Document:

Exhibit 10.1
    

    

    

    
      TENTH AMENDMENT TO LOAN DOCUMENTS
    

    
      BUILD-A-BEAR WORKSHOP, INC. (“BABWI”), successor
      by merger to BUILD-A-BEAR WORKSHOP, LLC, BUILD-A-BEAR WORKSHOP
      FRANCHISE HOLDINGS, INC. (“BABWF”), BUILD-A-BEAR
      ENTERTAINMENT, LLC (“BABE”), BUILD-A-BEAR RETAIL
      MANAGEMENT, INC. (“BABRM”), jointly and severally
      (individually and collectively, the "Borrower"), and U.S.
      BANK NATIONAL ASSOCIATION ("Lender"), hereby agree as follows
      effective as of June 30, 2012 (the "Effective Date"):
    

    	
          1.
        	
          
            Recitals.
          

        	

        
	

        	

        	
           
        
	

        	
          1.1
        	
          Lender and Build-A-Bear Workshop, LLC entered into a Loan Agreement
          and related loan and security documents dated as of March 1, 2000
          pursuant to which the Lender extended a revolving credit facility to
          the Borrower (the “Loan”).
        
	

        	

        	
           
        
	

        	
          1.2
        	
          Lender, Build-A-Bear Workshop, LLC and BABWI entered into an
          assumption and amendment agreement dated as of April 3, 2000,
          whereby BABWI assumed all of the obligations of its predecessor in
          interest, Build-A-Bear Workshop, LLC.
        
	

        	

        	
           
        
	

        	
          1.3
        	
          Lender and Borrower amended the terms of the Loan by the First
          Amended and Restated Loan Agreement and related loan and security
          documents dated as of June 1, 2001 (the “First Amended Loan
          Agreement”).
        
	

        	

        	
           
        
	

        	
          1.4
        	
          Lender and Borrower amended and restated the First Amended Loan
          Agreement by the Second Amended and Restated Loan Agreement dated as
          of February 13, 2002 (the “Second Amended Loan Agreement”) and
          Borrower delivered to Lender in connection therewith the First
          Amended and Restated Revolving Credit Note and the First Amended and
          Restated Security Agreement.
        
	

        	

        	
           
        
	

        	
          1.5
        	
          Lender and Borrower amended the Second Amended Loan Agreement and
          related Loan Documents pursuant to the First Amendment to Loan
          Documents effective as of May 30, 2003 to add additional borrowers
          to the Loan Documents, to revise certain financial covenants in the
          Loan Documents, and to add Build-A-Bear Workshop Canada, Ltd. (“Bear
          Canada”) as a guarantor of the obligations under the Loan Documents.
        
	

        	

        	
           
        
	

        	
          1.6
        	
          Lender and Borrower amended the Second Amended Loan Agreement and
          related Loan Documents pursuant to the Second Amendment to Loan
          Documents effective as of December 31, 2003 to add an additional
          borrower to the Loan Documents.
        
	

        	

        	
           
        
	

        	
          1.7
        	
          Lender and Borrower amended the Second Amended Loan Agreement and
          related Loan Documents pursuant to the Third Amendment to Loan
          Documents effective as of May 31, 2004 to extend the Maturity Date
          and to change certain other terms and covenants in the Loan
          Documents.
        

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    	
           
        	
          1.8
        	
          Lender and Borrower amended the Second Amended Loan Agreement and
          related Loan Documents pursuant to the Fourth Amendment to Loan
          Documents effective as of September 28, 2004 to correct the name of
          Bear Canada.
        
	

        	

        	
           
        
	

        	
          1.9
        	
          Lender and Borrower amended and restated the Second Amended Loan
          Agreement by the Third Amended and Restated Loan Agreement dated as
          of May 31, 2005 (the “Third Amended Loan Agreement”) and Borrower
          delivered to Lender in connection therewith the Second Amended and
          Restated Revolving Credit Note.
        
	

        	

        	
           
        
	

        	
          1.10
        	
          Lender and Borrower amended the Third Amended Loan Agreement and
          related Loan Documents pursuant to the Fifth Amendment to Loan
          Documents effective as of June 30, 2006 to add Build-A-Bear Workshop
          UK Holdings, Ltd. (“Bear UK”) as a Borrower and to change certain
          other terms and covenants in the Loan Documents and Borrower
          delivered to Lender in connection therewith the Third Amended and
          Restated Revolving Credit Note.
        
	

        	

        	
           
        
	

        	
          1.11
        	
          Lender and Borrower amended the Third Amended Loan Agreement and
          related Loan Documents pursuant to the Sixth Amendment to Loan
          Documents effective as of June 19, 2007 to extend the Maturity Date.
        
	

        	

        	
           
        
	

        	
          1.12
        	
          Lender and Borrower amended and restated the Third Amended Loan
          Agreement by the Fourth Amended and Restated Loan Agreement dated as
          of August 11, 2008 (the “Fourth Amended Loan Agreement”) and
          Borrower delivered to Lender in connection therewith the Fourth
          Amended and Restated Revolving Credit Note (the “Fourth Amended
          Revolving Credit Note”).
        
	

        	

        	
           
        
	

        	
          1.13
        	
          Lender and Borrower amended the Fourth Amended Loan Agreement, the
          Fourth Amended Revolving Note, and the related Loan Documents
          pursuant to the Seventh Amendment to Loan Documents effective as of
          October 28, 2009 to extend the Maturity Date, to adjust the rate of
          interest, and to modify certain covenants.
        
	

        	

        	
           
        
	

        	
          1.14
        	
          Lender and Borrower amended the Fourth Amended Loan Agreement, the
          Fourth Amended Revolving Note, and the related Loan Documents
          pursuant to the Eighth Amendment to Loan Documents effective as of
          December 31, 2010 to extend the Maturity Date, to adjust the rate of
          interest, and to modify certain covenants.
        
	

        	

        	
           
        
	

        	
          1.15
        	
          Lender and Borrower amended the Fourth Amended Loan Agreement, the
          Fourth Amended Revolving Note, and the related Loan Documents
          pursuant to the Ninth Amendment to Loan Documents effective as of
          December 30, 2011 to extend the Maturity Date, and to modify certain
          covenants.
        
	

        	

        	
           
        
	

        	
          1.16
        	
          Lender and Borrower intend to amend the Loan Documents by this Tenth
          Amendment to Loan Documents (the “Amendment”) to modify the Tangible
          Net Worth Covenant.
        
	

        	

        	
           
        
	

        	
          1.17
        	
          Capitalized terms used herein and not otherwise defined will have
          the meanings given such terms in the Loan Agreement.
        

    

    
      

    

    
      
        

        

      

      
        
          - 2 -
        

        
          

        

      

      
        

        

      

    

    
      

    

    	
          2.
        	
          
            Amendment.
          

        	

        	

        
	

        	

        	
           
        
	

        	
          2.1
        	
          Section 6.4 of the Fourth Amended Loan Agreement is hereby deleted
          and replaced with the following:
        
	

        	

        	

        	
           
        
	

        	

        	
          6.4
        	
          
            Minimum Tangible Net Worth. Permit the
            Tangible Net Worth of Borrower on a consolidated basis to be less
            than: (a) $82,500,000 as of the fiscal quarters ending June 30,
            2012 and September 29, 2012, or (b) $90,000,000 as of the fiscal
            quarter ending December 29, 2012 and at all times thereafter. Such
            amount shall be increased by the amount of all equity
            contributions made to the Borrower on a consolidated basis from
            time to time and shall be reduced by the amount of dividends,
            share repurchases, or any other return of capital contributions
            permitted under this Agreement; provided however, that such
            reductions shall not cause the Tangible Net Worth of Borrower on a
            consolidated basis to be less than $82,500,000 at any time prior
            to the last day of the fiscal quarter ending December 29, 2012, or
            less than $90,000,000 at any time thereafter.
          

        

    

    

    

    	
          3.
        	
          
            General.
          

        	

        
	

        	

        	
           
        
	

        	
          3.1
        	
          Except as expressly modified herein, the Loan Documents, as amended,
          are and remain in full force and effect. The Loan Documents are
          hereby ratified and confirmed as the continuing obligation of
          Borrower. Nothing contained herein will be construed as waiving any
          Default or Event of Default under the Loan Documents or will affect
          or impair any right, power or remedy of Lender under or with respect
          to the Loan Documents, as amended, or any agreement or instrument
          guaranteeing, securing or otherwise relating to any of the
          Obligations.
        
	

        	

        	
           
        
	

        	
          3.2
        	
          Borrower represents and warrants to Lender that: (a) this Amendment
          and the documents to be executed by Borrower in connection with this
          Amendment have been duly authorized, executed and delivered by
          Borrower; (b) each has full power and authority to enter into this
          Amendment; (c) this Amendment and the documents executed by Borrower
          in connection with this Amendment constitute the legal, valid and
          binding obligations of Borrower enforceable in accordance with their
          respective terms except as such enforceability may be limited by
          applicable bankruptcy, reorganization, insolvency, moratorium or
          similar laws in effect from time to time affecting the rights of
          creditors generally and except as such enforceability may be subject
          to general principles of equity (regardless of whether such
          enforceability is considered in a proceeding in law or in equity);
          and (d) no Default or Event of Default exists. The representations
          and warranties of Borrower contained in the Loan Documents are
          deemed to have been made again on and as of the date of execution of
          this Amendment, except to the extent that such representations and
          warranties were expressly limited to an earlier date.
        

    

    
      
        

        

      

      
        
          - 3 -
        

        
          

        

      

      
        

        

      

    

    

    

    	
           
        	
          3.3
        	
          All representations and warranties made by Borrower herein will
          survive the execution and delivery of this Amendment.
        
	

        	

        	
           
        
	

        	
          3.4
        	
          This Amendment will be binding upon and inure to the benefit of
          Borrower and Lender and their respective successors and assigns.
        
	

        	

        	
           
        
	

        	
          3.5
        	
          Borrower will pay attorneys’ fees and expenses of Lender incurred in
          connection with this Amendment and related documentation. Such fees,
          expenses may be charged to Borrower by Lender as a Revolving Advance.
        
	

        	

        	
           
        
	

        	
          3.6
        	
          This Amendment will in all respects be governed and construed in
          accordance with the laws of the State of Ohio.
        
	

        	

        	
           
        
	

        	
          3.7
        	
          A copy of this Amendment may be attached to the Note as an allonge.
          This Amendment is a “Loan Document” as defined in the Loan Agreement.
        
	

        	

        	
           
        
	

        	
          3.8
        	
          This Amendment and the documents and instruments to be executed
          hereunder constitute the entire agreement among the parties with
          respect to the subject matter hereof and shall not be amended,
          modified or terminated except by a writing signed by the party to be
          charged therewith.
        
	

        	

        	
           
        
	

        	
          3.9
        	
          Borrower agrees to execute such other instruments and documents and
          provide Lender with such further assurances as Lender may reasonably
          request to more fully carry out the intent of this Amendment.
        
	

        	

        	
           
        
	

        	
          3.10
        	
          This Amendment may be executed in a number of identical
          counterparts. If so, each such counterpart shall collectively
          constitute one agreement. Any signature delivered by a party by
          facsimile transmission shall be deemed to be an original signature
          hereto.
        
	

        	

        	
           
        
	

        	
          3.11
        	
          No provision of this Amendment is intended or shall be construed to
          be for the benefit of any third party.
        
	

        	

        	
           
        
	

        	
          3.12
        	
          BORROWER AND LENDER HEREBY WAIVE ANY AND ALL RIGHT TO TRIAL BY
          JURY IN ANY ACTION RELATING TO THIS INSTRUMENT AND TO ANY OF THE
          LOAN DOCUMENTS, THE OBLIGATIONS THEREUNDER, ANY COLLATERAL SECURING
          THE OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED
          THERETO. BORROWER AND LENDER EACH REPRESENTS TO THE OTHER THAT THIS
          WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.
        

    

    

    

    
      SIGNATURE PAGE FOLLOWS
    

    
      

      

    

    
      
        

        

      

      
        
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      SIGNATURE PAGE TO TENTH AMENDMENT TO LOAN DOCUMENTS
    

    	
           
        	
          U.S. BANK NATIONAL ASSOCIATION
        
	

        	
          Lender
        
	

        	

        	
           
        
	

        	
          
            By:
          

        	
          
            /s/ Charles L. Thomas
          

        
	

        	

        	
          
            Charles L. Thomas
          

        
	

        	

        	
          Senior Vice President
        
	

        	
           
        
	

        	
          
            BUILD-A-BEAR WORKSHOP, INC.,
          

          
            BUILD-A-BEAR WORKSHOP FRANCHISE HOLDINGS, INC.,
          

          
            BUILD-A-BEAR RETAIL MANAGEMENT, INC.
          

        
	

        	
          Borrowers
        
	

        	

        	
           
        
	

        	
          
            By:
          

        	
          
            /s/ Maxine Clark
          

        
	

        	

        	
          Maxine Clark
        
	

        	

        	
          Chief Executive Officer
        
	

        	

        	
           
        
	

        	
          BUILD-A-BEAR ENTERTAINMENT, LLC,
        
	

        	
          By: Build-A-Bear Retail Management, Inc.,

          
            Sole Member
          

          
            Borrower
          

        
	

        	

        	
           
        
	

        	
          
            By:
          

        	
          
            /s/ Maxine Clark
          

        
	

        	

        	
          Maxine Clark
        
	

        	

        	
          Chief Executive Officer
        

    

    
      

      

      - 5 -a50353689ex4_1.htm

Exhibit 4.1

 

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS.  SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT.

 

SUBJECT TO THE PROVISIONS OF SECTION 11 HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. CENTRAL TIME ON JULY 25, 2017, (THE “EXPIRATION DATE”).

 

	No. I-_______ 	July 25, 2012

 

OPEXA THERAPEUTICS, INC.

 

SERIES I WARRANT TO PURCHASE SHARES

OF COMMON STOCK, PAR VALUE $0.01 PER SHARE

 

For VALUE RECEIVED, _____________ (“Warrantholder”), is entitled to purchase, subject to the provisions of this Series I Warrant (the “Warrant”), from Opexa Therapeutics, Inc., a Texas corporation (“Company”), at any time from and after the date six months after the date hereof (the “Initial Exercise Date”) and not later than 5:00 P.M., Central time, on the Expiration Date (as defined above), at an exercise price per share equal to One Dollar and 25/100 ($1.25) (the exercise price in effect being herein called the “Warrant Price”), ____________ shares (“Warrant Shares”) of the Company’s Common Stock, par value $0.01 per share (“Common Stock”).  The number of Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time as described herein.  This Warrant is one of a series of Series I Warrants of like tenor issued by the Company pursuant to that certain Note Purchase Agreement entered into contemporaneously herewith among the Company and the Investors named therein (the “Purchase Agreement”).  Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement.

 

1.          Registration. The Company shall maintain books for the transfer and registration of the Warrant. Upon the initial issuance of this Warrant, the Company shall issue and register the Warrant in the name of the Warrantholder.

 

2.          Transfers. This Warrant may be transferred only pursuant to a registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”), or an exemption from such registration.  Subject to such restrictions, the Company shall transfer this Warrant from time to time upon the books to be maintained by the Company for that purpose, upon surrender hereof for transfer, properly endorsed or accompanied by appropriate instructions for transfer and such other documents as may be reasonably required by the Company, including, if required by the Company, an opinion of counsel to the effect that such transfer is exempt from the registration requirements of the Securities Act, to establish that such transfer is being made in accordance with the terms hereof, and a new Warrant shall be issued to the transferee (who shall thereafter be the Warrantholder hereunder) and the surrendered Warrant shall be canceled by the Company.

 

  

  

  

 

3.          Exercise of Warrant.

 

(a) Subject to the provisions hereof, including Section 3(d), the Warrantholder may exercise this Warrant, in whole or in part, at any time after the Initial Exercise Date and prior to 5:00 p.m. Central Time on the Expiration Date upon (i) written notice, in the form attached hereto as APPENDIX A (the “Exercise Notice”), of the Warrantholder’s election to exercise this Warrant, and (ii) payment by cash, certified check or wire transfer of funds, or pursuant to a cashless exercise pursuant to Section 3(b) below, of the aggregate Warrant Price for that number of Warrant Shares then being purchased, to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Warrantholder).  The Warrant Shares so purchased shall be deemed to be issued to the Warrantholder or the Warrantholder’s designee, as the record owner of such shares, as of the close of business on the date on which the Warrant Price shall have been paid and the completed Exercise Notice shall have been delivered.  The Warrantholder shall not be required to deliver the original Warrant in order to effect an exercise hereunder.  Certificates for the Warrant Shares so purchased shall be delivered to the Warrantholder within a reasonable time, not exceeding three (3) business days, after this Warrant shall have been so exercised.  The certificates so delivered shall be in such denominations as may be requested by the Warrantholder and shall be registered in the name of the Warrantholder or such other name as shall be designated by the Warrantholder, as specified in the Exercise Notice.  If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the Warrantholder a new Warrant representing the right to purchase the number of shares with respect to which this Warrant shall not then have been exercised.  As used herein, “business day” means a day, other than a Saturday or Sunday, on which banks in Houston, Texas are open for the general transaction of business.  Each exercise hereof shall constitute the re-affirmation by the Warrantholder that the representations and warranties contained in Section 5 of the Purchase Agreement are true and correct in all material respects with respect to the Warrantholder as of the time of such exercise.  The Warrantholder shall promptly physically surrender this Warrant to the Company in the event the Warrant is exercised.  The Warrantholder and the Company shall maintain records showing the amount exercised and the dates of such exercise.  The Warrantholder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provision of this paragraph, following exercise of a portion of the Warrant, the number of Warrant Shares of this Warrant may be less than the amount stated on the face hereof.

 

(b) Subject to the provisions hereof, the Warrantholder may effect one or more cashless exercises by surrendering Warrants to the Company and giving written notice that the Warrantholder wishes to effect a cashless exercise by surrendering some Warrants without exercise, upon which the Company shall issue, or cause to be issued, to the Warrantholder up to the number of Warrant Shares determined as follows:

 

  

2

  

 

	X  =	Y x (A-B)/A
	 	 
	where:
	 	 
	X  =	the maximum number of Warrant Shares that may be issued to the Warrantholder; 
	 	 
	Y  =	the number of Warrant Shares with respect to which the Warrant is being exercised; 
	 	 
	A  =	the Market Price as of the Date of Exercise; and 
	 	 
	B  =	the Exercise Price.

 

“Market Price” of a share of Common Stock on any date shall mean, (i) if the shares of Common Stock are listed on the NASDAQ Stock Market, the official closing price reported on that date; (ii) if the shares of Common Stock are no longer listed on the NASDAQ Stock Market and are listed on any other national securities exchange, the last sale price of the Common Stock reported by such exchange on that date; (iii) if the shares of Common Stock are not listed on any such exchange and the shares of Common Stock are traded in the over-the-counter market, the last price reported on such day by the OTC Bulletin Board; (iv) if the shares of Common Stock are not listed on any such exchange or quoted on the OTC Bulletin Board, then the last price quoted on such day in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); or (v) if none of clauses (i)-(iv) are applicable, then as determined in good faith by the Company’s Board of Directors (the “Board of Directors”).

 

“Date of Exercise” means the date on which the Company has received from Warrantholder the completed and executed Exercise Notice.

 

(c) Company’s Failure to Timely Deliver Securities. If within three (3) Trading Days after the Date of Exercise the Company shall fail to issue and deliver a certificate to the Warrantholder and register such shares of Common Stock on the Company’s share register or credit the Warrantholder’s balance account with The Depository Trust Company (“DTC”) for the number of shares of Common Stock to which the Warrantholder is entitled upon the Warrantholder’s exercise hereunder or pursuant to the Company’s obligation set forth in clause (ii) below, and if on or after such Trading Day the Warrantholder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Warrantholder of shares of Common Stock issuable upon such exercise that the Warrantholder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) business days after the Warrantholder’s request and in the Warrantholder’s discretion, either (i) pay cash to the Warrantholder in an amount equal to the Warrantholder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such shares of Common Stock) or credit such Warrantholder’s balance account with DTC shall terminate, or (ii) promptly honor its obligation to deliver to the Warrantholder a certificate or certificates representing such shares of Common Stock or credit such Warrantholder’s balance account with DTC and pay cash to the Warrantholder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Market Price on the date of exercise.

 

  

3

  

 

(d) Limitations on the Number of Shares Issuable.  Notwithstanding anything herein to the contrary, the Company shall not issue to the Warrantholder any Warrant Shares to the extent that, after giving effect to such issuance, the Warrantholder (together with any person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Warrantholder, as such terms are used in and construed under Rule 144 under the Securities Act and the rules and regulations promulgated thereunder - each an “Affiliate”) would (i) beneficially own shares of Common Stock in excess of 19.9% of the shares of Common Stock outstanding (immediately after giving effect to such issuance) or (ii) control in excess of 19.9% of the total voting power of the Company’s securities outstanding (immediately after giving effect to such issuance) that are entitled to vote on a matter being voted on by holders of Common Stock, unless and until the Company obtains shareholder approval permitting such issuances in accordance with applicable rules of the NASDAQ Stock Market; provided, however, that such limitations on issuance shall not apply to any exercise of this Warrant in connection with and subject to completion of the following if, upon completion, the Warrantholder and its Affiliates would not exceed the specified limits:  (i) any offering of securities by the Company or its shareholders (including, without limitation, the Warrantholder); and (ii) a bona fide third party tender offer for the Company securities.  For purposes of this Section 3(d), beneficial ownership shall (x) exclude such number of shares of Common Stock that would be issuable upon exercise or conversion of the unexercised or non-converted portion of any securities of the Company (including, without limitation, options, warrants, shares of Series A Preferred Stock and other convertible securities such as convertible promissory notes) except for a limitation on conversion or exercise analogous to the limitation contained in the first sentence of this Section 3(d) and (y) otherwise be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934 (and the rules promulgated thereunder).  [Note:  If the limitation contained in the first sentence of this Section 3(d) applies to any exercise of this Warrant, then the Company shall nonetheless issue to the Warrantholder such securities as may be issued below the limitation.]  Upon the written request of the Warrantholder, the Company shall within two (2) business days confirm in writing to the Warrantholder the number of shares of Common Stock then outstanding.

 

4.          Company Call Right; Redemption. Notwithstanding any other provision contained in this Warrant to the contrary, if the shares of Common Stock trade on the Nasdaq Capital Market, or any other trading market on which the shares of Common Stock are then traded, with a per share closing price on the trading day of at least $2.50 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock) for at least twenty (20) consecutive trading days, then the Company, upon thirty (30) days prior written notice (the “Notice Period”) given to the Warrantholders within thirty (30) days of the occurrence of the triggering event, may call the Warrants, in whole or in part, at a redemption price equal to $0.01 per share of Common Stock then purchasable pursuant to the Warrants called for redemption.  The Warrantholder shall have the right to exercise the Warrants prior to the end of the Notice Period.  As of the last day of the Notice Period, any Warrants timely and validly called for redemption by the Company shall terminate and permanently cease to be exercisable and the Warrantholders shall then be entitled only to receive the redemption price.

 

  

4

  

 

5.          Compliance with Securities Laws. This Warrant may only be exercised by the Warrantholder in accordance with applicable securities laws.  The Company may cause the legend set forth on the first page of this Warrant to be set forth on each Warrant, and a similar legend on any security issued or issuable upon exercise of this Warrant, unless counsel for the Company is of the opinion as to any such security that such legend is unnecessary.

 

6.          Payment of Taxes. The Company will pay any documentary stamp taxes attributable to the initial issuance of Warrant Shares issuable upon the exercise of the Warrant; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificates for Warrant Shares in a name other than that of the Warrantholder in respect of which such shares are issued, and in such case, the Company shall not be required to issue or deliver any certificate for Warrant Shares or any Warrant until the person requesting the same has paid to the Company the amount of such tax or has established to the Company’s reasonable satisfaction that such tax has been paid.  The Warrantholder shall be responsible for income taxes due under federal, state or other law, if any such tax is due.

 

7.          Mutilated or Missing Warrants. In case this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and substitution of and upon surrender and cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant lost, stolen or destroyed, a new Warrant of like tenor and for the purchase of a like number of Warrant Shares, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction of the Warrant, and with respect to a lost, stolen or destroyed Warrant, reasonable indemnity or bond with respect thereto, if requested by the Company.

 

8.          Reservation of Common Stock. At any time when this Warrant is exercisable, the Company shall at all applicable times keep reserved until issued (if necessary) as contemplated by this Section 8, out of the authorized and unissued shares of Common Stock, at least a number of shares of Common Stock as shall from time to time be necessary to effect the exercise of all of this Warrant then outstanding.  The Company agrees that all Warrant Shares issued upon due exercise of the Warrant shall be, at the time of delivery of the certificates for such Warrant Shares, duly authorized, validly issued, fully paid and non-assessable shares of Common Stock of the Company.

 

9.          Adjustments.

 

(a) If the Company shall, at any time or from time to time while this Warrant is outstanding, pay a dividend or make a distribution on its Common Stock in shares of Common Stock, subdivide its outstanding shares of Common Stock into a greater number of shares or combine its outstanding shares of Common Stock into a smaller number of shares, then (i) the Warrant Price in effect immediately prior to the date on which such change shall become effective shall be adjusted by multiplying such Warrant Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such change and the denominator of which shall be the number of shares of Common Stock outstanding immediately after giving effect to such change and (ii) the number of Warrant Shares purchasable upon exercise of this Warrant shall be adjusted by multiplying the number of Warrant Shares purchasable upon exercise of this Warrant immediately prior to the date on which such change shall become effective by a fraction, the numerator of which is shall be the Warrant Price in effect immediately prior to the date on which such change shall become effective and the denominator of which shall be the Warrant Price in effect immediately after giving effect to such change, calculated in accordance with clause (i) above.  Such adjustments shall be made successively whenever any event listed above shall occur.

 

  

5

  

 

(b) If any capital reorganization, reclassification of the capital stock of the Company, consolidation or merger of the Company with another corporation in which the Company is not the survivor, or sale, transfer or other disposition of all or substantially all of the Company’s assets to another corporation shall be effected, then, as a condition of such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby each Warrantholder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of the Warrant, such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise of the Warrant, had such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of each Warrantholder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Warrant Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof.  The Company shall not effect any such consolidation, merger, sale, transfer or other disposition unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume the obligation to deliver to the Warrantholder, at the last address of the Warrantholder appearing on the books of the Company, such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Warrantholder may be entitled to purchase, and the other obligations under this Warrant.  The provisions of this paragraph (b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions.

 

(c) In case the Company shall fix a payment date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of consolidated earnings or earned surplus or dividends or distributions referred to in Section 9(a)), or subscription rights or warrants, the Warrant Price to be in effect after such payment date shall be determined by multiplying the Warrant Price in effect immediately prior to such payment date by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding multiplied by the Market Price per share of Common Stock immediately prior to such payment date, less the fair market value (as determined by the Board of Directors in good faith) of said assets or evidences of indebtedness so distributed, or of such subscription rights or warrants, and the denominator of which shall be the total number of shares of Common Stock outstanding multiplied by such Market Price per share of Common Stock immediately prior to such payment date.

 

  

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(d) An adjustment to the Warrant Price shall become effective immediately after the payment date in the case of each dividend or distribution and immediately after the effective date of each other event which requires an adjustment.

 

(e) In the event that, as a result of an adjustment made pursuant to this Section 9, the Warrantholder shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise of this Warrant shall be subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Warrant Shares contained in this Warrant.

 

(f) To the extent permitted by applicable law and the listing requirements of any stock exchange on which the Common Stock is then listed, the Company from time to time may decrease the Warrant Price by any amount for any period of time if the period is at least twenty (20) days, the decrease is irrevocable during the period and the Board of Directors shall have made a determination that such decrease would be in the best interests of the Company, which determination shall be conclusive; provided, however, that the Warrant Price may not be decreased below the Market Price on the date of the execution of the Purchase Agreement.  Whenever the Warrant Price is decreased pursuant to the preceding sentence, the Company shall provide written notice thereof to the Warrantholder at least five (5) days prior to the date the decreased Warrant Price takes effect, and such notice shall state the decreased Warrant Price and the period during which it will be in effect.  Notwithstanding the foregoing, the Company shall treat all holders of the Series I Warrants equally in this respect.

 

(g) If the Company at any time this Warrant is outstanding shall issue shares of Common Stock or “Common Stock Equivalents,” as defined below, entitling any person to acquire shares of Common Stock at a price per share (determined in accordance with this Section 9(g) below) less than the then current Warrant Price in an instance which is not otherwise addressed by the provisions of this Section 9, then the Warrant Price shall be reduced to the price at which the Company issued such shares of Common Stock or Common Stock Equivalents, but no lower than the Warrant Price Floor, as defined below.

 

“Common Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

The Company shall notify the Holder in writing, no later than three (3) business days following the issuance of any Common Stock or Common Stock Equivalent subject to this Section 9(g), indicating therein the applicable issuance price, or of the applicable reset price, exchange price, conversion price and other pricing terms.

 

If any shares of Common Stock or any warrants or other rights to subscribe for or to purchase, or any options for the purchase of, Common Stock or any stock or security convertible into or exchangeable for Common Stock (such warrants, rights or options being called “Options” and such convertible or exchangeable stock or securities being called “Convertible Securities”) shall be issued or issuable for cash, the consideration received therefor shall be deemed to be the gross proceeds therefor.  If any shares of Common Stock, Options or Convertible Securities shall be issued or issuable for a consideration other than cash, the amount of the consideration other than cash received by the Company shall be deemed to be the fair market value of such consideration as determined in good faith by the Board of Directors.  In case any Options shall be issued in connection with the issue and sale of other securities of the Company, together comprising one integral transaction in which no specific consideration is allocated to such Options by the parties thereto, such Options shall be deemed to have been issued for such consideration as determined in good faith by the Board of Directors.  If Common Stock, Options or Convertible Securities shall be issued or sold by the Company and, in connection therewith, other Options or Convertible Securities (the “Additional Rights”) are issued, then the consideration received or deemed to be received by the Company shall be reduced by the fair market value of the Additional Rights (as determined in good faith by the Board of Directors).

 

  

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Notwithstanding the foregoing, no adjustment will be made under this Section 9(g) in respect of:  (i) the issuance of securities upon the exercise or conversion of any Common Stock Equivalents issued by the Company prior to the date of the Purchase Agreement; (ii) securities issued with approval of a majority of the members of the Board of Directors or a majority of the members of a committee of directors established for such purpose, pursuant to options, stock or similar awards to employees, directors, and consultants; (iii) securities issued to any bank or equipment lessor in connection with a financing or equipment lease; or (iv) securities issued pursuant to a “Strategic Transaction” approved by a majority of the Board of Directors.  A “Strategic Transaction” shall mean any transaction with an acquiror, acquisition target company or merger partner, or a joint venture, corporate alliance, research agreement or licensing transaction, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital.

 

(h) In any instance where the provisions of Section 9(g) would apply (disregarding, for this purpose, the existence of the Warrant Price Floor and the provisions of Section 9(i)) and the sale of shares of Common Stock or Common Stock Equivalents at issue occurs at a price per share, as determined in accordance with Section 9(g) (the “Actual Price”), which is less than the Warrant Price Floor (as defined below), then the number of Warrant Shares for which this Warrant is exercisable shall be increased to equal the product of the then effective number of Warrant Shares for which this Warrant is exercisable times a fraction determined as follows:

 

	
  

	
(i)

	
the numerator of which shall be the Warrant Price Floor, and

 

	
  

	
(ii)

	
the denominator of which shall be the Actual Price;

 

provided, however, that the cumulative effect of this Section 9(h) shall be capped at an increase in the number of Warrants Shares for which this Warrant is exercisable of no more than 50% (as compared with the number of Warrant Shares for which this Warrant is initially exercisable).

 

(i) Warrant Price Floor. Notwithstanding anything herein to the contrary, unless and until the Company obtains shareholder approval in accordance with applicable rules of the NASDAQ Stock Market in order to allow the Warrant Price to be less than the Warrant Price Floor (as defined below), no adjustment pursuant to this Section 9 shall cause the Warrant Price to be less than the most recent consolidated closing bid price of the Company’s Common Stock on the NASDAQ Stock Market of $0.64, as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction (the “Warrant Price Floor”).

 

  

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10.        Fractional Interest. The Company shall not be required to issue fractions of Warrant Shares upon the exercise of this Warrant.  If any fractional share of Common Stock would, except for the provisions of the first sentence of this Section 10, be deliverable upon such exercise, the Company, in lieu of delivering such fractional share, shall pay to the exercising Warrantholder an amount in cash equal to the Market Price (determined in accordance with Section 3(b)) of such fractional share of Common Stock on the date of exercise.

 

11.        Benefits. Nothing in this Warrant shall be construed to give any person, firm or corporation (other than the Company and the Warrantholder) any legal or equitable right, remedy or claim, it being agreed that this Warrant shall be for the sole and exclusive benefit of the Company and the Warrantholder.

 

12.        Notices to Warrantholder. Upon the happening of any event requiring an adjustment of the Warrant Price, the Company shall promptly give written notice thereof to the Warrantholder at the address appearing in the records of the Company, stating the adjusted Warrant Price and the adjusted number of Warrant Shares resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.  Failure to give such notice to the Warrantholder or any defect therein shall not affect the legality or validity of the subject adjustment.

 

13.        Identity of Transfer Agent. The Transfer Agent for the Common Stock is Continental Stock Transfer & Trust, 17 Battery Place, New York, New York 10004.  Upon the appointment of any subsequent transfer agent for the Common Stock or other shares of the Company’s capital stock issuable upon the exercise of the rights of purchase represented by the Warrant, the Company will mail to the Warrantholder a statement setting forth the name and address of such transfer agent.

 

14.        Notices. Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed effectively given and received as hereinafter described (i) if given by personal delivery, then such notice shall be deemed received upon such delivery, (ii) if given by telex or facsimile, then such notice shall be deemed received upon receipt of confirmation of complete transmittal, (iii) if given by certified mail return receipt requested, then such notice shall be deemed received upon the day such return receipt is signed, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier.  Copies of such notices shall also be transmitted by email to the email address provided for on the signature page of the Purchase Agreement.  All notices shall be addressed as follows:  if to the Warrantholder, at its address as set forth in the Company’s books and records; and, if to the Company, at the address as follows, or at such other address as the Warrantholder or the Company may designate by ten days’ advance written notice to the other:

 

  

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Opexa Therapeutics, Inc.

2635 Technology Forest Blvd.

The Woodlands, Texas 77381

Attention: President

Fax: (281) 872-8585

 

15.        Registration Rights. The Warrantholder is entitled to the benefit of certain registration rights with respect to the shares of Common Stock issuable upon the exercise of this Warrant as provided in the Registration Rights Agreement (as defined in the Purchase Agreement).

 

16.        Successors. All the covenants and provisions hereof by or for the benefit of the Warrantholder shall bind and inure to the benefit of its respective successors and permitted assigns hereunder.

 

17.        Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Warrant shall be governed by, and construed in accordance with, the internal laws of the State of Texas, without reference to the choice of law provisions thereof.  The Company and, by accepting this Warrant, the Warrantholder, each irrevocably submits to the exclusive jurisdiction of the courts of the State of Texas located in Harris County and the United States District Court for the Southern District of Texas for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Warrant and the transactions contemplated hereby.  Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Warrant.  The Company and, by accepting this Warrant, the Warrantholder, each irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

18.        No Rights as Shareholder. Prior to the exercise of this Warrant, the Warrantholder shall not have or exercise any rights as a shareholder of the Company by virtue of its ownership of this Warrant.

 

19.        Amendment; Waiver. Any term or provision of this Warrant may be amended or waived upon the written consent of the Company and the holders of Series I Warrants representing at least two thirds (66-2/3%) of the number of shares of Common Stock then subject to all outstanding Series I Warrants; provided, that any such amendment or waiver must apply to all such Series I Warrants, and further provided, that terms and provisions regarding the number of Warrant Shares subject to this Warrant, the Warrant Price and the Expiration Date require the written consent of holders of Series I Warrants representing at least three-quarters (75%) of the number of shares of Common Stock then subject to all outstanding Series I Warrants.

 

  

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20.        Remedies; Other Obligations; Breaches and Injunctive Relief. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Warrantholder right to pursue actual damages for any failure by the Company to comply with the terms of this Warrant.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Warrantholder and that the remedy at law for any such breach may be inadequate.  The Company therefore agrees that, in the event of any such breach or threatened breach, the Warrantholder shall be entitled, in addition to all other available remedies, an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

 

21.        Section Headings. The section headings in this Warrant are for the convenience of the Company and the Warrantholder and in no way alter, modify, amend, limit or restrict the provisions hereof.

 

[signature page follows]

 

  

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the date first written above.

 

	 	
OPEXA THERAPEUTICS, INC.

	 	 	 
	 	 	 
	 	
By:

	 
	 	
Name:  

	Neil K. Warma
	 	
Title:    

	President and Chief Executive Officer

 

[signature Page to Series I Warrant]

  

  

  

 

APPENDIX A

 

EXERCISE NOTICE

OPEXA THERAPEUTICS, INC.

The undersigned holder hereby exercises the right to purchase ____________ of the shares of Common Stock (“Warrant Shares”) of Opexa Therapeutics, Inc, a Texas corporation (the “Company”), evidenced by the attached Series I Warrant (the “Warrant”).  Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1.  Form of Exercise Price.  The Holder intends that payment of the aggregate Warrant Price shall be made as:

	
  

	
_______

	
a “Cash Exercise” with respect to _________ Warrant Shares; and/or

	
  

	
_______

	
a “Cashless Exercise” with respect to _______ Warrant Shares.

2.  Payment of Warrant Price.  In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the aggregate Warrant Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.

3.  Delivery of Warrant Shares.  The holder requests that the Company deliver the Warrant Shares in the name of the undersigned holder (or in the name of ______________________ in accordance with the terms of the Warrant)  by physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________

Date: ____________ __, 20____

____________________________

       Name of Registered Holder

	 	 	 	 	 	 
	 	 	 	 	 	 
	
By:

	 	 	 	 	 
	
Printed Name:

	 	 	 	 
	
Title (if applicable):

	 	 	 
	
Entity Name (if applicable):

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