall not have any powers, designations, preferences and relative, participating, optional or other special rights, other than those specifically set forth in this Certificate of Designations and the Certificate of Incorporation, as amended, of the Corporation.
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