Exhibit 10.1

 

THE SECURITIES REPRESENTED HEREBY (THE “SECURITIES”) HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED, HYPOTHECATED, EXCHANGED OR OTHERWISE DISPOSED OF UNLESS REGISTERED
UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE
COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.

 

CONVERTIBLE PROMISSORY NOTE

 

$[NUMBER] [DATE]

 

 

For value received, Humanigen, Inc., a Delaware corporation (the “Company”),
promises to pay to [HOLDER NAME] (the “Holder”) the principal sum of $[NUMBER]
together with accrued and unpaid interest thereon, each due and payable on the
date and in the manner set forth below.

 

This convertible promissory note (this “Note”) is issued as part of a series of
similar convertible promissory notes (collectively, the “Notes”) pursuant to the
terms of that certain Convertible Note Purchase Agreement dated as of [DATE] by
and among the Company, Holder, and the other purchasers identified therein, as
the same may be amended from time to time (the “Agreement”). Capitalized terms
used but not otherwise defined herein shall have the meanings ascribed to them
in the Agreement. This Note is an unsecured obligation of the Company.

 

1.       Repayment. Unless otherwise converted as provided herein, all unpaid
principal together with the unpaid and accrued interest payable hereunder shall
be due and payable on the date repayment is demanded by the Holder which may be
any day on or after the earliest of (i) twenty-four months from the date of this
Note (the “Stated Maturity Date”), (ii) the occurrence of an Event of Default
(as described in Section 7 below), or (iii) the occurrence of a Liquidation
Event (the earliest date of which being the “Maturity Date”). “Liquidation
Event” means (i) any event pursuant to which (A) any Person or Persons acting as
a group acquires all or substantially all of the assets of the Company by sale,
exclusive license or otherwise, or (B) any Person or Persons acting as a group
(other than the equity holders of the Company existing as of the date hereof),
whether by merger, consolidation or otherwise, shall become the beneficial
owner(s) of greater than an aggregate of 50% of the Company’s outstanding voting
equity interests (other than in connection with a Qualified Financing (as
defined below) or Non-Qualified Financing (as defined below)), or (ii) any
dissolution or winding-up of the Company. This Note shall rank pari passu with
each of the other Notes such that all Notes shall rank equally and no payment
will be made under any Note unless a pro rata payment is simultaneously made
under all Notes.

 

2.       Interest Rate. The Company promises to pay simple interest on the
outstanding principal amount hereof from the date hereof until payment in full,
which interest shall be payable at the rate of 7.5% per annum or the maximum
rate permissible by law, whichever is less. Interest shall be due and payable on
the Maturity Date and shall be calculated on the basis of a 365-day year for the
actual number of days elapsed.

 

   

 

 

3.       Conversion.

 

(a)       Mandatory Conversion Upon Qualified Financing. If the Company issues
and sells its Equity Securities (as defined below) to investors (the “Qualified
Financing Investors”) on or before the Stated Maturity Date in any bona fide
financing transaction that results in gross proceeds to the Company of at least
$10,000,000 (excluding conversion of this Note and other indebtedness) (a
“Qualified Financing”) or the Company consummates a reverse merger or similar
transaction, then the Company will give the Holder at least ten days’ prior
written notice of the anticipated closing date of such Qualified Financing or
reverse merger, and the outstanding principal balance and any unpaid and accrued
interest on this Note, together with such additional amount of interest as would
have been paid on this Note if held to the Stated Maturity Date (the “Conversion
Amount”), will automatically be converted, upon such closing date (and, in the
case of a reverse merger, immediately prior to the consummation of such reverse
merger), into either, at the Holder’s option, (x) (A) in the case of a Qualified
Financing, such Equity Securities as the Holder would acquire if the Conversion
Amount were invested directly in the Qualified Financing on the same terms and
conditions (including price) as given to the Qualified Financing Investors or
(B) in the case of a reverse merger, shares of Common Stock at the same price
per share paid by the buyer in such transaction (which, in a stock for stock
deal, shall be based on the price per share used by the parties for purposes of
setting the applicable exchange ratio), or (y) Common Stock at a conversion
price equal to $1.25 per share (subject to ratable adjustment for any stock
split, stock dividend, stock combination or other recapitalization occurring
subsequent to the date of this Note), as each Holder shall elect and notify the
Company at least five days prior to the anticipated closing date of such
Qualified Financing. For purposes of this Note, “Equity Securities” shall mean
Common Stock or any securities issued by the Company (other than convertible
indebtedness) and conferring the right to purchase Common Stock or that are
convertible into or exercisable or exchangeable for (with or without additional
consideration) Common Stock, whether sold independently or as part of a unit of
one or more securities issued by the Company.

 

(b)       Optional Conversion Upon Non-Qualified Financing. In the event that
the Company issues and sells shares of its Equity Securities to investors (the
“Non-Qualified Financing Investors”) on or before the date of the repayment in
full of this Note in any bona fide financing transaction that is not a Qualified
Financing (a “Non-Qualified Financing”), then the Company will give the Holder
at least ten days’ prior written notice of the anticipated closing date of such
Non-Qualified Financing and the Holder may elect to convert all, but not less
than all, of the Conversion Amount of the Notes held by such Holder, upon such
closing date, into either (x) such Equity Securities as the Holder would acquire
if the Conversion Amount were invested directly in the Non-Qualified Financing
on the same terms and conditions (including price) as given to the Non-Qualified
Financing Investors, or (y) Common Stock at a conversion price equal to $1.25
per share (subject to ratable adjustment for any stock split, stock dividend,
stock combination or other recapitalization occurring subsequent to the date of
this Note). In order to exercise the option to convert this Note pursuant to
this Section 3(b), the Holder must notify the Company of the Holder’s election
to so convert at least five days prior to the anticipated closing date of the
Non-Qualified Financing.

 

(c)       Optional Conversion Upon Liquidation Event. In the event that the
Company enters into any agreement providing for, or publicly announces the
intention to consummate, a Liquidation Event prior to the conversion or
repayment in full of this Note, (i) the Company will give the Holder at least
ten days’ prior written notice of the anticipated closing date of such
Liquidation Event, and (ii) the Holder may elect to convert, upon such closing
date (and immediately prior to the consummation of such Liquidiation Event),
all, but not less than all, of the Conversion Amount into Common Stock at a
conversion price equal to $1.25 per share (subject to ratable adjustment for any
stock split, stock dividend, stock combination or other recapitalization
occurring subsequent to the date of this Note). In order to exercise the option
to convert the Notes pursuant to this Section 3(c), the Holder must notify the
Company of the Holder’s election to so convert or require payment at least five
days prior to the anticipated closing date of the Liquidation Event.

 

  2 

 

 

(d)       Optional Conversion Upon Collaboration Or Expiry Of Holding Period.
Commencing on the earlier of (x) such time as the Company publicly announces
that it has entered into a definitive arrangement with an unaffiliated third
party (a “Strategic Partner”) pursuant to which, among other things, such
Strategic Partner may agree to collaborate with the Company in conducting a
clinical study to assess the efficacy of the Company’s lenzilumab monoclonal
antibody in reducing adverse effects from neurotoxicity and cytokine release
syndrome when used as a companion therapy in certain CAR-T cell therapies, or
(y) the six-month anniversary of the date of this Note, the Holder may elect to
convert any portion of the outstanding principal amount of this Note, together
with (i) any unpaid and accrued interest on such principal amount to the date
the Holder’s notice of the Holder’s intention to convert is received by the
Company (the “Notice Date”), and (ii) such additional amount of interest as
would have been paid on such principal amount from the Notice Date to the Stated
Maturity Date, into Common Stock at a conversion price equal to $1.25 per share
(subject to ratable adjustment for any stock split, stock dividend, stock
combination or other recapitalization occurring subsequent to the date of this
Note). In order to exercise the option to convert all or any portion of the
principal amount of this Note pursuant to this Section 3(d), the Holder shall
notify the Company of the Holder’s election to so convert in accordance with the
provisions of Section 9 hereof, and shall specify in such notice the principal
amount of this Note to be converted and the date on which such conversion shall
be effected.

 

(e)       No fractional shares or units will be issued on conversion of this
Note. If the Holder would otherwise be entitled to a fractional share or unit,
the Holder shall receive in lieu thereof a cash payment equal to the applicable
per share or per unit price of the Equity Securities or Common Stock into which
the Conversion Amount is proposed to be converted, as applicable, multiplied by
the fraction of the share or unit the Holder would otherwise be entitled to
receive. If conversion of this Note occurs pursuant to Section 3(a) or Section
3(b), the Company shall use its commercially reasonable efforts to afford to the
Holder the ability to become a party to any agreement pursuant to which an
investor in a Qualified Financing or Non-Qualified Financing, as the case may
be, may receive registration rights in respect of the Equity Securities issued
by the Company in such transaction.

 

4.       Maturity. If this Note has not been previously converted pursuant to
Section 3 above, then, effective upon the Stated Maturity Date, the Holder may
elect to convert the Conversion Amount of the Notes into Common Stock at a
conversion price equal to $1.25 per share (subject to ratable adjustment for any
stock split, stock dividend, stock combination or other recapitalization
occurring subsequent to the date of this Note). Any election to convert the
Notes pursuant to this paragraph must be made in writing and delivered to the
Company at least five days prior to the Maturity Date. Unless this Note has been
previously converted in accordance with the terms of Section 3 above or pursuant
to the preceding sentences of this Section 4, the entire outstanding principal
balance and all unpaid accrued interest shall become fully due and payable on
the Stated Maturity Date.

 

5.       Expenses. In the event of any default hereunder, the Company shall pay
all reasonable attorneys’ fees and court costs incurred by the Holder in
enforcing and collecting this Note.

 

6.       Prepayment. The Company may not prepay this Note (including accrued
interest), in whole or in part, prior to the Maturity Date without the consent
of the Holder.

 

7.       Default. If there shall be any Event of Default (as defined below)
hereunder, at the option and upon the declaration of the Holder and upon written
notice to the Company (which election and notice shall not be required in the
case of an Event of Default under Section 7(c), 7(d) or 7(e)), this Note shall
accelerate and all principal and unpaid accrued interest shall become due and
payable. The occurrence of any one or more of the following shall constitute an
“Event of Default”:

 

  3 

 

 

(a)       The Company fails to pay timely any of the principal amount due under
this Note on the date the same becomes due and payable or any accrued interest
or other amounts due under this Note on the date the same becomes due and
payable;

 

(b)       The Company shall default in its performance of any covenant under the
Agreement or this Note, and such default is not cured by the Company within 30
days after written notice thereof is given to the Company by the Holder;

 

(c)       The Company files any petition or action for relief under any
bankruptcy, reorganization, insolvency or moratorium law or any other law for
the relief of, or relating to, debtors, now or hereafter in effect, or makes any
assignment for the benefit of creditors or takes any corporate action in
furtherance of any of the foregoing;

 

(d)       An involuntary petition is filed against the Company (unless such
petition is dismissed or discharged within 60 days) under any bankruptcy statute
now or hereafter in effect, or a custodian, receiver, trustee, assignee for the
benefit of creditors (or other similar official) is appointed to take
possession, custody or control of any property of the Company;

 

(e)       A liquidation, termination of existence or dissolution of the Company;
or

 

(f)       Any representation, warranty or statement of fact made by the Company
in the Agreement, or any other agreement, schedule, confirmatory assignment or
otherwise in connection with the transactions contemplated hereby or thereby,
shall when made or deemed made be false or misleading in any material respect;
provided, however, that such failure shall not result in an Event of Default to
the extent it is corrected by the Company within a period of 30 days after the
Company’s receipt of written notice from the Holder specifying such failure.

 

8.       Waiver. The Company hereby waives demand, notice, presentment, protest
and notice of dishonor.

 

9.       Notices. All notices, requests, demands, consents, instructions or
other communications required or permitted hereunder shall be in writing and
faxed, emailed, mailed or delivered to each party as follows: (i) if to the
Holder, at the Holder’s address, email address or facsimile number set forth in
the Agreement, or at such other address, email address or facsimile number as
the Holder shall have furnished the Company in writing, or (ii) if to the
Company, at the Company’s address, email address or facsimile number set forth
on the signature page to the Agreement, or at such other address, email address
or facsimile number as the Company shall have furnished to the Holder in
writing. All such notices and communications will be deemed effectively given
the earliest of (a) when received, (b) when delivered personally, (c) one
business day after being delivered by facsimile or email (with receipt of
appropriate confirmation), (d) one business day after being deposited with an
overnight courier service of recognized standing or (e) three days after being
deposited in the U.S. mail, first class with postage prepaid.

 

10.       Governing Law. This Note shall be governed by and construed under the
internal laws of the State of New York, without giving effect to conflicts of
laws principles.

 

11.       Modification; Waiver. Any term of this Note may be amended or waived
with the written consent of the Company and the Holder. In the event that the
Company amends or otherwise modifies any other of the Notes, the Company shall
give notice thereof to the Holder and, upon request by the Holder, this Note
shall be similarly amended or modified.

 

  4 

 

 

12.       Powers and Remedies Cumulative; Delay or Omission Not Waiver of
Default. No right or remedy herein conferred upon or reserved to the Holder is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy. No delay or omission of the
Holder to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and every power and remedy given by this Note or by law
may be exercised from time to time, and as often as shall be deemed expedient,
by the Holder.

 

13.       Transfer Rights. The Holder may not transfer this Note to a third
party without the prior written consent of the Company, not to be unreasonably
withheld, conditioned or delayed; provided, however, that the Holder shall have
the right to transfer and assign this Note without any consent of the Company to
a Permitted Transferee (as defined below). Each new Note issued upon any
transfer of this Note shall bear a legend as to the applicable restrictions on
transferability to ensure compliance with the Act, unless in the opinion of
counsel for the Company such legend is not required in order to ensure
compliance with the Act. The Company may issue stop transfer instructions to its
Transfer Agent, if any, in connection with such restrictions. Subject to the
foregoing, transfers of this Note shall be registered upon registration books
maintained for such purpose by or on behalf of the Company. Prior to
presentation of this Note for registration of transfer, the Company shall treat
the registered holder hereof as the owner and holder of this Note for the
purpose of receiving all payments of principal and interest hereon and for all
other purposes whatsoever, whether or not this Note shall be overdue and the
Company shall not be affected by notice to the contrary. “Permitted Transferee”
means, as to any Holder, any of the following: (i) if a natural person, his/her
ancestors, descendants, siblings, or spouse, any executor or administrator of
his/her estate, or to a custodian, trustee (including a trustee of a voting
trust), executor, or other fiduciary primarily for the account of such Holder or
his/her ancestors, descendants, siblings, or spouse, whether step, in-law or
adopted, and, in the case of any such trust or fiduciary, to the Holder who
transferred this Note to such trust or fiduciary, but only with respect to
transfers made for bona fide estate planning purposes, either during his or her
lifetime or on death by will or intestacy; (ii) with respect to any Holder which
is an entity, (A) the then-existing members, shareholders or other investors in
the Holder in connection with the dissolution or winding-up of the Holder, or
(B) any Person in connection with any consolidation or reorganization of the
Holder directly or indirectly with or into one or more other investment
vehicles; (iii) any affiliate of the Holder (other than any investment portfolio
company of the Holder that is an affiliate) which controls, is controlled by or
is under common control with the Holder; or (iv) any fund or entity managed or
advised by Soundview Capital Partners LP or any affiliate thereof.

 

14.       Most Favored Nation Amendment Provisions. Prior to the conversion or
payment in full of the Note, if the Company issues any indebtedness which is
convertible into the Company’s Equity Securities (“Subsequent Convertible
Securities”), the Company will promptly provide Holder with written notice
thereof, together with a copy of all documentation relating to such Subsequent
Convertible Securities and, upon written request of Holder, any additional
information related to such Subsequent Convertible Securities as may be
reasonably requested by Holder. Within 30 days after the Holder’s receipt of
such information, if the Holder determines that the terms of the Subsequent
Convertible Securities are preferable to the terms of the Note, Holder will
notify the Company in writing. Promptly after receipt of such written notice
from the Holder, the Company agrees to amend and restate the Note to be
identical to the instruments evidencing the Subsequent Convertible Securities
and any purchase documents related thereto.

 

  5 

 

 

15.       Assignment by the Issuer. Neither this Note nor any of the rights,
interests or obligations hereunder may be assigned, in whole or in part, by the
Company, without the prior written consent of the Holder.

 

16.       Successors and Assigns. Subject to the restrictions on transfer
provided herein, the rights and obligations of the Company and the Holder shall
be binding upon and benefit the respective successors, assigns, heirs,
administrators and transferees of the Company or the Holder, as applicable.

 

ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT THE COMPANY AND THE HOLDER FROM MISUNDERSTANDING
OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED
IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT
BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.

 

[Remainder of Page Intentionally Left Blank]

 

  6 

 

 

IN WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to
be issued as of the date first set forth above.

 

 

COMPANY:

 

HUMANIGEN, INC.

                    By: _/s/ Cameron Durrant    

Name: Dr. Cameron Durrant

Title: Chief Executive Officer 

 

 

 

[Signature Page to Convertible Promissory Note]