Exhibit 10.3

 

Execution Version

 

Form of Lock-Up Agreement

 

[________], 2019

 

Ladies and Gentlemen:

 

The undersigned (the “Shareholder”) understands that: (i) AmpliPhi Biosciences
Corporation, a Washington corporation (“Parent”), has entered into an Agreement
and Plan of Merger and Reorganization, dated as of [___________], 2019 (the
“Merger Agreement”), with C3J Therapeutics, Inc., a Washington corporation (the
“Company”) and Ceres Merger Sub, Inc., a Washington corporation and wholly-owned
subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will be merged
with and into the Company (the “Merger”) and the separate corporate existence of
Merger Sub will cease and the Company will continue as the surviving
corporation; and (ii) in connection with the Merger, stockholders of the Company
will receive shares of Parent Common Stock. Capitalized terms used but not
otherwise defined herein shall have the respective meanings ascribed to such
terms in the Merger Agreement.

 

As a material inducement to the willingness of each of the Parties to enter into
the Merger Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Shareholder hereby agrees
that the Shareholder will not, subject to the exceptions set forth in this
letter agreement, during the period commencing upon the Effective Time and
ending on the date that is 180 days after the Closing Date (the “Restricted
Period”), (a) offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Parent Common Stock or any securities convertible into
or exercisable or exchangeable for Parent Common Stock, including without
limitation, Parent Common Stock or such other securities which may be deemed to
be beneficially owned by the Shareholder in accordance with the rules and
regulations of the SEC and securities of Parent which may be issued upon
exercise of a stock option or warrant (collectively, the “Shareholder’s
Shares”), (b) enter into any swap or other agreement that transfers, in whole or
in part, any of the economic consequences of ownership of the Shareholder’s
Shares, regardless of whether any such transaction described in clause (a) or
(b) above is to be settled by delivery of Parent Common Stock or such other
securities, in cash or otherwise or (c) make any demand for or exercise any
right with respect to the registration of any shares of Parent Common Stock or
any security convertible into or exercisable or exchangeable for Parent Common
Stock, in each case other than (i) transfers of the Shareholder’s Shares as
charitable gifts or donations, (ii) transfers or dispositions of the
Shareholder’s Shares to any trust for the direct or indirect benefit of the
Shareholder or the immediate family of the Shareholder, (iii) transfers or
dispositions of the Shareholder’s Shares by will, other testamentary document or
intestate succession to the legal representative, heir, beneficiary or a member
of the immediate family of the Shareholder, (iv) transfers of the Shareholder’s
Shares to stockholders, direct or indirect affiliates (within the meaning set
forth in Rule 405 under the Securities Act), current or former partners (general
or limited), members or managers of the Shareholder, as applicable, or to the
estates of any such stockholders, affiliates, partners, members or managers, or
to another corporation, partnership, limited liability company or other business
entity that controls, is controlled by or is under common control with the
Shareholder, (v) transfers that occur by operation of law pursuant to a
qualified domestic relations order or in connection with a divorce settlement,
(vi) transfers or dispositions not involving a change in beneficial ownership,
and (vii) if the Shareholder is a trust, transfers or dispositions to any
beneficiary of the Shareholder or the estate of any such beneficiary; provided
that, in each case, the transferee agrees in writing to be bound by the terms
and conditions of this letter agreement and either the Shareholder or the
transferee provides Parent with a copy of such agreement promptly upon
consummation of any such transfer; and provided, further, that in each case, no
filing by any party (donor, donee, transferor or transferee) under the Exchange
Act or other public announcement shall be required or shall be made voluntarily
in connection with such transfer or distribution (other than filings made in
respect of involuntary transfers or dispositions or a filing on a Form 5 made
after the expiration of the Restricted Period) and any such transfer or
distribution shall not involve a disposition for value. For purposes of this
letter agreement, “immediate family” shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin.

 

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Notwithstanding the restrictions imposed by this letter agreement, the
Shareholder may (a) exercise an option or warrant (including a net or cashless
exercise of such option or warrant) to purchase shares of Parent Common Stock,
(b) transfer shares of Parent Common Stock to Parent to cover tax withholding
obligations of the Shareholder in connection with any option exercise or the
vesting of any restricted stock or restricted stock unit award, provided that
the underlying shares of Parent Common Stock shall continue to be subject to the
restrictions on transfer set forth in this letter agreement, (c) establish a
trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of
Parent Common Stock, provided that such plan does not provide for any transfers
of Parent Common Stock during the Restricted Period, or (d) transfer or dispose
of shares of Parent Common Stock acquired on the open market following the
Closing Date, provided that, with respect to (a) and (b) above, any required
filing under the Exchange Act shall include a footnote disclosure explaining
that such exercise and sale was to cover tax withholding obligations of such
Shareholder, and with respect to (c) above, no filing under the Exchange Act or
other public announcement shall be required or shall be made voluntarily in
connection with the establishment of such a plan, provided that reasonable
notice shall be provided to Parent prior to any such filing, and provided
further that, for the avoidance of doubt, the underlying shares of Parent Common
Stock shall continue to be subject to the restrictions on transfer set forth in
this letter agreement.

 

Any attempted transfer in violation of this letter agreement will be of no
effect and null and void, regardless of whether the purported transferee has any
actual or constructive knowledge of the transfer restrictions set forth in this
letter agreement, and will not be recorded on the stock transfer books of
Parent. In order to ensure compliance with the restrictions referred to herein,
the Shareholder agrees that Parent may issue appropriate “stop transfer”
certificates or instructions. Parent may cause the legend set forth below, or a
legend substantially equivalent thereto, to be placed upon any certificate(s) or
other documents or instruments evidencing ownership of the Shareholder’s Shares:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND MAY ONLY BE
TRANSFERRED IN COMPLIANCE WITH A LOCK-UP AGREEMENT, A COPY OF WHICH IS ON FILE
AT THE PRINCIPAL OFFICE OF THE COMPANY.

 

The Shareholder hereby represents and warrants that the Shareholder has full
power and authority to enter into this letter agreement. All authority conferred
or agreed to be conferred and any obligations of the Shareholder under this
letter agreement will be binding upon the successors, assigns, heirs or personal
representatives of the Shareholder.

 

In the event that any holder of Parent’s securities that is subject to a
substantially similar agreement entered into by such holder, other than the
Shareholder, is permitted by Parent to sell or otherwise transfer or dispose of
shares of Parent Common Stock for value other than as permitted by this or a
substantially similar agreement entered into by such holder, the same percentage
of shares of Parent Common Stock held by the Shareholder shall be immediately
and fully released on the same terms from any remaining restrictions set forth
herein (the “Pro-Rata Release”); provided, however, that such Pro-Rata Release
shall not be applied unless and until permission has been granted by Parent to
an equity holder or equity holders to sell or otherwise transfer or dispose of
all or a portion of such equity holders’ shares of Parent Common Stock in an
aggregate amount in excess of 1% of the number of shares of Parent Common Stock
originally subject to a substantially similar agreement.

 

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Upon the release of any of the Shareholder’s Shares from this letter agreement,
Parent will cooperate with the Shareholder to facilitate the timely preparation
and delivery of certificates representing the Shareholder’s Shares without the
restrictive legend above or the withdrawal of any stop transfer instructions.

 

The Shareholder understands that each of Parent and the Company is relying upon
this letter agreement in proceeding toward consummation of the Merger. The
Shareholder further understands that this letter agreement is irrevocable and is
binding upon the Shareholder’s heirs, legal representatives, successors and
assigns.

 

This letter agreement and any claim, controversy or dispute arising under or
related to this letter agreement shall be governed by and construed in
accordance with the laws of the State of Washington, without regard to the
conflict of laws principles thereof.

 

The Shareholder understands that if the Merger Agreement is terminated in
accordance with its terms, the Shareholder will be released from all obligations
under this letter agreement.

 

This letter agreement may be executed by electronic (i.e., PDF) transmission,
which is deemed an original.

 

[Signature Page Follows]

 

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        Very truly yours,           Print Name of Shareholder:  
 
              Signature (for individuals):              
 
              Signature (for entities):                 By:  
 
                      Name:  
 
                      Title:  
 

 

 

[Signature Page to Lock-up Agreement]