Document:

EX-10.1

 Exhibit 10.1 

TRANSITION, RESIGNATION AND CONSULTING AGREEMENT AND GENERAL RELEASE OF CLAIMS 

This Transition, Resignation and Consulting Agreement and General Release of Claims (this “Agreement”) is entered into
by and between J. A. (Alan) Townsend (“Executive”) and Rosehill Operating Company, LLC, a Delaware limited liability company (the “Company”). Rosehill Resources Inc., a Delaware corporation and parent
of the Company (“Parent”), enters this Agreement for the limited purpose of acknowledging and agreeing to Sections 2(a)(iii) and 14 below. 

WHEREAS, Executive currently serves as the President and Chief Executive Officer of Parent and the Company; 

WHEREAS, Executive intends to resign from his employment with the Company effective as of the Resignation Date (as defined below); 

WHEREAS, the Company seeks to retain Executive for a period of time, as set forth below, for the purpose of transitioning his duties
prior to his resignation; 
 WHEREAS, the Company wishes for Executive to be available to provide certain consulting services, in the
capacity of an independent contractor, following the Resignation Date, and Executive wishes to provide such services; 
 WHEREAS, the
parties wish for Executive to receive severance pay and additional consideration as set forth in this Agreement, which pay and consideration is conditioned upon Executive’s timely execution (and
non-revocation) of this Agreement and the Confirming Release (as defined below), and Executive’s compliance with the terms of this Agreement; and 

WHEREAS, the parties wish to resolve any and all claims that Executive has or may have against the Company or any of the other Company
Parties (as defined below), including any claims that Executive may have arising out of Executive’s employment or the end of such employment. 

NOW, THEREFORE, in consideration of the promises set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, the parties agree as follows: 

1.    Transition of Duties; Resignation from Employment. Between the date Executive signs this
Agreement (the “Signing Date”) and a date mutually agreed upon by the Company and Executive, which date shall be on or before September 28, 2018 (such agreed upon date, the “Resignation Date”),
Executive will assist the Company in transitioning the duties of the President and Chief Executive Officer positions and otherwise provide those services that the Board of Directors of Parent may request of him from time to time. Executive’s
employment with the Company will end as of the Resignation Date, and, as of the Resignation Date, Executive will not have any further employment relationship with the Company or any other Company Party (as defined below). The end of Executive’s
employment with the Company on the Resignation Date shall constitute, as applicable, an automatic resignation of Executive: (a) 

 
as an officer of Parent and its direct and indirect subsidiaries including the Company (collectively, the “Company Group”); (b) from the Board of Directors of Parent; and
(c) from the board of directors or board of managers (or similar governing body) of any member of the Company Group and from the board of directors or board of managers (or similar governing body) of any corporation, limited liability entity,
unlimited liability entity or other entity in which any member of the Company Group holds an equity interest and with respect to which board of directors or board of managers (or similar governing body) Executive serves as such Company Group
member’s designee or other representative. 
 2.    Separation Payment and Benefits. 

(a)    Provided that Executive (i) executes this Agreement and returns it to Chris Wood, Corporate Attorney, at 16200
Park Row, Suite 300, Houston, Texas, 77084, so that it is received by Mr. Wood no later than May 1, 2018; (ii) provides the assistance and services described in Section 1 above; (iii) timely executes and
returns the Confirming Release as set forth in Section 7 below (and does not exercise his revocation right described in the Confirming Release); and (iv) abides by each of Executive’s commitments set forth herein,
then: 
  

	 	(i)	The Company will provide Executive with a total severance payment equal to $515,000, less applicable taxes and withholdings (the “Separation Payment”). The Separation Payment will be paid in a
single lump sum on the Company’s first regularly scheduled payroll date that is on or after the date that is 30 days after the Resignation Date (the “Separation Payment Date”); 

 

	 	(ii)	The Company will provide Executive with an additional payment equal to the product of (A) $515,000 multiplied by (B) a fraction, the numerator of which is the number of days that have elapsed from
January 1, 2018 through the Resignation Date and the denominator of which is 365, less applicable taxes and withholdings (the “STIP Payment”), which STIP Payment represents a prorated portion of the target amount of
Executive’s 2018 short-term incentive program bonus. The STIP Payment will be paid in a single lump sum on the Separation Payment Date; and 

  

	 	(iii)	 Effective as of the Resignation Date, Parent will cause a number of the outstanding equity-based awards in Parent
and held by Executive (collectively, the “Awards”) to vest and become nonforfeitable in the following amounts: (A) 62,893 of the restricted stock units granted to Executive on November 9, 2017; (B) 46,649 of the
restricted stock units granted to Executive on March 26, 2018; and (C) 46,649 of the performance share units granted to Executive on March 26, 2018 (representing approximately one-third of the target
number of performance share units originally granted pursuant to such Award) (the restricted stock units and performance share units described in the foregoing clauses (A)–(C), collectively, the “Accelerated Awards”).
The Accelerated Awards shall become fully vested and nonforfeitable as of the Resignation Date, and, on or before the Separation Payment Date, Parent shall deliver to 

  
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Executive a number of shares of Parent’s Class A common stock, par value $0.0001 per share (“Stock”), equal to the total number of shares of Stock subject to the
Accelerated Awards in accordance with the settlement provisions of the grant notices and award agreements evidencing the grant of the Awards (collectively, the “Award Agreements”) and the applicable terms and conditions of
the Rosehill Resources Inc. Long-Term Incentive Plan (as amended, supplemented or restated from time to time, the “Plan”). 

The payments and benefits set forth in this Section 2 are referred to herein collectively as the
“Separation Benefits”. 
 3.    Forfeiture of Unvested Awards. For the
avoidance of doubt, effective as of the Resignation Date, (i) 62,894 of the restricted stock units granted to Executive on November 9, 2017; (ii) 93,297 of the restricted stock units granted to Executive on March 26, 2018; and (iii)
93,297 of the performance share units granted to Executive on March 26, 2018, which collectively represent the portion of the Awards that remains outstanding and unvested as of the Resignation Date after giving effect to
Section 2(a)(iii), (and all rights arising from such portion of the Awards and from being a holder thereof) will terminate automatically without any further action by Parent, the Company or any of their respective
affiliates and will be forfeited without consideration or notice. 
 4.    Satisfaction of All Leaves and
Payment Amounts; Prior Rights and Obligations. In entering into this Agreement, Executive expressly acknowledges and agrees that Executive has received all leaves (paid and unpaid) to which Executive has been entitled during Executive’s
employment with the Company or any other Company Party, and Executive has received all wages, bonuses and other compensation, been provided all benefits and been afforded all rights and been paid all sums that Executive is owed or has been owed by
the Company or any other Company Party, including all payments arising out of all incentive plans and any other bonus arrangements; provided, however, that if the Resignation Date is on or prior to June 1, 2018, the Company shall pay
Executive two weeks’ vacation pay upon the Resignation Date. Notwithstanding the foregoing, Executive remains entitled to receive Executive’s current base salary (at the annualized rate of $515,000) and benefits for services performed
between the Signing Date and the Resignation Date. For the avoidance of doubt, Executive acknowledges and agrees that Executive had no right to the Separation Benefits but for Executive’s entry into this Agreement and satisfaction of the terms
herein. 
 5.    General Release of Claims. 

(a)    For good and valuable consideration (including the Separation Benefits), Executive hereby forever releases,
discharges and acquits the Company, Parent, each of their respective affiliates, and each of the foregoing entities’ respective past, present and future affiliates, shareholders, members, managers, partners, directors, officers, employees,
fiduciaries, agents, attorneys, heirs, predecessors, successors and representatives, in their personal and representative capacities, as well as all employee benefit plans maintained by the Company, Parent or any of their respective affiliates and
all fiduciaries and administrators of any such plans, in their personal and representative capacities (each a “Company Party,” and collectively, 

  
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the “Company Parties”), from liability for, and Executive hereby waives, any and all claims, damages, or causes of action of any kind
related to Executive’s employment or affiliation with any Company Party, the termination of such employment or affiliation, and any other acts or omissions related to any matter occurring or existing on or prior to the time that Executive
executes this Agreement, whether arising under federal or state laws or the laws of any other jurisdiction, including (i) any alleged violation through such time of: (A) any federal, state or local anti-discrimination or anti-retaliation
law, including Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, and Sections 1981 through 1988 of Title 42 of the United States Code, as amended, the Americans with Disabilities Act of 1990,
as amended; (B) the Employee Retirement Income Security Act of 1974, as amended (“ERISA”); (C) the Immigration Reform Control Act, as amended; (D) the National Labor Relations Act, as amended; (E) the
Occupational Safety and Health Act, as amended; (F) the Family and Medical Leave Act of 1993; (G) the Texas Labor Code (including the Texas Payday Law the Texas Anti-Retaliation Act, Chapter 21 of the Texas Labor Code, and the Texas
Whistleblower Act) and amendments to those laws; (H) any other local, state or federal law, regulation, ordinance or orders which may have afforded any legal or equitable causes of action of any nature; or (I) any public policy, contract,
tort, or common law claim, including any claim for defamation, emotional distress, wrongful termination, fraud or misrepresentation of any kind; (ii) any allegation for costs, fees, or other expenses including attorneys’ fees incurred in,
or with respect to, a Released Claim; (iii) any and all claims Executive may have under the Employment Agreement (as defined below) or any other agreement (including the Plan, the Award Agreements, or any offer letter), incentive or
compensation plan or under any other benefit plan, program or practice; and (iv) any claim for compensation, damages or benefits of any kind not expressly set forth in this Agreement (collectively, the
“Released Claims”). THIS RELEASE INCLUDES MATTERS ATTRIBUTABLE TO THE SOLE OR PARTIAL NEGLIGENCE (WHETHER GROSS OR SIMPLE) OR OTHER FAULT, INCLUDING STRICT LIABILITY, OF ANY OF THE COMPANY
PARTIES. 
 (b)    The Released Claims do not include any claims to the Separation Benefits or any rights that may
first arise after the time that Executive executes this Agreement. 
 (c)    In no event shall the Released Claims
include any claim to vested benefits under an employee benefit plan of the Company or Parent that is subject to ERISA (including any rights to vested benefits under health and retirement plans). Further notwithstanding this release of liability,
nothing in this Agreement prevents Executive from filing any non-legally waivable claim (including a challenge to the validity of this Agreement) with the Equal Employment Opportunity Commission
(“EEOC”) or other governmental agency or participating in any investigation or proceeding conducted by the EEOC or other governmental agency or cooperating with such agency; however, Executive
understands and agrees that Executive is waiving any and all rights to recover any monetary or personal relief as a result of such EEOC or other governmental agency proceeding or subsequent legal actions. Further, nothing herein waives
Executive’s right to receive an award for information provided to a governmental agency. 
 (d)    Executive hereby
represents and warrants that, as of the time Executive executes this Agreement, Executive has not brought or joined any lawsuit or filed any charge or claim against any of the Company Parties in any court or before any government agency or
arbitrator for or with respect to a matter, claim or incident that occurred or arose out of one or more 

  
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occurrences that took place on or prior to the Signing Date. Executive hereby further represents and warrants that Executive has not assigned, sold, delivered, transferred or conveyed any rights
Executive has asserted or may have against any of the Company Parties to any person or entity, in each case, with respect to any Released Claims. 

6.    Executive’s Acknowledgements. By executing and delivering this Agreement, Executive
expressly acknowledges that: 
 (a)    Executive has carefully read this Agreement; 

(b)    Executive has had sufficient time to consider this Agreement before the execution and delivery to Company; 

(c)    Executive has been advised, and hereby is advised in writing, to discuss this Agreement with an attorney of
Executive’s choice and Executive has had adequate opportunity to do so prior to executing this Agreement; 

(d)    Executive fully understands the final and binding effect of this Agreement; the only promises made to Executive to
sign this Agreement are those stated within the four corners of this document; and Executive is signing this Agreement knowingly, voluntarily and of Executive’s own free will, and that Executive understands and agrees to each of the terms of
this Agreement; and 
 (e)    No Company Party has provided any tax or legal advice regarding this Agreement and
Executive has had an adequate opportunity to receive sufficient tax and legal advice from advisors of Executive’s own choosing such that Executive enters into this Agreement with full understanding of the tax and legal implications thereof.

 7.    Confirming Release. On the Resignation Date or within 21 days thereafter, Executive shall
execute the Confirming Release Agreement that is attached as Exhibit A (the “Confirming Release”) and return the executed Confirming Release to the Company such that it is received by Chris Wood,
Corporate Attorney, at 16200 Park Row, Suite 300, Houston, Texas, 77084, no later than the date that is 21 days after the Resignation Date. 

8.    Affirmation of Restrictive Covenants; Permitted Disclosures. Executive and the Company are
parties to that certain Employment Agreement by and between Executive and the Company, executed as of April 27, 2017 (the “Employment Agreement”), which includes certain confidentiality,
non-solicitation and non-competition restrictive covenants. Executive expressly acknowledges and agrees that Sections 9, 10 and 11 of the Employment Agreement are
enforceable in all respects and promises to abide by their terms. Notwithstanding the foregoing, nothing in this Agreement or the Employment Agreement shall prohibit or restrict Executive from lawfully (a) initiating communications directly
with, cooperating with, providing information to, causing information to be provided to, or otherwise assisting in an investigation by, any governmental authority regarding a possible violation of any law; (b) responding to any inquiry or legal
process directed to Executive from any such governmental authority; (c) testifying, participating or otherwise assisting in an action or proceeding by any such governmental authority relating to a possible violation of law; or (d) making
any other disclosures that are protected under the whistleblower provisions of any applicable law. 

  
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Additionally, pursuant to the federal Defend Trade Secrets Act of 2016, Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of
a trade secret that: (i) is made (A) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation
of law; (ii) is made to Executive’s attorney in relation to a lawsuit for retaliation against Executive for reporting a suspected violation of law; or (iii) is made in a complaint or other document filed in a lawsuit or other
proceeding, if such filing is made under seal. Nothing in this Agreement requires Executive to obtain prior authorization from the Company before engaging in any conduct described in this paragraph, or to notify the Company that Executive has
engaged in any such conduct. 
 9.    Confidentiality. Executive shall keep the terms of this
Agreement confidential and shall not directly or indirectly disseminate any information, in any form, regarding this Agreement to any person or entity except his attorney or tax or financial advisors, or as otherwise provided by law; provided,
however, that prior to disclosure to his attorney or tax or financial advisors, Executive shall ensure that such advisors honor the confidentiality provisions herein. 

10.    Mutual Non-Disparagement Covenant; Company’s Release of
Claims. As a material inducement for the Company to enter into this Agreement, Executive agrees to refrain from making any statements (or permitting any statements to be reported as being attributed to him) that are critical, disparaging or
derogatory about, or which injure the reputation of the Company, Parent or any other Company Party. Notwithstanding the foregoing, Executive may respond to subpoenas, provide testimony or otherwise provide evidence to the extent required by law. The
Company shall instruct its directors, officers and human resource representatives not to make any statements (or permit any statements to be reported as being attributed to him) that are critical, disparaging or derogatory about, or which injure the
reputation of Executive. Executive represents that he has not committed fraud, violated any accounting standards or violated any law impacting the Company or any other Company Party in his capacity as an officer or agent of any member of the Company
Group. In express reliance on this representation, the Company agrees to release and forever discharge Executive from any and all matters, claims, charges, demands, damages, causes of action, debts, liabilities, controversies, judgments, and
lawsuits of every kind and nature whatsoever, foreseen or unforeseen, known or unknown, which may have arisen before the date of execution of this Agreement between Executive and the Company including, but not limited to, those arising out of
Executive’s employment by the Company. 
 11.    Indemnification and Insurance Coverage.
Nothing herein releases any Company Group obligations to Executive with respect to indemnification or insurance coverage for claims that may arise on or after the Signing Date. 

12.    Entire Agreement. This Agreement, the Employment Agreement, that certain Indemnification
Agreement by and among Executive and Parent and its subsidiaries and controlled affiliates, executed as of April 27, 2017, and, to the extent relating to the benefits described in Section 2(a)(iii) above, the Plan and
the Award Agreements, constitute the entire agreement between the parties with respect to the matters herein provided. No modifications or waiver of any provision hereof shall be effective unless in writing and signed by each party. 

  
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 13.    Consulting Services. 

(a)    During the Consulting Period (as defined below), Executive agrees to provide consultation services to the Company
in the capacity of an independent contractor, which services will include Executive providing consultation and advice as may be requested by the Board from time to time with regard to the business of the Company and the further transition of
Executive’s duties and responsibilities (the “Services”). In providing the Services, Executive agrees to attend such meetings as the Board may reasonably require for communication of his advice and consultation.
Executive shall coordinate the furnishing of the Services with representatives of the Board in order that such services can be provided in such a way as to generally conform to the business schedules and performance standards of the Company, but the
method of performance, time of performance, place of performance, hours utilized in such performance, and other details of the manner of performance of Executive’s provision of the Services shall be within the sole control of Executive. During
the Consulting Period, (i) Executive shall have the right to devote his business day and working efforts to other business and professional opportunities that do not interfere with his rendering of the Services to the Company or his other
obligations to the Company; and (ii) Executive shall not be deemed to be an agent of the Company or have any power to bind or commit the Company or otherwise act on its behalf. 

(b)    During the Consulting Period, Executive shall be an independent contractor and shall not participate in any pension
or welfare benefit plans, programs or arrangements of the Company or any other Company Party unless such benefits are made available to Executive by operation of law and due to his former employment status with the Company. As an independent
contractor, Executive shall be solely responsible for all taxes on the sums received by him pursuant to this Section 13, and Executive expressly agrees to pay and be responsible for making all applicable tax filings and
remittances with respect to amounts paid to Executive pursuant to this Section 13 and to hold harmless the Company Parties for all claims, damages, costs and liabilities arising from Executive’s failure to do so. 

(c)    In exchange for providing the Services set forth in Section 13(a) and for being available
to do so, the Company shall pay Executive a consulting fee at the rate of $10,000 per complete calendar month (prorated for partial calendar months) that the Consulting Period is in effect. 

(d)    Unless earlier terminated as provided hereunder, the “Consulting Period” shall be that
period between the Resignation Date and the date that is two months after the Resignation Date; provided, however, that the Consulting Period, and Executive’s and the Company’s respective obligations under this
Section 13, shall be terminated prior to the date that is two months after the Resignation Date upon any of the following: (i) the death or disability of Executive; (ii) the termination of the Consulting Period by
the Company for Cause (as defined in the Employment Agreement); (iii) the termination of the Consulting Period by mutual agreement of the Company and Executive; or (iv) Executive’s exercise of his revocation right described in the
Confirming Release. 
 14.    Governing Law and Jurisdiction. The validity, interpretation,
construction, performance and enforcement of this Agreement shall be governed by the laws of the State of 

  
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Texas without regard to its conflict of laws principles that would result in the application of the laws of another jurisdiction. With respect to any claim or dispute related to or arising under
this Agreement, the parties hereby consent to the exclusive jurisdiction, forum and venue of the state and federal courts (as applicable) located in the Houston, Texas. Executive irrevocably waives Executive’s right to object to or challenge
the above selected forum on the basis of inconvenience or unfairness. 
 15.    Assignment. The
Company has the right to assign this Agreement, but Executive does not. This Agreement inures to the benefit of the successors and assigns of the Company, who are intended third party beneficiaries of this Agreement. 

16.    Headings; Interpretation. Titles and headings to Sections hereof are for the purpose of
reference only and shall in no way limit, define or otherwise affect the provisions hereof. Unless the context requires otherwise, all references herein to an agreement, instrument or other document shall be deemed to refer to such agreement,
instrument or other document as amended, supplemented, modified and restated from time to time to the extent permitted by the provisions thereof. The word “or” as used herein is not exclusive and is deemed to have the meaning
“and/or.” The words “herein”, “hereof”, “hereunder” and other compounds of the word “here” shall refer to the entire Agreement, including exhibits, and not to any particular provision hereof. The use
herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or
matters, whether or not non-limiting language (such as “without limitation”, “but not limited to”, or words of similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against any
party hereto, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each of the parties hereto and shall be construed and interpreted according to the ordinary meaning of the words used so as to
fairly accomplish the purposes and intentions of the parties. 
 17.    Third Party Beneficiaries.
Each Company Party that is not a signatory hereto shall be a third-party beneficiary of Executive’s covenants, warranties, representations, and release of claims set forth in this Agreement and entitled to enforce such covenants, warranties,
representations, and release of claims as if it, he or she was a party hereto. 
 18.    Return of
Property. Executive represents and warrants that he has returned to the Company, or as of the Resignation Date he will have returned to the Company, all property belonging to the Company and any other Company Party, including all computer
files and other electronically stored information, client materials, electronically stored information and other materials provided to Executive by the Company or any other Company Party in the course of his employment and Executive further
represents and warrants that he has not maintained (or, after the Resignation Date, he will not maintain) a copy of any such materials in any form. Notwithstanding the foregoing, Executive shall be entitled to retain the laptop computer and cellular
telephone (including the associated telephone number) that have been issued to him by the Company; provided, however, Executive agrees to cooperate with Parent and the Company in order to facilitate the removal of Company Group materials from
those devices. 

  
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 19.    No Waiver. No failure by any party at any time to
give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

 20.    Severability and Modification. To the extent permitted by applicable law, the
parties agree that any term or provision of this Agreement (or part thereof) that renders such term or provision (or part thereof) or any other term or provision (or part thereof) of this Agreement invalid or unenforceable in any respect shall be
severable and shall be modified or severed to the extent necessary to avoid rendering such term or provision (or part thereof) invalid or unenforceable, and such severance or modification shall be accomplished in the manner that most nearly
preserves the benefit of the parties’ bargain hereunder. 
 21.    Withholding of Taxes and Other
Deductions. The Company may withhold from any payments made pursuant to this Agreement all federal, state, local, and other taxes and withholdings as may be required pursuant to any law or governmental regulation or ruling. 

22.    Counterparts. This Agreement may be executed in one or more counterparts (including
electronic mail in portable document format (.pdf), facsimile or by any other electronic means intended to preserve the original graphic and pictorial appearance of the document), each of which shall be deemed to be an original, but all of which
together will constitute one and the same agreement. Delivery of a copy of this Agreement bearing an original signature by facsimile transmission or by electronic mail shall have the same effect as physical delivery of the paper document bearing the
original signature. 
 23.    Section 409A. Neither this Agreement nor the payments provided
hereunder are intended to constitute “deferred compensation” subject to the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury regulations and interpretive guidance issued thereunder
(collectively, “Section 409A”), and this Agreement shall be construed and administered in accordance with such intent. Notwithstanding the foregoing, the Company makes no representations that
this Agreement or the payments provided under this Agreement complies with or is exempt from the requirements of Section 409A and in no event shall the Company or any other Company Party be liable for all or any portion of any taxes, penalties,
interest or other expenses that may be incurred by Executive on account of non-compliance with Section 409A. 

[Remainder of Page Intentionally Blank; 

Signature Page Follows] 

  
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 IN WITNESS WHEREOF, the parties have executed this Agreement with the intent to be legally bound.

  

			
	J. A. (ALAN) TOWNSEND
	
	/s/ J. A. (Alan) Townsend
	 J. A. (Alan) Townsend

	Date:	 	May 2, 2018
	
	ROSEHILL OPERATING COMPANY, LLC
		
	By:	 	/s/ Chris Wood
	Name:	 	Chris Wood
	Title:	 	Corporate Attorney, Chief Compliance Officer and Secretary
	Date:	 	May 2, 2018
	
	With respect to Sections 2(a)(iii) and 14:
	
	 ROSEHILL RESOURCES INC.

		
	By:	 	/s/ Chris Wood
	Name:	 	Chris Wood
	Title:	 	Chief Compliance Officer and Secretary
	Date:	 	May 2, 2018

  
 SIGNATURE
PAGE TO 
 TRANSITION, RESIGNATION AND CONSULTING
AGREEMENT AND 
 GENERAL RELEASE OF CLAIMS 

 EXHIBIT A 

CONFIRMING RELEASE AGREEMENT 

This Confirming Release Agreement (this “Confirming Release”) is that certain Confirming Release referenced in
Section 7 of the Transition, Resignation and Consulting Agreement and General Release of Claims (the “Resignation Agreement”) entered into by and between J. A. (Alan) Townsend
(“Executive”) and Rosehill Operating Company, LLC, a Delaware limited liability company (the “Company”) and, with respect to certain provisions thereof, Rosehill Resources Inc., a Delaware corporation
(“Parent”). Capitalized terms used herein that are not otherwise defined have the meanings assigned to them in the Resignation Agreement. 

1.    General Release of Claims. 

(a)    For good and valuable consideration, Executive hereby forever releases, discharges and acquits each of the Company,
Parent, each of their respective affiliates, and each of the foregoing entities’ respective past, present and future affiliates, shareholders, members, managers, partners, directors, officers, employees, fiduciaries, agents, attorneys, heirs,
predecessors, successors and representatives, in their personal and representative capacities, as well as all employee benefit plans maintained by the Company or any of its affiliates and all fiduciaries and administrators of any such plans, in
their personal and representative capacities (collectively, the “Confirming Release Company Parties”), from liability for, and Executive hereby waives, any and all claims, damages, or causes of action of any kind related to,
Executive’s employment or affiliation with any Confirming Release Company Party, the termination of such employment or affiliation, and any other acts or omissions related to any matter occurring or existing on or prior to the time that
Executive executes this Confirming Release, whether arising under federal or state laws or the laws of any other jurisdiction, including (i) any alleged violation through such time of: (A) any federal, state or local anti-discrimination or
anti-retaliation law, including the Age Discrimination in Employment Act of 1967, as amended (including as amended by the Older Workers Benefit Protection Act), Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of
1991, as amended, and Sections 1981 through 1988 of Title 42 of the United States Code, as amended, the Americans with Disabilities Act of 1990, as amended; (B) ERISA; (C) the Immigration Reform Control Act, as amended; (D) the
National Labor Relations Act, as amended; (E) the Occupational Safety and Health Act, as amended; (F) the Family and Medical Leave Act of 1993; (G) any other local, state or federal law, regulation, ordinance or orders which may have
afforded any legal or equitable causes of action of any nature (including the Texas Commission on Human Rights Act; Chapter 451 et seq. of the Texas Labor Code; the Texas Business and Commerce Code; the Texas Payday Act; the Texas Anti-Retaliation
Act; Chapter 21 of the Texas Labor Code; the Texas Whistleblower Act; and amendments to the foregoing as well as any claims under local statutes and ordinances that may be legally waived and released); or (H) any public policy, contract, tort,
or common law claim, including any claim for defamation, emotional distress, wrongful termination, fraud or misrepresentation of any kind; (ii) any allegation for costs, fees, or other expenses including attorneys’ fees incurred in, or
with respect to, a Confirming Released Claim; (iii) any and all claims Executive may have under the Employment Agreement or any other agreement (including the Plan, the Award Agreements, or any offer letter), incentive or

  
 EXHIBIT
A-1 

 
compensation plan or under any other benefit plan, program or practice; and (iv) any claim for compensation, damages or benefits of any kind not expressly set forth in this Confirming
Release (collectively, the “Confirming Released Claims”). THIS RELEASE INCLUDES MATTERS ATTRIBUTABLE TO THE SOLE OR PARTIAL NEGLIGENCE (WHETHER GROSS OR SIMPLE) OR OTHER FAULT, INCLUDING STRICT LIABILITY, OF ANY OF THE
CONFIRMING RELEASE COMPANY PARTIES. 
 (b)    The Released Claims do not include any claims to the Separation
Benefits set forth in Section 2 of the Resignation Agreement or any rights that may first arise after the time that Executive executes this Confirming Release. 

(c)    In no event shall the Confirming Released Claims include any claim to vested benefits under an employee benefit
plan of the Company or another Confirming Release Company Party that is subject to ERISA (including any rights to vested benefits under health and retirement plans). Further notwithstanding this release of liability, nothing in this Confirming
Release prevents Executive from filing any non-legally waivable claim (including a challenge to the validity of this Agreement) with the Equal Employment Opportunity Commission
(“EEOC”) or other governmental agency or participating in any investigation or proceeding conducted by the EEOC or other governmental agency or cooperating with such agency; however, Executive
understands and agrees that Executive is waiving any and all rights to recover any monetary or personal relief as a result of such EEOC or other governmental agency proceeding or subsequent legal actions. Further, nothing herein waives
Executive’s right to receive an award for information provided to a governmental agency. 
 (d)    Executive hereby
represents and warrants that, as of the time Executive executes this Confirming Release, Executive has not brought or joined any lawsuit or filed any charge or claim against any of the Confirming Release Company Parties in any court or before any
government agency or arbitrator for or with respect to a matter, claim or incident that occurred or arose out of one or more occurrences that took place on or prior to the time at which Executive signs this Confirming Release. Executive hereby
further represents and warrants that Executive has not assigned, sold, delivered, transferred or conveyed any rights Executive has asserted or may have against any of the Confirming Release Company Parties to any person or entity, in each case, with
respect to any Confirming Released Claims. 
 2.    Satisfaction of All Leaves and Payment Amounts; Prior
Rights and Obligations. In signing this Confirming Release, Executive expressly acknowledges and agrees that Executive has received all leaves (paid and unpaid) to which Executive has been entitled during Executive’s employment with the
Company, Parent or any other Confirming Release Company Party, and Executive has received all wages, bonuses and other compensation, been provided all benefits and been afforded all rights and been paid all sums that Executive is owed or has been
owed or ever could be owed by the Company, Parent or any other Confirming Release Company Party (with the exception of the Separation Benefits, if still not paid or provided), including all payments arising out of all incentive plans and any other
bonus arrangements. Notwithstanding the foregoing, Executive remains entitled to receive, if still unpaid, any unpaid base salary for services performed in the pay period in which the Resignation Date occurred. 

  
 EXHIBIT
A-2 

 3.    Executive’s Acknowledgments; Binding Effect.
Executive has been advised, and hereby is advised in writing, to consult with an attorney of his choice regarding the form and content of this Confirming Release, and he represents that he has had a sufficient opportunity to do so and that he has
read this Confirming Release carefully, and enters into the Confirming Release voluntarily and of his own free will. This Confirming Release and the releases and covenants contained herein shall be binding upon Executive, his heirs, executors,
administrators, assigns, agents, attorneys in fact, attorneys at law, and representatives. This Confirming Release and the releases and covenants contained herein shall inure to the benefit of all Confirming Released Parties and each of their
respective predecessors, successors, and assigns. 
 4.    Revocation Right. Notwithstanding the
initial effectiveness of this Confirming Release, Executive may revoke the delivery (and therefore the effectiveness) of this Confirming Release within the seven-day period beginning on the date Executive
executes this Confirming Release (such seven-day period being referred to herein as the “Release Revocation Period”). To be effective, such revocation must be in writing signed by
Executive and must be received by the Company, care of Chris Wood, Corporate Attorney, at 16200 Park Row, Suite 300, Houston, Texas, 77084, on the last day of the Release Revocation Period. If an effective revocation is delivered in the foregoing
manner and timeframe, then the Separation Benefits shall not be provided to Executive pursuant to Section 2 of the Resignation Agreement, Section 13 of the Resignation Agreement shall be of no
force or effect, this Confirming Release (including the release of claims set forth in this Confirming Release) shall be of no force or effect, and the remainder of the Resignation Agreement shall be in full force and effect. 

[Remainder of Page Intentionally Blank; 

Signature Page Follows] 

  
 EXHIBIT
A-3 

 
			
	J. A. (ALAN) TOWNSEND
	
	 
	J. A. (Alan) Townsend
		
	Date:	 	 

  
 SIGNATURE
PAGE TO 
 CONFIRMING RELEASE AGREEMENTWARRANT AGENT AGREEMENT

 

EXHIBIT 4.18

WARRANT AGENT AGREEMENT

THIS WARRANT AGENT AGREEMENT (this “Agreement”), dated as of May __, 2018 (the “Issuance Date”), is entered into by and between Heat Biologics, Inc., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation (the “Warrant Agent”).

WHEREAS, pursuant to the terms of that certain Underwriting Agreement (“Underwriting Agreement”), dated May __, 2018, by and among the Company and A.G.P./Alliance Global Partners, as representatives of the underwriters set forth therein, the Company is engaged in a public offering (the “Offering”) of up to [______] shares (the “Shares”) of common stock, par value $0.0002 per share (the “Common Stock”), pre-funded warrants (the “Pre-Funded Warrants”) to purchase shares of Common Stock (the “Pre-Funded Warrant Shares”), and up to [______] Warrants (the “Warrants” together with the Shares and the Pre-Funded Warrants, the “Securities”) to purchase shares of Common Stock (the “Warrant Shares”), including Shares and Warrants issuable pursuant to the underwriters’ over-allotment option; and 

WHEREAS, the Company has filed with the Securities and Exchange Commission a Registration Statement on Form S-1, as amended (File No. 333-224039) (the “Registration Statement”), for the registration, under the Securities Act of 1933, as amended (the “Act”) of, among other securities, the Shares, the Pre-Funded Warrants, the Warrants, the Pre-Funded Warrant Shares and the Warrant Shares; 

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise of the Warrants; 

WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and

WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:

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1.

Appointment of Warrant Agent.  The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.

2.

Warrants.

2.1

Form of Warrant. The Warrants shall be registered securities and shall be evidenced by a global certificate (“Global Certificate”) in the form of Exhibit A to this Agreement, which shall be deposited on behalf of the Company with the Warrant Agent, as a custodian for The Depository Trust Company (“DTC”), and registered in the name of Cede & Co., a nominee of DTC. If DTC subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant Agent regarding making other arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer necessary to have the Warrants available in, book-entry form, the Company may instruct the Warrant Agent to provide written instructions to DTC to deliver to the Warrant Agent for cancellation the Global Certificate, and the Company shall instruct the Warrant Agent to deliver to DTC separate certificates evidencing Warrants (“Definitive Certificates” and, together with the Global Certificate, “Warrant Certificates”) registered as requested through the DTC system.

2.2

Effect of Countersignature.  Unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.

2.3

Registration.

2.3.1

Warrant Register. The Warrant Agent shall maintain books (the “Warrant Register”) for the registration of the original issuance and transfers of the Warrants.  Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company.

2.3.2

Registered Holder.  Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant shall be registered upon the Warrant Register (the “registered holder”), as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the warrant certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.

2.3.3

Issuance of Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue the Global Certificate and deliver the Warrants in the DTC book-entry settlement system in accordance with written instructions delivered to the Warrant Agent by the Company. Ownership of security entitlements in the Warrants shall be shown on, and the transfer 

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of such ownership shall be effected through, records maintained (i) by DTC and (ii) by institutions that have accounts with DTC (each, a “Participant”).

2.3.4

Beneficial Owner; Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name that Warrant shall be registered on the Warrant Register (the “Holder”) as the absolute owner of such Warrant for purposes of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Warrant Agent or any agent of the Company or the Warrant Agent from giving effect to any written certification, proxy or other authorization furnished by DTC governing the exercise of the rights of a holder of a beneficial interest in any Warrant. The rights of beneficial owners in a Warrant evidenced by the Global Certificate shall be exercised by the Holder or a Participant through the DTC system, except to the extent set forth herein or in the Global Certificate.

2.3.5

Loss, Theft and Mutilation of Warrant Certificates. Upon receipt by the Company and the Warrant Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Warrant Certificate, and, in case of loss, theft or destruction, of indemnity or security in customary form and amount, and reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant Certificate if mutilated, the Warrant Agent shall, on behalf of the Company, countersign and deliver a new Warrant Certificate of like tenor to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated. The Warrant Agent may charge the Holder an administrative fee for processing the replacement of lost Warrant Certificates, which shall be charged only once in instances where a single surety bond obtained covers multiple certificates. The Warrant Agent may receive compensation from the surety companies or surety agents for administrative services provided to them.

2.3.6

Proxies. The Holder of a Warrant may grant proxies or otherwise authorize any person, including the Participants and beneficial holders that may own interests through the Participants, to take any action that a Holder is entitled to take under this Agreement or the Warrants; provided, however, that at all times that Warrants are evidenced by a Global Certificate, exercise of those Warrants shall be effected on their behalf by Participants through DTC in accordance the procedures administered by DTC.

3.

Terms and Exercise of Warrants.

3.1

Warrant Price.  Each Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder thereof, subject to the provisions of the applicable Warrant Certificate and of this Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $[__] per share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1. The term “Warrant Price” as used in this Agreement shall mean the price per share at which shares of Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than twenty (20) Business Days, provided, that the Company shall provide at least twenty (20) 

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days prior written notice of such reduction to Holders of the Warrants and, provided further that any such reduction shall be identical among all of the Warrants.

3.2

Duration of Warrants.  Warrants may be exercised only during the period (“Exercise Period”) commencing on the Issuance Date and terminating at 5:00 P.M., New York City time (the “close of business”) on [____________] (“Expiration Date”), subject to early expiration under Section 6. Each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at the close of business on the Expiration Date.

3.3

Exercise of Warrants.

3.3.1

Exercise. Exercise of the purchase rights represented by a Warrant may be made, in whole or in part, at any time or times on or after the Issuance Date and on or before the Expiration Date by delivery to the Warrant Agent of an election to purchase the Warrant Shares underlying the Warrants to be exercised (i) in the form included in Exhibit A to this Agreement or (ii) via an electronic warrant exercise through the DTC system (each, an “Election to Purchase”).Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 3.3.4 herein) following the date of exercise as aforesaid, the Holder shall (i) (A) surrender the Warrant Certificate evidencing the Warrants to the Warrant Agent at its office designated for such purpose or (B) deliver the Warrants to an account of the Warrant Agent at DTC designated for such purpose in writing by the Warrant Agent to DTC from time to time, and (ii) deliver to the Warrant Agent (on behalf of the Company) the Warrant Price for each Warrant to be exercised, in lawful money of the United States of America by certified or official bank check payable to the Warrant Agent or bank wire transfer in immediately available funds to:

[Wire/payment information for Warrant Agent (on behalf of the Company)]

or such other payment information as may be provided in writing by the Warrant Agent  from time to time. Any person so designated by the Holder (or a Participant or designee of a Participant on behalf of a Holder) to receive Warrant Shares shall be deemed to have become holder of record of such Warrant Shares as of the time that an appropriately completed and duly signed Election to Purchase has been delivered to the Warrant Agent, provided that the Holder (or Participant on behalf of the Holder) makes delivery of the deliverables referenced in the immediately preceding sentence by the date that is one (1) Trading Day after the delivery of the Election to Purchase.  If the Holder (or Participant on behalf of the Holder) fails to make delivery of such deliverables on or prior to the Trading Day following delivery of the Election to Purchase, such Election to Purchase shall be void ab initio. 

3.3.2

If any of (i) the Warrants, (ii) the Election to Purchase, or (iii) the Warrant Price therefor, is received by the Warrant Agent on any date after 5:00 P.M., New York City time, or on a date that is not a Trading Day, the Warrants with respect thereto will be deemed to have been received and exercised on the Trading Day next succeeding such date. The “Exercise Date” will be the date on which the materials in the foregoing sentence are received by the Warrant Agent (if by 5:00 P.M., New York City time), or the following Trading Day (if after 5:00 P.M., New York City time), regardless of any earlier date written on the materials. If the 

4

 

Warrants are received or deemed to be received after the Expiration Date, the exercise thereof will be null and void and any funds delivered to the Company will be returned to the Holder or Participant, as the case may be, as soon as practicable. In no event will interest accrue on any funds deposited with the Company in respect of an exercise or attempted exercise of Warrants.

3.3.3

If less than all the Warrants evidenced by a surrendered Warrant Certificate are exercised, the Warrant Agent shall split up the surrendered Warrant Certificate and return to the Holder a Warrant Certificate evidencing the Warrants that were not exercised at no charge to the Holder.

3.3.4

Issuance of Warrant Shares.  The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Company’s transfer agent to the Holder by crediting the account of the Holder’s or its designee's balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) or Depository Trust Company’s Fast Reject And Confirmation (“FRAC”) system if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) the Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company's share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Election to Purchase by the date that is the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Election to Purchase (such date, the “Warrant Share Delivery Date”).   Upon delivery of the Election to Purchase, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Warrant Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Election to Purchase.  If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to an Election to Purchase by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Election to Purchase), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.  As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company's primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Election to Purchase. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered by 12:00 p.m. (New York City time) on the Exercise Date, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Exercise Date.

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3.3.5

Rescission Rights. If the Company fails to cause its transfer agent to transmit to the Holder the Warrant Shares by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

3.3.6

Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise.  In addition to any other rights available to the Holder, if the Company fails to cause the Warrant Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 3.3.4 above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder's brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.  For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

3.3.7

Valid Issuance.  All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and nonassessable.

3.3.8

Date of Issuance.  Each person in whose name any such certificate for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

3.3.9

Restrictive Legend Events; Cashless Exercise Under Certain Circumstances. If at any time after the Issuance Date, there is no effective registration statement registering, or no current prospectus available for, the issuance of the Warrant Shares to the 

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Holder, then this Warrant may only be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

(A)  = 

as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Election to Purchase if such Election to Purchase is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 3.3 hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Election to Purchase or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Election to Purchase if such Election to Purchase is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 3.3 hereof or (iii) the VWAP on the date of the applicable Election to Purchase if the date of such Election to Purchase is a Trading Day and such Election to Purchase is both executed and delivered pursuant to Section 3.3 hereof after the close of “regular trading hours” on such Trading Day;

(B) = the Warrant Price of the Warrant, as adjusted as set forth herein; and 

(X) = the number of Warrant Shares that would be issuable upon exercise of the Warrant in accordance with the terms of the Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised.  The Company agrees not to take any position contrary to this 3.3.9.

“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then 

7

 

outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

Notwithstanding anything herein to the contrary, on the Expiration Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 3.3.9.

3.3.10

Beneficial Ownership Limitation. A Holder shall not have the right to exercise any Warrants to the extent that after giving effect to the issuance of Warrant Shares after exercise as set forth on the applicable Election to Purchase, such Holder or a person holding through such Holder (together with such Holder’s or person’s Affiliates (as defined in Rule 405 under the Act), and any other persons acting as a group together with that Holder or person or any of that Holder’s or person’s Affiliates), would beneficially own in excess of 4.99% (“Beneficial Ownership Limitation”) of the Company’s Common Stock. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by a person shall include the number of Warrant Shares that would be owned by that person issuable upon exercise of the Warrants with respect to which such determination is being made, but shall exclude the number of shares of Common Stock (a) which would be issuable upon exercise of the remaining, non-exercised Warrants beneficially owned by that person or any of its Affiliates and (b) underlying any other securities of the Company held by such Holder or its Affiliates that are exercisable or convertible into Common Stock and subject to a limitation on conversion or exercise that is analogous to the limitation contained in this Section 3.3.10. Except as set forth in the preceding sentence, for purposes of this Section 3.3.10, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that neither the Warrant Agent nor the Company is representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder or beneficial owner is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 3.3.10 applies, the determination of whether a Warrant is exercisable and of the number of Warrants that are exercisable shall be in the sole discretion of the Holder, and the submission of an Election to Purchase shall be deemed to be the Holder’s determination of whether such Warrant is exercisable and of the number of Warrants that are exercisable, and neither the Warrant Agent nor the Company shall have any obligation to verify or confirm the accuracy of such determination and neither of them shall have any liability for any error made by the Holder or any other person. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 3.3.10, in determining the number of outstanding shares of Common Stock, a Holder or other person may rely on the number of outstanding shares of Common Stock as reflected in (a) the Company’s most recent periodic or annual report filed with the Securities and Exchange Commission, as the case may be, (b) a more recent public announcement by the Company or (c) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request of a person that represents that it is or is acting on behalf of a Holder, the Company shall, within two (2) Trading Days, confirm orally or in writing or by e-mail to that person the number of shares of Common Stock then outstanding. Upon delivery of a written notice to the Company, the Holder may from time to time increase or decrease the Beneficial Ownership Limitation to any other percentage 

8

 

not in excess of 9.99% as specified in such notice, provided that any increase in the Beneficial Ownership Limitation will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and any such increase or decrease will apply only to the Holder and its Affiliates and not to any other holder of Warrants. The provisions of this Section 3.3.10 shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3.3.10 to correct this subsection (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitation herein contained.

4.

Adjustments.

4.1

Stock Dividends and Splits.  If the Company, at any time while the Warrants are outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of Common Stock any shares of capital stock of the Company, then in each case the Warrant Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Warrant Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 4.1 shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

4.2

Subsequent Rights Offerings.  In addition to any adjustments pursuant to Section 4.1 above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

9

 

4.3

Pro Rata Distributions.  During such time as the Warrants are outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

4.4

Fundamental Transaction. If, at any time while the Warrants are outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of shares of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding shares of Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the shares of Common Stock or any compulsory share exchange pursuant to which the shares of Common Stock are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 3.10 on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which the 

10

 

Warrants are exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 3.10 on the exercise of this Warrant).  For purposes of any such exercise, the determination of the Warrant Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Warrant Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of shares of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 4.4 pursuant to written agreements in form and substance reasonably satisfactory to the Holder prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

4.5

Aggregation of Shares.  If, after the date hereof, and subject to the provisions of Section 4.8, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock.

4.6

Adjustments in Warrant Price.  Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Sections 4.1 and 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately 

11

 

prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.

4.7

Notices of Changes in Warrant.  Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.  Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4 then, in any such event, the Company shall give written notice to each Warrant holder, at the last address set forth for such holder in the Warrant Register, of the record date or the effective date of the event.   If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the shares of Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the shares of Common Stock, (C) the Company shall authorize the granting to all holders of the shares of Common Stock rights or warrants to subscribe for or purchase any capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the shares of Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the shares of Common Stock are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register, at least 5 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the shares of Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or stock exchange is expected to become effective or close, and the date as of which it is expected that holders of the shares of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or stock exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice and provided, further that no notice shall be required if the information is disseminated in a  press release or document filed with the Securities and Exchange Commission.  To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

4.8

No Fractional Shares.  Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants.  If, by reason of any adjustment made pursuant to this Section 4, the holder of any 

12

 

Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round up or down to the nearest whole number the number of shares of Common Stock to be issued to the Warrant holder.

4.9

Form of Warrant.  The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement.  However, the Company may, at any time, in its sole discretion, make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.

5.

Transfer and Exchange of Warrants.

5.1

Registration of Transfer.  The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant in the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly medallion guaranteed and accompanied by appropriate instructions for transfer.  Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent.  The Warrants so cancelled may be delivered by the Warrant Agent to the Company from time to time upon request.

5.2

Procedure for Surrender of Warrants.  Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the registered holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer is exempt from registration under the Act and indicating whether the new Warrants must also bear a restrictive legend.

5.3

Fractional Warrants.  The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of a warrant certificate for a fraction of a warrant.

5.4

Service Charges.  No service charge shall be made for any exchange or registration of transfer of Warrants.

5.5

Warrant Execution and Countersignature.  The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.

6.

Call Option. Provided (i) there is an effective registration statement that covers resale of all of the Warrant Shares, or (ii) all of the Warrant Shares may be sold pursuant to Rule 144 upon 

13

 

cashless exercise without restrictions including without volume limitation, the Company has the option to “call” the exercise of any or all of the Warrants, from time to time by giving a call notice to the Holder only after any 10-consecutive Trading Day period during which the daily VWAP of the Common Stock is not less than 200% of the Warrant Price in effect for such 10-consecutive Trading Day period.  During the call period, the Holder may exercise the Warrant and purchase the called Common Stock underlying the Warrant. If the holder fails to timely exercise the Warrant or a number of shares of Common Stock equal to number of called shares of Common Stock during the call period, the Company’s sole remedy will be to cancel an amount of called shares of Common Stock underlying the Warrant equal to such shortfall, with the Warrant no longer being exercisable with respect to such shares of Common Stock. The call period is a period of 30 Trading Days following the date on which the call notice is deemed given and effective. 

7.

Other Provisions Relating to Rights of Holders of Warrants.

7.1

No Rights as Stockholder.  A Warrant does not entitle the registered holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.

7.2

Lost, Stolen, Mutilated, or Destroyed Warrants.  If any Warrant is lost, stolen, mutilated or destroyed, the Company and the Warrant Agent may, on such terms as to indemnity or otherwise as they may in their discretion impose (which terms shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor and date as the Warrant so lost, stolen, mutilated or destroyed.  Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.

7.3

Reservation of Common Stock.  The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.

8.

Concerning the Warrant Agent and Other Matters.

8.1

Payment of Taxes.  The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares.

8.2

Resignation, Consolidation, or Merger of Warrant Agent.

8.2.1

Appointment of Successor Warrant Agent.  The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company.  If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent.  If 

14

 

the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice, submit his, her or its Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost.  Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority.  After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.

8.2.2

Notice of Successor Warrant Agent.  In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.

8.2.3

Merger or Consolidation of Warrant Agent.  Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act.

8.3

Fees and Expenses of Warrant Agent.

8.3.1

Remuneration.  The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.

8.3.2

Further Assurances.  The Company agrees to perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.

8.4

Liability of Warrant Agent.

8.4.1

Reliance on Company Statement.  Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action 

15

 

hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the President or Chairman of the Board of the Company and delivered to the Warrant Agent.  The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.

8.4.2

Indemnity.  The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith.  The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a result of the Warrant Agent’s gross negligence, willful misconduct or bad faith.

8.4.3

Exclusions.  The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant; nor shall it be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common Stock will when issued be valid and fully paid and nonassessable.

8.5

Acceptance of Agency.  The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and, among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares of Common Stock through the exercise of Warrants.

9.

Miscellaneous Provisions.

9.1

Successors.  All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.

9.2

Notices.  Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be delivered by hand or sent by registered or certified mail or overnight courier service, addressed (until another address is filed in writing by the Company with the Warrant Agent) as follows:

Heat Biologics, Inc.

801 Capitola Drive

Durham, North Carolina 27713

16

 

Attention: Jeffrey Wolf, Chief Executive Officer

Fax No: (305) 503-8566

Email: jwolf@heatbio.com

With a copy (for informational purposes only) to:

Gracin & Marlow, LLP

The Chrysler Building

405 Lexington Avenue, 26th Floor

New York, New York 10174

Attention: Leslie Marlow, Esq.

Fax No: (212) 208-4657

Email: lmarlow@gracinmarlow.com

Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be delivered by hand or sent by registered or certified mail or overnight courier service, addressed (until another address is filed in writing by the Company with the Warrant Agent) as follows:

Continental Stock Transfer & Trust Company

1 State Street, 30 FL

New York, New York 10004

Attn:

Compliance Department

with a copy in each case to:

[     ]

Any notice, sent pursuant to this Agreement shall be effective, if delivered by hand, upon receipt thereof by the party to whom it is addressed, if sent by overnight courier, on the next business day of the delivery to the courier, and if sent by registered or certified mail on the third day after registration or certification thereof.

9.3

Applicable Law.  The validity, interpretation and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.  The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.  The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.  Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.2 hereof.  Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim.

17

 

9.4

Persons Having Rights under this Agreement.  Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the registered holders of the Warrants, any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof.  All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the registered holders of the Warrants.

9.5

Examination of the Warrant Agent Agreement.  A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the registered holder of any Warrant.  The Warrant Agent may require any such holder to submit his, her or its Warrant for inspection by it.

9.6

Counterparts.  This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

9.7

Effect of Headings.  The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.

9.8

Amendments.  This Agreement may be amended by the parties hereto without the consent of any registered holder for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the registered holders.  All other modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period, shall require the written consent of the registered holders of a majority of the then outstanding Warrants.  

9.9

Severability.  Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

9.10

Certain Definitions. As used herein, the following terms shall have the following meanings:

9.10.1

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

9.10.2

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time shares of Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other 

18

 

instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

9.10.3

 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

9.10.4

 “Trading Day” means a day on which the principal Trading Market is open for trading.

9.10.5

 “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).

9.10.6

 “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

[Signature page follows]

19

 

IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day and year first above written.

HEAT BIOLOGICS, INC.

By: ____________________________________

Name: Jeffrey Wolf

Title: Chief Executive Officer 

CONTINENTAL STOCK TRANSFER & TRUST COMPANY

By: ____________________________________

Name: 

Title: 

EXHIBIT A

[TO BE INCLUDED IN THE GLOBAL CERTIFICATE]

 

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

 

HEAT BIOLOGICS, INC.

WARRANT CERTIFICATE

NOT EXERCISABLE AFTER ____________________

 

This certifies that the person whose name and address appears below, or registered assigns, is the registered owner of the number of Warrants set forth below. Each Warrant entitles its registered holder to purchase from Heat Biologics, Inc. a company incorporated under the laws of the State of Delaware (the “Company”), at any time prior to 5:00 P.M. (New York City time) on ________________, one share of common stock, par value $0.0002 per share, of the Company (each, a “Warrant Share” and collectively, the “Warrant Shares”), at an exercise price of $____ per share, subject to possible adjustments as provided in the Warrant Agreement (as defined below). 

 

This Warrant Certificate, with or without other Warrant Certificates, upon surrender at the designated office of the Warrant Agent, may be exchanged for another Warrant Certificate or Warrant Certificates evidencing the same number of Warrants as the Warrant Certificate or Warrant Certificates surrendered. A transfer of the Warrants evidenced hereby may be registered upon surrender of this Warrant Certificate at the designated office of the Warrant Agent by the registered holder in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer, a signature guarantee, and such other and further documentation as the Warrant Agent may reasonably request and duly stamped as may be required by the laws of the State of New York and of the United States of America.

 

The terms and conditions of the Warrants and the rights and obligations of the holder of this Warrant Certificate are set forth in the Warrant Agent Agreement dated as of _________, 2018 (the “Warrant Agreement”) between the Company and Continental Stock Transfer & Trust Company (the “Warrant Agent”). A copy of the Warrant Agreement is available for inspection during business hours at the office of the Warrant Agent.

  

This Warrant Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by an authorized signatory of the Warrant Agent.

 

WITNESS the facsimile signature of a proper officer of the Company.

 

			
	 

	HEAT BIOLOGICS, INC.

	 

	 

	 

	By:

	 

	 

	Name:

	 Jeffrey Wolf

	 

	Title:

	Chief Executive Officer

Dated: _______________

 

Countersigned:

 

CONTINENTAL STOCK TRANSFER & TRUST COMPANY 

 

By: _________________________________________

Name: _______________________________________

Title: ________________________________________

 

	
	PLEASE DETACH HERE

	 

 

Certificate No.:_________ Number of Warrants:__________

 

WARRANT CUSIP NO.: ___________

 

HEAT BIOLOGICS, INC.

Election to Purchase

(To Be Executed Upon Exercise Of Warrants not evidenced by a Global Certificate)

The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive shares of Common Stock and herewith tenders payment for such shares of Common Stock to the order of Heat Biologics, Inc. (the “Company”) in the amount of $         in accordance with the terms hereof. The undersigned requests that a certificate for such shares of Common Stock be registered in the name of , whose address is and that such shares of Common Stock be delivered to whose address is . If said number of shares of Common Stock is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares of Common Stock be registered in the name of           , whose address is and that such Warrant Certificate be delivered to      , whose address is                .

 

In the event that the Warrant has been called for redemption by the Company pursuant to the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with the Warrant Agreement.

 

In the event that the Warrant is to be exercised on a “cashless” basis pursuant to the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with the Warrant Agreement.

 

In the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares of Common Stock that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive shares of Common Stock. If said number of shares is less than all of the shares of Common Stock purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares of Common Stock be registered in the name of , whose address is and that such Warrant Certificate be delivered to , whose address is .

 

[Signature Page Follows]

 

 

		
	Date:                , 20

	 

	 

	(Signature)

	 

	 

	 

	(Address)

	 

	 

	 

	(Tax Identification Number)

	 

	Signature Guaranteed:

 

 

 

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 (OR ANY SUCCESSOR RULE)).

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