Document:

Exhibit
4.5

 

DESCRIPTION
OF CAPITAL STOCK OF CORMEDIX INC.

 

Common
Stock

 

The
following is a summary of certain provisions of the capital stock of CorMedix Inc. (referred to herein as “we,” “us,”
“our” and “Company”). Such summary does not purport to be complete. You should refer to our Amended and
Restated Certificate of Incorporation, as amended, and our Amended and Restated Bylaws and each Certificate of Designation for
our Series C-3, E and G preferred stock, in each case, incorporated by reference as an exhibit to this Form 10-K. The summary
below is also qualified by provisions of such documents and applicable law.

 

Pursuant
to our Amended and Restated Certificate of Incorporation, as amended, we are authorized to issue 160,000,000 shares of common
stock, $0.001 par value per share. As of March 9, 2020, we had [__] shares of common stock outstanding.

 

The
holders of our common stock are entitled to one vote per share on all matters to be voted on by the stockholders, and there are
no cumulative voting rights. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the
case of election of directors, by a plurality) of the votes entitled to be cast by all shares of common stock present in person
or represented by proxy, subject to any voting rights granted to holders of any preferred stock.

 

The
holders of common stock are entitled to receive ratable dividends, if any, payable in cash, in stock or otherwise if, as and when
declared from time to time by our Board of Directors out of funds legally available for the payment of dividends, subject to any
preferential rights that may be applicable to any outstanding preferred stock. In the event of a liquidation, dissolution, or
winding up of our Company, after payment in full of all outstanding debts and other liabilities, the holders of common stock are
entitled to share ratably in all remaining assets, subject to prior distribution rights of preferred stock, if any, then outstanding.
No shares of common stock have preemptive rights or other subscription rights to purchase additional shares of common stock. There
are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are fully
paid and nonassessable. The rights, preferences and privileges of holders of our common stock will be subject to, and might be
adversely affected by, the rights of holders of any preferred stock that we may issue in the future. All shares of common stock
that are acquired by us shall be available for reissuance by us at any time.

 

Issued
and Outstanding Preferred Stock

 

Under
the terms of our Amended and Restated Certificate of Incorporation, as amended, our Board of Directors is authorized to issue
up to 2,000,000 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. As of December 31, 2019, of the 2,000,000
shares of preferred stock authorized, our Board of Directors has designated (all with par value of $0.001 per share): 200,000
shares as Series C-3 Non-Voting Convertible Preferred Stock; 89,623 shares as Series E Convertible Preferred Stock and 100,000
as Series G Convertible Preferred Stock. At December 31, 2019, we had outstanding: 54,000 shares as Series C-3 Non-Voting Convertible
Preferred Stock; 89,623 shares as Series E Convertible Preferred Stock and 100,000 shares as Series G Convertible Preferred Stock.

 

     

     

    

 

Series
C-3 Non-Voting Convertible Preferred Stock

 

The
Series C-3 Preferred Stock has the rights, privileges and terms described below.

 

Rank.
The Series C Preferred Stock will rank:

 

	 	●	senior to our common
    stock;

 

	 	●	senior to
    any class or series of capital stock created after the issuance of the Series C-3 Preferred Stock; and

 

	 	●	junior to the Series
    E Non-Voting Convertible Preferred Stock.

 

in
each case, as to dividends or distributions of assets upon our liquidation, dissolution or winding up whether voluntarily or involuntarily.

 

Conversion.
Each share of Series C-3 Preferred Stock is convertible into 2 shares of our common stock (subject to adjustment in the event
of stock dividends and distributions, stock splits, stock combinations, or reclassifications affecting our common stock) at a
per share price of $5 at any time at the option of the holder, except that a holder will be prohibited from converting shares
of Series C-3 Preferred Stock into shares of common stock if, as a result of such conversion, such holder, together with its affiliates,
would beneficially own more than 9.99% of the total number of shares of our common stock then issued and outstanding.

 

Liquidation
Preference. In the event of our liquidation, dissolution or winding up, holders of Series C-3 Preferred Stock will receive
a payment equal to $10.00 per share of Series C-3 Preferred Stock before any proceeds are distributed to the holders of our common
stock. After the payment of this preferential amount, and subject to the rights of holders of any class or series of our capital
stock hereafter created specifically ranking by its terms senior to the Series C-3 Preferred Stock and holders of Series C-3 Preferred
Stock will participate ratably in the distribution of any remaining assets with the common stock and any other class or series
of our capital stock hereafter created that participates with the common stock in such distributions.

 

Voting
Rights. Shares of Series C-3 Preferred Stock will generally have no voting rights, except as required by law and except
that the consent of holders of two thirds of the outstanding Series C-3 Preferred Stock will be required to amend the terms of
the Series C-3 Preferred Stock or the certificate of designation for the Series C-3 Preferred Stock.

 

Dividends.
Holders of Series C-3 Preferred Stock are entitled to receive, and we are required to pay, dividends on shares of the Series
C-3 Preferred Stock equal (on an as-if-converted-to-common-stock basis) to and in the same form as dividends (other than dividends
in the form of common stock) actually paid on shares of the common stock when, as and if such dividends (other than dividends
in the form of common stock) are paid on shares of the common stock.

 

Redemption.
We are not obligated to redeem or repurchase any shares of Series C-3 Preferred Stock. Shares of Series C-3 Preferred Stock
are not otherwise entitled to any redemption rights, or mandatory sinking fund or analogous fund provisions.

 

Listing.
There is no established public trading market for the Series C-3 Preferred Stock, and we do not expect a market to develop.
In addition, we do not intend to apply for listing of the Series C-3 Preferred Stock on any national securities exchange or trading
system.

 

Fundamental
Transactions. If, at any time that shares of Series C-3 Preferred Stock are outstanding, we effect a merger or other change
of control transaction, as described in the certificate of designation and referred to as a fundamental transaction, then a holder
will have the right to receive, upon any subsequent conversion of a share of Series C-3 Preferred Stock (in lieu of conversion
shares) for each issuable conversion share, the same kind and amount of securities, cash or property as such holder would have
been entitled to receive upon the occurrence of such fundamental transaction if such holder had been, immediately prior to such
fundamental transaction, the holder of a share of common stock.

 

    2

     

    

 

Series
E Convertible Preferred Stock

 

Rank.
The Series E Preferred Stock will rank:

 

	 	●	senior to our common
    stock;

 

	 	●	senior to any class
    or series of capital stock created after the issuance of the Series E Preferred Stock;

 

	 	●	senior to the Series
    C-3 Non-Voting Convertible Preferred Stock; and

 

	 	●	on parity with the Series
    G Convertible Preferred Stock.

 

in
each case, as to dividends or distributions of assets upon our liquidation, dissolution or winding up whether voluntarily or involuntarily.

 

Conversion.
Each share of Series E Preferred Stock is convertible into 4.3733 shares of our common stock (subject to adjustment as provided
in the certificates of designation for the Series E Preferred Stock) at a per share price of $3.75 at any time at the option of
the holder, except that a holder will be prohibited from converting shares of Series E Preferred Stock into shares of common stock
if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than 4.99% of the total
number of shares of our common stock then issued and outstanding.

 

Liquidation
Preference. In the event of our liquidation, dissolution or winding up, holders of Series E Preferred Stock will receive
a payment equal to $49.20 per share of Series E Preferred Stock on parity with the payment of the liquidation preference due the
Series G Preferred Stock, but before any proceeds are distributed to the holders of common stock, and the Series C-3 Non-Voting
Convertible Preferred Stock. After the payment of this preferential amount, holders of Series E Preferred Stock will participate
ratably in the distribution of any remaining assets with the common stock and any other class or series of our capital stock that
participates with the common stock in such distributions.

 

Voting
Rights. Shares of Series E Preferred Stock are entitled to vote on an as-converted basis, based upon an assumed conversion
price of $7.93.

 

Dividends.
Holders of Series E Preferred Stock are entitled to receive, and we are required to pay, dividends on shares of the Series
E Preferred Stock equal (on an as-if-converted-to-common-stock basis) to and in the same form as dividends (other than dividends
in the form of common stock) actually paid on shares of the common stock when, as and if such dividends (other than dividends
in the form of common stock) are paid on shares of the common stock.

 

Redemption.
We are not obligated to redeem or repurchase any shares of Series E Preferred Stock. Shares of Series E Preferred Stock are
not otherwise entitled to any redemption rights, or mandatory sinking fund or analogous fund provisions.

 

Listing.
There is no established public trading market for the Series E Preferred Stock, and we do not expect a market to develop.
In addition, we do not intend to apply for listing of the Series E Preferred Stock on any national securities exchange or trading
system.

 

Fundamental
Transactions. If, at any time that shares of Series E Preferred Stock are outstanding, we effect a merger or other change
of control transaction, as described in the certificate of designation and referred to as a fundamental transaction, then a holder
will have the right to receive, upon any subsequent conversion of a share of Series E Preferred Stock (in lieu of conversion shares)
for each issuable conversion share, the same kind and amount of securities, cash or property as such holder would have been entitled
to receive upon the occurrence of such fundamental transaction if such holder had been, immediately prior to such fundamental
transaction, the holder of a share of common stock.

 

Debt
Restriction. As long as any of the Series E Preferred Stock is outstanding, we cannot create, incur, guarantee, assume
or suffer to exist any indebtedness, other than (i) trade payables incurred in the ordinary course of business consistent with
past practice, and (ii) up to $10 million aggregate principal amount of indebtedness with a maturity less than twelve months outstanding
at any time, which amount may include up to $5 million of letters of credit outstanding at any time.

 

    3

     

    

 

Other
Covenants. In addition to the debt restrictions above, as long as any the Series E Preferred Stock is outstanding , we
cannot, among others things: create, incur, assume or suffer to exist any encumbrances on any of our assets or property; redeem,
repurchase or pay any cash dividend or distribution on any of our capital stock (other than as permitted, which includes the dividends
on the Series E Preferred Stock and Series G Preferred Stock); redeem, repurchase or prepay any indebtedness (other than as permitted);
or engage in any material line of business substantially different from our current lines of business.

 

Purchase
Rights. In the event we issue any options, convertible securities or rights to purchase stock or other securities pro
rata to the holders of common stock, then the a holder of Series E Preferred Stock will be entitled to acquire, upon the same
terms a pro rata amount of such stock or securities as if the Series E Preferred Stock had been converted to common stock.

 

Series
G Convertible Preferred Stock

 

Rank.
The Series G Preferred Stock will rank:

 

	 	●	senior to our common
    stock;

 

	 	●	senior to any class
    or series of capital stock created after the issuance of the Series G Preferred Stock;

 

	 	●	junior to the Series
    C-3 Non-Voting Convertible Preferred Stock, pending the consent of the holders of such series to the subordination thereof;
    and

 

	 	●	on parity with the Series
    E Convertible Preferred Stock.

 

in
each case, as to dividends or distributions of assets upon our liquidation, dissolution or winding up whether voluntarily or involuntarily.

 

Conversion.
Each share of Series G Preferred Stock is convertible into approximately 55.5978 shares of our common stock (subject to adjustment
as provided in the certificate of designation for the Series G Preferred Stock) at a per share price of $3.37 at any time at the
option of the holder, except that a holder will be prohibited from converting shares of Series G Preferred Stock into shares of
common stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than 4.99%
of the total number of shares of our common stock then issued and outstanding.

 

Liquidation
Preference. In the event of our liquidation, dissolution or winding up, holders of Series E Preferred Stock will receive
a payment equal to $187.36452 per share of Series G Preferred Stock on parity with the payment of the liquidation preference due
the Series E Preferred Stock, but before any proceeds are distributed to the holders of Series C-3 Preferred Stock (pending the
consent of the holders of such series to the subordination thereof) and after any proceeds are distributed to the holders of common
stock. After the payment of this preferential amount, holders of Series G Preferred Stock will participate ratably in the distribution
of any remaining assets with the common stock and any other class or series of our capital stock that participates with the common
stock in such distributions.

 

Voting
Rights. Shares of Series G Preferred Stock are entitled to vote on an as-converted basis, based upon an assumed conversion
price of $7.93.

 

Dividends.
Holders of Series G Preferred Stock are entitled to receive, and we are required to pay, dividends on shares of the Series G Preferred
Stock equal (on an as-if-converted-to-common-stock basis) to and in the same form as dividends (other than dividends in the form
of common stock) actually paid on shares of the common stock when, as and if such dividends (other than dividends in the form
of common stock) are paid on shares of the common stock.

 

    4

     

    

 

Redemption.
We are not obligated to redeem or repurchase any shares of Series G Preferred Stock. Shares of Series G Preferred Stock are not
otherwise entitled to any redemption rights, or mandatory sinking fund or analogous fund provisions.

 

Listing.
There is no established public trading market for the Series G Preferred Stock, and we do not expect a market to develop. In addition,
we do not intend to apply for listing of the Series G Preferred Stock on any national securities exchange or trading system.

 

Fundamental
Transactions. If, at any time that shares of Series G Preferred Stock are outstanding, we effect a merger or other change
of control transaction, as described in the certificate of designation and referred to as a fundamental transaction, then a holder
will have the right to receive, upon any subsequent conversion of a share of Series G Preferred Stock (in lieu of conversion shares)
for each issuable conversion share, the same kind and amount of securities, cash or property as such holder would have been entitled
to receive upon the occurrence of such fundamental transaction if such holder had been, immediately prior to such fundamental
transaction, the holder of a share of common stock.

 

Debt
Restriction. As long as any of the Series G Preferred Stock is outstanding, we cannot create, incur, guarantee, assume
or suffer to exist any indebtedness, other than (i) trade payables incurred in the ordinary course of business consistent with
past practice, and (ii) up to $10 million aggregate principal amount of indebtedness with a maturity less than twelve months outstanding
at any time, which amount may include up to $5 million of letters of credit outstanding at any time.

 

Other
Covenants. In addition to the debt restrictions above, as long as any the Series G Preferred Stock is outstanding, we
cannot, among others things: create, incur, assume or suffer to exist any encumbrances on any of our assets or property; redeem,
repurchase or pay any cash dividend or distribution on any of our capital stock (other than as permitted, which includes the dividends
on the Series E Preferred Stock and the Series G Preferred Stock); redeem, repurchase or prepay any indebtedness (other than as
permitted); or engage in any material line of business substantially different from our current lines of business.

 

Purchase
Rights. In the event we issue any options, convertible securities or rights to purchase stock or other securities pro
rata to the holders of common stock, then the a holder of Series G Preferred Stock will be entitled to acquire, upon the same
terms a pro rata amount of such stock or securities as if the Series G Preferred Stock had been converted to common stock.

 

Transfer
Agent and Registrar

 

We
act as our own transfer agent and registrar for the Series C-3, E and G Preferred Stock.

 

Certain
Anti-Takeover Provisions of Delaware Law and of Our Amended and Restated Certificate of Incorporation and Amended and Restated
Bylaws

 

Certain
provisions of the Delaware General Corporation Law (the “DGCL”) and our Amended and Restated Certificate of Incorporation,
as amended, and our Amended and Restated Bylaws discussed below may have the effect of making more difficult or discouraging a
tender offer, proxy contest or other takeover attempt. These provisions are expected to encourage persons seeking to acquire control
of our Company to first negotiate with our Board of Directors. We believe that the benefits of increasing our ability to negotiate
with the proponent of an unfriendly or unsolicited proposal to acquire or restructure our Company outweigh the disadvantages of
discouraging these proposals because negotiation of these proposals could result in an improvement of their terms.

 

    5

     

    

 

Delaware
Anti-takeover Law

 

We
are subject to Section 203 of the DGCL, an anti-takeover law. In general, Section 203 prohibits a publicly held Delaware corporation
from engaging in a “business combination” with an “interested stockholder” for a period of three years
following the date the person became an interested stockholder, unless:

 

	 	●	the Board of Directors
    approves the transaction in which the stockholder became an interested stockholder prior to the date the interested stockholder
    attained that status;

 

	 	●	when the stockholder
    became an interested stockholder, he or she 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 certain shares owned
    by employee benefits plans; or

 

	 	●	on or subsequent to
    the date the business combination is approved by the Board of Directors, the business combination is authorized by the affirmative
    vote of at least 66 2/3% of the voting stock of the corporation at an annual or special meeting of stockholders.

 

Generally,
a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit
to the interested stockholder. Generally, an “interested stockholder” is a person who, together with affiliates and
associates, owns, or is an affiliate or associate of the corporation and within three years prior to the determination of interested
stockholder status did own, 15% or more of a corporation’s voting stock.

 

The
existence of Section 203 of the DGCL would be expected to have an anti-takeover effect with respect to transactions not approved
in advance by our Board of Directors, including discouraging attempts that might result in a premium over the market price for
the shares of our common stock.

 

Charter
Documents

 

Our
Amended and Restated Certificate of Incorporation, as amended, and Amended and Restated Bylaws include a number of provisions
that may have the effect of deterring hostile takeovers or delaying or preventing changes in control or management of our Company.
First, our Amended and Restated Bylaws limit who may call special meetings of the stockholders, such meetings may only be called
by the chairman of the Board of Directors, the chief executive officer, the Board of Directors or holders of an aggregate of at
least 15% of our outstanding entitled to vote. Second, our Amended and Restated Certificate of Incorporation does not include
a provision for cumulative voting for directors. Under cumulative voting, a minority stockholder holding a sufficient percentage
of a class of shares may be able to ensure the election of one or more directors. Third, our Amended and Restated Bylaws provide
that the number of directors on our Board of Directors, which may range from five to nine directors, shall be exclusively fixed
by our Board of Directors, which has set the number of directors at seven. Fourth, newly created directorships resulting from
any increase in our authorized number of directors and any vacancies in our Board of Directors resulting from death, resignation,
retirement, disqualification or other cause (including removal from office by a vote of the shareholders) will be filled by a
majority of our Board of Directors then in office. Finally, our Amended and Restated Bylaws establish procedures, including 90-day
advance notice requirement, with regard to the nomination of candidates for election as directors and stockholder proposals. These
and other provisions of our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and Delaware law
could discourage potential acquisition proposals and could delay or prevent a change in control or management of our Company.

 

 

6Exhibit

Exhibit 4.2
DESCRIPTION OF REGISTRANT’S SECURITIES
As of December 31, 2019, Capital Bancorp, Inc. (the “Company,” “we,” or “our”) had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): our common stock, par value $0.01 per share (“common stock”).
DESCRIPTION OF COMMON STOCK
General
The following description of the current terms of our common stock is a summary and is not meant to be complete. It is qualified in its entirety by reference to the Maryland General Corporation Law (the “MGCL”), federal law, our Amended and Restated Articles of Incorporation (the “Articles”) and our Amended and Restated Bylaws (the “Bylaws”).
Authorized Capital Stock
Our Articles authorize us to issue up to 49,000,000 shares of common stock, par value $0.01 per share, and 1,000,000 shares of preferred stock, par value $0.01 per share.
Voting Rights
Each holder of our common stock is entitled to one vote for each share on all matters submitted to a vote of shareholders, except as otherwise required by law and subject to the rights and preferences of the holders of any outstanding shares of our preferred stock. The members of our board of directors (the “Board”) are elected by a plurality of the votes cast. Our Articles expressly prohibit cumulative voting.
No Preemptive or Similar Rights
Holders of our common stock do not have preemptive or subscription rights to acquire any authorized but unissued shares of our capital stock upon any future issuance of shares.
Dividend Rights
Subject to certain regulatory restrictions and to the rights of holders of any preferred stock that we may issue, all shares of our common stock are entitled to share equally in dividends from legally available funds, when, as, and if declared by our Board. 
Liquidation Rights 
Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, all shares of our common stock would be entitled to share equally in all of our remaining assets available for distribution to our shareholders after payment of creditors and subject to any prior distribution rights related to our preferred stock.
Restrictions on Ownership
The Bank Holding Company Act of 1956, as amended (the “BHC Act”), generally permits a company to acquire control of the Company with the prior approval of the Federal Reserve Board. However, any such company is restricted to banking activities, other activities closely related to the banking business as determined by the Federal Reserve Board and, for some companies, certain other financial activities. The BHC Act defines control in general as ownership of 25% or more of any class of voting securities, the authority 

to appoint a majority of the board of directors or other exercise of a controlling influence. Federal Reserve Board regulations provide that ownership of 5% or less of a class of voting securities is not control. As a policy matter, if a company owns more than 7.5% of a class of voting securities, the Federal Reserve Board expects the company to consult with the agency and in some cases will require the company to enter into passivity or anti-association commitments. Under a rebuttable presumption established by the Federal Reserve Board, the acquisition of 10% or more of a class of voting stock of a bank holding company with a class of securities registered under Section 12 of the Exchange Act, such as the Company following the offering, would, under the circumstances set forth in the presumption, constitute acquisition of control of the bank holding company.
Business Combinations under Our Articles and Maryland Law

Consideration of Business Combinations

Our Articles provide that when our Board evaluates any actual or proposed business combination, it shall consider the following factors: the effect of the business combination on the Company and its subsidiaries, and their respective shareholders, employees, customers and the communities which they serve; the timing of the proposed business combination; the risk that the proposed business combination will not be consummated; the reputation, management capability and performance history of the person proposing the business combination; the current market price of our capital stock; the relation of the price offered to the current value of the Company in a freely negotiated transaction and in relation to our directors’ estimate of the future value of the Company and its subsidiaries as an independent entity or entities; tax consequences of the business combination to the Company and its shareholders; and such other factors deemed by the directors to be relevant. In such considerations, our Board may consider all or some of such factors as a whole and may or may not assign relative weights to any of them. The foregoing is not intended as a definitive list of factors to be considered by our Board in the discharge of its fiduciary responsibility to the Company and its shareholders, but rather to guide such consideration and to provide specific authority for the consideration by our Board of factors which are not purely economic in nature in light of the circumstances of the Company and its subsidiaries at the time of such proposed business combination.

Our Articles provide that no business combination will be valid unless first approved by the affirmative vote of not less than 66.67% of the shares of the capital stock of the Company entitled to vote on the business combination; provided, that if the business combination has been approved prior to the vote of shareholders by a majority of our Board, the affirmative vote of the holders of record of a majority of the shares of the capital stock of the Company entitled to vote on the business combination will be required to approve the business combination.

Amendment of the Articles.

In general and except for increases or decreases to our authorized shares of common stock and any class of capital stock, which may be approved by our Board without shareholder approval, our Articles may be amended upon the vote of holders of two-thirds of the shares of the Company entitled to vote generally in an election of directors, voting together as a single class, which is the minimum vote required under Maryland law.

Restrictions on Business Combinations with Interested Shareholders

Section 3-602 of the MGCL, as in effect on the date hereof, imposes conditions and restrictions on certain “business combinations” (including, among other transactions, a merger, consolidation, share exchange, or, in certain circumstances, an asset transfer or issuance of equity securities) between a Maryland corporation and any person who beneficially owns at least 10% of the corporation’s stock, or an interested shareholder. Unless approved in advance by the board of directors, or otherwise exempted by the statute, such a business combination is prohibited for a period of five years after the most recent date on which the interested shareholder became an interested shareholder. After such five-year period, a business 

2

combination with an interested shareholder must be: (a) recommended by the corporation’s board of directors, and (b) approved by the affirmative vote of at least (i) 80% of the corporation’s outstanding shares entitled to vote and (ii) two-thirds of the outstanding shares entitled to vote which are not held by the interested shareholder with whom the business combination is to be effected, unless, among other things, the corporation’s common shareholders receive a “fair price” (as defined by the statute) for their shares and the consideration is received in cash or in the same form as previously paid by the interested shareholder for his or her shares. As indicated above, our Articles provide that no business combination will be valid unless first approved by the affirmative vote of not less than 66.67% of the shares of the capital stock of the Company entitled to vote on the business combination; provided, however, that if the business combination has been approved prior to the vote of shareholders by a majority of our Board, the affirmative vote of the holders of record of a majority of the shares of the capital stock of the Company entitled to vote on the business combination will be required to approve a business combination.

Control Share Acquisition Statute

Under the MGCL’s control share acquisition law, as in effect on the date hereof, voting rights of shares of stock of a Maryland corporation acquired by an acquiring person at ownership levels of 10%, 33 1/3% and 50% of the outstanding shares are denied unless conferred by a special shareholder vote of two-thirds of the outstanding shares held by persons other than the acquiring person and officers and directors of the corporation or, among other exceptions, such acquisition of shares is made pursuant to a merger agreement with the corporation or the corporation’s charter or bylaws permit the acquisition of such shares prior to the acquiring person’s acquisition thereof. Unless a corporation’s charter or bylaws provide otherwise, the statute permits such corporation to redeem the acquired shares at “fair value” if the voting rights are not approved or if the acquiring person does not deliver a “control share acquisition statement” to the corporation on or before the tenth day after the control share acquisition. The acquiring person may call a shareholder’s meeting to consider authorizing voting rights for control shares subject to meeting disclosure obligations and payment of costs set out in the statute. If voting rights are approved for more than 50% of the outstanding stock, objecting shareholders may have their shares appraised and repurchased by the corporation for cash. Pursuant to the terms of our Bylaws, which were approved by our shareholders, we have opted out from the operation of the control share acquisition law. As such, the above described control share acquisition statute will not be applicable to us and will not apply to shares of stock acquired by a shareholder subsequent to the adoption of adoption of the bylaw provision that opts-out of control share acquisition law.

Certain Provisions Potentially Having an Anti-Takeover Effect

Our Articles and Bylaws contain certain provisions that may have the effect of deterring or discouraging, among other things, a non-negotiated tender or exchange offer for our common stock, a proxy contest for control of the Company, the assumption of control of the Company by a holder of a large block of our common stock and the removal of our directors or management. These provisions:

		
	•
	empower our Board, without shareholder approval, to issue our preferred stock, the terms of which, including voting power, are set by our Board;

		
	•
	empower our Board, without shareholder approval, to amend our Articles to increase or decrease our authorized shares of common stock and any class of capital stock that we have the authority to issue;

		
	•
	divide our Board into three classes serving staggered three-year terms;

		
	•
	provide that directors may be removed from office for cause upon a majority shareholder vote and may only be removed from office without cause only upon a 66.67% shareholder vote;

		
	•
	eliminate cumulative voting in elections of directors;

		
	•
	permit our Board to alter, amend or repeal our Bylaws or to adopt new bylaws;

		
	•
	require the request of holders of at least a majority of the outstanding shares of our capital stock entitled to vote at a meeting to call a special shareholders’ meeting;

3

		
	•
	prohibit shareholder action by less than unanimous written consent, thereby requiring virtually all actions to be taken at a meeting of the shareholders;

		
	•
	require shareholders that wish to bring business before our annual meeting of shareholders or nominate candidates for election as directors at our annual meeting of shareholders to provide timely notice of their intent in writing; and

		
	•
	enable our Board to increase, between annual meetings, the number of persons serving as directors and to fill vacancies created as a result of the increase by a majority vote of the directors present at a meeting of directors.

Our Bylaws may have the effect of precluding a contest for the election of directors or the consideration of shareholder proposals if the established procedures for advance notice are not followed, or of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its proposal without regard to whether consideration of the nominees or proposals might be harmful or beneficial to us and our shareholders.

Stock Exchange Listing
Our common stock is listed on the NASDAQ Global Market under the symbol “CBNK.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC.

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00306-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00306-of-00352.parquet"}]]