Document:

ex10-5.htm

Exhibit 10.5

 

FORM OF SECURITY AGREEMENT 
 

 

SECURITY AGREEMENT

 

This Security Agreement (as amended, modified or otherwise supplemented from time to time, this “Security Agreement”) is made as of [●], 2016, by and between Cesca Therapeutics Inc., a Delaware corporation (together with its successors and assigns, the “Company”), and Boyalife Investment Inc. (the “Investor”).

 

RECITALS

 

A.     The Company, the Investor and Boyalife (Hong Kong) Limited have entered into a Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), pursuant to which the Company has issued a secured convertible debenture to the Investor, dated as of the date hereof (as amended, modified or otherwise supplemented from time to time (the “Debenture”), with an aggregate principal amount of $8,000,000 as of the Initial Closing (as defined in the Purchase Agreement), which principal amount shall increase by $4,500,000 as of the Subsequent Closing (as defined in the Purchase Agreement).

 

B.     In order to induce the Investor to enter into the Purchase Agreement and purchase the Debenture, the Company has agreed to enter into this Security Agreement and to grant the Investor the security interest in the Collateral described below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company hereby agrees with the Investor as follows:

 

1.     Definitions and Interpretation. When used in this Security Agreement, the following terms have the following respective meanings:

 

“Collateral” has the meaning given to that term in Section 2 hereof.

 

“Obligations” means the obligations owed by the Company to the Investor under the Debenture.

 

“UCC” means the Uniform Commercial Code as in effect in the State of California from time to time.

 

All capitalized terms not otherwise defined herein shall have the respective meanings given in the Debenture. Unless otherwise defined herein, all terms defined in the UCC have the respective meanings given to those terms in the UCC.

 

2.     Grant of Security Interest. As security for the Obligations, the Company hereby grants to the Investor a senior security interest of first priority in all right, title and interests of the Company in and to substantially all of the assets of the Company, whether now or hereafter acquired (collectively, the “Collateral”). Notwithstanding the foregoing, the security interest granted herein shall not extend to and the term “Collateral” shall not include any equipment or other property financed by a third party. 

 

 

 

 

 

3.     Financing Statement. As soon as reasonably practicable following the date of this Agreement, the Company shall promptly execute and file a UCC-1 Financing Statement in a form reasonably acceptable to the Investor and reflecting the Investor’s first priority security interest in the Collateral (the “Financing Statement”).

 

4.     General Representations and Warranties. The Company represents and warrants to the Investor that upon the repayment of the outstanding debentures issued to the Sabby Affiliates (as defined in the Purchase Agreement) and subsequent filing of UCC-1 financing statements in the appropriate filing offices, the Investor has (or in the case of after-acquired Collateral, at the time the Company acquires rights therein, will have) a first priority perfected security interest in the Collateral to the extent that a security interest in the Collateral can be perfected by such filing.

 

5.     Covenants Relating to Collateral. The Company hereby agrees (a) to perform all acts that may be necessary to maintain, preserve, protect and perfect the Collateral, the Lien (as defined in the UCC) granted to the Investor therein and the perfection and priority of such Lien; (b) not to use or permit any Collateral to be used (i) in violation in any material respect of any applicable law, rule or regulation, or (ii) in violation of any policy of insurance covering the Collateral; (c) to pay promptly when due all taxes and other governmental charges, all Liens and all other charges now or hereafter imposed upon or affecting any Collateral; and (d) to procure, execute and deliver from time to time any endorsements, assignments, financing statements and other writings reasonably deemed necessary or appropriate by the Investor to perfect, maintain and protect its Lien hereunder and the priority thereof and to deliver promptly upon the request of the Investor all originals of Collateral consisting of instruments.

 

6.     Default and Remedies. 

 

(a)     Default. The Company shall be deemed in default under this Security Agreement upon the occurrence and during the continuance of an Event of Default (as defined in the Debenture). 

 

(b)     Remedies. Upon the occurrence and during the continuance of any such Event of Default, the Investor shall have the rights of a secured creditor under the UCC, all rights granted by this Security Agreement and by law, including the right to: (a) require the Company to assemble the Collateral and make it available to the Investor at a place to be designated by the Investor; and (b) prior to the disposition of the Collateral, store, process, repair or recondition it or otherwise prepare it for disposition in any manner and to the extent the Investor deems appropriate. The Company hereby agrees that thirty (30) days’ notice of any intended sale or disposition of any Collateral is reasonable. In furtherance of the Investor’s rights hereunder, the Company hereby grants to the Investor an irrevocable, non-exclusive license, exercisable without royalty or other payment by the Investor, and only in connection with the exercise of remedies hereunder, to use, license or sublicense any patent, trademark, trade name, copyright or other intellectual property in which the Company now or hereafter has any right, title or interest together with the right of access to all media in which any of the foregoing may be recorded or stored.

 

 

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(c)     Application of Collateral Proceeds. The proceeds and/or avails of the Collateral, or any part thereof, and the proceeds and the avails of any remedy hereunder (as well as any other amounts of any kind held by the Investor at the time of, or received by the Investor after, the occurrence of an Event of Default) shall be paid to and applied as follows:

 

(i)     First, to the payment of reasonable costs and expenses, including all amounts expended to preserve the value of the Collateral, of foreclosure or suit, if any, and of such sale and the exercise of any other rights or remedies, and of all proper fees, expenses, liability and advances;

 

(ii)     Second, to the payment to the Investor of the amount then owing or unpaid under the Debenture (to be applied first to accrued interest and second to outstanding principal); and

 

(iii)     Third, to the payment of the surplus, if any, to the Company, its successors and assigns, or to whomsoever may be lawfully entitled to receive the same.

 

7.     Miscellaneous.

 

(a)     Notices. All notices and other communications hereunder shall be in writing and shall be deemed received (a) on the date of delivery if delivered personally and/or by messenger service, (b) on the date of confirmation of receipt of transmission by facsimile (or, the first Business Day (as defined in the Purchase Agreement) following such receipt if (i) the date is not a Business Day or (ii) confirmation of receipt is given after 5:00 p.m., Pacific Time) or (c) on the date of confirmation of receipt if delivered by a nationally or internationally recognized courier service (or, the first Business Day following such receipt if (i) the date is not a Business Day or (ii) confirmation of receipt is given after 5:00 p.m., Pacific Time), to the parties at the following address or facsimile numbers (or at such other address or facsimile number for a party as shall be specified by like notice): 

 

If to the Company: 

 

Cesca Therapeutics Inc. 

2711 Citrus Road

Rancho Cordova, California 95742 

Attention: Chief Executive Officer

 

With a copy to: 

 

Dorsey & Whitney LLP 

305 Lytton Avenue

Palo Alto, CA, 94301 

Attention: Evan Ng, Esq. 

 

If to the Investor: 

 

c/o Boyalife Group Ltd.

800 Jiefang Road East

Wuxi City, China 214002

 

 

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(b)     Termination of Security Interest. Upon the payment in full of all Obligations and the cancellation, termination or conversion of the Debenture, the security interest granted herein shall terminate and all rights to the Collateral shall revert to the Company. Upon such termination the Investor hereby authorizes the Company to file any UCC termination statements necessary to effect such termination and the Investor will, at the Company’s expense, execute and deliver to the Company any additional documents or instruments as the Company shall reasonably request to evidence such termination. 

 

(c)     Nonwaiver. No failure or delay on the Investor’s part in exercising any right hereunder shall operate as a waiver thereof or of any other right nor shall any single or partial exercise of any such right preclude any other further exercise thereof or of any other right.

 

(d)     Amendments and Waivers. This Security Agreement may not be amended or modified, nor may any of its terms be waived, except by written instruments signed by the Company and the Investor. Each waiver or consent under any provision hereof shall be effective only in the specific instances for the purpose for which given.

 

(e)     Assignments. This Security Agreement shall be binding upon and inure to the benefit of the Investor and the Company and their respective successors and assigns; provided, however, that the Company may not sell, assign or delegate rights and obligations hereunder without the prior written consent of the Investor.

 

(f)     Cumulative Rights, etc. The rights, powers and remedies of the Investor under this Security Agreement shall be in addition to all rights, powers and remedies given to the Investor by virtue of any applicable law, rule or regulation of any governmental authority, the Purchase Agreement or any other agreement, all of which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently without impairing the Investor’s rights hereunder. The Company waives any right to require the Investor to proceed against any person or entity or to exhaust any Collateral or to pursue any remedy in the Investor’s power.

 

(g)     Payments Free of Taxes, Etc. All payments made by the Company under the Debenture shall be made by the Company free and clear of and without deduction for any and all present and future taxes, levies, charges, deductions and withholdings. In addition, the Company shall pay upon demand any stamp or other taxes, levies or charges of any jurisdiction with respect to the execution, delivery, registration, performance and enforcement of this Security Agreement. Upon request by the Investor, the Company shall furnish evidence satisfactory to the Investor that all requisite authorizations and approvals by, and notices to and filings with, governmental authorities and regulatory bodies have been obtained and made and that all requisite taxes, levies and charges have been paid.

 

(h)     Partial Invalidity. If at any time any provision of this Security Agreement is or becomes illegal, invalid or unenforceable in any respect under the law or any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Security Agreement nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall in any way be affected or impaired thereby.

 

 

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(i)     Expenses. The Company shall pay on demand all reasonable fees and expenses, including reasonable attorneys’ fees and expenses, incurred by the Investor in connection with custody, preservation or sale of, or other realization on, any of the Collateral or the enforcement or attempt to enforce any of the Obligations which is not performed as and when required by this Security Agreement.

 

(j)     Construction. This Security Agreement is the result of negotiations among, and has been reviewed by, the Company, the Investor and their respective counsel. Accordingly, this Security Agreement shall be deemed to be the product of all parties hereto, and no ambiguity shall be construed in favor of or against the Company or the Investor.

 

(k)     Entire Agreement. This Security Agreement, taken together with the Purchase Agreement, the Debenture and the other documents contemplated therewith and thereby constitute and contain the entire agreement of the Company and the Investor and supersede any and all prior agreements, negotiations, correspondence, understandings and communications among the parties, whether written or oral, respecting the subject matter hereof.

 

(l)     Other Interpretive Provisions. References in this Security Agreement to any document, instrument or agreement (a) includes all exhibits, schedules and other attachments thereto, (b) includes all documents, instruments or agreements issued or executed in replacement thereof, and (c) means such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time to time and in effect at any given time. The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Security Agreement refer to this Security Agreement, as the case may be, as a whole and not to any particular provision of this Security Agreement. The words “include” and “including" and words of similar import when used in this Security Agreement shall not be construed to be limiting or exclusive.

 

(m)     Governing Law; Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of California without regard to the choice of law principles thereof (except to the extent governed by the UCC). Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of California located in Sacramento County and the United States District Court for the Northern District of California for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto by the same methods as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

 

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(n)     Counterparts. This Security Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall be deemed to constitute one instrument.

 

[The remainder of this page is intentionally left blank]

 

 

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IN WITNESS WHEREOF, the Company and the Investor have caused this Security Agreement to be executed as of the day and year first above written.

 

	
 
	
CESCA THERAPEUTICS INC.
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
 
	
 

	
 
	
Name:
	
 
	
 

	
 
	
Title: 
	
 
	
 

 

AGREED:

 

 

Investor:

 

BOYALIFE INVESTMENT INC.

 

	
By:
	
 
	
 

	
Name: 
	
 
	
 

	
Title:
	
 
	
 

 

 

 

(Signature Page to Cesca Therapeutics Inc. Security Agreement)ex10-6.htm

Exhibit 10.6

 

CONSENT, REPAYMENT AND RELEASE AGREEMENT

 

 

This CONSENT, REPAYMENT AND RELEASE AGREEMENT (this “Agreement”) is entered into as of February 2, 2016 (the “Effective Date”) by and among Cesca Therapeutics Inc., a Delaware corporation (the “Company”), Sabby Healthcare Master Fund, Ltd. (“Sabby Healthcare Fund”) and Sabby Volatility Warrant Master Fund, Ltd. (“Sabby Volatility Fund”, and together with Sabby Healthcare Fund, the “Sabby Parties”). The Company and the Sabby Parties are referred to herein, collectively, as the “Parties”.

 

RECITALS

 

WHEREAS, reference is made to (i) that certain Securities Purchase Agreement, dated August 31, 2015, by and among the Company and the Sabby Parties (the “Sabby Purchase Agreement”); (ii) those two certain Senior Secured Convertible Debentures Due August 31, 2045, in the original principal amounts of $3,500,000 and $2,000,000, each as amended pursuant to those amendments dated September 23, 2015, issued to the Sabby Parties pursuant to the Sabby Purchase Agreement (the “Sabby Debentures”); (iii) that certain Registration Rights Agreement, dated August 31, 2015, entered into by and among the Company and the Sabby Parties (the “Registration Rights Agreement”); (iv) those certain Series A Common Stock Purchase Warrants issued to the Sabby Parties pursuant to the Sabby Purchase Agreement (the “Series A Warrants”); and (v) those certain Series B Common Stock Purchase Warrants issued to the Sabby Parties pursuant to the Sabby Purchase Agreement (the “Series B Warrants” and together with the Sabby Purchase Agreement, the Sabby Debentures, the Registration Rights Agreement and the Series A Warrants, the “Sabby Transaction Documents”). Capitalized terms that are not otherwise defined herein has the meanings given to such terms in the Sabby Transaction Documents;

 

WHEREAS, the Company, Boyalife (Hong Kong) Inc. Limited (“Boyalife HK”) and Boyalife Investment Inc. (“Boyalife USA”, and together with Boyalife HK, the “Investors”) are entering into a Purchase Agreement, dated on or about the date hereof (“Boyalife Purchase Agreement”), pursuant to which the Company shall issue to the Investors the following securities: (i) up to $2.5 million of the Company’s common stock, $0.001 par value per share (the “Common Stock”), at a purchase price of $0.17 per share (the “Stock Price”), and sale of such shares, the “Stock Purchase”), (ii) unsecured three-year debentures (convertible at maturity into Common Stock at the Stock Price per share), with a principal face amount up to $12.5 million (the “Boyalife Debentures”), and (iii) five-year warrants to purchase additional shares of Common Stock equal to 80% of the shares sold to the Investors (assuming full conversion of the Boyalife Debentures), exercisable at $0.40 per share (the “Boyalife Warrants” and together with the Boyalife Purchase Agreement and Boyalife Debentures, the “Boyalife Transaction Documents”) (collectively, the “Boyalife Financing”);

 

WHEREAS, in connection with the Boyalife Financing, the Parties desire to evidence (i) the Sabby Parties’ consent to the Boyalife Financing; (ii) the Sabby Parties’ waiver of certain participation rights under the Sabby Purchase Agreement with respect to the Boyalife Financing; (iii) the Parties’ agreement to the full prepayment and cancellation, without penalty, of the Sabby Debentures; (iv) the Parties’ agreement to terminate the Registration Rights Agreement; (v) the Parties’ agreement to amend the Sabby Purchase Agreement to, among other things, terminate the Sabby Parties’ registration rights and participation rights thereunder; (vi) the Parties’ agreement to amend the terms of the Series A Warrants pursuant to the form of amendment attached hereto as Exhibit A (the “Series A Warrant Amendment”); (v) the Parties’ agreement to the Sabby Parties’ exercise of the Series B Warrants, pursuant to the cashless exercise provisions of Section 2(c) thereof, for an aggregate amount of shares equal to the lesser of (A) 2,500,000 shares of Common Stock and (B) the maximum amount of shares of Common Stock exercisable under the Series B Warrant as of January 18, 2015 without exceeding the “Beneficial Ownership Limitation” (as defined in the Series B Warrant); (vi) immediately following the cashless exercise set forth in the immediately preceding clause (v), the Parties’ agreement to cancel the outstanding Series B Warrants and any rights to exercise such Series B Warrants for shares of Common Stock thereunder; and (vii) the release by the Sabby Parties of the Company of all claims, liabilities and obligations owed to the Sabby Parties pursuant to the form of general release of claims attached hereto as Exhibit B (the “General Release”); and

 

 

 

 

 

WHEREAS, the Parties wish to memorialize such agreement and eliminate the possibility of any future disputes related thereto.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and obligations contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.     Consent to Boyalife Financing. Each of the Sabby Parties hereby irrevocably consents to the Boyalife Financing and all agreements and documents to be entered into or delivered in connection with the Boyalife Financing, including, but not limited to, the Boyalife Purchase Agreement and the Transaction Documents (as defined in the Boyalife Purchase Agreement) and consents to the issuance of the Common Stock, Boyalife Debentures and Boyalife Warrants contemplated under the terms of the Boyalife Purchase Agreement. Each of the Sabby Parties further agrees that the Boyalife Financing shall not be prohibited by, or be deemed to be breach of any term or provision of, the Sabby Purchase Agreement, including Section 4.13 thereunder, and further agrees that the Boyalife Financing shall be exempt from any other restriction, covenant, obligation or condition set forth in the Sabby Debentures, the Series A Warrants and/or the Series B Warrants. Each of the Sabby Parties further agrees that the Boyalife Financing, and all documents and transactions entered into and contemplated by the Boyalife Financing as of the date hereof, shall not constitute a “Fundamental Transaction” (as defined in the Series A Warrant and Series B Warrant) for all purposes under the Series A Warrant and Series B Warrant, notwithstanding the terms thereof or any provision to the contrary, provided that the Boyalife Financing is not integrated or combined with any other transaction that could result in the occurrence of a Fundamental Transaction. 

 

2.     Waiver of Participation Rights. Each of the Sabby Parties hereby irrevocably waives any rights of first refusal or participation rights with respect to the Boyalife Financing, including, but not limited to, the Sabby Parties’ participation rights under Section 4.12 of the Sabby Purchase Agreement and the Sabby Parties’ rights to acquire additional shares of capital stock under Section 5(c) of the Sabby Debentures.

 

3.     Prepayment and Cancellation of Sabby Debenture. Effective upon receipt by the Sabby Parties of payment in full of the Consideration (as defined below, and receipt of such Consideration by the Sabby Parties, “Repayment”), each of the Sabby Parties acknowledge and agree (a) that the Sabby Debentures shall be deemed paid in full, all obligations thereunder shall be deemed fully discharged and the Sabby Debentures shall be cancelled, terminated and extinguished in their entirety, (b) any and all of the Sabby Parties’ respective rights under the Sabby Debentures to acquire any shares of the Company’s capital stock shall be cancelled, terminated and extinguished in their entirety and (c) any and all security interests granted to the Sabby Parties to secure the Company’s performance under the Sabby Debentures shall be immediately terminated, and all collateral in connection with therewith shall be immediately released, without any further action on the part of the Parties. The Parties acknowledge and agree that the Company’s prepayment of its obligations under the Sabby Debentures shall be permitted and effected without restriction or penalty, including the prohibition on prepayments set forth in Section 2 of the Sabby Debentures. 

 

 

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4.     Termination of Registration Rights Agreement. Effective upon receipt by the Sabby Parties of the Repayment, the Registration Rights Agreement shall automatically terminate and be extinguished in its entirety without any further action on the part of the Parties thereto and without reservation of rights or obligations, and neither Party shall have any rights, duties or obligations under the Registration Rights Agreement thereafter. 

 

5.     Amendment to Sabby Purchase Agreement. Effective upon receipt by the Sabby Parties of the Repayment, the Sabby Purchase Agreement is hereby amended as follows:

 

(a)     Section 4.12 of the Sabby Purchase Agreement is hereby deleted in its entirety and replace with the following: 

 

“Section 4.12.      Reserved.”

 

(b)     Section 4.13 of the Sabby Purchase Agreement is hereby deleted in its entirety and replace with the following: 

 

“Section 4.13.      Reserved.”

 

(c)     The last sentence of Section 4.1(a) is hereby deleted in its entirety and replace with the following:

 

“As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of a Purchaser under this Agreement.”

 

(d)     All other references in the Sabby Purchase Agreement to the Registration Rights Agreement and corresponding rights, obligations, covenants and liabilities in connection therewith are hereby terminated and deleted.

 

6.     Amendment to Series A Warrant. Effective upon receipt by the Sabby Parties of the Repayment, the terms of the Series A Warrants held by the Sabby Parties shall be amended as set forth in the Series A Warrant Amendment, and the Parties shall execute and deliver a Series A Warrant Amendment for each of the outstanding Series A Warrants. 

 

7.     Cashless Exercise of Series B Warrants. Effective upon receipt by the Sabby Parties of the Repayment, the Sabby Parties agree to a single, one-time exercise the Series B Warrants pursuant to the cashless exercise provisions of Section 2(c) of the Series B Warrants, for an aggregate amount of shares equal to the lesser of (x) 2,500,000 shares of Common Stock and (y) the maximum amount of shares of Common Stock exercisable under the Series B Warrant as of January 18, 2015 without exceeding the “Beneficial Ownership Limitation” (as defined in the Series B Warrant) (such exercise, the “Top-Up Exercise”), regardless of the number of shares the formula in Section 2(c) of the Series B Warrants would otherwise yield.

 

8.     Cancellation of Remaining Series B Warrants. Immediately following the effectiveness of the Top-Up Exercise set forth in the Section 7 above, any outstanding Series B Warrants, and any rights to exercise such Series B Warrants for shares of Common Stock thereunder, are hereby terminated and cancelled in their entirety. The Sabby Parties shall deliver to the Company the original Series B Warrants for cancellation.

 

 

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9.     Release of Claims. Upon receipt by the Sabby Parties of the Repayment, each of the Sabby Parties shall execute and deliver a General Release to the Company.

 

10.     Consideration. Upon or immediately after the Initial Closing (as defined in the Boyalife Purchase Agreement), the Company shall pay to the Sabby Parties by wire transfer of immediately available funds to bank accounts designated in writing by each of the Sabby Parties an aggregate amount equal to Seven Million Five Hundred Thousand and 00/100 Dollars ($7,500,000.00) (the “Consideration”) in exchange for entering into this Agreement and such other documents and transactions contemplated hereby, with such Consideration to be allocated to the Sabby Parties as follows: (a) $4,772,727.27 to Sabby Healthcare Fund, and (b) $2,727,272.73 to Sabby Volatility Fund.

 

11.     [reserved]

 

12.     Representations and Warranties of the Sabby Parties. Each of the Sabby Parties represents and warrants to the Company, each with respect to only itself, that, as of the Effective Date and as of the date of the Repayment:

 

(a)     Organization; Authority. Each of the Sabby Parties is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by this Agreement.

 

(b)     Accredited Investor. Each of the Sabby Parties is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.

 

(c)     Ownership of Investor Warrants. Each of the Sabby Parties owns and holds, both beneficially and of record, the entire right, title, and interest in and to the Sabby Debentures, the Series A Warrants and the Series B Warrants free and clear of all Encumbrances (as defined below). Each of the Sabby Parties has full power and authority to transfer and dispose of the Sabby Debentures, the Series A Warrants and the Series B Warrants to the Company free and clear of any Encumbrance. There is no outstanding vote, plan, pending proposal, or other right of any person to acquire all or any of the Sabby Debentures, the Series A Warrants or the Series B Warrants. As used herein, “Encumbrances” shall mean any security or other property interest or right, claim, lien, pledge, option, charge, security interest, contingent or conditional sale, or other title claim or retention agreement, interest or other right or claim of third parties, whether perfected or not perfected, voluntarily incurred or arising by operation of law, and including any agreement (other than this Agreement) to grant or submit to any of the foregoing in the future other than encumbrances by one or more brokers of the Sabby Parties and encumbrances under federal or state securities laws. 

 

(d)     Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Sabby Parties and constitutes the legal, valid and binding obligations of the Sabby Parties enforceable against the Sabby Parties in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. Each of the Series A Warrant Amendments and the General Releases, when executed and delivered pursuant to the terms of this Agreement, will be duly and validly authorized, executed and delivered on behalf of the Sabby Parties and when executed and delivered will constitute the legal, valid and binding obligations of the Sabby Parties enforceable against the Sabby Parties in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies

 

 

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(e)     No Conflicts. The execution, delivery and performance by the Sabby Parties of this Agreement, the Series A Warrant Amendments, the General Releases and the consummation by the Sabby Parties of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of the Sabby Parties, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Sabby Parties are a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Sabby Parties, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Sabby Parties to perform its obligations hereunder.

 

13.     Representations and Warranties of the Company. The Company represents and warrants to the Sabby Parties that, as of the Effective Date and as of the date of the Repayment:

 

(a)     Organization and Qualification. The Company is duly organized and validly existing and in good standing under the laws of the jurisdiction in which it was formed, and has the requisite power and authorization to own its properties and to carry on its business as now being conducted and as presently proposed to be conducted.

 

(b)     Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform their obligations under this Agreement. The execution and delivery of this Agreement by the Company, and the consummation by the Company of the transactions contemplated hereby has been duly authorized by the Company’s board of directors and no further filing, consent or authorization is required by the Company, its board of directors, shareholders or other governing body. This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law.

 

(c)     No Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of the Company or any share capital of the Company, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and regulations and the rules and regulations of the Nasdaq Capital Market and including all applicable federal laws, rules and regulations) applicable to the Company or by which any property or asset of the Company is bound or affected except, in the case of clause (II) or (III) above, to the extent that such violations could not reasonably be expected to have a material adverse effect on the business, properties, assets, liabilities, operations, results of operations, condition (financial or otherwise) or prospects of the Company, taken as a whole, or on the transactions contemplated hereby or by the agreements and instruments to be entered into in connection herewith, or on the authority or ability of the Company to perform any of its obligations hereunder.

 

 

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(d)     Consents. The Company is not required to obtain any consent from, authorization or order of, or make any filing or registration with any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated hereby. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof (or in the case of filings, will be made timely after the date hereof), and the Company is not aware of any facts or circumstances which might prevent the Company from obtaining or effecting any of the registrations, applications or filings contemplated hereby. “Governmental Entity” means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.

 

14.     Disclosure of Transactions. The Company shall, by the end of the second day following the Effective Date (and if such date falls on a weekend, by 9:30 a.m. (New York Time) on the Trading Day immediately following such date) (the “8-K Filing Date”), file a Current Report on Form 8-K describing the terms of the transactions contemplated by this Agreement and the Boyalife Financing in the form required by the Securities Exchange Act of 1934, as amended and attaching a copy of the form of this Agreement as an exhibit to such Current Report on Form 8-K. From and after the 8-K Filing Date, the Company represents to the Sabby Parties that it shall have publicly disclosed all material, non-public information delivered to any of the Sabby Parties by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by this Agreement and the Boyalife Transaction Documents. In addition, effective upon the filing of the Current Report on Form 8-K on the 8-K Filing Date, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Sabby Parties or any of their Affiliates on the other hand, shall terminate.

 

15.     Standstill. Each of the Sabby Parties covenants that neither it nor any affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including short sales, of any of the Company’s securities during the period commencing on the Effective Date and ending at such time the Company files the Current Report on Form 8-K pursuant to Section 14 herein.    Each of the Sabby Parties covenants that neither it, nor any affiliate acting on its behalf or pursuant to any understanding with it will, (a) during the period commencing on the Effective Date and ending upon the date of Repayment: (i) declare a breach or default under the Sabby Purchase Agreement, the Sabby Debentures, the Series A Warrants, the Series B Warrants or the Registration Rights Agreement, (ii) accelerate any payment due under the Sabby Purchase Agreement, the Sabby Debentures, the Series A Warrants, the Series B Warrants or the Registration Rights Agreement, (iii) convert the Debentures or any part of the outstanding principal thereof into shares of the Company’s capital stock, or (iv) exercise any Series A Warrants or Series B Warrants, other than the Top-Up Exercise permitted pursuant to Section 7 above and (b) during the period commencing on the date of Repayment and ending on March 31, 2016, sell any Warrant Shares issued pursuant to any exercise of the Series A Warrants.

 

 

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16.     Confidentiality. Each of the Sabby Parties covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to a Company press release and the filing of a Current Report on Form 8-K pursuant to Section 14, each of the Sabby Parties will maintain the confidentiality of the existence and terms of this transaction and the information included in this Agreement, the Series A Warrant Amendment and the General Release. Each of the Sabby Parties covenants that until such time as the transactions contemplated by the Boyalife Financing are publicly disclosed by the Company pursuant the filing of the Current Report on Form 8-K pursuant to Section 14, each of the Sabby Parties will maintain the confidentiality of any and all information disclosed or communicated to the Sabby Parties relating to or in connection with the existence and terms of the Boyalife Financing. Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) neither Sabby Party makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the filing of the Current Report on Form 8-K as described in Section 14, (ii) the Sabby Parties shall not be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the filing of the Current Report on Form 8-K as described in Section 14 and (iii) the Sabby Parties shall not have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the filing of the Current Report on Form 8-K as described in Section 14.  

 

17.     Miscellaneous.

 

(a)     No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

(b)     Fees, Expenses, Taxes. Each party to this Agreement shall bear its own expenses in connection with the transactions contemplated hereby.

 

(c)     Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS CONSENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(d)     Counterparts. This Agreement may be executed in two or more counterparts and delivered by facsimile or other form of electronic transmission, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

 

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(e)     Severability. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the Parties. The Parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

(f)     Amendment. This Agreement shall not be deemed or construed to be modified or waived, in whole or in part, except by a written amendment signed by the Company and each of the Sabby Parties.

 

(g)     Entire Agreement. This Agreement embodies the entire agreement and understanding between the Company and the Sabby Parties with respect to the subject matter of this Agreement and supersedes all prior agreements, commitments, arrangements, negotiations or understandings, whether oral or written, express or implied, between either the Company or the Sabby Parties with respect thereto. Except as expressly set forth in this Agreement and pursuant to the Series A Warrant Amendment, all of the terms and conditions of the Sabby Transaction Documents shall continue in full force and effect after the execution of this Agreement and shall not be in any way changed, modified or superseded by the terms set forth herein.

 

(h)     Termination. This Agreement may be  terminated, and be of no further force or effect, by either Sabby Party by written notice to the Company if the Boyalife Financing is not consummated, and the Repayment is not received by the Sabby Parties, on or before February 19, 2016.

   

[Signature Page Follows]

 

 

8

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first set forth above.

 

	
 
	
CESCA THERAPEUTICS INC
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ ROBIN STRACEY
	
 

	
 
	
 
	
Robin Stracey
	
 

	
 
	
 
	
Chief Executive Officer
	
 

 

 

	
 
	
SABBY HEALTHCARE MASTER FUND, LTD.
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ ROBERT GRUNDSTEIN
	
 

	
 
	
 
	
Robert Grundstein
	
 

	
 
	
 
	
COO and General Counsel
	
 

  

 

	
 
	
SABBY VOLATILITY WARRANT MASTER FUND, LTD.
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ ROBERT GRUNDSTEIN
	
 

	
 
	
 
	
Robert Grundstein
	
 

	
 
	
 
	
COO and General Counsel
	
 

 

 

 

(CESCA THERAPEUTICS INC. – SIGNATURE PAGE TO CONSENT AND RELEASE AGREEMENT)

 

 

 

 

 

EXHIBIT A

 

FORM OF AMENDMENT TO SERIES A WARRANT

 

(see attached)

 

 

 

 

 

EXHIBIT B

 

FORM OF GENERAL RELEASE

 

(see attached)

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