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Delaware
|
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3841
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47-1214177
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(State or other jurisdiction of
incorporation or organization) |
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(Primary Standard Industrial Classification
Code Number) |
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(I.R.S. Employer Identification Number)
|
|
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420 Lexington Avenue, Suite 300
New York, New York 10170 (212) 401-1951 (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices) |
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Lishan Aklog,
Chairman and Chief Executive Officer PAVmed Inc. 420 Lexington Avenue, Suite 300 New York, New York 10170 (212) 401-1951 (Name, address, including zip code, and telephone number, including area code, of agent for service) |
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Copies to:
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David Alan Miller, Esq.
Jeffrey M. Gallant, Esq. Graubard Miller 405 Lexington Avenue New York, New York 10174 (212) 818-8800 (212) 818-8881 – Facsimile |
| |
Mark J. Wishner, Esq.
Jason T. Simon, Esq. Greenberg Traurig, LLP 1750 Tysons Boulevard McLean, VA 22102 (703) 749-1300 (703) 749-1301 – Facsimile |
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☐
(Do not check if a smaller reporting company) |
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Smaller reporting company ☒
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Title of Each Class of Securities to be Registered
|
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Proposed
Maximum Aggregate Offering Price(1) |
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Amount of
Registration Fee |
| ||||||
Units, each consisting of one share of common stock, par value $.001 per share, and one warrant(2)
|
| | | $ | 23,000,000 | | | | | $ | 2,672.60 | | |
Common stock included in the units
|
| | | | — | | | | | | — | | |
Warrants included in the units
|
| | | | — | | | | | | — | | |
Common stock, issuable upon exercise of all warrants issued or issuable in public offering(3)
|
| | | | — | | | | | | — | | |
Total
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| | | $ | 23,000,000 | | | | | $ | 2,672.60 | | |
| | |
Per Unit
|
| |
Total
|
| ||||||
Public offering price
|
| | | $ | ___ | | | | | $ | ___ | | |
Underwriting discounts and commissions(1)
|
| | | $ | ___ | | | | | $ | ___ | | |
Proceeds, before expenses, to us
|
| | | $ | ___ | | | | | $ | ___ | | |
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Page
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| | | | 34 | | | |
| | | | 35 | | | |
| | | | 38 | | | |
| | | | 56 | | | |
| | | | 71 | | | |
| | | | 73 | | | |
| | | | 75 | | | |
| | | | 78 | | | |
| | | | 79 | | | |
| | | | 85 | | | |
| | | | 85 | | | |
| | | | 85 | | |
Project
|
| |
Device
|
| |
Features
|
|
PortIO | | | Long-term implantable vascular access device | | |
•
No central venous access
•
No indwelling intravascular component
•
No radiographic confirmation required
|
|
Caldus | | | Disposable tissue ablation devices, including renal denervation for hypertension | | |
•
Completely disposable
•
No console or other capital equipment.
•
Direct thermal ablation using heated fluid
|
|
CarpX | | | Percutaneous device to treat carpal tunnel syndrome | | |
•
Completely percutaneous
•
Office-based procedure
|
|
NextCath | | | Self-anchoring short-term catheters | | |
•
Anchoring integral to catheter design
•
No suturing, elaborate dressings or costly catheter securement devices
|
|
NextFlo | | | Highly-accurate disposable infusion pumps | | |
•
Variable resistor design
•
Applicable to broader range of drugs
|
|
| | |
For the Period
June 26, 2014 (inception) through December 31, 2014 |
| |
For the Three
Months Ended March 31, 2015 |
| ||||||
Operating Data: | | | | | | | | | |||||
Net sales
|
| | | | — | | | | | | — | | |
Net loss
|
| | | $ | (274,384) | | | | | $ | (146,337) | | |
Basic and diluted net loss per share
|
| | | | (0.09) | | | | | | (0.04) | | |
Weighted average number of shares outstanding
|
| | | | 3,092,027 | | | | | | 3,895,000 | | |
| | |
December 31, 2014
|
| |
March 31, 2015
|
| |||||||||
| | |
Actual
|
| |
Actual
|
| |
As Adjusted
|
| ||||||
Balance Sheet Data: | | | | | | | | | | |||||||
Cash
|
| | | $ | 839,077 | | | | | $ | 729,203 | | | | ||
Working capital
|
| | | $ | 794,828 | | | | | $ | 748,491 | | | | ||
Total assets
|
| | | $ | 842,077 | | | | | $ | 790,781 | | | | ||
Total liabilities
|
| | | $ | 47,249 | | | | | $ | 42,290 | | | | ||
Total stockholders’ equity
|
| | | $ | 794,828 | | | | | $ | 748,491 | | | |
|
Public offering price
|
| | | | | | | | | $ | | | |||
|
Net tangible book value before this offering
|
| | | $ | | | | | | | | | |||
|
Decrease attributable to new investors
|
| | | $ | | | | | | | | | | ||
|
Pro forma net tangible book value after this offering
|
| | | | | | | | | $ | | | |||
|
Dilution to new investors
|
| | | | | | | | | $ | | | | ||
|
| | |
Shares Purchased
|
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Total Consideration
|
| |
Average Price
Per Share |
|||||||||||||||||||||||||
| | |
Number
|
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Percentage
|
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Amount
|
| |
Percentage
|
| |||||||||||||||||||||
Initial stockholders
|
| | | | 3,895,000 | | | | | | % | | | | | $ | 923,212 | | | | | | % | | | | | $ | 0.24 | |||||
New investors
|
| | | | | | | | | | % | | | | | | | | | | | | % | | | | | | ||||||
| | | | | | | | | | | 100.0% | | | | | | | | | | | | 100.0% | | | | | | | |||||
|
| | |
December 31, 2014
|
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March 31, 2015
|
| |||||||||||
| | |
Actual
|
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Actual
|
| |
As
Adjusted |
| ||||||||
Stockholders’ equity: | | | | | | | | | | |||||||||
Preferred stock, $.001 par value, 20,000,000 shares authorized; none issued or outstanding
|
| | | | — | | | | | | — | | | |
|
| ||
Common stock, $.001 par value, 50,000,000 shares authorized; 3,895,000 shares issued and outstanding; [__] shares issued and outstanding, as adjusted
|
| | | $ | 3,895 | | | | | $ | 3,895 | | | | | | ||
Additional paid-in capital
|
| | | $ | 1,065,317 | | | | | $ | 1,165,317 | | | | | | ||
Accumulated deficit
|
| | | $ | (274,384) | | | | | $ | (420,721) | | | | | | ||
Total stockholder’s equity
|
| | | $ | 794,828 | | | | | $ | 748,491 | | | | | | ||
Total capitalization
|
| | | $ | 794,828 | | | | | $ | 748,491 | | | | | | ||
|
Team Member
|
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Career Highlights
|
|
Lishan Aklog, M.D. Chairman and Chief Executive Officer |
| |
•
Co-founding Partner, Pavilion Holdings Group and Pavilion Medical Innovations
•
Former Chairman and Chief Technology Officer, Vortex Medical
•
Former Associate Professor, Chief of Cardiovascular Surgery and Cardiovascular Center Chair, St. Joseph’s Hospital and Medical Center, Phoenix, Arizona
•
Former Assistant Professor of Cardiothoracic Surgery and Associate Chief of Cardiac Surgery, Mount Sinai Medical Center, New York
•
Former Assistant Professor of Surgery and Attending Cardiac Surgeon, Harvard Medical School and Brigham and Women’s Hospital
|
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Michael J. Glennon Vice Chairman |
| |
•
Co-founding Partner, Pavilion Holdings Group and Pavilion Medical Innovations
•
Chairman and Chief Executive Officer, Saphena Medical and Cruzar Medsystems
•
Former Chief Executive Officer, Vortex Medical
•
Former Senior Vice President, Accellent, Inc.
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Brian J. deGuzman, M.D. Chief Medical Officer |
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•
Co-founding Partner, Pavilion Holdings Group and Pavilion Medical Innovations
•
Chief Executive Officer, Kaleidoscope Medical
•
Former Chief Medical Officer, Vortex Medical
•
Former Assistant Professor and Associate Chief of Cardiovascular Surgery, St. Joseph’s Hospital and Medical Center, Phoenix, Arizona
•
Former Assistant Professor of Surgery and Attending Cardiac Surgeon, Tufts University School of Medicine and Lahey Clinic
|
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James L. Cox, M.D. Director |
| |
•
Professor of Surgery Emeritus, Washington University School of Medicine
•
Creator of the Cox-Maze procedure for atrial fibrillation
•
Chairman, The World Heart Foundation
•
Former President, American Association of Thoracic Surgery
•
Instrumental in founding six medical device companies
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Ronald M. Sparks Director |
| |
•
Former Healthcare Industry Executive, Avista Capital Partners
•
Former Chairman and CEO, Navilyst, Inc.
•
Former President and CEO, Accellent
•
Former Division President, Smith & Nephew
•
Led the commercialization of over 50 medical device products
|
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Team Member
|
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Career Highlights
|
|
Albert Chin, M.D. Medical Advisory Board |
| |
•
Co-founding Partner and Chief Innovation Officer, Pavilion Medical Innovations
•
Former Vice President of Research and Chief Innovation Officer, Maquet Cardiovascular/ Guidant Cardiac Surgery
•
Inventor on 184 issued patents and of 12 commercialized products
|
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Marc Gerdisch, M.D. Medical Advisory Board |
| |
•
Assistant Professor, Loyola University Medical Center
•
Chief of Cardiovascular and Thoracic Surgery, Franciscan St. Francis Health Heart Center, Indianapolis
|
|
Timothy Murphy, M.D. Medical Advisory Board |
| |
•
Professor of Diagnostic Imaging and Director of the Vascular Diseases Research Center, Warren Alpert Medical School of Brown University
•
Former President, Society of Interventional Radiology
•
Co-founder of four medical device companies
|
|
Todd Rosengart, M.D. Medical Advisory Board |
| |
•
Professor and Chairman, Debakey Department of Surgery, Baylor Medical College
•
Professor of Heart and Vascular Disease and DeBakey-Bard Chair of Surgery, Texas Heart Institute
•
Co-founder of five medical device and healthcare IT companies
|
|
Phillip Stieg, M.D. Medical Advisory Board |
| |
•
Professor and Chairman of Neurological Surgery, Weil Cornell Medical College
•
Neurosurgeon-in-Chief and Chairman of Neurological Surgery, New York-Presbyterian Hospital
•
Former President of the Society of University Neurosurgeons
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Project
|
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Inventors
|
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Title
|
| |
Number
|
| |
Date
|
|
PortIO | | |
Aklog and deGuzman
|
| | “Long-term Intraosseous Infusion Ports” | | | Application# 62/079.266 |
| | Filed 13-Nov-2014 |
|
Caldus | | |
Aklog and deGuzman
|
| | “Continuous Flow Balloon Catheter Systems and Methods of Use” | | | Application# 62/131.214 |
| | Filed 10-Mar-2015 |
|
| | |
Aklog and deGuzman
|
| | “Continuous Flow Thermal Ablation Balloon Catheter Systems and Methods of Use” | | | Application# 62/131.217 |
| | Filed 10-Mar-2015 |
|
| | |
Aklog and deGuzman
|
| | “Continuous Flow Thermal Balloon Catheter Systems and Methods of Use for Renal Nerve Ablation” | | | | | | | |
CarpX | | |
Aklog and deGuzman
|
| | “Systems and Methods for Percutaneous Division of Fibrous Structures” | | | Application# 62/086.950 |
| | Filed 03-Dec-2014 |
|
NextCath | | |
Aklog and deGuzman
|
| | “Self-Anchoring Catheters and Methods of Use” | | | Application# 62/085.838 |
| | Filed 01-Dec-2014 |
|
NextFlo | | | Aklog, deGuzman and Glennon |
| | “Systems and Methods for Infusion of Fluids Using Stored Potential Energy and a Pressure-Sensitive Variable Flow Resistor” | | | | | | | |
| | | Aklog, deGuzman, Glennon, Cronin and Barker |
| | “Systems and Methods for Infusion of Fluids Using Stored Potential Energy and a Variable Flow Resistor” | | | U.S. Patent 8,622,976(1) |
| | Issued 07-Jan-2014 |
|
Name
|
| |
Age
|
| |
Position
|
|
Lishan Aklog, M.D. | | |
49
|
| | Chairman and Chief Executive Officer | |
Michael J. Glennon | | |
49
|
| | Vice Chairman and Director | |
Richard J. Salute | | |
69
|
| | Chief Financial Officer and Secretary | |
Brian J. deGuzman, M.D. | | |
50
|
| | Chief Medical Officer | |
Ira Scott Greenspan | | |
56
|
| | Senior Advisor and Director | |
James L. Cox, M.D. | | |
72
|
| | Director | |
Joshua R. Lamstein | | |
45
|
| | Director | |
Ronald M. Sparks | | |
60
|
| | Director | |
David Weild IV | | |
58
|
| | Director | |
Name and Address of Beneficial Owner(1)
|
| |
Amount and
Nature of Beneficial Ownership |
| |
Approximate
Percentage of Outstanding Shares of Common Stock Prior to Offering |
| |
Approximate
Percentage of Outstanding Shares of Common Stock After Offering |
| |||||||||
5% Stockholders | | | | | | | | | | | | | | | | | | | |
HCFP/Capital Partners III LLC
|
| | | | 2,050,000 | | | | | | 52.6% | | | | | | [__]% | | |
Pavilion Venture Partners LLC
|
| | | | 900,000 | | | | | | 23.1% | | | | | | [__]% | | |
Directors and Executive Officers | | | | | | | | | | | | | | | | | | | |
Lishan Aklog, M.D.
|
| | | | 2,950,000(2)(3) | | | | | | 75.7% | | | | | | [__]% | | |
Ira Scott Greenspan
|
| | | | 2,065,000(3)(9) | | | | | | 53.0% | | | | | | [__]% | | |
Joshua R. Lamstein
|
| | | | 30,000(4) | | | | | | * | | | | | | * | | |
Richard J. Salute
|
| | | | 20,000(4) | | | | | | * | | | | | | * | | |
Michael J. Glennon
|
| | | | 0(5) | | | | | | 0 | | | | | | 0 | | |
Brian J. deGuzman, M.D.
|
| | | | 0(5) | | | | | | 0 | | | | | | 0 | | |
Ronald M. Sparks
|
| | | | 0(6) | | | | | | 0 | | | | | | 0 | | |
James L. Cox, M.D.
|
| | | | 0(7) | | | | | | 0 | | | | | | 0 | | |
David Weild IV
|
| | | | 0(8) | | | | | | 0 | | | | | | 0 | | |
All directors and executive officers as a group (nine individuals)
|
| | | | 2,995,000(2)(3)(4)(5)(9) | | | | | | 76.9% | | | | | | [__]% | | |
Name
|
| |
Number of
Shares of Common Stock included in Units |
| |
Number of
Warrants included in Units |
| |
Relationship to Us
|
| ||||||
HCFP/Capital Partners III LLC
|
| | | | 20,000 | | | | | | 20,000 | | | | Affiliate of Drs. Aklog and deGuzman and Messrs. Glennon, Greenspan, Lamstein and Salute | |
Pavilion Venture Partners LLC
|
| | | | 30,000 | | | | | | 30,000 | | | | Affiliate of Drs. Aklog and deGuzman and Mr. Glennon | |
Richard J. Salute
|
| | | | 20,000 | | | | | | 20,000 | | | | Chief Financial Officer and Secretary | |
Ira Scott Greenspan
|
| | | | 10,000 | | | | | | 10,000 | | | | Senior Advisor and Director | |
Joshua R. Lamstein
|
| | | | 30,000 | | | | | | 30,000 | | | | Director | |
Underwriter
|
| |
Number of Units
|
| ||||
CRT Capital Group LLC
|
| | | | | | | |
Total
|
| | | | | | ||
|
| | |
Per Unit
|
| |
Without
Over-Allotment |
| |
With
Over-Allotment |
| |||||||||
Public offering price
|
| | | $ | | | | | $ | | | | | $ | | | |||
Underwriting discounts and commissions (7%)
|
| | | $ | | | | | $ | | | | | $ | | | |||
Non-accountable expense allowance (2%)(1)
|
| | | $ | | | | | $ | | | | | $ | | | |||
Proceeds, before expenses, to us
|
| | | $ | | | | | $ | | | | | $ | | | |
| | |
Page
|
| |||
Condensed Consolidated Financial Statements (Unaudited) | | | | | | | |
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-10 | | | |
Consolidated Financial Statements | | | |||||
| | | | F-11 | | | |
| | | | F-12 | | | |
Consolidated Statement of Changes in Stockholders’ Equity for the Period June 26, 2014 (Inception) through December 31, 2014
|
| | | | F-13 | | |
Consolidated Statement of Cash Flows for the Period June 26, 2014 (Inception) through December 31, 2014
|
| | | | F-14 | | |
| | | | F-15 | | |
| | |
March 31,
2015 |
| |
December 31,
2014 |
| ||||||||
| | |
(Unaudited)
|
| |
(1)
|
| ||||||||
ASSETS
|
| | | | | | | | | | | | | ||
CURRENT ASSETS: | | | | ||||||||||||
Cash
|
| | | $ | 729,203 | | | | | $ | 839,077 | | | ||
Deferred offering costs
|
| | | | 52,284 | | | | | | — | | | ||
Prepaid and other current assets
|
| | | | 9,294 | | | | | | 3,000 | | | ||
TOTAL ASSETS
|
| | | $ | 790,781 | | | | | $ | 842,077 | | | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | | | | | | |||||||
CURRENT LIABILITIES: | | | | ||||||||||||
Accounts payable and accrued expenses
|
| | | $ | 42,290 | | | | | $ | 47,249 | | | ||
COMMITMENTS AND CONTINGENCIES | | | | ||||||||||||
STOCKHOLDERS’ EQUITY: | | | | ||||||||||||
Preferred stock, $.001 par value, authorized 20,000,000 shares; none issued
|
| | | | — | | | | | | — | | | ||
Common stock, $.001 par value, authorized 50,000,000 shares, 3,895,000 shares issued and outstanding at March 31, 2015 and December 31, 2014
|
| | | | 3,895 | | | | | | 3,895 | | | ||
Additional paid-in capital
|
| | | | 1,165,317 | | | | | | 1,065,317 | | | ||
Accumulated deficit
|
| | | | (420,721) | | | | | | (274,384) | | | ||
TOTAL STOCKHOLDERS’ EQUITY
|
| | | | 748,491 | | | | | | 794,828 | | | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | $ | 790,781 | | | | | $ | 842,077 | | | ||
|
|
Revenue
|
| | | $ | — | | | |
|
Formation and operational costs
|
| | | | 130,337 | | | |
|
Research and development costs
|
| | | | 16,000 | | | |
|
Net loss
|
| | | $ | (146,337) | | | |
|
Weighted average number of shares used in computing net loss per share, basic and diluted
|
| | | | 3,895,000 | | | |
|
Basic and diluted net loss per share
|
| | | $ | (0.04) | | | |
|
|
Net loss
|
| | | $ | (146,337) | | | |
| Adjustments to reconcile net loss to net cash used in operating activities: | | | ||||||
|
Expense attributable to contributed services
|
| | | | 100,000 | | | |
| Change in operating assets and liabilities: | | | ||||||
|
Prepaid and other current assets
|
| | | | (6,294) | | | |
|
Accounts payable and accrued expenses
|
| | | | (4,959) | | | |
|
NET CASH USED IN OPERATING ACTIVITIES
|
| | | | (57,590) | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | ||||||
|
Payment of deferred offering costs
|
| | | | (52,284) | | | |
|
NET CASH USED IN FINANCING ACTIVITIES
|
| | | | (52,284) | | | |
|
NET DECREASE IN CASH
|
| | | | (109,874) | | | |
|
Cash at December 31, 2014
|
| | | | 839,077 | | | |
|
Cash at March 31, 2015
|
| | | $ | 729,203 | | | |
|
|
ASSETS
|
| |||||||
| CURRENT ASSETS: | | | ||||||
|
Cash
|
| | | $ | 839,077 | | | |
|
Prepaid expenses and other current assets
|
| | | | 3,000 | | | |
|
TOTAL ASSETS
|
| | | $ | 842,077 | | | |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| |||||||
| CURRENT LIABILITIES: | | | ||||||
|
Accounts payable and accrued expenses
|
| | | $ | 47,249 | | | |
| COMMITMENTS AND CONTINGENCIES (Note 4) | | | ||||||
| STOCKHOLDERS’ EQUITY: | | | ||||||
|
Preferred stock, $.001 par value, authorized 20,000,000 shares, none issued
|
| | | | — | | | |
|
Common stock, $.001 par value, authorized 50,000,000 shares, 3,895,000 issued and outstanding
|
| | | | 3,895 | | | |
|
Additional paid-in capital
|
| | | | 1,065,317 | | | |
|
Accumulated deficit
|
| | | | (274,384) | | | |
|
TOTAL STOCKHOLDERS’ EQUITY
|
| | | | 794,828 | | | |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | $ | 842,077 | | | |
|
|
Revenue
|
| | | $ | — | | | |
|
Formation and operational costs
|
| | | | 274,384 | | | |
|
Net loss
|
| | | $ | (274,384) | | | |
|
Weighted average number of shares used in computing net loss per share, basic and diluted
|
| | | | 3,092,027 | | | |
|
Basic and diluted net loss per share
|
| | | $ | (0.09) | | | |
|
| | |
Common Stock
|
| |
Additional
Paid-In Capital |
| |
Accumulated
deficit |
| |
Stockholders’
Equity |
| |||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |||||||||||||||||||||||||||||
Balance at June 26, 2014, date of inception
|
| | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | |||||
Common shares and 2,900,000 warrants issued to founders
|
| | | | 2,900,000 | | | | | | 2,900 | | | | | | 312 | | | | | | — | | | | | | 3,212 | | | |||||
Units consisting of one share of
common stock and one warrant issued to initial stockholders, net of offering costs of $7,500 |
| | | | 150,000 | | | | | | 150 | | | | | | 67,350 | | | | | | — | | | | | | 67,500 | | | |||||
Units consisting of one share of
common stock and one warrant issued to investors, net of offering costs of $46,500 |
| | | | 845,000 | | | | | | 845 | | | | | | 797,655 | | | | | | | | | | | | 798,500 | | | |||||
Value of contributed services of Chief Executive Officer and Chief Financial Officer
|
| | | | — | | | | | | — | | | | | | 200,000 | | | | | | — | | | | | | 200,000 | | | |||||
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (274,384) | | | | | | (274,384) | | | |||||
Balance at December 31, 2014
|
| | | | 3,895,000 | | | | | $ | 3,895 | | | | | $ | 1,065,317 | | | | | $ | (274,384) | | | | | $ | 794,828 | | | |||||
|
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | ||||||
|
Net loss
|
| | | $ | (274,384) | | | |
| Adjustments to reconcile net loss to net cash used in operating activities: | | | ||||||
|
Expense attributable to contributed services
|
| | | | 200,000 | | | |
| Change in operating assets and liabilities: | | | ||||||
|
Prepaid expenses and other current assets
|
| | | | (3,000) | | | |
|
Accounts payable and accrued expenses
|
| | | | 47,249 | | | |
|
NET CASH USED IN OPERATING ACTIVITIES
|
| | | | (30,135) | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | ||||||
|
Proceeds from sale of shares of common stock and warrants
|
| | | | 923,212 | | | |
|
Payment of offering costs
|
| | | | (54,000) | | | |
|
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
| | | | 869,212 | | | |
|
NET INCREASE IN CASH
|
| | | | 839,077 | | | |
|
Cash at June 26, 2014
|
| | | | — | | | |
|
Cash at December 31, 2014
|
| | | $ | 839,077 | | | |
|
| Current: | | | ||||||
|
Federal, state and local
|
| | | $ | — | | | |
| Deferred: | | | ||||||
|
Federal
|
| | | | (26,034) | | | |
|
State and local
|
| | | | (4,017) | | | |
| | | | | | (30,051) | | | |
|
Less: Valuation allowance
|
| | | | 30,051 | | | |
| | | | | $ | — | | | |
|
|
U.S. statutory rate
|
| | | | (35.0%) | | | |
|
State income taxes (net of federal benefit)
|
| | | | (5.4%) | | | |
|
Permanent differences
|
| | | | 29.5% | | | |
|
Valuation allowance
|
| | | | 10.9% | | | |
| | | | | | 0.0% | | | |
|
| Noncurrent deferred tax assets: | | | ||||||
|
Net operating loss
|
| | | $ | 30,051 | | | |
|
Valuation allowance
|
| | | | (30,051) | | | |
|
Total net deferred tax assets
|
| | | $ | — | | | |
|
|
SEC registration fee
|
| | | $ | 2,672.60 | | |
|
FINRA filing fee
|
| | | $ | 2,750.00 | | |
|
Accounting fees and expenses
|
| | | $ | 60,000 | | |
|
Printing and engraving expenses
|
| | | $ | 50,000 | | |
|
Legal fees and expenses
|
| | | $ | 400,000 | | |
|
Nasdaq listing fees
|
| | | $ | 50,000 | | |
|
Miscellaneous
|
| | | | [ ](1) | | |
|
Total
|
| | | $ | | | |
|
Exhibit No.
|
| |
Description
|
| |||
| | | 1.1 | | | | Form of Underwriting Agreement.* | |
| | | 3.1 | | | | Certificate of Incorporation. | |
| | | 3.2 | | | | Certificate of Amendment to Certificate of Incorporation | |
| | | 3.3 | | | | By-laws. | |
| | | 4.1 | | | | Specimen Unit Certificate.* | |
| | | 4.2 | | | | Specimen Common Stock Certificate.* | |
| | | 4.3 | | | | Specimen Warrant Certificate.* | |
| | | 4.4 | | | | Form of Warrant Agreement between Continental Stock Transfer & Trust Company and PAVmed. | |
| | | 4.5 | | | | 2014 Long-Term Equity Incentive Plan | |
| | | 5.1 | | | | Opinion of Graubard Miller.* | |
| | | 10.1 | | | | Patent Option Agreement. | |
| | | 10.2.1 | | | | Employment Agreement between PAVmed and Dr. Aklog. | |
| | | 10.2.2 | | | | Amendment to Employment Agreement between PAVmed and Dr. Aklog. | |
| | | 10.3.1 | | | | Form of Subscription Agreement (July 2014) | |
| | | 10.3.2 | | | | Form of Subscription Agreement (November 2014) | |
| | | 10.4.1 | | | | Form of Letter Agreement with HCFP Capital Partners III LLC | |
| | | 10.4.2 | | | | Form of Letter Agreement with Pavilion Venture Partners LLC | |
| | | 10.5.1 | | | | Letter agreement regarding corporate opportunities executed by Dr. Lishan Aklog. | |
| | | 10.5.2 | | | | Letter agreement regarding corporate opportunities executed by Michael Glennon. | |
| | | 10.5.3 | | | | Letter agreement regarding corporate opportunities executed by Dr. Brian deGuzman. | |
| | | 10.6 | | | | Form of Management services agreement between PAVmed and HCFP LLC. | |
| | | 10.7 | | | | Form of Management services agreement between PAVmed and Pavilion Holdings Group. | |
| | | 23.1 | | | | Consent of Citrin Cooperman & Company, LLP. | |
| | | 23.2 | | | | Consent of Graubard Miller (included in Exhibit 5.1).* | |
| | | 24 | | | | Power of Attorney (included on signature page of this Registration Statement). | |
| | | | PAVMED INC. | | |||
| | | | By: | | |
/s/ Lishan Aklog
|
|
| | | | | | | Lishan Aklog Chairman and Chief Executive Officer (Principal Executive Officer) |
|
|
Name
|
| |
Position
|
| |
Date
|
|
|
/s/ Lishan Aklog
Lishan Aklog
|
| |
Chairman and Chief Executive Officer
(Principal Executive Officer) |
| |
April 22, 2015
|
|
|
/s/ Richard J. Salute
Richard J. Salute
|
| |
Chief Financial Officer
(Principal Accounting and Financial Officer) and Secretary |
| |
April 22, 2015
|
|
|
/s/ Michael J. Glennon
Michael J. Glennon
|
| |
Vice Chairman and Director
|
| |
April 22, 2015
|
|
|
/s/ Ira Scott Greenspan
Ira Scott Greenspan
|
| |
Director
|
| |
April 22, 2015
|
|
|
/s/ James L. Cox, M.D.
James L. Cox, M.D.
|
| |
Director
|
| |
April 22, 2015
|
|
|
/s/ Joshua R. Lamstein
Joshua R. Lamstein
|
| |
Director
|
| |
April 22, 2015
|
|
|
/s/ Ronald M. Sparks
Ronald M. Sparks
|
| |
Director
|
| |
April 22, 2015
|
|
|
/s/ David Weild IV
David Weild IV
|
| |
Director
|
| |
April 22, 2015
|
|
Exhibit 3.1
Delaware | PAGE 1 | |
The First State |
I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF INCORPORATION OF “PAXMED INC.”, FILED IN THIS OFFICE ON THE TWENTY-SIXTH DAY OF JUNE, A.D. 2014, AT 4:27 O’CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.
5559210 8100
140890399 |
![]() |
/s/ Jeffrey W. Bullock | |
Jeffrey W. Bullock, Secretary of State | |||
|
AUTHENTICATION: 1493651
DATE: 06-27-14 | ||
You may verify this certificate online at corp.delaware.gov/authver.shtml |
State of Delaware | |
Secretary of State | |
Division of Corporations | |
Delivered 04:45 PM 06/26/2014 | |
FILED 04:27 PM 06/26/2014 | |
SRV 140890399 - 5559210 FILE |
CERTIFICATE OF INCORPORATION
OF
PAXmed Inc.
------------------------------------------------------
Pursuant to Section 102 of the
Delaware General Corporation Law
----------------------------------------------------------
I, the undersigned, in order to form a corporation for the purposes hereinafter stated, under and pursuant to the provisions of the General Corporation Law of the State of Delaware (the “GCL”), do hereby certify as follows:
FIRST: The name of the corporation is PAXmed Inc. (hereinafter sometimes referred to as the “Corporation”).
SECOND: The registered office of the Corporation is to be located at 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of its registered agent at that address is The Corporation Trust Company.
THIRD: The purpose of the Corporation shall be to engage in any lawful act or activity for which corporations may be organized under the GCL.
FOURTH: The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 70,000,000 of which 50,000,000 shares shall be Common Stock of the par value of $.001 per share and 20,000,000 shares shall be Preferred Stock of the par value of $.001 per share.
A. Preferred Stock. The Board of Directors is expressly granted authority to issue shares of the Preferred Stock, in one or more series, and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series (a “Preferred Stock Designation”) and as may be permitted by the GCL. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.
B. Common Stock. Except as otherwise required by law or as otherwise provided in any Preferred Stock Designation, the holders of the Common Stock shall exclusively possess all voting power and each share of Common Stock shall have one vote.
FIFTH: The name and mailing address of the sole incorporator of the Corporation are as follows:
Name | Address | |
David Alan Miller | Graubard Miller | |
405 Lexington Avenue | ||
New York, New York 10174 |
SIXTH: The Board of Directors shall be divided into three classes: Class A, Class B and Class C. The number of directors in each class shall be as nearly equal as possible. At the first election of directors by the incorporator, the incorporator shall elect a Class C director for a term expiring at the Corporation’s third Annual Meeting of Stockholders. The Class C director shall then appoint additional Class A, Class B and Class C directors, as necessary. The directors in Class A shall be elected for a term expiring at the first Annual Meeting of Stockholders, the directors in Class B shall be elected for a term expiring at the second Annual Meeting of Stockholders and the directors in Class C shall be elected for a term expiring at the third Annual Meeting of Stockholders. Commencing at the first Annual Meeting of Stockholders, and at each annual meeting thereafter, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election. Except as the GCL may otherwise require, in the interim between annual meetings of stockholders or special meetings of stockholders called for the election of directors and/or the removal of one or more directors and the filling of any vacancy in that connection, newly created directorships and any vacancies in the Board of Directors, including unfilled vacancies resulting from the removal of directors for cause, may be filled by the vote of a majority of the remaining directors then in office, although less than a quorum (as defined in the Corporation’s Bylaws), or by the sole remaining director. All directors shall hold office until the expiration of their respective terms of office and until their successors shall have been elected and qualified. A director elected to fill a vacancy resulting from the death, resignation or removal of a director shall serve for the remainder of the full term of the director whose death, resignation or removal shall have created such vacancy and until his successor shall have been elected and qualified.
SEVENTH: The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:
A. Election of directors need not be by ballot unless the by-laws of the Corporation so provide.
B. The Board of Directors shall have the power, without the assent or vote of the stockholders, to make, alter, amend, change, add to or repeal the by-laws of the Corporation as provided in the by-laws of the Corporation.
C. The directors in their discretion may submit any contract or act for approval or ratification at any annual meeting of the stockholders or at any meeting of the stockholders called for the purpose of considering any such act or contract, and any contract or act that shall be approved or be ratified by the vote of the holders of a majority of the stock of the Corporation which is represented in person or by proxy at such meeting and entitled to vote thereat (provided that a lawful quorum of stockholders be there represented in person or by proxy) shall be as valid and binding upon the Corporation and upon all the stockholders as though it had been approved or ratified by every stockholder of the Corporation, whether or not the contract or act would otherwise be open to legal attack because of directors’ interests, or for any other reason.
D. In addition to the powers and authorities hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation; subject, nevertheless, to the provisions of the statutes of Delaware, of this Certificate of Incorporation, and to any by-laws from time to time made by the stockholders; provided, however, that no by-law so made shall invalidate any prior act of the directors which would have been valid if such by-law had not been made.
EIGHTH: A. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the GCL, or (iv) for any transaction from which the director derived an improper personal benefit. If the GCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the GCL, as so amended. Any repeal or modification of this paragraph A by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation with respect to events occurring prior to the time of such repeal or modification.
B. The Corporation, to the full extent permitted by Section 145 of the GCL, as amended from time to time, shall indemnify all persons whom it may indemnify pursuant thereto. Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative, or investigative action, suit or proceeding for which such officer or director may be entitled to indemnification hereunder shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized hereby.
NINTH: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.
IN WITNESS WHEREOF, I have signed this Certificate of Incorporation this 26th day of June, 2014.
/s/David Alan Miller | |
David Alan Miller, Sole Incorporator |
Exhibit 3.2
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PAXMED INC.
----------------------------------------------------------
Pursuant to Section 242 of the
General Corporation Law of Delaware
----------------------------------------------------------
The undersigned Chief Executive Officer of PAXmed Inc. (the “Corporation”) does hereby certify:
FIRST: The name of the Corporation is PAXmed Inc.
SECOND: The certificate of incorporation of the Corporation is hereby amended by deleting Article I in its entirety and by substituting the following new Article I in lieu thereof:
ARTICLE I
NAME
The name of the corporation is PAVmed Inc. (the “Corporation”).
THIRD: The foregoing amendment to the Corporation’s certificate of incorporation was duly approved and adopted in accordance with the provisions of Sections 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the undersigned has signed this certificate of amendment on this 19th day of April, 2015.
/s/ Lishan Aklog | |
Lishan Aklog Chief Executive Officer |
Exhibit 3.3
Adopted as of June 26, 2014
BY LAWS
OF
PAXMED INC.
ARTICLE I
OFFICES
1.1 Registered Office. The registered office of PAXmed Inc. (the “Corporation”) in the State of Delaware shall be established and maintained at 1209 Orange Street, Wilmington, New Castle County, Delaware and The Corporation Trust Company shall be the registered agent of the corporation in charge thereof.
1.2 Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the board of directors of the Corporation (the “Board of Directors”) may from time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 Place of Meetings. All meetings of the stockholders shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.
2.2 Annual Meetings. The annual meeting of stockholders shall be held on such date and at such time as may be fixed by the Board of Directors and stated in the notice of the meeting, for the purpose of electing directors and for the transaction of only such other business as is properly brought before the meeting in accordance with these Bylaws (the “Bylaws”).
Written notice of an annual meeting stating the place, date and hour of the meeting, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the annual meeting.
To be properly brought before the annual meeting, business must be either (i) specified in the notice of annual meeting (or any supplement or amendment thereto) given by or at the direction of the Board of Directors, (ii) otherwise brought before the annual meeting by or at the direction of the Board of Directors, or (iii) otherwise properly brought before the annual meeting by a stockholder. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the meeting; provided, however, that in the event that less than
1 |
seventy (70) days notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by a stockholder, to be timely, must be received no later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made, whichever first occurs. A stockholder’s notice to the Secretary shall set forth (a) as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, and (ii) any material interest of the stockholder in such business, and (b) as to the stockholder giving the notice (i) the name and record address of the stockholder and (ii) the class, series and number of shares of capital stock of the Corporation which are beneficially owned by the stockholder. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at the annual meeting except in accordance with the procedures set forth in this Article II, Section 2. The officer of the Corporation presiding at an annual meeting shall, if the facts warrant, determine and declare to the annual meeting that business was not properly brought before the annual meeting in accordance with the provisions of this Article II, Section 2, and if such officer should so determine, such officer shall so declare to the annual meeting and any such business not properly brought before the meeting shall not be transacted.
2.3 Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”), may only be called by a majority of the entire Board of Directors, or the President or the Chairman, and shall be called by the Secretary at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting.
Unless otherwise provided by law, written notice of a special meeting of stockholders, stating the time, place and purpose or purposes thereof, shall be given to each stockholder entitled to vote at such meeting, not less than ten (10) or more than sixty (60) days before the date fixed for the meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
2.4 Quorum. The holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the holders of a majority of the votes entitled to be cast by the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.
2 |
2.5 Organization. The Chairman of the Board of Directors shall act as chairman of meetings of the stockholders. The Board of Directors may designate any other officer or director of the Corporation to act as chairman of any meeting in the absence of the Chairman of the Board of Directors, and the Board of Directors may further provide for determining who shall act as chairman of any stockholders meeting in the absence of the Chairman of the Board of Directors and such designee.
The Secretary of the Corporation shall act as secretary of all meetings of the stockholders, but in the absence of the Secretary the presiding officer may appoint any other person to act as secretary of any meeting.
2.6 Voting. Unless otherwise required by law, the Certificate of Incorporation or these Bylaws, any question (other than the election of directors) brought before any meeting of stockholders shall be decided by the vote of the holders of a majority of the stock represented and entitled to vote thereat. At all meetings of stockholders for the election of directors, a plurality of the votes cast shall be sufficient to elect. Each stockholder represented at a meeting of stockholders shall be entitled to cast one vote for each share of the capital stock entitled to vote thereat held by such stockholder, unless otherwise provided by the Certificate of Incorporation. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize any person or persons to act for him by proxy. All proxies shall be executed in writing and shall be filed with the Secretary of the Corporation not later than the day on which exercised. No proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in his discretion, may require that any votes cast at such meeting shall be cast by written ballot.
2.7 Action of Shareholders Without Meeting. Unless otherwise provided by the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
2.8 Voting List. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the election, either at a place within the city, town or village where the election is to be held, which place shall be specified in the
3 |
notice of the meeting, or, if not specified, at the place where said meeting is to be held. The list shall be produced and kept at the time and place of election during the whole time thereof, and may be inspected by any stockholder of the Corporation who is present.
2.9 Stock Ledger. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 8 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.
2.10 Adjournment. Any meeting of the stockholders, including one at which directors are to be elected, may be adjourned for such periods as the presiding officer of the meeting or the stockholders present in person or by proxy and entitled to vote shall direct.
2.11 Ratification. Any transaction questioned in any stockholders’ derivative suit, or any other suit to enforce alleged rights of the Corporation or any of its stockholders, on the ground of lack of authority, defective or irregular execution, adverse interest of any director, officer or stockholder, nondisclosure, miscomputation or the application of improper principles or practices of accounting may be approved, ratified and confirmed before or after judgment by the Board of Directors or by the holders of Common Stock and, if so approved, ratified or confirmed, shall have the same force and effect as if the questioned transaction had been originally duly authorized, and said approval, ratification or confirmation shall be binding upon the Corporation and all of its stockholders and shall constitute a bar to any claim or execution of any judgment in respect of such questioned transaction.
2.12 Inspectors. The election of directors and any other vote by ballot at any meeting of the stockholders shall be supervised by at least one inspector. Such inspectors shall be appointed by the Board of Directors in advance of the meeting. If the inspector so appointed shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.
ARTICLE III
DIRECTORS
3.1 Powers; Number; Qualifications. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided by law or in the Certificate of Incorporation. The number of directors which shall constitute the Board of Directors shall be not less than one (1) nor more than nine (9). The exact number of directors shall be fixed from time to time, within the limits specified in this Article III Section 1 or in the Certificate of Incorporation, by the Board of Directors. Directors need not be stockholders of the Corporation. The Board may be divided into Classes as more fully described in the Certificate of Incorporation.
3.2 Election; Term of Office; Resignation; Removal; Vacancies. Each director shall hold office until the next annual meeting of stockholders at which his Class stands for election or until such director’s earlier resignation, removal from office, death or incapacity. Unless otherwise provided in the Certificate of Incorporation, vacancies and newly created directorships resulting from any increase in the authorized number of directors or from any other cause may be filled by a
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majority of the directors then in office, although less than a quorum, or by a sole remaining director and each director so chosen shall hold office until the next election of the class for which such director shall have been chosen, and until his successor shall be elected and qualified, or until such director’s earlier resignation, removal from office, death or incapacity.
3.3 Nominations. Nominations of persons for election to the Board of Directors of the Corporation at a meeting of stockholders of the Corporation may be made at such meeting by or at the direction of the Board of Directors, by any committee or persons appointed by the Board of Directors or by any stockholder of the Corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Article III, Section 3. Such nominations by any stockholder shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the meeting; provided however, that in the event that less than seventy (70) days notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder, to be timely, must be received no later than the close of business on the tenth (10th) day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever first occurs. Such stockholder’s notice to the Secretary shall set forth (i) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (a) the name, age, business address and residence address of the person, (b) the principal occupation or employment of the person, (c) the class and number of shares of capital stock of the Corporation which are beneficially owned by the person, and (d) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to the Rules and Regulations of the Securities and Exchange Commission under Section 14 of the Securities Exchange Act of 1934, as amended, and (ii) as to the stockholder giving the notice (a) the name and record address of the stockholder and (b) the class and number of shares of capital stock of the Corporation which are beneficially owned by the stockholder. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth herein. The officer of the Corporation presiding at an annual meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded.
3.4 Meetings. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. The first meeting of each newly elected Board of Directors shall be held immediately after and at the same place as the meeting of the stockholders at which it is elected and no notice of such meeting shall be necessary to the newly elected directors in order to legally constitute the meeting, provided a quorum shall be present. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the President or a majority of the entire Board of Directors. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone, facsimile, telegram or e-mail on twenty-four (24) hours notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances.
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3.5 Quorum. Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these Bylaws, at all meetings of the Board of Directors or any committee thereof, a majority of the entire Board of Directors or such committee, as the case may be, shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors or of any committee thereof, a majority of the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
3.6 Organization of Meetings. The Board of Directors shall elect one of its members to be Chairman of the Board of Directors. The Chairman of the Board of Directors shall lead the Board of Directors in fulfilling its responsibilities as set forth in these By-Laws, including its responsibility to oversee the performance of the Corporation, and shall determine the agenda and perform all other duties and exercise all other powers which are or from time to time may be delegated to him or her by the Board of Directors.
Meetings of the Board of Directors shall be presided over by the Chairman of the Board of Directors, or in his or her absence, by the President, or in the absence of the Chairman of the Board of Directors and the President by such other person as the Board of Directors may designate or the members present may select.
3.7 Actions of Board of Directors Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or of such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filled with the minutes of proceedings of the Board of Directors or committee.
3.8 Removal of Directors by Stockholders. The entire Board of Directors or any individual Director may be removed from office with or without cause by a majority vote of the holders of the outstanding shares then entitled to vote at an election of directors. Notwithstanding the foregoing, if the Corporation’s board is classified, stockholders may effect such removal only for cause. In case the Board of Directors or any one or more Directors be so removed, new Directors may be elected at the same time for the unexpired portion of the full term of the Director or Directors so removed.
3.9 Resignations. Any Director may resign at any time by submitting his written resignation to the Board of Directors or Secretary of the Corporation. Such resignation shall take effect at the time of its receipt by the Corporation unless another time be fixed in the resignation, in which case it shall become effective at the time so fixed. The acceptance of a resignation shall not be required to make it effective.
3.10 Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such
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absent or disqualified member. Any such committee, to the extent provided by law and in the resolution of the Board of Directors establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation’s property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution or amending the Bylaws of the Corporation; and, unless the resolution expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock or to adopt a certificate of ownership and merger. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.
3.11 Compensation. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed amount (in cash or other form of consideration) for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.
3.12 Interested Directors. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if (i) the material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
3.13 Meetings by Means of Conference Telephone. Members of the Board of Directors or any committee designed by the Board of Directors may participate in a meeting of the Board of Directors or of a committee of the Board of Directors by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at such meeting.
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ARTICLE IV
OFFICERS
4.1 General. The officers of the Corporation shall be elected by the Board of Directors and may consist of: a Chairman of the Board, Vice Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Secretary and Treasurer. The Board of Directors, in its discretion, may also elect one or more Vice Presidents (including Executive Vice Presidents and Senior Vice Presidents), Assistant Secretaries, Assistant Treasurers, a Controller and such other officers as in the judgment of the Board of Directors may be necessary or desirable. Any number of offices may be held by the same person and more than one person may hold the same office, unless otherwise prohibited by law, the Certificate of Incorporation or these Bylaws. The officers of the Corporation need not be stockholders of the Corporation, nor need such officers be directors of the Corporation.
4.2 Election. The Board of Directors at its first meeting held after each annual meeting of stockholders shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are chosen and qualified, or until their earlier resignation or removal. Except as otherwise provided in this Article IV, any officer elected by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers who are directors of the Corporation shall be fixed by the Board of Directors.
4.3 Voting Securities Owned by the Corporation. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the President or any Vice President, and any such officer may, in the name and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.
4.4 Chief Executive Officer. Subject to the provisions of these Bylaws and to the direction of the Board of Directors, the Chief Executive Officer shall have ultimate authority for decisions relating to the general management and control of the affairs and business of the Corporation and shall perform such other duties and exercise such other powers which are or from time to time may be delegated to him or her by the Board of Directors or these Bylaws, all in accordance with basic policies as established by and subject to the oversight of the Board of Directors.
4.5 President. At the request of the Chief Executive Officer, or in the absence of the Chief Executive Officer, or in the event of his or her inability or refusal to act, the President shall perform the duties of the Chief Executive Officer, and when so acting, shall have all the powers of
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and be subject to all the restrictions upon such office. The President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe.
4.6 Chief Financial Officer. The Chief Financial Officer shall have general supervision, direction and control of the financial affairs of the Corporation and shall perform such other duties and exercise such other powers which are or from time to time may be delegated to him or her by the Board of Directors or these Bylaws, all in accordance with basic policies as established by and subject to the oversight of the Board of Directors. In the absence of a named Treasurer, the Chief Financial Officer shall also have the powers and duties of the Treasurer as hereinafter set forth and shall be authorized and empowered to sign as Treasurer in any case where such officer’s signature is required.
4.7 Vice Presidents. At the request of the President or in the absence of the President, or in the event of his or her inability or refusal to act, the Vice President or the Vice Presidents if there is more than one (in the order designated by the Board of Directors) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon such office. Each Vice President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe. If there be no Vice President, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of such officer to act, shall perform the duties of such office, and when so acting, shall have all the powers of and be subject to all the restrictions upon such office.
4.8 Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the President, under whose supervision the Secretary shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, then any Assistant Secretary shall perform such actions. If there be no Assistant Secretary, then the Board of Directors or the President may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.
4.9 Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions
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as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.
4.10 Assistant Secretaries. Except as may be otherwise provided in these Bylaws, Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Secretary, and in the absence of the Secretary or in the event of his disability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.
4.11 Assistant Treasurers. Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Treasurer, and in the absence of the Treasurer or in the event of his disability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.
4.12 Controller. The Controller shall establish and maintain the accounting records of the Corporation in accordance with generally accepted accounting principles applied on a consistent basis, maintain proper internal control of the assets of the Corporation and shall perform such other duties as the Board of Directors, the President or any Vice President of the Corporation may prescribe.
4.13 Other Officers. Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.
4.14 Vacancies. The Board of Directors shall have the power to fill any vacancies in any office occurring from whatever reason.
4.15 Resignations. Any officer may resign at any time by submitting his written resignation to the Corporation. Such resignation shall take effect at the time of its receipt by the Corporation, unless another time be fixed in the resignation, in which case it shall become effective at the time so fixed. The acceptance of a resignation shall not be required to make it effective.
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4.16 Removal. Subject to the provisions of any employment agreement approved by the Board of Directors, any officer of the Corporation may be removed at any time, with or without cause, by the Board of Directors.
ARTICLE V
CAPITAL STOCK
5.1 Form of Certificates. The shares of stock in the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the Corporation’s stock shall be in uncertificated form. Stock certificates shall be in such forms as the Board of Directors may prescribe and signed by the Chairman of the Board, President or a Vice President and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation.
5.2 Signatures. Any or all of the signatures on a stock certificate may be a facsimile, including, but not limited to, signatures of officers of the Corporation and countersignatures of a transfer agent or registrar. In case an officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
5.3 Lost Certificates. The Board of Directors may direct a new stock certificate or certificates to be issued in place of any stock certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new stock certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.
5.4 Transfers. Stock of the Corporation shall be transferable in the manner prescribed by law and in these Bylaws. Transfers of certificated stock shall be made on the books of the Corporation only by the person named in the certificate or by such person’s attorney lawfully constituted in writing and upon the surrender of the certificate therefor, which shall be canceled before a new certificate shall be issued. Transfers of uncertificated stock shall be made on the books of the Corporation only by the person then registered on the books of the Corporation as the owner of such shares or by such person's attorney lawfully constituted in writing and written instruction to the Corporation containing such information as the Corporation or its agents may prescribe. No transfer of uncertificated stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred. The Corporation shall have no duty to inquire into adverse claims with respect to any stock transfer unless (a) the Corporation has received a written notification of an adverse claim at a time and in a manner which affords the Corporation a reasonable opportunity to act on it prior to the issuance of a new, reissued or re-registered share certificate, in the case of certificated stock, or entry
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in the stock record books of the Corporation, in the case of uncertificated stock, and the notification identifies the claimant, the registered owner and the issue of which the share or shares is a part and provides an address for communications directed to the claimant; or (b) the Corporation has required and obtained, with respect to a fiduciary, a copy of a will, trust, indenture, articles of co-partnership, Bylaws or other controlling instruments, for a purpose other than to obtain appropriate evidence of the appointment or incumbency of the fiduciary, and such documents indicate, upon reasonable inspection, the existence of an adverse claim. The Corporation may discharge any duty of inquiry by any reasonable means, including notifying an adverse claimant by registered or certified mail at the address furnished by him or, if there be no such address, at his residence or regular place of business that the security has been presented for registration of transfer by a named person, and that the transfer will be registered unless within thirty days from the date of mailing the notification, either (a) an appropriate restraining order, injunction or other process issues from a court of competent jurisdiction; or (b) an indemnity bond, sufficient in the Corporation’s judgment to protect the Corporation and any transfer agent, registrar or other agent of the Corporation involved from any loss which it or they may suffer by complying with the adverse claim, is filed with the Corporation.
5.5 Fixing Record Date. In order that the Corporation may determine the stockholders entitled to notice or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than ten (10) days after the date upon which the resolution fixing the record date of action with a meeting is adopted by the Board of Directors, nor more than sixty (60) days prior to any other action. If no record date is fixed:
(a) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.
(b) The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the first date on which a signed written consent is delivered to the Corporation.
(c) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
5.6 Registered Stockholders. Prior to due presentment for transfer of any share or shares, the Corporation shall treat the registered owner thereof as the person exclusively entitled to vote, to
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receive notifications and to all other benefits of ownership with respect to such share or shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State Delaware.
ARTICLE VI
NOTICES
6.1 Form of Notice. Notices to directors and stockholders other than notices to directors of special meetings of the board of Directors which may be given by any means stated in Article III, Section 4, shall be in writing and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the corporation. Notice by mail shall be deemed to be given at the time when the same shall be mailed. Notice to directors may also be given by telegram.
6.2 Waiver of Notice. Whenever any notice is required to be given under the provisions of law or the Certificate of Incorporation or by these Bylaws of the Corporation, a written waiver, signed by the person or persons entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular, or special meeting of the stockholders, Directors, or members of a committee of Directors need be specified in any written waiver of notice unless so required by the Certificate of Incorporation.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
7.1 The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
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7.2 The Corporation shall indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
7.3 To the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 1 or 2 of this Article, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection therewith.
7.4 Any indemnification under sections 1 or 2 of this Article (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in such section. Such determination shall be made:
(a) By the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or
(b) If such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or
(c) By the stockholders.
7.5 Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Section. Such expenses (including attorneys’ fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate.
7.6 The indemnification and advancement of expenses provided by, or granted pursuant to the other sections of this Article shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement,
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vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.
7.7 The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article.
7.8 For purposes of this Article, references to “the Corporation” shall include, in addition to the resulting Corporation, any constituent Corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer employee or agent of such constituent Corporation, or is or was serving at the request of such constituent Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article with respect to the resulting or surviving Corporation as he would have with respect to such constituent Corporation of its separate existence had continued.
7.9 For purposes of this Article, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article.
7.10 The indemnification and advancement of expenses provided by, or granted pursuant to, this Article shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
7.11 No director or officer of the Corporation shall be personally liable to the Corporation or to any stockholder of the Corporation for monetary damages for breach of fiduciary duty as a director or officer, provided that this provision shall not limit the liability of a director or officer (i) for any breach of the director’s or the officer’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of Delaware, or (iv) for any transaction from which the director or officer derived an improper personal benefit.
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ARTICLE VIII
GENERAL PROVISIONS
8.1 Reliance on Books and Records. Each Director, each member of any committee designated by the Board of Directors, and each officer of the Corporation, shall, in the performance of his duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation, including reports made to the Corporation by any of its officers, by an independent certified public accountant, or by an appraiser selected with reasonable care.
8.2 Maintenance and Inspection of Records. The Corporation shall, either at its principal executive office or at such place or places as designated by the Board of Directors, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these by-laws, as may be amended to date, minute books, accounting books and other records.
Any such records maintained by the Corporation may be kept on, or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to the provisions of the Delaware General Corporation Law. When records are kept in such manner, a clearly legible paper form produced from or by means of the information storage device or method shall be admissible in evidence, and accepted for all other purposes, to the same extent as an original paper form accurately portrays the record.
Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the Corporation’s stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the Corporation at its registered office in Delaware or at its principal executive office.
8.3 Inspection by Directors. Any director shall have the right to examine the Corporation’s stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a director.
8.4 Dividends. Subject to the provisions of the Certificate of Incorporation, if any, dividends upon the capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall think conducive to the
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interest of the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created.
8.5 Checks. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other persons as the Board of Directors may from time to time designate.
8.6 Fiscal Year. The fiscal year of the Corporation shall be as determined by the Board of Directors. If the Board of Directors shall fail to do so, the President shall fix the fiscal year.
8.7 Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced.
8.8 Amendments. The original or other Bylaws may be adopted, amended or repealed by the stockholders entitled to vote thereon at any regular or special meeting or, if the Certificate of Incorporation so provides, by the Board of Directors. The fact that such power has been so conferred upon the Board of Directors shall not divest the stockholders of the power nor limit their power to adopt, amend or repeal Bylaws.
8.9 Interpretation of Bylaws. All words, terms and provisions of these Bylaws shall be interpreted and defined by and in accordance with the General Corporation Law of the State of Delaware, as amended, and as amended from time to time hereafter.
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Exhibit 4.4
WARRANT AGREEMENT
Agreement made as of _____________, 2015 between PAVmed Inc., a Delaware corporation, with offices at 420 Lexington Avenue, Suite 300, New York, New York 10170 (“Company”), and Continental Stock Transfer & Trust Company, a New York corporation, with offices at 17 Battery Place, New York, New York 10004 (“Warrant Agent”).
WHEREAS, the Company has previously sold an aggregate of 3,895,000 warrants (“Warrants”), each Warrant evidencing the right of the holder thereof to purchase one share of common stock, par value $0.001 per share (“Common Stock”), of the Company to certain private investors; and
WHEREAS, the Company is engaged in a public offering (“Public Offering”) of units (“Units”), each Unit consisting of one share of Common Stock and one Warrant and, in connection therewith, will issue and deliver up to __________ Warrants to public investors; and
WHEREAS, the Company has also previously sold an aggregate of 995,000 Units to certain private investors; and
WHEREAS, the Company has filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-1, No. 333-______ (“Registration Statement”), for the registration, under the Securities Act of 1933, as amended (“Act”) of, among other securities, the Warrants to be issued in the Public Offering; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise of all of the Warrants; and
WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.
2. Warrants.
2.1. Form of Warrant. Each Warrant shall be issued in registered form only, shall be in substantially the form of Exhibit A hereto, the provisions of which are incorporated herein and shall be signed by, or bear the facsimile signature of, the Chairman of the Board or Chief Executive Officer and Treasurer, Secretary or Assistant Secretary of the Company and shall bear a facsimile of the Company’s seal. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.
2.2. Uncertificated Warrants. Notwithstanding anything herein to the contrary, any Warrant, or portion thereof, may be issued as part of, and be represented by, a Unit, and any Warrant may be issued in uncertificated or book-entry form through the Warrant Agent and/or the facilities of The Depository Trust Company (the “Depositary”) or other book-entry depositary system, in each case as determined by the Board of Directors of the Company or by an authorized committee thereof. Any Warrant so issued shall have the same terms, force and effect as a certificated Warrant that has been duly countersigned by the Warrant Agent in accordance with the terms of this Agreement.
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2.3. Effect of Countersignature. Except with respect to uncertificated Warrants as described above, unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.
2.4. Registration.
2.4.1. Warrant Register. The Warrant Agent shall maintain books (“Warrant Register”) for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company.
2.4.2. Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant shall be registered upon the Warrant Register (“registered holder”) as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
2.5. Detachability of Warrants Included in Units. The securities comprising the Units will not be separately transferable until the __ (__nd) day after the date hereof or, if such __nd day is not on a day on which banks in New York City are generally open for business (including Saturdays, Sundays or federal holidays) (a “Business Day”), then on the immediately succeeding Business Day following such date, unless the Company and CRT Capital Group LLC mutually agree on an earlier date.
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3. Terms and Exercise of Warrants
3.1. Warrant Price. Each Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder thereof, subject to the provisions of such Warrant and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $__ per share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1. The term “Warrant Price” as used in this Warrant Agreement refers to the price per share at which shares of Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than 10 Business Days; provided, however, that the Company shall provide at least 10 Business Days prior written notice of such reduction to registered holders of the Warrants; provided, further, however, that any such reduction shall be applied consistently to all of the Warrants.
3.2. Duration of Warrants. A Warrant may be exercised only during the period (“Exercise Period”) commencing on __________, 2015 [90 days after the date of this agreement] and terminating at 5:00 p.m., New York City time on the earlier to occur of (i) ____, 20__ and (ii) the Redemption Date as provided in Section 6.2 of this Agreement (“Expiration Date”); provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in Section 7.4 below. Except with respect to the right to receive the Redemption Price (as set forth in Section 6 hereunder), each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at the close of business on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, however, that the Company will provide written notice to registered holders of the Warrants of such extension of not less than 20 days.
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3.3. Exercise of Warrants.
3.3.1. Payment. Subject to the provisions of the Warrant and this Warrant Agreement, a Warrant, when countersigned by the Warrant Agent, may be exercised by the registered holder thereof by surrendering it, at the office of the Warrant Agent, or at the office of its successor as Warrant Agent, in the Borough of Manhattan, City and State of New York, with the subscription form, as set forth in the Warrant, duly executed, and by paying in full the Warrant Price for each share of Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, as follows:
(a) good certified check or good bank draft payable to the order of the Company (or as otherwise agreed to by the Company); or
(b) in the event of redemption pursuant to Section 6 hereof in which the Company has elected to require all holders of Warrants to exercise such Warrants on a “cashless basis,” by surrendering the Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the difference between the Warrant Price and the “Fair Market Value” (defined below) by (y) the Fair Market Value. Solely for purposes of this Section 3.3.1(b), the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to holders of Warrant pursuant to Section 6 hereof; or
(c) in the event the post-effective amendment or registration statement required by Section 7.4 hereof is not effective and current at a time while the Warrants are exercisable, holders of the Warrants shall have the right, until such time as such post-effective amendment or registration statement has been declared effective by the SEC, and during any other period after such date of effectiveness when the Company shall fail to have maintained an effective registration statement covering the shares of Common Stock issuable upon exercise of the Warrants, by surrendering such Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the
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product of the number of shares of Common Stock underlying the Warrants, multiplied by the difference between the exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this Section 3.3.1(c), the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the date of exercise.
3.3.2. Issuance of Certificates. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price (if any), the Company shall issue to the registered holder of such Warrant a certificate or certificates for the number of full shares of Common Stock to which he is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new countersigned Warrant for the number of shares as to which such Warrant shall not have been exercised. Notwithstanding the foregoing, in no event will the Company be required to net cash settle the Warrant exercise. Warrants may not be exercised by, or securities issued to, any registered holder in any state in which such exercise would be unlawful.
3.3.3. Valid Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and nonassessable.
3.3.4. Date of Issuance. Each person in whose name any such certificate for Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the share transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the share transfer books are open.
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4. Adjustments.
4.1. Stock Dividends - Split Ups. If after the date hereof, the number of outstanding shares of Common Stock is increased by a stock dividend payable in Common Stock, or by a split up of the Common Stock, or other similar event, then, on the effective date of such stock dividend, split up or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in outstanding shares of Common Stock.
4.2. Aggregation of Shares. If after the date hereof, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse share split or reclassification of the Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse share split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock.
4.3 Extraordinary Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution in cash, securities or other assets to the holders of the Common Stock on account of such shares of Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible), other than (a) as described in subsection 4.1 above or (b) Ordinary Cash Dividends (as defined below) (any such non-excluded event being referred to herein as an “Extraordinary Dividend”), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and the fair market value (as determined by the Company’s board of directors, in good faith) of any securities or other assets paid on each share of the Common Stock in respect of such Extraordinary Dividend. For purposes of this subsection 4.3, “Ordinary Cash Dividends” means any cash dividend or cash distribution which, when combined on a per share basis with the per share amounts of all other cash dividends and cash distributions paid on the Common Stock during the 365-day period ending on the date of declaration of such
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dividend or distribution (as adjusted to appropriately reflect any of the events referred to in other subsections of this Section 4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number of shares of Common Stock issuable on exercise of each Warrant) does not exceed __% of the offering price of the Units in the Public Offering.
4.4 Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.
4.5. Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change covered by Section 4.1 or 4.2 hereof or that solely affects the par value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Warrant holders shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the Warrant holder would have received if such Warrant holder had exercised his, her or its Warrant(s) immediately prior to such event; and
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if any reclassification also results in a change in shares of Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be made pursuant to Sections 4.1, 4.2, 4.4 and this Section 4.5. The provisions of this Section 4.5 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers.
4.6. Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1 to 4.5, then, in any such event, the Company shall give written notice to each Warrant holder, at the last address set forth for such holder in the warrant register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
4.7. No Fractional Shares. Notwithstanding any provision contained in this Warrant Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round up to the nearest whole number the number of the shares of Common Stock to be issued to the Warrant holder.
4.8. Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
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5. Transfer and Exchange of Warrants.
5.1. Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.
5.2. Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the registered holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend.
5.3. Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of a warrant certificate for a fraction of a warrant.
5.4. Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.
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5.5. Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
6. Redemption.
6.1. Redemption. Subject to Section 6.4 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time while they are exercisable and prior to their expiration, at the office of the Warrant Agent, upon the notice referred to in Section 6.2, at the price of $.01 per Warrant (“Redemption Price”), provided that the last sales price of the Common Stock has been at least $__.00 per share (subject to adjustment in accordance with Section 4 hereof), on each of twenty (20) trading days within any thirty (30) trading day period ending on the third Business Day prior to the date on which notice of redemption is given and provided further that there is a current registration statement in effect with respect to the shares of Common Stock underlying the Warrants.
6.2. Date Fixed for, and Notice of, Redemption. In the event the Company shall elect to redeem all of the Warrants, the Company shall fix a date for the redemption (the “Redemption Date”). Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than ___ days prior to the Redemption Date to the registered holders of the Warrants to be redeemed at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the registered holder received such notice.
6.3. Exercise After Notice of Redemption. The Warrants may be exercised, for cash (or on a “cashless basis” in accordance with Section 3 of this Agreement) at any time after notice of redemption shall have been given by the Company pursuant to Section 6.2 hereof and prior to the Redemption Date. In the event the Company determines to require all holders of Warrants to exercise their Warrants on a “cashless basis” pursuant to Section 3.3.1(b), the notice of
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redemption will contain the information necessary to calculate the number of shares of Common Stock to be received upon exercise of the Warrants, including the “Fair Market Value” in such case. On and after the Redemption Date, the record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.
6.4 Exclusion of Certain Warrants. The Company has contractually agreed that it will not exercise its redemption rights provided for herein with respect to certain Warrants held by the Company’s founders, members of management and their respective affiliates while such Warrants continue to be held by such holders. However, once such Warrants are transferred from the Company’s founders, members of management and their respective affiliates, the Company may redeem such Warrants provided that the criteria for redemption is met.
7. Other Provisions Relating to Rights of Holders of Warrants.
7.1. No Rights as Shareholder. A Warrant does not entitle the registered holder thereof to any of the rights of a shareholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as shareholders in respect of the meetings of shareholders or the election of directors of the Company or any other matter.
7.2. Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
7.3. Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
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7.4. Registration of Common Stock. The Company agrees to use its commercially reasonable best efforts to have an effective and current registration statement, whether as a post-effective amendment to the Registration Statement or a new registration statement, for the registration, under the Act, of the shares of Common Stock issuable upon exercise of the Warrants. In either case, the Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement until the expiration of the Warrants in accordance with the provisions of this Agreement. In addition, the Company agrees to use its commercially reasonable best efforts to register such securities under the blue sky laws of the states of residence of the exercising warrant holders to the extent an exemption is not available. If any such post-effective amendment or registration statement has not been declared effective at a time while the Warrants are exercisable, holders of the Warrants shall have the right, until such time as such post-effective amendment or registration statement has been declared effective by the SEC, and during any other period after such date of effectiveness when the Company shall fail to have maintained an effective registration statement covering the shares of Common Stock issuable upon exercise of the Warrants, to exercise such Warrants on a “cashless basis” as determined in accordance with Section 3.3.1(c). For the avoidance of any doubt, unless and until all of the Warrants have been exercised on a cashless basis, the Company shall continue to be obligated to comply with its registration obligations under this Section 7.4.
8. Concerning the Warrant Agent and Other Matters.
8.1. Payment of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares.
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8.2. Resignation, Consolidation, or Merger of Warrant Agent.
8.2.1. Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice, submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
8.2.2. Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.
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8.2.3. Merger or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act.
8.3. Fees and Expenses of Warrant Agent.
8.3.1. Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2. Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.
8.4. Liability of Warrant Agent.
8.4.1. Reliance on Company Statement. Whenever in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer or Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.
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8.4.2. Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement except as a result of the Warrant Agent’s gross negligence, willful misconduct, or bad faith.
8.4.3. Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant; nor shall it be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any Common Stock will when issued be valid and fully paid and nonassessable.
8.5. Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of Common Stock through the exercise of Warrants.
9. Miscellaneous Provisions.
9.1. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.
9.2. Notices. Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company
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shall be sufficiently given when so delivered if by hand or overnight delivery or, if sent by certified mail or private courier service, within five days after deposit of such notice, statement or demand, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:
PAVmed Inc.
420 Lexington Avenue, Suite 300
New York, New York 10170
Attn: Chief Executive Officer
Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or, if sent by certified mail or private courier service within five days after deposit of such notice, statement or demand, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:
Continental Stock Transfer & Trust Company
17 Battery Place
New York, New York 10004
Attn: Compliance Department
with a copy in each case to:
Graubard Miller
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attn: David Alan Miller, Esq.
9.3. Applicable Law. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and
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enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.2 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim.
9.4. Persons Having Rights under this Agreement. Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the registered holders of the Warrants, any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the registered holders of the Warrants.
9.5. Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the registered holder of any Warrant. The Warrant Agent may require any such holder to submit his Warrant for inspection by it.
9.6. Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
9.7. Effect of Headings. The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not affect the interpretation thereof.
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9.8 Amendments. This Agreement may be amended by the parties hereto without the consent of any registered holder for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the registered holders. Except as otherwise set forth herein, all other modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period, shall require the written consent or vote of the registered holders of at least a majority of the then outstanding Warrants (including any Warrants held by the Company’s officers and directors or their respective affiliates). Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively, without the consent of the registered holders.
9.9 Severability. This Warrant Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Warrant Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Warrant Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day and year first above written.
PAVMED INC. | ||
By: | ||
Name: | ||
Title: | ||
CONTINENTAL STOCK TRANSFER | ||
& TRUST COMPANY | ||
By: | ||
Name: | ||
Title: |
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Exhibit 4.5
PAXmed Inc.
2014 Long-Term Incentive Equity Plan
Section 1. Purpose; Definitions.
1.1. Purpose. The purpose of the PAXmed Inc. 2014 Long-Term Incentive Equity Plan (“Plan”) is to enable the Company to offer to its employees, officers, directors and consultants whose past, present and/or potential future contributions to the Company and its Subsidiaries have been, are or will be important to the success of the Company, an opportunity to acquire a proprietary interest in the Company. The various types of long-term incentive awards that may be provided under the Plan will enable the Company to respond to changes in compensation practices, tax laws, accounting regulations and the size and diversity of its businesses.
1.2. Definitions. For purposes of the Plan, the following terms shall be defined as set forth below:
(a) “Agreement” means the agreement between the Company and the Holder, or such other document as may be determined by the Committee, setting forth the terms and conditions of an award under the Plan.
(b) “Board” means the Board of Directors of the Company.
(c) “Code” means the Internal Revenue Code of 1986, as amended from time to time.
(d) “Committee” means the committee of the Board designated to administer the Plan as provided in Section 2.1. If no Committee is so designated, then all references in this Plan to “Committee” shall mean the Board.
(e) “Common Stock” means the Common Stock of the Company, par value $0.001 per share.
(f) “Company” means PAXmed Inc., a corporation organized under the laws of the State of Delaware.
(g) “Disability” means physical or mental impairment as determined under procedures established by the Committee for purposes of the Plan.
(h) “Effective Date” means the date determined pursuant to Section 11.1.
(i) “Fair Market Value,” unless otherwise required by any applicable provision of the Code or any regulations issued thereunder, means, as of any given date: (i) if the Common Stock is listed on a national securities exchange or The Nasdaq Stock Market, LLC (“Nasdaq”) or is traded on the OTC Bulletin Board (“OTC”), the last sale price of the Common Stock in the principal trading market for the Common Stock on such date, as reported by the exchange, Nasdaq or OTC, as the case may be; (ii) if the fair market value of the Common Stock cannot be determined pursuant to clause (i) above, such price as the Committee shall determine, in good faith.
(j) “Holder” means a person who has received an award under the Plan.
(k) “Incentive Stock Option” means any Stock Option intended to be and designated as an “incentive stock option” within the meaning of Section 422 of the Code.
(l) “Non-qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.
(m) “Normal Retirement” means retirement from active employment with the Company or any Subsidiary on or after such age which may be designated by the Committee as “retirement age” for any particular Holder. If no age is designated, it shall be 65.
(n) “Other Stock-Based Award” means an award under Section 9 that is valued in whole or in part by reference to, or is otherwise based upon, Common Stock.
(o) “Parent” means any present or future “parent corporation” of the Company, as such term is defined in Section 424(e) of the Code.
(p) “Plan” means the PAXmed Inc. 2014 Long-Term Incentive Equity Plan, as hereinafter amended from time to time.
(q) “Repurchase Value” shall mean the Fair Market Value if the award to be settled under Section 2.2(e) or repurchased under Section 5.2(k) or 9.2 is comprised of shares of Common Stock and the difference between Fair Market Value and the Exercise Price (if lower than Fair Market Value) if the award is a Stock Option or Stock Appreciation Right; in each case, multiplied by the number of shares subject to the award.
(r) “Restricted Stock” means Common Stock received under an award made pursuant to Section 7 that is subject to restrictions under Section 7.
(s) “SAR Value” means the excess of the Fair Market Value (on the exercise date) over (a) the exercise price that the participant would have otherwise had to pay to exercise the related Stock Option or (b) if a Stock Appreciation Right is granted unrelated to a Stock Option, the Fair Market Value of a share of Common Stock on the date of grant of the Stock Appreciation Right, in either case, multiplied by the number of shares for which the Stock Appreciation Right is exercised.
(t) “Stock Appreciation Right” means the right to receive from the Company, without a cash payment to the Company, a number of shares of Common Stock equal to the SAR Value divided by the Fair Market Value (on the exercise date).
(u) “Stock Option” or “Option” means any option to purchase shares of Common Stock which is granted pursuant to the Plan.
(v) “Subsidiary” means any present or future “subsidiary corporation” of the Company, as such term is defined in Section 424(f) of the Code.
(w) “Vest” means to become exercisable or to otherwise obtain ownership rights in an award.
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Section 2. Administration.
2.1. Committee Membership. The Plan shall be administered by the Board or a Committee. If administered by a Committee, such Committee shall be composed of at least two directors, all of whom are “outside directors” within the meaning of the regulations issued under Section 162(m) of the Code and “non-employee” directors within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended. Committee members shall serve for such term as the Board may in each case determine and shall be subject to removal at any time by the Board.
2.2. Powers of Committee. The Committee shall have full authority to award, pursuant to the terms of the Plan: (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, and/or (iv) Other Stock-Based Awards. For purposes of illustration and not of limitation, the Committee shall have the authority (subject to the express provisions of this Plan):
(a) to select the officers, employees, directors and consultants of the Company or any Subsidiary to whom Stock Options, Stock Appreciation Rights, Restricted Stock and/or Other Stock-Based Awards may from time to time be awarded hereunder;
(b) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder (including, but not limited to, number of shares, share exercise price or types of consideration paid upon exercise of such options, such as other securities of the Company or other property, any restrictions or limitations, and any vesting, exchange, surrender, cancellation, acceleration, termination, exercise or forfeiture provisions, as the Committee shall determine);
(c) to determine any specified performance goals or such other factors or criteria which need to be attained for the vesting of an award granted hereunder;
(d) to determine the terms and conditions under which awards granted hereunder are to operate on a tandem basis and/or in conjunction with or apart from other equity awarded under this Plan and cash and non-cash awards made by the Company or any Subsidiary outside of this Plan; and
(e) to make payments and distributions with respect to awards (i.e., to “settle” awards) through cash payments in an amount equal to the Repurchase Value.
The Committee may not modify or amend any outstanding Option or Stock Appreciation Right to reduce the exercise price of such Option or Stock Appreciation Right, as applicable, below the exercise price as of the date of grant of such Option or Stock Appreciation Right. In addition, no Option or Stock Appreciation Right may be granted in exchange for the cancellation or surrender of an Option or Stock Appreciation Right or other award having a higher exercise price.
Notwithstanding anything to the contrary, the Committee shall not grant to any one Holder in any one calendar year awards for more than 70,000 Shares (as defined below) in the aggregate.
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2.3. Interpretation of Plan.
(a) Committee Authority. Subject to Section 10, the Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable to interpret the terms and provisions of the Plan and any award issued under the Plan (and to determine the form and substance of all agreements relating thereto), and to otherwise supervise the administration of the Plan. Subject to Section 10, all decisions made by the Committee pursuant to the provisions of the Plan shall be made in the Committee’s sole discretion and shall be final and binding upon all persons, including the Company, its Subsidiaries and Holders.
(b) Incentive Stock Options. Anything in the Plan to the contrary notwithstanding, no term or provision of the Plan relating to Incentive Stock Options (including but not limited to Stock Appreciation rights granted in conjunction with an Incentive Stock Option) or any Agreement providing for Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to disqualify the Plan under Section 422 of the Code or, without the consent of the Holder(s) affected, to disqualify any Incentive Stock Option under such Section 422.
Section 3. Stock Subject to Plan.
3.1. Number of Shares. Subject to Section 7.1(d), the total number of shares of Common Stock reserved and available for issuance under the Plan shall be 700,000 shares. Shares of Common Stock under the Plan (“Shares”) may consist, in whole or in part, of authorized and unissued shares or treasury shares. If any shares of Common Stock that have been granted pursuant to a Stock Option cease to be subject to a Stock Option, or if any shares of Common Stock that are subject to any Stock Appreciation Right, Restricted Stock award or Other Stock-Based Award granted hereunder are forfeited, or any such award otherwise terminates without a payment being made to the Holder in the form of Common Stock, such shares shall again be available for distribution in connection with future grants and awards under the Plan. Shares of Common Stock that are surrendered by a Holder or withheld by the Company as full or partial payment in connection with any award under the Plan, as well as any shares of Common Stock surrendered by a Holder or withheld by the Company or one of its Subsidiaries to satisfy the tax withholding obligations related to any award under the Plan, shall not be available for subsequent awards under the Plan.
3.2. Adjustment Upon Changes in Capitalization, Etc. In the event of any common stock dividend payable on shares of Common Stock, Common Stock split or reverse split, combination or exchange of shares of Common Stock, or other extraordinary or unusual event which results in a change in the shares of Common Stock of the Company as a whole, the Committee shall determine, in its sole discretion, whether such change equitably requires an adjustment in the terms of any award in order to prevent dilution or enlargement of the benefits available under the Plan (including number of shares subject to the award and the exercise price) or the aggregate number of shares reserved for issuance under the Plan. Any such adjustments will be made by the Committee, whose determination will be final, binding and conclusive.
Section 4. Eligibility.
Awards may be made or granted to employees, officers, directors and consultants who are deemed to have rendered or to be able to render significant services to the Company or its Subsidiaries and who are deemed to have contributed or to have the potential to contribute to the
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success of the Company and which recipients are qualified to receive options under the regulations governing Form S-8 registration statements under the Securities Act of 1933, as amended (“Securities Act”). No Incentive Stock Option shall be granted to any person who is not an employee of the Company or an employee of a Subsidiary at the time of grant or so qualified as set forth in the immediately preceding sentence. Notwithstanding the foregoing, an award may also be made or granted to a person in connection with his hiring or retention, or at any time on or after the date he reaches an agreement (oral or written) with the Company with respect to such hiring or retention, even though it may be prior to the date the person first performs services for the Company or its Subsidiaries; provided, however, that no portion of any such award shall vest prior to the date the person first performs such services and the date of grant shall be deemed to be the date hiring or retention commences.
Section 5. Stock Options.
5.1. Grant and Exercise. Stock Options granted under the Plan may be of two types: (i) Incentive Stock Options and (ii) Non-qualified Stock Options. Any Stock Option granted under the Plan shall contain such terms, not inconsistent with this Plan, or with respect to Incentive Stock Options, not inconsistent with the Plan and the Code, as the Committee may from time to time approve. The Committee shall have the authority to grant Incentive Stock Options or Non-qualified Stock Options, or both types of Stock Options which may be granted alone or in addition to other awards granted under the Plan. To the extent that any Stock Option intended to qualify as an Incentive Stock Option does not so qualify, it shall constitute a separate Non-qualified Stock Option.
5.2. Terms and Conditions. Stock Options granted under the Plan shall be subject to the following terms and conditions:
(a) Option Term. The term of each Stock Option shall be fixed by the Committee; provided, however, that an Incentive Stock Option may be granted only within the ten-year period commencing from the Effective Date and may only be exercised within ten years of the date of grant (or five years in the case of an Incentive Stock Option granted to an optionee who, at the time of grant, owns Common Stock possessing more than 10% of the total combined voting power of all classes of voting stock of the Company (“10% Shareholder”)).
(b) Exercise Price. The exercise price per share of Common Stock purchasable under a Stock Option shall be determined by the Committee at the time of grant and may not be less than 100% of the Fair Market Value on the date of grant (or, if greater, the par value of a share of Common Stock); provided, however, that the exercise price of an Incentive Stock Option granted to a 10% Shareholder will not be less than 110% of the Fair Market Value on the date of grant.
(c) Exercisability. Stock Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee. The Committee intends generally to provide that Stock Options be exercisable only in installments, i.e., that they vest over time, typically over a four-year period. The Committee may waive such installment exercise provisions at any time at or after the time of grant in whole or in part, based upon such factors as the Committee determines. Notwithstanding the foregoing, in the case of an Incentive Stock Option, the aggregate Fair Market Value (on the date of grant of the Option) with respect to which Incentive Stock Options become
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exercisable for the first time by a Holder during any calendar year (under all such plans of the Company and its Parent and Subsidiaries) shall not exceed $100,000.
(d) Method of Exercise. Subject to whatever installment, exercise and waiting period provisions are applicable in a particular case, Stock Options may be exercised in whole or in part at any time during the term of the Option by giving written notice of exercise to the Company specifying the number of shares of Common Stock to be purchased. Such notice shall be accompanied by payment in full of the purchase price, which shall be in cash or, if provided in the Agreement, either in shares of Common Stock (including Restricted Stock and other contingent awards under this Plan) or partly in cash and partly in such Common Stock, or such other means which the Committee determines are consistent with the Plan’s purpose and applicable law. Cash payments shall be made by wire transfer, certified or bank check or personal check, in each case payable to the order of the Company; provided, however, that the Company shall not be required to deliver certificates for shares of Common Stock with respect to which an Option is exercised until the Company has confirmed the receipt of good and available funds in payment of the purchase price thereof (except that, in the case of an exercise arrangement approved by the Committee and described in the last sentence of this paragraph, payment may be made as soon as practicable after the exercise). The Committee may permit a Holder to elect to pay the Exercise Price upon the exercise of a Stock Option by irrevocably authorizing a third party to sell shares of Common Stock (or a sufficient portion of the shares) acquired upon exercise of the Stock Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire Exercise Price and any tax withholding resulting from such exercise.
(e) Stock Payments. Payments in the form of Common Stock shall be valued at the Fair Market Value on the date of exercise. Such payments shall be made by delivery of stock certificates in negotiable form that are effective to transfer good and valid title thereto to the Company, free of any liens or encumbrances.
(f) Transferability. Except as may be set forth in the next sentence of this Section or in the Agreement, no Stock Option shall be transferable by the Holder other than by will or by the laws of descent and distribution, and all Stock Options shall be exercisable, during the Holder’s lifetime, only by the Holder (or, to the extent of legal incapacity or incompetency, the Holder’s guardian or legal representative). Notwithstanding the foregoing, a Holder, with the approval of the Committee, may transfer a Non-Qualified Stock Option (i) (A) by gift, for no consideration, or (B) pursuant to a domestic relations order, in either case, to or for the benefit of the Holder’s “Immediate Family” (as defined below), or (ii) to an entity in which the Holder and/or members of Holder’s Immediate Family own more than fifty percent of the voting interest, subject to such limits as the Committee may establish and the execution of such documents as the Committee may require, and the transferee shall remain subject to all the terms and conditions applicable to the Non-Qualified Stock Option prior to such transfer. The term “Immediate Family” shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, any person sharing the Holder’s household (other than a tenant or employee), a trust in which these persons have more than fifty percent beneficial interest, and a foundation in which these persons (or the Holder) control the management of the assets. The Committee may, in its sole discretion, permit transfer of an Incentive Stock Option in a manner consistent with applicable tax and securities law upon the Holder’s request.
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(g) Termination by Reason of Death. If a Holder’s employment by, or association with, the Company or a Subsidiary terminates by reason of death, any Stock Option held by such Holder, unless otherwise determined by the Committee and set forth in the Agreement, shall thereupon automatically terminate, except that the portion of such Stock Option that has vested on the date of death may thereafter be exercised by the legal representative of the estate or by the legatee of the Holder under the will of the Holder, for a period of one year (or such other greater or lesser period as the Committee may specify in the Agreement) from the date of such death or until the expiration of the stated term of such Stock Option, whichever period is shorter.
(h) Termination by Reason of Disability. If a Holder’s employment by, or association with, the Company or any Subsidiary terminates by reason of Disability, any Stock Option held by such Holder, unless otherwise determined by the Committee and set forth in the Agreement, shall thereupon automatically terminate, except that the portion of such Stock Option that has vested on the date of termination may thereafter be exercised by the Holder for a period of one year (or such other greater or lesser period as the Committee may specify in the Agreement) from the date of such termination or until the expiration of the stated term of such Stock Option, whichever period is shorter.
(i) Termination by Reason of Normal Retirement. Subject to the provisions of Section 12.3, if such Holder’s employment by, or association with, the Company or any Subsidiary terminates due to Normal Retirement, any Stock Option held by such Holder, unless otherwise determined by the Committee and set forth in the Agreement, shall thereupon automatically terminate, except that the portion of such Stock Option that has vested on the date of termination may thereafter be exercised by the Holder for a period of one year (or such other greater or lesser period as the Committee may specify in the Agreement) from the date of such termination or until the expiration of the stated term of such Stock Option, whichever period is shorter.
(j) Other Termination. Subject to the provisions of Section 12.3, if such Holder’s employment by, or association with, the Company or any Subsidiary terminates for any reason other than death, Disability or Normal Retirement, any Stock Option held by such Holder, unless otherwise determined by the Committee and set forth in the Agreement, shall thereupon automatically terminate, except that, if the Holder’s employment is terminated by the Company or a Subsidiary without cause, the portion of such Stock Option that has vested on the date of termination may thereafter be exercised by the Holder for a period of three months (or such other greater or lesser period as the Committee may specify in the Agreement) from the date of such termination or until the expiration of the stated term of such Stock Option, whichever period is shorter.
(k) Buyout and Settlement Provisions. The Committee may at any time, in its sole discretion, offer to repurchase a Stock Option previously granted, at a purchase price not to exceed the Repurchase Value, based upon such terms and conditions as the Committee shall establish and communicate to the Holder at the time that such offer is made.
(l) Rights as Shareholder. A Holder shall have none of the rights of a Shareholder with respect to the shares subject to the Option until such shares shall be transferred to the Holder upon the exercise of the Option.
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Section 6. Stock Appreciation Rights.
6.1. Grant and Exercise. Subject to the terms and conditions of the Plan, the Committee may grant Stock Appreciation Rights in tandem with an Option or alone and unrelated to an Option. The Committee may grant Stock Appreciation Rights to participants who have been or are being granted Stock Options under the Plan as a means of allowing such participants to exercise their Stock Options without the need to pay the exercise price in cash. In the case of a Non-qualified Stock Option, a Stock Appreciation Right may be granted either at or after the time of the grant of such Non-qualified Stock Option. In the case of an Incentive Stock Option, a Stock Appreciation Right may be granted only at the time of the grant of such Incentive Stock Option.
6.2. Terms and Conditions. Stock Appreciation Rights shall be subject to the following terms and conditions:
(a) Exercisability. Stock Appreciation Rights shall be exercisable as shall be determined by the Committee and set forth in the Agreement, subject, for Stock Appreciation Rights granted in tandem with an Incentive Stock Option, to the limitations, if any, imposed by the Code with respect to related Incentive Stock Options.
(b) Termination. All or a portion of a Stock Appreciation Right granted in tandem with a Stock Option shall terminate and shall no longer be exercisable upon the termination or after the exercise of the applicable portion of the related Stock Option.
(c) Method of Exercise. Stock Appreciation Rights shall be exercisable upon such terms and conditions as shall be determined by the Committee and set forth in the Agreement and, for Stock Appreciation Rights granted in tandem with a Stock Option, by surrendering the applicable portion of the related Stock Option. Upon exercise of all or a portion of a Stock Appreciation Right and, if applicable, surrender of the applicable portion of the related Stock Option, the Holder shall be entitled to receive a number of shares of Common Stock equal to the SAR Value divided by the Fair Market Value on the date the Stock Appreciation Right is exercised.
(d) Shares Available Under Plan. The granting of a Stock Appreciation Right in tandem with a Stock Option shall not affect the number of shares of Common Stock available for awards under the Plan. The number of shares available for awards under the Plan will, however, be reduced by the number of shares of Common Stock acquirable upon exercise of the Stock Option to which such Stock Appreciation Right relates.
Section 7. Restricted Stock.
7.1. Grant. Shares of Restricted Stock may be awarded either alone or in addition to other awards granted under the Plan. The Committee shall determine the eligible persons to whom, and the time or times at which, grants of Restricted Stock will be awarded, the number of shares to be awarded, the price (if any) to be paid by the Holder, the time or times within which such awards may be subject to forfeiture (“Restriction Period”), the vesting schedule and rights to acceleration thereof and all other terms and conditions of the awards.
7.2. Terms and Conditions. Each Restricted Stock award shall be subject to the following terms and conditions:
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(a) Certificates. Restricted Stock, when issued, will be represented by a stock certificate or certificates registered in the name of the Holder to whom such Restricted Stock shall have been awarded. During the Restriction Period, certificates representing the Restricted Stock and any securities constituting Retained Distributions (as defined below) shall bear a legend to the effect that ownership of the Restricted Stock (and such Retained Distributions) and the enjoyment of all rights appurtenant thereto are subject to the restrictions, terms and conditions provided in the Plan and the Agreement. Such certificates shall be deposited by the Holder with the Company, together with stock powers or other instruments of assignment, each endorsed in blank, which will permit transfer to the Company of all or any portion of the Restricted Stock and any securities constituting Retained Distributions that shall be forfeited or that shall not become vested in accordance with the Plan and the Agreement.
(b) Rights of Holder. Restricted Stock shall constitute issued and outstanding shares of Common Stock for all corporate purposes. The Holder will have the right to vote such Restricted Stock and to exercise all other rights, powers and privileges of a holder of Common Stock with respect to such Restricted Stock, with the exceptions that (i) the Holder will not be entitled to delivery of the stock certificate or certificates representing such Restricted Stock until the Restriction Period shall have expired and unless all other vesting requirements with respect thereto shall have been fulfilled; (ii) the Company will retain custody of the stock certificate or certificates representing the Restricted Stock during the Restriction Period; (iii) the Company will retain custody of all dividends and distributions (“Retained Distributions”) made, paid or declared with respect to the Restricted Stock (and such Retained Distributions will be subject to the same restrictions, terms and conditions as are applicable to the Restricted Stock) until such time, if ever, as the Restricted Stock with respect to which such Retained Distributions shall have been made, paid or declared shall have become vested and with respect to which the Restriction Period shall have expired; and (iv) a breach of any of the restrictions, terms or conditions contained in this Plan or the Agreement or otherwise established by the Committee with respect to any Restricted Stock or Retained Distributions will cause a forfeiture of such Restricted Stock and any Retained Distributions with respect thereto.
(c) Vesting; Forfeiture. Upon the expiration of the Restriction Period with respect to each award of Restricted Stock and the satisfaction of any other applicable restrictions, terms and conditions (i) all or part of such Restricted Stock shall become vested in accordance with the terms of the Agreement, and (ii) any Retained Distributions with respect to such Restricted Stock shall become vested to the extent that the Restricted Stock related thereto shall have become vested. Any such Restricted Stock and Retained Distributions that do not vest shall be forfeited to the Company and the Holder shall not thereafter have any rights with respect to such Restricted Stock and Retained Distributions that shall have been so forfeited.
Section 8. Other Stock-Based Awards.
Other Stock-Based Awards may be awarded, subject to limitations under applicable law, that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of Common Stock, as deemed by the Committee to be consistent with the purposes of the Plan, including, without limitation, purchase rights, shares of Common Stock awarded which are not subject to any restrictions or conditions, convertible or exchangeable debentures, or other rights convertible into shares of Common Stock and awards valued by reference to the value of securities of or the performance of specified Subsidiaries. These other
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stock-based awards may include performance shares or options, whose award is tied to specific performance criteria. Other Stock-Based Awards may be awarded either alone or in addition to or in tandem with any other awards under this Plan or any other plan of the Company. Each other Stock-Based Award shall be subject to such terms and conditions as may be determined by the Committee.
Section 9. Accelerated Vesting and Exercisability.
9.1. Non-Approved Transactions. If any one person, or more than one person acting as a group, acquires the ownership of stock of the Company that, together with the stock held by such person or group, constitutes more than 50% of the total fair market value or combined voting power of the stock of the Company, and the Board does not authorize or otherwise approve such acquisition, then the vesting periods of any and all Stock Options and other awards granted and outstanding under the Plan shall be accelerated and all such Stock Options and awards will immediately and entirely vest, and the respective holders thereof will have the immediate right to purchase and/or receive any and all Common Stock subject to such Stock Options and awards on the terms set forth in this Plan and the respective Agreements respecting such Stock Options and awards. An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires its stock in exchange for property is not treated as an acquisition of stock for purposes of this Section 9.1.
9.2. Approved Transactions. The Committee may, in the event of an acquisition by any one person, or more than one person acting as a group, together with acquisitions during the 12-month period ending on the date of the most recent acquisition by such person or persons, of assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions, or if any one person, or more than one person acting as a group, acquires the ownership of stock of the Company that, together with the stock held by such person or group, constitutes more than 50% of the total fair market value or combined voting power of the stock of the Company, which has been approved by the Company’s Board of Directors, (i) accelerate the vesting of any and all Stock Options and other awards granted and outstanding under the Plan, or (ii) require a Holder of any award granted under this Plan to relinquish such award to the Company upon the tender by the Company to Holder of cash in an amount equal to the Repurchase Value of such award. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
9.3. Code Section 409A. Notwithstanding any provisions of this Plan or any award granted hereunder to the contrary, no acceleration shall occur with respect to any award to the extent such acceleration would cause the Plan or an award granted hereunder to fail to comply with Code Section 409A.
Section 10. Amendment and Termination.
The Board may at any time, and from time to time, amend alter, suspend or discontinue any of the provisions of the Plan, but no amendment, alteration, suspension or discontinuance shall be made that would impair the rights of a Holder under any Agreement theretofore entered into hereunder, without the Holder’s consent, except as set forth in this Plan.
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Section 11. Term of Plan.
11.1. Effective Date. The Effective Date of the Plan shall be the date on which the Plan is adopted by the Board. Awards may be granted under the Plan at any time after the Effective Date and before the date fixed herein for termination of the Plan; provided, however, that if the Plan is not approved by the affirmative vote of the holders of a majority of the Common Stock cast at a duly held stockholders’ meeting at which a quorum is, either in person or by proxy, present and voting within one year from the Effective Date, then (i) no Incentive Stock Options may be granted hereunder and (ii) all Incentive Stock Options previously granted hereunder shall be automatically converted into Non-qualified Stock Options.
11.2. Termination Date. Unless terminated by the Board, this Plan shall continue to remain effective until such time as no further awards may be granted and all awards granted under the Plan are no longer outstanding. Notwithstanding the foregoing, grants of Incentive Stock Options may be made only during the ten-year period beginning on the Effective Date.
Section 12. General Provisions.
12.1. Written Agreements. Each award granted under the Plan shall be confirmed by, and shall be subject to the terms of, the Agreement executed by the Company and the Holder, or such other document as may be determined by the Committee. The Committee may terminate any award made under the Plan if the Agreement relating thereto is not executed and returned to the Company within 10 days after the Agreement has been delivered to the Holder for his or her execution.
12.2. Unfunded Status of Plan. The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Holder by the Company, nothing contained herein shall give any such Holder any rights that are greater than those of a general creditor of the Company.
12.3. Employees.
(a) Engaging in Competition With the Company; Solicitation of Customers and Employees; Disclosure of Confidential Information. If a Holder’s employment with the Company or a Subsidiary is terminated for any reason whatsoever, and within 12 months after the date thereof such Holder either (i) accepts employment with any competitor of, or otherwise engages in competition with, the Company or any of its Subsidiaries, (ii) solicits any customers or employees of the Company or any of its Subsidiaries to do business with or render services to the Holder or any business with which the Holder becomes affiliated or to which the Holder renders services or (iii) uses or discloses to anyone outside the Company any confidential information or material of the Company or any of its Subsidiaries in violation of the Company’s policies or any agreement between the Holder and the Company or any of its Subsidiaries, the Committee, in its sole discretion, may require such Holder to return to the Company the economic value of any award that was realized or obtained by such Holder at any time during the period beginning on the date that is six months prior to the date such Holder’s employment with the Company is terminated; provided, however, that if the Holder is a resident of the State of California, such right must be exercised by the Company for cash within six months after the date of termination of the Holder’s service to the Company or within six months after exercise of the applicable Stock Option, whichever is later. In such event, Holder agrees to remit to the Company, in cash, an amount equal to the difference between the Fair Market Value of the Shares on the date of termination (or the
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sales price of such Shares if the Shares were sold during such six month period) and the price the Holder paid the Company for such Shares.
(b) Termination for Cause. If a Holder’s employment with the Company or a Subsidiary is terminated for cause, the Committee may, in its sole discretion, require such Holder to return to the Company the economic value of any award that was realized or obtained by such Holder at any time during the period beginning on that date that is six months prior to the date such Holder’s employment with the Company is terminated. In such event, Holder agrees to remit to the Company, in cash, an amount equal to the difference between the Fair Market Value of the Shares on the date of termination (or the sales price of such Shares if the Shares were sold during such six month period) and the price the Holder paid the Company for such Shares.
(c) No Right of Employment. Nothing contained in the Plan or in any award hereunder shall be deemed to confer upon any Holder who is an employee of the Company or any Subsidiary any right to continued employment with the Company or any Subsidiary, nor shall it interfere in any way with the right of the Company or any Subsidiary to terminate the employment of any Holder who is an employee at any time.
12.4. Investment Representations; Company Policy. The Committee may require each person acquiring shares of Common Stock pursuant to a Stock Option or other award under the Plan to represent to and agree with the Company in writing that the Holder is acquiring the shares for investment without a view to distribution thereof. Each person acquiring shares of Common Stock pursuant to a Stock Option or other award under the Plan shall be required to abide by all policies of the Company in effect at the time of such acquisition and thereafter with respect to the ownership and trading of the Company’s securities.
12.5. Additional Incentive Arrangements. Nothing contained in the Plan shall prevent the Board from adopting such other or additional incentive arrangements as it may deem desirable, including, but not limited to, the granting of Stock Options and the awarding of Common Stock and cash otherwise than under the Plan; and such arrangements may be either generally applicable or applicable only in specific cases.
12.6. Withholding Taxes. Not later than the date as of which an amount must first be included in the gross income of the Holder for Federal income tax purposes with respect to any Stock Option or other award under the Plan, the Holder shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any Federal, state and local taxes of any kind required by law to be withheld or paid with respect to such amount. If permitted by the Committee, tax withholding or payment obligations may be settled with Common Stock, including Common Stock that is part of the award that gives rise to the withholding requirement. The obligations of the Company under the Plan shall be conditioned upon such payment or arrangements and the Company or the Holder’s employer (if not the Company) shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Holder from the Company or any Subsidiary.
12.7. Governing Law. The Plan and all awards made and actions taken thereunder shall be governed by and construed in accordance with the law of the State of Delaware (without regard to choice of law provisions).
12.8. Other Benefit Plans. Any award granted under the Plan shall not be deemed compensation for purposes of computing benefits under any retirement plan of the Company or
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any Subsidiary and shall not affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation (unless required by specific reference in any such other plan to awards under this Plan).
12.9. Non-Transferability. Except as otherwise expressly provided in the Plan or the Agreement, no right or benefit under the Plan may be alienated, sold, assigned, hypothecated, pledged, exchanged, transferred, encumbranced or charged, and any attempt to alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge the same shall be void.
12.10. Applicable Laws. The obligations of the Company with respect to all Stock Options and awards under the Plan shall be subject to (i) all applicable laws, rules and regulations and such approvals by any governmental agencies as may be required, including, without limitation, the Securities Act, and (ii) the rules and regulations of any securities exchange on which the Common Stock may be listed.
12.11. Conflicts. If any of the terms or provisions of the Plan or an Agreement conflict with the requirements of Section 422 of the Code, then such terms or provisions shall be deemed inoperative to the extent they so conflict with such requirements. Additionally, if this Plan or any Agreement does not contain any provision required to be included herein under Section 422 of the Code, such provision shall be deemed to be incorporated herein and therein with the same force and effect as if such provision had been set out at length herein and therein. If any of the terms or provisions of any Agreement conflict with any terms or provisions of the Plan, then such terms or provisions shall be deemed inoperative to the extent they so conflict with the requirements of the Plan. Additionally, if any Agreement does not contain any provision required to be included therein under the Plan, such provision shall be deemed to be incorporated therein with the same force and effect as if such provision had been set out at length therein.
12.12. Certain Awards Deferring or Accelerating the Receipt of Compensation. To the extent applicable, all awards granted, and all Agreements entered into, under the Plan are intended to comply with Section 409A of the Code, which was added by the American Jobs Creation Act of 2004 and relates to deferred compensation under nonqualified deferred compensation plans. The Committee, in administering the Plan, intends, and the parties entering into any Agreement intend, to restrict provisions of any awards that may constitute deferred receipt of compensation subject to Code Section 409A requirements to those consistent with this Section. The Board may amend the Plan to comply with Code Section 409A in the future.
12.13. Non-Registered Stock. The shares of Common Stock to be distributed under this Plan have not been, as of the Effective Date, registered under the Securities Act or any applicable state or foreign securities laws and the Company has no obligation to any Holder to register the Common Stock or to assist the Holder in obtaining an exemption from the various registration requirements, or to list the Common Stock on a national securities exchange or any other trading or quotation system, including Nasdaq.
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Exhibit 10.1
OPTION AGREEMENT
This AGREEMENT (the “Agreement”) is made and entered into as of September 21, 2014 (the “Effective Date”), by and between PAXmed Inc. having an address at 420 Lexington Avenue, Suite #300, New York, New York 10170 (“PAXmed”) and PAVILLION HOLDINGS GROUP LLC, a Delaware limited liability company, having an address at 50 Loring Drive, Norwell, MA 02061 (“PHG”). PAXmed and PHG are referred to collectively herein as the “Parties”.
PRELIMINARY STATEMENT
WHEREAS, PHG is the owner of United States Patent # US 8,622,976, issued January 7, 2014, “System and Methods for Infusion of Fluids Using Stored Potential Energy and a Variable Flow Resistor” (the “Patent”) and the inventors of such Patent, Lishan Aklog, Michael Glennon, Paul John Cronin and William Edgar Baker, had previously assigned to PHG all rights in such invention and patent under application Serial # 13/041,296 filed with the US Patent and Trademark Office (“USPTO”) on March 4, 2011;
WHEREAS, PHG has not, and is not currently in a position to, develop and/or commercialize products under such Patent and does not anticipate having the resources to do so in the foreseeable future;
WHEREAS, PAXmed has developed certain inventions and technology in medical infusion devices which may be considered improvements of the Patent or, alternatively, may not be improvements of the Patent and instead may be independent inventions not derived from the Patent, and PAXmed needs as time period to conduct further analysis to determine whether it would be desirable for PAXmed to acquire the Patent from PHG, and accordingly, for the consideration set forth below, PHG is willing to grant to PAXmed an option to acquire the Patent, on the terms and conditions set forth herein.
In consideration of the mutual promises and other terms and conditions contained herein, the Parties hereby agree as follows:
1. Grant of Option; Terms of Option
(a) PHG does hereby grant to PAXmed the right, but not the obligation, to acquire all right, title and interest in and to the Patent (the “Option”).
(b) In consideration for the grant of the Option, PAXmed will pay to PHG the sum of One Thousand ($1,000) Dollars, in cash, upon the execution and delivery of this Agreement.
(c) The term of the Option shall be one (1) year, such that the Option must be exercised by PAXmed on or prior to one (1) year from the Effective Date (the “Term”).
(c) The Exercise Price for exercise of the Option, such that PAXmed acquires all right, title and interest in the Patent, is Ten Thousand ($10,000) Dollars, in cash, upon the exercise of the Option and closing of the transfer of title to the Patent.
2. Procedures for Exercise of the Option and Assignment of Patent to PAXmed.
(a) If PAXmed desires to exercise the Option, it shall send written notice to PHG on or prior to one (1) year from the Effective Date, setting forth a date (“Closing Date”) for the closing of transfer of title to the Patent and payment of the Exercise Price which shall be no later than ten (10) days after the notice of exercise.
(b) On such Closing Date, PAXmed shall pay to PHG the Exercise Price of $10,000 and PHG shall transfer all right, title and interest in and to the Patent to PAXmed by execution and delivery of a written assignment of Patent in form recordable in the USPTO satisfactory to PAXmed’s counsel, and PAXmed shall be authorized to immediately file such assignment in the USPTO. PHG shall also execute and delivery such other documents and instruments as shall be reasonably necessary to effect the transfer of all right, title and interest in and to the Patent to PAXmed.
(c) The assignment and transfer of title from PHG to PAXmed shall be free and clear of all licenses, contracts, liens, claims, and encumbrances. From and after such assignment and transfer, PHG shall be excluded from practicing under the Patent, PHG shall not attack the title of PAXmed in and to the Patent and PHG shall not take any action adverse to PAXmed’s ownership or use of the Patent or challenging the validity of the Patent.
3. Restrictions during Term of Option. During the period commencing on the Effective Date, and continuing until one (1) year after the Effective Date:
(a) PHG shall maintain all right, title and interest in and to the Patent free and clear of all liens, claims and encumbrances; PHG shall not license, sublicense, transfer, assign, sale or otherwise dispose of or impair title to the Patent or enter into any contract to do so; and PHG shall not practice under, manufacture, sell, distribute or market any products under the Patent..
(b) PHG shall maintain the Patent in full force and effect and shall pay to the USPTO all maintenance fees, renewal fees and similar charges.
(c) PHG shall not file any amendments, modifications, continuations in part (CIP), abandonments, or make any other changes to the Patent or any other filings with the USPTO without the written consent of PAXmed in each instance.
(d) PHG shall not file any similar or related patents in any jurisdictions outside of the USPTO.
(e) PHG does hereby grant to PAXmed, an exclusive, but limited license for use of the Patent during the Term of the Option, solely for the purposes of (1) PAXmed’s evaluation and investigation of the Patent and (2) PAXmed’s development of improvements to the Patent, and not for any commercial sale or marketing of products under the Patent. If PAXmed does not elect to exercise the Option before the expiration of the Term, the limited license shall terminate
at the expiration of the Term. The limited license granted pursuant to this Section 4(e) above shall be royalty-free since no commercial sales will occur prior to exercise of the Option. Such limited license shall be exclusive to PAXmed. PAXmed shall not sell, transfer or assign such limited license, but PAXmed may grant limited sublicenses to consultants and potential manufacturers, distributors and other supply chain participants for research, development and evaluation purposes only.
4. Confidentiality and Protection of Technology.
(a) The confidentiality and non-disclosure provisions of this Agreement are intended to protect the respective confidential, technological and business information of each party.
(b) During the Term of the Option, and prior to the exercise of the Option by PAXmed, PAXmed shall maintain in strict confidence, and not copy, disclose or transfer to any third party, all Confidential and Proprietary Information (as defined below) relating to Patent, and utilize such information solely for PAXmed’s investigation and evaluation of the Patent, provided however, PAXmed may disclose such information as is necessary to consultants and contractors assisting PAXmed in its investigation and evaluation of the Patent solely for the purpose of enabling them to assist PAXmed in such functions.
(c) Protection of PAXmed Inventions/Improvements. During the Term and prior to the exercise of the Option by PAXmed, Confidential and Proprietary Information relating to improvements to the Patent, and/or independent inventions separate and apart from the Patent, may be developed by PAXmed (collectively, “Additional IP”). PHG shall maintain in strict confidence, and not copy, disclose or transfer to any third party, all Confidential and Proprietary Information (as defined below) relating to such Additional IP.
(d) Protection of Separate Technology of each of PHG and PAXmed. PAXmed shall not be obligated to disclose to PHG any medical devices, technologies or inventions it may be working on whether originated internally or from sources other than PHG, and PHG shall not be obligated to disclose to PAXmed any medical devices, technologies or inventions it may be working on except those relating to the Patent. Nevertheless, whether inadvertently or in the course of discussions between the Parties, each party may be exposed to or have access to such separate technologies of the other party which are not the subject of any development program between the Parties (“Separate Technologies”). Each Party shall maintain in strict confidence, and not copy, disclose or transfer to any third party, all Confidential and Proprietary Information relating to such Separate Technologies of the other party hereto.
(e) Protection of Business Information of each of PHG and PAXmed. Each Party shall maintain in strict confidence, and not copy, disclose or transfer to any third party, all Confidential and Proprietary Information relating to the business, operations, finances, systems, software or information technology of the other party hereto.
(f) For the purposes of this Agreement, the term “Confidential and Proprietary Information” of a party or its technology shall be deemed to include, without limitation, all designs, drawings, technology, systems, products, processes, methods, formulae, chemical compositions, schematics, specifications, techniques, technical information, models, prototypes,
samples, test results, research and development reports, software, data bases, computer programs, algorithms, source codes, object codes, program listings, platforms and architecture, screens, formats, Website development and configuration, know how, trade secrets, files, books and records, cost, pricing, sales, financial and tax information, business, marketing, product development and operational plans, projections, strategies, forecasts, budgets, channels of distribution, policies and manuals, terms and conditions of contracts, licenses, leases and financing and identification of personnel, and all other inventions, concepts, information, or tangible or intangible embodiments or records thereof, including any such information that may be stored on any computer system, network, disk, tape, CD or DVD or any other storage media.
(g) It is understood that Confidential and Proprietary Information excludes (i) information regarding one party (the “Disclosing Party”) which is or hereafter becomes generally available to the public through no act or failure to act on the part of the other party (the “Receiving Party”); (ii) information which is disclosed to the Receiving Party on a non-confidential basis by a third party having no legal or contractual obligation to the Disclosing Party to refrain from so doing; (iii) information which the Receiving Party can demonstrate by written record was independently developed prior to disclosure by the Disclosing Party by persons who did not have access to the Disclosing Party’s Confidential and Proprietary Information; or (iv) information set forth in an patent or patent application which has been officially published by the USPTO and available to the general public.
(h) Notwithstanding any other provision of this Agreement to the contrary, if a Receiving Party becomes the recipient of any subpoena, governmental or other third party request under lawful process for any of the Confidential and Proprietary Information of the Disclosing Party, the Receiving Party shall give prompt written notice to the Disclosing Party, prior to the disclosure or furnishing of such Confidential and Proprietary Information. The Receiving Party shall provide reasonable cooperation with the Disclosing Party at the Disclosing Party’s expense, in seeking relief to prevent, limit or restrict the disclosure of Confidential and Proprietary Information. If the Receiving Party has already complied with the foregoing provisions, and the Disclosing Party has either been denied relief as aforesaid or declined to seek such relief or only partial relief has been granted, the Receiving Party may disclose those components of the Confidential and Proprietary Information which may still be required to be disclosed (and shall redact or delete those components which are not required to be disclosed), upon the advice of counsel that such disclosure is required by law, court order, regulation of a stock exchange or other similar lawful process.
5. Non-Circumvention. In the event that PAXmed exercises the Option, then all business opportunities worldwide to research, develop, exploit, manufacture, sell, market, and license the products or technology relating to the Patent shall be belong to and be undertaken by and through PAXmed; PHG shall refer all such opportunities to PAXmed, and PHG shall not circumvent or participate in or undertake any such business opportunities for such PHG Project for its own account or with third parties.
6. | PAXMED Reservation of Intellectual Property/Ownership of Additional IP, and Proprietary Rights; Work for Hire. |
(a) PAXMED retains exclusive title, sole ownership and all proprietary rights in all patents and related designs, drawings, systems, products, processes, methods, formulae, chemical compositions, schematics, specifications, techniques, technical information, models, prototypes, samples, test results, research and development reports, software, data bases, computer programs, algorithms, source codes, object codes, program listings, platforms and architecture, screens, formats, know how, trade secrets, and all other inventions, concepts, information, or tangible or intangible embodiments or records thereof, relating to any developments, improvements, upgrades, modifications, customization, configuration or applications or derivatives thereof designed or developed by PAXmed in connection with the research, development and commercialization of any Additional IP.
(b) Work For Hire. PAXmed shall have the exclusive rights to all copyrights, trademarks, patents and other intellectual property rights and proprietary rights relating to any developments, improvements, upgrades, modifications, customizations, configuration or applications or derivatives thereof designed or developed in connection with the research, development and commercialization of any Additional IP. Any developments, improvements, inventions, creations, customizations, reductions to practice, or derivatives relating to any Additional IP undertaken by PAXmed under this Agreement in which PHG or any of its personnel has participated, in its, his or her capacity as a employee, clinical practitioner, consultant, director, officer, contractor, or otherwise, shall be considered works-for-hire for PAXmed, which shall have the exclusive rights thereto; and PHG agrees to assign, and hereby irrevocably assigns all right, title and interest in and to any such developments, improvements, inventions, creations, reductions to practice or derivatives, including all intellectual property rights, and shall sign and deliver or cause to be signed and delivered to PAXmed any and all instruments necessary to effect the assignment of such rights to PAXmed and for PAXmed to obtain all proprietary rights in connection therewith.
(c) All rights to secure protection or other acknowledgement for the Additional IP, including any developments, improvements, upgrades, modifications, customizations, configuration or applications or derivatives thereof pursuant to Federal, State or foreign law (including without limitation patent, trademark or copyright laws) are expressly reserved to PAXmed, which may do so in its sole discretion. PHG shall not secure or attempt to secure protection or other acknowledgement for any such Additional IP, even if PHG or its personnel have participated in the development thereof.
7. | Mutual Indemnification. |
(a) PHG shall defend, indemnify and hold harmless PAXmed, its subsidiaries, employees, officers, directors, and agents (collectively, the “PAXmed Indemnitees”), from and against all loss, demands, claims, fines, penalties, expenses, petitions, costs and damages, sustained by PAXmed or any of the PAXmed Indemnitees (including without limitation, reasonable attorney’s fees and disbursements), from or arising out of (i) PHG or PHG’s employees, agents, subcontractors, or their employee’s or agents’, acts or omissions in
connection with the implementation of this Agreement or (ii) breach by PHG of its obligations under this Agreement.
(b) PAXmed shall defend, indemnify and hold harmless PHG, its subsidiaries, employees, officers, directors, and agents (collectively, the “PHG Indemnitees”), from and against all loss, demands, claims, fines, penalties, expenses, petitions, costs and damages, sustained by PHG or any of the PHG Indemnitees (including without limitation, reasonable attorney’s fees and disbursements), from or arising out of (i) PAXmed or PAXmed’s employees, agents, subcontractors, or their employee’s or agents’, acts or omissions in connection with the implementation of this Agreement or (ii) breach by PAXmed of its obligations under this Agreement.
8. | Injunctive Relief. |
(a) PHG acknowledges and agrees that PAXmed would be irreparably injured by any violation of Sections 3, 4, 5, or 6 of this Agreement, that damages at law would be difficult to determine, and that accordingly PAXmed shall be entitled to an injunction and other equitable relief in court of competent jurisdiction to restrain any violation of such Sections without the need to post a bond or prove special damages.
(b) PAXmed acknowledges and agrees that PHG would be irreparably injured by any violation of Sections, 3 or 4 of this Agreement, that damages at law would be difficult to determine, and that accordingly PHG shall be entitled to an injunction and other equitable relief in court of competent jurisdiction to restrain any violation of such Sections without the need to post a bond or prove special damages.
9. | Survival of Provisions. |
(a) PHG’s obligations under Sections 3, 4, 5 and 6 hereof shall survive any termination of this Agreement, shall include all subsidiary and affiliated companies and divisions of PHG.
(b) PAXmed’s obligations under Sections 3 and 4 hereof shall survive any termination of this Agreement, shall include all subsidiary and affiliated companies and divisions of PAXmed.
10. | General Provisions. |
(a) Governing Law; Jurisdiction.
This Agreement will be governed by and construed according with the laws of the State of New York, without regard to principles of conflicts of law or choice of law. Any and all actions or proceedings relating to the subject matter of this Agreement may be maintained only in New York State or federal courts located in the State of New York. Each of PAXmed and PHG hereby submits to personal jurisdiction of the New York State and United States federal courts located in the State of New York for purposes of any and all actions and proceeding relating to the subject matter of this Agreement. Either party may serve any summons or process in any such proceeding on the other in the manner for giving notices under Section 11(b) hereof.
Notwithstanding the foregoing, PAXmed shall be free to pursue its remedies in any court of competent jurisdiction throughout the world to protect the PAXmed Technology and the Additional IP and its other intellectual property and proprietary rights and to restrain any violation of Sections 3, 4, 5 or 6 of this Agreement, and PHG shall be free to pursue its remedies in any court of competent jurisdiction throughout the world to protect its intellectual property and proprietary rights and to restrain any violation of Sections 3 or 4 of this Agreement.
(b) Notices.
All notices required to be provided hereunder shall be in writing and shall be deemed delivered if (i) sent by facsimile, upon confirmation of faxing, (ii) if sent by overnight courier, by the date after mailing, (iii) if by hand delivery, upon actual receipt or (iv) if by certified mail, return receipt requested and postage prepaid, on the third business day after deposit in the mails, to the addressee as follows or at such other location as such Party notifies the other pursuant to this provision:
PAXmed: | PAXmed Inc. | |
420 Lexington Avenue, Suite 300 | ||
New York, New York 10170 | ||
Attn: Lishan Aklog, Chairman & CEO | ||
Telephone: 602-361-6005 | ||
Email: laklog@paxmedinc.com | ||
PHG: | Pavilion Holding Group LLC | |
50 Loring Drive | ||
Norwell, MA 02061 | ||
Attn: Michael Glennon, Manager | ||
Telephone: 617-699-0700 | ||
Email: mglennon@pavilionhg.com |
(c) Severability.
If any part of this Agreement is determined to be invalid or illegal by any court or agency of competent jurisdiction, then that part shall be limited or curtailed to the extent necessary to make such provision valid, and all other remaining terms of this Agreement shall remain in full force and effect.
(d) Relationship of the Parties.
The Parties acknowledge that they are independent contractors, and neither party is an employee, partner, or joint venturer of the other party. PHG shall not have any authority or ability to bind or create any obligations on the part of PAXmed. PAXmed shall not have any authority or ability to bind or create any obligations on the part of PHG. PHG does not assume, and is not liable for, any obligations of PAXmed or its subcontractors. PAXmed does not assume, and is not liable for, any obligations of PHG or its subcontractors. Except as otherwise provided herein, each party shall be responsible for all costs and expenses of carrying out its responsibilities under this Agreement.
(e) Corporate Authorization, etc.
PAXmed represents and warrants to PHG that this Agreement is the duly and validly authorized, legal and binding obligation of PAXmed. PHG represents and warrants to PAXmed that this Agreement is the duly and validly authorized, legal and binding obligation of PHG.
(f) Amendment and Waiver.
This Agreement may be modified or amended only in a writing signed by both Parties. A Party’s failure to act hereunder shall not indicate a waiver of its rights hereto. No waiver of any provision of this Agreement shall be valid unless made in writing and signed by the waiving Party. The failure of either Party to require the performance of any term or obligation of this Agreement or the waiver by either Party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term and shall not be deemed a waiver of any subsequent breach.
(g) Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.
(h) No Third-Party Beneficiary.
The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other person or entity. Without limiting the generality of the foregoing, this Agreement is not intended to confer any rights on any employee, consultant, or clinical practitioner of either Party.
(i) No Assignment.
PHG may not assign, delegate or subcontract its rights or obligations hereunder without PAXmed’s written approval in each instance, except in the case of a merger, acquisition or reorganization of PHG, which shall not require PAXmed’s prior written approval if the resulting party assumes in writing all of PHG’s obligations under this Agreement. PAXmed may not assign, delegate or subcontract its rights or obligations hereunder without PHG’s written approval in each instance, except in the case of a merger, acquisition or reorganization of PAXmed, which shall not require PHG’s prior written approval, if the resulting party assumes in writing all of PAXmed’s obligations under this Agreement. No assignment by any party shall relieve such party of any of its obligations hereunder.
(j) Entire Agreement.
This Agreement constitutes the entire agreement between the Parties and supercedes all prior and contemporaneous agreements and understandings, whether written or oral, between the Parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Parties hereto have signed this Agreement by their duly authorized representatives as of the date first above written.
PAXmed INC. | PAVILION HOLDING GROUP LLC | |||
By: | /s/ Lishan Aklog | By: | /s/ Mike Glennon |
Printed Name: | Lishan Aklog | Printed Name: | Mike Glennon |
Title: | Chairman & CEO | Title: | Member, PHG LLC |
Exhibit 10.2.1
EMPLOYMENT AGREEMENT
AGREEMENT dated as of October 24, 2014 between Lishan Aklog MD, residing at 10 Hickory Pine Court, Purchase, NY 10577 (“Executive”), and PAXmed Inc., a Delaware corporation having its principal office at 420 Lexington Ave., Suite 300, New York, NY 10170 (“Company”);
WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, on the terms and conditions herein set forth;
IT IS AGREED:
1. Employment, Duties and Acceptance.
1.1 General. The Company hereby agrees to employ the Executive as its Chief Executive Officer. All of Executive’s powers and authority in any capacity shall at all times be subject to the direction and control of the Company’s Board of Directors (“Board”). The Board may assign to Executive such management and supervisory responsibilities and executive duties for the Company or any subsidiary of the Company, including serving as an executive officer and/or director of any subsidiary, as are consistent with Executive’s status as Chief Executive Officer. The Company and Executive acknowledge that Executive’s primary functions and duties as Chief Executive Officer shall be general management and control of the affairs and business of the Company.
1.2 Duties. Executive accepts such employment and agrees to devote such time as he reasonably deems necessary to the performance of his duties hereunder. Nothing herein shall be construed as preventing Executive from (i) making and supervising investments on a personal or family basis (including trusts, funds and investment entities in which Executive or members of his family have an interest) and (ii) in serving as a consultant to, or on boards of directors of, or in any other capacity to other companies, for profit and not for profit, provided they will not interfere with the performance of Executive’s duties hereunder or violate the provisions of Section 5.4 hereof.
1.3 Location. Executive will perform his duties in New York, New York. Executive shall undertake such occasional travel, within or outside the United States, as is reasonably necessary in the interests of the Company.
2. Term. The term of Executive’s employment hereunder shall commence on November 1, 2014 and terminate on December 31, 2019 (“Term”) unless terminated earlier as hereinafter provided in this Agreement, or unless extended by mutual written agreement of the Company and Executive. Unless the Company and Executive have otherwise agreed in writing, if Executive continues to work for the Company after the expiration of the Term, his employment thereafter shall be under the same terms and conditions provided for in this Agreement, except that his employment will be on an “at will” basis and the provisions of Sections 4.4 and 4.6(c) shall no longer be in effect.
3. Compensation and Benefits.
3.1 Salary. The Company shall pay to Executive a salary (“Base Salary”) at the annual rate of $240,000. Executive’s compensation shall be paid in equal, periodic installments in accordance with the Company’s normal payroll procedures; provided however, that Executive’s Base Salary shall be accrued and deferred until such time as the Company consummates an initial public offering of its securities, at which time such accrued and deferred Base Salary shall be paid to Executive in full.
3.2 Bonus. In addition to the Base Salary, Executive shall be paid a bonus (“Bonus”) on January 1st of each year beginning in 2016 equal to 50% of the Base Salary plus additional performance bonuses to be determined by the Board.
3.3 Stock Options. The Board (or Compensation Committee) may, in its sole discretion, grant Employee options to purchase shares of the Company’s common stock from time to time under the Company’s equity compensation plans, but Executive understands that it is under no obligation to do so.
3.4 Benefits. Executive shall be entitled to such medical, life, disability and other benefits as are generally afforded to other executives of the Company, subject to applicable waiting periods and other conditions, as well as participation in all other company-wide
employee benefits, including a defined contribution pension plan and 401(k) plan, as may be made available generally to executive employees from time to time.
3.5 Vacation and Sick Days. Executive shall be entitled to twenty-five (25) days of paid vacation and five (5) days of paid sick days in each year during the Term and to a reasonable number of other days off for religious and personal reasons in accordance with customary Company policy.
3.6 Expenses. The Company shall pay or reimburse Executive for all transportation, hotel and other expenses reasonably incurred by Executive on business trips and for all other ordinary and reasonable out-of-pocket expenses actually incurred by him in the conduct of the business of the Company, including expenses relating to his laptop, cell phone and Blackberry or other similar devices, against itemized vouchers submitted with respect to any such expenses and approved in accordance with customary procedures.
4. Termination.
4.1 Death. If Executive dies during the Term, Executive’s employment hereunder shall terminate and the Company shall pay to Executive’s estate the amount set forth in Section 4.6(a).
4.2 Disability. The Company, by written notice to Executive, may terminate Executive’s employment hereunder if Executive shall fail because of illness or incapacity to render services of the character contemplated by this Agreement for one hundred eighty (180) days. Upon such termination, the Company shall pay to Executive the amount set forth in Section 4.6(a).
4.3 By Company for “Cause”. The Company, by written notice to Executive, may terminate Executive’s employment hereunder for “Cause”. As used herein, “Cause” shall mean: (a) the refusal or failure by Executive to carry out specific directions of the Board which are of a material nature and consistent with his status as Chief Executive Officer (or whichever positions Executive holds at such time), or the refusal or failure by Executive to perform a material part of Executive’s duties hereunder; (b) the commission by Executive of a material breach of any of the provisions of this Agreement; (c) fraud or dishonest action by Executive in his relations with the Company or any of its subsidiaries or affiliates (“dishonest” for these
purposes shall mean Executive’s knowingly or recklessly making of a material misstatement or omission for his personal benefit); or (d) the conviction of Executive of a felony under federal or state law. Notwithstanding the foregoing, no “Cause” for termination shall be deemed to exist with respect to Executive’s acts described in clauses (a) or (b) above, unless the Company shall have given written notice to Executive within a period not to exceed ten (10) calendar days of the initial existence of the occurrence, specifying the “Cause” with reasonable particularity and, within thirty (30) calendar days after such notice, Executive shall not have cured or eliminated the problem or thing giving rise to such “Cause;” provided, however, no more than two cure periods need be provided during any twelve-month period. Upon such termination, the Company shall pay to Executive the amount set forth in Section 4.6(b).
4.4 By Executive for “Good Reason”. The Executive, by written notice to the Company, may terminate Executive’s employment hereunder if a “Good Reason” exists. For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following circumstances without the Executive’s prior written consent: (a) a substantial and material adverse change in the nature of Executive’s title, duties or responsibilities with the Company that represents a demotion from his title, duties or responsibilities as in effect immediately prior to such change (such change, a “Demotion”); (b) material breach of this Agreement by the Company; (c) a failure by the Company to make any payment to Executive when due, unless the payment is not material and is being contested by the Company, in good faith; or (d) a liquidation, bankruptcy or receivership of the Company. Notwithstanding the foregoing, no “Good Reason” shall be deemed to exist with respect to the Company’s acts described in clauses (a), (b) or (c) above, unless Executive shall have given written notice to the Company within a period not to exceed ten (10) calendar days of the initial existence of the occurrence, specifying the “Good Reason” with reasonable particularity and, within thirty (30) calendar days after such notice, the Company shall not have cured or eliminated the problem or thing giving rise to such “Good Reason”; provided, however, that no more than two cure periods shall be provided during any twelve-month period of a breach of clauses (a), (b) or (c) above. Upon such termination, the Company shall pay to Executive the amount set forth in Section 4.6(c).
4.5 By Company Without “Cause”. The Company may terminate Executive’s employment hereunder without “Cause” by giving at least one hundred eighty (180) days written
notice to Executive. Upon such termination, the Company shall pay to Executive the amount set forth in Section 4.6(c).
4.6 Compensation Upon Termination. In the event that Executive’s employment hereunder is terminated, the Company shall pay to Executive the following compensation:
(a) Payment Upon Death or Disability. In the event that Executive’s employment is terminated pursuant to Sections 4.1 or 4.2, the Company shall no longer be under any obligation to Executive or his legal representatives pursuant to this Agreement except for: (i) the Base Salary due Executive pursuant to Section 3.1 hereof through the date of termination; (ii) any Bonus which would have become payable under Section 3.2 for the year in which the employment was terminated prorated by multiplying the full amount of the Bonus by a fraction, the numerator of which is the number of “full calendar months” worked by Executive during the year of termination and the denominator of which is 12 (a “full calendar month” is a month in which the Executive worked at least two weeks); (iii) all earned and previously approved but unpaid Bonuses for any year prior to the year of termination; (iv) all valid expense reimbursements, and (v) all accrued but unused vacation pay.
(b) Payment Upon Termination by the Company For “Cause”. In the event that the Company terminates Executive’s employment hereunder pursuant to Section 4.3, the Company shall have no further obligations to the Executive hereunder, except for: (i) the Base Salary due Executive pursuant to Section 3.1 hereof through the date of termination (ii) all valid expense reimbursements and (ii) all unused vacation pay through the date of termination required by law to be paid.
(c) Payment Upon Termination by Company Without Cause or by Executive for Good Reason. In the event that Executive’s employment is terminated pursuant to Sections 4.4 or 4.5, the Company shall have no further obligations to Executive hereunder except for: (i) 150% of the Base Salary due Executive pursuant to Section 3.1 hereof through the end of the Term, payable in full; (ii) all valid expense reimbursements; and (iii) all accrued but unused vacation pay.
(d) Executive shall have no duty to mitigate awards paid or payable to him pursuant to this Agreement, and any compensation paid or payable to Executive from
sources other than the Company will not offset or terminate the Company’s obligation to pay to Executive the full amounts pursuant to this Agreement.
5. Protection of Confidential Information; Non-Competition.
5.1 Acknowledgment. Executive acknowledges that:
(a) As a result of his current and prior employment with the Company, Executive has obtained and will obtain secret and confidential information concerning the business of the Company and its subsidiaries (referred to collectively in this Section 5 as the “Company”), including, without limitation, financial information, proprietary rights, trade secrets and “know-how,” customers and sources (“Confidential Information”).
(b) The Company will suffer substantial damage which will be difficult to compute if, during the period of his employment with the Company or thereafter, Executive should enter a business competitive with the Company or divulge Confidential Information.
(c) The provisions of this Agreement are reasonable and necessary for the protection of the business of the Company.
5.2 Confidentiality. Executive agrees that he will not at any time, during the Term or thereafter, divulge to any person or entity any Confidential Information obtained or learned by him as a result of his employment with the Company, except (i) in the course of performing his duties hereunder, (ii) with the Company’s prior written consent; (iii) to the extent that any such information is in the public domain other than as a result of Executive’s breach of any of his obligations hereunder; or (iv) where required to be disclosed by law, regulation, stock exchange rule, court order, subpoena or other government process. If Executive shall be required to make disclosure pursuant to the provisions of clause (iv) of the preceding sentence, Executive promptly, but in no event more than 48 hours after learning of such subpoena, court order, or other government process, shall notify, confirmed by mail, the Company and, at the Company’s expense, Executive shall: (a) take all reasonably necessary and lawful steps required by the Company to defend against the enforcement of such subpoena, court order or other government process, and (b) permit the Company to intervene and participate with counsel of its choice in any proceeding relating to the enforcement thereof.
5.3 Documents. Upon termination of his employment with the Company, Executive will promptly deliver to the Company all memoranda, notes, records, reports, manuals, drawings, blueprints and other documents (and all copies thereof) relating to the business of the Company and all property associated therewith, which he may then possess or have under his control; provided, however, that Executive shall be entitled to retain copies of such documents reasonably necessary to document his financial relationship with the Company.
5.4 Non-competition. During the Term and for a period of six (6) months thereafter, Executive, without the prior written permission of the Company, shall not, anywhere in the world, (i) be employed by, or render any services to, any person, firm or corporation engaged in the medical device industry or any other business which is directly in competition with any “material” business conducted by the Company or any of its subsidiaries at the time of termination (as used herein “material” means a business which generated at least 10% of the Company’s consolidated revenues for the last full fiscal year for which audited financial statements are available) (“Competitive Business”); (ii) engage in any Competitive Business for his or its own account; (iii) be associated with or interested in any Competitive Business as an individual, partner, shareholder, creditor, director, officer, principal, agent, employee, trustee, consultant, advisor or in any other relationship or capacity; (iv) employ or retain, or have or cause any other person or entity to employ or retain, any person who was employed or retained by the Company while Executive was employed by the Company (other than Executive’s personal secretary and assistant); or (v) solicit, interfere with, or endeavor to entice away from the Company, for the benefit of a Competitive Business, any of its customers or other persons with whom the Company has a contractual relationship. Notwithstanding the foregoing, nothing in this Agreement shall preclude Executive from investing his personal assets in any manner he chooses, provided, however, that Executive may not, during the period referred to in this Section 5.4, own more than 4.9% of the equity securities of any Competitive Business.
5.5 Injunctive Relief. If Executive commits a breach, or threatens to commit a breach, of any of the provisions of Sections 5.2 or 5.4, the Company shall have the right and remedy to seek to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed by Executive that the services being rendered hereunder to the Company are of a special, unique and extraordinary character and that any such breach or threatened breach will cause irreparable injury to the Company and
that money damages will not provide an adequate remedy to the Company. The rights and remedies enumerated in this Section 5.5 shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or equity. In connection with any legal action or proceeding arising out of or relating to this Agreement, the prevailing party in such action or proceeding shall be entitled to be reimbursed by the other party for the reasonable attorneys’ fees and costs incurred by the prevailing party.
5.6 Modification. If any provision of Sections 5.2 or 5.4 is held to be unenforceable because of the scope, duration or area of its applicability, the tribunal making such determination shall have the power to modify such scope, duration, or area, or all of them, and such provision or provisions shall then be applicable in such modified form.
5.7 Survival. The provisions of this Section 5 shall survive the termination of this Agreement for any reason, except in the event Executive is terminated by the Company without “Cause,” or if Executive terminates this Agreement with “Good Reason,” in either of which events, clauses (i), (ii) and (iii) of Section 5.4 shall be null and void and of no further force or effect. The non-renewal of this Agreement at the end of the Term shall not be a termination by the Company without “Cause”.
6. Miscellaneous Provisions.
6.1 Notices. All notices provided for in this Agreement shall be in writing, and shall be deemed to have been duly given when (i) delivered personally to the party to receive the same, or (ii) when mailed first class postage prepaid, by certified mail, return receipt requested, addressed to the party to receive the same at his or its address set forth below, or such other address as the party to receive the same shall have specified by written notice given in the manner provided for in this Section 6.1. All notices shall be deemed to have been given as of the date of personal delivery or mailing thereof.
If to Executive:
Lishan Aklog, M.D.
10 Hickory Pine Court
Purchase, NY 10577
If to the Company:
PAXmed Inc.
420 Lexington Ave, Suite 300
New York, NY 10170
With a copy in either case to:
Graubard Miller
The Chrysler Building
405 Lexington Ave, 11th Floor
New York, NY 10170
6.2 Entire Agreement; Waiver. This Agreement sets forth the entire agreement of the parties relating to the employment of Executive and is intended to supersede all prior negotiations, understandings and agreements. No provisions of this Agreement may be waived or changed except by a writing by the party against whom such waiver or change is sought to be enforced. The failure of any party to require performance of any provision hereof or thereof shall in no manner affect the right at a later time to enforce such provision.
6.3 Governing Law. All questions with respect to the construction of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of New York applicable to agreements made and to be performed entirely in New York.
6.4 Binding Effect; Nonassignability. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. This Agreement shall not be assignable by Executive, but shall inure to the benefit of and be binding upon Executive’s heirs and legal representatives.
6.5 Severability. Should any provision of this Agreement become legally unenforceable, no other provision of this Agreement shall be affected, and this Agreement shall continue as if the Agreement had been executed absent the unenforceable provision.
6.6 Section 409A. This Agreement is intended to comply with the provisions of Section 409A of the Internal Revenue Code (“Section 409A”). To the extent that any payments and/or benefits provided hereunder are not considered compliant with Section 409A, the parties agree that the Company shall take all actions necessary to make such payments and/or benefits become compliant.
6.7 Preparation of Agreement. This Agreement has been prepared by Graubard Miller (“GM”) solely as counsel to the Company. GM is not acting as legal counsel
nor providing any legal representation or consultative services to Executive in connection with the Agreement and the Company has advised Executive to seek the advice of other counsel in connection with the negotiation and preparation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
PAXMED INC.
| |
/s/ Richard Salute | |
By: Richard
Salute CFO | |
/s/ Lishan Aklog | |
Exhibit 10.2.2
PAXMED INC.
420 Lexington Avenue, Suite 300
New York, New York 10170
April 8, 2015 |
Dr. Lishan Aklog
10 Hickory Pine Court
Purchase, NY 10577
Dear Dr. Aklog:
This letter will serve to amend the Employment Agreement (“Employment Agreement”), dated as of October 24, 2014, between you and PAXmed Inc.
Section 3.1 of the Employment Agreement is hereby amended and restated to read as follows:
“3.1 Salary. The Company shall pay to Executive a salary (“Base Salary”) at the annual rate of $240,000. Executive’s compensation shall be paid in equal, periodic installments in accordance with the Company’s normal payroll procedures; provide however, that Executive’s Base Salary shall be paid only upon, and be subject to, the consummation of the Company’s initial public offering of its securities.”
Except as amended herein, all other provisions of the Employment Agreement shall remain in full force and effect.
Please sign this letter in the place below to confirm your agreement.
Sincerely, | ||
PAXMED INC. | ||
By: | /s/ Richard Salute | |
Name: Richard Salute | ||
Title: CFO |
AGREED TO: | |
/s/ Lishan Aklog | |
Lishan Aklog |
Exhibit 10.3.1
Print Name of Investor:
Social Security or EIN Number:
SUBSCRIPTION/REGISTRATION RIGHTS AGREEMENT
PAXmed Inc. (the “Company”), and the undersigned hereby agree as follows:
1. Subscription for Securities. I (sometimes referred to herein as the “Investor”) hereby subscribe for and agree to purchase unit(s) (“Units”), each Unit consisting of one share of the Company’s common stock, par value $0.001 per share (“Common Stock”) and a warrant (“Warrant”) to purchase one share of the Company’s Common Stock. Each Unit is offered at a price of $0.50.
2. Terms of the Warrants. The terms of the Warrants are set forth in the form of Warrant attached hereto as Exhibit A and on Schedule 1.
3. Offering Period; Minimum; Maximum. The Company is offering (the “Offering”) the Units until the earlier of (i) the date by which the maximum amount of Units being offered have been sold or (ii) July 31, 2014, unless such latter date is extended, without notice to the Investor, by the Company in its sole discretion to a date not later than August 31, 2014 (such earlier date being referred to herein as the “Termination Date”). The Offering is being conducted on a “best efforts, no minimum, One Hundred Fifty Thousand (150,000) Units ($75,000) maximum” basis. The Company’s officers, directors and affiliates shall be entitled to purchase Units in the Offering on the same terms as other Investors.
4. Closings. The closing (“Closing”) on an Investor’s investment may occur at any time, as determined by the Company, together with, or separate from, investments by other Investors. After an initial Closing has occurred and prior to the Termination Date, the Offering shall continue and the Company shall sell additional Units in an aggregate amount, when combined with the amounts sold at the initial Closing and any subsequent Closings, of up to $75,000. Additional Closings may occur provided that subscriptions have been received and accepted and funds in payment therefor have cleared prior to 5:00 p.m., New York City time, on the Termination Date.
5. Investor Delivery of Payment and Documents.
5.1 I have tendered the full purchase price for the Units by wiring funds in accordance with the instructions set forth in Schedule 1.
5.2 I hereby tender to the Company two manually executed copies of this Subscription/Registration Rights Agreement.
5.3 In the event that a Closing does not take place with respect to any subscription for any reason or if my subscription is otherwise rejected, all cash proceeds delivered by me in accordance with the foregoing shall be returned to me as soon as practicable, without interest, offset or deduction.
5.4 In the event my subscription is accepted and there is a Closing, (i) a copy of a fully executed version of this Agreement will be delivered to me and (ii) the Common Stock and Warrants comprising the Units for which I am subscribing will be held by the Company’s general counsel in its vault, unless otherwise instructed by me.
6. Acceptance or Rejection of Subscription/Registration Rights Agreement. The Company has the right to reject this subscription for the Units, in whole or in part, for any reason and at any time prior to a Closing with respect to this subscription, notwithstanding prior receipt by me of notice
of acceptance of my subscription. The Common Stock and Warrants comprising the Units subscribed for herein will not be deemed issued to or owned by me until two copies of this Subscription/Registration Rights Agreement have been executed by me and accepted and countersigned by the Company, and a Closing with respect to my subscription has occurred.
7. Accredited Investor Status.
7.1 Investor is either (x) an “accredited investor” as defined by Rule 501 under the Securities Act of 1933, as amended (“Securities Act”), or (y) a sophisticated non-accredited and has such knowledge and experience in financial and business matters that Investor is capable of evaluating the merits and risks of Investor’s investment in the Units, of making an informed investment decision with respect thereto, and has the ability and capacity to protect Investor’s interests. The Investor shall submit to the Company such further assurances of accredited or sophisticated status as may reasonably be requested by the Company.
7.2 In the event the Investor is not an “accredited investor” as defined by Rule 501 under the Securities Act, the Investor represents and warrants that he, she or it may only invest in the Offering, subject to the limitation of no more than thirty five (35) such investors and further represents and warrants that the Investor has the ability to evaluate the risks and merits of the investment and thus is able to protect his, her or its interests as a result of:
(x) his, her or its business or financial experience;
(y) the business or financial experience of his, her or its professional advisors who are unaffiliated with and who are not compensated by the Company or any affiliate or selling agent of the Company directly or indirectly; and/or
(z) his, her or its pre-existing business relationship with the Company or its officers, directors or controlling persons.
7.3 The Investor represents and warrants that if he, she or it is not an “accredited investor” as defined by Rule 501, the investment by such non-accredited investor will not exceed ten percent (10%) of his, her or its net worth.
8. Investor Representations and Warranties. I acknowledge, represent and warrant to the Company as follows:
8.1 Information About the Investor. The Company has no obligation to me other than as set forth in this Agreement. I am aware that, except for any rescission rights that may be provided under applicable laws, I am not entitled to cancel, terminate or revoke this subscription, and any agreements made in connection herewith will survive my death or disability. In order to induce the Company to issue and sell the Units to me, I represent and warrant that the information relating to me stated herein is true and complete as of the date hereof and will be true and complete as of the date on which my purchase of Units becomes effective. If, prior to the termination of the Offering, there should be any change in such information or any of such information becomes incorrect or incomplete, I agree to notify the Company and supply the Company promptly with corrective information.
8.2 Information About the Company.
(a) I have been given reasonable opportunity to meet with officers of the Company for the purpose of asking reasonable questions of such officers concerning the terms and conditions of the Offering and the business and operations of the Company and all such questions have
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been answered to my full satisfaction. I have also been given an opportunity to obtain any additional relevant information to the extent reasonably available to the Company. I have received all information regarding the Company that I have reasonably requested. I understand that there is no assurance as to the future performance of the Company or the future value of the securities purchased by me.
8.3 No Assurances; No General Solicitation. I have received no representation or warranty from the Company or any of its officers, directors, employees or agents in respect of my investment in the Company. I am not participating in the Offering as a result of or subsequent to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television, radio or the Internet or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.
8.4 Speculative Investment. I am aware that my purchase of the Common Stock and Warrants comprising the Units is a speculative investment. I acknowledge that I can lose the entire amount of my investment in the Company. I have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Common Stock and Warrants and have obtained, in my judgment, sufficient information from the Company to evaluate the merits and risks of an investment in the Company. I have not utilized any person as my purchaser representative (as defined in Regulation D) in connection with evaluating such merits and risks and have relied solely upon my own investigation in making a decision to invest in the Company. I have been urged to seek independent advice from my professional advisors relating to the suitability of an investment in the Company in view of my overall financial needs and with respect to the legal and tax implications of such investment. I believe that the investment in the Company represented by my purchase of the Common Stock and Warrants comprising the Units in the Offering is suitable for me based upon my investment objectives and financial needs, and I have adequate means for providing for my current financial needs and contingencies and have no need for liquidity with respect to my investment in the Company. My investment in the Company does not constitute all, or substantially all, of my investment portfolio.
8.5 Restrictions on Transfer. I understand that (i) the Common Stock and Warrants (and the shares of Common Stock underlying such Warrants) have not been registered under the Securities Act or the securities laws of certain states in reliance on specific exemptions from registration, (ii) no securities administrator of any state or the federal government has recommended or endorsed this Offering or made any finding or determination relating to the fairness of an investment in the Company and (iii) the Company is relying on my representations and agreements for the purpose of determining whether this transaction meets the requirements of the exemptions afforded by the Securities Act and certain state securities laws. I acknowledge that the Common Stock and Warrants are (and the shares of Common Stock issuable upon exercise thereof, when issued, will be) subject to restrictions on transferability and may not be resold, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under applicable securities laws of certain states or an exemption from such registration is available. I further acknowledge that, although the Company has agreed to use commercially reasonable efforts to file a registration statement covering the resale by me of the Common Stock and shares of Common Stock issuable upon exercise of the Warrants, (i) there is no assurance that the Company will do so, (ii) such registration statement, if filed, may not be declared effective, (iii) if declared effective, the Company may not be able to keep it effective until I effect the resale of securities registered thereby and (iv) I will be subject to any lock-up restrictions as required by any underwriter engaged in connection with such registration statement. I understand that each certificate evidencing each of the Common Stock and Warrants (and the shares of Common Stock underlying such Warrants) will bear the legends substantively similar to that set forth below:
“NEITHER THIS SECURITY NOR ANY SECURITIES THAT MAY BE ACQUIRED UPON CONVERSION OR EXERCISE HEREOF HAS BEEN REGISTERED UNDER THE SECURITIES ACT, OR UNDER THE SECURITIES LAWS OF ANY STATE AND
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MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
THE COMPANY’S SUBSCRIPTION/REGISTRATION RIGHTS AGREEMENT WITH THE HOLDER SETS FORTH THE COMPANY’S OBLIGATIONS TO REGISTER THE RESALE OF THE COMMON STOCK AND SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF. A COPY OF SUCH SUBSCRIPTION/REGISTRATION RIGHTS AGREEMENT IS AVAILABLE FOR INSPECTION AT THE COMPANY’S OFFICE. SUCH SUBSCRIPTION/REGISTRATION RIGHTS AGREEMENT ALSO CONTAINS CERTAIN RESTRICTIONS REGARDING THE TRANSFER OF SUCH SECURITIES.”
8.6 No Market for the Common Stock or Warrants. I am purchasing the Common Stock and Warrants comprising the Units for my own account for investment and not with a view to, or for sale in connection with, any subsequent distribution of the Common Stock or Warrants (or the shares of Common Stock underlying such Warrants), nor with any present intention of selling or otherwise disposing of all or any part of such securities. I understand that there is currently no market for the Common Stock or Warrants and there may not be any market for the Common Stock or Warrants (or the Common Stock underlying the Warrants) in the future. I agree that (i) the purchase of the Common Stock and Warrants comprising the Units is a long-term investment and (ii) I may have to bear the economic risk of investment for an indefinite period of time because neither the Common Stock or Warrants nor the shares of Common Stock underlying such Warrants has been registered under the Securities Act and may never be registered and cannot be resold, pledged, assigned, or otherwise disposed of unless the securities are subsequently registered under the Securities Act and under applicable securities laws of certain states or an exemption from such registration is available. I understand that the Company is under no obligation to register any of these securities, except as may be set forth in Schedule 1, or to assist me in complying with any exemption from such registration under the Securities Act or any state securities laws.
8.7 Entity Authority.
(a) If the Investor is a corporation, partnership, company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to become an investor in the Company and the person signing this Subscription/Registration Rights Agreement on behalf of such entity has been duly authorized by such entity to do so.
(b) The undersigned represents and warrants to the Company that (i) if an entity, its principal place of business and executive offices are located in the State set forth on the Signature Page for Entity Investors and (ii) if an individual, his or her state of residency is the State set forth on the Signature Page for Individual Investors.
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8.8 Accredited Investor Status for Individuals. (INVESTORS THAT ARE CORPORATIONS, LIMITED LIABILITY COMPANIES, PARTNERSHIPS, REVOCABLE TRUSTS, IRREVOCABLE TRUSTS, EMPLOYEE BENEFIT PLAN TRUSTS, INDIVIDUAL RETIREMENT ACCOUNTS OR OTHER ENTITIES SHOULD INITIALLY IGNORE THE FOLLOWING QUESTIONS IN THIS SECTION 8.8 AND INSTEAD PROCEED TO SECTION 8.10).
(a) I am an accredited investor within the meaning of Section 2(15) of the Securities Act and Rule 501 promulgated thereunder because (please check the applicable responses):
¨ | My individual annual income during each of the two most recent years exceeded $200,000 and I reasonably expect my annual income during the current year will exceed $200,000. | |
¨ | If I am married, my joint annual income with my spouse during each of the two most recent years exceeded $300,000 and I reasonably expect my joint annual income with my spouse during the current year will exceed $300,000. | |
¨ | My individual or joint (together with my spouse) net worth exceeds $1,000,000. The calculation of net worth excludes (i) the value of my primary residence and (ii) the amount of any indebtedness secured by my primary residence, except to the extent that the lender or lenders have recourse to me personally and the indebtedness exceeds the value of my primary residence. | |
¨ | I am an executive officer or director of the Company. |
(b) The aggregate value of my assets is approximately $___________.
(c) My aggregate liabilities are approximately $___________.
(d) My current and expected income is:
YEAR | INCOME |
2014 (Estimated)
|
$ |
2013 (Actual)
|
$ |
2012 (Actual) | $ |
Individual Investors must sign below and then should skip to Section 8.11. Each person associated with an Entity Investor who is required under Section 8.10 to separately complete the questions in this Section 8.8 must sign the below confirmation:
I hereby confirm the answers to Section 8.8 are true and correct in all respects as of the date hereof and will be on the date of the purchase of Securities.
Executed this ____ day of ________, 2014
Signature: | ||
Print Name: |
Capacity (if signing in connection with an Entity Investor): |
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8.9 Non-Accredited Investor Status:
(a) For an individual, please describe your current employment, including the company by which you are employed and its principal business:
(b) For an individual, please describe any college or graduate degrees held by you:
(c) For all subscribers, please list types of prior investments:
(d) For all subscribers, please state whether you have participated in other private placements before:
YES _________ NO _________
(e) If your answer to question (d) above was “YES”, please indicate frequency of such prior participation in private placements of:
Public |
Private | ||
Frequently | |||
Occasionally | |||
Never |
(f) For individuals, do you expect your current level of income to significantly decrease in the foreseeable future?
YES _________ NO _________
(g) For trust, corporate, partnership and other institutional subscribers, do you expect your total assets to significantly decrease in the foreseeable future?
YES _________ NO _________
(h) For all subscribers, do you have any other investments or contingent liabilities which you reasonably anticipate could cause you to need sudden cash requirements in excess of cash readily available to you?
YES _________ NO _________
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(i) For all subscribers, are you familiar with the risk aspects and the non-liquidity of investments such as the Units for which you seek to purchase?
YES _________ NO _________
(j) For all subscribers, do you understand that there is no guarantee of financial return on this investment and that you run the risk of losing your entire investment?
YES _________ NO _________
(3) The Investor may invest in this offering, subject to the limitation of no more than thirty five (35) non-accredited investors and provided that the Investor has the ability to evaluate the risks and merits of the investment and thus is able to protect his, her or its interests as a result of:
(a) his, her or its business or financial experience; _____
(b) the business or financial experience of his, her or its professional advisors who are unaffiliated with and who are not compensated by the Company or any affiliate or selling agent of the Company directly or indirectly; and/or _____
(c) his, her or its pre-existing business relationship with the Company or its officers, directors or controlling persons. _____
Please check the line next to the representation applicable to you above.
(4) (a) The Investor understands that the investment will not exceed ten percent (10%) of his, her or its net worth. The value of a non-accredited investor's home, furnishings and automobiles shall not be included in calculating the net worth of a non-accredited investor.
Is the statement above accurate? |
YES | NO |
(b) The undersigned has such knowledge and experience in financial, investment and business matters that he/she/it is capable of evaluating the merits and risks of any investments.
YES | NO |
(c) The undersigned is using a financial advisor, planner, or consultant, or some other advisor who has such knowledge and experience in financial and business matters that he/she/it is capable of evaluating the merits and risks of any investments. (If this is checked, please fill out the information below)
YES | NO |
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The name and contact information for this advisor is as follows:
Name: _____________________________________________
Address: ___________________________________________
___________________________________________
Phone: ___________________________________________
Telephone number: ______________________________________
Email address (if available): _______________________________
(d) PRIMARY SOURCE OF INCOME:
_____ Investments
_____ Compensation
(e) PRIOR INVESTMENT EXPERIENCE; please check all that apply:
The undersigned has experience as an investor in:
_____ Stocks which are listed on a national securities exchange.
_____ Mutual funds which hold a portfolio primarily consisting of stocks.
_____ Taxable bonds or other debt instruments.
_____ Tax exempt bonds.
_____ Partnerships, limited liability companies, corporations which invest in real estate or real estate investment trusts (REITs).
_____ Other types of investments not mentioned in any of the previous categories
(please describe):
(f) PORTFOLIO. Please estimate the percentage of your assets that the undersigned currently has in each category:
_____ Stocks (including mutual funds)
_____ Bonds
_____ Certificates of Deposit/Loans/Savings Accounts
_____ Principal Residence
_____ Vacation Home(s)
_____ Rental Property
_____ Ownership of business(es) in which you are actively involved
_____ Other
100%
(5) Manner in which title is to be held: (circle one)
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(a) Individual Ownership
(b) Community Property
(c) Joint Tenant with Right of Survivorship (both parties must sign)
(d) Partnership
(e) Tenants in Common
(f) Company
(g) Trust
(h) Other
I hereby confirm the answers to Section 8.9 are true and correct in all respects as of the date hereof and will be on the date of the purchase of Securities.
Executed this ____ day of ________, 2014
Signature: | ||
Print Name: |
Capacity (if signing in connection with an Entity Investor): |
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8.10 Accredited Investor Status for Entities. (INVESTORS WHO ARE INDIVIDUALS SHOULD IGNORE THESE QUESTIONS.)
(a) The entity is a (please check the applicable response):
¨ | Corporation |
¨ | Limited Liability Company |
¨ | Partnership |
¨ | Revocable Trust |
¨ | Irrevocable Trust (If the Investor is an Irrevocable Trust, a supplemental questionnaire, which is contained on the page following the Entity Investor signature page of this Subscription/Registration Rights Agreement, must be completed by the person directing the investment decision for the trust.) |
¨ | Employee Benefit Plan Trust |
¨ | Individual Retirement Account (If you are an IRA, skip (b)) |
¨ | Other (please indicate): _____________________________ |
(b) Check all responses that apply:
¨ | The Entity was not formed for the specific purpose of investing in the Company. |
¨ | The Entity has total assets in excess of $5 million. |
¨ | For Employee Benefit Plan Trusts Only: The decision to invest in the Company was made by a plan fiduciary, as defined in Section 3(21) of ERISA, who is either a bank, insurance company or registered investment advisor. |
(c) If you did not check the first two of the three boxes in Question (b) or if the Entity is an Individual Retirement Account or a Self-directed Employee Benefit Plan Trust, list the name of each person who:
(i) owns an equity interest in the Entity (i.e., each shareholder if the Entity is a corporation, each member if the Entity is a limited liability company and each partner if the Entity is a partnership); or
(ii) is a grantor for the revocable trust or Individual Retirement Account; or
(iii) is the person making the investment decision for a self-directed Employee Benefit Plan Trust.
___________________________ | __________________________ | ||
___________________________ | __________________________ |
EACH PERSON LISTED ABOVE MUST SEPARATELY COMPLETE AND SUBMIT TO THE COMPANY THE ANSWERS TO QUESTION 8.8 AND SIGN THE WRITTEN
CONFIRMATION AT THE END OF SECTION 8.8.
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8.11 No Offer Until Determination of Suitability. I acknowledge that any delivery to me of the documents relating to the offering of the Units prior to the determination by the Company of my suitability will not constitute an offer of the Units until such determination of suitability is made.
8.12 For Florida Residents. The Common Stock and Warrants comprising the Units (and the underlying shares of Common Stock) have not been registered under the Securities Act or the Florida Securities Act, by reason of specific exemptions thereunder relating to the limited availability of the Offering. Neither the Common Stock or Warrants nor the shares of Common Stock underlying the Warrants can be sold, transferred, or otherwise disposed of to any person or entity unless subsequently registered under the Securities Act or the Securities Act of Florida, if such registration is required. Pursuant to Section 517.061(11) of the Florida Securities Act, when sales are made to five (5) or more persons in Florida, any sale made pursuant to Subsection 517.061(11) of the Florida Securities Act will be voidable by such Florida purchaser either within three days after the first tender of consideration is made by the purchaser to the issuer, an agent of the issuer, or an escrow agent. In addition, as required by Section 517.061(11)(a)(3) of the Florida Statutes and by Rule 69W-500.005 thereunder, if I am a Florida resident I may have, at the offices of the Company, at any reasonable hour, after reasonable notice, access to certain prescribed materials and an opportunity to question the appropriate executive officers of the Company.
9. Company Representations and Warranties. The Company hereby represents and warrants to the Investor that (i) it has all necessary corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby and thereby; (ii) all corporate action necessary to be taken by the Company to authorize the execution, delivery and performance of this Agreement and all other agreements and instruments delivered by the Company in connection with the transactions contemplated hereby and thereby has been duly and validly taken and this Agreement has been duly executed and delivered by the Company; (iii) subject to the terms and conditions of this Agreement, this Agreement constitutes the valid, binding and enforceable obligation of the Company, enforceable in accordance with its terms, except as enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws of general application now or hereafter in effect affecting the rights and remedies of creditors and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity), and (b) the applicability of the federal and state securities laws and public policy as to the enforceability of the indemnification provisions of this Agreement; (iv) the sale by the Company of the Common Stock and Warrants comprising the Units does not conflict with the certificate of incorporation or by-laws of the Company or any material contract by which the Company or its property is bound, or any federal or state laws or regulations or decree, ruling or judgment of any United States or state court applicable to the Company or its property; and (v) the sale of the Units will not trigger any pre-emptive or, to the knowledge of the Company, other rights held by any party and no governmental or regulatory consent is required for the consummation of the transactions contemplated by this Agreement.
10. Indemnification. I hereby agree to indemnify and hold harmless the Company, its officers, directors, stockholders, employees, agents, and attorneys against any and all losses, claims, demands, liabilities, and expenses (including reasonable legal or other expenses incurred by each such person in connection with defending or investigating any such claims or liabilities, whether or not resulting in any liability to such person or whether incurred by the indemnified party in any action or proceeding between the indemnitor and indemnified party or between the indemnified party and any third party) to which any such indemnified party may become subject, insofar as such losses, claims, demands, liabilities and expenses (a) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact made by me and contained herein, or (b) arise out of or are based upon any breach by me of any representation, warranty, or agreement made by me contained herein.
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11. Severability; Remedies. In the event any parts of this Subscription/Registration Rights Agreement are found to be void, the remaining provisions of this Subscription/Registration Rights Agreement are nevertheless binding with the same effect as though the void parts were deleted.
12. Governing Law and Jurisdiction. This Subscription/Registration Rights Agreement will be deemed to have been made and delivered in New York City and will be governed as to validity, interpretation, construction, effect and in all other respects by the internal law of the State of New York. Each of the Company and the Investor hereby (i) agrees that any legal suit, action or proceeding arising out of or relating to this Subscription/Registration Rights Agreement will be instituted exclusively in New York State Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection to the venue of any such suit, action or proceeding and the right to assert that such forum is not a convenient forum for such suit, action or proceeding, (iii) irrevocably consents to the jurisdiction of the New York State Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding, (iv) agrees to accept and acknowledge service of any and all process that may be served in any such suit, action or proceeding in New York State Supreme Court, County of New York or in the United States District Court for the Southern District of New York and (v) agrees that service of process upon it mailed by certified mail to its address set forth on my signature page will be deemed in every respect effective service of process upon it in any suit, action or proceeding.
13. Counterparts. This Subscription/Registration Rights Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. The execution of this Subscription/Registration Rights Agreement may be by actual or facsimile signature.
14. Benefit. This Subscription/Registration Rights Agreement is binding upon and inures to the benefit of the parties hereto and their respective heirs, executors, personal representatives, successors and assigns.
15. Notices. All notices, offers, acceptance and any other acts under this Subscription/Registration Rights Agreement (except payment) must be in writing, and are sufficiently given if delivered to the addressees in person, by overnight courier service, or, if mailed, postage prepaid, by certified mail (return receipt requested), and will be effective three days after being placed in the mail if mailed, or upon receipt or refusal of receipt, if delivered personally or by courier or confirmed telecopy, in each case addressed to a party. All communications to me should be sent to my preferred address on the signature page hereto. All communications to the Company should be sent to the addresses set forth on Schedule 1. Each party may designate another address by notice to the other parties.
16. Oral Evidence. This Subscription/Registration Rights Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof. This Subscription/Registration Rights Agreement may not be changed, waived, discharged, or terminated orally, but rather, only by a statement in writing signed by the party or parties against which enforcement or the change, waiver, discharge or termination is sought.
17. Section Headings. Section headings herein have been inserted for reference only and will not be deemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part, any of the terms or provisions of this Subscription/Registration Rights Agreement.
18. Survival of Representations, Warranties and Agreements. The representations, warranties and agreements contained herein will survive the delivery of, and the payment for, the Units.
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19. Acceptance of Subscription. The Company may accept this Subscription/Registration Rights Agreement at any time for all or any portion of the Common Stock and Warrants comprising the Units subscribed for by executing a copy hereof as provided and notifying me within a reasonable time thereafter.
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SIGNATURE PAGE FOR INDIVIDUAL INVESTORS - COMPLETE ALL INFORMATION
Name: | Name of Joint Investor (if any): |
Residence Address: |
Telephone: (H) ___________________ (W) _____________________ Fax ______________________________
Occupation: __________________________ Employer: _______________________________________________________
Business Address: |
Send communications to: | ¨ | Home | ¨ | Office | ¨ | E-Mail: |
E-mail address: _________________ |
Age: | Social Security Number: |
Check manner in which securities are to be held:
Individual | Tenants in | Joint Tenants with Right of Survivorship | |||
¨ | Ownership | ¨ | Common | ¨ | (both parties must sign) |
¨ | Community Property | ¨ | Other (please indicate):___________ |
The foregoing subscription is accepted and the Company hereby agrees to be bound by its terms.
INVESTOR MUST SIGN AND PRINT NAME BELOW: |
The foregoing subscription is accepted and the Company hereby agrees to be bound by its terms. |
Signature:________________________ |
PAXMED INC. |
Print Name: | |
Signature:________________________ |
By: |
Print Name:_______________________ |
Name: Title: Date: |
14 |
SIGNATURE PAGE FOR ENTITY INVESTORS - COMPLETE ALL INFORMATION
Name of Entity: _____________________________________________________________________
Address of Principal Office: ____________________________________________________________
Telephone: ___________________ Fax: ___________________
Taxpayer Identification Number: ______________________
Check type of Entity:
Employee Benefit | Limited | General | Individual Retirement | ||||
¨ | Plan Trust | ¨ | Partnership | ¨ | Partnership | ¨ | Account |
Limited Liability | Other (please indicate) | ||||||
¨ | Company | ¨ | Trust | ¨ | Corporation |
Date of Formation or incorporation: ___________ State of Formation or incorporation: _____________________
Describe the business of the Entity: _________________________________________________________
List the names and positions of the executive officers, managing members, partners or trustees authorized to act with respect to investments by the Entity generally and specify who has the authority to act with respect to this investment.
Name |
Position |
Authority for this investment |
|
|
|
|
|
|
|
|
|
|
|
|
INVESTOR:
___________________________ Signature of Authorized Signatory Name: Title: Date:
|
The foregoing subscription is accepted and the Company hereby agrees to be bound by its terms.
PAXMED INC.
By: _______________________________ Name: Lishan Aklog Title: Chairman & CEO Date: September 9, 2014 |
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SUPPLEMENTAL QUESTIONNAIRE FOR IRREVOCABLE TRUSTS
This Supplemental Questionnaire must be completed by the person directing the investment decision for an irrevocable trust. No other person needs to complete this Supplemental Questionnaire.
Please respond to the following questions, supplying as much detail as possible in order to make your answers complete:
1. Name of Trustee (“Trustee”) who is directing the decision for the Trust to invest in the Company ________________________. The remaining questions should be answered by the Trustee.
2. Does the Trustee have sufficient knowledge and experience in financial and business matters to enable it to evaluate the merits and risks of an investment in the Company?
Yes | No |
3. During the last three years, the Trustee has made the following investments:
Year |
Nature of Investment |
Amount |
| ||
| ||
| ||
|
4. Please list all the educational institutions the Trustee has attended (including high schools, colleges, and specialized training schools), and indicate the dates attended and the degree(s) (if any) obtained from each.
From |
To |
Institution |
Degree |
|
|||
|
|||
|
5. Please list any professional licenses the Trustee has.
16 |
6. Indicate the Trustee’s principal business experience or occupation during the last three years. (Please list present, or most recent, position first and the others in reverse chronological order).
From |
To |
Name of Employer |
Position |
|
|||
|
|||
|
7. Indicate by check mark which of the following categories best describes the extent of the Trustee’s prior experience in the areas of investment listed below:
|
Substantial Experience |
No Experience |
Marketable securities |
||
Government securities |
||
Municipal (tax-exempt) securities |
||
Commodities |
||
Options (stock or commodities) |
||
Securities for which no market exists |
||
Limited partnerships |
||
Real estate or oil and gas programs |
||
Tax deferred investment generally |
8. Does the Trustee make his own investment decisions with respect to investments?
____ Always ____ Frequently
____ Usually ____ Rarely
17 |
9. What is the Trustee’s principal sources of investment knowledge or advice? (The Trustee may check more than one).
_____ Firsthand experience with industry
_____ Financial publication(s)
_____ Trade or industry publication(s)
_____ Banker(s)
_____ Broker(s)
_____ Investment Advisor(s)
_____ Attorney(s)
_____ Accountant(s)
10. Please provide in the space below any additional information which would indicate that the Trustee has sufficient knowledge and experience in financial and business matters so that the Trustee are capable of evaluating the merits and risks of investing in restricted securities for which no market exists, such as those being offered by the Company.
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SCHEDULE 1
1. Wiring Instructions. Wiring instructions for the Company are as follows:
2. Warrants. If the Company consummates an initial public offering (“IPO”) of its securities (which include warrants to purchase shares of Common Stock of the Company), the Warrants shall automatically, and without any action on the part of the Investor, convert into the same form of warrant sold in the IPO (“IPO Warrants”). The exercise price of the IPO Warrants may be higher and the exercise period may be shorter than the Warrants being sold in this offering. The number of shares of Common Stock underlying the Warrants shall remain the same.
3. Registration Rights. The Company agrees to use commercially reasonable efforts to include for resale the shares of Common Stock included in the Units, the IPO Warrants into which the Warrants being sold in this offering convert and shares of Common Stock issuable upon exercise of the IPO Warrants in a registration statement on Form S-1 (the “Registration Statement”) to be filed in connection with the Company’s initial public offering, subject to the applicable rules and regulations of the U.S. Securities and Exchange Commission and the Investor agreeing to the terms of any lock-up restrictions imposed by the underwriters engaged in connection with any such Registration Statement.
4. Notices. All communications to the Company should be sent to:
PAXmed Inc.
420 Lexington Avenue, Suite 300
New York, New York 10170
Attn: Lishan Aklog
Tel: 602-361-6005
Fax: 602-391-2637
with copies to:
Graubard Miller
405 Lexington Avenue, 11th Floor
New York, New York 10174
Attn: David Alan Miller, Esq.
Tel:(212) 818-8661
Fax: (212) 818-8881
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Exhibit 10.3.2
Print Name of Investor: ________________
Social Security or EIN Number: __________
SUBSCRIPTION/REGISTRATION RIGHTS AGREEMENT
PAXmed Inc. (the “Company”), and the undersigned hereby agree as follows:
1. Subscription for Securities. I (sometimes referred to herein as the “Investor”) hereby subscribe for and agree to purchase _____ unit(s) (“Units”), each Unit consisting of one share of the Company’s common stock, par value $0.001 per share (“Common Stock”) and a warrant (“Warrant”) to purchase one share of the Company’s Common Stock. Each Unit is offered at a price of $1.00.
2. Terms of the Warrants. The terms of the Warrants are set forth in the form of Warrant attached hereto as Exhibit A and on Schedule 1.
3. Offering and Offering Period. The Company is offering (the “Offering”) the Units on an “any and all, $300,000 maximum” basis. Accordingly, there is no minimum amount that needs to be subscribed for in order for the Company to hold a Closing (defined below). Investor could be the only subscriber for Units in the Offering. Additionally, the Company may increase the maximum amount to be raised at any time without notice to the Investor. To the extent the Company raises the maximum amount pursuant to the preceding sentence, all references in this Subscription/Registration Rights Agreement to the “$300,000 maximum” amount shall be deemed to refer to such raised amount.
4. Closing(s). The closing (“Closing”) on an Investor’s investment may occur at any time, as determined by the Company, together with, or separate from, investments by other Investors, if there are any. The Company may accept this Subscription Agreement and have a Closing for all or any portion of the Units subscribed for by executing a copy hereof as provided and notifying Investor of such acceptance. The Company may hold additional closings up until it accepts subscriptions for the $300,000 maximum amount of Units. In connection with any closing, the Company may pay a commission to a broker-dealer on subscriptions the Company accepts. As a result, the net proceeds to be received by the Company may be less than the full subscription amounts received. In the event a commission will be paid on an Investor’s investment, the Company will notify such Investor prior to the Closing on such Investor’s investment.
5. Investor Delivery of Payment and Documents.
5.1 I have tendered the full purchase price for the Units by wiring funds in accordance with the instructions set forth in Schedule 1.
5.2 I hereby tender to the Company two manually executed copies of this Subscription/Registration Rights Agreement.
5.3 In the event that a Closing does not take place with respect to any subscription for any reason or if my subscription is otherwise rejected, all cash proceeds delivered by me in accordance with the foregoing shall be returned to me as soon as practicable, without interest, offset or deduction.
5.4 In the event my subscription is accepted and there is a Closing, (i) a copy of a fully executed version of this Agreement will be delivered to me and (ii) the Common Stock and Warrants comprising the Units for which I am subscribing will be held by the Company’s general counsel in its vault, unless otherwise instructed by me.
6. Acceptance or Rejection of Subscription/Registration Rights Agreement. The Company has the right to reject this subscription for the Units, in whole or in part, for any reason and at any time with respect to this subscription, notwithstanding prior receipt by me of notice of acceptance of my subscription. The Common Stock and Warrants comprising the Units subscribed for herein will not be deemed issued to or owned by me until two copies of this Subscription/Registration Rights Agreement have been executed by me and accepted and countersigned by the Company, and a Closing with respect to my subscription has occurred.
7. Accredited Investor Status. The Offering is limited to “accredited investors” as defined by Rule 501(a) under the Securities Act of 1933, as amended (“Securities Act”), and is being made without registration under the Securities Act in reliance upon the exemptions contained in Section 4(a)(2) of the Securities Act and applicable state securities laws.
8. Investor Representations and Warranties. I acknowledge, represent and warrant to the Company as follows:
8.1 Information About the Investor. The Company has no obligation to me other than as set forth in this Agreement. I am aware that, except for any rescission rights that may be provided under applicable laws, I am not entitled to cancel, terminate or revoke this subscription, and any agreements made in connection herewith will survive my death or disability. In order to induce the Company to issue and sell the Units to me, I represent and warrant that the information relating to me stated herein is true and complete as of the date hereof and will be true and complete as of the date on which my purchase of Units becomes effective. If, prior to the termination of the Offering, there should be any change in such information or any of such information becomes incorrect or incomplete, I agree to notify the Company and supply the Company promptly with corrective information.
8.2 Information About the Company.
(a) I have been given reasonable opportunity to meet with officers of the Company for the purpose of asking reasonable questions of such officers concerning the terms and conditions of the Offering and the business and operations of the Company and all such questions have been answered to my full satisfaction. I have also been given an opportunity to obtain any additional relevant information to the extent reasonably available to the Company. I have received all information regarding the Company that I have reasonably requested. I understand that there is no assurance as to the future performance of the Company or the future value of the securities purchased by me. The only representations I am relying on in making my investment hereunder is contained in this Subscription/Registration Rights Agreement.
8.3 No Assurances; No General Solicitation. I have received no representation or warranty from the Company or any of its officers, directors, employees or agents in respect of my investment in the Company. I am not participating in the Offering as a result of or subsequent to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television, radio or the Internet or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.
8.4 Speculative Investment. I am aware that my purchase of the Common Stock and Warrants comprising the Units is a speculative investment. I acknowledge that I can lose the entire amount of my investment in the Company. I have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Common Stock and Warrants and have obtained, in my judgment, sufficient information from the Company to evaluate the merits and risks of an investment in the Company. I have not utilized any person as my purchaser representative (as defined in Regulation D) in connection with evaluating such merits and risks and have relied solely upon my own
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investigation in making a decision to invest in the Company. I have been urged to seek independent advice from my professional advisors relating to the suitability of an investment in the Company in view of my overall financial needs and with respect to the legal and tax implications of such investment. I believe that the investment in the Company represented by my purchase of the Common Stock and Warrants comprising the Units in the Offering is suitable for me based upon my investment objectives and financial needs, and I have adequate means for providing for my current financial needs and contingencies and have no need for liquidity with respect to my investment in the Company. My investment in the Company does not constitute all, or substantially all, of my investment portfolio.
8.5 Restrictions on Transfer. I understand that (i) the Common Stock and Warrants (and the shares of Common Stock underlying such Warrants) have not been registered under the Securities Act or the securities laws of certain states in reliance on specific exemptions from registration, (ii) no securities administrator of any state or the federal government has recommended or endorsed this Offering or made any finding or determination relating to the fairness of an investment in the Company and (iii) the Company is relying on my representations and agreements for the purpose of determining whether this transaction meets the requirements of the exemptions afforded by the Securities Act and certain state securities laws. I acknowledge that the Common Stock and Warrants are (and the shares of Common Stock issuable upon exercise thereof, when issued, will be) subject to restrictions on transferability and may not be resold, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under applicable securities laws of certain states or an exemption from such registration is available. I further acknowledge that, although the Company has agreed to use commercially reasonable efforts to file a registration statement covering the resale by me of the Common Stock and shares of Common Stock issuable upon exercise of the Warrants, (i) there is no assurance that the Company will do so, (ii) such registration statement, if filed, may not be declared effective, (iii) if declared effective, the Company may not be able to keep it effective until I effect the resale of securities registered thereby and (iv) I will be subject to any lock-up restrictions as required by any underwriter engaged in connection with such registration statement. I understand that each certificate evidencing each of the Common Stock and Warrants (and the shares of Common Stock underlying such Warrants) will bear the legends substantively similar to that set forth below:
“NEITHER THIS SECURITY NOR ANY SECURITIES THAT MAY BE ACQUIRED UPON CONVERSION OR EXERCISE HEREOF HAS BEEN REGISTERED UNDER THE SECURITIES ACT, OR UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
THE COMPANY’S SUBSCRIPTION/REGISTRATION RIGHTS AGREEMENT WITH THE HOLDER SETS FORTH THE COMPANY’S OBLIGATIONS TO REGISTER THE RESALE OF THE COMMON STOCK AND SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF. A COPY OF SUCH SUBSCRIPTION/REGISTRATION RIGHTS AGREEMENT IS AVAILABLE FOR INSPECTION AT THE COMPANY’S OFFICE. SUCH SUBSCRIPTION/REGISTRATION RIGHTS AGREEMENT ALSO CONTAINS CERTAIN RESTRICTIONS REGARDING THE TRANSFER OF SUCH SECURITIES.”
8.6 No Market for the Common Stock or Warrants. I am purchasing the Common Stock and Warrants comprising the Units for my own account for investment and not with a view to, or for sale in connection with, any subsequent distribution of the Common Stock or Warrants (or the shares of
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Common Stock underlying such Warrants), nor with any present intention of selling or otherwise disposing of all or any part of such securities. I understand that there is currently no market for the Common Stock or Warrants and there may not be any market for the Common Stock or Warrants (or the Common Stock underlying the Warrants) in the future. I agree that (i) the purchase of the Common Stock and Warrants comprising the Units is a long-term investment and (ii) I may have to bear the economic risk of investment for an indefinite period of time because neither the Common Stock or Warrants nor the shares of Common Stock underlying such Warrants has been registered under the Securities Act and may never be registered and cannot be resold, pledged, assigned, or otherwise disposed of unless the securities are subsequently registered under the Securities Act and under applicable securities laws of certain states or an exemption from such registration is available. I understand that the Company is under no obligation to register any of these securities, except as may be set forth in Schedule 1, or to assist me in complying with any exemption from such registration under the Securities Act or any state securities laws.
8.7 Entity Authority.
(a) If the Investor is a corporation, partnership, company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to become an investor in the Company and the person signing this Subscription/Registration Rights Agreement on behalf of such entity has been duly authorized by such entity to do so.
(b) The undersigned represents and warrants to the Company that (i) if an entity, its principal place of business and executive offices are located in the State set forth on the Signature Page for Entity Investors and (ii) if an individual, his or her state of residency is the State set forth on the Signature Page for Individual Investors.
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8.8 Accredited Investor Status for Individuals. (INVESTORS THAT ARE CORPORATIONS, LIMITED LIABILITY COMPANIES, PARTNERSHIPS, REVOCABLE TRUSTS, IRREVOCABLE TRUSTS, EMPLOYEE BENEFIT PLAN TRUSTS, INDIVIDUAL RETIREMENT ACCOUNTS OR OTHER ENTITIES SHOULD INITIALLY IGNORE THE FOLLOWING QUESTIONS IN THIS SECTION 8.8 AND INSTEAD PROCEED TO SECTION 8.9).
(a) I am an accredited investor within the meaning of Section 2(15) of the Securities Act and Rule 501 promulgated thereunder because (please check the applicable responses):
¨ | My individual annual income during each of the two most recent years exceeded $200,000 and I reasonably expect my annual income during the current year will exceed $200,000. |
¨ | If I am married, my joint annual income with my spouse during each of the two most recent years exceeded $300,000 and I reasonably expect my joint annual income with my spouse during the current year will exceed $300,000. |
¨ | My individual or joint (together with my spouse) net worth exceeds $1,000,000. The calculation of net worth excludes (i) the value of my primary residence and (ii) the amount of any indebtedness secured by my primary residence, except to the extent that the lender or lenders have recourse to me personally and the indebtedness exceeds the value of my primary residence. |
¨ | I am an executive officer or director of the Company. |
(b) The aggregate value of my assets is approximately $___________.
(c) My aggregate liabilities are approximately $___________.
(d) My current and expected income is:
YEAR | INCOME |
2014 (Estimated)
|
$ |
2013 (Actual)
|
$ |
2012 (Actual) | $ |
Individual Investors must sign below and then should skip to Section 8.11. Each person associated with an Entity Investor who is required under Section 8.10 to separately complete the questions in this Section 8.8 must sign the below confirmation:
I hereby confirm the answers to Section 8.8 are true and correct in all respects as of the date hereof and will be on the date of the purchase of Securities.
Executed this ____ day of ________, 2014
Signature: ________________________
Print Name: ________________________
Capacity (if signing in connection with an Entity Investor: ____________________________________________
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8.9 Accredited Investor Status for Entities. (INVESTORS WHO ARE INDIVIDUALS SHOULD IGNORE THESE QUESTIONS.)
(a) The entity is a (please check the applicable response):
¨ | Corporation |
¨ | Limited Liability Company |
¨ | Partnership |
¨ | Revocable Trust |
¨ | Irrevocable Trust (If the Investor is an Irrevocable Trust, a supplemental questionnaire, which is contained on the page following the Entity Investor signature page of this Subscription/Registration Rights Agreement, must be completed by the person directing the investment decision for the trust.) |
¨ | Employee Benefit Plan Trust |
¨ | Individual Retirement Account (If you are an IRA, skip (b)) |
¨ | Other (please indicate): _____________________________ |
(b) Check all responses that apply:
¨ | The Entity was not formed for the specific purpose of investing in the Company. |
¨ | The Entity has total assets in excess of $5 million. |
¨ | For Employee Benefit Plan Trusts Only: The decision to invest in the Company was made by a plan fiduciary, as defined in Section 3(21) of ERISA, who is either a bank, insurance company or registered investment advisor. |
(c) If you did not check the first two of the three boxes in Question (b) or if the Entity is an Individual Retirement Account or a Self-directed Employee Benefit Plan Trust, list the name of each person who:
(i) | owns an equity interest in the Entity (i.e., each shareholder if the Entity is a corporation, each member if the Entity is a limited liability company and each partner if the Entity is a partnership); or |
(ii) | is a grantor for the revocable trust or Individual Retirement Account; or |
(iii) | is the person making the investment decision for a self-directed Employee Benefit Plan Trust. |
___________________________ __________________________
___________________________ __________________________
EACH PERSON LISTED ABOVE MUST SEPARATELY COMPLETE AND SUBMIT TO THE COMPANY THE ANSWERS TO QUESTION 8.8 AND SIGN THE WRITTEN
CONFIRMATION AT THE END OF SECTION 8.8.
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8.10 No Offer Until Determination of Suitability. I acknowledge that any delivery to me of the documents relating to the offering of the Units prior to the determination by the Company of my suitability will not constitute an offer of the Units until such determination of suitability is made.
8.11 For Florida Residents. The Common Stock and Warrants comprising the Units (and the underlying shares of Common Stock) have not been registered under the Securities Act or the Florida Securities Act, by reason of specific exemptions thereunder relating to the limited availability of the Offering. Neither the Common Stock or Warrants nor the shares of Common Stock underlying the Warrants can be sold, transferred, or otherwise disposed of to any person or entity unless subsequently registered under the Securities Act or the Securities Act of Florida, if such registration is required. Pursuant to Section 517.061(11) of the Florida Securities Act, when sales are made to five (5) or more persons in Florida, any sale made pursuant to Subsection 517.061(11) of the Florida Securities Act will be voidable by such Florida purchaser either within three days after the first tender of consideration is made by the purchaser to the issuer, an agent of the issuer, or an escrow agent. In addition, as required by Section 517.061(11)(a)(3) of the Florida Statutes and by Rule 69W-500.005 thereunder, if I am a Florida resident I may have, at the offices of the Company, at any reasonable hour, after reasonable notice, access to certain prescribed materials and an opportunity to question the appropriate executive officers of the Company.
9. Company Representations and Warranties. The Company hereby represents and warrants to the Investor that (i) it has all necessary corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby and thereby; (ii) all corporate action necessary to be taken by the Company to authorize the execution, delivery and performance of this Agreement and all other agreements and instruments delivered by the Company in connection with the transactions contemplated hereby and thereby has been duly and validly taken and this Agreement has been duly executed and delivered by the Company; (iii) subject to the terms and conditions of this Agreement, this Agreement constitutes the valid, binding and enforceable obligation of the Company, enforceable in accordance with its terms, except as enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws of general application now or hereafter in effect affecting the rights and remedies of creditors and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity), and (b) the applicability of the federal and state securities laws and public policy as to the enforceability of the indemnification provisions of this Agreement; (iv) the sale by the Company of the Common Stock and Warrants comprising the Units does not conflict with the certificate of incorporation or by-laws of the Company or any material contract by which the Company or its property is bound, or any federal or state laws or regulations or decree, ruling or judgment of any United States or state court applicable to the Company or its property; and (v) the sale of the Units will not trigger any pre-emptive or, to the knowledge of the Company, other rights held by any party and no governmental or regulatory consent is required for the consummation of the transactions contemplated by this Agreement.
10. Indemnification. I hereby agree to indemnify and hold harmless the Company, its officers, directors, stockholders, employees, agents, and attorneys against any and all losses, claims, demands, liabilities, and expenses (including reasonable legal or other expenses incurred by each such person in connection with defending or investigating any such claims or liabilities, whether or not resulting in any liability to such person or whether incurred by the indemnified party in any action or proceeding between the indemnitor and indemnified party or between the indemnified party and any third party) to which any such indemnified party may become subject, insofar as such losses, claims, demands, liabilities and expenses (a) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact made by me and contained herein, or (b) arise out of or are based upon any breach by me of any representation, warranty, or agreement made by me contained herein.
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11. Severability; Remedies. In the event any parts of this Subscription/Registration Rights Agreement are found to be void, the remaining provisions of this Subscription/Registration Rights Agreement are nevertheless binding with the same effect as though the void parts were deleted.
12. Governing Law and Jurisdiction. This Subscription/Registration Rights Agreement will be deemed to have been made and delivered in New York City and will be governed as to validity, interpretation, construction, effect and in all other respects by the internal law of the State of New York. Each of the Company and the Investor hereby (i) agrees that any legal suit, action or proceeding arising out of or relating to this Subscription/Registration Rights Agreement will be instituted exclusively in New York State Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection to the venue of any such suit, action or proceeding and the right to assert that such forum is not a convenient forum for such suit, action or proceeding, (iii) irrevocably consents to the jurisdiction of the New York State Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding, (iv) agrees to accept and acknowledge service of any and all process that may be served in any such suit, action or proceeding in New York State Supreme Court, County of New York or in the United States District Court for the Southern District of New York and (v) agrees that service of process upon it mailed by certified mail to its address set forth on my signature page will be deemed in every respect effective service of process upon it in any suit, action or proceeding.
13. Counterparts. This Subscription/Registration Rights Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. The execution of this Subscription/Registration Rights Agreement may be by actual or facsimile signature.
14. Benefit. This Subscription/Registration Rights Agreement is binding upon and inures to the benefit of the parties hereto and their respective heirs, executors, personal representatives, successors and assigns.
15. Notices. All notices, offers, acceptance and any other acts under this Subscription/Registration Rights Agreement (except payment) must be in writing, and are sufficiently given if delivered to the addressees in person, by overnight courier service, or, if mailed, postage prepaid, by certified mail (return receipt requested), and will be effective three days after being placed in the mail if mailed, or upon receipt or refusal of receipt, if delivered personally or by courier or confirmed telecopy, in each case addressed to a party. All communications to me should be sent to my preferred address on the signature page hereto. All communications to the Company should be sent to the addresses set forth on Schedule 1. Each party may designate another address by notice to the other parties.
16. Oral Evidence. This Subscription/Registration Rights Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof. This Subscription/Registration Rights Agreement may not be changed, waived, discharged, or terminated orally, but rather, only by a statement in writing signed by the party or parties against which enforcement or the change, waiver, discharge or termination is sought.
17. Section Headings. Section headings herein have been inserted for reference only and will not be deemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part, any of the terms or provisions of this Subscription/Registration Rights Agreement.
18. Survival of Representations, Warranties and Agreements. The representations, warranties and agreements contained herein will survive the delivery of, and the payment for, the Units.
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19. Acceptance of Subscription. The Company may accept this Subscription/Registration Rights Agreement at any time for all or any portion of the Common Stock and Warrants comprising the Units subscribed for by executing a copy hereof as provided and notifying me within a reasonable time thereafter.
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SIGNATURE PAGE FOR INDIVIDUAL INVESTORS - COMPLETE ALL INFORMATION
Name: _______________________ Name of Joint Investor (if any):_______________________________________
Residence Address: _____________________________________________________________________________
Telephone: (H) ___________________ (W) _____________________ Fax ________________________
Occupation: _________________________ Employer: ________________________________________________
Business Address: ______________________________________________________________________________
Send communications to: ¨ Home ¨ Office ¨ E-Mail:
E-mail address: __________________________
Age: _______________ Social Security Number: _____________________________
Check manner in which securities are to be held:
Individual ¨ Ownership |
Tenants in ¨ Common |
Joint Tenants with Right of ¨ (both parties must sign) |
¨ Community Property |
|
¨ Other (please indicate):___________ |
The foregoing subscription is accepted and the Company hereby agrees to be bound by its terms.
INVESTOR MUST SIGN AND PRINT NAME BELOW: |
The foregoing subscription is accepted and the Company hereby agrees to be bound by its terms. |
Signature:________________________ |
PAXMED INC. |
Print Name:________________________ | |
Signature:________________________ |
By: _____________________________________ |
Print Name:_______________________ |
Name: Title: Date: |
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SIGNATURE PAGE FOR ENTITY INVESTORS - COMPLETE ALL INFORMATION
Name of Entity: __________________________________________________________________
Address of Principal Office: ________________________________________________________
Telephone: ___________________ Fax: ___________________
Taxpayer Identification Number: ______________________
Check type of Entity:
Employee Benefit | Limited | General | Individual Retirement | ||
¨ | Plan Trust | ¨ | Partnership | ¨ Partnership | ¨ Account |
Limited Liability | Other (please indicate) | ||||
¨ | Company | ¨ | Trust | ¨ Corporation |
Date of Formation or incorporation: ___________ State of Formation or incorporation: ___________
Describe the business of the Entity: _____________________________________________________
__________________________________________________________________________________
List the names and positions of the executive officers, managing members, partners or trustees authorized to act with respect to investments by the Entity generally and specify who has the authority to act with respect to this investment.
Name |
Position |
Authority for this investment |
|
|
|
|
|
|
|
|
|
|
|
|
INVESTOR:
___________________________ Signature of Authorized Signatory Name: Title: Date:
|
The foregoing subscription is accepted and the Company hereby agrees to be bound by its terms.
PAXMED INC.
By: _____________________________________ Name: Title: Date: |
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SUPPLEMENTAL QUESTIONNAIRE FOR IRREVOCABLE TRUSTS
This Supplemental Questionnaire must be completed by the person directing the investment decision for an irrevocable trust. No other person needs to complete this Supplemental Questionnaire.
Please respond to the following questions, supplying as much detail as possible in order to make your answers complete:
1. Name of Trustee (“Trustee”) who is directing the decision for the Trust to invest in the Company ________________________. The remaining questions should be answered by the Trustee.
2. Does the Trustee have sufficient knowledge and experience in financial and business matters to enable it to evaluate the merits and risks of an investment in the Company?
Yes No
3. During the last three years, the Trustee has made the following investments:
Year | Nature of Investment | Amount |
4. Please list all the educational institutions the Trustee has attended (including high schools, colleges, and specialized training schools), and indicate the dates attended and the degree(s) (if any) obtained from each.
From | To | Institution | Degree |
5. Please list any professional licenses the Trustee has.
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6. Indicate the Trustee’s principal business experience or occupation during the last three years. (Please list present, or most recent, position first and the others in reverse chronological order).
From | To | Name of Employer | Position |
7. Indicate by check mark which of the following categories best describes the extent of the Trustee’s prior experience in the areas of investment listed below:
Substantial Experience or Knowledge |
No Experience | |
Marketable securities | ||
Government securities | ||
Municipal (tax-exempt) securities | ||
Commodities | ||
Options (stock or commodities) | ||
Securities for which no market exists | ||
Limited partnerships | ||
Real estate or oil and gas programs | ||
Tax deferred investment generally |
8. Does the Trustee make his own investment decisions with respect to investments?
Always Frequently
Usually Rarely
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9. What is the Trustee’s principal sources of investment knowledge or advice? (The Trustee may check more than one).
First hand experience with industry
Financial publication(s)
Trade or industry publication(s)
Banker(s)
Broker(s)
Investment Advisor(s)
Attorney(s)
Accountant(s)
10. | Please provide in the space below any additional information which would indicate that the Trustee has sufficient knowledge and experience in financial and business matters so that the Trustee are capable of evaluating the merits and risks of investing in restricted securities for which no market exists, such as those being offered by the Company. |
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SCHEDULE 1
1. Wiring Instructions. Wiring instructions for the Company are as follows:
2. Warrants. If the Company consummates an initial public offering (“IPO”) of its securities (which include warrants to purchase shares of Common Stock of the Company), the Warrants shall automatically, and without any action on the part of the Investor, convert into the same form of warrant sold in the IPO (“IPO Warrants”). The exercise price of the IPO Warrants may be higher and the exercise period may be shorter than the Warrants being sold in this offering. The number of shares of Common Stock underlying the Warrants shall remain the same.
3. Registration Rights. The Company agrees to use commercially reasonable efforts to include for resale the shares of Common Stock included in the Units, the IPO Warrants into which the Warrants being sold in this offering convert and shares of Common Stock issuable upon exercise of the IPO Warrants in a registration statement on Form S-1 (the “Registration Statement”) to be filed in connection with the Company’s initial public offering, subject to the applicable rules and regulations of the U.S. Securities and Exchange Commission and the Investor agreeing to the terms of any lock-up restrictions imposed by the underwriters engaged in connection with any such Registration Statement.
4. Notices. All communications to the Company should be sent to:
PAXmed Inc.
420 Lexington Avenue, Suite 300
New York, New York 10170
Attn: Lishan Aklog
Tel: 212-401-1951
Fax: 212-401-1951
with copies to:
Graubard Miller
405 Lexington Avenue, 11th Floor
New York, New York 10174
Attn: David Alan Miller, Esq.
Tel: | (212) 818-8661 |
Fax: | (212) 818-8881 |
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Exhibit 10.4.1
June 26, 2014
Re: | PAXmed Inc. |
Gentlemen:
Reference is made to those certain warrants (“Warrants”) to purchase shares of common stock, par value $0.001 (“Common Stock”), of PAXmed Inc. (“Company”) held by the undersigned.
The Company hereby acknowledges and agrees that, so long as the Warrants are held by the undersigned or its permitted transferees (as defined in the registration statement for the Company’s initial public offering), the Company shall allow the undersigned to exercise the Warrants by surrendering such Warrant for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrant, multiplied by the difference between the exercise price of the Warrants and the “Fair Market Value” (defined below) by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price of the Warrants. The “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Notwithstanding anything to the contrary herein, the Company shall not be required to net-cash settle the Warrants.
Very truly yours, | |||
PAXMED INC. | |||
By: | /s/ Lishan Aklog, MD | ||
Name: | Lishan Aklog, MD | ||
Title: | Chairman & CEO |
ACCEPTED AND AGREED:
HCFP CAPITAL PARTNERS III LLC
By: | /s/ Lishan Aklog, MD | ||
Name: | Lishan Aklog, MD | ||
Title: | Manager |
Exhibit 10.4.2
June 26, 2014
Re: | PAXmed Inc. |
Gentlemen:
Reference is made to those certain warrants (“Warrants”) to purchase shares of common stock, par value $0.001 (“Common Stock”), of PAXmed Inc. (“Company”) held by the undersigned.
The Company hereby acknowledges and agrees that, so long as the Warrants are held by the undersigned or its permitted transferees (as defined in the registration statement for the Company’s initial public offering), the Company shall allow the undersigned to exercise the Warrants by surrendering such Warrant for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrant, multiplied by the difference between the exercise price of the Warrants and the “Fair Market Value” (defined below) by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price of the Warrants. The “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Notwithstanding anything to the contrary herein, the Company shall not be required to net-cash settle the Warrants.
Very truly yours, | |||
PAXMED INC. | |||
By: | /s/ Lishan Aklog, MD | ||
Name: | Lishan Aklog, MD | ||
Title: | Chairman & CEO |
ACCEPTED AND AGREED:
PAVILION VENTURE PARTNERS LLC
By: | /s/ Lishan Aklog, MD | ||
Name: | Lishan Aklog, MD | ||
Title: | Manager |
Exhibit 10.5.1
April 8, 2015 |
PAXmed, Inc.
420 Lexington Avenue, Suite 300
New York, New York 10170
CRT Capital Group LLC
262 Harbor Drive
Stamford, Connecticut 06902
Re: Initial Public Offering
Gentlemen:
This letter is being delivered to you in connection with the initial public offering (“IPO”) of PAXmed Inc. (the “Company”) to be underwritten by several underwriters for whom CRT Capital Group LLC will serve as representative (collectively, the “Underwriters”). In order to induce the Company and the Underwriters to proceed with the IPO, and in recognition of the benefit that such IPO will confer upon the undersigned as beneficial owner of securities of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agrees as follows:
1. In order to minimize potential conflicts of interest which may arise from multiple affiliations, until such time as the undersigned ceases to be an officer of the Company, he will present to the Company for its consideration, prior to presentation to any other person or entity, any suitable business opportunity which may be reasonably required to be presented to the Company, subject to any pre-existing fiduciary and contractual obligations the undersigned might have.
2. The undersigned has full right and power, without violating any agreement by which he is bound, to enter into this letter agreement.
3. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The undersigned hereby (i) agrees that any action, proceeding or claim against him arising out of or relating in any way to this letter agreement (a “Proceeding”) shall be brought and enforced in the courts of the State of New York of the United States of America for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive, (ii) waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient
forum and (iii) irrevocably agrees to appoint Graubard Miller as agent for the service of process in the State of New York to receive, for the undersigned and on his behalf, service of process in any Proceeding.
4. The undersigned acknowledges and understands that the Underwriters and the Company will rely upon the agreements, representations and warranties set forth herein in proceeding with the IPO.
Lishan Aklog | |
Print Name | |
/s/ Lishan Aklog | |
Signature |
2 |
Exhibit 10.5.2
April 13, 2015 |
PAXmed, Inc.
420 Lexington Avenue, Suite 300
New York, New York 10170
CRT Capital Group LLC
262 Harbor Drive
Stamford, Connecticut 06902
Re: Initial Public Offering
Gentlemen:
This letter is being delivered to you in connection with the initial public offering (“IPO”) of PAXmed Inc. (the “Company”) to be underwritten by several underwriters for whom CRT Capital Group LLC will serve as representative (collectively, the “Underwriters”). In order to induce the Company and the Underwriters to proceed with the IPO, and in recognition of the benefit that such IPO will confer upon the undersigned as beneficial owner of securities of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agrees as follows:
1. In order to minimize potential conflicts of interest which may arise from multiple affiliations, until such time as the undersigned ceases to be an officer of the Company, he will present to the Company for its consideration, prior to presentation to any other person or entity, any suitable business opportunity which may be reasonably required to be presented to the Company, subject to any pre-existing fiduciary and contractual obligations the undersigned might have.
2. The undersigned has full right and power, without violating any agreement by which he is bound, to enter into this letter agreement.
3. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The undersigned hereby (i) agrees that any action, proceeding or claim against him arising out of or relating in any way to this letter agreement (a “Proceeding”) shall be brought and enforced in the courts of the State of New York of the United States of America for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive, (ii) waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient
forum and (iii) irrevocably agrees to appoint Graubard Miller as agent for the service of process in the State of New York to receive, for the undersigned and on his behalf, service of process in any Proceeding.
4. The undersigned acknowledges and understands that the Underwriters and the Company will rely upon the agreements, representations and warranties set forth herein in proceeding with the IPO.
Michael Glennon | |
Print Name | |
/s/ Michael Glennon | |
Signature |
2 |
Exhibit 10.5.3
April 7, 2015 |
PAXmed, Inc.
420 Lexington Avenue, Suite 300
New York, New York 10170
CRT Capital Group LLC
262 Harbor Drive
Stamford, Connecticut 06902
Re: Initial Public Offering
Gentlemen:
This letter is being delivered to you in connection with the initial public offering (“IPO”) of PAXmed Inc. (the “Company”) to be underwritten by several underwriters for whom CRT Capital Group LLC will serve as representative (collectively, the “Underwriters”). In order to induce the Company and the Underwriters to proceed with the IPO, and in recognition of the benefit that such IPO will confer upon the undersigned as beneficial owner of securities of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agrees as follows:
1. In order to minimize potential conflicts of interest which may arise from multiple affiliations, until such time as the undersigned ceases to be an officer of the Company, he will present to the Company for its consideration, prior to presentation to any other person or entity, any suitable business opportunity which may be reasonably required to be presented to the Company, subject to any pre-existing fiduciary and contractual obligations the undersigned might have.
2. The undersigned has full right and power, without violating any agreement by which he is bound, to enter into this letter agreement.
3. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The undersigned hereby (i) agrees that any action, proceeding or claim against him arising out of or relating in any way to this letter agreement (a “Proceeding”) shall be brought and enforced in the courts of the State of New York of the United States of America for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive, (ii) waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient
forum and (iii) irrevocably agrees to appoint Graubard Miller as agent for the service of process in the State of New York to receive, for the undersigned and on his behalf, service of process in any Proceeding.
4. The undersigned acknowledges and understands that the Underwriters and the Company will rely upon the agreements, representations and warranties set forth herein in proceeding with the IPO.
Brian J. deGuzman, MD | |
Print Name | |
/s/ Brian J. deGuzman | |
Signature |
2 |
Exhibit 10.6
PAVMED INC.
420 Lexington Avenue, Suite 300
New York, New York 10170
________ __, 2015
HCFP LLC
420 Lexington Avenue
New York, New York 10170
Gentlemen:
This letter agreement will confirm the understanding between PAVmed Inc. (“Company”), a Delaware corporation with offices at 420 Lexington Avenue, Suite 300, New York, New York 10170, and HCFP LLC, a Delaware limited liability company with offices at 420 Lexington Avenue, New York, New York 10170 (“Affiliate”), under which Affiliate will provide certain services (“Services”) to the Company as set forth herein.
Affiliate will make available to the Company the services of Richard J. Salute, Affiliate’s Chief Financial Officer, to serve, in accordance with the Company’s bylaws, as the Company’s Chief Financial Officer (“CFO”). Mr. Salute shall report to the Company’s Chief Executive Officer (“CEO”) and Board of Directors (“Board”), including the audit committee thereof. As CFO, Mr. Salute shall perform and provide such services as are customarily provided by chief financial officers of similarly situated companies or which the Board or the CEO reasonably delegates to him.
Through Mr. Salute or otherwise, Affiliate will provide such other services as reasonably requested by the Company, including but not limited to providing financial and accounting resources for assistance in complying with Section 404 of the Sarbanes-Oxley Act of 2002, business development, corporate development, corporate governance, financial advisory and consulting services.
In consideration of the provision of the Services hereunder, the Company shall pay Affiliate a monthly fee of $15,000 commencing upon the consummation of the Company’s initial public offering (“IPO”). Additionally, Affiliate shall be entitled to recover all direct, out of pocket costs and other expenses incurred by Affiliate or Mr. Salute in connection with providing the Services; provided, however, that all amounts in excess of $500 shall require prior approval from the Company acting through the CEO or the Board.
The Company agrees to indemnify and hold harmless Affiliate from and against any and all losses, claims, damages or liabilities, including reasonable legal fees (collectively, “Losses”), suffered or incurred by Affiliate in connection with or as a result of the provision of the Services hereunder (except to the extent that any such Losses result from the gross negligence or bad faith of Affiliate performing the Services). Affiliate agrees to indemnify the Company for Losses incurred by it as a result of the gross negligence or bad faith of Affiliate in performing the Services.
This agreement will commence upon consummation of the IPO and will be in effect for one year and thereafter shall be automatically renewed for successive one year periods; provided, however, that this agreement shall automatically terminate if Mr. Salute ceases to serve as the CFO and either party may terminate this agreement for any other reason upon 30 days’ prior written notice to the other party.
Please indicate your acceptance by signing this letter in the space provided below.
PAVMED INC. | ||
By: | ||
Name: Title: |
ACCEPTED AND AGREED TO: | |
HCFP LLC | |
By: | |
Name: Title: |
Exhibit 10.7
PAVMED INC.
420 Lexington Avenue, Suite 300
New York, New York 10170
___________ __, 2015
Pavilion Holdings Group
50 Loring Drive
Norwell, Massachusetts 20601
Gentlemen:
This letter agreement will confirm the understanding between PAVmed Inc. (“Company”), a Delaware corporation with offices at 420 Lexington Avenue, Suite 300, New York, New York 10170, and Pavilion Holdings Group, LLC a Delaware limited liability company with offices at 50 Loring Drive, Norwell, Massachusetts 20601 (“Affiliate”), under which Affiliate will provide certain services (“Services”) to the Company as set forth herein.
Affiliate will make available to the Company the services of Michael J. Glennon and Brian J. deGuzman, each a member of Affiliate, to serve, in accordance with the Company’s bylaws, as the Company’s vice-chairman and chief medical officer (“CMO”), respectively. As CMO, Dr. deGuzman shall perform and provide such services as are customarily provided by chief medical officers of medical device companies. Mr. Glennon and Dr. deGuzman shall provide such advisory and consulting services as reasonably requested by the Company, including but not limited to interfacing with regulatory consultants, designing and executing pre-clinical and clinical studies, participating in design process and recruiting additional resources, business development services, assisting with vendor selection and relationships, strategic relationships, sourcing innovative technologies and other corporate opportunities.
In consideration of the Services being provided hereunder, the Company shall pay Affiliate a monthly fee of $20,000 commencing upon the consummation of the Company’s initial public offering (“IPO”). Additionally, Affiliate shall be entitled to recover all direct, out of pocket costs and other expenses incurred by Affiliate or Messrs. Glennon and deGuzman in connection with providing the Services; provided, however, that all amounts in excess of $500 shall require prior approval from the Company.
The Company agrees to indemnify and hold harmless Affiliate from and against any and all losses, claims, expenses, damages or liabilities, including reasonable legal fees (collectively, “Losses”), suffered or incurred by Affiliate in connection with or as a result of the provision of the Services hereunder (except to the extent that any such Losses result from the gross negligence or bad faith of Affiliate performing the Services). Affiliate agrees to indemnify the Company for Losses incurred by it as a result of the gross negligence or bad faith of Affiliate in performing the Services.
This agreement will commence upon consummation of the IPO and will be in effect for one year and thereafter shall be automatically renewed for successive one year periods; provided, however, that if either Mr. Glennon or Dr. deGuzman ceases to serve as vice-chairman or CMO, respectively, this agreement shall automatically terminate and either party may terminate this agreement for any other reason upon 30 days’ prior written notice to the other party.
Please indicate your acceptance by signing this letter in the space provided below.
PAVMED INC. | ||
By: | ||
Name: Title: |
ACCEPTED AND AGREED TO: | |
PAVILION HOLDINGS GROUP, LLC | |
By: | |
Name: Title: |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated February 12, 2015, with respect to the consolidated financial statements of PAVmed Inc. (formerly known as PAXmed Inc.) and Subsidiary contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Prospectus, and to the use of our name as it appears under the caption "Experts."
/s/ CITRIN COOPERMAN & COMPANY, LLP
New York, New York
April 22, 2015
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