Document:

ex10-1.htm

Exhibit 10.1

 

 

THIRD AMENDMENT AND CONSENT
TO THE

AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT

 

Dated as of September 3, 2015

 

among

 

THE PROVIDENCE SERVICE CORPORATION,
as the Borrower,

 

CERTAIN DOMESTIC SUBSIDIARIES OF THE BORROWER,
as the Guarantors,

 

BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender and L/C Issuer,

 

SUNTRUST BANK

and

ROYAL BANK OF CANADA,
as Co-Syndication Agents,

 

BMO HARRIS BANK, N.A.

and

HSBC BANK USA, NATIONAL ASSOCIATION,

as Co-Documentation Agents

 

and

 

THE OTHER LENDERS PARTY HERETO

 

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, 

 

SUNTRUST ROBINSON HUMPHREY, INC.

 

and

 

RBC CAPITAL MARKETS,1

as Joint Lead Arrangers and Joint Bookrunners

 

 

 

1 RBC Capital Markets is a marketing name for the capital markets activities of Royal Bank of Canada and its affiliates. 

 

 

 

 

 

THIRD AMENDMENT AND CONSENT TO THE AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT 

                THIS THIRD AMENDMENT AND CONSENT TO THE AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT dated as of September 3, 2015 (this "Agreement") is entered into among The Providence Service Corporation, a Delaware corporation (the "Borrower"), the Guarantors, the Lenders and Bank of America, N.A., as Administrative Agent. All capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Borrower, the Guarantors, the Lenders and Bank of America, N.A., as Administrative Agent, entered into that certain Amended and Restated Credit and Guaranty Agreement dated as of August 2, 2013 (as amended by that certain First Amendment dated as of May 28, 2014 and by that certain Second Amendment and Consent dated October 23, 2014, the "Credit Agreement"); 

 

WHEREAS, on the date hereof, the Borrower and Ross Innovative Employment Solutions Corp., a Delaware corporation, intend to sell Providence Human Services, LLC, a Delaware limited liability company, Providence Community Services, LLC, a Pennsylvania limited liability company, and their respective Subsidiaries set forth on Schedule 1 hereto (collectively, the “Services Business”) to Molina Healthcare, Inc., a Delaware corporation (the "Purchaser"), for consideration in an amount not less than $175,000,000, plus any additional amount, which may be paid from time to time (the "Sale Price"), on the terms, limitations and conditions as provided in the Membership Interest Purchase Agreement, dated as of the date hereof, by and between Borrower and the Purchaser (such sale, the "Services Business Disposition");

 

WHEREAS, the Services Business Disposition would constitute a violation of Section 8.05(b) of the Credit Agreement because the aggregate net book value of assets Disposed exceeds the permitted $35,000,000 threshold for asset dispositions;

 

WHEREAS, the Borrower has requested that any mandatory prepayment of Net Cash Proceeds from the Services Business Disposition pursuant to Section 2.05(b)(ii) of the Credit Agreement be waived (the "Prepayment Waiver") and that the Borrower be permitted to use up to 50% of such Net Cash Proceeds for the Stock Repurchase Program (as hereinafter defined) (the “Stock Repurchase Application”); and

 

WHEREAS, the Borrower has requested that the Lenders provide the consent to the Services Business Disposition, the Prepayment Waiver and the Stock Repurchase Application and amend the Credit Agreement as set forth below (the Credit Agreement, as amended as set forth below, the "Amended Credit Agreement"). 

 

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

 

1.     Consent. The Required Lenders hereby consent to the Services Business Disposition, Prepayment Waiver and the Stock Repurchase Application; provided that a minimum amount equal to 50% of the Net Cash Proceeds received from the Services Business Disposition shall be applied pro rata to the prepayment of the Revolving Loans and Swing Line Loans. The above consent shall not modify or affect the Loan Parties' obligations to comply fully with the terms of the Amended Credit Agreement or any other duty, term, condition or covenant contained in the Amended Credit Agreement or any other Loan Document in the future. The consent is limited solely to the specific consent identified above and nothing contained in this Agreement shall be deemed to constitute a future waiver of any other rights or remedies the Administrative Agent or any Lender may have under the Credit Agreement or any other Loan Document or under applicable law.

 

 

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2.     Amendments. 

 

(a)     Section 1.01. The following definitions are hereby added to Section 1.01 of the Credit Agreement in the appropriate alphabetical order to read as follows:

 

“Services Business Disposition” means the sale by the Borrower and Ross Innovative Employment Solutions Corp. of all issued and outstanding Equity Interests of Providence Human Services, LLC, a Delaware limited liability company and Providence Community Services, LLC, a Pennsylvania limited liability company pursuant to the Services Business Disposition Agreement.

 

"Services Business Disposition Agreement" means the Membership Interest Purchase Agreement, dated as of September 3, 2015 by and between the Borrower, Ross Innovative Employment Solutions Corp., a Delaware corporation, and Molina Healthcare, Inc., a Delaware corporation.

 

“Services Business Prepayment” means the prepayment of the Revolving Loans by the Borrower with the proceeds of the Services Business Disposition in an amount equal to 50% of the Net Cash Proceeds received from the Services Business Disposition.

 

"Stock Repurchase Program" means that certain stock repurchase program approved by the Board of Directors of the Borrower whereby the Borrower may purchase common Equity Interests of the Borrower, for an aggregate amount not to exceed 50% of the Net Cash Proceeds received from the Services Business Disposition.

 

(b)     Section 2.02(a). The first parenthetical of Section 2.02(a) of the Credit Agreement is hereby amended to read as follows:

 

(provided, that a notice of Borrowing with respect to funding of a Permitted Acquisition or Stock Repurchase Program may state that such notice is conditioned upon the completion of such Permitted Acquisition or Stock Repurchase Program, in which case, subject to Section 3.05, such notice of Borrowing may be revoked by the Borrower if the Permitted Acquisition or Stock Repurchase Program is not consummated at the time specified)

 

(c)     Section 7.11. Section 7.11 of the Credit Agreement is hereby amended to read as follows:Use the proceeds of the Credit Extensions (a) to finance a portion of the consideration payable in connection with the Matrix Acquisition (it being understood that no more than $25,000,000 of Revolving Loans may be used to finance the Matrix Acquisition), to repay certain existing indebtedness of Matrix and its subsidiaries and to pay fees and expenses in connection with the Matrix Acquisition and the Second Amendment, (b) to refinance certain existing Indebtedness, (c) to finance working capital, capital expenditures, Permitted Acquisitions and repayment of the Convertible Notes, (d) to finance a portion of the consideration payable in connection with the Stock Repurchase Program and (e) for other general corporate purposes, provided that in no event shall the proceeds of the Credit Extensions be used in contravention of any Law or of any specific provision in any Loan Document. 

 

 

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(d)     Section 8.06. Section 8.06 of the Credit Agreement is hereby amended by (i) deleting the "and" at the end of clause (j) thereof, (ii) renumbering clause (k) thereof as clause (l) and (iii) inserting a new clause (k) to read as follows:

 

(k)     the Borrower may make Restricted Payments to repurchase its common Equity Interests pursuant to Borrower's Stock Repurchase Program, in an aggregate amount not to exceed an amount equal to 50% of the Net Cash Proceeds received from the Services Business Disposition, provided that (i) no Default or Event of Default shall have occurred and be continuing before or after giving effect thereto and (ii) such Restricted Payments shall be made with the proceeds of the Services Business Disposition and/or Revolving Loans so long as the aggregate amount of Revolving Loans used to make such Restricted Payments does not exceed the amount of voluntary prepayments of the Revolving Loans made by the Borrower with the proceeds of the Services Business Disposition that were in excess of the Services Business Prepayment; and

 

3.     Release.

 

(a)     The Required Lenders hereby authorize the Administrative Agent to (i) release each of the entities listed on Schedule 1 hereto as Guarantors under the Credit Agreement and (ii) release any Liens granted by or on such entities and their property (such collateral, collectively, the "Released Collateral") in favor of the Administrative Agent pursuant to the Credit Agreement, in each case, upon the consummation of the Services Business Disposition.

 

(b)     Upon the consummation of the Services Business Disposition and the receipt by the Borrower of the Sale Price, the Administrative Agent, on behalf of itself and the Lenders and in accordance with the foregoing clause (a), hereby (i) releases each of the entities listed on Schedule 1 hereto as Guarantors under the Credit Agreement, (ii) releases the Liens in favor of the Administrative Agent in or on the Released Collateral arising or created under the Loan Documents, excluding however any Liens in the proceeds received in connection with the consummation of the Services Business Disposition and (iii) agrees to execute and deliver to the Borrower, at the sole expense of the Borrower, all documents or instruments reasonably requested by the Borrower in connection therewith.

 

(c)     The Borrower hereby acknowledges that the releases in clause (b) above are being made without recourse to, or any representation or warranty by, the Administrative Agent.

 

 

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4.     Conditions Precedent. This Agreement shall be effective (the date of such effectiveness, the "Third Amendment Effective Date") upon (i) execution and delivery of counterparts hereof by the Borrower, the Guarantors, the Required Lenders and the Administrative Agent, (ii) the Borrower having paid, or causing to be paid, to the Administrative Agent for the account of each Lender that consents to this Agreement by execution and delivery of counterparts hereof, an amendment consent fee of 0.05% of the aggregate principal amount of such Lender's Revolving Commitment and Term Loans and (iii) the Loan Parties having paid the reasonable and invoiced out-of-pocket costs and expenses of the Administrative Agent, including, without limitation, the reasonable and invoiced fees and expenses of Moore & Van Allen, PLLC.

 

5.     Miscellaneous.

 

(a)     The Credit Agreement and the obligations of the Loan Parties thereunder and under the other Loan Documents are hereby ratified and confirmed and shall remain in full force and effect according to their terms. This Agreement is a Loan Document.

 

(b)     Each Guarantor (i) acknowledges and consents to all of the terms and conditions of this Agreement, (ii) affirms all of its obligations under the Loan Documents and (iii) agrees that this Agreement and all documents executed in connection herewith do not operate to reduce or discharge its obligations under the Credit Agreement or the other Loan Documents.

 

(c)     The Borrower and the Guarantors hereby represent and warrant as follows:

 

(i)     Each Loan Party has taken all necessary action to authorize the execution, delivery and performance of this Agreement.

 

(ii)     This Agreement has been duly executed and delivered by the Loan Parties and constitutes each of the Loan Parties' legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and by general principles of equity and principles of good faith and fair dealing.

 

(iii)     No approval, consent, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement other than (A) those approvals, consents, exemptions, authorizations or other actions, notices or filings, that have already been obtained, taken, given or made and are in full force and effect, (B) filings and recordings necessary to perfect and continue certain Liens on the Collateral created by the Collateral Documents and (C) recording of the transfer of registrations and applications for IP Rights upon foreclosure.

 

(d)     The Loan Parties represent and warrant to the Lenders that (i) the representations and warranties of the Loan Parties set forth in Article VI of the Credit Agreement and in each other Loan Document are true and correct in all material respects as of the date hereof with the same effect as if made on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date in which case they shall be true and correct in all material respects as of such earlier date and (ii) no event has occurred and is continuing which constitutes a Default or an Event of Default.

 

 

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(e)     This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.

 

(f)     THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

(g)     EACH PARTY HERETO AGREES AS SET FORTH IN SECTION 11.15 OF THE CREDIT AGREEMENT AS IF SUCH SECTION WERE SET FORTH IN FULL HEREIN.

 

 

 

[SIGNATURE PAGES FOLLOW]

 

 5

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

BORROWER:                                        THE PROVIDENCE SERVICE CORPORATION,

a Delaware corporation

 

By:          /s/ James Lindstrom          

Name:     James Lindstrom

Title:       Chief Executive Officer, President & Assistant Secretary

 

GUARANTORS:                                  ProvADO TECHNOLOGIES, LLC

 

By:          /s/ James Lindstrom          

Name:     James Lindstrom

Title:       Treasurer

 

LOGISTICARE SOLUTIONS, LLC

 

By:          /s/ James Lindstrom          

Name:     James Lindstrom

Title:       Assistant Secretary and Treasurer

 

LOGISTICARE SOLUTIONS INDEPENDENT PRACTICE

ASSOCIATION, LLC

 

By: LogistiCare Solutions, LLC, as Sole Member

 

By:          /s/ James Lindstrom          

Name:     James Lindstrom

Title:       Assistant Secretary and Treasurer 

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

 

A to Z In-Home Tutoring LLC

AlphaCare Resources, Inc. 

AmericanWork, Inc.

Camelot Care Centers, Inc.

Children’s Behavioral Health, Inc.

Choices Group, Inc.

Dockside Services, Inc.

Drawbridges Counseling Services, LLC 

Family-Based Strategies, Inc.

Family Preservation Services, Inc.

Family Preservation Services of Florida, Inc.

Family Preservation Services of North Carolina, Inc.

Family Preservation Services of Washington D.C., Inc.

Family Preservation Services of West Virginia, Inc.

Health Trans, Inc.

Maple Star Nevada

Providence Human Services of Washington, Inc. (f/k/a Maple Star Washington, Inc.)

Oasis Comprehensive Foster Care LLC 

Providence Community Corrections, Inc. 

Providence Community Services, Inc. 

Providence Community Services, LLC 

Providence Management Corporation of Florida

Providence of Arizona, Inc.

Providence Service Corporation of ALABAMA

PROVIDENCE SERVICE CORPORATION OF DELAWARE

Providence Service Corporation of Maine

Providence Service Corporation of Oklahoma

Providence Service Corporation of Texas

RAYSTOWN DEVELOPMENTAL SERVICES, INC.

Red Top Transportation, Inc.

Ride Plus, LLC

RIO GRANDE MANAGEMENT COMPANY, L.L.C.

THE REDCO GROUP, INC.

Transitional Family Services, Inc.

W.D. Management, L.L.C.

 

By:          /s/ James Lindstrom          

Name:     James Lindstrom

Title:       Secretary and Treasurer

 

 

PINNACLE ACQUISITIONS, LLC

PROVIDENCE OF IDAHO, LLC

 

By:          /s/ Warren S. Rustand          

Name:     Warren S. Rustand

Title:       Manager

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

CCHN Group Holdings, Inc.

CCHN Holdings, Inc.

Community Care Health Network, Inc.

Ascender Software, Inc.

MMNRA, LLC

Votiva Health, LLC

Mission Medical Group of Alabama LLC

Matrix Medical Network of Arizona, LLC

Matrix Medical Network of Colorado, LLC

Matrix Medical Network of Florida, LLC

Matrix Medical Network of Georgia, LLC

Matrix Medical Network of Kentucky, LLC

Mission Medical Group of Louisiana, L.L.C.

Matrix Medical Network of Missouri, LLC

Matrix Medical Network of Nevada, LLC

Matrix Medical Network of New Mexico, LLC

Matrix Medical Network of Oklahoma, LLC

Matrix Medical Network of Oregon, LLC

Matrix Medical Network of Utah, LLC

Matrix Medical Network of Virginia, LLC

Matrix Medical Network of Washington, LLC

 

By:          /s/ Walter W. Cooper          

Name:     Walter W. Cooper

Title:       President and Chief Executive Officer 

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

 

PROVIDENCE HUMAN SERVICES, LLC

 

By:          /s/ Warren S. Rustand          

Name:     Warren S. Rustand

Title:      Sole Manager

 

 

PHS II Corp.

Ross Innovative Employment Solutions Corp.

 

 

By:          /s/ Michael Fidgeon               

Name:     Michael Fidgeon

Title:       President and Chief Executive Officer

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

 

administrative

agent:                                                bank of america, n.a.,

as Administrative Agent

 

By:          /s/ Anthea Del Bianco          

Name:     Anthea Del Bianco

Title:       Vice President

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

LENDERS:                                             bank of america, n.a.,

as a Lender, Swing Line Lender and L/C Issuer

 

By:          /s/ Heath Lipson          

Name:     Heath Lipson

Title:       SVP

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

SUNTRUST BANK,

as a Lender

 

By:          /s/ Mary E. Coke          

Name:     Mary E. Coke

Title:       Vice President

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

HSBC BANK USA, NATIONAL ASSOCIATION,

as a Lender

 

By:          /s/ Rohan Trikha          

Name:     Rohan Trikha

Title:       Vice President

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

BMO HARRIS BANK, N.A.

as a Lender

 

By:          /s/ Brian Harbin                    

Name:     Brian Harbin

Title:       Director

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

MUFG UNION BANK, N.A.,

as a Lender

 

By:          /s/ R. Cassandra Bolz          

Name:     R. Cassandra Bolz

Title:       Authorized Signatory

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

CAPITAL ONE, NATIONAL ASSOCIATION,

as a Lender

 

By:          /s/ Parminder Atwal          

Name:     Parminder Atwal

Title:       Managing Director

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

CITIZENS BANK, N.A.,

as a Lender

 

By:          /s/ Andrea B. Goldman          

Name:     Andrea B. Goldman

Title:       Senior Vice President

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

GE CAPITAL BANK,

as a Lender

 

By:          /s/ Paul Sleet                    

Name:     Paul Sleet

Title:      Duly Authorized Signatory

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

BOKF, N.A., D/B/A BANK OF ARIZONA,

as a Lender

 

By:          /s/ Margaret DelBrocco                    

Name:    Margaret DelBrocco

Title:      Senior Vice President

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

REGIONS BANK,

as a Lender

 

By:          /s/ Kap Yarbrough                    

Name:    Kap Yarbrough

Title:      Senior Vice President

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

ROYAL BANK OF CANADA,

as a Lender

 

By:          /s/ Steven T. Bachman                    

Name:    Steven T. Bachman

Title:       Authorized Signatory

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

VIST BANK,

as a Lender

 

By:          /s/ Gary M. Moyer          

Name:     Gary M. Moyer

Title:       EVP

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

BROWN BROTHERS HARRIMAN & CO.,

as a Lender

 

By:          /s/ Jared S. Keyes          

Name:     Jared S. Keyes

Title:       Partner

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

WESTERN ALLIANCE BANK,

as a Lender

 

By:          /s/ Victor J. Napolitano          

Name:     Victor J. Napolitano

Title:      Senior Vice President

 

 

[Signature Page to Third Amendment to Amended and Restated Credit and Guaranty Agreement and Consent]

 

 

  

Schedule 1

 

SERVICES BUSINESS

 

	 	
1.
	
PHS II Corp.

	 	
2.
	
Providence Human Services, LLC

	 	
3.
	
Alphacare Resources, Inc.

	 	
4.
	
AmericanWork, Inc.

	 	
5.
	
A To Z In-Home Tutoring LLC

	 	
6.
	
Camelot Care Centers, Inc.

	 	
7.
	
Children's Behavioral Health, Inc.

	 	
8.
	
Choices Group, Inc.

	 	
9.
	
College Community Services

	 	
10.
	
Dockside Services, Inc.

	 	
11.
	
Drawbridges Counseling Services, LLC

	 	
12.
	
Family-Based Strategies, Inc.

	 	
13.
	
Family Preservation Services, Inc.

	 	
14.
	
Family Preservation Services Of Florida, Inc.

	 	
15.
	
Family Preservation Services Of North Carolina, Inc.

	 	
16.
	
Family Preservation Services Of Washington D.C., Inc.

	 	
17.
	
Family Preservation Services Of West Virginia, Inc.

	 	
18.
	
Maple Star Nevada, Inc.

	 	
19.
	
Providence Human Services of Washington, Inc. (f/k/a Maple Star Washington, Inc.)

	 	
20.
	
Oasis Comprehensive Foster Care LLC

	 	
21.
	
Providence Community Corrections, Inc.

	 	
22.
	
Providence Community Services, Inc.

	 	
23.
	
Providence Community Services, LLC

	 	
24.
	
Providence Human Services of Massachusetts, LLC

	 	
25.
	
Providence Management Corporation Of Florida

	 	
26.
	
Providence Of Arizona, Inc.

	 	
27.
	
Providence Of Idaho, LLC

	 	
28.
	
Providence Service Corporation Of Alabama

	 	
29.
	
Providence Service Corporation Of Delaware

	 	
30.
	
Providence Service Corporation Of Maine

	 	
31.
	
Providence Service Corporation Of Oklahoma

	 	
32.
	
Providence Service Corporation Of Texas

	 	
33.
	
Raystown Developmental Services, Inc.

	 	
34.
	
The Redco Group, Inc.

	 	
35.
	
Rio Grande Management Company, L.L.C.

	 	
36.
	
Transitional Family Services, Inc.

	 	
37.
	
W.D. Management, L.L.C.

	 	
38.
	
Maple Star Oregon, Inc.

	 	
39.
	
Family Builders, Inc.Exhibit 4.2

 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS COVERING SUCH SECURITIES OR THE SALE IS MADE IN ACCORDANCE WITH
AN EXEMPTION UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER
OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

Checkpoint
Therapeutics, Inc.

 

COMMON
STOCK WARRANT

 

This
Warrant is issued as of this ____ day of ______________ (the “Issue Date”) by [Checkpoint Therapeutics,
Inc.], a Delaware corporation (the “Company”), to _____________________________, or permitted assigns
(the “Holder”).

 

1.            Issuance of Warrant; Number and Type of Securities
Subject to Warrant; Exercise Price. The Company hereby grants to the Holder the right to purchase ______________ shares of
the Company’s Common Stock (the “Common Stock”). The exercise price of the warrant will be $_____.

 

2.          Term.
This Warrant shall only be exercisable in accordance with the terms of Section 6 hereof, and shall expire on the date that is
ten (10) years after the Issue Date.

 

3.          Adjustments
and Notices. This Warrant shall be subject to adjustment from time to time in accordance with the following provisions.

 

(a)          
Stock Splits, Subdivisions or Combinations. If at any time on or after the date hereof the Company shall split, subdivide
or otherwise change its outstanding shares of any securities receivable upon exercise of this Warrant into a greater number of
securities, the Warrant Price in effect immediately prior to such subdivision shall thereby be proportionately reduced and the
number of Warrant Shares shall thereby be proportionately increased; and, conversely, if at any time on or after the date hereof
the outstanding number of shares of any securities receivable upon exercise of this Warrant shall be combined into a smaller number
of securities, the Warrant Price in effect immediately prior to such combination shall thereby be proportionately increased and
the number of Warrant Shares shall thereby be proportionately decreased, all subject to further adjustment as provided in this
Section 3.

 

    	 

    	 

    

 

(b)         Reclassification.
If the Company, by reclassification of securities, reorganization of the Company (or any other entity the securities of which
are at the time receivable upon the exercise of this Warrant) or otherwise (including by merger or consolidation), shall change
any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of
any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights
under this Warrant immediately prior to such reclassification or other change and the Warrant Price therefor shall be appropriately
adjusted, all subject to further adjustment as provided in this Section 3.

 

(c)       No Impairment. The Company shall not, by amendment
of its Certificate of Incorporation or Bylaws, each as amended to date, or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times in good faith assist
in carrying out the provisions of this Warrant and in taking all such action as may be necessary or appropriate to protect the
Holder’s rights under this Warrant against impairment.

 

(d)         Fractional
Shares. No fractional Warrant Shares shall be issuable upon exercise or conversion of the Warrant and the number of Warrant
Shares to be issued shall be rounded to the nearest whole Warrant Share. If a fractional Warrant Share arises upon any exercise
or conversion of the Warrant, the Company shall eliminate such fractional Warrant Share by paying the Holder an amount computed
by multiplying the fractional interest by the fair market value of a full Warrant Share.

 

 
             4.           No
Voting or Dividend Rights. Nothing contained in this Warrant shall be construed as conferring upon the holder hereof the right
to vote or to consent to receive notice as a stockholder of the Company on any other matters or any rights whatsoever as a stockholder
of the Company. No dividends or interest shall be payable or accrued in respect of this Warrant or the interest represented hereby
or the shares purchasable hereunder until, and only to the extent that, this Warrant shall have been exercised.

 

5.           Shares
to be Fully Paid; Reservation of Shares. The Company covenants and agrees that all Warrant Shares will, upon issuance and
payment of the applicable Warrant Price, be duly authorized, validly issued, fully paid and nonassessable, and free of all preemptive
rights, liens and encumbrances, except for restrictions on transfer provided for herein. The Company shall at all times reserve
and keep available out of its authorized and unissued Common Stock, solely for the purpose of providing for the exercise of the
rights to purchase all Warrant Shares granted pursuant to this Warrant, such number of shares of Common Stock as shall, from time
to time, be sufficient therefor.

 

               6.           Exercise
of Warrant. Subject to Section 4, this Warrant may be exercised in whole or in part, at any time, by the surrender of this
Warrant, together with the Notice of Exercise and Investment Representation Statement in substantially the forms attached hereto
as Attachment 1 and Attachment 2, respectively (subject to appropriate revision if this Warrant is adjusted pursuant
to Section 3 hereof), duly completed and executed at the principal office of the Company, and accompanied by payment in full of
the applicable aggregate Warrant Price in cash or by check with respect to the Warrant Shares being purchased. Prior to exercise
of the Warrant, the Holder shall notify the Company of its desire to exercise the Warrant. This Warrant shall be deemed to have
been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the
person or entity entitled to receive the Warrant Shares issuable upon such exercise shall be treated for all purposes as holder
of such shares of record as of the close of business on such date.

 

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7.           Notice
of Proposed Transfer. Prior to any proposed transfer of this Warrant or the Warrant Shares received on the exercise of this
Warrant (together, the “Securities”), unless there is in effect a registration statement under the Securities
Act of 1933, as amended (the “Act”) covering the proposed transfer, the Holder thereof shall give written
notice to the Company of such Holder’s intention to effect such transfer. Each such notice shall describe the manner and
circumstances of the proposed transfer in sufficient detail, and shall, if the Company so requests, be accompanied (except in
transactions in compliance with Rule 144) by either (i) an unqualified written opinion of legal counsel who shall be reasonably
satisfactory to the Company addressed to the Company and reasonably satisfactory in form and substance to the Company’s
counsel, to the effect that the proposed transfer of the Securities may be effected without registration under the Act, or (ii)
a “no action” letter from the Securities and Exchange Commission (the “Commission”) to the
effect that the transfer of such Securities without registration will not result in a recommendation by the staff of the Commission
that action be taken with respect thereto, whereupon the Holder of the Securities shall be entitled to transfer the Securities
in accordance with the terms of the notice delivered by the Holder to the Company; provided, however, no such registration
statement or opinion of counsel shall be necessary for a transfer by a Holder to any affiliate of such Holder. Each certificate
evidencing the Securities transferred as above provided shall bear the appropriate restrictive legend set forth above, except
that such certificate shall not bear such restrictive legend if in the opinion of counsel for the Company such legend is not required
in order to establish compliance with any provisions of the Act.

 

8.           Certificate
of Adjustment. Whenever the Warrant Price or number or type of Warrant Shares issuable upon exercise of this Warrant is adjusted,
as herein provided, the Company shall promptly deliver to the record holder of this Warrant a certificate of the Secretary of
the Company setting forth the nature of such adjustment and a brief statement of the facts requiring such adjustment.

9.           Replacement
of Warrants. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of the Warrant, and in the case of any such loss, theft or destruction of the Warrant, on delivery of an indemnity
agreement or security reasonably satisfactory in form and amount to the Company, and reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of the Warrant if mutilated, the Company will execute and deliver,
in lieu thereof, a new Warrant of like tenor.

 

    	3

    	 

    

 

 

               10.         Amendment,
Waiver, etc. Except as expressly provided herein, neither this Warrant nor any term hereof may be amended, waived, discharged
or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge
or termination is sought; provided, however, that any provisions hereof may be amended, waived, discharged or terminated
upon the written consent of the Company and a Requisite Majority. For purposes hereof, “Requisite Majority”
shall mean Holders of at least a majority of the Warrant Shares then issuable upon exercise of then outstanding warrants of like
tenor to this Warrant issued by the Company (the “Offering Warrants”); provided, however,
that no such amendment or waiver may disproportionately and adversely affect the Holder relative to the holders of all other Offering
Warrants without the Holder’s consent. Any amendment effected in accordance with this Section shall be binding upon all
holders of the Offering Warrants, each future holder of the Offering Warrants, and the Company. By acceptance hereof, the Holder
acknowledges that in the event the required consent is obtained, any term of this Warrant may be amended or waived with or without
the consent of the Holder.

 

               11.         Successors
and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors
of the Company and the successors and assigns of the Holder. The provisions of this Warrant are intended to be for the benefit
of all Holders from time to time of this Warrant, and shall be enforceable by any such Holder.

 

               12.         Severability.
In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will
attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor,
and upon so agreeing, shall incorporate such substitute provision in this Warrant.

 

 13.        Miscellaneous.
This Warrant shall be governed by the laws of the State of New York as such laws are applied to contracts to be entered into and
performed entirely in New York. The headings in this Warrant are for purposes of convenience and reference only, and shall not
be deemed to constitute a part hereof.

 

    	4

    	 

    

 

 

	 	 	 
	ISSUED this ____ day of _____________.	 
	 	 
	 	[Checkpoint Therapeutics, Inc.]
	 	 
	 	By: 	
	 	 	Michael S. Weiss
	 	 	President and Interim CEO

 

    	 

    	 

    

 

Attachment
1

 

NOTICE
OF EXERCISE

 

TO:         Checkpoint
Therapeutics, Inc.

 

               1.            The
undersigned hereby elects to purchase _____________ shares of __________ of Checkpoint Therapeutics, Inc. (the “Warrant
Shares”) pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price in full, together
with all applicable transfer taxes, if any.

 

               2.            Please
issue a certificate or certificates representing said number of Warrant Shares in the name of the undersigned or in such other
name as is specified below:

 

________________________________________

(Name)

_______________________________________

(Address)

	 	 	 	 	 
	 	 	 	 	 	 
		 	 	
	(Date)	 	 	(Name
    of Warrant Holder)
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	 
	 	 	 	Title:	 
	 	 	 	 	 

 

    	 

    	 

    

 

Attachment
2 

INVESTMENT
REPRESENTATION STATEMENT

 

Shares
of _________ of 

Checkpoint
Therapeutics, Inc.

 

In
connection with the purchase of the shares of __________ of Checkpoint Therapeutics, Inc., the undersigned hereby represents to
Checkpoint Therapeutics, Inc. (the “Company”) as follows:

 

               (A)         The
undersigned is an accredited investor (as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933,
as amended (the “Act”)). The undersigned acknowledges that an investment in the Company is highly speculative and
represents that it is able to fend for itself in the transactions contemplated by this Statement, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and risks of its investments, and has the ability
to bear the economic risks (including the risk of a total loss) of its investment. The undersigned represents that it has had
the opportunity to ask questions of the Company concerning the Company’s business and assets and to obtain any additional
information which it considered necessary to verify the accuracy of or to amplify the Company’s disclosures, and has had
all questions which have been asked by it satisfactorily answered by the Company.

 

               (B)          The
undersigned understands that no liquid public market now exists for the securities being issued by the Company and that the Company
has made no assurances that a public market will ever exist for the Company’s securities being obtained hereby.

 

               (C)          The
undersigned understands that the securities issued upon exercise of the Warrant (the “Securities”), and any securities
issued in respect thereof or exchange therefor, may bear the following legend:

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”)
OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS COVERING SUCH SECURITIES OR THE SALE IS MADE IN ACCORDANCE WITH
AN EXEMPTION UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER
OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS.”

 

               (D)          By
executing this Statement, the undersigned further represents that it does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participation to such person or to any third person, with respect to any Securities
issuable upon exercise of the Warrant.

 

    	5

    	 

    

 

 

               (E)          The
undersigned understands that the Securities issuable upon exercise of the Warrant at the time of issuance and exercise may not
be registered under the Act, and applicable state securities laws, on the ground that the issuance of such securities is exempt
pursuant to Section 4(2) of the Act and state law exemptions relating to offers and sales not by means of a public offering, and
that the Company’s reliance on such exemptions is predicated on the undersigned’s representations set forth herein.

 

               (F)          The
undersigned agrees that in no event will it make a disposition of any Securities acquired upon the exercise of the Warrant unless
and until (i) it shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement
of the circumstances surrounding the proposed disposition, and (ii) if reasonably required by the Company it shall have furnished
the Company with an opinion of counsel reasonably satisfactory to the Company and Company’s counsel to the effect that (A)
appropriate action necessary for compliance with the Act and any applicable state securities laws has been taken or an exemption
from the registration requirements of the Act and such laws is available, and (B) the proposed transfer will not violate any of
said laws.

 

               (G)
         The undersigned acknowledges that the Securities issuable upon exercise
of the Warrant must be held indefinitely unless subsequently registered under the Act or an exemption from such registration is
available. The undersigned is aware of the provisions of Rule 144 promulgated under the Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain conditions, including, among other things, the existence
of a public market for the shares, the availability of certain current public information about the Company, the resale occurring
not less than one year after a party has purchased and paid for the security to be sold, the sale being through a “broker’s
transaction” or in transactions directly with a “market makers” (as provided by Rule 144(f)) and the number
of shares being sold during any three-month period not exceeding specified limitations.

 

[Signature
on Next Page]

 

    	 

    	 

 

 

    

	 	 	 	 	 
	Dated:	 	 	 
	 	 	 	 
	 	 	 	 
	(Print Name of Holder)	 
	 	 	 	 
	By:	 	 	 	 
	 	 (signature)	 
	 	 	 	 
	Name:	 	 	 
	 	 (print name of person signing)	 
	 	 	 	 
	Title:

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