Document:

EX-4.3

 Exhibit 4.3 

Execution Version 
  

 
  

SUPPLEMENTAL INDENTURE NO. 1 

BETWEEN 
 AMERICAN
ELECTRIC POWER COMPANY, INC. 
 AND 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. 

TRUSTEE 
 DATED AS OF
March 19, 2019 
 3.40% JUNIOR SUBORDINATED DEBENTURES DUE 2024 

 
  

 

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
	ARTICLE I DEFINITIONS	  	 	1	 
			
	 Section 1.01
	  	Definition of Terms	  	 	1	 
		
	ARTICLE II GENERAL TERMS AND CONDITIONS OF THE DEBENTURES	  	 	4	 
			
	 Section 2.01
	  	Designation and Principal Amount	  	 	4	 
	 Section 2.02
	  	Stated Maturity	  	 	4	 
	 Section 2.03
	  	Form and Payment; Minimum Transfer Restriction	  	 	4	 
	 Section 2.04
	  	Exchange and Registration of Transfer of Debentures; Restrictions on Transfers; Depositary	  	 	5	 
	 Section 2.05
	  	Interest	  	 	5	 
	 Section 2.06
	  	Events of Default	  	 	6	 
	 Section 2.07
	  	No Defeasance	  	 	6	 
	 Section 2.08
	  	No Sinking Fund or Repayment at Option of the Holder	  	 	6	 
	 Section 2.09
	  	Increase and Decrease in Pledged Debentures	  	 	6	 
	 Section 2.10
	  	No Additional Amounts	  	 	7	 
	 Section 2.11
	  	Reserved	  	 	7	 
	 Section 2.12
	  	Reserved	  	 	7	 
	 Section 2.13
	  	Reserved	  	 	7	 
	 Section 2.14
	  	Reserved	  	 	7	 
	 Section 2.15
	  	Ranking; Subordination	  	 	7	 
		
	ARTICLE III RESERVED	  	 	7	 
		
	ARTICLE IV OPTION TO DEFER INTEREST PAYMENTS	  	 	7	 
			
	 Section 4.01
	  	Option to Defer Interest Payments	  	 	7	 
		
	ARTICLE V FORM OF DEBENTURE	  	 	10	 
			
	 Section 5.01
	  	Form of Debenture	  	 	10	 
		
	ARTICLE VI ORIGINAL ISSUE OF DEBENTURES	  	 	10	 
			
	 Section 6.01
	  	Original Issue of Debentures	  	 	10	 
		
	ARTICLE VII RESERVED	  	 	10	 
		
	ARTICLE VIII SUPPLEMENTAL INDENTURE	  	 	10	 
			
	 Section 8.01
	  	Supplemental Indenture without Consent of Holders	  	 	10	 
	 Section 8.02
	  	Supplemental Indenture with Consent of Holders	  	 	11	 
		
	ARTICLE IX REMARKETING	  	 	11	 
			
	 Section 9.01
	  	Remarketing Procedures	  	 	11	 
	 Section 9.02
	  	Remarketing	  	 	12	 
	 Section 9.03
	  	Reset Rate	  	 	13	 
	 Section 9.04
	  	Modification of Terms in Connection with a Successful Remarketing	  	 	14	 
	 Section 9.05
	  	Put Right	  	 	14	 
		
	ARTICLE X RESERVED	  	 	15	 
		
	ARTICLE XI TAX TREATMENT	  	 	15	 
			
	 Section 11.01
	  	Tax Treatment	  	 	15	 
	 Section 11.02
	  	FATCA	  	 	15	 

  
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	ARTICLE XII THE TRUSTEE	  	 	15	 
			
	 Section 12.01
	  	Appointment of Trustee	  	 	15	 
	 Section 12.02
	  	Eligibility of Trustee	  	 	15	 
	 Section 12.03
	  	Security Registrar and Paying Agent	  	 	16	 
	 Section 12.04
	  	Concerning the Trustee	  	 	16	 
	 Section 12.05
	  	Patriot Act Requirements of Trustee	  	 	16	 
	 Section 12.06
	  	Notice upon Trustee	  	 	16	 
	 Section 12.07
	  	Amendment to Section 903(l) of the Base Indenture	  	 	16	 
	 Section 12.08
	  	Amendment to Section 1002 of the Base Indenture. Section 1002 of the Base Indenture is amended and restated in its entirety as follows:	  	 	16	 
	 Section 12.09
	  	Amendment to Section 902 of the Base Indenture. Section 902 of the Base Indenture is amended and restated in its entirety as follows:	  	 	17	 
		
	ARTICLE XIII MISCELLANEOUS	  	 	17	 
			
	 Section 13.01
	  	Ratification of Indenture; Supplemental Indenture No. 1 Controls	  	 	17	 
	 Section 13.02
	  	Recitals	  	 	17	 
	 Section 13.03
	  	Amendment to Section 112 of the Base Indenture	  	 	17	 
	 Section 13.04
	  	Separability	  	 	18	 
	 Section 13.05
	  	Counterparts	  	 	18	 

 Exhibits 
  

					
	Exhibit A	  	Form of Debenture and the Trustee’s Certificate of Authentication	  	
	Exhibit B	  	Form of Put Notice	  	

  

  
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 SUPPLEMENTAL INDENTURE NO. 1 

THIS SUPPLEMENTAL INDENTURE NO. 1, dated as of March 19, 2019 (this “Supplemental Indenture
No. 1”), is between AMERICAN ELECTRIC POWER COMPANY, INC., a New York corporation, having its principal office at 1 Riverside Plaza, Columbus, Ohio 43215 (the “Company”), and The Bank of New York Mellon
Trust Company, N.A., as trustee of the Securities established by this Supplemental Indenture No. 1, having a Corporate Trust Office at 2 North LaSalle Street, 7th Floor, Chicago, Illinois
60602 (herein called the “Trustee”). 
 WHEREAS, the Company has heretofore entered into a Junior Subordinated Indenture
(the “Base Indenture”), dated as of March 1, 2008 between the Company and The Bank of New York Mellon Trust Company, N.A. (the “Trustee”); 

WHEREAS, the Base Indenture is incorporated herein by this reference and the Base Indenture, as supplemented and amended by this Supplemental
Indenture No. 1, and as may be hereafter supplemented or amended from time to time in accordance herewith and therewith, is herein called the “Indenture”; 

WHEREAS, under the Base Indenture, a new series of Securities may at any time be established in accordance with the provisions of the Base
Indenture and the terms of such series may be described by a supplemental indenture executed by the Company and the Trustee; 
 WHEREAS, the
Company proposes to create under the Base Indenture a new series of Securities and to appoint the Trustee as Trustee under the Base Indenture with respect to such Securities; 

WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental Indenture No. 1 and all requirements necessary
to make this Supplemental Indenture No. 1 a valid instrument in accordance with its terms, and to make the Debentures, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been
performed, and the execution and delivery of this Supplemental Indenture No. 1 has been duly authorized in all respects; 
 NOW,
THEREFORE, in consideration of the purchase and acceptance of the Debentures by the Holders, and for the purpose of setting forth, as provided in the Base Indenture, the form and substance of the Debentures and the terms, provisions and conditions
thereof, the Company covenants and agrees with the Trustee as follows: 
 ARTICLE I 

DEFINITIONS 

Section 1.01 Definition of Terms. For all purposes of this Supplemental Indenture No. 1, except as otherwise expressly
provided or unless the context otherwise requires: 
 (a) the capitalized terms not otherwise defined herein shall have the meanings set
forth in the Base Indenture or, if not defined in the Base Indenture, in the Purchase Contract and Pledge Agreement; 
 (b) the terms defined
in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; 

 (c) all other terms used herein which are defined in the Trust Indenture Act of 1939, as
amended, whether directly or by reference therein, have the meanings assigned to them therein; 
 (d) a reference to a Section or Article is
to a Section or Article of this Supplemental Indenture No. 1 unless otherwise stated; 
 (e) the words “herein,”
“hereof” and “hereunder” and other words of similar import refer to this Supplemental Indenture No. 1 as a whole and not to any particular Article, Section or other subdivision; 

(f) headings are for convenience of reference only and do not affect interpretation; 

“Applicable Law” has the meaning set forth in Section 11.02. 

“Business Day” means any day, other than a Saturday or Sunday, which is not a day on which banking institutions or trust
companies in New York, New York are generally authorized or required by law, regulation or executive order to remain closed. 

“Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) shares issued by that Person. 
 “Code” has the meaning set forth
in Section 11.02. 
 “Corporate Trust Office of the Trustee” means the office of the Trustee at
which at any particular time its corporate trust business with respect to the Securities herein described shall be principally administered, which office at the date of original execution of this Supplemental Indenture No. 1 is located at 2
North LaSalle Street, 7th Floor, Chicago, Illinois 60602, Attention: Corporate Trust Administration. 

“Coupon Rate” has the meaning set forth in Section 2.05. 

“Deferral Period” means the period beginning on the Interest Payment Date for which the Company has elected to defer the
Interest Payment in accordance with Section 4.01 and ending on the earlier of (a) the next Interest Payment Date on which all Deferred Interest (including compounded interest thereon) has been paid in full and (b)(i)
the Purchase Contract Settlement Date, in the case of a Deferral Period that begins prior to the Purchase Contract Settlement Date, or (ii) the Stated Maturity, in the case of a Deferral Period that begins after the Purchase Contract Settlement
Date. 
 “Deferred Interest” shall have the meaning set forth in Section 4.01. 

“Equity Unit” shall have the meaning set forth in the Underwriting Agreement. 

“Global Debenture” shall have the meaning set forth in Section 2.04. 

“Holder” means (i) with respect to the Corporate Units or the Treasury Units, such term as defined in the Purchase
Contract and Pledge Agreement and (ii) with respect to the Debentures, the Person in whose name at the time a particular Debenture is registered on the books of the Trustee kept for that purpose. 

“Increased Principal Amount” shall have the meaning set forth in Section 2.09. 

  
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 “Interest Payment” means, with respect to any Interest Payment Date, the
interest payment on the Debentures due on such Interest Payment Date. 
 “Interest Payment Date” shall have the meaning set
forth in Section 2.05. 
 “Interest Period” means, with respect to any Interest Payment Date, the
period from and including the immediately preceding Interest Payment Date (or if none, March 19, 2019) to, but excluding, such Interest Payment Date. 

“Debentures” shall have the meaning specified in Section 2.01. 

“Original Issue Date” means March 19, 2019 or, in the case of Debentures issued in connection with any exercise by the
underwriters of their option to purchase additional Corporate Units as set forth in the Underwriting Agreement, the date on which such Debentures are issued. 

“Pledged Debenture” shall have the meaning set forth in Section 2.09. 

“Purchase Contract and Pledge Agreement” means the Purchase Contract and Pledge Agreement, dated as of March 19, 2019 ,
between the Company and The Bank of New York Mellon Trust Company, N.A., as Purchase Contract Agent, collateral agent, custodial agent and securities intermediary, as amended from time to time. 

“Put Price” shall have the meaning specified in Section 9.05. 

“Put Right” shall have the meaning set forth in Section 9.05. 

“Reduced Principal Amount” shall have the meaning set forth in Section 2.09. 

“Regular Record Date” means, with respect to any Interest Payment Date for the Debentures, the thirtieth day of the calendar
month immediately preceding the calendar month in which the applicable Interest Payment Date falls (or, if such day is not a Business Day, the next preceding Business Day); provided that if any of the Debentures or Corporate Units are held by
a securities depository in book-entry form, the Regular Record Date for such Debentures will be the close of business on the Business Day immediately preceding the applicable Interest Payment Date. 

“Released Debenture” shall have the meaning set forth in Section 2.09. 

“Remarketed Debentures” means, with respect to all Remarketings during any Applicable Remarketing Period, the aggregate
principal amount of Debentures underlying the Pledged Applicable Ownership Interests in Debentures and the Separate Debentures, if any, subject to Remarketing as identified to the Remarketing Agent(s) by the Purchase Contract Agent and the Custodial
Agent, respectively, in each case pursuant to the terms of the Purchase Contract and Pledge Agreement. 
 “Remarketing
Agent(s)” means the Remarketing Agent or Agents appointed by the Company, pursuant to the Remarketing Agreement. 
 “Reset
Rate” shall have the meaning specified in Section 9.03(a). 
 “Stated Maturity” shall
have the meaning specified in Section 2.02. 
 “Subjected Debenture” shall have the meaning
specified in Section 2.09. 

  
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 “Successor Person” shall have the meaning specified in
Section 10.01. 
 “Underwriting Agreement” means the Underwriting Agreement, dated as of
March 14, 2019, between the Company, Barclays Capital Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC, as representatives, for the sale of up to 16,100,000 of the Company’s Corporate Units. 

The terms “Company,” “Trustee,” “Base Indenture,” and “Indenture” shall
have the respective meanings set forth in the recitals to this Supplemental Indenture No. 1. 
 ARTICLE II 

GENERAL TERMS AND CONDITIONS OF THE DEBENTURES 

Section 2.01 Designation and Principal Amount. There is hereby authorized a new series of Securities, to be designated the
“3.40% Junior Subordinated Debentures due 2024,” (the “Debentures”) in the initial aggregate principal amount of $805,000,000, which amount shall be set forth in any written orders of the Company for the authentication and
delivery of Debentures pursuant to Section 301 of the Base Indenture and Section 6.01 hereof. For the avoidance of doubt, no additional Debentures may be issued following the Original Issue Date, except as expressly
set forth in the first sentence of this Section 2.01. 
 Section 2.02 Stated Maturity. The
“Stated Maturity” of the Debentures is March 15, 2024. For the avoidance of doubt, with respect to the Debentures, the term “Stated Maturity” refers only to the date on which principal is due and payable as set forth
in this Section 2.02. 
 Section 2.03 Form and Payment; Minimum Transfer Restriction. 

(a) Except as provided in Section 2.04, the Debentures shall be issued in fully registered definitive form without
coupons. All Debentures shall have identical terms. Debentures corresponding to Applicable Ownership Interests in Debentures that are components of Corporate Units shall be registered in the name of the Purchase Contract Agent. Principal of the
Debentures will be payable (subject to the last sentence of this Section 2.03(a)), the transfer of such Debentures will be registrable, and such Debentures will be exchangeable for Debentures of a like aggregate principal
amount bearing identical terms and provisions, at the Corporate Trust Office of the Trustee; provided, however, that, except as otherwise provided in the form of Debenture attached hereto as Exhibit A, payment of interest will be made
by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or, if such Person so requests and designates an account in writing to the Trustee at least five Business Days prior to the relevant
Interest Payment Date, by wire transfer to such account, and provided, further, that the Company, in its discretion may remove the Paying Agent and may appoint one or more additional Paying Agents (including the Company or any of its
affiliates). Payments with respect to any Global Debenture or any Debenture corresponding to Applicable Ownership Interests in Debentures that are components of Corporate Units will be made by wire transfer to the Depository or in accordance with
any other applicable procedures of the Depository. 
 (b) The Debentures shall be issuable in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof; provided, however, that upon the release by the Collateral Agent of Debentures underlying the Pledged Applicable Ownership Interests in Debentures in accordance with Section 3.15 of the
Purchase Contract and Pledge Agreement, if any Holder or Beneficial Owner shall be entitled to receive Debentures in an aggregate principal amount that is not an integral multiple of $1,000, the Purchase Contract Agent may request, on behalf of such
Holder or Beneficial Owner, that the Company issue Debentures in denominations of $50, or integral multiples thereof, in exchange for Debentures in denominations of $1,000 or integral multiples thereof. Section 302 of the Base Indenture

  
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shall not apply with respect to the Debentures, and any reference in the Base Indenture to such provision shall, for purposes of the Debentures, be deemed to refer instead to this
Section 2.03(b). 
 Section 2.04 Exchange and Registration of Transfer of Debentures; Restrictions on
Transfers; Depositary. Debentures corresponding to Applicable Ownership Interests in Debentures that are no longer a component of the Corporate Units and are released from the Collateral Account will be initially issued in permanent global form
(a “Global Debenture”), and if issued as one or more Global Debentures, the Depository shall be The Depository Trust Company or such other depository that is a clearing agency registered under Section 17A of the Exchange Act as
any officer of the Company may from time to time designate. On the date on which the Debentures registered in the name of the Purchase Contract Agent pursuant to Section 2.03 are issued, the Company shall also issue one or
more Global Debentures, registered in the name of the Depository or its nominee, each having a zero principal balance. Upon the creation of Treasury Units, or the re-creation of Corporate Units or in any other
case where the Collateral Agent releases Debentures underlying the Pledged Applicable Ownership Interests in Debentures, an appropriate annotation shall be made on the Schedule of Increases or Decreases in Debentures on the Global Debentures held by
the Depository and on the Pledged Debenture (as defined below) held by the Collateral Agent. Except upon recreation of Corporate Units, Debentures represented by the Global Debentures will be exchangeable for Debentures in certificated form only
(x) if the Depository (A) has notified the Company that it is unwilling or unable to continue as depository for the Global Debentures or (B) has ceased to be a “clearing agency” registered under the Exchange Act and, in
either case, a successor depository that is a clearing agency registered under Section 17A of the Exchange Act is not appointed by the Company within 90 days after such notice or cessation, or (y) upon the occurrence and during the
continuance of an Event of Default or any other event that after notice or lapse of time, would constitute an Event of Default with respect to the Debentures and any beneficial owner of a Global Debenture requests that its beneficial interest be
exchanged for a Debenture in certificated form; provided, subject to Section 2.03, that the Debentures in certificated form so issued in exchange for the Global Debentures shall be in denominations of $1,000 or any whole
multiple of $1,000 above that amount and shall be of like aggregate principal amount and tenor as the portion of the Global Debenture to be exchanged. Except as provided above, owners of a beneficial interest in a Global Debenture will not be
entitled to receive physical delivery of Debentures in certificated form and will not be considered the Holders thereof for any purpose under the Indenture. Any Global Debenture that is exchangeable pursuant to clause (x) of the fourth
sentence of this Section 2.04 shall be exchangeable for Debentures in certificated form registered in such names as the Depository shall direct. 

Section 2.05 Interest. 

(a) Subject to Article IV and Section 9.04, interest on the Debentures shall be payable quarterly in arrears
on March 15, June 15, September 15 and December 15 of each year (each, subject to adjustment in accordance with Section 2.05(b), an “Interest Payment Date”), commencing June 15,
2019 and at maturity, whether Stated Maturity or otherwise, to the Person in whose name the relevant Debentures are registered at the close of business on the Regular Record Date for such Interest Payment Date except that interest payable at the
Stated Maturity shall be paid to the Person to whom principal is payable. Interest shall be calculated on the basis of a 360-day year of twelve 30-day months, and with
respect to any period less than a full calendar month, on the basis of the actual number of days elapsed during the period. If any Interest Payment Date, the Stated Maturity or the date (if any) on which the Company is required to purchase the
Debentures pursuant to Section 9.05 is not a Business Day, then the applicable payment shall be made on the next succeeding day that is a Business Day and no interest shall accrue or be paid in respect of such delay.
Section 113 of the Base Indenture is hereby superseded in its entirety, with respect to the Debentures, by the immediately preceding sentence. 

  
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 (b) The Debentures will bear interest initially at the rate of 3.40% per year (the
“Coupon Rate”) from and including March 19, 2019, to, but excluding, the date the principal amount thereof is paid or made available for payment, or in the event of a Successful Remarketing, the Remarketing Settlement Date. In
the event of a Successful Remarketing of the Debentures, the interest rate applicable to the Debentures may be reset by the Remarketing Agent(s) to the applicable Reset Rate with effect from the Remarketing Settlement Date, as set forth in
Section 9.03. If the interest rate is so reset, the Debentures will bear interest at the applicable Reset Rate from, and including, the Remarketing Settlement Date to, but excluding, the date the principal amount thereof is
paid or made available for payment. In the event of a Successful Remarketing, following the applicable Remarketing Settlement Date, interest on Debentures will be payable semi-annually on March 15 and September 15 and, if the Debentures
are remarketed as floating-rate notes, interest on the Debentures will be payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, or if any such date is not a Business Day, on the next
following Business Day. If the Company remarkets the Debentures as floating-rate notes, without the consent of any Holder of Debentures, the Company may modify the Interest Payment Dates to provide that if any March 15, June 15,
September 15 and December 15 is not a Business Day, the relevant Interest Payment Date shall be the immediately succeeding Business Day. If there is no Successful Remarketing, the interest rate will not be reset, the Interest Payment Dates
shall remain the same and the Debentures shall continue to bear interest at the Coupon Rate. The Debentures shall bear interest, to the extent permitted by law, on any overdue principal and interest at the Coupon Rate, unless a Successful
Remarketing shall have occurred, in which case on and after the Remarketing Settlement Date the Debentures shall bear interest, to the extent permitted by law, on any overdue principal and interest at the Reset Rate. Section 307 of the Base
Indenture shall not apply with respect to the Debentures, and any reference in the Base Indenture to such provision shall, for purposes of the Debentures, be deemed to refer instead to this Section 2.05. 

Section 2.06 Events of Default. 

Any Event of Default as defined in the Base Indenture shall be an Event of Default with respect to the Debentures; provided that the
nonpayment of interest for so long as and to the extent that interest is permitted to be deferred pursuant to Article IV herein shall not be deemed to be a default in the payment of interest for the purposes of Article VIII of the Base
Indenture and shall not otherwise be deemed an Event of Default with respect to the Debentures. 
 In addition, an Event of Default with
respect to the Debentures will occur if the Company fails to pay the Put Price of any Debenture on the Purchase Contract Settlement Date after a Holder’s Put Right has been exercised pursuant to Section 9.05
(“Put Right Default”). For the avoidance of doubt, and without prejudice to any other remedies that may be available to the Trustee or the Holders of the Debentures, no breach by the Company of any covenant or obligation under the
Base Indenture or the terms of the Debentures shall be an Event of Default except those that are specifically identified as an Event of Default under the Base Indenture (including, for the avoidance of doubt in Section 801(c) of the Base
Indenture) or a Put Right Default. 
 Section 2.07 No Defeasance. Prior to the Purchase Contract Settlement Date, the provisions
of Section 701 of the Base Indenture shall not apply to the Debentures. 
 Section 2.08 No Sinking Fund or Repayment at Option
of the Holder. The Debentures shall not be subject to any sinking fund or analogous provision and, except in the case of the Put Right, shall not be repayable at the option of a Holder thereof prior to the Stated Maturity. 

Section 2.09 Increase and Decrease in Pledged Debentures. In the event that any Debentures underlying Pledged Applicable Ownership
Interests in Debentures with respect to any Corporate Units in 

  
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global form are to be released from the Pledge following a Termination Event, Collateral Substitution, Cash Settlement, Successful Remarketing, Early Settlement or Fundamental Change Early
Settlement pursuant to the Purchase Contract and Pledge Agreement (a “Released Debenture”), such release and delivery shall be evidenced by an endorsement by the Collateral Agent on the Debenture held by the Collateral Agent (the
“Pledged Debenture”) reflecting a reduction in the principal amount of such Pledged Debenture equal in amount (the “Reduced Principal Amount”) to the principal amount of the Released Debenture. The Collateral Agent
shall confirm any such Reduced Principal Amount by telecopying or otherwise delivering a photocopy of such endorsement made on the Pledged Debenture evidencing such Reduced Principal Amount to the Trustee at the telecopier number or address of the
Trustee provided for notices to the Trustee Section 12.06 (or at such other telecopier or address as the Trustee shall provide to the Collateral Agent). Upon receipt of such confirmation, the Trustee shall increase the
principal amount of a Global Debenture held by the Trustee in an amount equal to the Reduced Principal Amount by an endorsement made by the Trustee on such Global Debenture to reflect such increase. In the event that a Debenture is transferred to
the Collateral Agent pursuant to Section 3.14 of the Purchase Contract and Pledge Agreement (a “Subjected Debenture”) in connection with the re-creation of Corporate Units, such transfer
shall be evidenced by an endorsement by the Collateral Agent on the Pledged Debenture held by the Collateral Agent reflecting an increase in the principal amount of such Pledged Debenture equal in amount (the “Increased Principal
Amount”) to the principal amount of such Subjected Debenture. The Collateral Agent shall confirm any such Increased Principal Amount by telecopying or otherwise delivering a photocopy of such endorsement made on the Pledged Debenture
evidencing such Increased Principal Amount to the Trustee at the telecopier number or address of the Trustee provided for notices to the Trustee in Section 12.06 (or at such other telecopier or address as the Trustee shall
provide to the Collateral Agent). Upon receipt of such confirmation, the Trustee shall decrease the principal amount of the Global Debenture held by the Trustee in an amount equal to the Increased Principal Amount by an endorsement made by the
Trustee on such Global Debenture to reflect such decrease. 
 Section 2.10 No Additional Amounts. The Company will not pay any
additional amounts to any Holder in respect of any tax, assessment or governmental charge. 
 Section 2.11 Reserved. 

Section 2.12 Reserved. 

Section 2.13 Reserved. 

Section 2.14 Reserved. 

Section 2.15 Ranking; Subordination. For the avoidance of doubt, the Debentures shall rank on a parity with all Securities of
other series issued under the Base Indenture, as well as the CAP Obligations. 
 ARTICLE III 

RESERVED 
 ARTICLE IV

 OPTION TO DEFER INTEREST PAYMENTS 

Section 4.01 Option to Defer Interest Payments. 

(a) The Company may elect at one or more times to defer payment of interest on the Debentures (such unpaid interest, the “Deferred
Interest”) for one or more consecutive Interest Periods; 

  
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provided that the interest payable on the Purchase Contract Settlement Date or the Stated Maturity may not be deferred, and no Interest Payment may be deferred beyond the Purchase Contract
Settlement Date, in the case of a Deferral Period that begins prior to the Purchase Contract Settlement Date, or the Stated Maturity, in the case of a Deferral Period that begins after the Purchase Contract Settlement Date. Furthermore, in the event
of a Successful Remarketing, following the applicable Remarketing Settlement Date, the Company shall have no right to defer the payment of interest on the Debentures. If all Deferred Interest has been paid (including compounded interest thereon) and
the Company still has the right to defer the payment of interest, the Company may again defer Interest Payments subject to and in accordance with the terms of this Section 4.01. 

(b) Deferred Interest on the Debentures will bear interest at the interest rate applicable to the Debentures, and subject to applicable law,
such interest will be compounded on each Interest Payment Date to, but excluding, the Interest Payment Date on which such Deferred Interest is paid. 

(c) If a Deferral Period is continuing with respect to the Debentures or the Company has given notice of a Deferral Period but such Deferral
Period has not yet commenced, then until all Deferred Interest (including compounded interest thereon) has been paid, the Company will not: 

(i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any shares
of its Capital Stock; 
 (ii) make any payment of principal of, or interest or premium, if any, on, or repay, repurchase or redeem any of
its debt securities ranking on a parity with, or ranking junior to, the Debentures (including debt securities of other series issued under the Base Indenture); or 

(iii) make any guarantee payments on any guarantee of debt securities if the guarantee ranks on a parity with or junior to the Debentures.

 (d) However, the foregoing provisions of Section 4.01(c) shall not prevent or restrict the Company from making:

 (i) purchases, redemptions or other acquisitions of its Capital Stock in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors, agents or consultants or a stock purchase or dividend reinvestment plan, or the satisfaction of its obligations pursuant to any contract or security outstanding on the
date that the payment of interest is deferred requiring it to purchase, redeem or acquire its Capital Stock; 
 (ii) any payment, repayment,
redemption, purchase, acquisition or declaration of dividends described in clause (c)(i) above as a result of a reclassification of its Capital Stock, or the exchange or conversion of all or a portion of one class or series of its Capital
Stock for another class or series of its Capital Stock; 
 (iii) the purchase of fractional interests in shares of its Capital Stock
pursuant to the conversion or exchange provisions of its Capital Stock or the security being converted or exchanged, or in connection with the settlement of stock purchase contracts outstanding on the date that the payment of interest is deferred;

 (iv) dividends or distributions paid or made in its Capital Stock (or rights to acquire its Capital Stock), or repurchases, redemptions
or acquisitions of Capital Stock in connection with 

  
 8 

 
the issuance or exchange of Capital Stock (or of securities convertible into or exchangeable for shares of its Capital Stock) and distributions in connection with the settlement of stock purchase
contracts outstanding on the date that the payment of interest is deferred; 
 (v) redemptions, exchanges or repurchases of, or with respect
to, any rights outstanding under a shareholder rights plan outstanding on the date that the payment of interest is deferred or the declaration or payment thereunder of a dividend or distribution of or with respect to rights in the future; 

(vi) payments on the Debentures, any trust preferred securities, subordinated debentures, junior subordinated debentures or junior
subordinated notes, or any guarantees of any of the foregoing, in each case ranking on a parity with the Debentures, so long as the amount of payments made on account of such securities or guarantees is paid on all such securities and guarantees
then outstanding on a pro rata basis in proportion to the full payment to which each series of such securities and guarantees is then entitled if paid in full; provided that, for the avoidance of doubt, the Company will not be
permitted under the Indenture to make interest payments on the Debentures in part; or 
 (vii) any payment of deferred interest or principal
on, or repayment, redemption or repurchase of, securities ranking on a parity with or ranking junior to the Debentures that, if not made, would cause the Company to breach the terms of the instrument governing such parity or junior securities. 

(e) In the event that the Company elects to defer any Interest Payment, the Company shall notify the Trustee and the Holders in writing of such
election at least one Business Day prior to the Regular Record Date for the Interest Payment Date on which the Company intends to begin a Deferral Period; provided, however, that the Company’s failure to pay the interest owed on a
particular Interest Payment Date shall also constitute the commencement of a Deferral Period, unless such interest is paid within five Business Days after such Interest Payment Date, whether or not the Company provides a notice of deferral. 

(f) The Company may pay Deferred Interest (including compounded interest thereon) in cash on any scheduled Interest Payment Date occurring on
or prior to (i) the Purchase Contract Settlement Date, in the case of a Deferral Period that begins prior to the Purchase Contract Settlement Date, or (ii) the Stated Maturity, in the case of a Deferral Period that begins after the
Purchase Contract Settlement Date; provided that in order to end a Deferral Period on any scheduled Interest Payment Date other than the Purchase Contract Settlement Date or the Stated Maturity, the Company must deliver written notice thereof
to Holders of the Debentures and the Trustee on or before the relevant Regular Record Date. Deferred Interest paid on any Interest Payment Date shall be payable to the Person in whose name the Debentures are registered at the close of business on
the Regular Record Date next preceding such Interest Payment Date. 
 (g) In the event there is any Deferred Interest outstanding, the
Company may not elect to conduct an Optional Remarketing. 
 (h) Notwithstanding anything to the contrary herein, in connection with any
Successful Final Remarketing of the Debentures, all accrued and unpaid Deferred Interest (including compounded interest thereon), calculated to, but excluding, the Purchase Contract Settlement Date at the Coupon Rate, shall be paid to the Holders of
Debentures (whether or not such Debentures were remarketed in such Remarketing), as of the applicable Regular Record Date, on the Purchase Contract Settlement Date in cash. 

  
 9 

 ARTICLE V 

FORM OF DEBENTURE 

Section 5.01 Form of Debenture. The Debentures and the Trustee’s Certificate of Authentication to be endorsed thereon are to
be substantially in the form attached hereto as Exhibit A. 
 ARTICLE VI 

ORIGINAL ISSUE OF DEBENTURES 

Section 6.01 Original Issue of Debentures. Debentures in the initial aggregate principal amount of up to $805,000,000 may be
executed by the Company and delivered to the Trustee for authentication by it, and the Trustee shall thereupon authenticate and deliver said Debentures to or upon the written order of the Company, signed by any Officer of the Company, without any
further corporate action by the Company. 
 ARTICLE VII 

RESERVED 
 ARTICLE VIII

 SUPPLEMENTAL INDENTURE 

Section 8.01 Supplemental Indenture without Consent of Holders. Without the consent of any Holders, the Company and the Trustee
may from time to time, and at any time enter into an indenture or indentures supplemental hereto to amend the Indenture and the Debentures, in form satisfactory to the Trustee (which shall comply with the provisions of the Trust Indenture Act as
then in effect), for any purpose set out in the Base Indenture and, in addition, for any one or more of the following purposes: 
 (a)
following the Purchase Contract Settlement Date, to supplement any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of the Debentures pursuant to Section 701 of the
Base Indenture, provided that any such action shall not adversely affect the interests of any Holder in any material respect; 
 (b)
to modify Section 2.15 hereof in a manner not materially adverse to the rights of the Holders, it being understood that any modification of the terms of the Debentures permitted pursuant to
Section 9.04 in connection with a Remarketing that is made in accordance with the terms of the Indenture may be made without the consent of any Holders of the Debentures; or 

(c) to amend the Debentures, the Base Indenture (insofar as it relates to the Debentures) and the Indenture to conform the provisions thereof
or hereof to the descriptions thereof or hereof contained in the preliminary prospectus supplement dated March 13, 2019 for the Equity Units, as supplemented by any free writing prospectus used in connection with the offering of the Equity
Units, under the sections entitled “Description of the Equity Units,” “Description of the Purchase Contracts,” “Certain Provisions of the Purchase Contract and Pledge Agreement” and “Description of the Junior
Subordinated Debentures.” 
 The Trustee is hereby authorized to join with the Company in the execution of any such supplemental
indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, mortgage, pledge or assignment of any property thereunder, but the Trustee shall not be obligated to enter
into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under the Indenture or otherwise. 

  
 10 

 Any supplemental indenture authorized by the provisions of this Section may be executed by
the Company and the Trustee without the consent of the Holders of any of the Debentures at the time outstanding, notwithstanding any of the provisions of Section 1202 of the Base Indenture. 

Section 1201 of the Base Indenture shall apply, as amended, with respect to the Debentures, and any reference in the Base Indenture to
such provision shall, for purposes of the Debentures, be deemed to refer to such provision as amended by this Section 8.01. 

Section 8.02 Supplemental Indenture with Consent of Holders. With the consent of the Holders of not less than a majority in the
principal amount of Debentures then outstanding (except as otherwise provided in Section 1202 of the Base Indenture), the Company, when authorized by a Resolution of the Company, and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto or to the Base Indenture for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Base Indenture or this Supplemental Indenture No. 1 or of
modifying in any manner the rights of the Holders of the Debentures; provided, however, that, in addition to the restrictions set forth in the proviso contained in Section 1202 of the Base Indenture (which shall apply to this
Section 8.02, mutatis mutandis), no supplemental indenture may without the consent of the Holders of each outstanding Debenture directly affected thereby: (i) modify the Put Right of Holders of the Debentures
upon a Failed Remarketing in a manner materially adverse to the rights of the Holders, (ii) modify the Remarketing provisions of the Debentures in a manner materially adverse to the rights of the Holders or (iii) modify
Section 2.15 hereof in a manner materially adverse to the rights of the Holders, it being understood that any modification of the terms of the Debentures permitted pursuant to Section 9.04 in
connection with a Remarketing that is made in accordance with the terms of the Indenture may be made without the consent of any Holders of the Debentures. Section 1202 of the Base Indenture shall apply, as amended, with respect to the
Debentures, and any reference in the Base Indenture to such provision shall, for purposes of the Debentures, be deemed to refer to this Section 8.02. 

ARTICLE IX 
 REMARKETING

 Section 9.01 Remarketing Procedures. 

(a) In the case of an Optional Remarketing, unless a Termination Event has occurred prior to the Optional Remarketing Period, or in the case of
a Final Remarketing, unless a Successful Optional Remarketing or Termination Event has occurred prior to the Final Remarketing Period, the Company shall engage the Remarketing Agent(s) pursuant to the Remarketing Agreement for the Remarketing of the
Debentures as set forth under Section 9.02. The Company shall, no later than (a) in the case of an Optional Remarketing, five Business Days prior to the first day of the Optional Remarketing Period or (b) in the case of a Final
Remarketing, seven days prior to the first day of the Final Remarketing Period, request that the Depository or its nominee notify the Beneficial Owners or Depository Participants holding Separate Debentures, Corporate Units and Treasury Units, and
shall provide a copy of such request to the Collateral Agent and the Purchase Contract Agent, in the case of an Optional Remarketing, of the Company’s intent to attempt an Optional Remarketing in the Applicable Remarketing Period, and in all
cases, of the proposed Remarketing Dates and the procedures to be followed in each Remarketing, including the procedures to be followed by Holders of Separate Debentures to participate in a Remarketing, the applicable procedures for Holders of
Corporate Units to create Treasury Units or Holders of Treasury Units to recreate Corporate Units, as the case may be, the applicable procedures for Holders of Corporate Units to effect an Early Settlement and, in the case of a Final Remarketing,
applicable procedures to effect a Cash Settlement and the applicable procedures that 

  
 11 

 
must be followed by a Holder of Separate Debentures if such Holder wishes to exercise its Put Right or by a Holder of Corporate Units if such Holder elects not to exercise its Put Right. 

(b) At any time after notice is given by the Company in accordance with Section 9.01(a), other than during a Blackout
Period, each Holder of Separate Debentures may elect to have Separate Debentures held by such Holder remarketed in the applicable Remarketing for which notice was given. A Holder making such an election must notify the Custodial Agent and deliver
such Separate Debentures to the Custodial Agent in accordance with the provisions set forth in the Purchase Contract and Pledge Agreement. Any such notice and delivery may not be conditioned upon the level at which the Reset Rate is established in
the Remarketing. Any such notice and delivery may be withdrawn, other than during a Blackout Period, by notifying the Custodial Agent on or prior to 4:00 p.m., New York City time, on the second Business Day immediately preceding the first day of the
Applicable Remarketing Period in accordance with the Purchase Contract and Pledge Agreement. Any such notice and delivery not withdrawn in accordance with the immediately preceding sentence will be irrevocable with respect to each Remarketing to
occur during the Applicable Remarketing Period. Pursuant to Section 5.02 of the Purchase Contract and Pledge Agreement, by 4:00 p.m., New York City time on the Business Day immediately preceding the first day of the Applicable Remarketing
Period, the Custodial Agent, based on the notices and deliveries received by it prior to such time, shall notify the Remarketing Agent of the aggregate principal amount of Separate Debentures surrendered for Remarketing. Pursuant and subject to
Section 5.02 of the Purchase Contract and Pledge Agreement, Debentures that underlie Applicable Ownership Interests in Debentures included in Corporate Units will be deemed surrendered for Remarketing (unless in the case of a final Remarketing,
the Holder thereof has duly notified the Purchase Contract Agent of its intent to effect a Cash Settlement and timely paid the Purchase Price) and will be remarketed in accordance with the terms of the Remarketing Agreement and the Purchase Contract
and Pledge Agreement. 
 (c) The right of each Holder of Remarketed Debentures to have such Debentures remarketed on any Remarketing Date and
sold on any Optional Remarketing Date or Final Remarketing Date, as the case may be, shall be subject to the conditions that (i)(A) the Remarketing Agent conducts any Optional Remarketing or (i)(B) in the case of a Final Remarketing, that no
Successful Optional Remarketing has occurred pursuant to the terms of the Remarketing Agreement and the Purchase Contract and Pledge Agreement, (ii) a Termination Event has not occurred prior to the Optional Remarketing Date or Final
Remarketing Date, as the case may be, (iii) the Remarketing Agent(s) are able to find a purchaser or purchasers for Remarketed Debentures at the Remarketing Price based on the Reset Rate and (iv) each condition precedent to settlement of
the Remarketed Debentures set forth in the Remarketing Agreement is satisfied or waived. 
 (d) Neither the Trustee, the Company, nor the
Remarketing Agent(s) shall be obligated in any case to provide funds to make payment upon surrender of Debentures for remarketing. 

Section 9.02 Remarketing. 

(a) Unless a Termination Event has occurred prior to such date, if the Company elects to conduct an Optional Remarketing during an Optional
Remarketing Period selected by the Company pursuant to the Purchase Contract and Pledge Agreement, the Remarketing Agent shall use its commercially reasonable efforts to remarket the Remarketed Debentures at the applicable Remarketing Price as
provided in the Remarketing Agreement. 
 (b) In the case there is no Successful Optional Remarketing during the Optional Remarketing Period,
either because the Remarketing Agent is unable to remarket the Debentures at the applicable Remarketing Price or because a condition precedent to the Remarketing has not been satisfied, 

  
 12 

 
and unless a Termination Event has occurred prior to such date, during the Final Remarketing Period, the Remarketing Agent shall use its commercially reasonable efforts to remarket the Remarketed
Debentures at the applicable Remarketing Price as provided in the Remarketing Agreement. The Remarketing on any Remarketing Date will be considered successful if the resulting proceeds are at least equal to the applicable Remarketing Price. The
Company has the right to postpone any Optional Remarketing for any reason in its sole and absolute discretion. The Company has the right to postpone the Final Remarketing in its sole and absolute discretion on any day prior to the last three
Business Days of the Final Remarketing Period. 
 Section 9.03 Reset Rate. 

(a) In connection with each Remarketing, in order to remarket the Debentures, the Remarketing Agent, in consultation with the Company, may
reset the interest rate on the Debentures either upward or downward, or if any Debentures are remarketed as floating-rate notes, may determine the index selected by the Company and the reset spread applicable to such Debentures (the new interest
rate in the case of fixed-rate Debentures, and the index plus the reset spread, in the case of floating-rate notes, referred to as the “Reset Rate”), as provided in the Remarketing Agreement. 

(b) Anything herein to the contrary notwithstanding, no Reset Rate shall in any event exceed the maximum rate permitted by applicable law. 

(c) In the event of a Successful Remarketing, the interest rate for the Debentures may be reset on the Remarketing Settlement Date to the
applicable Reset Rate as determined by the Remarketing Agent, in consultation with the Company, under the Remarketing Agreement, and the Company shall (1) notify the Trustee by an Officer’s Certificate delivered to the Trustee and
(2) request the Depository to notify its Depository Participants holding Debentures, in each case, of the maturity date, the Reset Rate, the Interest Payment Dates and any other modified terms established for the Debentures during the
Remarketing no later than 9:00 a.m. New York time on the Business Day following the date of such Successful Remarketing. Upon a Successful Remarketing, if the interest rate for the Debentures is reset, the Reset Rate shall apply to all outstanding
Debentures, whether or not the Holders of all outstanding Debentures participated in such Remarketing. 
 (d) If a reset of the interest rate
on the Debentures occurs pursuant to a Successful Optional Remarketing, the Reset Rate of the Debentures shall be the interest rate or reset spread determined by the Remarketing Agent(s), in consultation with the Company, pursuant to the Remarketing
Agreement, as the interest rate or reset spread the Debentures should bear in order for the Remarketing proceeds to equal at least 100% of the sum of the Treasury Portfolio Purchase Price and the Separate Debentures Purchase Price (if any). 

(e) If a reset of the interest rate on the Debentures occurs pursuant to a Successful Final Remarketing, the Reset Rate shall be the interest
rate determined by the Remarketing Agent(s), in consultation with the Company, pursuant to the Remarketing Agreement, as the rate the Debentures should bear in order for the Remarketing proceeds to equal at least 100% of the aggregate principal
amount of Debentures to be remarketed. 
 (f) In the event of a Failed Final Remarketing, or if no Applicable Ownership Interests in
Debentures are included in Corporate Units (or the Holder of each such Corporate Unit has duly notified the Purchase Contract Agent of its intent to effect a Cash Settlement and timely paid the Purchase Price) and none of the Holders of the Separate
Debentures elect to have their Debentures remarketed in any Remarketing, the applicable interest rate on the Debentures will not be reset and will continue to be the Coupon Rate. 

  
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 (g) If there is a Failed Remarketing, the Company shall cause a notice of the unsuccessful
Remarketing to be published not later than 9:00 a.m., New York City time on the Business Day following the Applicable Remarketing Period. This notice shall be validly published by making a timely release to any appropriate news agency, including
Bloomberg Business News and the Dow Jones News Service. 
 Section 9.04 Modification of Terms in Connection with a Successful
Remarketing. 
 (a) In consultation with the Remarketing Agent and without the consent of any Holders of the Debentures, the Company may
(but will not be required to) elect to, pursuant to Section 9.03, remarket any Debentures as fixed-rate notes or floating-rate notes and, in the case of floating-rate notes, provide that the interest rate on the Debentures
shall be equal to an index selected by the Company plus the reset spread (as determined by the Remarketing Agent), in consultation with the Company, in which case interest on the Debentures may be calculated on the basis of a 360 day year and the
actual number of days elapsed (or such other basis as is customarily used for floating-rate Debentures bearing interest at a rate based on such index rate). 

(b) The modifications listed in Section 9.04(a) shall take effect only if the Remarketing is successful. All such
modifications, without the consent of the Holders, shall be effective upon the earlier of the applicable Remarketing Settlement Date and the Purchase Contract Settlement Date and shall apply to all of the Debentures, regardless of whether the
Debentures were included in the Remarketing; provided, however, that if the Company makes any such elections in connection with an Optional Remarketing and no Successful Remarketing occurs during the Optional Remarketing Period, such
elections shall cease to apply and the Company may make new elections in connection with the Final Remarketing. 
 Section 9.05 Put
Right. 
 (a) If there has not been a Successful Remarketing on or prior to the last day of the Final Remarketing Period, Holders of
Debentures will, subject to this Section 9.05, have the right (the “Put Right”) to require the Company to purchase such Debentures for cash on the Purchase Contract Settlement Date, at a price per Debenture
to be purchased equal to the principal amount of the applicable Debenture (the “Put Price”). 
 (b) The Put Right of a
Holder of a Separate Debenture shall only be exercisable upon delivery of a notice substantially in the form attached as Exhibit B hereto (or, in the case of Global Debentures, in accordance with applicable procedures of the Depository), together
with such Holder’s Separate Debentures, to the Trustee by such Holder at or prior to 4:00 p.m., New York City time, on the second Business Day immediately preceding the Purchase Contract Settlement Date. Such Put Right for a Holder of a
Separate Debenture may be exercised with respect to all or a portion of such Holder’s Separate Debentures (so long as such portion is an integral multiple of $1,000 principal amount). Prior to the Purchase Contract Settlement Date, the Company
shall deposit with the Trustee immediately available funds in an amount sufficient to pay, on the Purchase Contract Settlement Date, the aggregate Put Price of all Separate Debentures with respect to which a Holder has exercised a Put Right. In
exchange for any Separate Debentures surrendered pursuant to the Put Right, the Trustee shall then distribute such amount to the Holders of such Separate Debentures. 

(c) If there has not been a Successful Remarketing on or prior to the last day of the Final Remarketing Period, the Put Right of Holders with
respect to Debentures relating to Applicable Ownership Interests in Debentures included in Corporate Units will be deemed to be automatically exercised in accordance with Section 5.02(b) of the Purchase Contract and Pledge Agreement (unless any

  
 14 

 
such Holder has duly notified the Purchase Contract Agent of its intent to effect a Cash Settlement and timely paid the Purchase Price). 

(d) Debentures purchased pursuant to the Put Right shall be cancelled by the Trustee. 

ARTICLE X 
 RESERVED

 ARTICLE XI 
 TAX
TREATMENT 
 Section 11.01 Tax Treatment. The Company agrees, and by acceptance of a Corporate Unit or a Separate Debenture,
each Holder (or Beneficial Owner) will be deemed to have agreed for U.S. federal, state and local income tax purposes (unless otherwise required by any taxing authority) (a) to treat each Beneficial Owner of a Corporate Unit as the owner,
separately, of each of the applicable Purchase Contract and the applicable interests in the Collateral, including the Debentures underlying the Applicable Ownership Interest in Debentures constituting a part of such Corporate Unit, (b) to treat
the Debentures as indebtedness that are contingent payment debt instruments (as that term is used in U.S. Treasury Regulations Section 1.1275-4), (c) to be bound by the Company’s determination of the
comparable yield and projected payment schedule with respect to the Debentures, (d) with respect to Holders who purchase Corporate Units upon issuance, to allocate, as of the Original Issue Date, 100.0% of a Holder’s purchase price for a
Corporate Unit to the Applicable Ownership Interests in Debentures and 0.0% to each Purchase Contract, which will establish each Holder’s initial tax basis in each Purchase Contract as $0.00 and each Holder’s initial tax basis in each
Applicable Ownership Interest in Debentures as $50.00, and (e) in all events, not to take any position for U.S. federal, state or local income tax purposes that is inconsistent with or contrary to the above covenants. 

Section 11.02 FATCA. The Company agrees (i) to provide the Purchase Contract Agent and the Collateral Agent with such
reasonable information as it has in its possession to enable the Contract Agent and the Collateral Agent to determine whether any payments pursuant to the Indenture are subject to the withholding requirements described in Section 1471(b) of the
US Internal Revenue Code of 1986 (the “Code”) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code and any regulations, or agreements thereunder or official interpretations thereof (“Applicable
Law”), and (ii) that the Contract Agent and the Collateral Agent shall be entitled to make any withholding or deduction from payments under the Indenture to the extent necessary to comply with Applicable Law, for which the Contract
Agent and the Collateral Agent shall not have any liability. 
 ARTICLE XII 

THE TRUSTEE 

Section 12.01 Appointment of Trustee. Pursuant to the Base Indenture and pursuant to this Supplemental Indenture No. 1, the
Company hereby appoints the Trustee as Trustee under the Base Indenture with respect to the Debentures, and by execution hereof the Trustee accepts such appointment. Pursuant to the Base Indenture, all the rights, powers, trusts and duties of the
Trustee under the Base Indenture shall be vested in the Trustee with respect to the Debentures and there shall continue to be vested in the Trustee all of its rights, powers, trusts and duties as Trustee under the Base Indenture with respect to all
of the series of Securities as to which it has served and continues to serve as Trustee. 
 Section 12.02 Eligibility of
Trustee. The Trustee hereby represents that it is qualified and eligible under Section 909 of the Base Indenture and the provisions of the Trust Indenture Act to accept 

  
 15 

 
its appointment as Trustee with respect to the Debentures under the Base Indenture and hereby accepts the appointment as such Trustee. 

Section 12.03 Security Registrar and Paying Agent. Pursuant to the Base Indenture, the Company hereby appoints The Bank of New
York Mellon Trust Company, N.A. as registrar and “Paying Agent” with respect to the Debentures. 
 Section 12.04
Concerning the Trustee. The Trustee does not assume any duties, responsibilities or liabilities by reason of this Supplemental Indenture No. 1 other than as set forth in the Base Indenture or as expressly set forth herein and, in
carrying out its responsibilities hereunder, shall have all of the rights, powers, privileges, protections, duties and immunities which it possesses under the Base Indenture. 

Section 12.05 Patriot Act Requirements of Trustee. The parties hereto acknowledge that in order to help the United States
government fight the funding of terrorism and money laundering activities, pursuant to Federal regulations that became effective on October 1, 2003 (Section 326 of the USA PATRIOT Act) all financial institutions are required to obtain, verify,
record and update information that identifies each person establishing a relationship or opening an account. The parties to this Supplemental Indenture No. 1 agree that they will provide to the Trustee such information as it may request, from
time to time, in order for the Trustee to satisfy the requirements of the USA PATRIOT Act, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is
establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided. 

Section 12.06 Notice upon Trustee. Any notice, direction, request, demand, consent or waiver by the Company or any Holder to or
upon the Trustee, registrar or Paying Agent for the Debentures shall be deemed to have been sufficiently given, made or filed, for all purposes, if given, made or filed in writing at the Corporate Trust Office of the Trustee. 

Section 12.07 Amendment to Section 903(l) of the Base Indenture. Section 903(l) of the Base Indenture is
amended and restated in its entirety as follows: 
 “(l) in no event shall the Trustee be responsible or liable for
special, indirect, punitive, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the
form of action.” 
 Section 12.08 Amendment to Section 1002 of the Base Indenture. Section 1002 of
the Base Indenture is amended and restated in its entirety as follows: 
 “The Trustee shall transmit to Holders such
reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the time and in the manner provided pursuant thereto. Reports so required to be transmitted at stated intervals of not more
than 12 months shall be transmitted no later than May 15 in each calendar year with respect to the 12-month period ending on the next preceding May 15, commencing May 15, 2008. A copy of each
such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any Securities
are listed on or delisted from any stock exchange. 

  
 16 

 The Company shall file with the Trustee (within thirty (30) days after
filing with the Commission in the case of reports that pursuant to the Trust Indenture Act must be filed with the Commission and furnished to the Trustee) and transmit to the Holders, such information, reports and other documents, if any, at such
times and in such manner, as shall be required by the Trust Indenture Act. 
 Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee’s receipt thereof shall not constitute actual or constructive notice of any information contained therein or determinable from information contained therein, including
the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on the Officers’ Certificates).” 

Section 12.09 Amendment to Section 902 of the Base Indenture. Section 902 of the Base Indenture is amended
and restated in its entirety as follows: 
 “The Trustee shall give notice of any default hereunder with respect to the
Securities of any series to the Holders of such series, in the manner and to the extent required to do so by the Trust Indenture Act, within 30 days after the occurrence of any default by the Company hereunder of which a Responsible Officer of the
Trustee has received written notice at its Corporate Trust Office specifying the series of Securities, unless such default shall have been cured or waived; provided, however, that in the case of any default of the character specified in
Section 801(c), no such notice to Holders shall be given until at least 90 days after the occurrence thereof. For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time, or both,
would become, an Event of Default with respect to the Securities of such series.” 
 ARTICLE XIII 

MISCELLANEOUS 

Section 13.01 Ratification of Indenture; Supplemental Indenture No. 1 Controls. The Base Indenture, as
supplemented and (solely for purposes of the Debentures) amended by this Supplemental Indenture No. 1, is in all respects ratified and confirmed, and this Supplemental Indenture No. 1 shall be deemed part of the Base Indenture in the
manner and to the extent herein and therein provided. The provisions of this Supplemental Indenture No. 1 shall supersede the provisions of the Base Indenture to the extent the Base Indenture is inconsistent herewith with respect to the
Debentures only. 
 Section 13.02 Recitals. The recitals herein contained are made by the Company only and not by the Trustee,
and the Trustee does not assume any responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture No. 1. All of the provisions contained in the Base Indenture in
respect of the rights, powers, privileges, protections, duties and immunities of the Trustee shall be applicable in respect of the Debentures and of this Supplemental Indenture No. 1 as fully and with like effect as if set forth herein in full.

 Section 13.03 Amendment to Section 112 of the Base Indenture. Section 112 of the Base Indenture is
amended and restated in its entirety as follows: 
 “This Indenture and the Securities shall be governed by and
construed in accordance with the law of the State of New York (including without limitation Section 5-1401 of the New York General Obligations Law or any successor to such statute), except to the extent
that the Trust Indenture Act shall be applicable. 

  
 17 

 The Company agrees that any suit, action or proceeding against the Company
brought by any Holder or the Trustee arising out of or based upon this Indenture or the Securities may be instituted in any state or the federal court in the Borough of Manhattan, New York, New York, and any appellate court from any thereof, and the
Company irrevocably submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding. The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any
objection to any suit, action or proceeding that may be brought in connection with this Indenture or any Security, including such actions, suits or proceedings relation to securities laws of the United States of America or any state thereof, in such
courts whether on the grounds of venue, residence or domicile or on the ground that any such suit, action or proceeding has been brought in an inconvenient forum.” 

Section 13.04 Separability. In case any one or more of the provisions contained in this Supplemental Indenture No. 1 or in
the Debentures shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Supplemental Indenture No. 1 or of the Debentures,
but this Supplemental Indenture No. 1 and the Debentures shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein. 

Section 13.05 Counterparts. This Supplemental Indenture No. 1 may be executed in any number of counterparts each of which
shall be an original; but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Supplemental Indenture No. 1 and of signature pages by facsimile or PDF transmission shall constitute
effective execution and delivery of this Supplemental Indenture No. 1 as to the parties hereto and may be used in lieu of the original Supplemental Indenture No. 1 for all purposes. Signatures of the parties hereto transmitted by facsimile
or PDF shall be deemed to be their original signatures for all purposes. 
 [Signatures begin next page] 

  
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 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. 1 to
be duly executed as of the date first above written. 
  

			
	AMERICAN ELECTRIC POWER COMPANY, INC.
		
	By:	 	 /s/ Renee V. Hawkins

	Name:	 	Renee V. Hawkins
	Title:	 	Assistant Treasurer
	
	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
		
	By:	 	 /s/ R. Tarnas

	Name:	 	R. Tarnas
	Title:	 	Vice President

 Signature Page 

Supplemental Indenture No. 1 

 EXHIBIT A 

FORM OF 
 3.40% JUNIOR SUBORDINATED
DEBENTURE DUE 2024 
 [THIS DEBENTURE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES.
THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE, YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE OF THIS DEBENTURE MAY BE OBTAINED AT ANY TIME BEGINNING NO LATER THAN 10 DAYS AFTER THE DATE HEREOF BY WRITING TO: AMERICAN ELECTRIC POWER
COMPANY, INC., 1 RIVERSIDE PLAZA, COLUMBUS, OHIO, 43215, ATTENTION: TREASURER.]* 
 [THIS DEBENTURE IS
A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS DEBENTURE IS EXCHANGEABLE FOR DEBENTURES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS DEBENTURE (OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.]* 

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY DEBENTURE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]* 

THE DEBENTURES EVIDENCED HEREBY WILL BE ISSUED, AND MAY BE TRANSFERRED, ONLY IN DENOMINATIONS OF $1,000 AND ANY GREATER INTEGRAL MULTIPLE OF $1,000, EXCEPT AS
PROVIDED IN SUPPLEMENTAL INDENTURE NO. 1. ANY ATTEMPTED TRANSFER, SALE OR OTHER DISPOSITION OF DEBENTURES IN A DENOMINATION OF DEBENTURES IN A DENOMINATION OF LESS THAN $1,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER EXCEPT AS
PROVIDED IN SUPPLEMENTAL INDENTURE NO. 1. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH DEBENTURES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF PAYMENTS IN RESPECT OF SUCH DEBENTURES, AND SUCH TRANSFEREE SHALL BE
DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH DEBENTURES. 
  
  

 

	* 	 Insert in Global Debentures. 

	* 	 Insert in Global Debentures. 

	* 	 Insert in Global Debentures. 

  
 A-1 

 AMERICAN ELECTRIC POWER COMPANY, INC. 

[Up to]* $[•] 

3.40% JUNIOR SUBORDINATED DEBENTURES DUE 2024 

Dated: March 19, 2019 
  

					
	NUMBER [     ]	  		  	[CUSIP NO: 025537 AK7]**
			
	Registered Holder:	  		  	[ISIN NO: US025537AK70]**

 AMERICAN ELECTRIC POWER COMPANY, INC., a corporation duly organized and existing under the laws of the state of New York
(herein referred to as the “Company,” which term includes any successor person under the Indenture hereinafter referred to), for value received, hereby promises to pay to the Registered Holder named above, the principal sum [of [•]
Dollars]*** [specified in the Schedule of Increases or Decreases in Debentures annexed hereto]* on March 15, 2024 (the “Stated
Maturity”), and to pay (subject to deferral as set forth herein) interest thereon at the rate of 3.40% per annum, such interest to accrue from March 19, 2019, subject to any reset of such interest rate in connection with a
Successful Remarketing, as described below. Subject to the Company’s right to defer interest payments as set forth in Supplemental Indenture No. 1 (as defined on the reverse hereof) and to changes in the interest payment dates as set forth
in Supplemental Indenture No. 1 in connection with a Successful Remarketing, interest is payable quarterly in arrears on each March 15, June 15, September 15 and December 15, commencing on June 15, 2019 (the
“Interest Payment Dates”), until the principal thereof is paid or made available for payment. On and after the Purchase Contract Settlement Date or, if earlier, the Optional Remarketing Settlement Date, interest on this Debenture
will be payable at the relevant Reset Rate or, if the interest rate has not been reset, at the Coupon Rate of 3.40% per year. The Reset Rate, if any, shall be established pursuant to the terms of the Indenture and the Remarketing Agreement. If
Interest Payments are deferred or otherwise not paid, they will accrue and compound on each Interest Payment Date until paid at the annual rate of 3.40% per annum, to the extent permitted by applicable law. 

The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months, and with respect to any period less than a full calendar month, on the basis of the actual number of days elapsed during the period. The interest so payable on an Interest Payment Date will be paid to
the Person in whose name this Debenture is registered, at the close of business on the Regular Record Date next preceding such Interest Payment Date; provided that interest payable at Stated Maturity will be paid to the Person to whom
principal is payable. Any such interest that is not so punctually paid or duly provided for, and that is not deferred as described below, will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid (i) to
the Person in whose name this Debenture (or any Debenture issued upon registration of transfer or exchange thereof) is registered at the close of business on the record date for the payment of such defaulted interest established in accordance with
Section 307 of the Base Indenture or (ii) at any time in any other lawful manner not inconsistent with the requirements of the securities exchange, if any, on which the Debenture may be listed, and upon such notice as may be required by
such exchange. The “Regular Record Date” with respect to any Interest Payment Date for the Debentures, will be the thirtieth day of the calendar month immediately preceding the calendar month in which the applicable Interest Payment
Date falls (or, if such day is not a Business Day, the next preceding Business Day); provided that if any of the Debentures or the related Corporate 

 

	* 	 Insert in Global Debentures and Debentures included in Corporate Units in global form. 

	** 	 Insert in Global Debentures. 

	** 	 Insert in Global Debentures. 

	*** 	 Insert in Debentures other than Global Debentures and Debentures included in Corporate Units in global form.

	* 	 Insert in Global Debentures. 

  
 A-2 

 
Units are held by a securities depository in book-entry form, the Regular Record Date for such Debentures will be the close of business on the Business Day immediately preceding the applicable
Interest Payment Date. 
 If an Interest Payment Date or the Stated Maturity of the Debentures or the date (if any) on which the Company is required to
purchase the Debentures falls on a day that is not a Business Day, the applicable payment will be made on the next succeeding Business Day, and no interest shall accrue or be paid in respect of such delay. 

This Debenture may be presented for payment of principal and interest at the office of the Paying Agent, in the Borough of Manhattan, City and State of New
York; provided, however, that at the option of the Company, interest on this Debenture may be paid by check mailed to the address of the Person entitled thereto, as the address shall appear on the Security Register, or by a wire
transfer to an account designated by the Person entitled thereto. Payment of the principal and interest on this Debenture shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of
public and private debts. 
 The indebtedness of the Company evidenced by this Debenture, including the principal hereof and interest hereon, is, to the
extent and in the manner set forth in the Indenture, subordinate and junior in right of payment to the Company’s obligations to Holders of Senior Indebtedness of the Company and each Holder of this Debenture, by acceptance hereof, agrees to and
shall be bound by such provisions of the Indenture and all other provisions of the Indenture. 
 Reference is hereby made to the further provisions of this
Debenture set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 
 In the
event of any inconsistency between the provisions of this Debenture and the provisions of the Indenture, the provisions of the Indenture shall govern and control. 

This Debenture shall not be entitled to any benefit under the Indenture, or be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been manually signed by an authorized signatory of the Trustee under the Indenture. 

  
 A-3 

 IN WITNESS WHEREOF, AMERICAN ELECTRIC POWER COMPANY, INC. has caused this instrument to be
duly executed. 
 Dated: 
  

			
	AMERICAN ELECTRIC POWER COMPANY, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  
 A-4 

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

This is one of the Securities, of the series designated herein, referred to in the within-mentioned Indenture. 

Dated: 
  

			
	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  
 A-5 

 REVERSE OF DEBENTURE 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to
be issued pursuant to the Junior Subordinated Indenture (the “Base Indenture”), dated as of March 1, 2008, between the Company and The Bank of New York Mellon Trust Company, N.A., as supplemented and amended by Supplemental
Indenture No. 1 dated as of March 19, 2019 by and between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee of the Securities established thereby (herein called the “Trustee,” which term includes
any successor trustee for the Debentures under the Indenture) (“Supplemental Indenture No. 1” and together with the Base Indenture, as it may be hereafter supplemented or amended from time to time, the
“Indenture”). Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders (the word
“Holder” or “Holders” meaning the registered holder or registered holders) of the Debentures. This Security is one of the series designated on the face hereof (the “Debentures”) which is limited in
aggregate principal amount to $805,000,000. 
 Capitalized terms used herein but not defined herein shall have the respective meanings
assigned thereto in the Indenture. 
 The Debentures shall be remarketed as provided in Supplemental Indenture No. 1. In connection
with a Successful Remarketing, the Remarketing Agent, in consultation with the Company, may remarket the Debentures as fixed- or floating-rate Debentures and reset the interest rate of the Debentures. Furthermore, in connection with a Successful
Remarketing, the Company will cease to have the ability to defer interest payments on the Debentures. Following any Successful Remarketing of the Debentures, if the Debentures are remarketed as fixed-rate notes, interest on the Debentures will be
payable semi-annually on March 15 and September 15 of each year or, if the Debentures are remarketed as floating-rate notes, interest on the Debentures will be payable quarterly in arrears on March 15, June 15, September 15
and December 15 of each year. 
 Pursuant to Supplemental Indenture No. 1, if there has not been a Successful Remarketing prior to
the end of the Final Remarketing Period, Holders of the Debentures will have the right to require the Company to purchase such Debentures for cash on the Purchase Contract Settlement Date at a price per Debenture to be purchased equal to the
principal amount of the applicable Debenture. 
 The Debentures are not subject to the operation of any sinking fund and, except as set
forth in Supplemental Indenture No. 1, are not repayable at the option of a Holder thereof prior to the Stated Maturity. 
 In the case
an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Debentures may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to
the conditions provided in the Indenture. 
 Prior to the Purchase Contract Settlement Date, the provisions of Section 701 of the Base
Indenture shall not apply to the Debentures. 
 The Company will not pay any additional amounts to any Holder in respect of any tax,
assessment or governmental charge. 

  
 A-6 

 The Indenture permits, with certain exceptions as therein provided, the amendment thereof
and the modification of the rights and obligations of the Company and the rights of the Holders of the Debentures by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Debentures
outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Debentures at the time outstanding, on behalf of the Holders of all outstanding Debentures, to waive compliance by the
Company with certain provisions of the Indenture, and contains provisions permitting the Holders of specified percentages in principal amount in certain instances of the outstanding Debentures, to waive on behalf of all of the Holders of Debentures,
certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debenture shall be conclusive and binding upon such Holder and upon all future Holders of this Debenture and of any Debenture issued
upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Debenture. 

As provided in and subject to the provisions of the Indenture, no Holder of Debentures shall have any right by virtue or by availing of any
provision of the Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to the Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless such holder
previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as provided in the Indenture, and unless also the Holders of not less than a majority in principal amount of all the Securities at the
time outstanding (considered as one class) shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee under the Indenture and shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee, for 60 days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 812 of the Base Indenture; it being understood and intended, and being expressly covenanted by the taker
and Holder of every Debenture with every other taker and Holder and the Trustee, that no one or more Holders of Debentures shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of the Holders of any other of such Securities, or to obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under the Indenture, except in the manner therein provided and for the
equal, ratable and common benefit of all Holders of Securities. For the protection and enforcement of the provisions of Section 807 of the Base Indenture, each and every Holder and the Trustee shall be entitled to such relief as can be given
either at law or in equity. 
 Nothing contained in the Indenture is intended to or shall impair, as between the Company and the Holders of
the Debentures, the obligation of the Company, which is absolute and unconditional, to pay to such Holders the principal of and interest on such Debentures when, where and as the same shall become due and payable, all in accordance with the terms of
the Debentures, or is intended to or shall affect the relative rights of such Holders and creditors of the Company other than the holders of the Senior Indebtedness of the Company, nor shall anything herein or therein prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under the Indenture, subject to the rights, if any, under Article XIV of the Base Indenture of the holders of Senior Indebtedness of the Company
in respect of cash, property, or securities of the Company received upon the exercise of any such remedy. 
 As provided in the Indenture
and subject to certain limitations therein set forth, the transfer of this Debenture may be registered on the Security Register upon surrender of this Debenture for registration of transfer at the offices maintained by the Company or its agent for
such purpose, duly endorsed by the Holder hereof or his attorney duly authorized in writing, or accompanied by a written instrument of 

  
 A-7 

 
transfer in form satisfactory to the Company and the Securities registrar duly executed by the Holder hereof or his attorney duly authorized in writing, but without payment of any charge other
than a sum sufficient to reimburse the Company for any tax or other governmental charge incident thereto. Upon any such registration of transfer, a new Debenture or Debentures of authorized denomination or denominations for the same aggregate
principal amount will be issued to the transferee in exchange herefor. 
 No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. 

Pursuant to Supplemental Indenture No. 1, Debentures corresponding to Applicable Ownership Interests in Debentures that are no longer a
component of the Corporate Units and are released from the Collateral Account will be initially issued as Global Debentures. Except upon recreation of Corporate Units and except as otherwise provided in the Indenture, Debentures represented by
Global Debentures will not be exchangeable for, and will not otherwise be issuable as, Debentures in certificated form. Unless and until such Global Debentures are exchanged for Debentures in certificated form, Global Debentures may be transferred,
in whole but not in part, and any payments on the Debentures shall be made, only to the Depository or a nominee of the Depository, or to a successor Depository selected or approved by the Company or to a nominee of such successor Depository. 

By acceptance of this Debenture or a beneficial interest in this Debenture, each Holder hereof and any Person acquiring a beneficial interest
herein, for United States federal, state and local tax purposes, agrees to treat this Debenture as indebtedness that is a contingent payment debt instrument and to take other positions for such tax purposes as set forth in Supplemental Indenture
No. 1. 
 Prior to due presentment for registration of transfer of this Debenture, the Company, the Trustee, and any agent of the
Company or the Trustee may deem and treat the person in whose name this Debenture shall be registered upon the Security Register of this series as the absolute owner of this Debenture (whether or not this Debenture shall be overdue and
notwithstanding any notation of ownership or other writing hereon) for the purpose of receiving payment of or on account of the principal hereof and, subject to the provisions on the face hereof, interest due hereon and for all other purposes; and
neither the Company nor the Trustee nor any such agent shall be affected by any notice to the contrary. 
 No recourse shall be had for the
payment of the principal of or interest on this Debenture, or for any claim based hereon or otherwise in respect hereof, or based on or in respect of the Indenture, against any stockholder, officer, director or employee, as such, past, present or
future, of the Company or of any successor person, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by
the acceptance hereof and as a part of the consideration for the issue hereof, expressly waived and released. 
 This Debenture shall be
deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by, and construed in accordance with, the laws of said State. 

  
 A-8 

 ASSIGNMENT 

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto 

 

	
	  
 (please insert
Social Security or other identifying number of assignee)

	
	  

	
	  

	
	  

	PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE the within Debenture and all rights thereunder, hereby irrevocably constituting and appointing
	
	  

	
	  

	
	  

	
	  

	
	  

	
	  

	agent to transfer said Debenture on the books of the Company, with full power of substitution in the premises.

			
		
	Dated:	 	  

			
	
	NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever.

  
 A-9 

 SCHEDULE OF INCREASES OR DECREASES IN THIS DEBENTURE 

The initial principal amount of this Debenture is: $ 

Changes to Principal Amount of [Global] Debenture 
  

							
	 Date
	 	 Principal Amount by which this
Debenture is to be Decreased
or
Increased and the Reason for the
Decrease or Increase
	 	 Remaining Principal Amount

of this Debenture
	  	 Signature of Authorized

Officer of Trustee

  
 A-10 

 EXHIBIT B 

FORM OF PUT NOTICE 
 TO: American Electric Power
Company, Inc. 
 The Bank of New York Mellon Trust Company, N.A. 

Please refer to the Junior Subordinated Indenture (the “Base Indenture”), dated as of March 1, 2008 among American
Electric Power Company, Inc. (the “Company”) and The Bank of New York Mellon Trust Company, N.A. (herein called the “Trustee”), as supplemented and amended by Supplemental Indenture No. 1 dated as of
March 19, 2019 (“Supplemental Indenture No. 1” and, together with the Base Indenture, as it may be hereafter supplemented or amended from time to time, the “Indenture”), by and between the
Company and The Bank of New York Mellon Trust Company, N.A., as Trustee of the Securities established thereby (herein called the “Trustee”). Capitalized terms used herein but not defined shall have the meanings ascribed to such
terms in the Indenture. 
 The undersigned registered Holder of the Debenture designated below, which is being delivered to the Trustee
herewith, hereby requests and instructs the Company to purchase such Debenture or the portion thereof specified below (so long as such portion is in a principal amount of $1,000 or an integral multiple thereof), in accordance with the terms of the
Indenture, at the price of 100% of the principal amount of such Debenture (or portion thereof). The Debenture (or portion thereof) shall be purchased by the Company as of the Purchase Contract Settlement Date pursuant to the terms and conditions
specified in the Indenture. 
  

			
	Dated:	  	  

		  	 Signature:
  

	  
 NOTICE: The above signature of the Holder hereof must
correspond with the name as written upon the face of the Debenture in every particular without alteration or enlargement or any change whatever.

		  	  
 Signature Guarantee:

		
	Debenture Certificate Number (if applicable):	  	  

		
	Principal Amount:	  	  

		
	Portion to be purchased if other than the Principal Amount set forth above:	  	  

		
	Social Security or Other Taxpayer Identification Number:	  	  

		
	DTC Account Number (if applicable):	  	  

		
	Name of Account Party (if applicable):	  	  

  
 B-1 

	
	 PAYMENT INSTRUCTIONS: The purchase price of the Debenture should be paid by check in the name of the person(s) set forth below and mailed
to the address set forth below.
  

			
	Name(s):	 	  

		 	(Please Print)
	Address:	 	  

		 	(Please Print)

	
	
	  

	
	
	  
 (Zip
Code)

	
	
	  
 (Tax Identification
or Social Security Number)

  
 B-2Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of March 13, 2019, between ContraVir Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant an exemption from the registration requirements of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Regulation D thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in 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 each Purchaser 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:

 

“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.

 

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

 

“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.

 

“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 Securities pursuant to Section 2.1.

 

“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions

 

1

 

precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the third (3rd) Trading Day following the date hereof.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the common stock of the Company, par value $0.0001 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 or the Subsidiaries 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 Sheppard, Mullin, Richter & Hampton LLP.

 

“Debentures” means the Subordinated Debentures due, subject to the terms therein, on June 30, 2019, issued by the Company to the Purchasers hereunder, in the form of Exhibit A attached hereto.

 

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

 

“Disclosure Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent.

 

“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(s).

 

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

 

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose or as approved by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee

 

2

 

directors established for such purpose for services rendered to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith and provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d) shares of Common Stock to satisfy redemption payments on the Indebtedness existing on the date hereof as set forth on Schedule 3.1(aa) and (e) Common Stock or Common Stock Equivalents issued pursuant to Section 3(a)(9) under the Securities Act, provided that such Common Stock or Common Stock Equivalents are issued at a price per share that is at least equal to the consolidated closing bid price of the Company’s Common Stock.

 

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

 

“FDA” shall have the meaning ascribed to such term in Section 3.1(hh).

 

“FDCA” shall have the meaning ascribed to such term in Section 3.1(hh).

 

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(aa).

 

“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).

 

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

 

“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

3

 

“Material Permits” shall have the meaning ascribed to such term in Section 3.1(n).

 

“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.

 

“Pharmaceutical Product” shall have the meaning ascribed to such term in Section 3.1(hh).

 

“Placement Agent” means Roth Capital Partners, LLC.

 

“Pre-Notice” shall have the meaning ascribed to such term in Section 4.11(b).

 

“Pro Rata Portion” shall have the meaning ascribed to such term in Section 4.11(e).

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.

 

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

 

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Securities” means the Shares and the Debentures.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing shares of Common Stock).

 

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares and Debentures purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.

 

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“Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a), and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 

“Trading Day” means a day on which the principal Trading Market is open for trading.

 

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).

 

“Transaction Documents” means this Agreement, the Debentures, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer Agent” means Philadelphia Stock Transfer, Inc., the current transfer agent of the Company, and any successor transfer agent of the Company.

 

ARTICLE II.
 PURCHASE AND SALE

 

2.1                               Closing.  On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly,  agree to purchase, up to an aggregate of $1,250,000 of Shares and Debentures.  Each Purchaser’s Subscription Amount, as set forth on the signature page hereto executed by such Purchaser, shall be made available for “Delivery Versus Payment” settlement with the Company or its designee. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the location as the parties shall mutually agree.

 

2.2                               Deliveries.

 

(a)                                 On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:

 

(i)                                     this Agreement duly executed by the Company;

 

(ii)                                  subject to the last sentence of Section 2.1, the Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the Chief Executive Officer or Chief Financial Officer;

 

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(iii)                               a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis, via book entry to the applicable balance account or via the delivery of a physical certificate (at the Holder’s option), the number of Shares such Purchaser is entitled to;

 

(iv)                              a Debenture registered in the name of such Purchaser with a principal amount equal to such Purchaser’s Subscription Amount; and

 

(b)                                 On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company, the following:

 

(i)                                     this Agreement duly executed by such Purchaser;

 

(ii)                                  an agreement of such Purchaser not to dispose of the voting control over Shares on or before March 15, 2019, in form and substance reasonably acceptable to the Company and such Purchaser; and

 

(iii)                               such Purchaser’s Subscription Amount.

 

2.3                               Closing Conditions.

 

(a)                                 The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)                                     the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

 

(ii)                                  all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed;

 

(iii)                               the Company shall have obtained forbearance agreements from all outstanding Indebtedness and waivers of any anti-dilution provisions of any outstanding Common Stock Equivalents (including warrants) currently outstanding, which forbearance agreement and waivers shall be irrevocable until the Debentures are paid off in full; and

 

(iv)                              the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.

 

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(b)                                 The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)                                     the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

 

(ii)                                  all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;

 

(iii)                               the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

 

(iv)                              there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and

 

(v)                                 from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.

 

ARTICLE III.
 REPRESENTATIONS AND WARRANTIES

 

3.1                               Representations and Warranties of the Company.  Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:

 

(a)                                 Subsidiaries.  All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a).  The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the

 

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issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.  If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

 

(b)                                 Organization and Qualification.  The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

(ii)                                  Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals.  This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as

 

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indemnification and contribution provisions may be limited by applicable law.

 

(c)                                  No Conflicts.  The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(d)                                 Filings, Consents and Approvals.  Except as set forth on Schedule 3.1(d), the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) application(s) to each applicable Trading Market for the listing of the Shares for trading thereon in the time and manner required thereby, and (iii) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

 

(e)                                  Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement.

 

(f)                                   Capitalization.  The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g).  The Company has not issued any capital stock since its

 

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most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees, officers, directors or consultants pursuant to the Company’s employee stock purchase plans 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 the Transaction Documents.  Except as a result of the purchase and sale of the Securities, 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 the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary.  The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers). There are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary.  There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and 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 Securities.  [Other than the Voting Agreement,], 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.

 

(g)                                  SEC Reports; Financial Statements.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively

 

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referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports complied in all material respects with 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 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 applied on a consistent basis during the periods involved (“GAAP”), 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, 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.

 

(h)           Material Changes; Undisclosed Events, Liabilities or Developments.  Since the date of the latest audited financial statements included within the SEC Reports, except as set forth on Schedule 3.1(i), (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans.  The Company does not have pending before the Commission any request for confidential treatment of information.  Except for the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

 

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(i)            Litigation.  There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any Subsidiary, nor 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 or any Subsidiary under the Exchange Act or the Securities Act.

 

(j)            Labor Relations.  No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect.  None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good.  To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters.  The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(k)           Compliance.  Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is

 

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bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(l)            Environmental Laws.  The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(m)          Regulatory Permits.  The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

(n)           Title to Assets.  The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities held under lease by the

 

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Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

 

(o)           Intellectual Property.  The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).  None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.  Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect.  To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights.  The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(p)           Insurance.  The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount.  Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

(q)           Transactions With Affiliates and Employees.  Except as set forth on Schedule 3.1(q), none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any

 

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officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

 

(r)            Sarbanes-Oxley; Internal Accounting Controls.  Except as set forth on Schedule 3.1(r), the Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date.  Except as set forth on Schedule 3.1(r), the Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures 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 time periods specified in the Commission’s rules and forms.  The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).  The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

 

(s)            Intentionally Omitted.

 

(t)            Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  The Company shall conduct its business in a manner so that it will not become

 

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an “investment company” subject to registration under the Investment Company Act of 1940, as amended.

 

(u)           Registration Rights.  No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

 

(v)           Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. Except as disclosed on Schedule 3.1(v), the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as disclosed on Schedule 3.1(v), the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.

 

(w)          Application of Takeover Protections.  The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

 

(x)           Disclosure.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed in the SEC Reports.   The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby,

 

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including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit 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 and when made, not misleading.  The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

 

(y)           No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, 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 Securities to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

 

(z)           Solvency.  Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.  The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).  The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date.  Schedule 3.1(aa) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary and the regularly scheduled interest and principal payments due thereupon, or for which the Company or any Subsidiary has commitments.  For the purposes of this Agreement, “Indebtedness” means

 

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(x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.  Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

(aa)         Tax Status.  Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

 

(bb)         Foreign Corrupt Practices.  Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA.

 

(cc)         Accountants.  The Company’s accounting firm is set forth on Schedule 3.1(dd) of the Disclosure Schedules.  To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2019.

 

(dd)         Acknowledgment Regarding Purchasers’ Purchase of Securities.  The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the

 

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transactions contemplated thereby.  The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities.  The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(ee)         Acknowledgment Regarding Purchaser’s Trading Activity.  Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction.  The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding.  The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

 

(ff)          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 Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement of the Securities.

 

(gg)         FDA.  As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries

 

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(each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect.  There is no pending, completed or, to the Company’s knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect.  The properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA.  The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company.

 

(hh)         Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated.  The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.

 

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

 

(jj)           U.S. Real Property Holding Corporation.  The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.

 

(kk)         Bank Holding Company Act.  Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).  Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.  Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

(ll)           Money Laundering.  The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

 

(mm)      Private Placement.  Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securitiess by the Company to the Purchasers as contemplated hereby.

 

(nn)         General Solicitation.  Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising.  The Company has offered the Securities for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

 

(oo)         No Disqualification Events.  With respect to the Debenture to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none of the Company, any

 

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of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder.

 

(pp)         Other Covered Persons.  Other than the Placement Agent, the Company is not aware of any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.

 

(qq)         Notice of Disqualification Events.  The Company will notify the Purchasers in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, reasonably be expected to become a Disqualification Event relating to any Issuer Covered Person, in each case of which it is aware.

 

3.2          Representations and Warranties of the Purchasers.  Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):

 

(a)           Organization; Authority.  Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser.  Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of

 

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specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b)           Understandings or Arrangements.  Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities.  Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.  Such Purchaser understands that the Debentures are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring such Securities as principal for his, her or its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s right to sell such Securities pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws).

 

(c)           Purchaser Status.  At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises any Debentures, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.

 

(d)           Experience of Such Purchaser.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

(e)           Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the

 

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investment.  Such Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired.  Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to it.  In connection with the issuance of the Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.

 

(f)            Certain Transactions and Confidentiality.  Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.  Other than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.

 

(g)           General Solicitation.  Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.

 

(h)           Nasdaq Listing. Such Purchaser understands that the Company is not currently in compliance with the minimum bid price requirement of $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Closing Bid Price Requirement”). If the Company is unable to comply with the Minimum Closing Bid Price Requirement, the

 

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Common Stock may be delisted, which could make trading in the Common Stock more difficult for investors, potentially leading to declines in the Common Stock’s share price and liquidity. Such Purchaser understands that the Company cannot assure that the Company will be able to maintain its Nasdaq listing of the Common Stock, or, if the Common Stock is delisted from Nasdaq, that it will be listed on another national securities exchange or quoted on an over-the counter quotation system.

 

The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby.  Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.

 

ARTICLE IV.
 OTHER AGREEMENTS OF THE PARTIES

 

4.1          Restricted Status

 

(a)       The Securities may only be disposed of in compliance with state and federal securities laws.  In connection with any transfer of Securities, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Security under the Securities Act.

 

(b)       The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

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THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

4.2          Intentionally Omitted.

 

4.3          Integration.  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 Securities in a manner that would require the registration under the Securities Act of the sale of the Debentures or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

 

4.4          Securities Laws Disclosure; Publicity.  The Company shall (a) by the Disclosure Time, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act.  From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents.  In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).

 

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4.5          Shareholder Rights Plan.  No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.

 

4.6          Non-Public Information.   Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such information confidential.  The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.  To the extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

4.7          Use of Proceeds.  Except as set forth on Schedule 4.7 attached hereto, the Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than (i) payment of trade payables in the ordinary course of the Company’s business and prior practices and (ii) regularly scheduled principal and interest payments as set forth on Schedule 3.1(aa)), (b) for the redemption of any Common Stock or Common Stock Equivalents or distributions on Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.

 

4.8          Indemnification of Purchasers.   Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each

 

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Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct), the Company will indemnify each Purchaser Party, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses, as incurred, arising out of or relating to (i) any untrue or alleged untrue statement of a material fact contained in such registration statement, any prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Purchaser Party furnished in writing to the Company by such Purchaser Party expressly for use therein, or (ii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder in connection therewith.  If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (x) the employment thereof has been specifically authorized by the Company in writing, (y) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (z) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.  The Company will not be liable to any

 

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Purchaser Party under this Agreement (1) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (2) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

 

4.9          Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement.

 

4.10        Listing of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares on such Trading Market and promptly secure the listing of all of the Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then 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 or quoted on such other Trading Market as promptly as possible.  The Company will then take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market.  The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.

 

4.11        Intentionally Omitted.

 

4.12        Subsequent Equity Sales.

 

(a)           From the date hereof until the earlier of (i) the 15th day following the Closing Date and (ii) the date that the Debentures are no longer outstanding, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents.

 

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(b)           Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of (i) an Exempt Issuance or (ii) an issuance of Common Stock or Common Stock Equivalents pursuant to which the proceeds are first used to redeem the outstanding Debentures in full.

 

4.13        Equal Treatment of Purchasers.  No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents.  For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

 

4.14        Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules.  Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.

 

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ARTICLE V.
 MISCELLANEOUS

 

5.1          Termination.  This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).

 

5.2          Fees and Expenses.  Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.  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 a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.

 

5.3          Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.4          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 or email attachment at the email address as set forth on the signature pages attached hereto 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 or email attachment at the email address as set forth on the signature pages attached hereto 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 on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

 

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5.5          Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the Shares based on the initial Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required.  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. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.

 

5.6          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.

 

5.7          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 each Purchaser (other than by merger).  Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”

 

5.8          No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto 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 and this Section 5.8.

 

5.9          Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in

 

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the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.   If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.

 

5.10        Survival.  The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

 

5.11        Execution.  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.

 

5.12        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 hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or 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.

 

5.13        Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a

 

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Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission of an exercise of a Debenture, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s Debenture (including, issuance of a replacement warrant certificate evidencing such restored right).

 

5.14        Replacement of Securities.  If any certificate or instrument evidencing any Securities 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 Securities.

 

5.15        Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents 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.

 

5.16        Payment Set Aside.  To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

5.17        Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document.  Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser

 

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pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose.  Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents.  The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers.  It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.

 

5.18        Liquidated Damages.  The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.

 

5.19        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.

 

5.20        Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents 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 the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document 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.

 

5.21        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.

 

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(Signature Pages Follow)

 

36

 

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

 

	
CONTRAVIR   PHARMACEUTICALS, INC.
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name: Robert Foster
    	
E-Mail:
    
	
 
    	
Title: CEO
    	
Fax:
    
	
 
    	
 
    
	
With   a copy to (which shall not constitute notice):
    	
 
    
				

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

37

 

[PURCHASER SIGNATURE PAGES TO CTRV SECURITIES PURCHASE AGREEMENT]

 

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

 

	
Name   of Purchaser:
    	
 
    	
 
    
	
 
    	
 
    
	
Signature   of Authorized Signatory of Purchaser:
    	
 
    	
 
    
	
 
    	
 
    
	
Subscription   Amount: $1,250,000
    	
 
    
	
 
    	
 
    
	
Principal   Amount (Equal to Subscription Amount): $1,250,000
    	
 
    
	
 
    	
 
    
	
Shares:   3,320,000
    	
 
    
						

 

38

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