Document:

EX-4.12

 Exhibit 4.12 

DESCRIPTION OF CONTRAFECT CORPORATION SECURITIES 

The following description of the capital stock of ContraFect Corporation (the “Company,” “we,” “us,” and
“our”) and certain provisions of our amended and restated certificate of incorporation, as amended (our “certificate of incorporation”), and amended and restated bylaws (our “bylaws”) are summaries and are qualified in
their entirety by reference to the full text of our amended and restated certificate of incorporation and amended and restated bylaws, each of which is filed as an exhibit to this Annual Report on Form 10-K,
and applicable provisions of the General Corporation Law of the State of Delaware (the “DGCL”). Our authorized capital stock consists of: 
  

	 	•	 	 125,000,000 shares of common stock, par value $0.0001 per share; and 

 

	 	•	 	 25,000,000 shares of preferred stock, par value $0.0001 per share. 

Common Stock 
 Our common stock is listed
on the Nasdaq Capital Market under the symbol “CFRX.” 
 Voting Rights. Holders of our common stock are
entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. Holders of our common stock are not entitled to vote on any amendment to the certificate of incorporation that
relates solely to the terms of one or more series of preferred stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to the
certificate of incorporation. An election of directors by our stockholders shall be determined by a plurality of the votes cast by the stockholders entitled to vote on the election. Subject to the exceptions provided below, other matters shall be
decided by the affirmative vote of our stockholders having a majority in voting power of the votes cast by the stockholders present or represented and voting on such matter. Our certificate of incorporation and amended and restated bylaws also
provide that our directors may be removed, with or without cause, by the affirmative vote of the holders of at least 75% in voting power of the outstanding shares of capital stock entitled to vote thereon. Subject to the rights of holder of any
series of preferred stock, any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority of our directors then in office. In addition, the affirmative
vote of the holders of at least 75% in voting power of the outstanding shares of capital stock entitled to vote in any annual election of directors is required to amend or repeal, or to adopt any provision inconsistent with, several of the
provisions of our certificate of incorporation or our bylaws. See below under “—Anti-Takeover Effects of Delaware Law and Our Certificate of Incorporation and Bylaws—Amendment of Certificate of Incorporation and Bylaws.” 

Rights Upon Liquidation. In the event of our liquidation or dissolution, the holders of common stock are entitled to
receive proportionately all assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. 

Other Rights. Holders of common stock have no preemptive, subscription, redemption or conversion rights. The rights,
preferences and privileges of holders of common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future. 

Transfer Agent 
 The transfer agent and
registrar for our common stock is American Stock Transfer & Trust Company, LLC. 
 Dividend 

Holders of common stock are entitled to receive proportionately any dividends as may be declared by our board of directors, subject to any
preferential dividend rights of outstanding preferred stock. We have never declared or paid any cash dividends on our common stock. We do not intend to pay cash dividends for the foreseeable future. We currently expect to retain all future earnings,
if any, for use in the development, operation and expansion of our 

 
business. Any determination to pay cash dividends in the future will depend upon, among other things, our results of operations, plans for expansion, tax considerations, available net profits and
reserves, limitations under law, financial condition, capital requirements and other factors that our board of directors considers to be relevant. 

Preferred Stock 
 Our board of directors
is authorized to issue shares of preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights,
dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. 
 The purpose of
authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in
connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of our
outstanding voting stock. 
 Registration Rights 

The shares of common stock underlying the warrants issued in connection with our initial public offering are currently registered under a
registration statement that has been declared effective by the Securities and Exchange Commission, pursuant to registration rights granted to the holders in accordance with the terms of the warrants. 

Anti-Takeover Effects of Delaware Law and Our Certificate of Incorporation and Bylaws 

Some provisions of Delaware law, our certificate of incorporation and our bylaws could make the following transactions more difficult: an
acquisition of us by means of a tender offer; an acquisition of us by means of a proxy contest or otherwise; or the removal of our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or
could deter transactions that stockholders may otherwise consider to be in their best interest or in our best interests, including transactions that provide for payment of a premium over the market price for our shares. 

Undesignated Preferred Stock. The ability of our board of directors, without action by the stockholders, to issue up to
25,000,000 shares of undesignated preferred stock with voting or other rights or preferences as designated by our board of directors could impede the success of any attempt to change control of us. These and other provisions may have the effect of
deferring hostile takeovers or delaying changes in control or management of our company. 
 Stockholder Meetings. Our
bylaws provide that a special meeting of stockholders may be called only by our chairman of the board, the chief executive officer, or by our board of directors. 

Requirements for Advance Notification of Stockholder Nominations and Proposals. Our bylaws establish an advance notice
procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of persons for election to our board of directors. Stockholders at an annual meeting will only be able to consider proposals
or nominations specified in the notice of meeting or brought before the meeting by or at the direction of our board of directors or by a stockholder of record on the record date for the meeting who is entitled to vote at the meeting and who has
delivered timely written notice in proper form to our secretary of the stockholder’s intention to bring such business before the meeting. These provisions could have the effect of delaying until the next stockholder meeting stockholder actions
that are favored by the holders of a majority of our outstanding voting securities. 
 Elimination of Stockholder Action by Written
Consent. Our certificate of incorporation eliminates the right of stockholders to act by written consent without a meeting. 

 Removal of Directors. Our certificate of incorporation and amended and restated
bylaws provide that our directors may be removed, with or without cause, by the affirmative vote of the holders of at least 75% in voting power of the outstanding shares of capital stock entitled to vote thereon. Subject to the rights of holders of
any series of preferred stock, any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority of our directors then in office. 

Stockholders Not Entitled to Cumulative Voting. Our certificate of incorporation does not permit stockholders to cumulate
their votes in the election of directors. Accordingly, the holders of a majority of the outstanding shares of our common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they choose, other
than any directors that holders of our preferred stock may be entitled to elect. 
 Delaware Anti-Takeover Statute. We are subject to
the provisions of Section 203 of the DGCL. Under Section 203, we would generally be prohibited from engaging in any business combination with any interested stockholder for a period of three years following the time that this stockholder
became an interested stockholder unless: 
  

	 	•	 	 prior to this time, the board of directors of the corporation approved either the business combination or the
transaction that resulted in the stockholder becoming an interested stockholder; 

  

	 	•	 	 upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares owned by persons who are directors and also officers, and by employee stock plans in which employee
participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or 

  

	 	•	 	 at or subsequent to such time, the business combination is approved by the board of directors and authorized at
an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder. 

Under Section 203, a “business combination” includes: 

 

	 	•	 	 any merger or consolidation involving the corporation and the interested stockholder; 

 

	 	•	 	 any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the
interested stockholder; 

  

	 	•	 	 any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to
the interested stockholder, subject to limited exceptions; 

  

	 	•	 	 any transaction involving the corporation that has the effect of increasing the proportionate share of the stock
of any class or series of the corporation beneficially owned by the interested stockholder; or 

  

	 	•	 	 the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other
financial benefits provided by or through the corporation. 

 In general, Section 203 defines an interested
stockholder as an entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by such entity or person. 

Choice of Forum. Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative
form, the Court of Chancery of the State of Delaware or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) will be the sole and exclusive
forum for: (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any of our directors, officers, employees or agents to us or our
stockholders, creditors or other constituents; (3) any action arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws; (4) any action to interpret, apply, enforce or determine the validity of our
certificate of incorporation or bylaws; or (5) any action asserting a claim against us governed by the internal affairs doctrine. Our amended and restated bylaws also provide, to the fullest extent permitted by applicable law, that any person
or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and to have consented to this choice of forum provision. It is possible 

 
that a court of law could rule that the choice of forum provision contained in our amended and restated bylaws is inapplicable or unenforceable if it is challenged in a proceeding or otherwise.

 Amendment of Certificate of Incorporation and Bylaws. The amendment of any of the above provisions, among others and except for
the above-described provision making it possible for our board of directors to issue preferred stock and the provision prohibiting cumulative voting, would require approval by holders of at least 75% in voting power of the outstanding shares of
stock entitled to vote in an annual election of directors. 
 The provisions of Delaware law, our certificate of incorporation and our
bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile
takeover attempts. These provisions may also have the effect of preventing changes in the composition of our board and management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may
otherwise deem to be in their best interests.ex_177433.htm

Exhibit 10.1

 

 

 

 

 

March 12, 2020

 

John L. Gainer, PhD

125 Cameron Lane

Charlottesville, VA 22903

 

Dear John:

 

In a communication dated February 2, 2020, you announced to the Board of Directors of Diffusion Pharmaceuticals Inc. ("Board") your intent to retire from Diffusion Pharmaceuticals Inc. ("Company"). The Company has accepted your retirement. This letter termination agreement and general release ("Agreement") will confirm the separation from employment of Dr. John L. Gainer ("you" or "your") from the Company, under the following terms and conditions:

 

1.     Separation from Employment. Your employment with the Company will terminate as of the date you sign this Agreement below (the "Separation Date"). You will receive your regular pay and benefits through the Separation Date. Any bonus for the year 2019 will also be paid. You will be entitled to the Accrued Benefits (as such term is defined in Section 4.2.1 of the Employment Agreement entered into as of October 18, 2016 between the Company and you ("Employment Agreement")). You and the Company agree that you are not entitled to any further compensation or benefits other than such Accrued Benefits and any bonus for the year 2019.

 

2.     Consulting Agreement. As you requested, the Company is entering into a consulting agreement with you on or around the date of this Agreement ("Consulting Agreement"). In addition, the Board acknowledges your desire to remain on the Board, and you understand that any re-nomination to the Board for a subsequent term or terms will be within the purview of the Board' s Nominating and Corporate Governance Committee. You will receive the same yearly compensation (cash/options) as the other non-Diffusion employee members of the Board of Directors do, which will consist solely of (i) annual cash compensation of $35,000, payable evenly over the course of the year, (ii) annual discretionary stock options as shall be determined by the Compensation Committee of the Board in its sole discretion, and (iii) at the Board's sole discretion, payments for annual committee membership depending on committee participation.

 

 

 

	Gainer Separation Letter	Page 2

 

 

3.     Options. As of the Separation Date, (i) you hold options (the "Options") to purchase a total of 258,501 shares of the Company's common stock, par value $0.001 per share ("Common Stock") that were granted to you under the Diffusion Pharmaceuticals Inc. 2015 Equity Incentive Plan or other plans (collectively, as amended and/or restated from time to time, the " Plans"), (ii) Options covering 58,046 shares of Common Stock in the aggregate are vested and exercisable and (iii) Options covering 200,455 shares of Common Stock in the aggregate are not vested. Conditioned upon your execution of this Agreement , (a) all of your Options that are outstanding and unvested as of the Separation Date shall become immediately vested and exercisable and (b) all of your Options that are outstanding and vested as of the Separation Date (including those Options that become vested under clause (a) of this sentence) shall remain exercisable in accordance with their respective terms until the expiration date stated in the applicable Option agreement and the Plan (generally, the tenth anniversary of the grant date of the applicable Option).

 

4.     Complete General Release of Claims. In consideration of the Company entering into the Consulting Agreement, and other good and valuable consideration to which you would not otherwise be entitled, you (on behalf of yourself, and your heirs, executors, and assigns) hereby irrevocably release and discharge the Company and its past, present and future subsidiaries, divisions, affiliates and parents; each of their respective current and former officers, directors , shareholders, employees, attorneys, agents , benefit plans, and/or owners, in their individual and official capacities; and any other person or entity claimed to be jointly or severally liable with the Company or any of the aforementioned persons or entities (the

"Released Parties" ) from any and all claims and/or causes of action, known or unknown , contingent or noncontingent, accrued or unaccrued, which you may have or could claim to have against the Released Parties up to and including the date you sign this Agreement. The general release in this paragraph includes, but is not limited to, (i) all claims arising from or during your employment or as a result of the termination of your employment with any of the Released Parties, (ii) all claims arising under federal, state or local laws prohibiting employment discrimination based upon race, age, sex, religion, disability, color, national origin or any other protected characteristic , including without limitation under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Virginia Human Rights Act, and the Virginians with Disabilities Act, and (iii) all claims arising under any federal, state, or local statute , rule, regulation or ordinance (including without limitation under the Virginia genetic testing and nondiscrimination law (Va. Code Ann§ 40.1-28.7:1), the Virginia HIV/AIDS confidentiality law (Va. Code Ann§ 32.1-36.1), the Virginia equal pay law (Va. Code Ann§ 40.1-28.6), and the Virginia statute on release of an employee's personal identifying information (Va. Code Ann

§ 40.1-28.7:4)) or under the common law of any jurisdiction. It is the intention of you and the

Company that the language relating to the description of released claims in this Section shall be given the broadest possible interpretation permitted by law. It is understood that nothing in this Agreement is to be construed as an admission on behalf of the Released Parties of any wrongdoing.

 

5.     Covenant Not to Sue. You agree and covenant not to institute or join any lawsuit (either individually, with others, or as part of a class), in any forum, pleading, raising or asserting any claim(s) barred or released by this Agreement. You understand that nothing in this Agreement precludes you from filing a charge with, cooperating with, communicating with , or providing information to the U.S. Equal Employment Opportunity Commission, U.S. Securities and Exchange Commission, or other government agency, or in connection with any proceedings by any such agency. You agree, however, that you will not seek or accept any relief obtained on your behalf by an y government agency, private party, class, or otherwise with respect to any claims released in this Agreement, provided that this Agreement does not limit your right to receive an award for information provided to any government agency.

 

 

 

	Gainer Separation Letter	Page 3

 

 

6.     Continuing Obligations.

 

(a)     Surviving Provisions of the Employment Agreement. You acknowledge and agree that you remain bound by, and will abide by, Article 1, Article 5, Section 2.1, and Sections 4.4 through 4.17 of the Employment Agreement, which remain in effect. Without limiting the generality of the foregoing, you specifically agree that all works of authorship, in any format or medium, and whether published or unpublished, created wholly or in part by you, whether alone or jointly with others, (i) in the course of, in connection with, or as a result of your service with the Company or any of its affiliates (whether before or after the Separation Date), (ii) at the direction or request of the Company or any of its affiliates, or (iii) through the use of, or that is related to, facilities, equipment, confidential information, other invent ions, intellectual property, or other resources of the Company or any of its affiliates, are works made for hire as defined under the United States copyright law and shall be considered a Work for purposes of the Employment Agreement.

 

(b)     Return of Property. You represent that you have returned (and have not retained) in good working condition any and all property, equipment, documents, and other information, confidential or otherwise, of the Company or any of its affiliates that was in your possession, custody, or control, except as necessary in connection with the performance of services under the Consulting Agreement.

 

(c)     Material Non-Public Information. You acknowledge that the Company is a reporting company under the Securities Exchange Act of 1934, as amended, and its equity securities are currently traded on the NASDAQ Capital Market. You hereby acknowledge and agree that you shall not (i) trade in the securities of the Company while in possession of material, non-public information regarding the Company or (ii) communicate any such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.

 

 

 

	Gainer Separation Letter	Page 4

 

 

7.     Miscellaneous. You and the Company acknowledge and agree that this Agreement will be governed by the substantive laws of the State of Virginia, irrespective of conflicts of law principles, and you and the Company hereby agree that all disputes arising under or relating to this Agreement or the Consulting Agreement shall be resolved in accordance with Sections 5.2 and 5.3 of the Employment Agreement. This Agreement represents the total and complete understanding between you and the Company with respect to the subject matter hereof and supersedes all other prior or contemporaneous written or oral agreements or representations, if any, relating to such subjects. This Agreement may be modified only by a writing signed by both you and the Company. No waiver by you or the Company of any breach by the other party is to be deemed a waiver of any other provisions at any time. The Company, but not you, may assign its rights and obligations under this Agreement, and such rights and obligations inure to the benefit of, and are binding upon, the Company ' s successors and permitted assigns . You and the Company intend that the terms of this Agreement be considered severable, such that if any provision of this Agreement is adjudged to be invalid for whatever reason, such invalidity will not affect any other clause of this Agreement, and such clauses will remain in full force and effect. The principle of construction that all ambiguities are to be construed against the drafter will not be employed in the interpretation of this Agreement. Rather, it is agreed that this Agreement should not be construed for or against any party. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may be executed in counterparts and delivered by facsimile transmission or electronic transmission in "portable document format," each of which shall be an original and which taken together shall constitute one and the same document.

 

 

 

	Gainer Separation Letter	Page 5

 

 

Please sign the enclosed copy of this letter in the space provided and return it to me. By signing this Agreement, you acknowledge that you have carefully reviewed this Agreement, that you have had an opportunity to consult with counsel of your choice, that you have entered into this Agreement freely and voluntarily and without reliance on any promises not expressly contained herein, that you have been afforded an adequate time to review carefully the terms of this Agreement, that you are releasing any claims that you may have against the Company and related entities , and that this Agreement will not be deemed void or avoidable by claims, of duress, deception, mistake of fact, or otherwise.

 

 

	 	
			Sincerely,

			/s/ David Kalergis           

			David Kalergis

			Chief Executive Officer

			

 

 

I have reviewed the Agreement as set forth above and, intending to be legally bound by my signature below, knowingly and voluntarily accept all of its terms and conditions.

 

 

	
			/s/ John L. Gainer

			John L. Gainer

				 	
			March 12, 2020

			Date

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