Document:

Certificate of Designation, Rights and Privledges

 Exhibit 4.2 
  

			
	 	  	State of Delaware
	 	  	Secretary of State
	 	  	Division of Corporations
	 	  	Delivered 05:51 PM 03/09/2005
	 	  	Filed 05:37 PM 03/09/2005
	 	  	SRV 050200508 – 2977741 File

  
 CERTIFICATE OF
DESIGNATIONS 
 OF PREFERENCES, RIGHTS AND PRIVILEGES 
 SERIES B NON-VOTING CONVERTIBLE PREFERRED STOCK OF 
 PHAGE BIOTECHNOLOGY CORPORATION 
  
 Phage Biotechnology Corporation (the “Corporation”), a corporation
organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”) does hereby certify that, pursuant to authority conferred upon the Board of Directors of the Corporation by the Certificate of Incorporation of
the Corporation, and pursuant to Sections 151 and 141 of the DGCL, the Board of Directors of the Corporation adopted resolutions (i) designating a series of the Corporation’s previously authorized preferred stock, par value $0.001
per share, and (ii) providing for the designations, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of Thirty Thousand (30,000) shares of Series B Non-voting
Convertible Preferred Stock of the Corporation, as follows: 
  
 RESOLVED, that the Corporation is authorized to issue 30,000 shares of Series B Nonvoting Convertible Preferred Stock, par value $0.001 per share, which shall have the following powers, designations, preferences and other special rights:

  
 1. Designation. The series of Preferred Stock to which
this Certificate of Designations relates shall be designated “Series B Non-voting Convertible Preferred Stock” (the “Series B Preferred Stock”). Each share shall have a purchase price (subject to later adjustment) of Eight
Hundred Dollars ($800.00) (the “Purchase Price”). 
  
 2.
Additional Shares. None of the shares of the Series B Preferred Stock has been issued. No additional shares of Series B Preferred Stock shall be authorized without the consent of a majority of the Series B Preferred Stock as provided in
Section 5.2(c). 
  
 3. Liquidation Preferences.

  
 3.1 Upon any liquidation, dissolution or
winding up or other return of capital of the Corporation, each holder of the Series B Preferred Stock will be entitled to be paid, after any distribution or payment is made on the Fifty-Five Thousand (55,000) shares of Non-voting Convertible
Preferred Original Stock (the “Original Preferred Stock”) of the Corporation and before any distribution or payment is made upon any Common Stock of the Corporation or any other series of capital stock, pari passu with the holders
of any additional series of preferred stock (“Additional Series”, excluding the Original Preferred Stock, the “Preferred Stock”) based upon the relative liquidation preferences of the Series B Preferred Stock and such Additional
Series, an amount in cash equal to the Purchase Price per each share of the Series B Preferred Stock (which. amount shall be subject to adjustment whenever there shall occur a stock split, combination, reclassification or other similar event
involving the Series B Preferred Stock) held by such holder (the “Liquidation Amount”). Notwithstanding the foregoing, no Liquidation Amount shall be paid with respect to the Series B Preferred Stock if the holders thereof have previously
received a cumulative amount of distributions or payments with respect to the Series B Preferred Stock of $800.00 per share of Series B Preferred Stock. 

 3.2 The reorganization, consolidation or the merger of the Corporation into or with any
other corporation(s) or other entity(ies) in which the stockholders of the Corporation do not hold more than 50% of the voting securities of the merged or consolidated entity, (“Reorganization”), the sate, lease, licensing, exchange
or other transfer by the Corporation of all or any significant part of its assets or the commencement by the Corporation of a voluntary case under the United States bankruptcy laws or any applicable bankruptcy, insolvency or similar law of any other
country, or the consent to the entry of an order for relief in an involuntary case under any such law or to the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Corporation or of
any substantial part of its property, or the making of an assignment for the benefit of its creditors, or an admission in writing of its inability to pay its debts generally as they become due, will ‘be deemed to be a liquidation, dissolution
or winding up of the Corporation within the meaning of this Section 3; provided that, with the consent of the Series B Preferred Stock holders acting by a vote of the holders of at least a majority of the issued and outstanding Series B
Preferred Stock vote (the “Reorganization Consent”), a Reorganization of the Corporation shall not be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 3 if (a) the
principal agreement for such Reorganization shall expressly provide that the Series B Preferred Stock shall become preferred stock of such surviving entity with rights equivalent to the rights set forth herein (“Surviving Entity Preferred
Stock”) and (b) the holders of Series B Preferred Stock shall be entitled to receive at the option of holders of a majority of the outstanding shares of Series B Preferred Stock, either (i) the Surviving Entity Preferred Stock or
(ii) the kind and amount of shares or other securities or property which they would have been entitled to receive had they converted their shares of Series B Preferred Stock into shares of Common Stock of the Corporation pursuant to
Section 5.1 hereof. 
  
 4. Voting Rights. Holders of
shares of the Series B Preferred Stock shall have no voting rights on any Corporation matters. 
  
 5. Conversion. The holders of the Series 13 Preferred Stock shall have conversion rights as follows (the “Conversion Rights”): 
  
 5.1 Voluntary Conversion. Each share of Series B Preferred Stock shall be convertible, at the option
of the holder thereof, at any time after the date of issuance of such Preferred Share at the office of the Corporation. Each share of Series B Preferred Stock shall be convertible into the number of shares of Common Stock which results from dividing
the aggregate dollar equivalent of all shares of Series B Preferred Stock surrendered for conversion by any one holder by the Conversion Price then in. effect at the time of conversion. The number of shares of Common Stock into which a single share
of Series B Preferred Stock is convertible is hereinafter referred to as the “Conversion Rate.” The Conversion Price per share for the Series B Preferred Stock initially in effect shall be $800.00. The initial Conversion Price of the
Series B Preferred Stock shall be subject to adjustment as herein provided. 
  
 5.2 Mechanics of Conversion. Before any holder of Series B Preferred Stock shall be entitled to convert the same into Common Stock as provided in Section 5.1, such bolder shall surrender the certificate or
certificates therefore, duly endorsed, at the office of the Corporation and shall give written notice to the Corporation at such office that the holder elects to convert the same. The Corporation shall, as soon as practicable thereafter issue and
deliver at 

 
such office to such holder of Series B Preferred Stock a certificate or certificates for the number of shares of Common Stock to which he shall be entitled
aforesaid, Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the Series B Preferred Stock to be converted, and the person or persons entitled to receive Common Stock
issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Stock on such date. 
  
 5.3 Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of Series B Preferred Stock; In lieu of
any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the Conversion Price. 
  
 5.4 Adjustment of Conversion Price Generally. The Conversion Price of the Series B Preferred Stock
shall be subject to adjustment from time to time as follows: 
  
 (a) After the Corporation completes an initial public offering (an “IPO”) of its common equity securities, the Conversion Price shall be adjusted to equal the Lesser of $800.00 per share or 50% of the
initial offering price per share of the common stock equity security sold in the IPO. 
  
 (b) If the number of shares of Common Stock outstanding ax any time after the date hereof is increased by a share distribution payable in
Common Stock or by a subdivision or Split-up of Common Stock, then, on the date such payment is made or such change is effective, the Conversion Price shall be appropriately decreased so that the number of shares of Common Stock issuable on
conversion of the Series B Preferred Stock shall be increased in proportion to such increase of outstanding shares. 
  
 (c) If the number of shares of Common Stock outstanding at any tine after the date hereof is decreased by a combination of the outstanding
Common Stock, then, on the effective date of such combination, the Conversion Price shall be appropriately increased so that the number of shares of Common Stock issuable on conversion of the Series B Preferred Stock shall be decreased in proportion
to such decrease in outstanding shares. 
  
 (d)
In case, at any time after the date hereof, of any capital reorganization, or any reclassification of the shares of the Corporation (other than as a result of a share distribution or subdivision, split-up or combination of shares), or the
consolidation or merger of the Corporation with or into another person (other than a consolidation or merger in which the Corporation is the continuing entity and which does not result in any change in the Common Stock), or the sale or other
disposition of all or substantially all the properties and assets of the Corporation as an entirety to any other person, the Series B Preferred Stock shall, if such event is not deemed a liquidation for purposes of Section 34.2, after such
reorganization, reclassification; consolidation, merger, sale or other disposition, be convertible into the kind and number of shares or other securities or property of the Corporation or of the entity resulting from such consolidation or surviving
such merger, or to which such properties and assets shall have been sold or otherwise disposed, to which such holder would have been entitled if immediately prior to such reorganization, reclassification, consolidation, merger, sale or other
disposition he had converted his Series B Preferred Stock into Common Stock. The provisions of this Section 

 
5.4(d) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or other dispositions. 
  
 (e) All calculations under this Section 5 shall
be made to the nearest cent or to the nearest one hundredth (1/100) of a share, as the case may be. 
  
 5.5 Minimal Adjustments. No adjustment in a Conversion Price need be made if such adjustment would result in a change in a
Conversion Price of less than $0.01. Any adjustment of less than $0.01 which is not made shall be carried forward and shall be made at the time of and together with any subsequent adjustment which, on a cumulative basis, amounts to an adjustment of
$0.01 or more in a Conversion Price. 
  
 5.6 Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of a Conversion Price pursuant to this Section 5, the Corporation at its expense shall promptly compute such adjustment or
readjustment accordance with the terms hereof and prepare and furnish to each holder of Series 8 Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment
is based. The Corporation shall, upon written request at any time of any holder of Series B Preferred Stock, furnish or cause to be finished to such bolder a like certificate setting forth (1) such adjustments and readjustments, (ii) the
Conversion Price at the time in effect for all Series B Preferred Stock held, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversional such
Preferred Stock. 
  
 5.7 Reservation of Shares
Issuable upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued Common Stock solely fur the purpose of effecting the conversion of the Series B Preferred Stock such number of shares of
Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Series B Preferred Stock; and if at anytime the number of authorized but unissued Common Stock shall not be sufficient to effect the conversion of all
then outstanding Series B Preferred Stock, the Corporation will take such action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued Common Stock to such number of shares as shall be sufficient for such
purpose. 
  
 5.8 Notices. Any notice
required by the provisions of this Section 5 to be given to the holders of Series B Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his latest
address appearing on the books of the Corporation. 
  
 6.
Replacement. Upon receipt of evidence reasonably satisfactory to the Corporation of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing one or more shares of Series B Preferred Stock, and in the case of
any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Corporation, the Corporation will (at its expense) execute and deliver in lieu of such certificate a new certificate representing the number of shares
represented by such lost, stoic, destroyed or mutilated certificate. 

 IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations to be signed by its Chief
Financial Officer this March 7, 2005. 
  

	
	
	/s/    MICKAEL A. FLAA        
	Mickael A. Flaa,
	Chief Financial Officer

  
 Delaware

 The First State 
  
 I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATION OF
DESIGNATION OF “PHAGE BIOTECHNOLOGY CORPORATION”, FILED IN THIS OFFICE ON THE NINTH DAY OF MARCH, A.D. 2005, AT 5:37 O’CLOCK P.M. 
  
 A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS. 
  
 {SECRETARY’S OFFICE SEAL} 
  

					
	 	 	 	 	 
			
	 2977741 8100
	 	 	 	/s/    HARRIET SMITH
WINDSOR        
	 050200508
	 	 	 	Harriet Smith Windsor, Secretary of State

  

							
				
	 	 	 	 	AUTHENTICATION:	 	3733420
	 	 	 	 	DATE:	 	03-10-05

  

 PAGE 1Specimen Series I Convertible Promissory Note

 Exhibit 4.3 
  

Note #                 
  
 THIS NOTE HAS NOT BEEN REGISTERED TINDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. 
  
 PHAGE BIOTECHNOLOGY CORPORATION 
  
 CONVERTIBLE PROMISSORY NOTE 
  

				
	 $__________
	  	[Date	]            

  
 FOR VALUE RECEIVED,
the undersigned, PHAGE BIOTECHNOLOGY CORPORATION, a company organized under the laws of the State of Delaware (the “Company”), promises to pay to the order of [Name] or its registered assigns (the “Holder”), the principal sum of
[Amount Written Out ] ($Amount) [minimum $20,000 and additional $10,000 increments thereafter], with interest from the date hereof at the rate of 7% per annum on the unpaid balance hereof until paid. 
  
 1. Principal. The principal of this Note shall be payable in one
installment on the earlier of (a) three years from the date hereof; or (b) 30 days after the successful completion of the Company’s initial public offering in the United States (an “IPO”) (in either case, the “Maturity
Date”). This Note is subject to automatic conversion upon the occurrence of the Conversion Events described in Paragraphs 3(a) and conversion at the option of the Holder pursuant to Paragraph 3(b). 
  
 2. Interest. Interest on the unpaid principal balance of this Note
shall accrue at the rate of 7% per annum compounded annually (computed on the basis of a 365-366 day year (as applicable) based on actual days elapsed) commencing on the date hereof. The Company agrees to pay interest after the occurrence of an
Event of Default, at a rate per annum equal to the lesser of (a) the highest rate of interest per annum permitted by applicable law and (b) 14% per annum (the “Default Rate”) until all amounts outstanding under the Note
payable to Holder have been paid in full. For purposes herein, an “Event of Default” exists in the event the Company fails to make a payment required by Paragraph 1 hereof, and such failure is not cured within 10 days following written
notice from the Holder. 
  
 3. Conversion Events and Mechanics
of Conversion. 
  
 (a) Automatic Conversion.
Upon the occurrence of a Conversion Event (as hereinafter defined), the entire unpaid principal balance of this Note will automatically convert into Common Stock of the Company at a price equal to the Conversion Price (as hereinafter defined). For
purposes herein, “Conversion Event” shall mean the consummation of a merger or sale of the Company in which the Company is not a surviving entity. For purposes herein “Conversion Price” shall be $200 per share; 

  

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provided however, if the purchase price for shares at the completion of the Company’s IPO (the “IPO Price”) is less than $400 per
share, the Conversion Price shall be adjusted to equal 50% of the IPO Price. 
  
 (b) At Holder’s Option. The Holder has the option to convert all, but not less than all, of this Note into Common Stock at any
time prior to the Maturity Date, for the Conversion Price set forth in Paragraph 3(a) above. The Holder may exercise this option only in accordance with Paragraph 3(c) below. 
  
 (c) Mechanics of Conversion. The equity securities that are issuable to the Holder upon any
conversion of this Note shall be referred to as the “Conversion Shares.” To exercise the Holder’s right of conversion, the Holder shall surrender this Note to the Company at its registered office, accompanied by a written notice in
the form annexed hereto as Exhibit A, properly completed (the “Conversion Notice”). Within ten business days after its receipt of this Note and the Conversion Notice, the Company shall issue and deliver a certificate or certificates
for the number of full Conversion Shares issuable, registered in the Holder’s name and bearing the restrictive legend stated herein. Such conversion shall be deemed to have been effected and the number of the Conversion Shares issuable in
connection with such conversion shall be determined as of the close of business on the date on which this Note and the Conversion Notice shall have been received by the Company and, at such time, the Holder’s rights as holder of such Note shall
cease, and the Holder shall be deemed to have become the holder of record of the shares or interest represented thereby. 
  
 4. Antidilution. In the event the Company declares or pays any dividend on the Common Stock payable in shares of Common Stock or in the event that
the outstanding shares of Common Stock is subdivided, by reclassification, stock split or otherwise, into a greater number of shares of Common Stock prior to the Maturity Date, this Note shall, after such dividend or subdivision, entitle the Holder
to receive upon conversion the number of shares of Common Stock to which the Holder would be entitled had the Holder converted this Note immediately prior to such dividend or subdivision. 
  
 5. Transfer Restrictions. The Holder shall not transfer the Note or the Conversion Shares (except to its own
affiliate, subsidiary, or shareholders) until (a) it has first given written notice to the Company, describing briefly the manner of any such proposed transfer; and (b) (i) the Company has received from the Holder’s counsel an
opinion that such transfer can be made without compliance with the registration requirements of the Securities Act of 1933 and applicable state securities laws, or (ii) a registration statement filed by the Company under the Securities Act of
1933 and applicable state securities laws is declared effective by the Securities and Exchange Commission and state securities commissions having jurisdiction. 
  

6. Currency: Payments. All references herein to “dollars” or “$” are to U.S. dollars, and all payments of principal of and
interest on this Note shall be made in lawful money of the United States of America in immediately available funds. If the date on which any such payment is required to be made pursuant to the provisions of this Note occurs on a Saturday or Sunday
or legal holiday observed in the State of California, such payments shall be due and payable on the immediately succeeding date which is not a Saturday or Sunday or legal holiday so observed. 
  

 - 2 - 

 7. Waiver. The Company expressly waives presentment, protest, demand, notice of dishonor, notice
of nonpayment, notice of maturity, notice of protest, presentment for the purpose of accelerating maturity, and diligence in collection. 
  
 8. Jurisdiction. The Company consents to the exclusive jurisdiction of the state and federal courts of California for any legal action, suit or
proceeding arising out of or in connection with this Note, and agrees that any such action, suit, or proceeding may be brought only in such courts. The Company further waives any objection to the laying of venue for any suit, action or proceeding in
such courts. The Company agrees to accept and acknowledge service of any and all process that may be served in any suit, action or proceeding. The Company agrees that any service of process mailed by registered or certified mail, return receipt
requested to the Company at the address set forth below shall be deemed in every respect effective service of process upon such party in any such suit, action or proceeding. 
  
 9. Attorneys’ Fees and Costs. In the event of any legal proceedings in connection with this Note, all expenses
in connection with such legal proceedings of the prevailing party, including reasonable legal fees and applicable costs and expenses, shall be reimbursed by the non-prevailing party upon demand. This provision shall not merge with any enforcement
order or judgment on this Note and shall be applicable to any proceeding to enforce or appeal any judgment relating to the Note. 
  
 10. Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the
benefits of the remaining provisions hereof. 
  
 11. Successors
and Assigns. This Note shall inure to the benefit of the Holder and its successors and permitted assigns and shall be binding upon the undersigned and its successors and permitted assigns. As used herein, the term “Holder” shall mean
and include the successors and permitted assigns of the Holder. 
  
 12. Governing Law. The parties acknowledge and agree that this Note and the rights and obligations of all parties hereunder shall be governed by and construed under the laws of the State of California, without regard to conflict of
laws principles. 
  
 13. Headings. The headings in this
Note are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
  

 - 3 - 

 14. Modification. This Note may not be modified or amended orally, but only by an agreement in
writing signed by the party against whom such agreement is sought to be enforced. 
  

			
	 PHAGE BIOTECHNOLOGY CORPORATION,

	 a Delaware corporation

		
	 	 	 
	 By:
	 	Daniel C. Montano
	 Its:
	 	President & CEO
	 Address:
	 	101 Academy, Ste. 120 Irvine, CA 92617

  

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 Exhibit A 
  

[FORM OF CONVERSION NOTICE] 
  

	TO:	Phage Biotechnology Corporation 

  
 Pursuant to Paragraph 3(b) of that certain Convertible Promissory Note (the “Note”), the undersigned Holder of the Note hereby:
(i) irrevocably exercises the option to convert the entire unpaid principal balance of the Note for that number of shares of Common Stock of Phage Biotechnology Corporation equal to the aggregate principal amount of the Note divided by the
Conversion Price (as defined in Paragraph 3(a) of the Note) (the “Conversion Shares”) in accordance with the terms of the Note and (ii) directs that such Conversion Shares deliverable upon the conversion, together with any check in
payment for fractional shares, be issued and delivered to the registered holder of the Note unless a different name has been indicated below. If Conversion Shares are to be delivered or registered in the name of a person other than the undersigned
the person in whose name the Conversion Shares will be issued represents and warrants that he or she is such person and that the representations and warranties made in the Note are true and correct as of the date of conversion. 
  

					
			
	 Dated: ________
	 	 	 	  
	 	 	 	 	Signature

  
 Fill in for
registration of shares if to be delivered, and of Notes if to be issued, otherwise than to and in the name of the registered holder. 
  

	
	
	 
	 Social Security or Other
 Taxpayer Identifying Number

  

	
	
	  
	(Name)
	
	  
	(Street Address)
	
	  
	 (City, State and Zip Code)
 (Please print name and address)

  

 - 5 -

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