Exhibit 10.1

Execution Version

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”) is dated as of October 10, 2018
(the “Effective Date”), between Agenus Inc., a Delaware corporation (the
“Company”), and the investors set forth on Exhibit A hereto (each a “Purchaser”
and collectively, the “Purchasers”).

WHEREAS, the Company and the Purchasers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D as promulgated by the United States
Securities and Exchange Commission (the “Commission”) under the Securities Act;
and

WHEREAS, the Company desires to sell to the Purchasers, and the Purchasers
desire to purchase from the Company, shares of preferred stock in the Company in
accordance with the terms and provisions of this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and Purchasers agree as
follows:

ARTICLE I.

DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement,
for all purposes of this Agreement, the following terms have the meanings set
forth in this Section 1.1:

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 405 under the
Securities Act.

“Applicable Health Laws” has the meaning ascribed to such term in
Section 3.1(z).

“Authorizations” has the meaning ascribed to such term in Section 3.1(z).

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

“Closing” means the closing of the purchase and sale of the Preferred Shares
pursuant to Section 2.1.

“Closing Date” means the date hereof or such other date as mutually agreed upon
by the Parties.

 

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“Common Stock” means the common stock of the Company, par value $0.01 per share,
and any other class of securities into which such securities may hereafter be
reclassified or changed.

“Common Stock Equivalents” means any securities of the Company which would
entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, right, option, warrant or other
instrument that is at any time convertible into or exercisable or exchangeable
for, or otherwise entitles the holder thereof to receive, Common Stock.

“Company Counsel” means Ropes & Gray LLP, with offices located at Prudential
Tower, 800 Boylston Street, Boston, MA 02199.

“Company Product” has the meaning ascribed to such term in Section 3.1(z).

“Cut Back Shares” has the meaning ascribed to such term in Section 4.2.

“Disclosure Schedules” means the schedules attached to this Agreement.

“Effectiveness Date” has the meaning ascribed to such term in
Section 3.2(e)(ii).

“Effectiveness Deadline” has the meaning ascribed to such term in Section 4.1.

“Effectiveness Failure” has the meaning ascribed to such term in Section 4.5(a).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

“Filing Deadline” has the meaning ascribed to such term in Section 4.1.

“Filing Failure” has the meaning ascribed to such term in Section 4.5(a).

“GAAP” has the meaning ascribed to such term in Section 3.1(g).

“Governmental Authority” means any court, agency, authority, department,
regulatory body or other instrumentality of any government or country or of any
national, federal, state, provincial, regional, county, city or other political
subdivision of any such government or country or any supranational organization
of which any such country is a member.

“Gibson Dunn” means Gibson Dunn & Crutcher LLP with offices located at 555
Mission Street, San Francisco, CA 94105.

“Grace Period” has the meaning ascribed to such term in Section 4.5(a).

“IFRS” has the meaning ascribed to such term in Section 3.1(g).

 

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“Intellectual Property” means patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade dress, trade secrets,
inventions and discoveries and invention disclosures whether or not patented,
copyrights in both published and unpublished works, including without limitation
all compilations, data bases and computer programs, materials and other
documentation, licenses, internet domain names and other intellectual property
rights and similar rights.

“knowledge of the Company” and similar phrases, including “to the Company’s
knowledge,” means the knowledge after reasonably inquiry of the Chief Executive
Officer, Chief Strategy Officer and Head of Finance, and Vice President &
General Counsel of the Company.

“Liens” means a lien, charge, pledge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction.

“Maintenance Failure” has the meaning ascribed to such term in Section 4.5(a).

“Material Contract” means any written or oral contract, agreement, deed,
mortgage, lease, sublease, license, instrument, note, commitment, commission,
undertaking, arrangement or understanding which is required to be filed as an
exhibit by the Company with the Commission pursuant to Items 601(b)(1),
601(b)(2), 601(b)(4), 601(b)(9) or 601(b)(10) of Regulation S-K promulgated by
the Commission.

“Material Adverse Effect” means any (i) material adverse effect on the legality,
validity or enforceability of this Agreement, (ii) material adverse effect on
the results of operations, assets, business or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole, or
(iii) material adverse effect on the Company’s ability to perform in any
material respect on a timely basis its obligations under this Agreement.

“Nasdaq” means the Nasdaq Capital Market (or any successor thereto).

“Party” means any party to this Agreement.

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

“Preferred Shares” has the meaning ascribed to such term in Section 2.1.

“Purchase Price” has the meaning ascribed to such term in Section 2.1.

“Registration Delay Payments” has the meaning ascribed to such term in
Section 4.5(a).

“Registration Statement” means the registration statement on Form S-3 (or any
successor form related to secondary offerings) required to be filed hereunder as
contemplated by ARTICLE IV, including the prospectus, amendments and supplements
to such registration statement or prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.

 

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“Reporting Period” means the period commencing on the Closing Date and ending on
the earliest of: (i) the date as of which the Purchasers may sell all of the
Shares under Rule 144 without volume or manner-of-sale restrictions and without
the requirement for the Company to be in compliance with the current public
information requirements under Rule 144(c)(1) (or any successor thereto)
promulgated under the Securities Act; (ii) the second anniversary of the Closing
Date, and (iii) the date on which such Purchaser shall have sold all of the
Shares pursuant to a Registration Statement.

“Restriction Termination Date” has the meaning ascribed to such term in
Section 4.2.

“RTW” has the meaning ascribed to such term in Section 6.2.

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

“SEC Restrictions” has the meaning ascribed to such term in Section 4.2.

“SEC Reports” has the meaning ascribed to such term in Section 3.1(g).

“Shares” means the shares Common Stock of the Company into which the Preferred
Shares may be converted.

“Staff” has the meaning ascribed to such term in Section 4.2.

“Subsidiary” means the Company’s subsidiaries, as set forth on Schedule 1.1.

“Third Party” means any Person (other than a Governmental Authority) other than
the Purchasers, the Company or any Affiliate of a Purchaser or the Company.

“Trading Day” means a day on which Nasdaq is open for trading.

“Transfer Agent” means American Stock Transfer & Trust Company, LLC, the current
transfer agent of the Company, with a mailing address of 6201 15th Avenue,
Brooklyn, NY 11219 and a facsimile number of (718) 236-4588, and any successor
transfer agent of the Company.

 

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ARTICLE II.

PURCHASE AND SALE

2.1 Purchase and Sale of Preferred Shares; Closing. Subject to the terms and
conditions of this Agreement, the Company agrees to sell to each Purchaser at
the Closing, and each Purchaser agrees to purchase from the Company at the
Closing, that number of shares of Series C-1 Convertible Preferred Stock of the
Company set forth on Exhibit A (collectively, the “Preferred Shares”), with the
preferences, rights and limitations set forth in the Certificate of Designation
attached hereto as Exhibit B (the “Certificate of Designation”), at a price per
share of $2,167 (the “Purchase Price”). Subject to the satisfaction or waiver of
the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing
shall occur on the date hereof at the offices of Gibson Dunn, or such other
location as the Parties shall mutually agree.

2.2 Deliveries at Closing. At the Closing, subject to the terms and conditions
of this Agreement:

(a) the Company shall deliver to the Purchasers a copy of the irrevocable
instructions to the Transfer Agent instructing the Transfer Agent to deliver the
Preferred Shares to the Purchasers via book entry;

(b) Company Counsel shall deliver to the Purchasers a legal opinion in the form
agreed upon by the parties; and

(c) the Purchasers shall pay to the Company, by wire transfer of immediately
available funds to an account or accounts designated in writing by or on behalf
of the Company to the Purchasers, the Purchase Price.

2.3 Closing Conditions.

(a) The obligation of the Company to sell the Preferred Shares to the Purchasers
at the Closing is subject to the following conditions being met or waived in
writing by the Company:

(i) the representations and warranties of Purchasers contained in Section 3.2
shall be true and correct as of the date hereof;

(ii) the Purchasers shall have performed and complied with all covenants,
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by Purchasers on or before the
Closing; and

(iii) the Purchasers shall have delivered the Purchase Price.

(b) The obligation of the Purchasers to purchase the Preferred Shares at the
Closing is subject to the following conditions being met or waived in writing by
the Purchasers:

(i) the representations and warranties of the Company contained in Section 3.1
shall be true and correct as of the date hereof;

(ii) the Company shall have performed and complied with all covenants,
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by the Company on or before the
Closing;

 

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(iii) the Company shall deliver to Purchasers a certificate executed by an
authorized officer of the Company confirming the conditions set forth in
Sections 2.3(a)(i) and 2.3(a)(ii) have been duly satisfied;

(iv) the Company shall have filed the Certificate of Designation with the
Delaware Secretary of State;

(v) the Company shall have delivered the item set forth in Section 2.2(a) of
this Agreement;

(vi) Company Counsel shall have delivered the item set forth in Section 2.2(b)
of this Agreement; and

(vii) there shall be no Material Adverse Effect with respect to the Company
existing as of the Closing.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. Except as set forth in the
Disclosure Schedules, the Company hereby represents and warrants to the
Purchasers as of the date hereof (unless specifically made as of another date,
in which case as of such other date) as follows:

(a) Capitalization. The capitalization of the Company as of June 30, 2018 is as
set forth on Schedule 3.1(a). Except as disclosed on Schedule 3.1(a), the
Company has not issued any capital stock since June 30, 2018, other than
pursuant to the exercise of stock options under the Company’s stock option
plans, the issuance of shares of Common Stock to employees pursuant to the
Company’s employee stock purchase plans, the issuance of shares of Common Stock
pursuant to the Company’s at-the-market sales agreement and pursuant to the
conversion and/or exercise of Common Stock Equivalents outstanding as of the
date of the most recently filed periodic report under the Exchange Act. No
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by this
Agreement. Except as disclosed on Schedule 3.1(a) and as a result of the
purchase and sale of the Preferred Shares (and the obligation to issue the
Shares upon conversion of the Preferred Shares), there are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any
right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to issue additional shares of Common Stock or Common Stock
Equivalents. Neither the issuance and sale of the Preferred Shares, nor the
issuance of the Shares upon conversion of the Preferred Shares, will obligate
the Company to issue shares of Common Stock or other securities to any Person
and will not result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price under any of such securities. All
of the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and

 

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nonassessable, have been issued in compliance with all federal and state
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase securities.
No further approval or authorization of any stockholder, the Board of Directors
or others is required for the issuance and sale of the Preferred Shares or the
issuance of the Shares upon conversion of the Preferred Shares. There are no
stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party or, to
the knowledge of the Company, between or among any of the Company’s
stockholders.

(b) Litigation. There are no actions, suits, proceedings or, to the knowledge of
the Company, any investigations pending or currently threatened against the
Company that: (i) questions or challenges the validity of this Agreement, the
issuance of the Preferred Shares contemplated hereby or the issuance of the
Shares upon conversion of the Preferred Shares, or (ii) would, if there were an
unfavorable decision, have or could reasonably be expected to result in a
Material Adverse Effect on the Company. As of the date hereof, there is no other
material action, suit, or proceeding pending or, to the knowledge of the
Company, currently threatened in writing against the Company. As of the date
hereof, there are no material outstanding consents, orders, decrees or judgments
of any governmental entity naming the Company. Neither the Company, nor, to the
knowledge of the Company, any director or officer thereof, is or has been the
subject of any action involving a claim of violation of or liability under
federal or state securities laws or a claim of breach of fiduciary duty. There
has not been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the Commission involving the Company or any
current or former director or officer of the Company. The Commission has not
issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company under the Exchange Act or the
Securities Act.

(c) Organization and Good Standing. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own, lease and operate
its properties and carry on its business as now conducted and as described in
the SEC Reports. The Company is duly qualified and is in good standing as a
foreign corporation in each jurisdiction in which the properties owned, leased
or operated, or the business conducted, by it requires such qualification except
where the failure to be so qualified or in good standing, individually or in the
aggregate, would not have a Material Adverse Effect.

(d) Authorization. All corporate actions on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution
and delivery of this Agreement and for the issuance of the Preferred Shares (and
the Shares, when and as issued upon conversion of the Preferred Shares) have
been taken. The Company has the requisite corporate power to enter into this
Agreement and to carry out and perform its obligations hereunder. This Agreement
has been duly authorized, executed and delivered by the Company and, upon due
execution and delivery by the Purchasers, will be a valid and binding agreement
of the Company, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally or by equitable principles.

 

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(e) Subsidiaries. Except as would not reasonably be expected to result in a
Material Adverse Effect, each Subsidiary (i) has been duly organized and is
validly existing in good standing under the laws of the jurisdiction of its
incorporation or organization, has corporate or similar power and authority to
own, lease and operate its properties and to conduct its business as presently
conducted, and (ii) is duly qualified to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business.
All of the issued and outstanding shares of capital stock of each Subsidiary
are, where applicable, validly issued, fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase securities. The
Company does not currently own or control, directly or indirectly, any interest
in any other corporation, partnership, trust, joint venture, limited liability
company, association, or other business entity. Except as disclosed in the SEC
Reports, the Company is not a participant in any material joint venture,
partnership or similar arrangement.

(f) No Conflict With Other Instruments. Neither the execution, delivery nor
performance of this Agreement, nor the issuance of the Preferred Shares
contemplated hereby or the Shares, when and as issued upon conversion of the
Preferred Shares will result in (i) any violation of, be in conflict with, cause
any acceleration or any increased payments under, or constitute a default under,
with or without the passage of time or the giving of notice: (a) any provision
of the Company’s certificate of incorporation or bylaws; (b) any provision of
any judgment, decree or order to which the Company is a party or by which it is
bound; (c) any law, rule or regulation applicable to the Company; or (d) any
note, mortgage, Material Contract, license, waiver, exemption, order or permit;
or (ii) the creation or imposition of any lien, encumbrance, claim, security
interest or restriction whatsoever upon any of the material properties or assets
of the Company or an acceleration of indebtedness pursuant to any obligation,
agreement or condition contained in any material bond, debenture, note or any
other evidence of indebtedness or any material indenture, mortgage, deed of
trust or any other agreement or instrument to which the Company is a party or by
which it is bound or to which any of the material property or assets of the
Company is subject.

(g) Disclosure Documents. For the two years preceding the date hereof, the
Company has filed, on a timely basis or has received a valid extension as of
such time of filing and has thereafter made such filings prior to the expiration
of any such extension, all reports, schedules, forms, statements and other
documents required to be filed by the Company with the Commission under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof (the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, being collectively referred to
herein as the “SEC Reports”), and the Company has paid all fees and assessments
due and payable in connection with the SEC Reports. As of their respective
dates, the SEC Reports complied in all material respects with all statutes and
applicable rules and regulations of the Commission, including the requirements
of the Securities Act and the Exchange Act, as applicable, 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. The financial statements of the Company
included in the SEC

 

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Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles (“GAAP”)
or, to the extent applicable, the International Financial Reporting Standards
(“IFRS”), applied on a consistent basis during the periods involved, except as
may be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP or IFRS, as applicable, and fairly present in all material
respects the financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. There are no material unconsolidated
subsidiaries of the Company or any material off-balance sheet arrangements of
any type (including any off balance sheet arrangements required to be disclosed
pursuant to Item 303(a)(4) of Regulation S-K promulgated under the Securities
Act) that have not been so described in the SEC Reports filed prior to the date
hereof, nor any obligations to enter into any such arrangements. As of the date
of this Agreement, there are no outstanding or unresolved comments in comment
letters received from the Commission or the Staff. The Common Stock is listed on
Nasdaq, and the Company has taken no action designed to, or which would be
reasonably likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or delisting the Common Stock from Nasdaq.
The Company has not received any notification that, and has no knowledge that,
the Commission or Nasdaq is contemplating terminating such listing or
registration. To the Company’s knowledge, no stop order or suspension of trading
of the Common Stock has been imposed by Nasdaq, the Commission or any other
Governmental Authority and remains in effect.

(h) Absence of Certain Events and Changes. Except as otherwise disclosed in the
SEC Reports, since the date of the Company’s Quarterly Report on Form 10-Q for
the quarter ended on June 30, 2018: (i) the Company has conducted its business
in the ordinary course consistent with past practice, (ii) there has not been
any event, change or development which, individually or in the aggregate, has
had or could reasonably be expected to have a Material Adverse Effect, (iii) the
Company has not incurred any material liabilities (contingent or otherwise)
other than expenses incurred in the ordinary course of business consistent with
past practice, (iv) the Company has not altered its method of accounting in any
material respect, and (v) the Company has not declared or made any dividend or
distribution of cash or other property to its shareholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock.

(i) Intellectual Property. Except as otherwise disclosed by the Company in
writing to the Purchasers on or before the date hereof, the Company owns, or has
the right pursuant to a valid, written license agreement to use and exploit, all
Intellectual Property used in or necessary for the conduct of the business of
the Company and that is material to the business of the Company as conducted as
of the Closing (the “Company Intellectual Property”). To the knowledge of the
Company, (i) all issued patents and registered trademarks that are Company
Intellectual Property and that are owned by the Company are valid and
enforceable and are currently in compliance with formal legal requirements
(including without limitation, as applicable, payment of filing, examination and

 

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maintenance fees, proofs of working or use, timely post registration filing of
affidavits of use and incontestability and renewal applications), and (ii) there
is no existing infringement or misappropriation by another Person of any of the
Company Intellectual Property. Except as disclosed in the SEC Reports, since
January 1, 2014, no claims have been asserted by a third party in writing
(a) alleging that the conduct of the business of the Company has infringed or
misappropriated any Intellectual Property rights of such third party, or
(b) challenging or questioning the validity or effectiveness of any Intellectual
Property right of the Company, and, to the Company’s knowledge, there is no
valid basis for any such claim. No loss or early expiration of any of the
Company’s material Intellectual Property is pending, or, to the Company’s
knowledge, threatened. The Company has taken reasonable steps in accordance with
standard industry practices to protect its rights in the Company Intellectual
Property and at all times has maintained the confidentiality of all information
used in connection with the business that constitutes or constituted a trade
secret of the Company.

(j) Compliance. The Company has all material permits, licenses, franchises,
authorizations, orders and approvals of (collectively, “Permits”), and has made
all filings, applications and registrations with, governmental entities that are
required in order to permit the Company to own or lease its properties and
assets and to carry on its business as presently conducted. Neither the issuance
or sale of the Preferred Shares hereunder nor the issuance of the Shares upon
conversion of the Preferred Shares, nor the performance of the Company’s other
obligations under this Agreement, will result in the suspension, revocation,
impairment, forfeiture or nonrenewal of any Permit applicable to the Company,
its businesses or operations or any of its assets or properties. The Company and
the Subsidiaries have complied and are in compliance in all material respects
with all Permits, statutes, laws, regulations, rules, judgments, orders and
decrees of all governmental entities applicable to it that relate to its
business. The Company has not received any notice alleging noncompliance, and,
to the knowledge of the Company, the Company is not under investigation with
respect to, or threatened to be charged with, any material violation of any
applicable statutes, laws, regulations, rules, judgments, orders or decrees of
any governmental entities. The Company has not received any notice of
proceedings relating to the revocation or modification of any Permit. No Permit
is subject to termination as a result of the execution of this Agreement or
consummation of the transactions contemplated hereby. Except as disclosed in the
SEC Reports, since January 1, 2014, the Company has not entered into or been
subject to any judgment, consent decree, compliance order or administrative
order with respect to any aspect of the business, affairs, properties or assets
of the Company or received any formal or informal complaint or claim from any
regulatory agency with respect to any aspect of the business, affairs,
properties or assets of the Company.

(k) Valid Issuance of Preferred Shares and Shares. The Preferred Shares are, and
the Shares issuable upon conversion of the Preferred Shares will be, duly
authorized and, when issued and paid for in accordance with this Agreement, will
be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company, and, based in part on the representations of
Purchasers in Section 3.2 of this Agreement, will be issued in compliance with
all applicable federal and state securities laws. The Shares issuable upon
conversion of the Preferred Shares have been duly reserved for issuance. Neither
the Company nor any person acting on behalf of the Company has offered or sold
any of the Preferred Shares by any form of general solicitation or general
advertising. The Company has offered the Preferred Shares for sale only to the
Purchasers.

 

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(l) Governmental and Third-Party Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Authority or other Third Party on the part of the
Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for notices required or permitted to be
filed with certain state and federal securities commissions, which notices will
be filed on a timely basis.

(m) No Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based on arrangements made by the
Company.

(n) No Undisclosed Liabilities. The Company does not have any liabilities
(contingent or otherwise), except for (i) liabilities reflected or reserved
against in financial statements of the Company (or otherwise disclosed in the
accompanying footnotes) included in the SEC Reports filed with the Commission
prior to the date of this Agreement, (ii) liabilities incurred in the ordinary
course of business or otherwise disclosed in SEC Reports subsequent to the
period covered by the Company’s Quarterly Report on Form 10-Q for the quarter
ended on June 30, 2018 and (iii) liabilities that have not been and would not
reasonably be expected to be material.

(o) Internal Controls. The Company has implemented and maintains a system of
internal control over financial reporting (as required by Rule 13a-15(a) under
the Exchange Act) that is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of consolidated financial
statements for external purposes, and, to the knowledge of the Company, such
system of internal control over financial reporting is effective. For purposes
of this Section 3.1(o), “knowledge of the Company” means the actual knowledge of
the Chief Executive Officer and the Chief Strategy Officer and Head of Finance
of the Company. The Company has implemented and maintains disclosure controls
and procedures (as required by Rule 13a-15(a) of the Exchange Act) that are
designed to ensure that information required to be disclosed by the Company in
the reports it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the timeframes specified by the Commission’s
rules and forms (and such disclosure controls and procedures are effective), and
has disclosed, based on its most recent evaluation of its system of internal
control over financial reporting prior to the date of this Agreement, to the
Company’s outside auditors and the audit committee of the Board of Directors:
(i) any significant deficiencies and material weaknesses known to it in the
design or operation of its internal control over financial reporting (as defined
in Rule 13a-15(f) of the Exchange Act) that would reasonably be expected to
adversely affect the Company’s ability to record, process, summarize and report
financial information and (ii) any fraud known to it, that involves management
or other employees who have a significant role in the Company’s internal control
over financial reporting.

 

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(p) Foreign Corrupt Practices. Since January 1, 2017, none of the Company, the
Subsidiaries or, to the knowledge of the Company, any director, officer, agent,
or employee of the Company or any of the Subsidiaries has taken any action,
directly or indirectly, that is in violation by such persons of the FCPA,
including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of
value to any “foreign official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA or any applicable similar laws in
foreign jurisdictions in which the Company is currently, or has previously,
conducted its business.

(q) Office of Foreign Assets Control. Neither the Company nor, to the Company’s
knowledge, any director, officer, agent, employee or Affiliate of the Company is
currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department.

(r) Company Not An Investment Company. The Company has been advised of the rules
and requirements under the Investment Company Act of 1940, as amended (the
“Investment Company Act”). The Company is not, and immediately after receipt of
payment for the Preferred Shares will not be, an “investment company” or an
entity “controlled” by an “investment company” within the meaning of the
Investment Company Act.

(s) Shell Company. As of the date hereof and the Closing Date, the Company is
not a “shell company” nor a former “shell company” (as defined in Rule 405 of
the Securities Act) and has never been a “shell company.”

(t) Solvency. The Company has not: (i) made a general assignment for the benefit
of creditors; (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by its creditors; (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
its assets; (iv) suffered the attachment or other judicial seizure of all, or
substantially all, of its assets; (v) admitted in writing its inability to pay
its debts as they come due; or (vi) made an offer of settlement, extension or
composition to its creditors generally.

(u) No Integrated Offering. Neither the Company, nor any of its Affiliates, nor
any person acting on its or their 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 cause this offering of the Preferred Shares (or
the issuance of the Shares upon conversion of the Preferred Shares) to be
integrated with prior offerings by the Company for purposes of the Securities
Act or any applicable shareholder approval provisions, including, without
limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated.

 

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(v) Private Placement. Neither the Company nor the Subsidiaries or any of their
respective affiliates, nor any person acting on its or their behalf, has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under any circumstances that would require
registration of the Preferred Shares under the Securities Act. Assuming the
accuracy of the representations and warranties of the Purchasers contained in
Section 3.2, the issuance of the Preferred Shares and the issuance of the Shares
upon conversion of the Preferred Shares are exempt from registration under the
Securities Act.

(w) Regulation M Compliance. The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the Preferred
Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting
purchases of, any of the Preferred Shares or the Common Stock, or (iii) paid or
agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company.

(x) Whistleblowers. To the knowledge of the Company, as of the date hereof, no
employee of the Company or any of the Subsidiaries has provided since January 1,
2014 or is providing information to any law enforcement agency regarding the
violation of any applicable law of the type described in Section 806 of the
Sarbanes-Oxley Act by the Company or its Subsidiaries. Neither the Company nor
its Subsidiaries have discharged, demoted or suspended an employee of the
Company or its Subsidiaries in the terms and conditions of employment because of
any lawful act of such employee described in Section 806 of the Sarbanes-Oxley
Act.

(y) Takeover Laws. The Board of Directors has taken all action necessary to
render inapplicable to the Purchasers (individually and collectively) the
restrictions on “business combinations” set forth in Section 203 of the Delaware
General Corporation Law and, to the knowledge of the Company, any similar
“moratorium,” “control share,” “fair price,” “takeover” or “interested
stockholder” law applicable to transactions between Purchasers and the Company.

(z) Health Laws and FDA Compliance. Except as would not, individually or in the
aggregate, result in a Material Adverse Effect: (i) each of the Company and each
of its Subsidiaries is and has been in compliance with statutes, laws,
ordinances, rules and regulations applicable to the Company or its Subsidiaries
for the ownership, testing, development, manufacture, packaging, processing,
use, labeling, storage, or disposal of any product manufactured by or on behalf
of the Company and its Subsidiaries or out-licensed by the Company and its
Subsidiaries (each a “Company Product”), including without limitation, the
Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301, et seq., the Public
Health Service Act, 42 U.S.C. § 262, similar (collectively, “Applicable Health
Laws”); (ii) the Company and its Subsidiaries possess all licenses,
certificates, approvals, authorizations, permits and supplements or amendments
thereto required by any such Applicable Health Laws and/or for the ownership of
their properties or the conduct of their business as it relates to a Company
Product and as described in the Company SEC Documents (collectively,
“Authorizations”) and such Authorizations are valid and in full force and effect
and neither the Company nor any of its Subsidiaries is in violation of any term
of any such Authorizations; (iii) neither the Company nor any of its
Subsidiaries has

 

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received any written notice of adverse finding, warning letter or other written
correspondence or notice from the U.S. Food and Drug Administration (the “FDA”)
or any other Governmental Authority alleging or asserting noncompliance with any
Applicable Health Laws or Authorizations relating to a Company Product;
(iv) neither the Company nor any of its Subsidiaries has received written notice
of any ongoing claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action from any governmental entity or third
party alleging that any Company Product, operation or activity related to a
Company Product is in violation of any Applicable Health Laws or Authorizations;
and (v) neither the Company nor any of its Subsidiaries has received written
notice that any governmental entity has taken, is taking or intends to take
action to limit, suspend, modify or revoke any Authorizations.

(aa) Tests and Preclinical and Clinical Trials. The studies, tests and
preclinical and clinical trials conducted by or, to the Company’s knowledge, on
behalf of the Company that are described in the SEC Reports were and, if still
pending, are being, conducted in all material respects in accordance with any
applicable protocols submitted to the FDA or any Governmental Authority
exercising comparable authority, procedures and controls pursuant to, where
applicable, accepted professional and scientific standards, and all applicable
laws, rules and regulations; the descriptions of the studies, tests and
preclinical and clinical trials conducted by or, to the Company’s knowledge, on
behalf of the Company, and the results thereof, contained in the SEC Reports are
accurate and complete in all material respects; to the Company’s knowledge,
there are no subsequent studies, tests or preclinical and clinical trials, the
results of which call into question the results described in the SEC Reports;
and the Company has not received any notices or correspondence from the FDA, any
Governmental Authority exercising comparable authority or any Institutional
Review Board requiring the termination, suspension, material modification or
clinical hold of any studies, tests or preclinical or clinical trials conducted
by or on behalf of the Company.

(bb) Taxes. (i) the Company and its Subsidiaries have filed all tax returns that
are required to have been be filed by each of them or has requested extensions
of the filing date thereof and (ii) the Company and its Subsidiaries have paid
all taxes required to be paid by any of them and any other assessment, fine or
penalty levied against any of them, to the extent that any of the foregoing is
due and payable, except in the case of clause (i) and (ii), for any such
assessment, fine or penalty that is currently being contested in good faith or
as would not have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business and (iii) there are no tax
audits ongoing of which the Company has received written notice.

(cc) Insurance. The Company and each Subsidiary maintains in full force and
effect insurance coverage that is customary for a company (i) in the businesses
and location in which the Company is engaged, (ii) with the resources of the
Company, and (iii) at a similar stage of development as the Company, and the
Company reasonably believes such insurance coverage to be adequate against all
liabilities, claims and risks against which it is customary for comparably
situated companies to insure.

 

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(dd) Related Party Transactions. No director or Affiliate of the Company, nor
any family member of any officer, director or Affiliate of the Company, has
entered into any transaction with the Company or any of the Subsidiaries that
would be required to be disclosed under Item 404 of Regulation S-K that has not
been disclosed in the Company SEC Documents as required by the rules and
regulations of the Commission.

(ee) Material Contracts. Each Material Contract is the legal, valid and binding
obligation of the Company or a Subsidiary, as the case may be, enforceable
against the Company or such Subsidiary, as the case may be, in accordance with
its terms, except to the extent that enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and
any other laws of general application affecting enforcement of creditors’ rights
generally, and as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies. The Company and
each Subsidiary, as the case may be, is in compliance with all material terms of
the Material Contracts to which it is party, and there has not occurred any
breach, violation or default or any event that, with the lapse of time, the
giving of notice or the election of any Person, or any combination thereof,
would constitute a breach, violation or default by the Company or any Subsidiary
under any such Material Contract or, to the knowledge of the Company and each
Subsidiary, by any other Person to any such contract except where such breach,
violation or default would not have a Material Adverse Effect. Neither the
Company nor any Subsidiary has been notified that any party to any Material
Contract intends to cancel, terminate, not renew or exercise an option under any
Material Contract, whether in connection with the transactions contemplated
hereby or otherwise.

3.2 Representations and Warranties of Purchaser. Each Purchaser hereby
represents and warrants to the Company as of the date hereof (unless
specifically made as of another date, in which case as of such other date) as
follows:

(a) Legal Power. Purchaser has the requisite corporate power to enter into this
Agreement and to carry out and perform its obligations hereunder.

(b) Due Execution. This Agreement has been duly authorized, executed and
delivered by Purchaser, and, upon due execution and delivery by the Company,
will constitute a valid and legally binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally or by equitable principles.

(c) Investment Representations. In connection with the offer, purchase and sale
of the Preferred Shares, Purchaser makes the following representations:

(i) Purchaser is acquiring the Preferred Shares for its own account for the
purpose of investment and not with a view to or for sale in connection with any
distribution thereof, and has no present intention to effect, or any present or
contemplated plan, agreement, undertaking, arrangement, obligation,
indebtedness, or commitment providing for, any distribution of the Preferred
Shares.

 

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(ii) Purchaser has carefully reviewed the representations concerning the Company
contained in this Agreement and has made detailed inquiry concerning the
Company, its business and its personnel.

(iii) Purchaser understands that the Preferred Shares have not been registered
under the Securities Act or any applicable state securities laws and,
consequently, Purchaser may have to bear the risk of owning the Preferred Shares
for an indefinite period of time because the Preferred Shares may not be
transferred unless (x) the resale of the Preferred Shares is registered pursuant
to an effective registration statement under the Securities Act in accordance
with the terms and conditions set forth in Section 4.1 hereof; (y) Purchaser has
delivered to the Company an opinion of counsel (in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
the Preferred Shares to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration; or (z) the Preferred Shares are
sold or transferred pursuant to Rule 144.

(iv) Purchaser has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Preferred Shares to be purchased hereunder.

(v) Purchaser is an “accredited investor” as defined in Rule 501(a) of the rules
and regulations promulgated under the Securities Act.

(d) Certain Fees. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based on arrangements made by
Purchaser.

(e) Legends.

(i) In connection with the issuance and sale of the Preferred Shares, Purchaser
understands that each of the Preferred Shares (and the Shares, when and as
issued upon conversion of the Preferred Shares), whether certificated or in
book-entry form, will be endorsed with the following legend:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN
STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.”

(ii) Notwithstanding the foregoing, the Company shall remove the foregoing
legend within three Business Days after the receipt of a written request for
legend removal by any Purchaser, which request may be made: (i) any time after
the date on which the Registration Statement is declared effective by the
Commission (the “Effectiveness Date”), (ii)

 

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upon any sale of such securities effected in accordance with Rule 144, or
(iii) at such time as when the Preferred Shares or the underlying Shares may be
sold without volume restrictions pursuant to Rule 144. In the case of clauses
(ii) and (iii) above, Purchaser’s written request for legend removal shall be
accompanied by such evidence as reasonably requested by the Company that a
public sale or transfer of such Shares may be made without registration under
the Securities Act. To the extent that the foregoing legend is being removed
pursuant to the foregoing clause (i) and prior to a sale of the legended
securities, the Purchaser covenants that it will only sell, transfer or
otherwise dispose of such securities pursuant to the Registration Statement and
subject to the limitations set forth in Article IV.

The Company acknowledges and agrees that the representations contained in
Section 3.2 shall not modify, amend or affect Purchaser’s right to rely on the
Company’s representations and warranties contained in this Agreement or any
other document or instrument executed and/or delivered in connection with this
Agreement or the consummation of the transactions contemplated hereby.

ARTICLE IV.

REGISTRATION RIGHTS

4.1 Registration of the Shares. The Company shall file with the Commission, as
soon as practicable but in no event later than 30 days after the Closing Date
(the “Filing Deadline”), a Registration Statement covering the resale of the
full amount of the Shares to the public by Purchaser. The Company shall use
commercially reasonable efforts to cause the Registration Statement covering the
Shares to be declared effective by the Commission as soon as practicable, but in
no event later than the date (the “Effectiveness Deadline”), which shall be
either: (i) in the event that the Commission does not review the Registration
Statement, 90 days after the Closing Date (but in any event, no later than three
Business Days following the Commission indicating a “no-review” decision on the
Registration Statement), or (ii) in the event that the Commission reviews the
Registration Statement or notifies the Company that the Registration Statement
cannot be declared effective prior to the resolution of any comments related to
filings made by the Company with the Commission or confidential treatment
requests made by the Company, 120 days after the Closing Date (but in any event,
no later than three Business Days following the Commission indicating that it
has no further comments on the Registration Statement). Notwithstanding the
above, if the Company has received comments from the Commission or the Staff
regarding the Registration Statement, then the Company shall use its reasonable
best efforts to resolve any such comments as promptly as practicable. The
Company shall cause such Registration Statement to remain effective under the
Securities Act until all Shares covered by such Registration Statement have been
sold or may be sold without volume restrictions pursuant to Rule 144. The
Company shall promptly notify the Purchasers of the effectiveness of such
Registration Statement after the Company confirms effectiveness with the
Commission. The Company hereby covenants and agrees to use reasonable commercial
efforts to maintain its eligibility to make filings with the Commission on Form
S-3 until one or more registrations statements covering the resale of all of the
Shares shall have been filed with, and declared effective by, the Commission
pursuant to the terms and conditions of this Agreement.

 

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4.2 Rule 415; Cutback. If at any time the staff of the Commission (the “Staff”)
takes the position that the offering of some or all of the Shares in a
Registration Statement is not eligible to be made on a delayed or continuous
basis under the provisions of Rule 415 under the Securities Act or requires any
Purchaser to be named as an “underwriter,” the Company shall use its reasonable
best efforts to persuade the Commission that the offering contemplated by the
Registration Statement is a valid secondary offering and not an offering “by or
on behalf of the issuer” as defined in Rule 415 and that none of the Purchasers
is an “underwriter.” For the avoidance of doubt, “reasonable best efforts” shall
not require the Company to institute or maintain any action, suit or proceeding
against the Commission or any member of the Staff. In the event that, despite
the Company’s reasonable best efforts and compliance with the terms of this
Section 4.2, the Staff refuses to alter its position, the Company shall:
(a) remove from the Registration Statement such portion of the Shares (the “Cut
Back Shares”) and/or (b) agree to such restrictions and limitations on the
registration and resale of the Shares as the Staff may require to assure the
Company’s compliance with the requirements of Rule 415 (collectively, the “SEC
Restrictions”); provided, however, that the Company shall not agree to name any
Purchaser as an “underwriter” in such Registration Statement without the prior
written consent of such Purchaser. No liquidated damages shall accrue as to any
Cut Back Shares until such date as the Company is able to effect the
registration of such Cut Back Shares in accordance with any SEC Restrictions
(such date, the “Restriction Termination Date” of such Cut Back Shares). From
and after the Restriction Termination Date applicable to any Cut Back Shares,
all of the provisions of this ARTICLE IV (including the liquidated damages
provisions) shall again be applicable to such Cut Back Shares; provided,
however, that (x) the Filing Deadline for the Registration Statement including
such Cut Back Shares shall be ten Business Days after such Restriction
Termination Date and (y) the Effectiveness Deadline with respect to such Cut
Back Shares shall be the 90th day immediately after the Restriction Termination
Date or the 120th day if the Staff reviews such Registration Statement (but in
any event no later than three Business Days from the Staff indicating it has no
further comments on such Registration Statement).

4.3 Registration Covenant. Each Purchaser covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of the Shares pursuant to a
Registration Statement. The Company shall comply in all material respects with
all applicable rules and regulations of the Commission applicable to the filing
of a Registration Statement.

4.4 Rule 144. With a view to making available to the Purchasers the benefits of
Rule 144, the Company agrees to:

(a) use its reasonable best efforts to make and keep public information
available, as those terms are understood and defined in Rule 144, during the
Reporting Period;

(b) use its reasonable best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Exchange Act; and

(c) furnish to the Purchasers, so long as any Purchaser owns Preferred Shares or
Shares, promptly upon request during the Reporting Period: (i) a written
statement by the Company, if true, that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act; and (ii) a
statement of how many shares of Common Stock are then issued and outstanding.

 

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4.5 Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement.

(a) Subject to Section 4.2, if either: (a) a Registration Statement covering all
of the Shares required to be covered thereby and required to be filed by the
Company pursuant to this Agreement is: (i) not filed with the Commission on or
before the Filing Deadline (a “Filing Failure”), or (ii) not declared effective
by the Commission on or before the Effectiveness Deadline (an “Effectiveness
Failure”), or (b) on any day during the Reporting Period and after the date on
which the Registration Statement is declared effective by the Commission (the
“Effectiveness Date”), sales of all of the Shares required to be included on
such Registration Statement cannot be made (other than (i) during a Grace Period
or (ii) if the Registration Statement is on Form S-1, for a period of 15 days
following the date the Company files a post-effective amendment to incorporate
the Company’s Annual Report on Form 10-K) pursuant to such Registration
Statement (including, without limitation, because of a failure to keep such
Registration Statement effective, to disclose such information as is necessary
for sales to be made pursuant to such Registration Statement or to register a
sufficient number of shares of Common Stock) (a “Maintenance Failure”), then, in
satisfaction of the damages to any holder of Shares by reason of any such delay
in or reduction of its ability to sell the underlying shares of Common Stock,
the Company shall pay to each holder of Shares relating to such Registration
Statement an amount in cash equal to 1.0% of such holder’s ratable interest in
the aggregate Purchase Price on each of the following dates: (x) the day of a
Filing Failure and on every thirtieth day (prorated for periods totaling less
than 30 days) thereafter until such Filing Failure is cured; (y) the day of an
Effectiveness Failure and on every thirtieth day (prorated for periods totaling
less than 30 days) thereafter until such Effectiveness Failure is cured; and
(z) the initial day of a Maintenance Failure and on every thirtieth day
(prorated for periods totaling less than 30 days) thereafter until such
Maintenance Failure is cured. The payments to which a holder shall be entitled
pursuant to this Section 4.5 are referred to herein as “Registration Delay
Payments”; provided that no Registration Delay Payments shall be required
following the termination of the Reporting Period, and provided, further, that
in no event shall the aggregate Registration Delay Payments accruing under this
Section 4.5 exceed 6% of a holder’s ratably interest in the aggregate Purchase
Price (i.e., corresponding to a total delay of six months). The first such
Registration Delay Payment shall be paid within three Business Days after the
event or failure giving rise to such Registration Delay Payment occurred and all
other Registration Delay Payments shall be paid on the earlier of (I) the last
day of the calendar month during which such Registration Delay Payments are
incurred and (II) the third Business Day after the event or failure giving rise
to the Registration Delay Payments is cured.

(b) Notwithstanding anything to the contrary herein, at any time after the
Effectiveness Date, the Company may delay the disclosure of material, non-public
information concerning the Company that would be required to be made in a
registration statement filed with the Commission so that such registration
statement does not contain an untrue statement of a material fact or omit to
state a material fact required to be stated

 

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therein or necessary to make the statements therein not misleading the
disclosure of which at the time is not, in the good faith opinion of the Company
and its counsel, in the best interest of the Company and, in the opinion of
counsel to the Company, would not be required to be made at such time but for
the continued use of such registration statement (a “Grace Period”); provided,
that the Company shall promptly: (i) notify the Purchasers in writing of the
existence of material, non-public information giving rise to a Grace Period
(provided that in each notice the Company will not disclose the content of such
material, non-public information to the Purchasers) and the date on which the
Grace Period will begin, and (ii) notify the Purchasers in writing of the date
on which the Grace Period ends; and, provided further, that the Grace Periods
shall not exceed an aggregate of 30 Trading Days during any 365-day period and
the first day of any Grace Period must be at least 15 days after the last day of
any prior Grace Period. For purposes of determining the length of a Grace Period
above, the Grace Period shall begin on and include the date the Purchasers
receive the notice referred to in clause: (i) and shall end on and include the
later of the date the Purchasers receive the notice referred to in clause
(ii) and the date referred to in such notice. Upon expiration of the Grace
Period, the Company shall again be bound by Section 4.6(c) with respect to the
information giving rise thereto unless such material, non-public information is
no longer applicable. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended shares of Common Stock to a
transferee of any Purchaser in accordance with the terms of this Agreement in
connection with any sale of Registrable Securities with respect to which a
Purchaser has entered into a contract for sale, and delivered a copy of the
prospectus included as part of the applicable Registration Statement (unless an
exemption from such prospectus delivery requirement exists), prior to the
Purchaser’s receipt of the notice of a Grace Period and for which the Purchaser
has not yet settled.

4.6 Registration Procedures.

(a) In connection with the filing by the Company of a Registration Statement
covering the Shares, the Company shall furnish to Purchasers (i) a copy of the
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act and (ii) such other documents as Purchasers
may reasonably request, in order to facilitate the public sale or other
disposition of the Shares.

(b) The Company shall use commercially reasonable efforts to register or qualify
the Shares covered by a Registration Statement under the securities laws of each
state of the United States as Purchasers shall reasonably request; provided,
however, that the Company shall not be required in connection with this
subsection (b) to qualify as a foreign corporation or execute a general consent
to service of process in any jurisdiction.

(c) If the Company has delivered preliminary or final prospectuses to Purchasers
and after having done so the prospectus is amended or supplemented to comply
with the requirements of the Securities Act, the Company shall promptly notify
Purchasers and, if requested by the Company, Purchasers shall immediately cease
making offers or sales of the Shares covered by a Registration Statement and
return all prospectuses to the Company. The Company shall promptly provide
Purchasers with revised or supplemented prospectuses and, following receipt of
the revised or supplemented prospectuses, Purchasers shall be free to resume
making offers and sales of the Shares under such Registration Statement.

 

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(d) The Company shall be entitled to include in a Registration Statement the
shares of Common Stock held by other shareholders of the Company, provided such
other shares of Common Stock are excluded first from such Registration Statement
in order to comply with any applicable laws or request from any governmental
entity or Nasdaq, or in the case of an underwritten offering, in order to comply
with a cutback request of any underwriter.

(e) The Company shall pay all expenses incurred in connection with the
preparation and filing of such Registration Statement pursuant to this ARTICLE
IV, including all registration and filing fees and printer, legal and accounting
fees related thereto but excluding (i) any brokerage fees, selling commissions
or underwriting discounts incurred by Purchasers in connection with sales under
any Registration Statement covering the Shares and (ii) the fees and expenses of
counsel retained by Purchaser.

(f) The Company shall use commercially reasonable efforts to avoid the issuance
of any order suspending the effectiveness of a Registration Statement, or any
suspension of the qualifications (or exemption from qualification) of any of the
Shares covered by a Registration Statement for sale in any jurisdiction. The
Company shall advise Purchasers promptly after it shall receive notice of any
stop order or issuance of any order by the Commission delaying or suspending the
effectiveness of a Registration Statement covering the Shares or of the
initiation of any proceeding for that purpose, and it will promptly use
commercially reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order should
be issued.

4.7 Registration Confidentiality. Purchasers agree to treat as confidential
(unless otherwise publicly disclosed by the Company or a third party not to the
knowledge of such Purchaser in breach of an agreement of confidentiality with
the Company) any written notice from the Company regarding the Company’s plans
to file a Registration Statement and shall not disclose such information to any
other person, or use such information, except as is necessary to exercise its
rights under this Agreement.

4.8 Indemnification.

(a) The Company agrees to indemnify and hold harmless each Purchaser and each
other person, if any, who controls each such Purchaser within the meaning of the
Securities Act or Exchange Act from and against any losses, claims, damages or
liabilities to which such Purchaser or controlling person may become subject
(under the Securities Act, the Exchange Act, state securities or “Blue Sky” laws
or otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon any untrue
statement or alleged misstatement of a material fact contained in any
Registration Statement covering the Shares or in any preliminary prospectus or
final prospectus contained in such Registration Statement, or any amendment or
supplement to such Registration Statement, or the omission or alleged omission
to state

 

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a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will reimburse Purchaser or
controlling person for any reasonable legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim, or preparing to defend any such action, proceeding or
claim; provided, however, that the Company shall not be liable in any such case
to the extent that such loss, claim, damage or liability arises out of, or is
based upon, an untrue statement made in such Registration Statement, preliminary
prospectus or prospectus, or any amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
Purchasers or controlling person specifically for use in the preparation thereof
or any statement or omission in any prospectus that is corrected in any
subsequent prospectus that was delivered to Purchaser prior to the pertinent
sale or sales by Purchaser.

(b) Each Purchaser agrees to indemnify and hold harmless the Company and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, each officer of the Company who signs the Registration Statement
and each director of the Company, from and against any losses, claims, damages
or liabilities to which the Company or any officer, director or controlling
person may become subject (under the Securities Act, the Exchange Act, state
securities or “Blue Sky” laws or otherwise), insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon any untrue statement or alleged misstatement of a material
fact contained in any Registration Statement covering the Shares or in any
preliminary prospectus, final prospectus contained in such Registration
Statement, or any amendment or supplement to such Registration Statement or the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, if such
untrue statement or omission was made in reliance upon and in conformity with
written information furnished by or on behalf of Purchaser specifically for use
in preparation of the Registration Statement, prospectus, amendment or
supplement and Purchaser will reimburse the Company, or such officer, director
or controlling person, as the case may be, for any legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim; provided, however, that Purchaser’s obligation to
indemnify the Company shall be limited to the Purchase Price.

(c) Promptly after receipt by any indemnified person of a notice of a claim or
the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 4.8, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, but the omission to so notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party under this Section 4.8 (except to the extent that such
omission materially and adversely affects the indemnifying party’s ability to
defend such action). Subject to the provisions hereinafter stated, in case any
such action shall be brought against an indemnified person, the indemnifying
person shall be entitled to participate therein, and, to the extent that it
shall elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, shall be entitled to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such

 

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indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the
defense thereof; provided, however, that if there exists or shall exist a
conflict of interest that would make it inappropriate, in the opinion of counsel
to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any Affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel at
the expense of such indemnifying person; provided, however, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate
counsel (together with appropriate local counsel) for all indemnified parties.
In no event shall any indemnifying person be liable in respect of any amounts
paid in settlement of any action unless the indemnifying person shall have
approved the terms of such settlement; provided, however, that such consent
shall not be unreasonably withheld. No indemnifying person shall, without the
prior written consent of the indemnified person, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified person is
or could have been a party and indemnification could have been sought hereunder
by such indemnified person, unless such settlement includes an unconditional
release of such indemnified person from all liability on claims that are the
subject matter of such proceeding.

(d) If the indemnification provided for in this Section 4.8 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and Purchaser on the other hand, in
connection with the statements or omissions or other matters which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, in the case of an untrue
statement, whether the untrue statement relates to information supplied by the
Company on the one hand or Purchaser on the other hand and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement. The Company and Purchasers agree that it would not be
just and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), Purchaser shall not be
required to contribute any amount in excess of the amount by which the net
amount received by Purchaser from the sale of the Preferred Shares to which such
loss relates exceeds the amount of any damages which Purchaser has otherwise
been required to pay by reason of such untrue statement. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

 

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(e) The rights and obligations of the Company and Purchasers under this
Section 4.8 shall survive the termination of this Agreement.

ARTICLE V.

COVENANTS AND ADDITIONAL AGREEMENTS

5.1 Non-Public Information. The Company covenants and agrees that neither it,
nor any other Person acting on its behalf will provide Purchasers or their
agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto Purchaser shall have
entered into a written agreement with the Company regarding the confidentiality
and use of such information. The Company will publicly announce this Agreement
and the transactions contemplated herein via a Current Report on Form 8-K, which
will be filed within one Business Day from the Effective Date. The Company
understands and confirms that Purchasers shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.

5.2 Use of Proceeds. The Company shall use the net proceeds from the sale of the
Preferred Shares hereunder for working capital purposes and shall not use such
proceeds: (a) for the redemption of any Common Stock or Common Stock
Equivalents, (b) for the settlement of any outstanding litigation or (c) in
violation of FCPA or regulations of the Office of Foreign Assets Control of the
U.S. Treasury Department.    

5.3 Listing of Common Stock, No Integrated Offerings. The Company shall take no
action designed to, or which to the knowledge of the Company is likely to have
the effect of, terminating the registration of the Common Stock under the
Exchange Act. The Company further agrees, if the Company applies to have the
Common Stock traded on any other trading market, it will include in such
application all of the Shares, and will take such other action as is necessary
to cause all of the Shares to be listed on such other trading market as promptly
as possible. The Company will take all action reasonably necessary to continue
the listing and trading of its Common Stock, including the Shares, on Nasdaq and
will comply in all material respects with the Company’s reporting, filing and
other obligations under the bylaws or rules of Nasdaq. The Company currently
meets the continuing eligibility requirements for listing on Nasdaq and has not
received in the past twelve (12) months any notification of non-compliance of
applicable Nasdaq listing standards. The Company agrees to use reasonable best
efforts to file with the Commission in a timely manner all reports and other
filings required of the Company under the Securities Act and the Exchange Act.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Preferred Shares (or
the issuance of the Shares upon conversion of the Preferred Shares) in a manner
that would require the registration under the Securities Act of the sale to the
Purchaser of the Preferred Shares or the Shares, or that would be integrated
with the offer or sale of the Preferred Shares or the Shares for purposes of the
rules and regulations of Nasdaq.

 

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ARTICLE VI.

MISCELLANEOUS

6.1 Publicity. Except for the Current Report on Form 8-K described in
Section 5.2, as otherwise required by judicial order or applicable law, rule or
regulation, or as set forth below, neither Party shall make any public
announcement concerning this Agreement without the prior written consent of the
other Party, which consent shall not be unreasonably withheld or delayed. The
Party preparing any such public announcement shall provide the other Party with
a draft thereof at least three (3) Business Days prior to the date on which such
Party would like to make the public announcement. Neither Party shall use the
name, trademark, trade name or logo of the other Party or its employees, in any
publicity or news release relating to this Agreement or its subject matter,
without the prior express written permission of the other Party. Notwithstanding
the terms of this Section 6.1, either Party shall be permitted to disclose the
existence and terms of this Agreement to the extent required, based on the
advice of such Party’s legal counsel, to comply with applicable laws, rules and
regulations, including the rules and regulations promulgated by the Commission
or any other Governmental Authority. Notwithstanding the foregoing, before
disclosing this Agreement or any of the terms hereof pursuant to this
Section 6.1, the Parties will consult with one another on the terms of this
Agreement for which confidential treatment will be sought in making any such
disclosure. If a Party wishes to disclose this Agreement or any of the terms
hereof in accordance with this Section 6.1, such Party agrees, at its own
expense, to seek confidential treatment of the portions of this Agreement or
such terms as may be reasonably requested by the other Party; provided that the
disclosing Party shall always be entitled to comply with legal requirements,
including the requirements of the Commission. Either Party may also disclose the
existence and terms of this Agreement in confidence to its attorneys and
advisors, and to potential acquirors (and their respective professional
advisors), in connection with a potential merger, acquisition or reorganization
and to existing and potential investors or lenders of such Party, as a part of
their due diligence investigations, or to existing and potential sublicensees or
to permitted sublicensees and assignees, in each case under an agreement to keep
the terms of this Agreement confidential under terms of confidentiality and
non-use substantially no less rigorous than the terms contained in this
Agreement and to use such information solely for the purpose permitted pursuant
to this Section 6.1.

For purposes of clarity, either Party may issue a press release or public
announcement or make such other disclosure if the content of such press release,
public announcement or disclosure has previously been made public other than
through a breach of this Agreement by the issuing Party or its Affiliates.

6.2 Fees and Expenses. All reasonable documented fees and expenses of RTW
Investments, LP, and its affiliated funds (collectively, “RTW”) (including the
fees and expenses of Gibson Dunn, as counsel to RTW) incurred in connection with
the purchase of the Preferred Shares and the filing of the Registration
Statement, including any post-closing matters related therewith, shall be paid
by the Company, up to a maximum aggregate amount of $50,000. The Company shall
pay all Transfer Agent fees (including, without limitation, any fees required
for same-day processing of any instruction letter delivered by the Company and
any exercise notice delivered by Purchaser), stamp taxes and other taxes and
duties levied in connection with the delivery of any Preferred Shares or the
Shares to Purchaser.

 

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6.3 Entire Agreement. This Agreement, together with the exhibits and schedules
hereto, contains the entire understanding of the Parties with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral or written, with respect to such matters, which the Parties acknowledge
have been merged into this Agreement.

6.4 Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of: (a) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth below at or prior to 5:30 p.m. (New York City time) on a Trading Day,
(b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth below
on a day that is not a Trading Day or later than 5:30 p.m. (New York City time)
on any Trading Day, (c) the second (2nd) Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service or
(d) upon actual receipt by the Party to whom such notice is required to be
given. The address for such notices and communications shall be as set forth
below:

If to the Company:

Agenus Inc.

3 Forbes Road

Lexington, Massachusetts 02421-7305, USA

Attention: General Counsel

Facsimile: (781) 674-4200

with a copy to:

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, Massachusetts 02199, USA

Attention: Zachary R. Blume

Facsimile: (617) 951-7050

If to Purchaser:

RTW Investments, LP

412 West 15th Street

Floor 9

New York, NY 10011, USA

Attention:         Roderick Wong

Email:               rw@rtwfunds.com

with a copy (which shall not constitute notice) to:

Gibson, Dunn & Crutcher, LLP

555 Mission Street

San Francisco, California 94105-0921, USA

Attention:         Ryan A. Murr

Email:               murr@gibsondunn.com

 

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6.5 Amendments; Waivers. No provision of this Agreement may be waived, modified,
supplemented or amended except in a written instrument signed by the Company and
Purchaser. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such
right.

6.6 Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.

6.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of Purchasers (other than by merger).
Purchasers may assign any or all of their respective rights under this Agreement
to any Person to whom such Purchaser assigns or transfers any Preferred Shares
or Shares, provided that such transferee agrees in writing to be bound, with
respect to the transferred Preferred Shares or Shares, as applicable, by the
provisions of this Agreement that apply to “Purchaser.”

6.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of
the Parties and their respective successors and permitted assigns and is not for
the benefit of, nor may any provision hereof be enforced by, any other Person,
except as otherwise set forth in Section 4.8.

6.9 Governing Law. This Agreement shall in all respects be governed by and
construed in accordance with the laws of the State of Delaware, USA, including
all matters of construction, validity and performance, in each case without
reference to any conflict of law rules that might lead to the application of the
laws of any other jurisdiction.

6.10 Survival of Representation and Warranties. The representations and
warranties contained herein shall survive the Closing and the delivery of the
Preferred Shares.

6.11 Execution in Counterparts. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each Party and delivered to each other Party, it being understood that the
Parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

6.12 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the Parties shall use their
commercially reasonable efforts to find and employ an alternative means to
achieve the same or

 

27

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substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the Parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

6.13 Replacement of Securities. If any certificate or instrument evidencing any
of the Preferred Shares or Shares is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for and
upon cancellation thereof (in the case of mutilation), or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction. The applicant for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs (including
customary indemnity) associated with the issuance of such replacement Preferred
Shares or Shares.

6.14 Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, Purchasers and the
Company will be entitled to specific performance under this Agreement. The
Parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations contained in this Agreement
and hereby agree to waive and not to assert in any action for specific
performance of any such obligation the defense that a remedy at law would be
adequate.

6.15 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.

6.16 Construction. The Parties agree that each of them and/or their respective
counsel have reviewed and had an opportunity to revise this Agreement and,
therefore, the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting Party shall not be employed in the
interpretation of this Agreement or any amendments hereto. In addition, each and
every reference to share prices and shares of Common Stock in this Agreement
shall be subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the Common Stock
that occur after the date of this Agreement.

6.17 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.

(Signature Pages Follow)

 

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IN WITNESS WHEREOF, the Parties have caused this Stock Purchase Agreement to be
duly executed by their respective authorized signatories as of the date first
indicated above.

 

AGENUS INC. By:  

/s/ Garo. H. Armen

  Name: Garo H. Armen   Title: Chairman and Chief Executive Officer RTW MASTER
FUND, LTD. By:  

/s/ Roderick Wong

  Name: Roderick Wong   Title: Director RTW INNOVATION MASTER FUND, LTD. By:  

/s/ Roderick Wong

  Name: Roderick Wong   Title: Director

[Signature Page to Stock Purchase Agreement]

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Exhibit A

Purchasers

 

Purchaser

   Investment Amount      No. Shares Purchased  

RTW Master Fund, Ltd.

   $ 34,726,045.67        16,025  

RTW Innovation Master Fund, Ltd.

   $ 5,274,607.33        2,434  

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Exhibit B

Certificate of Designation of Preferred Shares

[To be attached.]

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AGENUS INC.

CERTIFICATE OF DESIGNATION OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES C-1 CONVERTIBLE PREFERRED STOCK

PURSUANT TO SECTION 151 OF THE

DELAWARE GENERAL CORPORATION LAW

AGENUS INC., a Delaware corporation (the “Corporation”), in accordance with the
provisions of Section 103 of the Delaware General Corporation Law (the “DGCL”)
does hereby certify that, in accordance with Sections 141(c) and 151 of the
DGCL, the following resolution was duly adopted by a committee of the Board of
Directors of the Corporation acting upon authority delegated by the Board of
Directors, on October 10, 2018:

RESOLVED, pursuant to authority expressly set forth in the Amended and Restated
Certificate of Incorporation of the Corporation, as amended (the “Certificate of
Incorporation”), the issuance of a series of Preferred Stock designated as the
Series C-1 Convertible Preferred Stock, par value $0.01 per share, of the
Corporation is hereby authorized and the designation, number of shares, powers,
preferences, rights, qualifications, limitations and restrictions thereof (in
addition to any provisions set forth in the Certificate of Incorporation that
are applicable to the Preferred Stock of all classes and series) are hereby
fixed, and the Certificate of Designation of Preferences, Rights and Limitations
of Series C-1 Convertible Preferred Stock is hereby approved as follows:

SERIES C-1 CONVERTIBLE PREFERRED STOCK

Section 1. Definitions. For the purposes hereof, the following terms shall have
the following meanings:

“Affiliate” means any person or entity that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
with a person or entity, as such terms are used in and construed under Rule 144
under the Securities Act of 1933, as amended. With respect to a Holder, any
investment fund or managed account that is managed on a discretionary basis by
the same investment manager as such Holder will be deemed to be an Affiliate of
such Holder.

“Alternate Consideration” shall have the meaning set forth in Section 7(b).

“Beneficial Ownership Limitation” shall have the meaning set forth in
Section 6(c).

“Business Day” means any day except Saturday, Sunday, any day which shall be 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)(iii).

--------------------------------------------------------------------------------

“Closing Sale Price” means, for any security as of any date, the last closing
trade price for such security prior to 4:00 p.m., New York City time, on the
principal securities exchange or trading market where such security is listed or
traded, as reported by Bloomberg, L.P. (or an equivalent, reliable reporting
service mutually acceptable to and hereafter designated by Holders of a majority
of the then-outstanding Series C-1 Preferred Stock and the Corporation), or if
the foregoing do not apply, the last trade price of such security in the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg, L.P., or, if no last trade price is reported for such
security by Bloomberg, L.P., the average of the bid prices of any market makers
for such security as reported on the OTC Pink Market by OTC Markets Group, Inc.
If the Closing Sale Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Closing Sale Price of such security on
such date shall be the fair market value as determined in good faith by the
Board of Directors of the Corporation.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the Corporation’s common stock, par value $0.01 per share,
and stock of any other class of securities into which such securities may
hereafter be reclassified or changed into.

“Conversion Date” shall have the meaning set forth in Section 6(a).

“Conversion Price” shall mean $2.167, as adjusted pursuant to paragraph 7
hereof.

“Conversion Ratio” 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 Series C-1 Preferred Stock in accordance with
the terms hereof.

“DGCL” shall mean the Delaware General Corporation Law.

“Distributions” shall have the meaning set forth in Section 5(a).

“DTC” shall have the meaning set forth in Section 6(a).

“DWAC Delivery” shall have the meaning set forth in Section 6(a).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“Fundamental Transaction” shall have the meaning set forth in Section 7(b).

“Holder” means any holder of Series C-1 Preferred Stock.

“Issuance Date” means October 10, 2018.

“Junior Securities” shall have the meaning set forth in Section 5(a).

“Notice of Conversion” shall have the meaning set forth in Section 6(a).

 

33

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“Parity Securities” shall have the meaning set forth in Section 5(a).

“Person” means any 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.

“Senior Securities” shall have the meaning set forth in Section 5(a).

“Series C-1 Preferred Stock” shall have the meaning set forth in Section 2(a).

“Series C-1 Preferred Stock Register” shall have the meaning set forth in
Section 2(b).

“Share Delivery Date” shall have the meaning set forth in Section 6(d)(i).

“Stated Value” shall mean $2,167 per share.

“Trading Day” means a day on which the Common Stock is traded for any period on
the principal securities exchange or if the Common Stock is not traded on a
principal securities exchange, on a day that the Common Stock is traded on
another securities market on which the Common Stock is then being traded.

Section 2. Designation, Amount and Par Value; Assignment.

(a) The series of preferred stock designated by this Certificate of Designation
shall be designated as the Corporation’s Series C-1 Convertible Preferred Stock
(the “Series C-1 Preferred Stock”) and the number of shares so designated shall
be 18,459. Each share of Series C-1 Preferred Stock shall have a par value of
$0.01 per share.

(b) The Corporation shall register shares of the Series C-1 Preferred Stock,
upon records to be maintained by the Corporation for that purpose (the “Series
C-1 Preferred Stock Register”), in the name of the Holders thereof from time to
time. The Corporation may deem and treat the registered Holder of shares of
Series C-1 Preferred Stock as the absolute owner thereof for the purpose of any
conversion thereof and for all other purposes. Shares of Series C-1 Preferred
Stock may be issued solely in book-entry form or, if requested by any Holder,
such Holder’s shares may be issued in certificated form. The Corporation shall
register the transfer of any shares of Series C-1 Preferred Stock in the Series
C-1 Preferred Stock Register, upon surrender of the certificates (if applicable)
evidencing such shares to be transferred, duly endorsed by the Holder thereof,
to the Corporation at its address specified herein. Upon any such registration
or transfer, a new certificate evidencing the shares of Series C-1 Preferred
Stock so transferred shall be issued to the transferee and a new certificate
evidencing the remaining portion of the shares not so transferred, if any, shall
be issued to the transferring Holder, in each case, within three Business Days.
The provisions of this Certificate of Designation are intended to be for the
benefit of all Holders from time to time and shall be enforceable by any such
Holder.

 

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Section 3. Dividends. Holders shall be entitled to receive, and the Corporation
shall pay, dividends on shares of the Series C-1 Preferred Stock equal (on an
as-if-converted-to-Common-Stock basis, without regard to the Beneficial
Ownership Limitation) to and in the same form, and in the same manner, as
dividends (other than dividends in the form of Common Stock) actually paid on
shares of the Common Stock when, as and if such dividends (other than dividends
in the form of Common Stock) are paid on shares of the Common Stock. Other than
as set forth in the previous sentence, no other dividends shall be paid on
shares of Series C-1 Preferred Stock, and the Corporation shall pay no dividends
(other than dividends in the form of Common Stock) on shares of the Common Stock
unless it simultaneously complies with the previous sentence.

Section 4. Voting Rights. Except as otherwise provided herein or as otherwise
required by the DGCL, the Series C-1 Preferred Stock shall have no voting
rights. However, as long as any shares of Series C-1 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 Series C-1 Preferred
Stock, (i) alter or change adversely the powers, preferences or rights given to
the Series C-1 Preferred Stock or alter or amend this Certificate of
Designation, amend or repeal any provision of, or add any provision to, the
Certificate of Incorporation or bylaws of the Corporation, or file any articles
of amendment, certificate of designations, preferences, limitations and relative
rights of any series of preferred stock, in all such cases if such action would
adversely alter or change the preferences, rights, privileges or powers of, or
restrictions provided for the benefit of the Series C-1 Preferred Stock,
regardless of whether any of the foregoing actions shall be by means of
amendment to the Certificate of Incorporation or by merger, consolidation or
otherwise, (ii) issue further shares of Series C-1 Preferred Stock or increase
or decrease (other than by conversion) the number of authorized shares of Series
C-1 Preferred Stock, or (iii) enter into any agreement with respect to any of
the foregoing.

Section 5. Rank; Liquidation.

(a) The Series C-1 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 Series C-1
Preferred Stock (“Junior Securities”); (iii) on parity with all shares of the
Corporation’s Series C-1 Convertible Preferred Stock; (iv) on parity with any
class or series of capital stock of the Corporation hereafter created
specifically ranking by its terms on parity with the Series C-1 Preferred Stock
(together with the Corporation’s Series C-1 Convertible Preferred Stock, the
“Parity Securities”); (v) junior to the Corporation’s outstanding Series A-1
Convertible Preferred Stock and (vi) junior to any class or series of capital
stock of the Corporation hereafter created specifically ranking by its terms
senior to any Series C-1 Preferred Stock (“Senior Securities”), in each case, as
to distributions of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntarily or involuntarily (all such distributions being
referred to collectively as “Distributions”).

(b) Subject to the prior and superior rights of the holders of any Senior
Securities of the Corporation, upon liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, each holder of shares of
Series C-1 Preferred Stock shall be entitled to participate pari passu with the
holders of Common Stock (on an as-converted basis, without regard to the
Beneficial Ownership Limitation) in the remaining distribution of the net assets
of the Corporation available for distribution.

 

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Section 6. Conversion.

(a) Conversions at Option of Holder. Each share of Series C-1 Preferred Stock
shall be convertible, at any time and from time to time from and after the
Issuance Date, at the option of the Holder thereof, into a number of shares of
Common Stock equal to the Conversion Ratio. Holders shall effect conversions by
providing the Corporation with the form of conversion notice attached hereto as
Annex A (a “Notice of Conversion”), duly completed and executed. Other than a
conversion following a Fundamental Transaction or following a notice provided
for under Section 7(d)(ii) hereof, the Notice of Conversion must specify at
least a number of shares of Series C-1 Preferred Stock to be converted equal to
the lesser of (x) 100 shares (such number subject to appropriate adjustment
following the occurrence of an event specified in Section 7(a) hereof) and
(y) the number of shares of Series C-1 Preferred Stock then held by the Holder.
Provided the Corporation’s transfer agent is participating in the Depository
Trust Company (“DTC”) Fast Automated Securities Transfer program, the Notice of
Conversion may specify, at the Holder’s election, whether the applicable
Conversion Shares shall be credited to the account of the Holder’s prime broker
with DTC through its Deposit Withdrawal Agent Commission system (a “DWAC
Delivery”). The “Conversion Date”, or the date on which a conversion shall be
deemed effective, shall be defined as the Trading Day that the Notice of
Conversion, completed and executed, is sent by facsimile to, and received during
regular business hours by, the Corporation; provided that the original
certificate(s) (if any) representing such shares of Series C-1 Preferred Stock
being converted, duly endorsed, and the accompanying Notice of Conversion, are
received by the Corporation within two (2) Trading Days thereafter. In all other
cases, the Conversion Date shall be defined as the Trading Day on which the
original shares of Series C-1 Preferred Stock being converted, duly endorsed,
and the accompanying Notice of Conversion, are received by the Corporation. The
calculations set forth in the Notice of Conversion shall control in the absence
of manifest or mathematical error.

(b) Conversion Ratio. The “Conversion Ratio” for each share of Series C-1
Preferred Stock shall be equal to the Stated Value divided by the Conversion
Price.

(c) Beneficial Ownership Limitation. Notwithstanding anything herein to the
contrary, the Corporation shall not effect any conversion of the Series C-1
Preferred Stock, and a Holder shall not have the right to convert any portion of
the Series C-1 Preferred Stock, to the extent that, after giving effect to an
attempted conversion set forth on an applicable Notice of Conversion, such
Holder (together with such Holder’s Affiliates, and any other Person whose
beneficial ownership of Common Stock would be aggregated with the Holder’s for
purposes of Section 13(d) or Section 16 of the Exchange Act and the applicable
regulations of the Commission, including any “group” of which the Holder is a
member (the foregoing, “Attribution Parties”)) would beneficially own a number
of shares of Common Stock 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 Attribution Parties shall
include the number of shares of Common Stock issuable upon conversion of the
Series C-1 Preferred Stock subject to the Notice of Conversion with respect to
which such determination is being made, but shall exclude the number of shares
of Common Stock which are issuable upon (A) conversion of the remaining,
unconverted Series C-1 Preferred Stock beneficially owned by such Holder or any
of its Attribution Parties, and (B) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Corporation (including any
warrants) beneficially owned by such Holder or any of its Attribution Parties
that are subject to a limitation on conversion or exercise similar to the
limitation

 

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contained herein. For purposes of this Section 6(c), beneficial ownership shall
be calculated in accordance with Section 13(d) of the Exchange Act and the
applicable regulations of the Commission. In addition, for purposes hereof,
“group” has the meaning set forth in Section 13(d) of the Exchange Act and the
applicable regulations of the Commission. For purposes of this Section 6(c), 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: (A) the Corporation’s most recent periodic or annual filing
with the Commission, as the case may be, (B) a more recent public announcement
by the Corporation that is filed with the Commission, or (C) a more recent
notice by the Corporation or the Corporation’s transfer agent to the Holder
setting forth the number of shares of Common Stock then outstanding. Upon the
written request of a Holder (which may be by email), the Corporation shall,
within three (3) Trading Days thereof, confirm in writing to such Holder (which
may be via email) 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 any actual conversion or exercise of securities of the
Corporation, including shares of Series C-1 Preferred Stock, by such Holder or
its Attribution Parties since the date as of which such number of outstanding
shares of Common Stock was last publicly reported or confirmed to the Holder.
The “Beneficial Ownership Limitation” shall initially be 9.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock pursuant to such Notice of Conversion (to the
extent permitted pursuant to this Section 6(c)). The Corporation shall be
entitled to rely on representations made to it by the Holder in any Notice of
Conversion regarding its Beneficial Ownership Limitation. Notwithstanding the
foregoing, by written notice to the Corporation, the Holder may reset the
Beneficial Ownership Limitation percentage to a higher or lower percentage, not
to exceed 19.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock
pursuant to such Notice of Conversion; provided, however, that any increase in
the Beneficial Ownership Limitation shall not be effective until the sixty-first
(61st) day after such notice is delivered to the Corporation. Upon such a change
by a Holder of the Beneficial Ownership Limitation, the Beneficial Ownership
Limitation may not be further amended by such Holder without first providing the
minimum notice required by this Section 6(c) Notwithstanding the foregoing, at
any time following notice of a Fundamental Transaction, the Holder may waive
and/or change the Beneficial Ownership Limitation effective immediately upon
written notice to the Corporation and may reinstitute a Beneficial Ownership
Limitation at any time thereafter effective immediately upon written notice to
the Corporation.

(d) Mechanics of Conversion

(i) Delivery of Certificate or Electronic Issuance Upon Conversion. Not later
than two Trading Days after the applicable Conversion Date (or if the Holder
requests the issuance of physical certificate(s) representing the Conversion
Shares, two (2) Trading Days after receipt by the Corporation of the original
certificate(s) (if applicable) representing such shares of Series C-1 Preferred
Stock being converted, duly endorsed, and the accompanying Notice of Conversion)
(the “Share Delivery Date”), the Corporation shall (a) deliver, or cause to be
delivered, to the converting Holder a physical certificate or certificates or
book-entry position (as requested by the Holder) representing the number of
Conversion Shares being acquired upon the conversion of shares of Series C-1
Preferred Stock, or (b) in the case of a DWAC Delivery (if so requested by the
Holder), electronically

 

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transfer such Conversion Shares by crediting the account of the Holder’s prime
broker with DTC through its DWAC system. 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 applicable Holder shall be
entitled to elect to rescind such Notice of Conversion by written notice to the
Corporation at any time on or before its receipt of such certificate or
certificates for Conversion Shares or electronic receipt of such shares (via
book-entry or DWAC, as applicable), in which event the Corporation shall
promptly return to such Holder any original Series C-1 Preferred Stock
certificate(s) (if applicable) delivered to the Corporation and such Holder
shall promptly return to the Corporation any underlying Conversion Shares that
may have been subsequently delivered.

(ii) Obligation Absolute. Subject to Section 6(c) hereof and subject to Holder’s
right to rescind a Notice of Conversion pursuant to Section 6(d)(i) above,
except as set forth below, the Corporation’s obligation to issue and deliver the
Conversion Shares upon conversion of Series C-1 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. Subject to Section 6(c) hereof and subject to Holder’s right to rescind
a Notice of Conversion pursuant to Section 6(d)(i) above, in the event a Holder
shall elect to convert any or all of its Series C-1 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 Series C-1 Preferred Stock of such Holder shall have been sought and
obtained by the Corporation. In the absence of such injunction, the Corporation
shall, subject to Section 6(c) hereof and subject to Holder’s right to rescind a
Notice of Conversion pursuant to Section 6(d)(i) above, issue Conversion Shares
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;
provided that Holder shall not receive duplicate damages for the Corporation’s
failure to deliver Conversion Shares within the period specified herein. 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.

(iii) Compensation for Buy-In on Failure to Timely Deliver Certificates Upon
Conversion. If the Corporation fails to deliver to a Holder the applicable
certificate or certificates or to effect a DWAC Delivery, as applicable, by the
Share Delivery Date pursuant to Section 6(d)(i) (other than a failure caused by
incorrect or incomplete information provided by Holder to the Corporation), 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

 

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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 by which
(x) such Holder’s total purchase price (including any brokerage commissions) for
the shares of 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-1 Preferred Stock equal
to the number of shares of Series C-1 Preferred Stock submitted for conversion
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(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-1 Preferred Stock with
respect to which the actual sale price (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,
within three (3) Trading Days after the occurrence of a Buy-In, indicating the
amounts payable to such Holder in respect of such Buy-In together with
applicable confirmations and other evidence reasonably requested by the
Corporation. 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 certificates representing
shares of Common Stock upon conversion of the shares of Series C-1 Preferred
Stock as required pursuant to the terms hereof; provided, however, that the
Holder shall not be entitled to both (i) require the reissuance of the shares of
Series C-1 Preferred Stock submitted for conversion for which such conversion
was not timely honored and (ii) receive 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(d)(i).

(iv) 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 Series C-1 Preferred Stock, free from preemptive rights or any other
actual contingent purchase rights of Persons other than the Holders of the
Series C-1 Preferred Stock, not less than such aggregate number of shares of the
Common Stock as shall be issuable (taking into account the adjustments of
Section 7) upon the conversion of all outstanding shares of Series C-1 Preferred
Stock. The Corporation covenants that all shares of Common Stock that shall be
so issuable shall, upon issue, be duly authorized, validly issued, fully paid
and non-assessable.

(v) Fractional Shares. No fractional shares or scrip representing fractional
shares of Common Stock shall be issued upon the conversion of the Series C-1
Preferred Stock. As to any fraction of a share which a Holder would otherwise be
entitled to receive upon such conversion, the Corporation shall pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Conversion Price.

 

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(vi) Transfer Taxes. The issuance of certificates for shares of the Common Stock
upon conversion of the Series C-1 Preferred Stock shall be made without charge
to any Holder for any documentary stamp or similar taxes that may be payable in
respect of the issue or delivery of such certificates, 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 certificate
upon conversion in a name other than that of the registered Holder(s) of such
shares of Series C-1 Preferred Stock and the Corporation shall not be required
to issue or deliver such certificates 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.

(e) Status as Stockholder. Upon each Conversion Date: (i) the shares of Series
C-1 Preferred Stock being converted shall be deemed converted into shares of
Common Stock; and (ii) the Holder’s rights as a holder of such converted shares
of Series C-1 Preferred Stock shall cease and terminate, excepting only the
right to receive certificates for such shares of Common Stock and to any
remedies provided herein or otherwise available at law or in equity to such
Holder because of a failure by the Corporation to comply with the terms of this
Certificate of Designation. In all cases, the holder shall retain all of its
rights and remedies for the Corporation’s failure to convert Series C-1
Preferred Stock.

Section 7. Certain Adjustments.

(a) Stock Dividends and Stock Splits. If the Corporation, at any time while this
Series C-1 Preferred Stock is outstanding: (A) pays a stock dividend or
otherwise makes a distribution or distributions payable in shares of Common
Stock (which, for avoidance of doubt, shall not include any shares of Common
Stock issued by the Corporation upon conversion of this Series C-1 Preferred
Stock) with respect to the then outstanding shares of Common Stock;
(B) subdivides outstanding shares of Common Stock into a larger number of
shares; or (C) combines (including by way of a reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, 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
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 (excluding any treasury shares of the Corporation).
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 or combination.

(b) Fundamental Transaction. If, at any time while this Series C-1 Preferred
Stock is outstanding, (A) the Corporation effects any merger or consolidation of
the Corporation with or into another Person or any stock sale to, or other
business combination (including, without limitation, a reorganization,
recapitalization, spin-off, share exchange or scheme of arrangement) with or
into another Person (other than such a transaction in which the Corporation is
the surviving or continuing entity and its Common Stock is not exchanged for or
converted into other securities, cash or property), (B) the Corporation effects
any sale of all or substantially all of its assets in one transaction or a
series of related transactions, (C) any tender offer or exchange offer (whether
by the Corporation or another Person) is completed pursuant to which more than

 

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50% of the Common Stock not held by the Corporation or such Person is exchanged
for or converted into other securities, cash or property, or (D) the Corporation
effects any reclassification of the Common Stock or any compulsory share
exchange pursuant (other than as a result of a dividend, subdivision or
combination covered by Section 7(a) above) to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental Transaction”), then, upon any subsequent
conversion of this Series C-1 Preferred Stock the Holders shall have the right
to receive, in lieu of the right to receive Conversion Shares, for each
Conversion Share that would have been issuable upon such conversion immediately
prior to the occurrence of such Fundamental Transaction, the same kind and
amount of securities, cash or property as it would have been entitled to receive
upon the occurrence of such Fundamental Transaction if it had been, immediately
prior to such Fundamental Transaction, the holder of one share of Common Stock
(the “Alternate Consideration”). For purposes of any such subsequent conversion,
the determination of the Conversion Ratio 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 adjust the Conversion Ratio
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-1 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 terms of any
agreement to which the Corporation is a party and pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this Section 7(b)
and insuring that this Series C-1 Preferred Stock (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous
to a Fundamental Transaction. The Corporation shall cause to be delivered to
each Holder, at its last address as it shall appear upon the stock books of the
Corporation, written notice of any Fundamental Transaction at least 20 calendar
days prior to the date on which such Fundamental Transaction is expected to
become effective or close.

(c) 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.

(d) 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 a notice setting forth the Conversion Ratio after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.

 

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(ii) Other Notices. 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, 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 Series C-1 Preferred Stock, and shall cause to
be delivered to each Holder at its last address as it shall appear upon the
stock books of the Corporation, 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.

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 facsimile, via
email, or sent by a nationally recognized overnight courier service, addressed
to the Corporation, at 3 Forbes Road, Lexington, Massachusetts 02421-7305, USA,
or such other facsimile number, email address, or mailing address as the
Corporation may specify for such purposes by notice to the Holders delivered in
accordance with this Section. 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, email, or sent by a nationally recognized
overnight courier service addressed to each Holder at the facsimile number,
email address or mailing address of such Holder appearing on the books of the
Corporation, or if no such facsimile number, email address, or mailing address
appears on the books of the Corporation, at the principal place of business of
such Holder. Any notice or other communication or deliveries hereunder shall be
deemed given and effective on the earliest of: (i) the date of transmission, if
such notice or communication is delivered via facsimile or email prior to 5:30
p.m. (New York City time) on any date, (ii) the date immediately following the
date of transmission, if such notice or communication is delivered via facsimile
or email between 5:30 p.m. and 11:59 p.m. (New York City time) on any date,
(iii) the second Business Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given.

 

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(b) Lost or Mutilated Series C-1 Preferred Stock Certificate. If a Holder’s
Series C-1 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 Series C-1 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 thereof, reasonably
satisfactory to the Corporation and, in each case, customary and reasonable
indemnity, if requested. Applicants for a new certificate under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Corporation
may prescribe.

(c) 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 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.

(d) 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. Any waiver by the Corporation
or a Holder must be in writing. Notwithstanding any provision in this
Certificate of Designation to the contrary, any provision contained herein and
any right of the Holders of Series C-1 Preferred Stock granted hereunder may be
waived as to all shares of Series C-1 Preferred Stock (and the Holders thereof)
upon the written consent of the Holders of not less than a majority of the
shares of Series C-1 Preferred Stock then outstanding, unless a higher
percentage is required by the DGCL, in which case the written consent of the
Holders of not less than such higher percentage shall be required.

(e) 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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(f) 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.

(g) 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.

(h) Status of Converted Series C-1 Preferred Stock. If any shares of Series C-1
Preferred Stock shall be converted 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 C-1 Preferred Stock.

********************

 

44

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IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designation
this 10th day of October, 2018.

 

/s/ Garo H. Armen

Garo H. Armen, Chairman

& Chief Executive Officer

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ANNEX A

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER

IN ORDER TO CONVERT SHARES OF SERIES C-1 PREFERRED STOCK)

The undersigned Holder hereby irrevocably elects to convert the number of shares
of Series C-1 Preferred Stock indicated below, represented by stock certificate
No(s). (the “Preferred Stock Certificates”), into shares of common stock, par
value $0.01 per share (the “Common Stock”), of Agenus Inc., a Delaware
corporation (the “Corporation”), as of the date written below. If securities 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. Capitalized terms
utilized but not defined herein shall have the meaning ascribed to such terms in
that certain Certificate of Designation of Preferences, Rights and Limitations
of Series C-1 Convertible Preferred Stock (the “Certificate of Designation”)
filed by the Corporation with the Secretary of State of the State of Delaware
on            , 2018.

As of the date hereof, the number of shares of Common Stock beneficially owned
by the undersigned Holder (together with such Holder’s Affiliates, and any other
Person whose beneficial ownership of Common Stock would be aggregated with the
Holder’s for purposes of Section 13(d) or Section 16 of the Exchange Act and the
applicable regulations of the Commission, including any “group” of which the
Holder is a member (the foregoing, “Attribution Parties”)), including the number
of shares of Common Stock issuable upon conversion of the Series C-1 Preferred
Stock subject to this Notice of Conversion, but excluding the number of shares
of Common Stock which are issuable upon (A) conversion of the remaining,
unconverted Series C-1 Preferred Stock beneficially owned by such Holder or any
of its Attribution Parties, and (B) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Corporation (including any
warrants) beneficially owned by such Holder or any of its Attribution Parties
that are subject to a limitation on conversion or exercise similar to the
limitation contained in Section 6(c) of the Certificate of Designation, is
[            ]%. For purposes hereof, beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act and the applicable
regulations of the Commission. In addition, for purposes hereof, “group” has the
meaning set forth in Section 13(d) of the Exchange Act and the applicable
regulations of the Commission.

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Conversion calculations:

 

Date to Effect Conversion:                                          
                                         
                                                                           

Number of shares of Series C-1 Preferred Stock owned prior to Conversion:
                                                                              

Number of shares of Series C-1 Preferred Stock to be Converted:
                                         
                                                      

Number of shares of Common Stock to be Issued:
                                         
                                                                              

Address for delivery of physical certificates:
                                         
                                         
                                              

or for DWAC Delivery:                                          
                                         
                                                                               

DWAC Instructions:                                          
                                         
                                         
                                           

Broker no:                                          
                                         
                                         
                                                           

Account no:                                          
                                         
                                         
                                                         

 

HOLDER   By:  

 

  Name:  

 

  Title:  

 

  Date: