SEC Connect





  EXHIBIT
10.2






 




HS
CONTRARIAN INVESTMENTS, LLC


68
Fiesta Way


Fort
Lauderdale, FL 33301


 


May 18,
2017


 


MabVax
Therapeutics Holdings, Inc.


11535
Sorrento Valley Rd., Suite 400


San
Diego, CA 92121


Attn:
J. David Hansen


 


Re:
Consent to 2017 Offering


 


Dear
Mr. Hansen:

 


Reference is made
to the following: (i) that Letter Agreement dated August 16, 2016
(hereinafter referred to as the “August 2016 Letter
Agreement”) by and among MabVax Therapeutics Holdings, Inc.
(the “Company”) and the undersigned lead investor in
the Company’s public offering that closed in August 2016 (the
“2016 Public Offering”), (ii) the consent dated March
10, 2017 (the “March 2017 Consent”), and (iii) the
second letter agreement dated May 15, 2017 attached hereto as
Exhibit A (the “May 2017 Letter Agreement”).
Capitalized terms used herein and not defined herein shall have the
meanings given to them in the August 2016 Letter
Agreement.


 


On
February 10, 2017, the Company filed a Registration Statement on
Form S-1 (File No. 333-216016), as amended (the “Registration
Statement”) pursuant to which the Company had undertaken to
consummate a public offering of up to $10 million of its
securities. On May 12, 2017, the Registration Statement amount was
amended by Amendment No. 6 to an amount of $5.085 million, and on
May 15, 2017, an Underwriting Agreement for an offering of $4.1
million (the “2017 Offering”) was executed with Laidlaw
& Co. (UK) Ltd. as lead underwriter, as described in the
prospectus dated May 16, 2017 filed with the SEC under Rule 424B4
(the “Prospectus”) promulgated under the Securities Act
of 1933, as amended (the “Act”).


 


The
undersigned has reviewed the Prospectus. Pursuant to Paragraph A of
the August 2016 Letter Agreement, the undersigned hereby consents
to the 2017 Offering and the transactions contemplated by the
Prospectus (the “Consent”).


 


In
consideration for the Consent to the 2017 Offering, upon closing
thereof pursuant to the Prospectus, the Company shall issue to the
undersigned and certain investors in the 2016 Public Offering (the
“August 2016 Investors”) 2,610,000 shares (the “Inducement
Shares”) of the Company’s common stock, par value $0.01
per share (the “Common Stock”), provided, however, that
any August 2016 Investor who beneficially owns or as a result of
any purchases in the Offering or issuances of the Inducement Shares
or otherwise will beneficially own 5% or more of the Common Stock
of the Company, may elect to receive shares of the Company’s
preferred stock containing “beneficial ownership
blocker” provisions and a liquidation preference equal to the
par value thereof (the “Inducement Preferred Shares”)
to be issued by the Company convertible into the pro rata portion
of the Inducement Shares such August 2016 Investor would otherwise
receive. The Company shall issue the Inducement Shares and
Inducement Preferred Shares as restricted securities, unless in the
opinion of counsel to the Company such shares are deemed to be
registered under the Act and if not so registered shall within 30
days of issuance file a registration statement under the Act with
respect to the Inducement Shares and the Common Stock underlying
the Inducement Preferred Shares, and shall issue such shares within
five (5) business days of closing of the 2017 Offering during which
time any August 2016 Investor may instruct the Company to issue
Inducement Preferred Shares. No Inducement Shares and no Inducement
Preferred Shares shall be required to be issued or issued to any
August 2016 Investor who in connection with the 2017 Offering does
not invest at least 50% of the of such investor made in the August
2016 Offering and holds on the date of the Prospectus 100% of the
shares of common stock or Series F Preferred Stock acquired (the
“Minimum Required Investment”). August 2016 Investors
shall be entitled to receive their pro rata share of 2,610,000
Inducement Shares, as provided above, and the undersigned
consenting investor shall receive 290,000 Inducement Shares, in
addition to any pro rata shares.


 


 




 

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In
the event the August 2016 Investors elect to receive Inducement
Preferred Shares, the Inducement Preferred Shares shall be entitled
to a per share preferential payment equal to the par value of $0.01
per share. In the event of a liquidation, dissolution or winding up
of the Company, each share of Inducement Preferred Shares will be
entitled to a per share preferential payment equal to the par value
of $0.01 per share. Additionally, any August 2016 Investor as a
condition of receiving Inducement Shares or Inducement Preferred
Shares shall be required to consent to the cancellation of all
warrants issued in connection with the August 2016 Offering which
warrants are presently exercisable at a price of $5.55 and $6.29,
respectively.



  


In
consideration for the Consent to the 2017 Offering, upon closing
thereof pursuant to the Prospectus provided investors in the Company’s April
2015 financing (the “April 2015 Financing”) invest at
least 25% of the amount of such investor’s investment in the
April 2015 Financing made in the August 2016 Offering and holds on
the date of the Prospectus 100% of the shares of common stock or
Series E Preferred Stock acquired (the “2015 Minimum Required
Investment”) then the exercise price of all warrants to
purchase common stock currently exercisable at $11.10 per share,
shall be reduced to $2.00 per share, provided however, such April
2015 Financing Investor shall be required to consent to elimination
of any right to cashless exercise of such warrants and that such
warrants shall require immediate payment in cash upon the exercise
thereof (the “Inducement Amended Warrants”). To the
extent there is less than 100% participation, the number of
warrants offered for repricing, or number of shares to be issued as
part of the Additional Issuance would be reduced pro rata. The
Company shall issue the Inducement Amended Warrants and Common
Stock issuable thereunder as restricted securities, unless in the
opinion of counsel to the Company such shares are deemed to be
registered under the Act and if not so registered shall within 30
days of issuance file a registration statement under the Act with
respect to the Common Stock underlying the Inducement Amendment
Warrants, and shall issue such Inducement Amended Warrants within
five (5) business days of closing of the 2017
Offering.


 


Each
investor will be required to present suitable evidence of the
ownership to the Company in accordance with the
foregoing.


 


Notwithstanding
anything herein to the contrary, in the event the 2017 Offering
does not close prior to June 1, 2017, this Consent and the
agreements hereunder shall be null and void.


 


Upon
closing of the 2017 Offering, rights to consent under the August
2016 Letter Agreement and the March 2017 Consent (and any
restrictions on the Company contained therein) shall terminate and
be of no force and effect, provided however, the undersigned shall
have the right to approve future (i) issuances of the
Company’s securities, (ii) equity or debt financings and
(iii) sales of any development product assets currently held by the
Company, subject to certain exceptions, if such securities are sold
at price below $2.50 per share and for as long as the undersigned
holds 50% or more of the shares of Series G Preferred Stock
purchased by the undersigned in the 2017 Offering. In addition,
each of the matters set forth in the May 2017 Letter Agreement,
shall be enforceable by the undersigned and continue in full force
and effect following closing of the 2017 Offering.


 


	
 

	
 

Sincerely,


 


HS
Contrarian Investments, LLC


 


By:
/s/ John
Stetson


Name:
John Stetson


Title:
Manager









 

 

 





 

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Exhibit
A 




 


 



 

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MabVax
Therapeutics Holdings, Inc.


11535
Sorrento Valley Rd., Suite 400


San
Diego, CA 92121


Phone:
(858) 259-9405


 


  May 15,
2017


 


HS
Contrarian Investments, LLC


68
Fiesta Way


Fort
Lauderdale, FL 33301


Attn:
John Stetson


 


Re:
Letter Agreement


 


Dear
Mr. Stetson,


 


MabVax Therapeutics
Holdings, Inc. (the “Company”) and HS Contrarian
Investments, LLC (“HSCI”) hereby agree pursuant to this agreement
(this “Letter Agreement”) that:


 




A.


Financing.






 



HSCI shall lead a financing of $4,000,000 at $1.75 per share of
common stock (or shares of the Company’s Series G Convertible
Preferred Stock (“Series G Preferred Stock”), as HSCI
may elect, so as not to own in excess of 4.9% but otherwise
equivalent to common stock) in the Company’s May 2017 public
offering (the “Offering”). The stock shall be fully
registered on Form S-1.


 



$500,000 of the funds will be held in escrow and released to one or
more investor relations services acceptable to the Company
following the closing of the Offering.


 




B.

Consent to
Future Financings.







HSCI shall have the right to approve future (i) issuances of the
Company’s securities, (ii) equity or debt financings and
(iii) sales of any development product assets currently held by the
Company, subject to certain exceptions, if such securities are sold
at price below $2.50 per share and for as long as HSCI holds 50% or
more of the shares of Series G Preferred Stock purchased by HSCI in
the Offering.


 




C.

Ratchet
Provision.






 



HSCI and each investor in the Company’s 2016 public offering
(the “August 2016 Investors”), upon receipt of suitable
evidence of such ownership acceptable to the Company and an
investment into the Offering of at least 50% of their August 2016
investment, shall be entitled to receive their pro rata share of
2.9 million shares, after HSCI receives the first 10%. The Company
shall issue the additional shares within three (3) trading
days’ of closing the Offering.


 




D.

Warrant
Cancellation.






 



The August 2016 Investors who still hold 100% of their shares from
the 2016 public offering and make an investment into the Offering
of at least 50% of their August 2016 investment, will have their
outstanding warrants, exercisable at a price of $5.55 and $6.29,
respectively, from the August 2016 public offering,
cancelled.


 




E.

August 2015
Investors.






 



Investors in the Company’s 2015 private offering that invest
at least 25% of their original investment from the April 2015
financing and still hold 100% of their common stock or Series E
preferred stock from the April 2015 financing, will have their up
to 805,361 warrants to purchase common stock at $11.10 per share,
which were issued in that financing, reduced to $2.00 per share and
the cashless exercise provision shall be removed. To the extent
there is less than 100% participation, the number of warrants
offered for repricing would be reduced pro rata.


 




F.

Board of
Directors.






 



The Company shall nominate one candidate to the Board of Directors
of the Company prior to December 31, 2017. Such candidate shall be
presented to and acceptable to HSCI prior to appointment. Two
current Board of Directors members shall resign.


 


 



 







 






 




G.

Executive
Hire.






 



The Company shall hire a new executive officer in a leadership role
with a C-Level title by July 15, 2017.


 




H.

Executive
& Board Compensation.






 



The Company shall issue an aggregate of 1,050,000 options (50,000
to Phil Livingston and 500,000 to each of J. David Hansen and
Jeffrey Ravetch), at a price not less than $2.00 per share. Each
member of the Board of Directors (not including Mr. Hansen and Mr.
Ravetch) shall receive 50,000 options at the current market price
in connection with the Offering. The options shall be issued
pursuant to the Company’s option plan and are subject to the
requisite approvals and subject to availability under the plan. To
the extent the Company needs to increase the number of shares
available under such plan, the Company will need the approval of
the Board of Directors and stockholders. The Company shall also
waive all board fees for 2017.


 




I.


Miscellaneous






 


The rights herein are specific to HSCI,
and may only be exercised by the managing
partner/president of HSCI
which is John Stetson.  Such rights shall not be assigned
or transferred to or assumed by any other party or individual,
voluntarily or by operation of law, and any such purported
assignment, transfer or assumption shall be void and of no force or
effect.


 



This Letter Agreement shall be governed by the laws of the state of
New York, without giving effect to any conflict of laws provision,
and may not be amended other than through a written agreement
executed by the Company and HSCI.


 



As used herein, “HSCI” shall mean any person or entity
controlled by, in control of, or in common control with John
Stetson.


  


 MabVax Therapeutics Holdings,
Inc.


 


 


By:
/s/ J. David
Hansen


Name:
J. David Hansen


Title:  President
and Chief Executive Officer



HS Contrarian Investments LLC


 


 


By:  /s/
John Stetson


Name: 
John Stetson


Title:  
Manager


 


 




 

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