Document:

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), is dated as of December 20, 2019, by and among Jaguar Health, Inc., a Delaware corporation (the “Company”), and the purchasers listed on the Schedule of Purchasers attached hereto (each, a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

A.                                    Subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, (i) that aggregate number of shares of voting common stock, par value $0.0001 per share, of the Company (the “Common Stock”), set forth opposite such Purchaser’s name in column (4) on the Schedule of Purchasers (which aggregate amount for all Purchasers shall collectively be referred to herein as the “Common Shares”) and (ii) a warrant to acquire up to that number of additional shares of Common Stock set forth opposite such Purchaser’s name in column (5) on the Schedule of Purchasers at an exercise price of $0.78 per share (the “Warrants”), in substantially the form attached hereto as Exhibit A (as exercised, collectively, the “Warrant Shares”).

 

B.                                    The Common Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities.”

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual agreements, covenants, representations and warranties contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser hereby agree as follows:

 

1.             PURCHASE AND SALE OF COMMON SHARES AND WARRANTS.

 

a.             Sale and Issuance of Stock.  Subject to the satisfaction (or waiver) of the terms and conditions set forth in Section 4 below, the Company agrees to sell to each Purchaser, and each Purchaser, severally and not jointly, agree to purchase from the Company on the Closing Date (as defined below), the number of Common Shares as is set forth opposite such Purchaser’s name in column (4) on the Schedule of Purchasers, along with the Warrants to acquire up to that number of Warrant Shares as is set forth opposite such Purchaser’s name in column (5) on the Schedule of Purchasers (the “Closing”).

 

(i)          Closing.  The date and time of the Closing (the “Closing Date”) shall be 9:00 a.m., New York City time, on December 24, 2019 (or such later date and time as is mutually agreed to by the Company and each Purchaser) after notification of satisfaction or waiver of the conditions to the Closing set forth in Section 4 below at the offices of Reed Smith LLP, 1510 Page Mill Road, Suite 110, Palo Alto, California, 94304.

 

(ii)         Purchase Price.  The aggregate purchase price for the Common

 

 

Shares and the Warrants to be purchased by each Purchaser at the Closing (the “Purchase Price”) shall be $0.60 per unit (consisting of one Common Share and a Warrant exercisable for 0.5 Warrant Shares, with each whole Warrant exercisable for one Warrant Share at an exercise price of $0.78 per share).

 

b.             Form of Payment.  On the Closing Date, (i) each Purchaser shall pay its Purchase Price to the Company for the Common Shares and the Warrants to be issued and sold to such Purchaser at the Closing, by wire transfer of immediately available funds in accordance with the Company’s written wire instructions and (ii) the Company shall deliver to each Purchaser the Common Shares (allocated in the amounts as such Purchaser shall request) which such Purchaser is then purchasing hereunder along with the Warrants (allocated in the amounts as such Purchaser shall request) which such Purchaser is then purchasing hereunder, in each case, duly executed or authenticated on behalf of the Company and registered in the name of such Purchaser or its designee, and, in the case of the Common Shares, on the applicable balance account at American Stock Transfer and Trust Company LLC, as the Company’s transfer agent (the “Transfer Agent”). Upon the request of a Purchaser, the Company shall instruct the Transfer Agent to provide such Purchaser with a copy of such Purchaser’s balance account at the Transfer Agent.

 

2.             COMPANY’S REPRESENTATIONS AND WARRANTIES.

 

The Company hereby represents and warrants to each Purchaser as of the date hereof and as of the Closing as follows, subject to the exceptions as are disclosed prior to the date hereof in the Company’s reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”), which SEC Reports as filed prior to the date hereof shall be deemed a part hereof and shall qualify any representation or warranty otherwise made herein to the extent of the disclosure contained in the SEC Reports as filed prior to the date hereof:

 

a.             Organization, Good Standing and Qualification.  The Company is a corporation duly organized and validly existing under the laws of the State of Delaware.  The Company has all requisite corporate power and authority to own and operate its properties and assets, to execute and deliver this Agreement and sell the Securities, and to carry out the provisions of this Agreement and to carry on its business as presently conducted.  The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business (a “Material Adverse Effect”).

 

b.             Authorization; Binding Obligations.  All corporate action on the part of the Company, its officers, directors and shareholders necessary for the authorization of this Agreement, the Warrants and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement, if any (collectively, the “Transaction Documents”), the performance of all obligations of the Company thereunder at the

 

2

 

Closing, and the sale, issuance and delivery of the Securities pursuant hereto has been taken or will be taken prior to the Closing.

 

c.             No Conflict.  Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate or result in a breach of or constitute a default under any contract or agreement to which the Company is a party or by which it is bound, (ii) conflict with or result in a breach of or constitute a default under any provision of the certificate of incorporation or bylaws (or other charter documents) of the Company, or (iii) violate or result in a breach of or constitute a default under any judgment, order, decree, rule or regulation of any court or governmental agency to which the Company is subject, except, in the case of clauses (i) and (iii) above, for any such conflict, breach, violation or default that would not, individually or in the aggregate, have a Material Adverse Effect.

 

d.             SEC Reports; Financial Statements.  The Company has filed all SEC Reports required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material).  The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the U.S. Securities and Exchange Commission (the “Commission”) with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

e.             Capitalization.  Except as set forth on Schedule 2.e., the authorized capital stock of the Company and the issued and outstanding securities of the Company are as disclosed as of the date hereof in the SEC Reports.

 

f.             Absence of Litigation.  Except as disclosed in the SEC Reports, neither the Company nor any of its directors is engaged in any litigation, administrative, mediation or arbitration proceedings or other proceedings or hearings before any statutory or governmental body, department, board or agency and is not the subject of any investigation, inquiry or enforcement proceedings by any governmental, administrative or regulatory body that could reasonably be expected to have a Material Adverse Effect.  No such proceedings, investigation or inquiry are pending or, to the Company’s knowledge, threatened against the Company, and, to the Company’s knowledge, there are no circumstances likely to give rise to any such proceedings.

 

g.             Intellectual Property.  The Company has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as described in the SEC Reports as necessary or required for use in connection with its business and which the failure to so have could have a material adverse effect (collectively, the “Intellectual Property Rights”).  The Company has not received a notice (written or otherwise) that any of, the

 

3

 

Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.  To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights.

 

h.             Valid Issuance.  The Common Shares and the Warrants have been duly authorized and, upon issuance in accordance with the terms hereof and payment of the Purchase Price, shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights and free of restrictions on transfer other than restrictions on transfer under this Agreement and under applicable state and federal securities laws.

 

3.             PURCHASER’S REPRESENTATIONS AND WARRANTIES.

 

Each Purchaser, for itself and for no other Purchaser, represents and warrants as of the Closing as follows:

 

a.             Organization and Good Standing. If such Purchaser is an entity, such Purchaser is a corporation, partnership, limited liability company or other entity duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization.

 

b.             Requisite Power and Authority.  Such Purchaser has all necessary power and authority under all applicable provisions of law to execute and deliver the Transaction Documents (as defined below) to which such Purchaser is a party and to purchase the Securities being sold to it hereunder.  If such Purchaser is an entity, the execution, delivery and performance of the Transaction Documents to which such Purchaser is a party by such Purchaser and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate, limited liability company or partnership action, and no further consent or authorization of such Purchaser or its board of directors, stockholders, partners or similar body, as the case may be, is required. The Transaction Documents to which such Purchaser is a party have been duly authorized, executed and delivered by such Purchaser and assuming due authorization, execution and delivery by the Company, constitutes valid and binding obligations of such Purchaser enforceable against such Purchaser in accordance with the terms thereof, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

c.             No Public Sale or Distribution. Such Purchaser is acquiring the Common Shares and the Warrants, and upon exercise of the Warrants will acquire the Warrant Shares issuable upon exercise of the Warrants, for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the representations herein, such Purchaser does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of all or any part of the Securities at any time in accordance with or pursuant to a registration statement or an exemption from registration under the Securities Act and pursuant to the applicable terms of the Transaction Documents. Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such

 

4

 

Purchaser does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities. As used in this Agreement, “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

 

d.             Accredited Investor Status. Such Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D. Such Purchaser has executed and delivered to the Company a questionnaire in substantially the form attached hereto as Exhibit B (the “Investor Questionnaire”), which such Purchaser represents and warrants is true, correct and complete. Such Purchaser will promptly notify the Company of any changes to its status as an “accredited investor”.

 

e.             Reliance on Exemptions. Such Purchaser understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Purchaser set forth in the Transaction Documents and the Investor Questionnaire in order to determine the availability of such exemptions and the eligibility of such Purchaser to acquire the Securities.

 

f.             Information. Such Purchaser and its advisors, if any, have had an opportunity to discuss the Company’s business, management and financial affairs with the Company’s management and to obtain any additional information which such Purchaser has deemed necessary or appropriate for conducting its due diligence investigation and deciding whether or not to purchase the Securities, including an opportunity to receive, review and understand the information regarding the Company’s financial statements, capitalization and other business information contained in the SEC Reports as such Purchaser deems prudent.  Such Purchaser has sufficient knowledge and experience in investing in companies similar to the Company so as to be able to evaluate the risks and merits of its investment in the Company. Such Purchaser acknowledges that no representations or warranties, oral or written, have been made by the Company or any agent thereof except as set forth in this Agreement. Such Purchaser understands that its investment in the Securities involves a high degree of risk and represents and warrants that it is able to bear the economic risk and complete loss of such investment. Such Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.

 

g.             No Governmental Review. Such Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

h.             Transfer or Resale. Such Purchaser understands that, except as provided in Section 6, the: (i) the Securities have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, or (B) such Purchaser shall have delivered to the Company an opinion of counsel, in a form reasonably acceptable to the Company, to the effect that such

 

5

 

Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to Rule 144, as amended, promulgated under the Securities Act (or a successor rule thereto) (“Rule 144”) or an exemption from such registration, (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the Commission thereunder, and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

 

i.              Legends. Such Purchaser understands that the certificates or other instruments representing the Securities, including any applicable balance account at the Transfer Agent, except as set forth below, shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such Securities):

 

NEITHER THIS SECURITY NOR THE SECURITIES AS TO WHICH THIS SECURITY MAY BE EXERCISED HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

j.              Legend Removal. Unless otherwise required by state securities laws, the legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Securities upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at The Depository Trust Company (“DTC”) or the Transfer Agent, as applicable, and at the Purchaser’s election so long as the Purchaser is not an affiliate of the Company, if (i) such Securities are registered for resale under the Securities Act, (ii) in connection with a sale, assignment or other transfer, such holder provides the Company with an opinion of a law firm reasonably acceptable to the Company, in a form reasonably acceptable to the Company, to the effect that such sale, assignment or transfer of the Securities may be made without registration under the applicable requirements of the Securities Act, or (iii) such holder provides the Company with an opinion of a law firm reasonably acceptable to the Company, in a form reasonably acceptable to the Company, to the effect that the Securities can be sold, assigned or transferred pursuant to Rule 144 or an exemption from registration.

 

6

 

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

 

l.              No General Solicitation and Advertising. Such Purchaser is not, to such Purchaser’s knowledge, purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

m.           Residency. Such Purchaser is a resident of that jurisdiction specified in its address on the Schedule of Purchasers.

 

n.             Brokers. There is no broker, investment banker, financial advisor, finder or other Person which has been retained by or is authorized to act on behalf of such Purchaser who might be entitled to any fee or commission for which the Company will be liable in connection with the execution of this Agreement and the consummation of the transactions contemplated hereby.

 

4.             CONDITIONS TO CLOSING.

 

a.             Conditions to Each Purchaser’s Obligation to Purchase.  The obligation of each Purchaser to consummate the transactions contemplated in the Transaction Documents at the Closing is subject to the satisfaction on or before the date of the Closing of the following conditions, all or any of which may be waived in writing by such Purchaser as to its obligation to consummate the transactions so contemplated:

 

i.              Performance.  The Company shall have duly executed and delivered to such Purchaser (A) each of the Transaction Documents and (B) the Common Shares and the Warrants being purchased by such Purchaser at the Closing pursuant to this Agreement.

 

ii.             Proceedings.  All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby to be consummated at or prior to the Closing and all documents incidental thereto or required to be delivered prior to or at the Closing will be reasonably satisfactory in form and substance to such Purchaser.

 

iii.            Suits/Proceedings.  No action, suit, proceeding or investigation by or before any court, administrative agency or other governmental authority shall have been instituted or threatened to restrain, prohibit or invalidate the transactions contemplated by this Agreement.

 

7

 

iv.            Authorization of Issuance.  The Company’s board of directors will have authorized the issuance and sale by it to the Purchasers pursuant to this Agreement of the Securities.

 

v.             Consents and Approvals.  The Company shall have obtained any and all consents (including all governmental or regulatory consents, approvals or authorizations required in connection with the valid execution and delivery of this Agreement), permits and waivers necessary or appropriate for consummation of the transactions contemplated by this Agreement.

 

vi.            Representations and Warranties.  The representations and warranties of the Company contained in this Agreement that are not qualified by materiality or similar qualification shall be true and correct in all material respects on and as of the Closing, except to the extent expressly made as of an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date, and the representations and warranties of the Company contained in this Agreement that are qualified by materiality or similar qualification shall be true and correct in all respects on and as of the Closing, except to the extent expressly made as of an earlier date, in which case such representations and warranties shall be true and correct in all respects as of such earlier date.

 

b.             Conditions to the Company’s Obligation to Sell.  The obligation of the Company to consummate the transactions contemplated herein at the Closing is subject to the satisfaction on or before the date of the Closing of the following conditions, all or any of which may be waived in writing by the Company as to its obligation to consummate the transaction so contemplated:

 

i.              Performance.  Each Purchaser shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.

 

ii.             Investor Questionnaire.  Each Purchaser shall have executed and delivered to the Company an Investor Questionnaire pursuant to which each such Purchaser shall provide information necessary to confirm each such Purchaser’s status as an “accredited investor” (as such term is defined in Rule 501 promulgated under the Securities Act) and to enable the Company to comply with its obligations under Section 6.

 

iii.            Payment of Purchase Price.  Each Purchaser shall have delivered to the Company the Purchase Price for the Common Shares and the Warrants being purchased by such Purchaser by wire transfer of immediately available funds pursuant to wire instructions provided by the Company.

 

iv.            Suits/Proceedings.  No action, suit, proceeding or investigation by or before any court, administrative agency or other governmental authority shall have been instituted or threatened to restrain, prohibit or invalidate the transactions contemplated by this Agreement.

 

v.             Representations and Warranties.  The representations and warranties of each Purchaser contained in this Agreement that are not qualified by materiality or similar qualification shall be true and correct in all material respects on and as of the Closing, except to

 

8

 

the extent expressly made as of an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date, and the representations and warranties of each Purchaser contained in this Agreement that are qualified by materiality or similar qualification shall be true and correct in all respects on and as of the Closing, except to the extent expressly made as of an earlier date, in which case such representations and warranties shall be true and correct in all respects as of such earlier date.

 

5.             RELIANCE.  Each Purchaser is aware that the Company is relying on the accuracy of the representations and warranties set forth in Section 3 hereof to establish compliance with Federal and State securities laws.  If any such warranties or representations are not true and accurate in any respect as of the Closing, each Purchaser with such knowledge shall so notify the Company in writing immediately and shall be cause for rescission by the Company at its sole election.

 

6.             REGISTRATION RIGHTS.

 

a.             The Company hereby agrees that, within twenty (20) Business Days after the date hereof, the Company shall file a registration statement on Form S-1 (or such other form available, the “Registration Statement”) with the Commission with respect to the Registrable Securities.  The Company shall use its commercially reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event (x) no later than the sixtieth (60th) Business Day following the filing of the Registration Statement in the event of “limited review” by the Commission, or (y) in the event of a “review” by the Commission, the ninetieth (90th) Business Day following the filing of the Registration Statement, and shall use its commercially reasonable efforts to keep such Registration Statement continuously effective under the Securities Act during the entire Effectiveness Period (as such term is defined below along with any other terms used in this Section 6).

 

b.             Notwithstanding anything in this Section to the contrary, the Company may, on no more than two occasions during any 12-month period, delay or suspend the effectiveness of the Registration Statement for up to 30 days on each occasion (a “Delay Period”) if the board of directors of the Company determines in good faith that (i) effectiveness of the Registration Statement must be suspended in accordance with the rules and regulations under the Securities Act or that (ii) the disclosure of material non-public information at such time would be detrimental to the Company and its subsidiaries, taken as a whole.  Notwithstanding the foregoing, the Company shall use its reasonable best efforts to ensure that the Registration Statement is declared effective and its permitted use is resumed following a Delay Period as promptly as practicable.

 

c.             All fees and expenses incident to the performance of or compliance with this Section by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement.

 

d.             Except for registration rights granted on or prior to the date hereof, the Company has not entered into and, unless agreed in writing by each Holder on or after the date of this Agreement, will not enter into, any agreement or arrangement that (i) is inconsistent with the rights granted to the Holders with respect to Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof in any material respect or (ii) other than as set forth in this

 

9

 

Agreement, would allow any holder of Common Stock or other securities of the Company to include such securities in any Registration Statement filed by the Company on a basis that is more favorable in any material respect to the rights granted to the Holders hereunder including granting registration rights that would have priority over the Registrable Securities with respect to the inclusion of such securities in any registration.

 

e.             As used in this Section, the following terms have the respective meanings:

 

“Business Day” means a day other than Saturday, Sunday or any day on which banks located in the State of New York are authorized or obligated to close.

 

“Effectiveness Period” means, the period commencing on the Registration Statement Effective Date and ending on the earlier of (i) the time as all of the Registrable Securities covered by such Registration Statement have been sold (either pursuant to a Registration Statement or otherwise) by the Holders (as defined below), or (ii) the time as all of the remaining Registrable Securities are eligible to be sold by the Holders without compliance with the volume limitations or public information requirements of Rule 144.

 

“Holder” or “Holders” means the holder or holders, as the case may be, from time to time, of Registrable Securities.

 

“Registrable Securities” means: (i) the Common Shares, (ii) the Warrant Shares, and (iii) any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event, or any price adjustment as a result of such stock splits, reverse stock splits or similar events with respect to any of the securities referenced in (i) or (ii).

 

“Registration Statement” means the registration statements required to be filed in accordance with this Section and any additional registration statements required to be filed under this Section, including in each case the prospectus, amendments and supplements to such registration statements or prospectus, including pre and post effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference therein.

 

“Registration Statement Effective Date” means, as to a Registration Statement, the date on which such Registration Statement is first declared effective by the Commission.

 

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

 

7.             MISCELLANEOUS.

 

a.             Survival.  The representations, warranties, covenants and agreements made herein shall survive the closing of the transactions contemplated hereby for a period of one year.

 

b.             Successors and Assigns.  Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

 

10

 

c.             Entire Agreement.  This Agreement and the Schedules attached hereto constitute the entire agreement and understanding between the parties with respect to the subject matters herein, and supersede and replace any prior agreements and understandings, whether oral or written between and among them with respect to such matters.  The provisions of this Agreement may be waived, altered, amended or repealed, in whole or in part, only upon the written consent of the Company and Purchasers holding at least 50.1% in interest of the Securities then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required.

 

d.             Title and Subtitles.  The titles of the Sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

e.             Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

f.             Applicable Law.  This Agreement shall be governed by and construed in accordance with laws of the State of California, applicable to contracts between California residents entered into and to be performed entirely within the State of California.

 

g.             Venue.  Any action, arbitration, or proceeding arising directly or indirectly from this Agreement or any other instrument or security referenced herein shall be litigated or arbitrated, as appropriate, in the County of San Francisco, in the State of California.

 

h.             Authority.  With respect to each Purchaser, the individual executing and delivering this Agreement on behalf of such Purchaser has been duly authorized and is duly qualified to execute and deliver this Agreement in connection with the purchase of the Securities and the signature of such individual is binding upon such Purchaser.

 

i.              Notices.  All notices and other communications provided for or permitted hereunder shall be made by hand-delivery, electronic mail, telecopier, or overnight air courier guaranteeing next day delivery at the address set forth on the signature page hereof, if to the Company, and on the Schedule of Purchasers, if to a Purchaser, with copies to such Purchaser’s representatives as set forth on the Schedule of Purchasers.  All such notices and communications shall be deemed to have been duly given (i) at the time delivered by hand, if personally delivered (ii) when sent, if sent my electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient’s email server that such email could not be delivered to such recipient), (iii) when receipt acknowledged, if telecopied, and (iv) the next business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next

 

11

 

day delivery.  The parties may change the addresses to which notices are to be given by giving five days prior written notice of such change in accordance herewith.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

12

 

IN WITNESS WHEREOF, each Purchaser and the Company have caused their respective signature page to this Securities Purchase Agreement to be executed as of the date first written above.

 

 

	
COMPANY:
    	
 
    	
Address for Notice:
    
	
 
    	
 
    	
 
    
	
JAGUAR HEALTH, INC.
    	
 
    	
201 Mission Street,   Suite 2375
    
	
 
    	
 
    	
San Francisco, CA 94105
    
	
 
    	
 
    	
Fax: (415) 371-8311
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Lisa A. Conte
    	
 
    	
 
    
	
 
    	
Name: Lisa A. Conte
    	
 
    	
 
    
	
 
    	
Title: CEO and President
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
With a copy to (which shall not constitute   notice):
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Donald C. Reinke, Esq.
    	
 
    	
 
    
	
Reed Smith LLP
    	
 
    	
 
    
	
101 Second Street, Suite 1800
    	
 
    	
 
    
	
San Francisco, CA 94105
    	
 
    	
 
    

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASERS FOLLOW]

 

SPA Signature Page

 

 

IN WITNESS WHEREOF, each Purchaser and the Company have caused their respective signature page to this Securities Purchase Agreement to be executed as of the date first written above.

 

 

	
Name of Purchaser:
    	
Joseph W & Patricia   G Abrams Family Trust DTD 3/15/95
    
	
 
    	
 
    
	
Signature   of Authorized Signatory of Purchaser:
    	
/s/   Joseph W Abrams, TTEE
    
	
 
    	
 
    
	
Name of Authorized   Signatory:
    	
Joseph W Abrams
    
	
 
    	
 
    
	
Title of Authorized   Signatory:
    	
Trustee
    
				

 

SPA Signature Page

 

 

IN WITNESS WHEREOF, each Purchaser and the Company have caused their respective signature page to this Securities Purchase Agreement to be executed as of the date first written above.

 

 

	
Name of Purchaser:
    	
Rogers Family Trust,   UTD 01/21/1981
    
	
 
    	
 
    
	
Signature   of Authorized Signatory of Purchaser:
    	
/s/   Roy L. Rogers
    
	
 
    	
 
    
	
Name of Authorized   Signatory:
    	
Roy L. Rogers
    
	
 
    	
 
    
	
Title of Authorized   Signatory:
    	
Trustee
    
				

 

SPA Signature Page

 

 

IN WITNESS WHEREOF, each Purchaser and the Company have caused their respective signature page to this Securities Purchase Agreement to be executed as of the date first written above.

 

 

	
Name of Purchaser:
    	
Potter Family Trust
    
	
 
    	
 
    
	
Signature   of Authorized Signatory of Purchaser:
    	
/s/   Bruce G. Potter
    
	
 
    	
 
    
	
Name of Authorized   Signatory:
    	
Bruce G. Potter
    
	
 
    	
 
    
	
Title of Authorized   Signatory:
    	
Trustee
    
				

 

SPA Signature Page

 

 

IN WITNESS WHEREOF, each Purchaser and the Company have caused their respective signature page to this Securities Purchase Agreement to be executed as of the date first written above.

 

 

	
Name of Purchaser:
    	
Jon D and Linda W   Gruber Trust
    
	
 
    	
 
    
	
Signature   of Authorized Signatory of Purchaser:
    	
/s/   Jon D Gruber
    
	
 
    	
 
    
	
Name of Authorized   Signatory:
    	
Jon D Gruber
    
	
 
    	
 
    
	
Title of Authorized   Signatory:
    	
Trustee
    
				

 

SPA Signature Page

 

 

IN WITNESS WHEREOF, each Purchaser and the Company have caused their respective signature page to this Securities Purchase Agreement to be executed as of the date first written above.

 

 

	
Name of Purchaser:
    	
Howard Miller
    
	
 
    	
 
    
	
Signature   of Authorized Signatory of Purchaser:
    	
/s/ Howard   Miller
    
	
 
    	
 
    
	
Name of Authorized   Signatory:
    	
 
    
	
 
    	
 
    
	
Title of Authorized   Signatory:
    	
 
    
				

 

SPA Signature Page

 

 

IN WITNESS WHEREOF, each Purchaser and the Company have caused their respective signature page to this Securities Purchase Agreement to be executed as of the date first written above.

 

 

	
Name of Purchaser:
    	
Pensco Trust LLC FBO   Brian Swift Roth IRA
    
	
 
    	
 
    
	
Signature   of Authorized Signatory of Purchaser:
    	
/s/   Brian Swift
    
	
 
    	
 
    
	
Name of Authorized   Signatory:
    	
Brian Swift
    
	
 
    	
 
    
	
Title of Authorized   Signatory:
    	
 
    
				

 

SPA Signature Page

 

 

IN WITNESS WHEREOF, each Purchaser and the Company have caused their respective signature page to this Securities Purchase Agreement to be executed as of the date first written above.

 

 

	
Name of Purchaser:
    	
Karl L. Matthies Trust
    
	
 
    	
 
    
	
Signature   of Authorized Signatory of Purchaser:
    	
/s/   Karl L. Matthies
    
	
 
    	
 
    
	
Name of Authorized   Signatory:
    	
Karl L. Matthies
    
	
 
    	
 
    
	
Title of Authorized   Signatory:
    	
Trustee
    
				

 

SPA Signature Page

 

 

IN WITNESS WHEREOF, each Purchaser and the Company have caused their respective signature page to this Securities Purchase Agreement to be executed as of the date first written above.

 

 

	
Name of Purchaser:
    	
 
    
	
 
    	
 
    
	
Signature   of Authorized Signatory of Purchaser:
    	
/s/   KHWM Krueger
    
	
 
    	
 
    
	
Name of Authorized   Signatory:
    	
KHWM Krueger
    
	
 
    	
 
    
	
Title of Authorized   Signatory:
    	
Trustee, Krueger Family   Living Trust
    
				

 

SPA Signature Page

 

 

 

Schedule of  Purchasers

 

	
(1)
    	
 
    	
(2)
    	
 
    	
(3)
    	
 
    	
(4)
    	
 
    	
(5)
    	
 
    	
(6)
    	
 
    	
(7)
    	
 
    
	
Purchaser
    	
 
    	
Address
    	
 
    	
Email Address
    	
 
    	
Number
   of
   Common
   Shares
    	
 
    	
Number of
   Warrant
   Shares
    	
 
    	
Aggregate
   Purchase
   Price
    	
 
    	
Legal
   Representative’s
   Address
    	
 
    
	
Jon D. and Linda W. Gruber   Trust
    	
 
    	
300 Tamal Plaza, Ste 280
   Corte Madera CA, 94925
    	
 
    	
jon@gmcm.com
    	
 
    	
1,250,000
    	
 
    	
625,000
    	
 
    	
$
    	
750,000.00
    	
 
    	
 
    	
 
    
	
Rogers Family Trust, UTD   01/21/1981
    	
 
    	
27927 Briones Way
   Los Altos Hills, CA 94022
    	
 
    	
rogers.roy@comcast.net
    	
 
    	
608,333
    	
 
    	
304,167
    	
 
    	
$
    	
365,000.20
    	
 
    	
 
    	
 
    
	
Karl L. Matthies Trust
    	
 
    	
300 Tamal Plaza, Ste 280
   Corte Madera CA, 94925
    	
 
    	
kmatthies@bellagiopartners.com
    	
 
    	
166,667
    	
 
    	
83,334
    	
 
    	
$
    	
100,000.00
    	
 
    	
 
    	
 
    
	
Howard Miller
    	
 
    	
301 Mission Street, #705
   San Francisco, CA 94105
    	
 
    	
howardnmiller@msn.com
    	
 
    	
166,667
    	
 
    	
83,334
    	
 
    	
$
    	
100,000.00
    	
 
    	
 
    	
 
    
	
Potter Family Trust
    	
 
    	
P.O. Box 1194
   Ross, CA 94957
    	
 
    	
bpotter@potterinvestments.com
    	
 
    	
100,000
    	
 
    	
50,000
    	
 
    	
$
    	
60,000.00
    	
 
    	
 
    	
 
    
	
Pensco Trust Company   Custodian FBO Brian Swift Roth IRA
    	
 
    	
2400 Bridgeway, Suite 230
   Sausalito, CA 94965
    	
 
    	
briangswift@gmail.com
    	
 
    	
83,333
    	
 
    	
41,666
    	
 
    	
$
    	
50,000.20
    	
 
    	
 
    	
 
    
	
Joseph W. &   Patricia G. Abrams Family Trust DTD 3/15/95
    	
 
    	
131 Laurel Grove Ave.
   Kentfield, CA 94904
    	
 
    	
joe@toolworks.com
    	
 
    	
41,667
    	
 
    	
20,833
    	
 
    	
$
    	
25,000.00
    	
 
    	
 
    	
 
    
	
Krueger Family Living Trust
    	
 
    	
591 Redwood Hwy,   Suite 5295
   Mill Valley, CA 94941
    	
 
    	
khwk@pacbell.net
    	
 
    	
83,333
    	
 
    	
41,666
    	
 
    	
$
    	
50,000.20
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
 
    	
 
    	
 
    	
 
    	
2,500,000
    	
 
    	
1,250,000
    	
 
    	
$
    	
1,500,000.60
    	
 
    	
 
    	
 
    

 

 

Schedule 2.e.

 

Capitalization

 

As of December 20, 2019

 

	
 
    	
 
    	
Shares
    	
 
    	
Shares
    	
 
    
	
 
    	
 
    	
Authorized
    	
 
    	
Outstanding
    	
 
    
	
Common Stock -   Voting Shares
    	
 
    	
150,000,000
    	
 
    	
12,468,188
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Convertible   Non-voting Common Stock - as converted
    	
 
    	
50,000,000
    	
 
    	
38,382
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Preferred Stock
    	
 
    	
10,000,000
    	
 
    	
 
    	
 
    
	
Series A   Convertible Preferred Stock — as converted
    	
 
    	
 
    	
 
    	
473,565
    	
 
    
	
Series B   Convertible Preferred Stock — as converted
    	
 
    	
 
    	
 
    	
985,500
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total Common and   Preferred Stock
    	
 
    	
210,000,000
    	
 
    	
13,965,635
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Options   outstanding - to purchase common stock - 2013 Plan
    	
 
    	
 
    	
 
    	
—
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Options   outstanding - to purchase common stock - 2014 Plan
    	
 
    	
 
    	
 
    	
3,973,964
    	
 
    
	
Options   outstanding — Tom Stankovich (consultant)
    	
 
    	
 
    	
 
    	
25,000
    	
 
    
	
Options   outstanding -Inducement options - not related to any stock plan
    	
 
    	
 
    	
 
    	
—
    	
 
    
	
Options   available for grant - 2014 Plan - excluding contingent increase to the plan
    	
 
    	
 
    	
 
    	
5,613
    	
 
    
	
Restricted Stock   Units outstanding - Jaguar
    	
 
    	
 
    	
 
    	
—
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Warrants to   purchase common stock
    	
 
    	
 
    	
 
    	
19,354,905
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Fully diluted   common shares
    	
 
    	
 
    	
 
    	
37,325,117Exhibit 10.2

 

EXCHANGE AGREEMENT

 

THIS EXCHANGE AGREEMENT (this “Agreement”) is executed as of December 23, 2019 by and between Jaguar Health, Inc., a Delaware corporation (the “Company”), and Oasis Capital, LLC, a Puerto Rico limited liability company (“Holder”).

 

A.            Pursuant to that certain Securities Purchase Agreement, dated as of November 13, 2019, between the Company and Holder (the “SPA”), the Company issued pre-funded warrants to purchase up to 2,222,223 shares (the “Warrant Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) at an offering price of $0.80 per share and an exercise price of $0.01 per share (the “Existing Warrants”).

 

B.            Holder currently holds such number of Existing Warrants and Warrant Shares as set forth in Exhibit A hereto (collectively, the “Exchange Securities”), and the remaining Existing Warrants have an exercise price of $12,362.23 in the aggregate (the “Aggregate Exercise Price”).

 

C.            Subject to the terms of this Agreement, Holder and the Company desire to exchange the Exchange Securities for shares of the Company’s Series B-2 Convertible Preferred Stock (the “Preferred Stock”).

 

D.            This Agreement, the Lock-Up Agreement (as defined below) and any other documents, agreements, or instruments entered into or delivered in connection with this Agreement, or any amendments to any of the foregoing, are collectively referred to as the “Exchange Documents”.

 

E.            Pursuant to the terms and conditions hereof, Holder and the Company agree to exchange the Exchange Securities for shares of Preferred Stock.

 

NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties and covenants herein contained, the parties hereto agree as follows:

 

1.             Terms of the Exchange. The Company and Holder agree that Holder shall surrender the Exchange Securities to the Company and relinquish any and all other rights Holder may have under the Exchange Securities and pay the Aggregate Exercise Price to the Company in exchange for the number of shares of Preferred Stock (the “Preferred Shares”) as set forth on Exhibit A annexed hereto. The terms, limitations and preferences of the Preferred Stock are set forth in the form of Certificate of Designation of Series B-2 Convertible Preferred Stock annexed hereto as Exhibit B (the “Certificate of Designation”).

 

2.             Closing. Upon satisfaction or written waiver of the conditions set forth herein, the closing of the transaction contemplated hereby (the “Closing”) shall occur at the principal offices of the Company, or such other location as the parties shall mutually agree. At Closing, (a) Holder shall (i) surrender the Exchange Securities to the Company and (ii) deliver or cause to be delivered to the Company the Aggregate Exercise Price by wire transfer to the account specified in writing by the Company and (b) the Company shall deliver to such Holder a certificate evidencing the Preferred Shares, in the name(s) and amount(s) as indicated on Exhibit A annexed hereto. Upon closing, any and all obligations of the Company to Holder under the Exchange Securities shall be fully satisfied, the Exchange Securities shall be cancelled and Holder will have no remaining rights, powers, privileges, remedies or interests under the Exchange Securities or the SPA.

 

3.             Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates,

 

 

instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

4.             Representations, Warranties and Covenants of Holder. Holder represents, warrants, and covenants to the Company that:

 

4.1.         Investment Purpose. Holder is acquiring the Preferred Shares for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act.

 

4.2.         Accredited Investor Status. Holder is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation D of the Securities Act.

 

4.3.         Authorization; Enforcement. Each of this Agreement and the Lock-Up Agreement has been duly and validly authorized, executed and delivered on behalf of Holder and is a valid and binding agreement of Holder enforceable in accordance with its terms.

 

4.4.         Additional Representations and Warranties of Holder.  Holder is acquiring the Preferred Shares for investment for such Holder’s own account, and not with a view to, or for resale in connection with, any distribution thereof, and Holder has no present intention of selling or distributing the Preferred Shares.  Holder has had an opportunity to discuss Company’s business, management and financial affairs with its management and to obtain any additional information which Holder has deemed necessary or appropriate for deciding whether or not to acquire the Preferred Shares, including an opportunity to receive, review and understand the information set forth in Company’s financial statements, capitalization and other business information as Holder deems prudent. Holder acknowledges that no other representations or warranties, oral or written, have been made by Company or any agent thereof except as set forth in this Agreement.  Holder is aware that no federal, state or other agency has made any finding or determination as to the fairness of the investment, nor made any recommendation or endorsement of the Preferred Shares.  Holder has such knowledge and experience in financial and business matters, including investments in other emerging growth companies that such individual or entity is capable of evaluating the merits and risks of the investment in the Preferred Shares and it is able to bear the economic risk of such investment.  Holder has such knowledge and experience in financial and business matters that such individual is capable of utilizing the information made available in connection with the acquisition of the Preferred Shares, of evaluating the merits and risks of an investment in the Preferred Shares and of making an informed investment decision with respect to the Preferred Shares. Neither Holder, nor any person or entity with whom such Holder shares beneficial ownership of the Preferred Shares, is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii).  Holder is aware that there is currently no public market for the Preferred Shares, that there is no guarantee that a public market will develop at any time in the future and Holder understands that the Preferred Shares are unregistered and may not presently be sold except in accordance with applicable securities laws. Holder understands that the Preferred Shares cannot be readily sold or liquidated in case of an emergency or other financial need.  Holder acknowledges and agrees that the Preferred Shares must be held indefinitely unless it is subsequently registered under the Securities Act of 1933, as amended (the “Securities Act”) or an exemption from such registration is available, and are subject to additional restrictions on transfer pursuant to the Lock-Up Agreement. Holder has been advised or is aware of the provisions of Rule 144 promulgated under the Securities Act as in effect from time to time, which permits limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions, including, among other things: the availability of certain current public information about the Company and the resale occurring following the required holding period under Rule 144. Each instrument evidencing the Preferred Shares may be imprinted with legends substantially in the following form:

 

2

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATES IN THE UNITED STATES. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.”

 

5.             Representations, Warranties, and Covenants of the Company. The Company hereby makes the representations set forth below and covenants and agrees as follows to Holder (in addition to those set forth elsewhere herein) with respect to itself, as applicable:

 

5.1.         Organization and Qualification. The Company has been duly organized, validly exists and is in good standing under the laws of the State of Delaware. The Company has full corporate power and authority to enter into this Agreement and this Agreement has been duly and validly authorized, executed and delivered by the Company and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforcement may be limited by the United States Bankruptcy Code and laws effecting creditors’ rights, generally. The Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified would not reasonably be expected to have a material adverse effect on Company’s business, assets, properties, operations or financial condition or its ability to perform is obligations hereunder (a “Material Adverse Effect”).

 

5.2.         Authorization, Enforcement, Compliance with Other Instruments. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement, the Preferred Shares, and each of the other Exchange Documents and to issue the Preferred Shares in accordance with the terms hereof, (ii) the execution and delivery of the Exchange Documents by the Company and the consummation by the Company of the transactions contemplated hereby, including, without limitation, the issuance of the Preferred Shares, have been duly authorized by the Company’s Board of Directors and no further consent or authorization is required by the Company, its Board of Directors or its stockholders, (iii) the Exchange Documents have been duly executed and delivered by the Company, (iv) the Exchange Documents constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, (v) no further authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock exchange or market or the stockholders or any lender of the Company is required to be obtained by the Company for the issuance of the Preferred Shares to Holder or the entering into of the Exchange Documents, and (vi) the Company’s signatory has full corporate or other requisite authority to execute the Exchange Documents and to bind the Company. The Company’s Board of Directors has duly adopted a resolution authorizing this Agreement and the other Exchange Documents and ratifying their terms.

 

5.3.         Issuance of Preferred Shares. The issuance of the Preferred Shares is duly authorized and upon issuance and payment in accordance with the terms of the Exchange Documents shall be validly issued, fully paid and non-assessable.

 

5.4.         No Conflicts. The execution and delivery of the Exchange Documents by the Company, the issuance of the Preferred Shares in accordance with the terms hereof, and the consummation by the Company of the other transactions contemplated by the Exchange Documents do not and will not conflict with or result in a breach by the Company of any of the terms or provisions of, or

 

3

 

constitute a default under (i) the  Company’s formation documents or bylaws, each as currently in effect, (ii) any indenture, mortgage, deed of trust, or other material agreement or instrument to which the Company is a party or by which it or any of its properties or assets are bound, including, without limitation, any listing agreement for the Common Stock, except (1) as to which requisite consents have been obtained and (2) otherwise as would not reasonably be expected to have a Material Adverse Effect, or (iii) any existing applicable law, rule, or regulation or any applicable decree, judgment, or order of any court, United States federal, state or foreign regulatory body, administrative agency, or other governmental body having jurisdiction over Company or any of Company’s properties or assets, except as would not reasonably be expected to have a Material Adverse Effect.

 

5.5.         Common Stock Registered. The Company has registered its Common Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is obligated to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

 

5.6.         SEC Documents. Except with respect to the 10-Q report for the quarter ending March 31, 2019, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company with the United States Securities and Exchange Commission (the “SEC”) under the Exchange Act on a timely basis or has received a valid extension of such time of filing and has filed any such report, schedule, form, statement or other document prior to the expiration of any such extension.

 

5.7.         Not a Shell Company. The Company is not, nor has it been at any time in the previous twelve (12) months, a “Shell Company,” as such type of “issuer” is described in Rule 144(i)(1) under the Securities Act.

 

5.8.         Brokers. The Company agrees that it will not incur any brokerage commission, placement agent or finder’s fees or similar payments relating to this Agreement or the transactions contemplated hereby.

 

6.             No Registration Rights. Holder waives any rights Holder may have had with respect to registration of the Preferred Shares under the Securities Act and confirms that the Company is under no obligation to register the Preferred Shares.

 

7.             Conditions to the Company’s Obligation to Exchange. The obligation of the Company hereunder to exchange the Exchange Securities for the Preferred Shares at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:

 

7.1.         Holder shall have executed and delivered this Agreement and a lock-up agreement in the form attached hereto as Exhibit C (the “Lock-Up Agreement”) to the Company.

 

7.2.         All representations and warranties of Holder set forth herein shall be true and correct.

 

7.3.         Holder shall have delivered the Exchange Securities to the Company for cancellation.

 

8.             Conditions to Holder’s Obligation to Exchange. The obligation of Holder hereunder to exchange the Exchange Securities for the Preferred Shares at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these conditions are for Holder’s sole benefit and may be waived by Holder at any time in its sole discretion:

 

4

 

8.1.         The Company shall have executed and delivered this Agreement and the Preferred Shares to Holder.

 

8.2.         The Company shall have delivered to Holder all other Exchange Documents.

 

8.3.         The Company shall have filed the Certificate of Designation with the Secretary of State of the State of Delaware.

 

8.4.         All representations and warranties of the Company set forth herein shall be true and correct.

 

9.             Miscellaneous. The provisions set forth in this Section 9 shall apply to this Agreement, as well as all other Exchange Documents as if these terms were fully set forth therein.

 

9.1.         Governing Law; Venue. This Agreement shall be governed by and interpreted in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Exchange Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Exchange Documents), and hereby irrevocably waives, and agrees not to assert in any action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action or proceeding is improper or is an inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address set forth in Section 9.15 below and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  If any party shall commence an action or proceeding to enforce any provisions of the Exchange Documents, then, the prevailing party in such action or proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

9.2.         Successors and Assigns; Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto. Except as otherwise expressly provided herein, no person other than the parties hereto and their successors and permitted assigns is intended to be a beneficiary of this Agreement.

 

9.3.         Pronouns.  All pronouns and any variations thereof in this Agreement refer to the masculine, feminine or neuter, singular or plural, as the context may permit or require.

 

9.4.         Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. The parties hereto confirm that any electronic copy of another party’s executed counterpart of this Agreement (or its signature page thereof) will be deemed to be an executed original thereof.

 

9.5.         Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

 

5

 

9.6.         Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such provision shall be modified to achieve the objective of the parties to the fullest extent permitted and such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other jurisdiction.

 

9.7.         Entire Agreement. This Agreement, together with the Preferred Shares, the Lock-Up Agreement and the other Exchange Documents, constitutes and contains the entire agreement between the parties hereto, and supersedes all prior oral or written agreements and understandings between Holder, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor Holder makes any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance of doubt, all prior term sheets or other documents between the Company and Holder, or any affiliate thereof, related to the transactions contemplated by the Exchange Documents (collectively, “Prior Agreements”), that may have been entered into between the Company and Holder, or any affiliate thereof, are hereby null and void and deemed to be replaced in their entirety by the Exchange Documents. To the extent there is a conflict between any term set forth in any Prior Agreement and the term(s) of the Exchange Documents, the Exchange Documents shall govern.

 

9.8.         Amendment. Any amendment, supplement or modification of or to any provision of this Agreement, shall be effective only if it is made or given by an instrument in writing (excluding any email message) and signed by the Company and Holder.

 

9.9.         No Waiver. No forbearance, failure or delay on the part of a party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. Any waiver of any provision of this Agreement shall be effective (a) only if it is made or given in writing (including an email message) and (b) only in the specific instance and for the specific purpose for which made or given.

 

9.10.       Assignment. Notwithstanding anything to the contrary herein, the rights, interests or obligations of the Company hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of Holder, except in the case of a merger, sale of substantially all of the Company’s assets or other corporate reorganization. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by Holder hereunder may be assigned by Holder to a third party, including its financing sources, in whole or in part.

 

9.11.       Advice of Counsel. In connection with the preparation of this Agreement and all other Exchange Documents, Holder, its members, officers, agents, and representatives each acknowledges and agrees that the attorney that prepared this Agreement and all of the other Exchange Documents acted as legal counsel to the Company only. Each of Holder, its members, officers, agents, and representatives (i) hereby acknowledges that he/she/it has been, and hereby is, advised to seek legal counsel and to review this Agreement and all of the other Exchange Documents with legal counsel of his/her/its choice, and (ii) either has sought such legal counsel or hereby waives the right to do so.

 

9.12.       No Strict Construction. The language used in this Agreement is the language chosen mutually by the parties hereto and no doctrine of construction shall be applied for or against any party.

 

6

 

9.13.       Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER EXCHANGE DOCUMENT, OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY.  THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT IT IS KNOWINGLY AND VOLUNTARILY WAIVING ITS RIGHT TO DEMAND TRIAL BY JURY.

 

9.14.       Further Assurances. Each party shall do and perform or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

9.15.       Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor or by email to an executive officer, or by facsimile (with successful transmission confirmation), (ii) the earlier of the date delivered or the third Trading Day after deposit, postage prepaid, in the United States Postal Service by certified mail, or (iii) the earlier of the date delivered or the third Trading Day after mailing by express courier, with delivery costs and fees prepaid, in each case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by five (5) calendar days’ advance written notice similarly given to each of the other parties hereto):

 

If to the Company:

 

Jaguar Health, Inc.

Attn: Lisa A. Conte

201 Mission Street, Suite 2375

San Francisco, CA 94105

 

With a copy to (which copy shall not constitute notice):

 

Reed Smith LLP

Attn: Donald C. Reinke, Esq.

1510 Page Mill Road, Suite 110

Palo Alto, CA, 94304

 

If to Holder:

 

Oasis Capital, LLC

Attn: Adam Long

208 Ponce de Leon, suite 1600

San Juan, PR 00918

 

9.16.       Survival of Representations and Warranties. All of the representations and warranties made herein shall survive the execution and delivery of this Agreement for the maximum time allowable by applicable law.

 

7

 

9.17.       Transaction Fees. Except as otherwise set forth herein, each party shall be responsible for its own attorneys’ fees and other costs and expenses associated with documenting and closing the transaction contemplated by this Agreement.

 

9.18.       Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of Holder and the Company will be entitled to specific performance under the Exchange Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Exchange Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

[Remainder of the page intentionally left blank; signature page to follow]

 

8

 

IN WITNESS WHEREOF, each of the undersigned represents that the foregoing statements made by it above are true and correct and that it has caused this Agreement to be duly executed on its behalf (if an entity, by one of its officers thereunto duly authorized) as of the date first above written.

 

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
JAGUAR   HEALTH, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Lisa A. Conte
    
	
 
    	
Name:   Lisa A. Conte
    
	
 
    	
Title:   President and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HOLDER:
    
	
 
    	
 
    
	
 
    	
OASIS   CAPITAL, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Adam Long
    
	
 
    	
Name:   Adam Long
    
	
 
    	
Title:   Managing Member
    

 

 

ATTACHMENTS:

 

	
Exhibit A
    	
Schedule   of Preferred Shares
    
	
Exhibit B
    	
Form of   Certificate of Designation for Series B-2 Convertible Preferred Stock
    
	
Exhibit C
    	
Form of   Lock-Up Agreement
    

 

[Signature Page to Exchange Agreement]

 

 

Exhibit A

 

Schedule of Preferred Shares

 

	
Holder
    	
 
    	
Shares of Common
   Stock Issuable upon
   Exercise of Existing
   Warrants
    	
 
    	
Warrant Shares Held
    	
 
    	
Shares of Series B-2
   Preferred Stock
   Exchangeable therefor
    	
 
    
	
Oasis Capital, LLC
    	
 
    	
1,236,223
    	
 
    	
695,127
    	
 
    	
10,165

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00303-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00303-of-00352.parquet"}]]