Document:

vtvt-ex43_144.htm

Exhibit 4.3

DESCRIPTION OF THE CAPITAL STOCK

Capital Stock

Our authorized capital stock consists of 100,000,000 shares of Class A common stock, par value $0.01 per share, 100,000,000 shares of Class B common stock, par value $0.01 per share, and 50,000,000 shares of preferred stock, par value $0.01 per share.  As of February [___], 2020, we have approximately [42,168,522] shares of our Class A common stock outstanding, 23,094,221 shares of our Class B common stock outstanding and no shares of preferred stock outstanding. As of February [___], 2020, there were approximately [21] holders of record of our Class A common stock and [7] holders of record of our Class B common stock. Because almost all of the shares of our Class A common stock are held by brokers, nominees and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.

 

Common Stock

Voting.  Holders of our Class A common stock and Class B common stock are entitled to one vote for each share held on all matters submitted to stockholders for their vote or approval.  The holders of our Class A common stock and Class B common stock vote together as a single class on all matters submitted to stockholders for their vote or approval, except with respect to the amendment of certain provisions of our amended and restated certificate of incorporation that would alter or change the powers, preferences or special rights of the Class B common stock so as to affect them adversely, which amendments must be approved by a majority of the votes entitled to be cast by the holders of the shares affected by the amendment, voting as a separate class, or as otherwise required by applicable law.

As of December 31, 2019, subsidiaries and affiliates of MacAndrews & Forbes Incorporated (collectively “MacAndrews”) hold 23,084,267 shares of our Class B common stock and 30,356,212 shares of our Class A common stock and therefore control approximately 83.5% of the combined voting power of our outstanding common stock. As a result, MacAndrews is able to control our business policies and affairs and any action requiring the general approval of our stockholders, including the adoption of amendments to our certificate of incorporation and bylaws, the approval of mergers or sales of substantially all of our assets and the removal of members of our Board of Directors with or without cause.  MacAndrews also has the power to nominate a majority of the members to our Board of Directors under our investor rights agreement.  The concentration of ownership and voting power of MacAndrews may also delay, defer or even prevent an acquisition by a third party or other change of control of our company and may make some transactions more difficult or impossible without the support of MacAndrews, even if such events are in the best interests of minority stockholders.

Dividends.  The holders of Class A common stock are entitled to receive dividends when, as, and if declared by our Board of Directors out of legally available funds.  The holders of our Class B common stock do not have any right to receive dividends other than dividends consisting of shares of our Class B common stock paid proportionally with respect to each outstanding share of our Class B common stock.

Liquidation or Dissolution.  Upon our liquidation or dissolution, the holders of our Class A common stock are entitled to share ratably in those of our assets that are legally available for distribution to stockholders after payment of liabilities and subject to the prior rights of any holders of preferred stock then outstanding.  Other than their par value, the holders of our Class B common stock do not have any right to receive a distribution upon a liquidation or dissolution of our company.

Transferability and Exchange.  Subject to the terms of an exchange agreement and the operating agreement of  vTv Therapeutics LLC (“vTv LLC”), our principal operating subsidiary, units of vTv LLC (along with a corresponding number of shares of our Class B common stock) are exchangeable for (i) shares of our Class A common stock or (ii) cash (based on the market price of the shares of Class A common stock), at our option (as the managing member of vTv LLC).  Any decision to require an exchange for cash rather than shares of Class A common stock will ultimately be determined by our entire Board of Directors.  Each such exchange will be on a one-for-one equivalent basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications.  Shares of Class B common stock may not be transferred except in connection with an exchange or transfer of units of vTv LLC.

 

Upon exchange, each share of our Class B common stock will be cancelled.

Preferred Stock

We have been authorized to issue up to 50,000,000 shares of preferred stock.  Our board of directors has authorized, subject to limitations prescribed by Delaware law and our amended and restated certificate of incorporation, to determine the terms and conditions of the preferred stock, including whether the shares of preferred stock will be issued in one or more series, the number of shares to be included in each series and the powers, designations, preferences and rights of the shares.  Our Board of Directors has also been authorized to designate any qualifications, limitations or restrictions on the shares without any further vote or action by the stockholders.  The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of our company and may adversely affect the voting and other rights of the holders of our Class A common stock and Class B common stock, which could have an adverse impact on the market price of our Class A common stock.  We have no current plan to issue any shares of preferred stock.

Corporate Opportunities

Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by law, the doctrine of “corporate opportunity” will not apply to MacAndrews, any of our non-employee directors who are employees, affiliates or consultants of MacAndrews or its affiliates (other than us or our subsidiaries) or any of their respective affiliates in a manner that would prohibit them from investing in competing businesses or doing business with our clients or customers.  See “Risk Factors—Risks Relating to this Offering and Ownership of Our Class A Common Stock—MacAndrews has substantial influence over our business, and their interests may differ from our interests or those of our other stockholders” in our Annual Report on Form 10-K for the year ended December 31, 2019, which is incorporated herein by reference.

Anti-Takeover Effects of our Certificate of Incorporation and Bylaws

Our amended and restated certificate of incorporation and bylaws contain certain provisions that are intended to enhance the likelihood of continuity and stability in the composition of the Board of Directors and which may have the effect of delaying, deferring or preventing a future takeover or change in control of us unless such takeover or change in control is approved by our Board of Directors. 

These provisions include:

Action by Written Consent; Special Meetings of Stockholders.  Our amended and restated certificate of incorporation provides that, following the date on which MacAndrews ceases to beneficially own more than 50% of our common stock (the “Triggering Event”), stockholder action can be taken only at an annual or special meeting of stockholders and cannot be taken by written consent in lieu of a meeting.  Our amended and restated certificate of incorporation and bylaws also provide that, except as otherwise required by law, special meetings of the stockholders can only be called by the chairman or vice-chairman of the board, the chief executive officer, or pursuant to a resolution adopted by a majority of the Board of Directors or, until the Triggering Event, at the request of holders of 50% or more of our outstanding shares of common stock.  Except as described above, stockholders will not be permitted to call a special meeting or to require the Board of Directors to call a special meeting.

Advance Notice Procedures.  Our bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to the 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 the Board of Directors or by a stockholder who was a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has given our Secretary timely written notice, in proper form, of the stockholder’s intention to bring that business before the meeting.  Although the bylaws do not give the Board of Directors the power to approve or disapprove stockholder nominations of candidates or proposals regarding other business to be conducted 

at a special or annual meeting, the bylaws may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed or may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of us.

Vacancies and Newly-Created Directorships on the Board of Directors.  Our bylaws provide that the Board of Directors can fill vacancies on the Board of Directors.  In addition, the Board of Directors will be permitted to increase the number of directors and fill the vacant positions.  These provisions could make it more difficult for shareholders to affect the composition of our Board of Directors.

Authorized but Unissued Shares.  Our authorized but unissued shares of common stock and preferred stock will be available for future issuance without stockholder approval.  These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans.  The existence of authorized but unissued shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of a majority of our common stock by means of a proxy contest, tender offer, merger or otherwise.

Business Combinations with Interested Stockholders.  We have elected in our amended and restated certificate of incorporation not to be subject to Section 203 of the Delaware General Corporation Law, an antitakeover law.  In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the corporation’s voting stock for a period of three years following the date the person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner.  Accordingly, we will not be subject to any anti-takeover effects of Section 203.  Nevertheless, our amended and restated certificate of incorporation contains provisions that have the same effect as Section 203, except that they provide that MacAndrews and its various affiliates, successors and transferees will not be deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and accordingly will not be subject to such restrictions.

Choice of Forum

Our amended and restated certificate of incorporation provides that the Court of Chancery in the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by our directors, officers or other employees, (iii) any action asserting a claim arising under the Delaware General Corporation Law, our amended and restated certificate of incorporation and amended and restated by-laws or (iv) any action asserting a claim that is governed by the internal affairs doctrine. It is possible that a court could rule that this provision is not applicable or is unenforceable.  We may consent in writing to alternative forums.  Stockholders will be deemed to have consented to the personal jurisdiction of the state and federal courts located within the State of Delaware and having service of process made on such stockholder’s counsel as agent for such stockholder.

Directors’ Liability; Indemnification of Directors and Officers

Our amended and restated certificate of incorporation limits the liability of our directors to the fullest extent permitted by the Delaware General Corporation Law and provides that we will provide them with customary indemnification. We expect to enter into customary indemnification agreements with each of our executive officers and directors that provide them, in general, with customary indemnification in connection with their service to us or on our behalf.

Transfer Agent and Registrar

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

Securities Exchange

Our shares of Class A common stock are listed on The NASDAQ Capital Market under the symbol “VTVT”.vtvt-ex1025_142.htm

Exhibit 10.25

 

 

 

MacAndrews & Forbes Group LLC

35 East 62nd Street

New York, New York 10065

 

      December 23, 2019

 

vTv Therapeutics Inc.

3980 Premier Drive, Suite 310

High Point, NC 27265

 

Attn: Stephen L. Holcombe

President and Chief Executive Officer

Rudy C. Howard

Chief Financial Officer

 

Gentlemen:

 

You have indicated an interest in an additional investment by MacAndrews & Forbes Group LLC or one of its affiliates (collectively, “MacAndrews”) in Class A common stock, par value $0.01 (“Common Stock”), of vTv Therapeutics Inc. (the “Company”) in an amount of up to $10,000,000. I am pleased to present, for your board’s consideration, the terms on which we would agree to make such an additional investment.

 

As set forth in more detail in the term sheet attached to this letter (collectively, the term sheet and this letter are referred to as this “Letter”) we agree to invest up to $10,000,000 in the Company, with such commitment remaining available to the Company, at its option, for a period of one year from the date of this Letter (the “Commitment Period”). In exchange, the definitive agreement will provide that the Company will issue to us on each funding date (the “Company Option”) Common Stock at a per share purchase price equal to $1.60 (the “Per Share Price”), which is equal to the closing price of the Common Stock for the trading day prior to the date of this Letter.

 

In consideration for our binding commitment, upon the execution of this Letter, the Company will issue us warrants to acquire 365,472 shares of Common Stock, exercisable at an initial exercise price of $1.84 per share of Common Stock, subject to customary proportional adjustments for stock splits, stock dividends, combinations and similar transactions. The warrants shall be exercisable for a period of seven years commencing on the date of this Letter. We shall also have the option, during the Commitment Period, to invest in the Company by purchasing up to $10,000,000 of shares of Common Stock at the Per Share Price (the “MacAndrews Option”). Notwithstanding anything to the contrary in this Letter, the total value of Common Stock that may be purchased pursuant to the Company Option and the MacAndrews Option shall not exceed $10,000,000 in the aggregate. The Company Option may be exercised by you, and the MacAndrews Option may be exercised by us, in each case, by the exercising party delivering a notice (a “Funding Notice”) to the other party, which notice shall specify the aggregate value and number of shares of Common Stock to be purchased by us. Funding Notices from the Company shall be made in writing by the Chief Executive Officer or Chief Financial Officer of the Company. MacAndrews shall be limited to three Funding Notices during the Commitment Period; the number of Funding Notices from the Company shall not be limited.

 

The Company would use the proceeds of any such investment to fund research and development, to pursue growth opportunities and for general corporate purposes.

 

Our obligation to fund the purchase price and the Company’s obligation to issue shares of Common Stock on the terms set forth in this Letter with respect to each investment contemplated by this Letter are subject to the negotiation and execution of a mutually acceptable securities purchase agreement with respect to each such investment.

 

This Letter shall, upon execution, be binding on the parties hereto. All obligations under this Letter shall remain in full force and effect until the one-year anniversary of this Letter. The completion of the transactions contemplated by this Letter are subject, among other things, to the negotiation and execution of a definitive agreement acceptable to each of us. The parties hereto agree that, upon delivery of a Funding Notice in accordance with the terms of this Letter by either party, the parties shall, as promptly as practicable, (i) enter into a securities purchase agreement with respect to the investment contemplated by the 

 

 

Funding Notice, (ii) take all actions and further steps as may be reasonably necessary to complete such investment, and (iii) complete such investment. Notwithstanding anything to the contrary in this Letter, failure by either party to comply with the foregoing sentence shall constitute a material breach under this Letter, entitling the non-breaching party to specific performance (it being understood that money damages would not be an adequate remedy for any such breach).      

 

Neither this Letter nor any of the provisions hereof may be amended, modified, changed or waived except by an instrument in writing signed by the parties hereto. This Letter shall be governed by and construed in accordance with the laws of the State of New York. This Letter contains the full and entire understanding and agreement between the parties with regard to the subject matters hereof and supersedes all prior understandings and agreements relating to the matters set forth herein. This Letter may be executed in counterparts, each of which shall be deemed to constitute an original but all of which together shall constitute one and the same instrument.

 

We continue to be excited about the Company and its prospects. We look forward to implementing a transaction that would be in the best interests of the Company’s stockholders, officers and other employees, and customers. 

 

 

        

                      Very truly yours,

 

       MacAndrews & Forbes Group LLC  

 

 

        

		
	
By:
	
/s/ Shiri Ben-Yishai

	
Name:
	
Shiri Ben-Yishai

	
Title:
	
Corporate Secretary

 

 

 

 

AGREED AND ACCEPTED:

 

vTv Therapeutics INC.

 

 

		
	
By:
	
/s/ Rudy C. Howard

	
Name:
	
Rudy C Howard

	
Title:
	
Chief Financial Officer

 

 

 

 

 

[Signature Page to Commitment Letter]

 

 

SUMMARY OF TERMS

$10,000,000 INVESTMENT

vTv Therapeutics INC.

December 23, 2019

 

This term sheet (“Term Sheet”) summarizes the principal terms of an investment by MacAndrews & Forbes Group LLC or one of its affiliates (collectively, “MacAndrews”) of up to $10,000,000 in vTv Therapeutics Inc. (the “Company”).

 

		
	
Company Option:
	
MacAndrews commits to invest up to an aggregate of $10,000,000 in the Company, at the Company’s option (the “Company Option”), during the one-year period (the “Commitment Period”) following execution of this Letter.  

 

		
	
MacAndrews Option:
	
At any time during the Commitment Period, MacAndrews may, at MacAndrews’ option (the “MacAndrews Option”), elect to invest up to $10,000,000 in the Company on the same terms as the Company Option; provided that in no event will the aggregate amount of the investments pursuant to the Company Option and the MacAndrews Option exceed $10,000,000.

 

		
	
Securities to be Issued; Terms of Investments:
	
Pursuant to the exercise of the Company Option or the MacAndrews Option (an “Investment”), subject to the terms and conditions of the Purchase Agreement (defined below), the Company will issue to Investor on each funding date:

 

Such number of shares (the “Shares”) of Class A common stock, par value $0.01 per share (“Common Stock”), of the Company with a value equal to the Investment, at a per share price (“Per Share Price”) equal to $1.60, which is equal to the closing price of the Common Stock on the day prior to the date of this Letter.

  

		
	
Use of Proceeds:
	
To fund research and development, to pursue growth opportunities and for general corporate purposes.

 

		
	
Commitment Fee:
	
As consideration for the investment commitment and the other covenants and obligations of MacAndrews under this Letter, upon the execution of this Letter, the Company will issue to MacAndrews warrants (the “Commitment Fee Warrants”) to purchase 365,472 shares of Common Stock, at an exercise price per share of $1.84, payable in cash or by cashless exercise. The Commitment Fee Warrants shall be exercisable for seven years commencing on the date of execution of this Letter. The Commitment Fee Warrants do not reduce the total amount to be invested under the Company Option and the MacAndrews Option. 

 

		
	
Funding Notices; Binding Commitment:
	
The Company Option may be exercised by the Company, and the MacAndrews Option may be exercised by MacAndrews, in each case, by the exercising party delivering a written notice (a “Funding Notice”) to the other party, which notice shall specify the aggregate value and number of shares of Common Stock to be purchased by MacAndrews.  Funding Notices from the Company shall be made in writing by the Chief Executive Officer or Chief Financial Officer of the Company. MacAndrews shall be limited to three Funding Notices during the Commitment Period; the number of Funding Notices from the Company shall not be limited.

 

Upon delivery of a Funding Notice in accordance with the terms of this Letter by either party, the parties shall, as promptly as practicable, (i) enter into a securities purchase agreement with respect to the Investment contemplated by the Funding Notice, (ii) take all actions and further steps as may be reasonably necessary to complete such Investment, and (ii) complete such Investment. Notwithstanding anything to the contrary in this Letter, failure by either party to comply with the foregoing sentence shall constitute a material breach of this Letter, entitling the non-breaching party to specific performance (it being understood that money damages would not be an adequate remedy for any such breach).       

 

		

 

 

		
	
Securities Purchase Agreement:
	
MacAndrews’ obligation to fund the purchase price and the Company’s obligation to issue shares of Common Stock on the terms set forth in this Letter with respect to each Investment contemplated by this Letter are subject to the negotiation and execution of a mutually acceptable securities purchase agreement (the “Purchase Agreement”) with respect to each such Investment.  The issuance of the Shares will be made pursuant to Regulation D under the Securities Act of 1933, as amended, and 

MacAndrews agrees that it is an “accredited investor” (as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended).

 

		
	
Expenses:
	
Counsel to the Company will prepare initial drafts of all documents. The Company shall pay all reasonable fees and expenses of MacAndrews’ counsel, if necessary.

 

		
	
Registration Rights:
	
The Shares and shares of Common Stock issuable upon exercise of the Commitment Fee Warrants and any other securities acquired in connection with any Investment shall be covered by the Investor Rights Agreement by and between the Company and M&F TTP Holdings Two LLC, as successor in interest to vTv Therapeutics Holdings LLC, dated July 29, 2015, as amended from time to time.

 

		
	
Representations and Warranties:
	
Each Purchase Agreement will include standard representations and warranties by the Company.

 

		
	
Conditions to Closing:
	
Each Purchase Agreement will include standard conditions to closing of each tranche, including, without limitation, (i) the Company being in compliance with all applicable Nasdaq Marketplace Rules (both before and after giving effect to the applicable closing), except for non-compliance as previously disclosed by the Company (ii) the Common Stock remaining listed for trading on a Nasdaq exchange and (iii) the Shares to be then issued having been listed for trading on a Nasdaq exchange.

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