UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 17, 2023
Denali Capital Acquisition Corp.
(Exact name of registrant as specified in its charter)
| Cayman Islands | 001-41351 | 98-1659463 | ||
(State
or Other Jurisdiction |
(Commission File Number) |
(IRS
Employer |
437 Madison Avenue, 27th Floor,
New York, New York 10022
(Address of principal executive office) (zip code)
Registrant’s telephone number, including area code: (646) 978-5180
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☒ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Units, each consisting of one Class A ordinary share and one redeemable warrant | DECAU | The Nasdaq Stock Market LLC | ||
| Class A ordinary shares, par value $0.0001 per share | DECA | The Nasdaq Stock Market LLC | ||
| Warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50 per share | DECAW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
Amended and Restated Subscription Agreement
As previously disclosed, on August 23, 2023, Denali SPAC Holdco, Inc., (“Holdco”), a direct, wholly owned subsidiary of Denali Capital Acquisition Corp., a Cayman Islands exempted company with limited liability (“Denali”), entered into a Subscription Agreement (the “Initial Subscription Agreement”) with FutureTech Capital LLC (the “Investor”), pursuant to which, among other things, the Investor agreed to subscribe for and purchase, and Holdco agreed to issue and sell to the Investor, 1,800,000 shares of Holdco’s Series A Convertible Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), at a purchase price equal to $10.00 per share in connection with a financing effort related to the proposed business combination (the “Business Combination”) to be effected pursuant to the Agreement and Plan of Merger, dated as of January 25, 2023 (as amended by the Amendment to and Consent under the Agreement and Plan of Merger, dated as of April 11, 2023, together, the “Merger Agreement”), by and among Denali, Longevity Biomedical, Inc., a Delaware corporation (“Longevity”), HoldCo, Denali SPAC Merger Sub, Inc., a Delaware corporation and direct, wholly owned subsidiary of Holdco, Longevity Merger Sub, Inc., a Delaware corporation and direct, wholly owned subsidiary of Holdco, and Bradford A. Zakes, solely in the capacity as seller representative.
On November 17, 2023, Holdco and the Investor amended and restated the Initial Subscription Agreement (as amended and restated, the “Amended and Restated Subscription Agreement”) to, among other things, reduce the aggregate number of shares of Preferred Stock to be purchased by the Investor from 1,800,000 shares to 1,300,000 shares, at a purchase price of $10.00 per share of Preferred Stock, and provide that the Investor will receive two warrants for each share of the Preferred Stock purchased, with each warrant being exercisable for a period of five years that commences upon the six-month anniversary of the Closing, for one share of Holdco Common Stock at an exercise price of $8.00 per share.
The foregoing descriptions of the Amended and Restated Subscription Agreement and the transactions contemplated thereby are only summaries and do not purport to be complete, and are qualified in their entirety by reference to the full text of such instruments, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1, respectively, and incorporated herein by reference.
Deferred Discount Agreement
On April 6, 2022, in connection with Denali’s initial public offering, Denali entered into an underwriting agreement (the “Underwriting Agreement”) with US Tiger Securities, Inc. (“US Tiger”) and EF Hutton, division of Benchmark Investments, LLC, as representatives of the several underwriters named therein (“EF Hutton”, and together with US Tiger, the “Representatives”), pursuant to which Denali agreed to pay to the underwriters an aggregate cash amount of $2,887,500 as a deferred discount (the “Deferred Discount”) upon the consummation of Denali’s initial business combination.
On November 20, 2023, Denali entered into a letter agreement by and among Denali, Holdco, EF Hutton, US Tiger and Craig-Hallum Capital Group LLC (the “Deferred Discount Agreement”), pursuant to which the Representatives have agreed to receive $866,250 of the aggregate $2,887,500 Deferred Discount owed to them upon the closing of the Business Combination with Longevity (the “Closing”) in the form of 86,625 shares of Holdco’s common stock, par value $0.0001 (the “Common Stock Consideration”). Upon the terms of the Deferred Discount Agreement, the Common Stock Consideration will be issued at the Closing and the remaining $2,021,250 of the aggregate Deferred Discount owed will remain payable at the Closing in cash in accordance with the terms of the Underwriting Agreement. In addition, the Deferred Discount Agreement provides the Representatives with certain customary registration rights to the Common Stock Consideration following the Closing. The Deferred Discount Agreement will terminate in the event that Denali does not consummate the Closing of the Business Combination with Longevity.
The foregoing descriptions of the Deferred Discount Agreement and the transactions contemplated thereby are only summaries and do not purport to be complete, and are qualified in their entirety by reference to the full text of such instruments, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.2, respectively, and incorporated herein by reference.
Item 8.01 Other Events.
Waiver of Closing Condition
Pursuant to the Merger Agreement, the parties thereto agreed that their respective obligations to consummate the Business Combination are subject to the satisfaction or written waiver by Denali and Longevity of the condition that upon the Closing, Holdco shall have net tangible assets of at least $5,000,001. On November 17, 2023, the parties agreed to irrevocably waive such condition.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 10.1 | Amended and Restated Subscription Agreement, dated as of November 17, 2023, by and between Denali SPAC Holdco, Inc. and FutureTech Capital LLC. | |
| 10.2 | Deferred Discount Agreement, dated as of November 20, 2023, by and among Denali Capital Acquisition Corp., Denali SPAC Holdco, Inc., US Tiger Securities, Inc., EF Hutton, division of Benchmark Investments, LLC and Craig-Hallum Capital Group LLC | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DENALI CAPITAL ACQUISITION CORP. | ||
| By: | /s/ Lei Huang | |
| Name: | Lei Huang | |
| Title: | Chief Executive Officer | |
Date: November 20, 2023
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Exhibit 10.1
AMENDED AND RESTATED SUBSCRIPTION AGREEMENT
| Denali SPAC Holdco, Inc. | |
| 437 Madison Avenue, 27th Floor | |
| New York, New York 10022 | |
| November 17, 2023 |
Ladies and Gentlemen:
Pursuant to the Agreement and Plan of Merger, dated as of January 25, 2023 (as amended prior to the date hereto, the “Merger Agreement”), by and among Denali Capital Acquisition Corp. (“Denali”), Longevity Biomedical, Inc., a Delaware corporation (“Longevity”), Denali SPAC Holdco, Inc., a Delaware corporation and direct, wholly owned subsidiary of Denali (“Holdco”), Denali SPAC Merger Sub, Inc., a Delaware corporation and direct, wholly owned subsidiary of Holdco (“Denali Merger Sub”), Longevity Merger Sub, Inc., a Delaware corporation and direct, wholly owned subsidiary of Holdco (“Longevity Merger Sub”), and Bradford A. Zakes, solely in the capacity as seller representative, the parties are undertaking a proposed business combination (the “Business Combination”). Following the Business Combination, Holdco will change its name to Longevity Biomedical, Inc., and its common stock, par value $0.0001 per share (the “Common Stock”), is expected to list on The Nasdaq Stock Market (“Nasdaq”) under the ticker symbol “LBIO.” In connection with the Business Combination, Holdco is seeking commitments to purchase shares (subject to Section 7(d) and Section 10(m), the “Shares”) of its Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), at a price per Share of $10.00 (the “Purchase Price”), and warrants, each of which will be exercisable for one share of Common Stock at an exercise price of $8.00 per share (the “Warrants”), which purchase shall close concurrently with the closing of the Business Combination (the “Offering”).
On August 23, 2023, Holdco entered into a subscription agreement with FutureTech Capital LLC (the “Subscriber”), pursuant to which the Subscriber agreed to subscribe and purchase 1,800,000 shares of Series A Preferred Stock, at a price of $10.00 per share (the “Initial Subscription Agreement”). Holdco and the Subscriber desire to amend and restate the Initial Subscription Agreement to update certain terms contained therein. In connection therewith, Holdco and the Subscriber hereby agree as follows:
1. Subscription. As of the date written above, the Subscriber hereby irrevocably subscribes for and agrees to purchase from Holdco at the Purchase Price and on the terms provided for herein (i) such number of Shares as is set forth on the signature page of this amended and restated subscription agreement (the “Amended and Restated Subscription Agreement”) and (ii) such number of Warrants equal to such number of Shares multiplied by two. The Subscriber further acknowledges and agrees that:
a. On or prior to the closing of the Business Combination, Holdco may enter into subscription agreements (the “Other Subscription Agreements” and together with this Amended and Restated Subscription Agreement, the “Subscription Agreements”) with certain other investors (the “Other Subscribers” and together with the Subscriber, the “Subscribers”), pursuant to which such Other Subscribers, if any, will agree to subscribe for and purchase from Holdco, and Holdco desires to issue and sell to the Other Subscribers, if any, at the Closing, additional Shares of Series A Preferred Stock and Warrants at the Purchase Price per Share of Series A Preferred Stock.
b. Holdco intends that the terms of such Other Subscription Agreements, if any, will be the same as this Amended and Restated Subscription Agreement. Should the terms of the Other Subscriptions Agreements differ materially from the terms herein, or should the terms of the Offering change materially, the Subscriber will be advised of such differences or changes (the “Modified Terms”) and shall have the opportunity to either (i) agree to purchase the Shares and Warrants on the Modified Terms or (ii) terminate the Subscriber’s subscription for the Shares and Warrants. Notice of such Modified Terms shall be provided to the Subscriber by Holdco in writing, and the Subscriber shall provide written notice of its decision to either accept the Modified Terms for the purchase of the Shares and Warrants or terminate its subscription.
2. Closing; Delivery of Shares and Warrants.
a. The closing of the Offering of Shares and Warrants contemplated hereby (the “Closing”) is contingent upon the concurrent consummation of the Business Combination. The Closing shall occur on the date of the consummation of the Business Combination. Upon (i) satisfaction of the conditions set forth in Section 3 below and (ii) not less than five (5) business days’ written notice (which may be via email) from (or on behalf of) Holdco to the Subscriber (the “Closing Notice”), which Closing Notice shall contain Holdco’s wire instructions, that Holdco reasonably expects the closing of the Business Combination to occur on a date that is not less than five (5) business days from the date of the Closing Notice, the Subscriber shall deliver to Holdco, no later than two (2) business days’ prior to the closing date specified in the Closing Notice (the “Closing Date”) the Purchase Price for the Shares and Warrants subscribed by wire transfer of United States dollars in immediately available funds to the account specified by Holdco in the Closing Notice against delivery to the Subscriber of the Shares and Warrants, free and clear of any liens or other restrictions whatsoever (other than those arising under state or federal securities laws), in book-entry form as set forth in Section 2(b) below. This Amended and Restated Subscription Agreement shall terminate and be of no further force or effect, without any liability to either party hereto, if Holdco notifies the Subscriber in writing that it has abandoned its plans to move forward with the Business Combination prior to the Closing Date. If, within three (3) business days following the Closing Date, the consummation of the Business Combination does not occur, Holdco shall promptly (but not later than two (2) business days thereafter) return the Purchase Price to the Subscriber, and the Shares and Warrants, if issued, shall be cancelled. Notwithstanding such return, (i) a failure to close on the Closing Date shall not, by itself, be deemed to be failure of any of the conditions to Closing set forth in Section 3 to be satisfied or waived on or prior to the Closing Date and (ii) unless and until this Amended and Restated Subscription Agreement is terminated in accordance with Section 8 hereof, the Subscriber shall remain obligated (A) to redeliver funds following Holdco’s delivery to the Subscriber of a new Closing Notice and (B) to consummate the Closing upon satisfaction or waiver of the conditions set forth in Section 3. For purposes of this Amended and Restated Subscription Agreement, “business day” shall mean any day other than (x) a Saturday or Sunday or (y) a day on which the banking institutions located in New York, New York are permitted or required by law, executive order or governmental decree to remain closed.
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b. Immediately upon the Closing, Holdco shall deliver (or cause the delivery of) the Shares and Warrants in book-entry form with restrictive legends in the amount as set forth on the signature page to the Subscriber as indicated on the signature page (or to the funds and accounts designated by Subscriber, if so designated by Subscriber, or its nominee in accordance with its delivery instruction) or to a custodian designated by Subscriber, as applicable, as indicated below.
3. Closing Conditions. In addition to the condition set forth in Section 2(a) above:
a. The Closing is also subject to satisfaction or valid waiver by each party of the conditions that, on the Closing Date:
(i) no suspension of the qualification of the Shares or Warrants for offering or sale in any jurisdiction, or initiation or threatening of any proceedings for any of such purposes, shall have occurred;
(ii) no applicable governmental authority shall have enacted, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation (whether temporary, preliminary or permanent) that is then in effect and has the effect of making consummation of the Business Combination illegal or otherwise restraining or prohibiting consummation of the Business Combination, and no governmental authority shall have instituted or threatened in writing a proceeding seeking to impose any such restraint or prohibition; and
(iii) all conditions precedent to the closing of the Business Combination set forth in the Merger Agreement, including all necessary approvals of Holdco’s stockholders and regulatory approvals, if any, shall have been satisfied or waived (other than those conditions that, by their nature, are to be satisfied at the closing of the Business Combination) and the closing of the Business Combination shall be scheduled to occur concurrently with or immediately following the Closing.
b. The obligations of Holdco to consummate the Closing shall be subject to the satisfaction or valid waiver by Holdco of the additional conditions that, on the Closing Date:
(i) all representations and warranties of the Subscriber contained in this Amended and Restated Subscription Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality, which representations and warranties shall be true in all respects) at and as of the Closing Date (except for representations and warranties made as of a specific date, which shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality, which representations and warranties shall be true in all respects) as of such date), and consummation of the Closing shall constitute a reaffirmation by the Subscriber of each of the representations, warranties and agreements of each such party contained in this Amended and Restated Subscription Agreement as of the Closing Date; and
(ii) the Subscriber shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Amended and Restated Subscription Agreement to be performed, satisfied or complied with by it at or prior to Closing, no later than the Closing Date.
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c. The obligation of the Subscriber to consummate the Closing shall be subject to the satisfaction or valid waiver by the Subscriber of the additional conditions that, on the Closing Date:
(i) all representations and warranties of Holdco contained in this Amended and Restated Subscription Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Material Adverse Effect (as defined herein), which representations and warranties shall be true in all respects) at and as of the Closing Date (except for representations and warranties made as of a specific date, which shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Material Adverse Effect, which representations and warranties shall be true in all respects) as of such date), and consummation of the Closing shall constitute a reaffirmation by Holdco of each of the representations, warranties and agreements of each such party contained in this Amended and Restated Subscription Agreement as of the Closing Date;
(ii) Holdco shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Amended and Restated Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing; and
(iii) other than with respect to the condition to consummate the closing of the Business Combination set forth in Section 10.2(c) of the Merger Agreement, which Subscriber hereby acknowledges and agrees that, notwithstanding anything herein to the contrary, the parties to the Merger Agreement may waive, amend, modify or remove in their sole discretion, without any effect on the obligation of Subscriber to consummate the Closing hereunder, no amendment, waiver or modification of the Merger Agreement (as the same exists on the date hereof) shall have occurred that would reasonably be expected to materially and adversely affect the Subscriber, unless such amendment, waiver or modification has been consented in writing to by the Subscriber.
4. Holdco Representations and Warranties. Holdco represents and warrants to the Subscriber that:
a. Holdco is a Delaware corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Holdco has the corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver and perform its obligations under this Amended and Restated Subscription Agreement.
b. Prior to the Closing Date, the Shares and Warrants will have been duly authorized and, when issued and delivered to the Subscriber against full payment therefor in accordance with the terms of this Amended and Restated Subscription Agreement, the Shares and Warrants will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under Holdco’s Amended and Restated Certificate of Incorporation to be filed prior to the Closing or under the laws of the State of Delaware. Prior to the Closing Date, the shares of Common Stock to be issued upon the conversion of the Shares (the “Conversion Shares”) will have been duly authorized and reserved and, when issued and delivered to the Subscriber against full payment therefore in accordance with the terms of the Certificate of Designation to be filed prior to the Closing by the Company with the Secretary of State of Delaware, in the form of Exhibit A attached hereto (the “Certificate of Designation”), the Conversion Shares will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under Holdco’s Amended and Restated Certificate of Incorporation to be filed prior to the Closing or under the laws of the State of Delaware. Prior to the Closing Date, the shares of Common Stock to be issued upon the exercise of the Warrants (the “Warrant Shares”) will have been duly authorized and reserved and, when issued and delivered to the Subscriber against full payment therefor in accordance with the terms of the Warrants, in the form of Exhibit B attached hereto (the “Form of Warrant”), the Warrant Shares will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under Holdco’s Amended and Restated Certificate of Incorporation to be filed prior to the Closing or under the laws of the State of Delaware.
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c. This Amended and Restated Subscription Agreement has been duly authorized, executed and delivered by Holdco and is enforceable against Holdco in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
d. The issuance and sale of the Shares and Warrants and the compliance by Holdco with the provisions of this Amended and Restated Subscription Agreement and the consummation of the Business Combination will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of Holdco or any of its subsidiaries pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, license, lease or any other agreement or instrument to which Holdco or any of its subsidiaries is a party or by which Holdco or any of its subsidiaries is bound or to which any of the property or assets of Holdco is subject, which would have a material adverse effect on the business, properties, financial condition, stockholders’ equity or results of operations of Holdco or on the validity of the Shares or Warrants or the legal authority of Holdco to comply in all material respects with the terms of this Amended and Restated Subscription Agreement (a “Material Adverse Effect”); (ii) result in any violation of the provisions of the organizational documents of Holdco; or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over Holdco or any of its properties that would have a Material Adverse Effect or materially affect the validity of the Shares or Warrants or the legal authority of Holdco to comply with this Amended and Restated Subscription Agreement.
e. Holdco has not entered into any agreement or arrangement entitling any agent, broker, investment banker, financial advisor or other person to any broker’s or finder’s fee or any other commission or similar fee in connection with the Business Combination contemplated by this Amended and Restated Subscription Agreement for which the Subscriber could become liable.
f. Holdco is not, and immediately after receipt of payment for the Shares and Warrants, will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
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g. Assuming the accuracy of the Subscriber’s representations and warranties set forth in Section 5, in connection with the offer, sale and delivery of the Shares and Warrants in the manner contemplated by this Amended and Restated Subscription Agreement, it is not necessary to register the offer and sale of the Shares and Warrants by Holdco to the Subscriber under the Securities Act of 1933, as amended (the “Securities Act”).
h. The Shares and Warrants (i) were not offered by any form of general solicitation or general advertising and (ii) assuming the accuracy of the subscriber representations and warranties set forth in Section 5, are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. Furthermore, neither Holdco, nor any person acting on its behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security under circumstances that would adversely affect reliance by Holdco on Section 4(a)(2) of the Securities Act or would require registration of the issuance of the Shares and Warrants under the Securities Act.
i. Immediately prior to the Closing, the authorized capital of Holdco will consist of 200,000,000 shares of Common Stock and 2,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”), 2,000,000 of which shares will be designated as “Series A Convertible Preferred Stock.” All shares of Common Stock and Series A Preferred Stock to be issued in connection with the Business Combination and the Offering, as the case may be, prior to the Closing, will have been duly authorized and validly issued, will be fully paid and nonassessable, and will not be issued in violation of (or subject to) any preemptive rights (including any preemptive rights set forth in the organizational documents of Holdco, rights of first refusal or similar rights). Other than as described in the Investor Disclosure Package (as defined below) or pursuant to the Subscription Agreements, there are no options, warrants, equity securities, calls, rights, commitments or agreements to which Holdco is a party or by which Holdco is bound obligating Holdco to issue, exchange, transfer, deliver or sell, or cause to be issued, exchanged, transferred, delivered or sold, additional shares of Common Stock or Preferred Stock, or other equity interests of Holdco or any security or rights convertible into or exchangeable or exercisable for any shares of Common Stock or Preferred Stock or other equity interests of Holdco, or obligating Holdco to enter into any commitment or agreement containing such obligation.
j. The class of shares of Common Stock to be issued in the Business Combination will be registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will be listed for trading on Nasdaq under the symbol “LBIO.” There is no suit, action, proceeding or investigation pending or, to the knowledge of Holdco, threatened against Holdco by Nasdaq or the U.S. Securities and Exchange Commission (the “SEC”) with respect to any intention by such entity to prevent the registration of or deregister the Common Stock or prohibit or terminate the listing of the Common Stock on Nasdaq, excluding, for the purposes of clarity, the customary ongoing review by Nasdaq of Holdco’s listing application with respect to the Business Combination.
k. As of their respective dates, all forms, reports, statements, schedules, proxies, registration statements and other documents filed by Denali or Holdco with the SEC prior to the date of this Amended and Restated Subscription Agreement (collectively, the “SEC Reports”) complied in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of Denali and Longevity included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing and fairly present in all material respects the financial position of Holdco as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments. A copy of each SEC Report is available to the Subscriber via the SEC’s EDGAR system.
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l. Holdco is in compliance with all applicable laws, except where such non- compliance would not reasonably be expected to have a Material Adverse Effect. Holdco has not received any written communication from a governmental entity that alleges that Holdco is not in compliance with or is in default or violation of any applicable law, except where such non- compliance, default or violation would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.
m. Holdco is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self-regulatory organization or other person in connection with the execution, delivery and performance by Holdco of this Amended and Restated Subscription Agreement (including, without limitation, the issuance of the Shares and Warrants), other than (i) the filing with the SEC of a registration statement on Form S-4 in connection with the Business Combination, (ii) filings required by applicable state securities laws, (iii) the filing of a Notice of Exempt Offering of Securities on Form D with the SEC under Regulation D of the Securities Act (if any), (iv) those required by Nasdaq; and (v) any filing, the failure of which to obtain would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect.
n. Holdco has not entered into any side letter or similar agreement with any investor in connection with such investor’s direct or indirect investment in Holdco other than the Merger Agreement.
o. Holdco understands that the foregoing representations and warranties shall be deemed material and to have been relied upon by the Subscriber.
5. Subscriber Representations, Warranties and Covenants. The Subscriber represents and warrants to Holdco that:
a. At the time the Subscriber was offered the Shares and Warrants, it was, and as of the date hereof, the Subscriber is (i) a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act), an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act) or an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act), in each case, satisfying the requirements set forth on Exhibit C hereto, (ii) acquiring the Shares and Warrants only for his, her or its own account or for an account over which it exercises sole discretion for another qualified institutional buyer or accredited investor, (iii) not a party to a binding written agreement to sell, exchange or otherwise dispose of the Shares or Warrants and has no current plan or intention to sell, exchange or otherwise dispose of the Shares or Warrants, and (iv) not acquiring the Shares or Warrants for the account of others, nor on behalf of any other account or person or with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act (and shall provide the requested information on Exhibit C following the signature page hereto). The Subscriber is not an entity formed for the specific purpose of acquiring the Shares or Warrants.
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b. The Subscriber understands that the Shares and Warrants are being offered in an offering not involving any public offering within the meaning of the Securities Act and that neither the Shares and Warrants delivered at the Closing nor the Conversion Shares and Warrant Shares will have been registered under the Securities Act. The Subscriber understands that none of the Shares, Warrants, Conversion Shares or Warrant Shares may be resold, transferred, pledged or otherwise disposed of by the Subscriber absent an effective registration statement under the Securities Act except (i) to Holdco or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and in each of cases (i) and (iii) in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates representing the Shares or Warrants delivered at the Closing or certificates representing the Conversion Shares or Warrant Shares delivered upon conversion of the Shares or exercise of the Warrants, as the case may be, shall contain a legend to such effect. The Subscriber acknowledges that none of the Shares Warrants, Conversion Shares, or Warrant Shares will be eligible for resale pursuant to Rule 144A promulgated under the Securities Act. The Subscriber understands and agrees that the Shares, Warrants, Conversion Shares, and Warrant Shares, until registered under an effective registration statement, will be subject to transfer restrictions and, as a result of these transfer restrictions, the Subscriber may not be able to readily resell the Shares, Warrants, Conversion Shares, or Warrant Shares and may be required to bear the financial risk of an investment in the Shares, Warrants, Conversion Shares, and Warrant Shares for an indefinite period of time. The Subscriber understands that it has been advised to consult legal counsel prior to entering into this Amended and Restated Subscription Agreement or prior to making any offer, resale, pledge or transfer of any of the Shares, Warrants, Conversion Shares, or Warrant Shares.
c. The Subscriber understands and agrees that the Subscriber is purchasing Shares and Warrants directly from Holdco. The Subscriber further acknowledges that there have been no representations, warranties, covenants and agreements made to the Subscriber by Holdco, or any of its officers, directors or representatives, expressly (other than those representations, warranties, covenants and agreements included in this Amended and Restated Subscription Agreement) or by implication.
d. The Subscriber acknowledges and agrees that the Subscriber has received such information as the Subscriber deems necessary in order to make an investment decision with respect to the Shares and Warrants. Without limiting the generality of the foregoing, the Subscriber acknowledges that it has reviewed (i) the SEC Reports and (ii) the Merger Agreement, a copy of which has been be filed by Denali with the SEC ((i) and (ii) together, the “Investor Disclosure Package”). The Subscriber represents and agrees that the Subscriber and the Subscriber’s professional advisor(s), if any, have had the full opportunity to ask Holdco’s management questions, receive such answers and obtain such information as the Subscriber and such Subscriber’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Shares and Warrants. The Subscriber further acknowledges that the information contained in the Investor Disclosure Package is preliminary and subject to change, and that any changes to the information contained in the Investor Disclosure Package, including, without limitation, any changes based on updated information or changes in terms of the Business Combination, shall in no way affect the Subscriber’s obligation to purchase the Shares and Warrants hereunder, except as otherwise provided herein.
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e. The Subscriber became aware of this Offering of the Shares and Warrants solely by means of direct contact between the Subscriber and Longevity or Holdco, or a representative of Longevity or Holdco. The Subscriber acknowledges that Holdco represents and warrants that neither the Shares nor Warrants (i) were offered by any form of general solicitation or general advertising and (ii) are being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.
f. The Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Shares and Warrants, including those set forth in the SEC Reports. The Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares and Warrants, and the Subscriber has sought such independent accounting, legal and tax advice as the Subscriber has considered necessary to make an informed investment decision.
g. Alone, or together with any professional advisor(s), the Subscriber has adequately analyzed and fully considered the risks of an investment in the Shares and Warrants and determined that the Shares and Warrants are a suitable investment for the Subscriber and that the Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of the Subscriber’s investment in Holdco. The Subscriber acknowledges specifically that a possibility of total loss exists.
h. In making its decision to purchase the Shares and Warrants, the Subscriber has relied solely upon independent investigation made by the Subscriber and the representations and warranties set forth herein.
i. The Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of the Offering of the Shares and Warrants or made any findings or determination as to the fairness of this investment or the accuracy or adequacy of the SEC Reports.
j. The Subscriber has been duly formed or incorporated and is validly existing in good standing under the laws of its jurisdiction of incorporation or formation.
k. The execution, delivery and performance by the Subscriber of this Amended and Restated Subscription Agreement are within the powers of the Subscriber, have been duly authorized and will not constitute or result in a breach or default under or conflict with any order, ruling or regulation of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which the Subscriber is a party or by which the Subscriber is bound, and, if the Subscriber is not an individual, will not violate any provisions of the Subscriber’s charter documents, including, without limitation, its incorporation or formation documents, bylaws, indenture of trust or partnership or operating agreement, as may be applicable, which would reasonably be expected to materially affect the legal authority of the Subscriber to comply in all material respects with the terms of this Amended and Restated Subscription Agreement. The signature on this Amended and Restated Subscription Agreement is genuine, and the signatory, if the Subscriber is an individual, has legal competence and capacity to execute the same or, if the Subscriber is not an individual the signatory has been duly authorized to execute the same, and this Amended and Restated Subscription Agreement constitutes a legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
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l. Neither the due diligence investigation conducted by the Subscriber in connection with making its decision to acquire the Shares and Warrants nor any representations and warranties made by the Subscriber herein shall modify, amend or affect the Subscriber’s right to rely on the truth, accuracy and completeness of Holdco’s representations and warranties contained herein.
m. The Subscriber is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or in any Executive Order issued by the President of the United States and administered by OFAC (“OFAC List”), or a person or entity prohibited by any OFAC sanctions program, (ii) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (iii) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (collectively, a “Prohibited Investor”). The Subscriber agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that the Subscriber is permitted to do so under applicable law. If the Subscriber is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.) (the “BSA”), as amended by the USA PATRIOT Act of 2001 (the “PATRIOT Act”), and its implementing regulations (collectively, the “BSA/PATRIOT Act”), the Subscriber maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. To the extent required, it maintains policies and procedures reasonably designed for the screening of its investors against the OFAC sanctions programs, including the OFAC List. To the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by the Subscriber and used to purchase the Shares and Warrants were legally derived.
n. The Subscriber will deliver, contemporaneously with the execution of this Amended and Restated Subscription Agreement, a signed copy of the “investor representation letter” in the form attached as Exhibit C hereto.
6. Conversion and Exercise Procedures. The form of Notice of Conversion included in the Certificate of Designation sets forth the totality of the procedures required of the Subscriber to convert the Shares, and the form of Notice of Exercise included in the Form of Warrant sets forth the totality of the procedures required of the Subscriber to exercise the Warrants. No ink-original Notice of Conversion or Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of a Notice of Conversion or Notice of Exercise form be required to convert the Shares or exercise the Warrants, as the case may be. Holdco shall honor conversions of the Shares and exercises of the Warrants and shall deliver the Conversion Shares and Warrant Shares in accordance with the terms, conditions and time periods set forth herein and in the Certificate of Designation and Form of Warrant, as the case may be.
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7. Registration Rights.
a. Holdco agrees that, within twenty (20) business days after the consummation of the Business Combination (the “Filing Date”), the Holdco will file with the SEC (at the Holdco’s sole cost and expense) a registration statement (the “Registration Statement”) registering the resale of the number of Conversion Shares issuable assuming the Conversion Price is equal to the Floor Price and the number of Warrant Shares issuable (the “Registrable Securities”), and the Holdco shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 60th calendar day (or 90th calendar day if the SEC notifies the Holdco that it will “review” the Registration Statement) following the Closing Date and (ii) the 5th business day after the date the Holdco is notified (orally or in writing, whichever is earlier) by the SEC that the Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effectiveness Date”); provided, however, that the Holdco’s obligations to include the Registrable Securities in the Registration Statement are contingent upon Subscriber furnishing a completed and executed selling shareholders questionnaire in customary form to the Holdco that contains the information required by the SEC rules for a Registration Statement regarding Subscriber, the securities of the Holdco held by Subscriber and the intended method of disposition of the Registrable Securities to effect the registration of the Registrable Securities, and Subscriber shall execute such documents in connection with such registration as the Holdco may reasonably request that are customary of a selling stockholder in similar situations, including providing that the Holdco shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement, if applicable, as permitted hereunder; provided, that Subscriber shall not in connection with the foregoing be required to execute any lock-up or similar agreement or otherwise be subject to any contractual restriction on the ability to transfer the Registrable Securities. For purposes of clarification, any failure by the Holdco to file the Registration Statement by the Filing Date or to effect such Registration Statement by the Effectiveness Date shall not otherwise relieve the Holdco of its obligations to file or effect the Registration Statement as set forth above in this Section 7. For purposes of this Section 7, Registrable Securities shall include, as of any date of determination, the Conversion Shares, Warrant Shares, and any other equity security of the Holdco issued or issuable with respect to the Conversion Shares or Warrant Shares by way of share split, dividend, distribution, recapitalization, merger, exchange, replacement or similar event or otherwise and “Subscriber” shall include any person to which the rights under this Section 7 shall have been duly assigned. The Holdco will provide a draft of the Registration Statement to Subscriber for review at least two (2) business days in advance of filing the Registration Statement. In no event shall Subscriber be identified as a statutory underwriter in the Registration Statement unless requested by the SEC and consented to by the Subscriber. If the SEC requests that Subscriber be identified as a statutory underwriter in the Registration Statement, Subscriber will have an opportunity to withdraw from the Registration Statement. Notwithstanding the foregoing, if the SEC prevents the Holdco from including any or all of the Conversion Shares and Warrant Shares proposed to be registered for resale under the Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale of the Conversion Shares and Warrant Shares by the applicable shareholders or otherwise, (i) such Registration Statement shall register for resale such number of Conversion Shares and Warrant Shares which is equal to the maximum number of Conversion Shares and Warrant Shares as is permitted by the SEC and (ii) the number of Conversion Shares and Warrant Shares to be registered for each selling shareholder named in the Registration Statement shall be reduced pro rata among all such selling shareholders; and as promptly as practicable after being permitted to register additional Conversion Shares and Warrant Shares under Rule 415 under the Securities Act, the Holdco shall amend the Registration Statement or file a new Registration Statement to register such Conversion Shares and Warrant Shares not included in the initial Registration Statement and cause such amendment or Registration Statement to become effective as promptly as practicable.
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b. Notwithstanding anything to the contrary in this Amended and Restated Subscription Agreement, the Holdco shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require Subscriber not to sell under the Registration Statement or to suspend the effectiveness thereof, (i) as may be necessary in connection with the preparation and filing of a post-effective amendment to the Registration Statement following the filing of the Holdco’s Annual Report on Form 10-K, or (ii) if the filing, effectiveness or continued use of any Registration Statement would require the Holdco to make any public disclosure of material non-public information, which disclosure, in the good faith determination of the board of directors of the Holdco, after consultation with counsel to the Holdco, (a) would be required to be made in any Registration Statement in order for the applicable Registration Statement not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading, (b) would not be required to be made at such time if the Registration Statement were not being filed, and (c) the Holdco has a bona fide business purpose for not making such information public (each such circumstance, a “Suspension Event”); provided, however, that the Holdco may not delay or suspend the Registration Statement on more than two occasions or for more than sixty (60) consecutive calendar days, or more than ninety (90) total calendar days, in each case, during any twelve-month period. Upon receipt of any written notice from the Holdco (which notice shall not contain any material non-public information regarding the Holdco and which notice shall not be subject to any duty of confidentiality) of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, Subscriber agrees that it will immediately discontinue offers and sales of the Conversion Shares and Warrant Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until Subscriber receives copies of a supplemental or amended prospectus (which the Holdco agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Holdco that it may resume such offers and sales (which notice shall not contain any material non-public information regarding the Holdco and which notice shall not be subject to any duty of confidentiality). If so directed by the Holdco, Subscriber will deliver to the Holdco or, in Subscriber’s sole discretion destroy, all copies of the prospectus covering the Conversion Shares and Warrant Shares in Subscriber’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Conversion Shares and Warrant Shares shall not apply (i) to the extent Subscriber is required to retain a copy of such prospectus (a) in order to comply with applicable legal, regulatory, self- regulatory or professional requirements or (b) in accordance with a bona fide pre-existing document retention policy or (ii) to copies stored electronically on archival servers as a result of automatic data back-up.
c. Subscriber may deliver written notice (including via email in accordance with Section 10(m)) (an “Opt-Out Notice”) to the Holdco requesting that Subscriber not receive notices from the Holdco otherwise required by Section 7; provided, however, that Subscriber may later revoke any such Opt-Out Notice in writing. Following receipt of an Opt-Out Notice from Subscriber (unless subsequently revoked), (i) the Holdco shall not deliver any such notices to Subscriber and Subscriber shall no longer be entitled to the rights associated with any such notice and (ii) each time prior to Subscriber’s intended use of an effective Registration Statement, Subscriber will notify the Holdco in writing at least two (2) business days in advance of such intended use, and if a notice of a Suspension Event was previously delivered (or would have been delivered but for the provisions of this Section 7(c)) and the related suspension period remains in effect, the Holdco will so notify Subscriber, within one (1) business day of Subscriber’s notification to the Holdco, by delivering to Subscriber a copy of such previous notice of Suspension Event, and thereafter will provide Subscriber with the related notice of the conclusion of such Suspension Event immediately upon its availability (which notices shall not contain any material non-public information regarding the Holdco and which notice shall not be subject to any duty of confidentiality).
8. Termination. This Amended and Restated Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earlier to occur of (a) such date and time as the Merger Agreement is terminated in accordance with its terms, (b) upon the mutual written agreement of each of the parties hereto to terminate this Amended and Restated Subscription Agreement or (c) December 31, 2023; provided that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover reasonable and documented out-of-pocket losses, liabilities or damages arising from such breach. Holdco shall promptly notify the Subscriber of the termination of the Merger Agreement promptly after the termination of such agreement.
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9. Trust Account Waiver. Reference is made to the final prospectus of Denali, filed with the SEC (Registration No. 333-263123) (the “Prospectus”), dated April 6, 2022. Denali shall provide the Subscriber with a copy of the Prospectus upon request and the Subscriber hereby represents and warrants that it understands that Denali has established a trust account (the “Trust Account”) containing the proceeds of its initial public offering (the “IPO”) and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of Denali’s public shareholders (including overallotment shares acquired by Denali’s underwriters, the “Public Shareholders”), and that, except as otherwise described in the Prospectus, Denali may disburse monies from the Trust Account only: (a) to the Public Shareholders in the event they elect to redeem their Denali shares in connection with the consummation of Denali’s initial business combination (as such terms are used in the Prospectus) or in connection with an extension of the deadline to consummate a business combination, (b) to the Public Stockholders if Denali fails to consummate a business combination within twelve (12) months after the closing of the IPO, or such later date if the deadline to consummate a business combination is extended in accordance with Denali’s charter, (c) with respect to any interest earned on the amounts held in the Trust Account, as necessary to pay any franchise or income taxes or (d) to Holdco after or concurrently with the consummation of the Business Combination. For and in consideration of Holdco entering into this Amended and Restated Subscription Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Subscriber, on behalf of itself and its controlling persons acting on its behalf, hereby agrees that, notwithstanding anything to the contrary in this Amended and Restated Subscription Agreement, (i) it and its controlling persons acting on its behalf do not now and shall not at any time hereafter have any right, title, interest or claim of any kind in or to any assets held in the Trust Account (including distributions directly or indirectly to Public Shareholders therefrom (“Public Distributions”)) arising from, as a result of or in connection with this Amended and Restated Subscription Agreement, any ancillary documents entered in connection herewith, the Business Combination, or any discussions in connection therewith, (ii) agrees that it shall not make any claim against the Trust Account (including Public Distributions) arising from, as a result of or in connection with this Amended and Restated Subscription Agreement, any ancillary documents entered in connection herewith, the Business Combination, or any discussions in connection therewith, regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (collectively, the “Released Claims”), (iii) it and its controlling persons acting on its behalf shall not make any claim against the Trust Account (including Public Distributions) for any Released Claims, (iv) it and its controlling persons acting on its behalf hereby irrevocably waive any Released Claims that it or its controlling persons acting on its behalf may have against the Trust Account (including any Public Distributions) now or in the future, (v) it and its controlling persons acting on its behalf will not seek recourse against the Trust Account (including Public Distributions) in respect of any Released Claims, and (vi) such irrevocable waiver set forth herein is material to this Amended and Restated Subscription Agreement and specifically relied upon by Denali, Holdco and their respective affiliates to induce Holdco to enter in this Amended and Restated Subscription Agreement, and the Subscriber further intends and understands such waiver to be valid, binding and enforceable under applicable law against the Subscriber and each of its controlling persons acting on its behalf, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity. For the avoidance of doubt, the parties acknowledge that the Subscriber and its controlling persons acting on its behalf are not releasing or waiving any rights that they may have as Public Shareholders to receive funds from the Trust Account in their capacity as Public Shareholders upon the redemption of their shares of Holdco or the liquidation of Holdco, as described in the Prospectus or any other right, title, interest or claim to the Trust Account by virtue of the Subscriber’s record or beneficial ownership of securities of Holdco acquired by any means other than pursuant to this Amended and Restated Subscription Agreement. Notwithstanding anything to the contrary contained in this Amended and Restated Subscription Agreement, the provisions of this Section 9 shall survive the Closing or any termination of this Amended and Restated Subscription Agreement and last indefinitely.
10. Miscellaneous.
a. Neither this Amended and Restated Subscription Agreement nor any rights that may accrue to the Subscriber hereunder (other than the Shares and Warrants acquired hereunder, if any) may be transferred or assigned; provided that the Subscriber may assign its rights and obligations hereunder pursuant to a joinder to this Amended and Restated Subscription Agreement in form and substance reasonably satisfactory to Holdco, to one or more funds or investment vehicles advised or managed by the Subscriber or its affiliates, but such assignment shall not relieve the Subscriber from any of its obligations or liabilities hereunder. At the Closing, the number of Shares and Warrants delivered pursuant to this Amended and Restated Subscription Agreement by Holdco to the Subscriber and its permitted assignees shall equal, in the aggregate, the number of Shares and Warrants set forth on the Subscriber’s signature page hereto.
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b. Holdco may request from the Subscriber such additional information as Holdco may deem necessary to evaluate the eligibility of the Subscriber to acquire the Shares and Warrants, and the Subscriber shall provide such information as may reasonably be requested to Holdco promptly upon such request, to the extent readily available and to the extent consistent with its internal policies and procedures; provided, that Holdco agrees to keep such information confidential.
c. The Subscriber acknowledges that Holdco, and others will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Amended and Restated Subscription Agreement. Prior to the Closing, the Subscriber agrees to promptly notify Holdco if any of the acknowledgments, understandings, agreements, representations and warranties of the Subscriber set forth herein are no longer accurate. The parties further acknowledge and agree that Longevity is a third-party beneficiary of the acknowledgments, understandings, agreements, representations and warranties contained in this Amended and Restated Subscription Agreement.
d. Holdco and the Subscriber are entitled to rely upon this Amended and Restated Subscription Agreement and is irrevocably authorized to produce this Amended and Restated Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. The Subscriber shall not issue any press release or make any other similar public statement with respect to the Offering or the Business Combination without the prior consent of Holdco and Denali in each instance. Notwithstanding the foregoing, Holdco shall not publicly disclose the name of the Subscriber or any affiliate or investment adviser of the Subscriber without the prior written consent (including by e-mail) of the Subscriber, except as required by the U.S. federal laws, the rules and regulations of the SEC or Nasdaq, or otherwise, or at the request of the staff of the SEC, Nasdaq or other regulatory agency.
e. The agreements, representations and warranties made by each party hereto in this Amended and Restated Subscription Agreement shall survive the Closing.
f. This Amended and Restated Subscription Agreement may not be modified, waived or terminated except by an instrument in writing, signed by the party against whom enforcement of such modification, waiver, or termination is sought.
g. This Amended and Restated Subscription Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof. This Amended and Restated Subscription Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successor and assigns.
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h. This Amended and Restated Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.
i. If any provision of this Amended and Restated Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Amended and Restated Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
j. This Amended and Restated Subscription Agreement may be executed in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
k. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Amended and Restated Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Amended and Restated Subscription Agreement and to enforce specifically the terms and provisions of this Amended and Restated Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise.
l. THIS AMENDED AND RESTATED SUBSCRIPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AMENDED AND RESTATED SUBSCRIPTION AGREEMENT.
m. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication.
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|
If to Holdco at or prior to the Closing, to:
Denali Capital Acquisition Corp. Telephone No.: 646-978-5180 E-mail: lei.huang@itradeup.com |
with a copy (which will not constitute notice) to:
Sidley Austin LLP New York, New York 10019 Telephone No.: (212) 839-5300
Sidley Austin LLP 1999 Avenue of the Stars Los Angeles, California 90067 |
If to Holdco after the Closing, to:
Longevity Biomedical, Inc. Bothell, WA 98011 Attn: Bradford A. Zakes, President and CEO E-mail: bzakes@cerevast.com |
with a copy (which will not constitute notice) to:
Nelson Mullins Riley & Scarborough LLP Washington, DC 20001 Attn: Andrew M. Tucker, Esq. E-mail: andy.tucker@nelsonmullins.com |
11. Non-Reliance and Exculpation. The Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation, other than the statements, representations and warranties contained in this Amended and Restated Subscription Agreement, in making its investment or decision to invest in Holdco. The Subscriber agrees that, without limiting Holdco’s obligations hereunder, no purchaser pursuant to the Subscription Agreements (including the respective controlling persons, members, officers, directors, partners, agents, or employees of any purchaser) shall be liable to any other purchaser pursuant to the Subscription Agreements for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the Offering of the Shares and Warrants.
12. Additional Agreements. The Subscriber acknowledges and agrees that Holdco and its officers, directors, employees, agents and representatives may be required to identify the Subscriber (whether in the Subscriber’s capacity as an investor in Holdco or otherwise) and that such disclosure may be made in written or oral public communications or press releases or other filings with the SEC or other U.S. federal or state regulatory agencies or bodies. The determination to make such disclosure, and the content and timing of such disclosure, shall be in Holdco’s sole and exclusive discretion, shall not require any advance notice to the Subscriber prior to disclosure, and may include, without limitation, the Subscriber’s name and/or the name of any of its affiliates, or any derivative of any of the foregoing names (collectively, the “Investor Names”). Further, Holdco may make disclosures of the Investor Names to an auditor or governmental or regulatory authority pursuant to any investigation, inspection, examination or inquiry without providing the Subscriber with any notification thereof. The Subscriber shall indemnify, defend and hold harmless Holdco and its officers, directors, agents and agents, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable external attorneys’ fees) and expenses related to, in connection with or resulting from such disclosure.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Subscription Agreement to be executed and delivered by their respective authorized signatories as of the date first indicated above.
| DENALI SPAC HOLDCO, INC. | Address for Notice: | |||
| 437 Madison Avenue, 27th Floor | ||||
| New York, New York 10022 | ||||
| By: | /s/ Jiandong (Peter) Xu | Attn: Lei Huang | ||
| Name: | Jiandong (Peter) Xu | Telephone No.: 646-978-5180 | ||
| Title: | President | E-mail: lei.huang@itradeup.com | ||
[Amended and Restated Subscription Agreement]
[PURCHASER SIGNATURE PAGES TO AMENDED AND RESTATED SUBSCRIPTION AGREEMENT]
IN WITNESS WHEREOF, the Subscriber has caused this Amended and Restated Subscription Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
| Name(s) of Subscriber: | FutureTech Capital LLC |
| Signature of Authorized Signatory of Subscriber: | /s/ Yuquan Wang |
| Name of Authorized Signatory: | Yuquan Wang |
| Title of Authorized Signatory: | President |
| Email Address of Authorized Signatory: | yuquanwang111@gmail.com |
| Facsimile Number of Authorized Signatory: | N/A |
Address for Notice to Subscriber:
| 128 Gail Drive | |
| New Rochelle, New York 10805 |
Address for Delivery of Shares to Subscriber (if not same as address for notice):
Subscription Amount: US$13,000,000.00
Shares: 1,300,000 Shares of Series A Convertible Preferred Stock
Warrants: 2,600,000 Warrants
EIN Number: 87-4731073
[SIGNATURE PAGES CONTINUE]
Exhibit A
Form of Certificate of Designation
(attached)
DENALI SPAC HOLDCO, INC.
CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS
OF
SERIES A CONVERTIBLE PREFERRED STOCK
PURSUANT TO SECTION 151(G) OF THE DELAWARE GENERAL CORPORATION LAW
The undersigned, [__] and [__], do hereby certify that:
1. They are the [Chief Executive Officer] and [Secretary], respectively, of Denali SPAC Holdco, Inc., a Delaware corporation (the “Corporation”).
2. The Corporation is authorized to issue 2,000,000 shares of preferred stock, none of which have been issued.
3. The following resolutions were duly adopted by the board of directors of the Corporation (the “Board of Directors”):
WHEREAS, the amended and restated certificate of incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, consisting of 2,000,000 shares, $0.0001 par value per share, issuable from time to time in one or more series;
WHEREAS, the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof, of any of them; and
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WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a series of the preferred stock, which shall consist of, except as otherwise set forth in the Purchase Agreement, up to 2,000,000 shares of the preferred stock which the Corporation has the authority to issue, as follows:
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of preferred stock as follows:
TERMS OF SERIES A CONVERTIBLE PREFERRED STOCK
Section 1. Definitions. For the purposes hereof, the following terms shall have the following meanings:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.
“Alternate Consideration” shall have the meaning set forth in Section 7(d).
“Beneficial Ownership Limitation” shall have the meaning set forth in Section 6(d).
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
“Buy-In” shall have the meaning set forth in Section 6(c)(iv).
“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1 of the Purchase Agreement.
“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto and all conditions precedent to (i) each Holder’s obligations to pay the Subscription Amount and (ii) the Corporation’s obligations to deliver the Securities have been satisfied or waived.
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the Corporation’s common stock, par value $0.0001 per share, and stock of any other class of securities into which such securities may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Conversion Amount” means the sum of the Stated Value at issue.
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“Conversion Date” shall have the meaning set forth in Section 6(a).
“Conversion Price” shall have the meaning set forth in Section 6(b).
“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in accordance with the terms hereof.
“Delaware Courts” shall have the meaning set forth in Section 11(d).
“Effective Date” means the earlier of (i) date that the Registration Statement filed by the Corporation pursuant to Section 7 of the Purchase Agreement is first declared effective by the Commission or (ii) the Rule 144 Date.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Floor Price” means $5.00 (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction occurring after the date of the Purchase Agreement).
“Fundamental Transaction” shall have the meaning set forth in Section 7(d).
“GAAP” means United States generally accepted accounting principles.
“Holder” shall have the meaning given such term in Section 2.
“Liquidation” shall have the meaning set forth in Section 5.
“Notice of Conversion” shall have the meaning set forth in Section 6(a).
“Original Issue Date” means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred Stock.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Preferred Stock” shall have the meaning set forth in Section 2.
“Purchase Agreement” means the Subscription Agreement, dated as of August 23, 2023 (the “Subscription Date”), by and between the Corporation and the original Holder, as amended, modified or supplemented from time to time in accordance with its terms.
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“Registration Statement” means a registration statement meeting the requirements set forth in Section 7 of the Purchase Agreement and covering the resale of the Conversion Shares by the Holders as provided for in such section.
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“Rule 144 Date” means the date the Conversion Shares first become eligible for resale without volume or manner-of-sale restrictions after initial satisfaction of the conditions set forth in Rule 144(i)(2).
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Securities” means the Preferred Stock and the Conversion Shares.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share Delivery Date” shall have the meaning set forth in Section 6(c).
“Stated Value” shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 3.
“Subscription Amount” shall mean the aggregate amount to be paid for the Preferred Stock purchased pursuant to the Purchase Agreement as specified below the Holder’s name on the signature page of the Purchase Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.
“Subsidiary” means any subsidiary of the Corporation and shall, where applicable, also include any direct or indirect subsidiary of the Corporation formed or acquired after the date of the Purchase Agreement.
“Successor Entity” shall have the meaning set forth in Section 7(d).
“Trading Day” means a day on which the principal Trading Market is open for business.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any successors to any of the foregoing).
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“Transaction Documents” means this Certificate of Designation, the Purchase Agreement, all exhibits thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated pursuant to the Purchase Agreement.
“Transfer Agent” means VStock Transfer, LLC, the current transfer agent of the Corporation, and any successor transfer agent of the Corporation.
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Corporation, the fees and expenses of which shall be paid by the Corporation.
Section 2. Designation, Amount and Par Value. The series of preferred stock shall be designated as its Series A Convertible Preferred Stock (the “Preferred Stock”) and the number of shares so designated shall be up to 2,000,000 (which shall not be subject to increase without the written consent of the holders of a majority of the then outstanding Preferred Stock (each, a “Holder” and collectively, the “Holders”)). Each share of Preferred Stock shall have a par value of $0.0001 per share and a stated value equal to $10.00, subject to increase set forth in Section 3 below (the “Stated Value”).
Section 3. Dividends. Except for stock dividends or distributions for which adjustments are to be made pursuant to Section 7, Holders shall be entitled to receive, and the Corporation shall pay, dividends on shares of Preferred Stock equal (on an as-if-converted-to- Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares of Preferred Stock.
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Section 4. Voting Rights. Each Holder of outstanding shares of Preferred Stock shall be entitled to vote with holders of outstanding shares of Common Stock, voting together as a single class, with respect to any and all matters presented to the stockholders of the Corporation for their action or consideration (whether at a meeting of stockholders of the Corporation, by written action of stockholders in lieu of a meeting, or otherwise). For the purposes of the foregoing, each holder of outstanding shares of Preferred Stock shall be entitled to a number of votes equal to the number of shares of Common Stock into which such shares of Preferred Stock are convertible based on the then-effective Conversion Price as of the record date for determining stockholders entitled to vote on such matter. Further, as long as any shares of Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority of the then outstanding shares of the Preferred Stock (the “Required Holders”), (a) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend this Certificate of Designation, (b) amend its certificate of incorporation, as amended, or other charter documents in any manner that adversely affects any rights of the Holders, (c) increase the number of authorized shares of Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing; provided, that Section 6(d) may not be amended, modified or waived.
Section 5. Ranking; Liquidation. The Preferred Stock shall rank (i) senior to all of the Common Stock; (ii) senior to any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms junior to any Preferred Stock (“Junior Securities”); (iii) on parity with any class or series of capital stock of the Corporation created specifically ranking by its terms on parity with the Preferred Stock (“Parity Securities”); and (iv) junior to any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms senior to any Preferred Stock (“Senior Securities”), in each case, as to dividends or distributions of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntarily or involuntarily. Subject to any superior liquidation rights of the holders of any Senior Securities of the Corporation and the rights of the Corporation’s existing and future creditors, upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), each Holder shall be entitled to be paid out of the assets of the Corporation legally available for distribution to stockholders, prior and in preference to any distribution of any of the assets or surplus funds of the Corporation to the holders of the Common Stock and Junior Securities and pari passu with any distribution to the holders of Parity Securities, an amount equal to the Stated Value for each share of Preferred Stock held by such Holder and an amount equal to any dividends declared but unpaid thereon, and thereafter the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation the same amount that a holder of Common Stock would receive if the Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. The Corporation shall mail written notice of any such Liquidation, not less than 60 days prior to the payment date stated therein, to each Holder.
Section 6. Conversion.
a) Conversions at Option of Holder. Each share of Preferred Stock shall be convertible, at any time and from time to time from and after the Original Issue Date at the option of the Holder thereof, into that number of shares of Common Stock (subject to the limitations set forth in Section 6(d)) determined by dividing the Stated Value of such share of Preferred Stock by the Conversion Price. Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers by e-mail attachment or by a nationally recognized overnight courier service such Notice of Conversion to the Corporation (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. To effect conversions of shares of Preferred Stock, a Holder shall not be required to surrender the certificate(s) representing the shares of Preferred Stock to the Corporation unless all of the shares of Preferred Stock represented thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of Preferred Stock promptly following the Conversion Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the terms hereof shall be canceled and shall not be reissued.
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b) Conversion Price. The conversion price for each share of Preferred Stock is the lower of (i) $8.00 and (ii) the product of (x) the average of the twenty (20) consecutive daily VWAPs over the twenty (20) consecutive Trading Days ending on and including the Conversion Date, multiplied by (y) 80% (i.e., applying a discount of 20%) (subject to adjustment herein, the “Conversion Price”); provided, however, in no event will the Conversion Price be less than the Floor Price.
c) Mechanics of Conversion
i. Delivery of Conversion Shares Upon Conversion. Not later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery Date”), the Corporation shall deliver, or cause to be delivered, to the converting Holder (A) the number of Conversion Shares being acquired upon the conversion of the Preferred Stock, and (B) a bank check in the amount of accrued and unpaid dividends, if any. On or after the earlier of (i) the one-year anniversary of the Original Issue Date or (ii) the Effective Date, the Corporation shall deliver the Conversion Shares required to be delivered by the Corporation under this Section 6 electronically through the Depository Trust Company or another established clearing corporation performing similar functions. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Corporation’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Conversion. Notwithstanding the foregoing, with respect to any Notice(s) of Conversion delivered at or prior to 12:00 p.m. (New York City time) on the Original Issue Date, the Corporation agrees to deliver the Conversion Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Original Issue Date.
ii. Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Corporation at any time on or before its receipt of such Conversion Shares, to rescind such conversion, in which event the Corporation shall promptly return to the Holder any original Preferred Stock certificate delivered to the Corporation and the Holder shall promptly return to the Corporation the Conversion Shares issued to such Holder pursuant to the rescinded Notice of Conversion.
iii. Obligation Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion Shares upon conversion of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Corporation of any such action that the Corporation may have against such Holder. In the event a Holder shall elect to convert any or all of the Stated Value of its Preferred Stock, the Corporation may not refuse conversion based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and/or enjoining conversion of all or part of the Preferred Stock of such Holder shall have been sought and obtained, and the Corporation posts a surety bond for the benefit of such Holder in the amount of 150% of the Stated Value of Preferred Stock which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction, the Corporation shall issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion. Nothing herein shall limit a Holder’s right to pursue actual damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
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iv. Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights available to the Holder, if the Corporation fails for any reason to deliver to a Holder the applicable Conversion Shares by the Share Delivery Date pursuant to Section 6(c)(i), and if after such Share Delivery Date such Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which such Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Corporation shall (A) pay in cash to such Holder (in addition to any other remedies available to or elected by such Holder) the amount, if any, by which (x) such Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of such Holder, either reissue (if surrendered) the shares of Preferred Stock equal to the number of shares of Preferred Stock submitted for conversion (in which case, such conversion shall be deemed rescinded) or deliver to such Holder the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements under Section 6(c)(i). For example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Preferred Stock with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000, under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder $1,000. The Holder shall provide the Corporation written notice indicating the amounts payable to such Holder in respect of the Buy-In and, upon request of the Corporation, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Corporation’s failure to timely deliver Conversion Shares upon conversion of the shares of Preferred Stock as required pursuant to the terms hereof.
v. Reservation of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred Stock as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Preferred Stock), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 7) upon the conversion of the then outstanding shares of Preferred Stock (assuming for such purpose a Conversion Price equal to the Floor Price then in effect and any such conversions are made without regard to any limitations on conversion set forth herein). The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable and, if a Registration Statement is then effective under the Securities Act, shall be registered for public resale in accordance with such Registration Statement (subject to such Holder’s compliance with its obligations under Section 7 of the Purchase Agreement).
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vi. Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Preferred Stock. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share. Notwithstanding anything to the contrary contained herein, but consistent with the provisions of this subsection with respect to fractional Conversion Shares, nothing shall prevent any Holder from converting fractional shares of Preferred Stock.
vii. Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holders of such shares of Preferred Stock and the Corporation shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. The Corporation shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Conversion Shares.
d) Beneficial Ownership Limitation. The Corporation shall not effect any conversion of the Preferred Stock, and a Holder shall not have the right to convert any portion of the Preferred Stock, to the extent that, after giving effect to the conversion set forth on the applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any Persons acting as a group together with such Holder or any of such Holder’s Affiliates (such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of the Preferred Stock with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted Stated Value of Preferred Stock beneficially owned by such Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, the Preferred Stock) beneficially owned by such Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 6(d) applies, the determination of whether the Preferred Stock is convertible (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and of how many shares of Preferred Stock are convertible shall be in the sole discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be such Holder’s determination of whether the shares of Preferred Stock may be converted (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and how many shares of the Preferred Stock are convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, each Holder will be deemed to represent to the Corporation each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Corporation shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 6(d), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Corporation’s most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Corporation or (iii) a more recent written notice by the Corporation or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request (which may be via email) of a Holder, the Corporation shall within one Trading Day confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation, including the Preferred Stock, by such Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any shares of Preferred Stock, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of Preferred Stock held by the applicable Holder. A Holder, upon notice to the Corporation, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 6(d) applicable to its Preferred Stock provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Preferred Stock held by the Holder and the provisions of this Section 6(d) shall continue to apply. Any such increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Corporation and shall only apply to such Holder and no other Holder. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of Preferred Stock.
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Section 7. Certain Adjustments.
a) Stock Dividends and Stock Splits. If the Corporation, at any time while this Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of, or payment of a dividend on, this Preferred Stock), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Corporation, then each of the Conversion Price and the Floor Price then in effect shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holders will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of such Holder’s Preferred Stock (without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c) Pro Rata Distributions. During such time as this Preferred Stock is outstanding, if the Corporation declares or makes any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Preferred Stock, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Preferred Stock (without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
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d) Fundamental Transaction. If, at any time while this Preferred Stock is outstanding, (i) the Corporation, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Corporation, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Corporation, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this Preferred Stock, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 6(d) on the conversion of this Preferred Stock), the number of shares of Common Stock of the successor or acquiring corporation or of the Corporation, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Preferred Stock is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 6(d) on the conversion of this Preferred Stock). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of Designation with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions and evidencing the Holders’ right to convert such preferred stock into Alternate Consideration. The Corporation shall cause any successor entity in a Fundamental Transaction in which the Corporation is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Corporation under this Certificate of Designation and the other Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 7(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Preferred Stock, deliver to the Holder in exchange for this Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Preferred Stock which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Preferred Stock (without regard to any limitations on the conversion of this Preferred Stock) prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Preferred Stock immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Designation and the other Transaction Documents referring to the “Corporation” shall refer instead to the Successor Entity), and may exercise every right and power of the Corporation and shall assume all of the obligations of the Corporation under this Certificate of Designation and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Corporation herein.
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e) Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.
f) Notice to the Holders.
i. Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7, the Corporation shall promptly deliver to each Holder by facsimile or email a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
ii. Adjustment to Floor Price. Whenever the Floor Price is adjusted pursuant to any provision of this Section 7, the Corporation shall promptly deliver to each Holder by facsimile or email a notice setting forth the Floor Price then in effect after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
iii. Notice to Allow Conversion by Holder. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Corporation shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation (and all of its Subsidiaries, taken as a whole), or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of this Preferred Stock, and shall cause to be delivered by facsimile or email to each Holder at its last facsimile number or email address as it shall appear upon the stock books of the Corporation, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Corporation or any of the Subsidiaries, the Corporation shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. For the avoidance of doubt, and without limiting the conversion rights of any Holder, each Holder shall remain entitled to convert the Conversion Amount of this Preferred Stock (or any part hereof) during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
g) Voluntary Adjustment By Corporation. Subject to the rules and regulations of the Trading Market, the Corporation may at any time, subject to the prior written consent of the Required Holders, reduce the then current Conversion Price to any amount and for any period of time deemed appropriate by the board of directors of the Corporation.
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Section 8. Miscellaneous.
a) Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by e-mail attachment, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at the address set forth above Attention: [ ], e-mail address [ ], or such other e-mail address or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section 11. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile or e-mail attachment, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, e-mail address or address of such Holder appearing on the books of the Corporation, or if no such facsimile number, e-mail address or address appears on the books of the Corporation, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or e-mail attachment at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or e-mail attachment at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
b) Absolute Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay liquidated damages and accrued dividends, as applicable, on the shares of Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.
c) Lost or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation (which shall not include the posting of any bond).
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d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflict of laws thereof. All legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by this Certificate of Designation (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of Wilmington, Delaware, County of New Castle (the “Delaware Courts”). The Corporation and each Holder hereby irrevocably submits to the exclusive jurisdiction of the Delaware Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such Delaware Courts, or such Delaware Courts are improper or inconvenient venue for such proceeding. The Corporation and each Holder hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Certificate of Designation and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. The Corporation and each Holder hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If the Corporation or any Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
e) Waiver. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation on any other occasion. Any waiver by the Corporation or a Holder must be in writing.
f) Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.
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g) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
h) Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.
i) Status of Converted or Redeemed Preferred Stock. Shares of Preferred Stock may only be issued pursuant to the Purchase Agreement. If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series A Convertible Preferred Stock.
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RESOLVED, FURTHER, that the Chairman, the Chief Executive Officer, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Delaware law.
IN WITNESS WHEREOF, the undersigned have executed this Certificate this [ ] day of [ ], 2023.
| Name: | Name: | |||
| Title: | Chief Executive Officer | Title: | Secretary | |
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ANNEX A
NOTICE OF CONVERSION
(TO BE EXECUTED BY THE REGISTERED
HOLDER IN ORDER TO CONVERT SHARES
OF SERIES A CONVERTIBLE PREFERRED STOCK)
The undersigned hereby elects to convert the number of shares of Series A Convertible Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), indicated below into shares of common stock, par value $0.0001 per share (the “Common Stock”), of Denali SPAC Holdco, Inc., a Delaware corporation (the “Corporation”), according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation in accordance with the Purchase Agreement. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.
Conversion calculations:
Date to Effect Conversion: _______________________________________________________________
Number of shares of Preferred Stock owned prior to Conversion: __________________________________
Number of shares of Preferred Stock to be Converted: ___________________________________________
Stated Value of shares of Preferred Stock to be Converted: ______________________________________
Number of shares of Common Stock to be Issued: _____________________________________________
Applicable Conversion Price:_____________________________________________________________
Number of shares of Preferred Stock subsequent to Conversion: ___________________________________
Address for Delivery: _____________________________________
or
DWAC Instructions:
Broker no:_____________________________
Account no: ___________________________
| [HOLDER] | |||
| By: | |||
| Name: | |||
| Title: | |||
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Exhibit B
Form of Warrant
(attached)
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
DENALI SPAC HOLDCO, INC.
| Warrant Shares: [ ] | Initial Exercise Date: [ ]1, 2023 |
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [ ] or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on [ ], 2028 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Denali SPAC Holdco, Inc., a Delaware corporation (the “Company”), up to [ ] shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Amended and Restated Subscription Agreement, dated as of November 17, 2023, by and between the Company and FutureTech Capital, LLC, (the “Subscription Agreement”).
| 1 | To be the date that is the 6-month anniversary of the Business Combination closing date. |
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Section 2. Exercise.
a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver to the Company the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
For the purposes of this warrant, “Trading Day” means a day on which the principal Trading Market is open for trading, and “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any successors to any of the foregoing).
b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $8.00, subject to adjustment hereunder (the “Exercise Price”).
c) Cashless Exercise. If at any time after the six (6) month anniversary of the Closing Date, there is no effective registration statement registering, or the prospectus contained therein is not available for the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) | = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
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| (B) | = | the Exercise Price of this Warrant, as adjusted hereunder; and |
| (X) | = | the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Series A Preferred Stock, the Warrants, the Conversion Shares, and the Warrant Shares (the “PIPE Securities”) then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the PIPE Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
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d) Mechanics of Exercise.
i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Company’s transfer agent (the “Transfer Agent”) to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the later of (i) two (2) Trading Days or, if earlier, the Standard Settlement Period, after the delivery to the Company of the Notice of Exercise, and (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company (such date, the “Warrant Share Delivery Date”); provided, however, in any event, the Company shall not be obligated to deliver Warrant Shares until it has received the aggregate Exercise Price therefor. Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.
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ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy- In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
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v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares pursuant to the terms of this Warrant. The Company shall (i) pay all reasonable attorney fees required for the issuance of attorney legal opinions for removal of restrictive legends on Warrant Shares or (ii) provide an attorney legal opinion from counsel to the Company to Holder for removal of restrictive legends on Warrant Shares.
vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
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e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s affiliates, and any other persons acting as a group together with the Holder or any of the Holder’s affiliates (such persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be [9.99/4.99%]2 of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.
| 2 | As elected by the Holder on or prior to the date of initial issuance. |
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The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section 3. Certain Adjustments.
a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
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c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
e) Notice to Holder.
i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
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ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
f) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
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Section 4. Transfer of Warrant.
a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and any applicable provisions of the Subscription Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. The Company may appoint Continental Stock Transfer & Trust Company as warrant agent for the Warrants.
d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, execute such documents as the Company may require to ensure the transferee of this Warrant is bound by the provisions of this Warrant and the Subscription Agreement.
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e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
Section 5. Miscellaneous.
a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.
b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.
d) Authorized Shares.
The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant (without regard to any limitation on exercise set forth herein). The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
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Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Subscription Agreement.
f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Subscription Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
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h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Subscription Agreement.
i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
l) Amendment. This Warrant may be modified, waived or amended or the provisions hereof waived with the written consent of the Company and the Holder.
m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
o) Equal Treatment of Holders. No consideration (including any modification of this Warrant) shall be offered or paid to any person to amend or consent to a waiver or modification of any provision hereof unless the same consideration is also offered to all of the Holders. For clarification purposes, this provision constitutes a separate right granted to each Holder by the Company and negotiated separately by each Holder, and is intended for the Company to treat the Holders as a class and shall not in any way be construed as the Holders acting in concert or as a group with respect to the Warrants or the shares of Common Stock issuable upon exercise of the Warrants.
********************
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| DENALI SPAC HOLDCO, INC. | ||
| By: | ||
| Name: | Jiandong (Peter) Xu | |
| Title: | President | |
EXHIBIT A
NOTICE OF EXERCISE
| TO: | Denali SPAC Holdco, Inc. |
437 Madison Avenue, 27th Floor
New York, New York 10022
Attn: Lei Huang
Email: lei.huang@itradeup.com
(1) The undersigned hereby elects to purchase ______ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
| ☐ | in lawful money of the United States; or |
| ☐ | if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c). |
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
___________________________________
The Warrant Shares shall be delivered to the following DWAC Account Number:
___________________________________
___________________________________
___________________________________
(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.
[SIGNATURE OF HOLDER]
Name of Investing Entity: __________________________________________________________________
Signature of Authorized Signatory of Investing Entity: ____________________________________________
Name of Authorized Signatory: _______________________________________________________________
Title of Authorized Signatory: _______________________________________________________________
Date: __________________________________________________________________________________
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: | |||
| (Please Print) | |||
| Address: | |||
| (Please Print) | |||
| Phone Number: | |||
| Email Address: | |||
| Dated: | ______________ __, __________ | ||
| Holder’s Signature: | |||
| Holder’s Address: | |||
EXHIBIT C
INVESTOR REPRESENTATION LETTER
| Re: | Purchase of shares (the “Shares”) of Series A Convertible Preferred Stock (the “Series A Preferred Stock”) and warrants (the “Warrants”) issued by Denali SPAC Holdco, Inc. (“Holdco”) |
Ladies and Gentlemen:
In connection with the offer and sale of the Shares of Series A Preferred Stock and Warrants to be issued by Holdco, we represent, warrant, agree and acknowledge as follows:
| 1. | No disclosure or offering document has been prepared in connection with the offer and sale of the Shares or Warrants by Holdco, Longevity or any of their respective affiliates. |
| 2. | (a) We have relied solely upon our independent investigation and we have not relied on any statements or other information provided by or on behalf of Holdco concerning Holdco or the Shares, Warrants, or the offer and sale of the Shares and Warrants; (b) we have received such information as we deem necessary in order to make an investment decision with respect to the Shares and Warrants; (c) we have had the full opportunity to ask Holdco’s management questions, receive such answers, and obtain such information as we and our professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Shares and Warrants ; and (d) we have sought such accounting, legal and tax advice as we have considered necessary to make an informed investment decision. |
| 3. | In connection with the issue and purchase of the Shares and Warrants, neither Holdco nor its officers, directors, stockholders, members, managers, representatives or agents have acted as our financial advisor or fiduciary. |
| 4. | We are (x) a “qualified institutional buyer” (as defined in Rule 144A of the Securities Act of 1933 as amended (the “Securities Act”)), (y) an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act), or (z) an “accredited investor” (as defined in Rule 501(a) under the Securities Act). |
| 5. | We are acquiring the Shares and Warrants only for our own account or for an account over which we exercise sole discretion for another qualified institutional buyer or accredited investor (each as defined above) and not on the account of others, and not on behalf of any other account or person or with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act. |
| 6. | We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our prospective investment in the Shares and Warrants; and we are able to, at this time and in the foreseeable future, bear the economic risk of a total loss of our investment in Holdco. |
| 7. | The offer and sale of the Shares and Warrants have not been registered under the Securities Act or any other applicable securities laws, and unless so registered, the Shares and Warrants may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act or any other applicable securities laws, pursuant to any exemption therefrom. |
Very truly yours,
FutureTech Capital LLC
| By: | /s/ Yuquan Wang | |
| Name: | Yuquan Wang | |
| Title: | President | |
| Date: | November 17, 2023 |
Exhibit 10.2
DEFERRED DISCOUNT AGREEMENT
November 20, 2023
WHEREAS, pursuant to that certain Underwriting Agreement between Denali Capital Acquisition Corp. (the “Company”) and US Tiger Securities, Inc. (“U.S. Tiger”) and EF Hutton, division of Benchmark Investments, LLC (“EF Hutton”, and together with U.S. Tiger, the “Representatives”), as representatives of the several Underwriters named therein (collectively, the “Underwriters”), and Craig-Hallum Capital Group LLC, as QIU, dated April 6, 2022 (as may be amended from time to time, the “Underwriting Agreement”), the Company previously agreed to pay to the Underwriters an aggregate cash amount of $2,887,500 as a deferred discount (the “Deferred Discount”), upon the consummation of a Business Combination. Capitalized terms used herein and not defined shall have the respective meanings ascribed to such terms in the Underwriting Agreement.
WHEREAS, the Company and Denali SPAC Holdco, Inc. (“Holdco”) have entered into that certain agreement and plan of merger, dated as of January 25, 2023 (as amended, supplemented or otherwise modified from time to time, the “Merger Agreement”) with respect to a Business Combination (the “Transaction”) with Longevity Biomedical, Inc. and certain other parties thereto.
For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:
| 1. | Deferred Discount: In the event that the Company elects (in its sole discretion) to consummate the Transaction, the Representatives agree, on behalf of themselves and the several Underwriters, that (a) $866,250 of the aggregate Deferred Discount that would otherwise be payable by the Company to the Underwriters in cash pursuant to the Underwriting Agreement shall be payable by the Company to the Underwriters in the form of 86,625 shares of common stock, par value $0.0001, of Holdco (the “Common Stock Consideration”) and (b) the remaining $2,021,250 of the aggregate Deferred Discount shall remain payable in cash upon the consummation of the Transaction, in each case, as set forth on Schedule A hereto. For the avoidance of doubt, the foregoing arrangement shall only apply to the consummation of the Transaction and not to any other potential Business Combination that may be contemplated or consummated by the Company. |
| 2. | Issuance of Common Stock Consideration: Upon the consummation of the Transaction, the Company shall issue, transfer and deliver, or cause to be issued, transferred and delivered, the entire amount of the Common Stock Consideration to the Underwriters as set forth on Schedule A hereto, in book-entry form with restrictive legends, by instruction from the Company to its duly appointed transfer agent, and the shares representing the Common Stock Consideration shall be validly issued, fully paid and non-assessable and free and clear of all liens and encumbrances (other than those imposed by applicable securities laws). |
| 3. | Registration Rights: The Company and Holdco hereby agree that they shall: |
| (a) | Prepare and, as soon as practicable, but in no event later than 20 business days following the consummation of the Transaction, file with the Securities and Exchange Commission (the “SEC”), a re-sale registration statement on Form S-1 (or any successor form) to register the re-sale by the Underwriters of the shares of Common Stock Consideration issued to CF&CO pursuant to Section 4 hereof (the “Resale Registration Statement”); and |
| (b) | Use its reasonable best efforts to have the Resale Registration declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 60th calendar day (or 90th calendar day if the SEC notifies the Holdco that it will “review” the Resale Registration Statement) following the Closing Date and (ii) the 5th business day after the date the Holdco is notified (orally or in writing, whichever is earlier) by the SEC that the Resale Registration Statement will not be “reviewed” or will not be subject to further review; provided, however, that Holdco’s obligations to include any Underwriter’s Common Stock Consideration in the Resale Registration Statement are contingent upon such Underwriter furnishing a completed and executed selling shareholders questionnaire in customary form to Holdco and executing such documents in connection with such registration as Holdco may reasonably request that are customary of a selling stockholder in similar situations. |
Notwithstanding anything to the contrary herein, Holdco shall be entitled to delay or postpone the effectiveness of the Resale Registration Statement, and from time to time to require the Underwriters not to sell under the Resale Registration Statement or to suspend the effectiveness thereof, (i) as may be necessary in connection with the preparation and filing of a post-effective amendment to the Resale Registration Statement following the filing of Holdco’s Annual Report on Form 10-K, or (ii) if the filing, effectiveness or continued use of any Registration Statement would require Holdco to make any public disclosure of material non-public information, which disclosure, in the good faith determination of the board of directors of Holdco, after consultation with counsel to Holdco, (a) would be required to be made in any Resale Registration Statement in order for the applicable Registration Statement not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading, (b) would not be required to be made at such time if the Resale Registration Statement were not being filed, and (c) Holdco has a bona fide business purpose for not making such information public (each such circumstance, a “Suspension Event”); provided, however, that Holdco may not delay or suspend the Resale Registration Statement on more than two occasions or for more than 60 consecutive calendar days, or more than 90 total calendar days, in each case, during any twelve-month period.
| 4. | Further Assurances: Each of the parties hereto will, upon request of the other, execute such other documents, instruments or agreements as may be reasonable or necessary to effectuate the agreements set forth in this agreement (this “Agreement”). |
| 5. | Disclosure: The parties hereby acknowledge and agree that the Company and Holdco may publicly disclose the terms of this Agreement, including by filing a copy of such Agreement or a description thereof with the SEC. |
| 6. | Termination: This Agreement will terminate automatically upon the earlier of: |
| (a) | the payment in full of the Deferred Discount and the effectiveness of the Resale Registration Statement, in each case, upon the terms set forth herein; and |
| (b) | the termination of the Merger Agreement or the abandonment by the Company of the Transaction. |
In the event of a termination pursuant to sub-section (b) of this paragraph, the Deferred Discount shall become due and payable by the Company to the Underwriters, in cash, upon the consummation of a Business Combination, in accordance terms originally set forth in the Underwriting Agreement.
| 7. | Incorporation by Reference: Sections 10.1, 10.3, 10.5, 10.6, 10.7 and 10.8 of the Underwriting Agreement are hereby incorporated by reference into this Agreement, mutatis mutandis. Except as expressly set forth herein, the provisions of the Underwriting Agreement are not amended and remain in full force and effect. |
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be executed and delivered by its duly authorized signatory as of the date first set forth above.
| US Tiger Securities, Inc. | ||
| By: | /s/ Tony Tian | |
| Name: | Tony Tian | |
| Title: | Head of Capital Markets | |
| EF Hutton, division of Benchmark Investments, LLC | ||
| By: | /s/ Sam Fleischman | |
| Name: | Sam Fleischman | |
| Title: | Supervisory Principal | |
| Craig-Hallum Capital Group LLC | ||
| By: | /s/ Rick Hartfiel | |
| Name: | Rick Hartfiel | |
| Title: | Managing Partner | |
| Denali Capital Acquisition Corporation | ||
| By: | /s/ Lei Huang | |
| Name: | Lei Huang | |
| Title: | Chief Executive Officer | |
| Denali SPAC Holdco, Inc. | ||
| By: | /s/ Jiandong (Peter) Xu | |
| Name: | Jiandong (Peter) Xu | |
| Title: | President | |
[Signature page to Deferred Discount Agreement]
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