Attached files
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EX-10 - FIRST WAVE PURCHASE AGREEMENT - AzurRx BioPharma, Inc. | azrx_ex101.htm |
EX-4.1 - FORM OF WAINWRIGHT WARRANT - AzurRx BioPharma, Inc. | azrx_ex41.htm |
8-K - CURRENT REPORT - AzurRx BioPharma, Inc. | azrx8k01082021.htm |
Exhibit 3.1
CERTIFICATE OF THE DESIGNATIONS, POWERS, PREFERENCES AND
RIGHTS
OF
SERIES C 9.00% CONVERTIBLE JUNIOR PREFERRED STOCK
OF
AZURRX BIOPHARMA, INC.
(Pursuant
to Section 151 of the
Delaware
General Corporation Law)
AzurRx
BioPharma, Inc., a corporation organized and existing under the
laws of the State of Delaware (the “Company”), hereby
certifies that, pursuant to authority vested in the Board of
Directors of the Company (the “Board of Directors”) by
Article FOURTH of the Amended and Restated Certificate of
Incorporation, as amended (the “Certificate of
Incorporation”), of the Company, the following resolutions
were adopted on December 31, 2020 by the Board of Directors
pursuant to Section 151 of the Delaware General Corporation Law
(the “DGCL”), and in accordance with the provisions of
Section 103 of the DGCL, does hereby submit the
following:
WHEREAS,
the Company’s Certificate of Incorporation authorizes the
issuance of 10,000,000 shares of preferred stock, par value $0.0001
per share (the “Preferred Stock”), from time to time in
one or more classes or series;
WHEREAS,
the Board of Directors is authorized to divide the Preferred Stock
into any number of shares and to fix the designations, relative
rights, preferences and limitations of any wholly unissued series
of preferred stock; and
WHEREAS,
it is the desire of the Board of Directors, pursuant to its
authority as aforesaid, to fix the designation and number of, and
determine the designation, relative rights, preferences, and
limitations relating to a series of the Preferred Stock, which
shall consist of up to 75,000.0000 shares of the Preferred Stock
which the Company has the authority to issue, as
follows:
“RESOLVED
that, pursuant to authority vested in the Board of Directors of the
Company by ARTICLE FOURTH of the Company’s Certificate of
Incorporation, out of the total authorized number of 10,000,000
shares of Preferred Stock, there shall be designated a series of
75,000.0000 shares which shall be issued in and constitute a single
series to be known as “Series C 9.00% Convertible Junior
Preferred Stock” (hereinafter called the “Series C
Preferred Stock”). The Board of Directors hereby resolves
that the shares of Series C Preferred Stock shall have the
designations, relative rights, preferences and the limitations
thereof, set forth below:
-1-
TERMS OF SERIES C 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(e).
“Bankruptcy Event” means
any of the following events: (a) the Company or any Significant
Subsidiary (as such term is defined in Rule 1-02(w) of Regulation
S-X) thereof commences a case or other proceeding under any
bankruptcy, reorganization, arrangement, adjustment of debt, relief
of debtors, dissolution, insolvency or liquidation or similar law
of any jurisdiction relating to the Company or any Significant
Subsidiary thereof, (b) there is commenced against the Company or
any Significant Subsidiary thereof any such case or proceeding that
is not dismissed within 60 days after commencement, (c) the Company
or any Significant Subsidiary thereof is adjudicated insolvent or
bankrupt or any order of relief or other order approving any such
case or proceeding is entered, (d) the Company or any Significant
Subsidiary thereof suffers any appointment of any custodian or the
like for it or any substantial part of its property that is not
discharged or stayed within 60 calendar days after such
appointment, (e) the Company or any Significant Subsidiary thereof
makes a general assignment for the benefit of creditors, (f) the
Company or any Significant Subsidiary thereof calls a meeting of
its creditors with a view to arranging a composition, adjustment or
restructuring of its debts, or (g) the Company or any Significant
Subsidiary thereof, by any act or failure to act, expressly
indicates its consent to, approval of or acquiescence in any of the
foregoing or takes any corporate or other action for the purpose of
effecting any of the foregoing.
“Beneficial Ownership
Limitation” shall have the meaning set forth in
Section 6(e).
“Business Day” means any
day except any Saturday, any Sunday, any day which is a federal
legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by
law or other governmental action to close.
“Buy-In” shall have the
meaning set forth in Section 6(d)(iv).
“Change of Control
Transaction” means the occurrence after the date
hereof of any of (a) an acquisition after the date hereof by an
individual or legal entity or “group” (as described in
Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective
control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of 50%
of the voting securities of the Company (other than by means of
conversion or exercise of Series C Preferred Stock and the
Securities issued together with the Series C Preferred Stock), (b)
the Company merges into or consolidates with any other Person, or
any Person merges into or consolidates with the Company and, after
giving effect to such transaction, the stockholders of the Company
immediately prior to such transaction own less than 50% of the
aggregate voting power of the Company or the successor entity of
such transaction, (c) the Company sells or transfers all or
substantially all of its assets to another Person and the
stockholders of the Company immediately prior to such transaction
own less than 66% of the aggregate voting power of the acquiring
entity immediately after the transaction, (d) a replacement at one
time or within a one year period of more than one-half of the
members of the Board of Directors which is not approved by a
majority of those individuals who are members of the Board of
Directors on the Original Issue Date (or by those individuals who
are serving as members of the Board of Directors on any date whose
nomination to the Board of Directors was approved by a majority of
the members of the Board of Directors who are members on the
Original Issue Date), or (e) the execution by the Company of an
agreement to which the Company is a party or by which it is bound,
providing for any of the events set forth in clauses (a) through
(d) above.
“Closing” means the
initial closing of the purchase and sale of the Series C Preferred
Stock and the Warrants pursuant to Section 2.1 of the Initial
Purchase Agreement.
-2-
“Commission” means the
United States Securities and Exchange Commission.
“Common Stock” means the
Company’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 Company 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.
“Conversion Date” shall
have the meaning set forth in Section 6(a).
“Conversion Price” shall
have the meaning set forth in Section 6(c).
“Conversion Shares” means,
collectively, the shares of Common Stock issuable upon conversion
of the shares of Series C Preferred Stock in accordance with the
terms hereof.
“Conversion Shares Registration
Statement” means a registration statement that
registers the resale of all of the Conversion Shares by the
Holders, which shall be named as “selling stockholders”
therein, and meets the requirements of the Registration Rights
Agreement.
“Covered Securities” means
any shares of Common Stock underlying (x) any shares of preferred
stock issuable to First Wave Bio, Inc., as consideration for the
First Wave License Agreement (if other than the Series C Preferred
Stock), (y) any warrants issuable as placement agent compensation,
as a result of with the transactions contemplated by the
Transaction Documents, and (z) any securities issuable to holders
of the exchange rights set forth in Section 8 of the Series B
Certificate of Designations, as a result of the transactions
contemplated the Transaction Documents.
“Dividend Payment Date”
shall have the meaning set forth in Section 3(a).
“Effective Date” means the
date that the Conversion Shares Registration Statement filed by the
Company pursuant to the Registration Rights Agreement is first
declared effective by the Commission.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“First Wave License
Agreement” means the License Agreement, dated as of
December 31, 2020, by and between First Wave Bio, Inc. and the
Company, as amended, modified or supplemented from time to time in
accordance with its terms.
“First Wave Purchase
Agreement” means any Securities Purchase Agreement
relating to the purchase of Series C Preferred Stock to be entered
into by and between First Wave Bio, Inc. and the Company pursuant
to the terms of the First Wave License Agreement, as amended,
modified or supplemented from time to time in accordance with its
terms.
“Fundamental Transaction”
shall have the meaning set forth in Section 7(e).
“GAAP” means United States
generally accepted accounting principles.
-3-
“Holder” shall have the
meaning given such term in Section 2.
“Initial Closing Date”
means the Trading Day on which the Investor Purchase Agreement has
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 Company’s
obligations to deliver the Series C Preferred Stock and the
Warrants have been satisfied or waived.
“Investor Purchase
Agreement” means the Securities Purchase Agreement,
dated as of December 31, 2020, by and among the Company and the
original Holders signatory thereto, as amended, modified or
supplemented from time to time in accordance with its
terms.
“Issuable Maximum” shall
have the meaning set forth in Section 6(f).
“Issue Date” means, with
respect to any Purchase Agreement, the date of first issuance of
shares of the Series C Preferred Stock pursuant to such Purchase
Agreement, regardless of the number of transfers of any particular
shares of Series C Preferred Stock and regardless of the number of
certificates which may be issued to evidence such Series C
Preferred Stock.
“Junior Securities” means
the Common Stock and all other Common Stock Equivalents of the
Company other than those securities which are explicitly senior or
pari passu to the Series C Preferred
Stock in dividend rights or liquidation preference.
“Liquidation” shall have
the meaning set forth in Section 5.
“MFN Purchase Agreement”
means any agreement pursuant to which shares of Series B Preferred
Stock are exchanged for shares of Series C Preferred Stock in
accordance with the exchange rights set forth in Section 8 of the
Series B Certificate of Designations.
“New York Courts” shall
have the meaning set forth in Section 8(d).
“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 Series C
Preferred Stock regardless of the number of transfers of any
particular shares of Series C Preferred Stock and regardless of the
number of certificates which may be issued to evidence such Series
C 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.
“Prefunded Warrant” means
a prefunded warrant or similar instrument, with a similar
Beneficial Ownership Limitation as specified in Section
6(e).
“Purchase Agreement” means
the Investor Purchase Agreement, the First Wave Purchase Agreement
or any MFN Purchase Agreement, as applicable.
“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.
“Series B Preferred Stock”
means the Series B Convertible Preferred Stock, par value $0.0001
per share, of the Company.
“Series B Certificate of
Designations” means the Certificate of Designations,
Powers, Preferences and Rights of the Series B Convertible
Preferred Stock.
-4-
“Series C Preferred Stock”
shall have the meaning set forth in Section 2.
“Securities” means the
Series C Preferred Stock, the Warrants, the Warrant Shares and the
Conversion Shares.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Senior Securities” means
the Company’s Series B Preferred Stock.
“Share Delivery Date”
shall have the meaning set forth in Section 6(c\d).
“Stated Value” shall have
the meaning set forth in Section 2, as the same may be increased
pursuant to Section 3.
“Stockholder Approval”
means such approval as may be required from the stockholders of the
Company in accordance with applicable law, the applicable rules and
regulations of the Nasdaq Stock Market (or any successor entity),
the Company’s certificate of incorporation and bylaws and the
General Corporate Law of the State of Delaware with respect to the
transactions contemplated by the Transaction Documents, including
(x) an increase in the number of authorized shares of Common Stock
above 150,000,000 and (y) the issuance of any Underlying Shares or
other Covered Securities in excess of the Issuable
Maximum.
“Subscription Amount”
shall mean, as to each Holder who is a party to the Investor
Purchase Agreement, the aggregate amount to be paid for the Series
C Preferred Stock purchased pursuant to the Investor Purchase
Agreement, as specified below such Holder’s name on the
signature page of such Purchase Agreement and next to the heading
“Subscription Amount,” in United States dollars and in
immediately available funds.
“Subsidiary” means any
subsidiary of the Company as set forth on Schedule 3.1(a) of the Investor
Purchase Agreement and shall, where applicable, also include any
direct or indirect subsidiary of the Company formed or acquired
after the date of the Investor Purchase Agreement.
“Successor Entity” shall
have the meaning set forth in Section 7(e).
“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, or the New York Stock Exchange (or any
successors to any of the foregoing).
“Transaction Documents”
means any Purchase Agreement, the Warrants, the Registration Rights
Agreement, all exhibits and schedules thereto and hereto and any
other documents or agreements executed in connection with the
transactions contemplated pursuant to any Purchase
Agreement.
“Transfer Agent” means
Colonial Stock Transfer Company, Inc., the current transfer agent
of the Company, with a mailing address of 66 Exchange Place, 1st
Floor, Salt Lake City, Utah 84111, and any successor transfer agent
of the Company.
“Underlying Shares” means,
collectively, the shares of Common Stock issued and issuable upon
conversion of the Series C Preferred Stock, and upon exercise of
the Warrants.
“Warrants” means,
collectively, the Common Stock purchase warrants delivered to the
Holder at the Closing in accordance with Section 2.2(a) of the
Investor Purchase Agreement.
“Warrant Shares” means the
shares of Common Stock issuable upon exercise of the
Warrants.
-5-
Section
2. Designation,
Amount and Par Value. The series of preferred stock shall be
designated as its Series C 9.00% Convertible Junior Preferred Stock
(the “Series C
Preferred Stock”) and the number of shares so
designated shall be up to 75,000.0000 (which shall not be subject
to increase without the written consent of all of the holders of
the Series C Preferred Stock (each, a “Holder” and collectively,
the “Holders”)). Each share of
Series C Preferred Stock shall have a par value of $0.0001 per
share and a stated value equal to $750.00, subject to increase set
forth in Section 3 below (the “Stated
Value”).
Section
3. Dividends.
a) Accrual and Payment of
Dividends. From and after its applicable Issue Date, subject
to the rights the holders of the Senior Securities, cumulative
dividends on the Series C Preferred Stock shall accrue, whether or
not declared by the Board and whether or not there are funds
legally available for the payment of dividends, on a daily basis in
arrears at the rate of 9.00% per annum on the sum of the Stated
Value thereof plus all unpaid accrued and accumulated dividends
thereon. All accrued dividends on any Series C Preferred Stock
shall be paid in cash only when, as and if declared by the Board of
Directors out of funds legally available therefor or upon a
Liquidation in accordance with the provisions of Section 5;
provided, that to the extent not paid on the last day of March,
June, September and December of each calendar year (each such date,
a “Dividend Payment
Date”), all accrued dividends on any share shall
accumulate and compound on the applicable Dividend Payment Date
whether or not declared by the Board of Directors and shall remain
accumulated, compounding dividends until paid pursuant hereto or
converted pursuant to Section 6. All accrued and accumulated
dividends on the Series C Preferred Stock shall be prior and in
preference to any dividend on any Junior Securities and shall be
fully declared and paid before any dividends are declared and paid,
or any other distributions or redemptions are made, on any Junior
Securities, other than to (a) declare or pay any dividend or
distribution payable on the Common Stock in shares of Common Stock
or (b) repurchase Common Stock held by employees or consultants of
the Company upon termination of their employment or services
pursuant to agreements providing for such repurchase.
b) Partial Dividend Payments.
Except as otherwise provided herein, if at any time the Company
pays less than the total amount of dividends then accrued and
accumulated with respect to the Series C Preferred Stock, such
payment shall be distributed pro rata among the Holders thereof
based upon the aggregate accrued and accumulated but unpaid
dividends on the Series C Preferred Stock held by each such
Holder.
Section
4. Voting
Rights. Except as otherwise provided herein or as otherwise
required by law, the Series C Preferred Stock shall have no voting
rights. However, as long as any shares of Series C Preferred Stock
are outstanding, the Company shall not, without the affirmative
vote of the Holders of a majority of the then outstanding shares of
the Series C Preferred Stock, (a) alter or change adversely the
powers, preferences or rights given to the Series C Preferred Stock
or alter or amend this Certificate of Designation, (b) authorize or
create any class of stock ranking as to dividends, redemption or
distribution of assets upon a Liquidation (as defined in Section 5)
senior to, or otherwise pari passu with, the Series C
Preferred Stock, (c) amend its certificate of incorporation or
other charter documents in any manner that adversely affects any
rights of the Holders, (d) increase the number of authorized shares
of Series C Preferred Stock, or (e) enter into any agreement with
respect to any of the foregoing.
Section
5. Liquidation.
Upon any liquidation, dissolution or winding-up of the Company,
whether voluntary or involuntary (a “Liquidation”), after
payment in full of any liquidation preference to the holders of the
Senior Securities, the Holders shall be entitled to receive out of
the assets, whether capital or surplus, of the Company an amount
equal to the Stated Value, plus any accrued and unpaid dividends
thereon and any other fees or liquidated damages then due and owing
thereon under this Certificate of Designation, for each share of
Series C Preferred Stock before any distribution or payment shall
be made to the holders of any Junior Securities, and if the assets
of the Company shall be insufficient to pay in full such amounts,
then the entire assets to be distributed to the Holders shall be
ratably distributed among the Holders in accordance with the
respective amounts that would be payable on such shares if all
amounts payable thereon were paid in full. A Fundamental
Transaction or Change of Control Transaction shall be deemed a
Liquidation for purposed of this Section 5. The Company shall mail
written notice of any such Liquidation, not less than 45 days prior
to the payment date stated therein, to each Holder.
Section
6. Conversion.
a) Conversions at Option of
Holder. Each share of Series C Preferred Stock shall be
convertible, at any time and from time to time at the option of the
Holder thereof, into that number of shares of Common Stock (subject
to the limitations set forth in Section 6(e), except to the extent
the Company makes reasonable provision for the issuance of
Prefunded Warrants in lieu of Common Stock, and Section 6(f))
determined by dividing (x) the sum of (i) the Stated Value of such
share of Series C Preferred Stock and (ii) all accrued and
accumulated and unpaid dividends on such share of Series C
Preferred Stock to be converted by (y) the Conversion Price.
Holders shall effect conversions by providing the Company 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
Series C Preferred Stock to be converted, the number of shares of
Series C Preferred Stock owned prior to the conversion at issue,
the number of shares of Series C 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 such Notice of Conversion to the Company
pursuant to Section 8(a) (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 Company 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 Series C Preferred Stock, a Holder
shall not be required to surrender the certificate(s) representing
the shares of Series C Preferred Stock to the Company unless all of
the shares of Series C Preferred Stock represented thereby are so
converted, in which case such Holder shall deliver the certificate
representing such shares of Series C Preferred Stock promptly
following the Conversion Date at issue. Shares of Series C
Preferred Stock converted into Common Stock (or Prefunded Warrants,
as applicable) or redeemed in accordance with the terms hereof
shall be canceled and shall not be reissued.
-6-
b) Conversions at Option of
Company. Each share of Series C Preferred Stock shall be
convertible, at any time and from time to time at the option of the
Company, into that number of shares of Common Stock (subject to the
limitations set forth in Section 6(e), except to the extent the
Company makes reasonable provision for the issuance of Prefunded
Warrants in lieu of Common Stock, and Section 6(f)) determined by
dividing (x) the sum of (i) the Stated Value of such share of
Series C Preferred Stock and (ii) all accrued and accumulated
and unpaid dividends on such share of Series C Preferred Stock to
be converted by (y) the Conversion Price. The Company shall send
each Holder written notice of such event and of the date of
effectiveness thereof. Promptly after receipt of such notice, each
Holder shall surrender any certificate or certificates representing
such shares of Series C Preferred Stock to the Company at its
principal office (or such other office or agency of the Company as
the Company may designate by notice in writing to the holder or
holders of the Series C Preferred Stock), together with a properly
completed statement of the name or names (with address), subject to
compliance with applicable laws to the extent such designation
shall involve a transfer, in which the certificate or certificates
for shares of Common Stock (or Prefunded Warrants, as applicable)
shall be issued, at any time during its usual business hours, as of
the date set forth in such notice.
c) Conversion Price. The
conversion price for the Series C Preferred Stock shall equal
$0.75, subject to adjustment herein (the “Conversion
Price”).
d)
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 Company shall deliver, or cause
to be delivered, to the converting Holder the number of Conversion
Shares being acquired upon the conversion of the Series C Preferred
Stock which, if (A) there is an effective registration statement
permitting the issuance of the Conversion Shares to or resale of
the Conversion Shares by such Holder or (B) the Conversion Shares
are eligible for resale by the Holder without volume or
manner-of-sale limitations pursuant to Rule 144, shall be free of
restrictive legends and trading restrictions (other than those
which may then be required by any Purchase Agreement). If (A) there
is an effective registration statement permitting the issuance of
the Conversion Shares to or resale of the Conversion Shares by such
Holder following a conversion of Series C Preferred Stock or (B)
the Conversion Shares issuable upon a conversion of Series C
Preferred Stock are eligible for resale by the Holder without
volume or manner-of-sale limitations pursuant to Rule 144, the
Company shall deliver the Conversion Shares required to be
delivered by the Company 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 Company’s
primary Trading Market with respect to the Common Stock as in
effect on the date of delivery of the Notice of
Conversion.
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 Company at any time on
or before its receipt of such Conversion Shares, to rescind such
Conversion, in which event the Company shall promptly return to the
Holder any original Series C Preferred Stock certificate delivered
to the Company and the Holder shall promptly return to the Company
the Conversion Shares issued to such Holder pursuant to the
rescinded Conversion Notice.
iii. Obligation
Absolute; Partial Liquidated Damages. The Company’s
obligation to issue and deliver the Conversion Shares upon
conversion of Series C 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 Company or any violation or alleged violation of
law by such Holder or any other person, and irrespective of any
other circumstance which might otherwise limit such obligation of
the Company to such Holder in connection with the issuance of such
Conversion Shares; provided, however, that such delivery
shall not operate as a waiver by the Company of any such action
that the Company may have against such Holder. In the event a
Holder shall elect to convert any or all of the Stated Value of its
Series C Preferred Stock, the Corporation may not refuse conversion
based on any claim that such Holder or any one associated or
affiliated with such Holder has been engaged in any violation of
law, agreement or for any other reason, unless an injunction from a
court, on notice to Holder, restraining and/or enjoining conversion
of all or part of the Series C 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 Series C 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 upon a properly noticed
conversion. If the Company fails to deliver to a Holder such
Conversion Shares pursuant to Section 6(d)(i) by the Share Delivery
Date applicable to such conversion, the Company shall pay to such
Holder, in cash, as liquidated damages and not as a penalty, for
each $5,000 of Stated Value of Series C Preferred Stock being
converted, $50 per Trading Day (increasing to $100 per Trading Day
on the third Trading Day and increasing to $200 per Trading Day on
the sixth Trading Day after such damages begin to accrue) for each
Trading Day after the Share Delivery Date until such Conversion
Shares are delivered or Holder rescinds such conversion. Nothing
herein shall limit a Holder’s right to pursue actual damages
for the Company’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.
-7-
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
Company fails for any reason to deliver to a Holder the applicable
Conversion Shares by the Share Delivery Date pursuant to Section
6(d)(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
Company 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 Series C Preferred Stock equal to the number of
shares of Series C 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 Company had timely complied with its delivery
requirements under Section 6(d)(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 Series C 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
Company shall be required to pay such Holder $1,000. The Holder
shall provide the Company written notice indicating the amounts
payable to such 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 the Conversion Shares upon conversion of the shares of
Series C Preferred Stock as required pursuant to the terms
hereof.
v. Reservation of Shares Issuable Upon
Conversion. The Company covenants that it will at all times
reserve and keep available out of its authorized and unissued
shares of Common Stock for the sole purpose of issuance upon
conversion of the Series C Preferred Stock, free from preemptive
rights or any other actual contingent purchase rights of Persons
other than the Holder (and the other holders of the Series C
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 any Purchase Agreement) be issuable (taking into account
the adjustments and restrictions of Sections 6(f) and 7) upon the
conversion of the then outstanding shares of Series C Preferred
Stock, including all accrued and accumulated dividends. The Company
covenants that all shares of Common Stock that shall be so issuable
shall, upon issue, be duly authorized, validly issued, fully paid
and nonassessable.
vi. Fractional Shares. No
fractional shares or scrip representing fractional shares of Common
Stock (or Prefunded Warrants to purchase fractional shares of
Common Stock, as applicable) shall be issued upon the conversion of
the Series C Preferred Stock. As to any fraction of a share of
Common Stock which the Holder would otherwise be entitled to
purchase upon such conversion, 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 Conversion Price
or round up to the next whole share.
vii. Transfer
Taxes and Expenses. The issuance of Conversion Shares on
conversion of this Series C Preferred Stock shall be made without
charge to any Holder for any documentary stamp or similar taxes
that may be payable in respect of the issue or delivery of such
Conversion Shares, provided that the Company shall not be required
to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such Conversion Shares
upon conversion in a name other than that of the Holders of such
shares of Series C Preferred Stock and the Company shall not be
required to issue or deliver such Conversion Shares unless or until
the Person or Persons requesting the issuance thereof shall have
paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has
been paid. The Company shall pay all Transfer Agent fees required
for same-day processing of any Notice of Conversion and all fees to
the Depository Trust Company (or another established clearing
corporation performing similar functions) required for same-day
electronic delivery of the Conversion Shares.
e) Beneficial
Ownership Limitation. The Company shall not effect any
conversion of the Series C Preferred Stock, and a Holder shall not
have the right to convert any portion of the Series C 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 Series C 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 Series C 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 Company subject
to a limitation on conversion or exercise analogous to the
limitation contained herein (including, without limitation, the
Series C Preferred Stock or the Warrants) 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(e), 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(e) applies, the
determination of whether the Series C 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 Series C 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 Series C 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 Series C 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 Company 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 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 6(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 stated in the most recent of the
following: (i) the Company’s most recent periodic or annual
report filed with the Commission, as the case may be, (ii) a more
recent public announcement by the Company or (iii) 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 two
Trading Days confirm orally and in writing to such Holder the
number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of
securities of the Company, including the Series C 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% 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
Series C Preferred Stock held by the applicable Holder. A Holder,
upon notice to the Company, may increase or decrease the Beneficial
Ownership Limitation provisions of this Section 6(e) applicable to
its Series C 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 Series C
Preferred Stock held by the Holder and the provisions of this
Section 6(e) 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 Company 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(e) 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 Series C Preferred
Stock.
-8-
f) Issuance Limitations.
Notwithstanding anything herein to the contrary, except to the
extent the Company has previously obtained effective Stockholder
Approval, the Company may not issue, upon conversion of the Series
C Preferred Stock, a number of shares of Common Stock (or Prefunded
Warrants covering a number of shares of Common Stock, as
applicable) which would exceed 6,186,966 shares of Common Stock in
the aggregate, subject to adjustment for forward and reverse stock
splits, recapitalizations and the like (such number of shares, the
“Issuable
Maximum”).
Section
7. Certain
Adjustments.
a) Stock Dividends and Stock
Splits. If the Company, at any time while this Series C
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 Company upon conversion of, or
payment of a dividend on, this Series C 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
Company, then the Conversion Price 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 Company)
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) [Intentionally
Omitted].
c) Subsequent Rights Offerings. In
addition to any adjustments pursuant to Section 7(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
each Holder of Series C Preferred Stock 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 Series C Preferred
Stock (without regard to any limitations on exercise hereof,
including without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in
abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
d) Pro Rata Distributions. During
such time as this Series C Preferred Stock is outstanding, if the
Company 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 Series C 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 Series C
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).
-9-
e) Fundamental Transaction. If, at
any time while this Series C Preferred Stock is outstanding, (i)
the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company
with or into another Person, (ii) the Company, directly or
indirectly, effects any sale, lease, license, assignment, transfer,
conveyance or other disposition of all or substantially all of its
assets in one or a series of related transactions, (iii) any,
direct or indirect, purchase offer, tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to
which holders of Common Stock are permitted to sell, tender or
exchange their shares for other securities, cash or property and
has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or
more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash
or property, or (v) the Company, directly or indirectly, in one or
more related transactions consummates a stock or share purchase
agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person 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 Series C Preferred Stock, the Holders 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(e) and Section 6(f) on the conversion of this Series C
Preferred Stock), the number of shares of Common Stock of the
successor or acquiring corporation or of the Company, if it is the
surviving corporation, and any additional consideration (the
“Alternate
Consideration”) receivable as a result of such
Fundamental Transaction by a holder of the number of shares of
Common Stock for which this Series C Preferred Stock is convertible
immediately prior to such Fundamental Transaction (without regard
to any limitation in Section 6(e) and Section 6(f) on the
conversion of this Series C 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 Company 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 Holders shall be given the same choice as to
the Alternate Consideration it receives upon any conversion of this
Series C Preferred Stock following such Fundamental Transaction. To
the extent necessary to effectuate the foregoing provisions, any
successor to the Company 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 Company shall cause any successor entity in a
Fundamental Transaction in which the Company is not the survivor
(the “Successor
Entity”) to assume in writing all of the obligations
of the Company under this Certificate of Designation and the other
Transaction Documents in accordance with the provisions of this
Section 7(e) pursuant to written agreements in form and substance
reasonably satisfactory to the Holders and approved by the Holders
(without unreasonable delay) prior to such Fundamental Transaction
and shall, at the option of the holder of this Series C Preferred
Stock, deliver to the Holders in exchange for this Series C
Preferred Stock a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to
this Series C 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 Series C
Preferred Stock (without regard to any limitations on the
conversion of this Series C 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 Series C Preferred Stock immediately
prior to the consummation of such Fundamental Transaction), and
which is reasonably satisfactory in form and substance to the
Holders. 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 “Company” shall
refer instead to the Successor Entity), and may exercise every
right and power of the Company and shall assume all of the
obligations of the Company under this Certificate of Designation
and the other Transaction Documents with the same effect as if such
Successor Entity had been named as the Company herein.
f) 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 Company) issued and outstanding.
g) Notice to the
Holders.
i. Adjustment to Conversion Price.
Whenever the Conversion Price is adjusted pursuant to any provision
of this Section 7, the Company shall promptly deliver to each
Holder a notice pursuant to Section 8(a) setting forth
the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such
adjustment.
ii. Notice to Allow Conversion 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 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
Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially
all of the assets of the Company, or any compulsory share exchange
whereby the Common Stock is converted into other securities, 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 filed at each office or agency maintained
for the purpose of conversion of this Series C Preferred Stock, and shall cause to be
delivered by to each Holder at its
last e-mail address or address as it shall appear upon the
stock books of the Company, 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 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 convert the Conversion Amount of
this Series C 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.
-10-
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 or by e-mail
attachment, or sent by a nationally recognized overnight courier
service, addressed to the Company, at the address set forth above
Attention: Chief Financial Officer, e-mail address dschneiderman@azurrx.com,
or such other e-mail address or address as the Company may specify
for such purposes by notice to the Holders delivered in accordance
with this Section 8. Any and all notices or other communications or
deliveries to be provided by the Company hereunder shall be in
writing and delivered personally, by or e-mail attachment, or sent
by a nationally recognized overnight courier service addressed to
each Holder at the e-mail address or address of such Holder
appearing on the books of the Company, or if no such e-mail address
or address appears on the books of the Company, at the principal
place of business of such Holder, as set forth in the Purchase
Agreement applicable to such Holder. Any notice or other
communication or deliveries hereunder shall be deemed given and
effective on the earliest of (i) the date of transmission, if such
notice or communication is delivered via 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
date of transmission, if such notice or communication is delivered
via 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 Company,
which is absolute and unconditional, to pay liquidated damages,
accrued dividends and accrued interest, as applicable, on the
shares of Series C 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 Series C Preferred Stock
certificate shall be mutilated, lost, stolen or destroyed, the
Company 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 Series C 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
Company.
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. Each party agrees that all legal
proceedings concerning the interpretation, enforcement and defense
of the transactions contemplated by this Certificate of Designation
and any of the Transaction Documents (whether brought against a
party hereto or its respective Affiliates, directors, officers,
stockholders, employees or agents) shall be commenced in the state
and federal courts sitting in the City of New York, Borough of
Manhattan (the “New
York Courts”). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York 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 this Certificate of
Designation 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 New York Courts, or such New York Courts are
improper or inconvenient venue for such proceeding. Each party
hereby irrevocably waives personal service of process and consents
to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this 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. Each party
hereto 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 any party
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.
-11-
e) Waiver. Any waiver by the
Company 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 Company 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 Company 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.
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. If any shares of Series C Preferred Stock
shall be converted, redeemed or reacquired by the Company, such
shares shall resume the status of authorized but unissued shares of
preferred stock and shall no longer be designated as Series C 9.00%
Convertible Junior Preferred Stock.
j) Fractional Shares. Series C
Preferred Stock may not be issued in fractional shares or scrip
representing fractional shares of more than four decimal places. As
to any fraction of a share of Series C Preferred Stock to be issued
pursuant to any provision hereof, 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
Stated Value or round up to the next ten-thousandth of a
share.
*********************
-12-
RESOLVED,
FURTHER, that the Chairman, the president or any vice-president,
and the secretary or any assistant secretary, of the Company 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 4th
day of January, 2021.
/s/
James Sapirstein
Name:
James Sapirstein
Title:
Chief Executive Officer
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-13-
ANNEX A
NOTICE
OF CONVERSION
(TO BE
EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF
SERIES C PREFERRED STOCK)
The
undersigned hereby elects to convert the number of shares of Series
C 9.00% Convertible Junior Preferred Stock indicated below into
shares of common stock, par value $0.0001 per share (the
“Common
Stock”), of AzurRx BioPharma, Inc., a Delaware
corporation (the “Company”), 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 Company in
accordance with the applicable Purchase Agreement. No fee will be
charged to any Holder for any conversion, except for any such
transfer taxes.
Conversion
calculations:
Date to
Effect Conversion:
____________________________________________________
|
|
Number
of shares of Series C Preferred Stock owned prior to Conversion:
_______________
|
|
Number
of shares of Series C Preferred Stock to be Converted:
________________________
|
|
Stated
Value of shares of Series C 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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