Document:

Exhibit 10.2

Execution

 

VIRNETX HOLDING CORPORATION

 

AMENDMENT NO. 1 TO

SALES AGREEMENT

 

March 8, 2018

 

Cowen and Company, LLC

599 Lexington Avenue

New York, NY 10022

 

Ladies and Gentlemen:

 

Reference is made to the Sales Agreement, dated as of August 20, 2015 (the “Sales Agreement”), between Cowen and Company, LLC (“Cowen”) and VirnetX Holding Corporation, a Delaware corporation (the “Company”), pursuant to which the Company agreed to sell through Cowen, acting as agent and/or principal, shares of common stock, par value $0.0001 per share, of the Company. All capitalized terms used in this Amendment No. 1 to Sales Agreement between Cowen and the Company (this “Amendment”) and not otherwise defined herein shall have the respective meanings assigned to such terms in the Sales Agreement. Cowen and the Company agree as follows:

 

A.        Amendments to Sales Agreement. The Sales Agreement is amended as follows:

 

1.         The heading on page 1 of the Sales Agreement shall be amended such that the reference to “$35,000,000” shall be “$50,000,000”.

 

2.         The first sentence of the first paragraph of Section 1 of the Sales Agreement shall be amended such that the reference to “$35,000,000” shall be “$50,000,000”.

 

3.         The second paragraph of Section 1 of the Sales Agreement shall be replaced as follows:

 

The Company has filed, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the “Securities Act”), with the Commission a registration statement on Form S-3 (File No. 333-206497), including a base prospectus, relating to certain securities, including the Common Stock, to be issued from time to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange Act”). The Company has prepared and filed a prospectus supplement specifically relating to the Placement Shares having an aggregate offering price of up to $35,000,000 (the “Prospectus Supplement”) to the base prospectus included as part of such registration statement. The Company has furnished to Cowen, for use by Cowen, copies of the prospectus included as part of such registration statement, as supplemented by the Prospectus Supplement, relating to such Placement Shares. In addition, the Company has filed or will file, in accordance with the provisions of the Securities Act, with the Commission an additional sales agreement prospectus specifically relating to the Placement Shares having an aggregate offering price of up to $15,000,000 (the “Sales Prospectus”). The Company will make available to Cowen, for use by Cowen, copies of the Sales Prospectus included as part of the Registration Statement (as defined below). Except where the context otherwise requires, the registration statement, as amended when it became effective, including all documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act or deemed to be a part of such registration statement pursuant to Rule 430B or 462(b) of the Securities Act, are herein called the “Registration Statement.” The base prospectus, including all documents incorporated therein by reference, and the Sales Prospectus, including all documents incorporated therein by reference, each of which is included in the Registration Statement, as it or they may be supplemented by the Prospectus Supplement or by any additional prospectus supplement, in the form in which such prospectus and/or Prospectus Supplement and/or Sales Prospectus have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act, together with any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act regulations (“Rule 433”), relating to the Placement Shares that (i) is required to be filed with the Commission by the Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i), in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g), is herein called the “Prospectus.” Any reference herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with the Commission pursuant to either the Electronic Data Gathering Analysis and Retrieval System or Interactive Data Electronic Applications (collectively “IDEA”).

 

4.         The first sentence of Section 3(a) of the Sales Agreement shall be amended such that the reference to “NYSE MKT LLC” shall be “NYSE American, LLC”.

 

5.         The first sentence of the Officer Certificate pursuant to Section 7(m) of the Sales Agreement shall be replaced as follows:

 

The undersigned, the duly qualified and elected                    , of VirnetX Holding Corporation (“Company”), a Delaware corporation, does hereby certify in such capacity and on behalf of the Company, pursuant to Section 7(m) of the Sales Agreement dated August 20, 2015, as amended on March [•], 2018 (as amended, the “Sales Agreement”) between the Company and Cowen and Company, LLC, that to the best of the knowledge of the undersigned.

 

B.         Company Filings. The Company shall file a sales agreement prospectus covering the offering, issuance and sale by the Company of Placement Shares having a maximum aggregate offering price of $15,000,000, reflecting this Amendment within two Business Days of the date hereof.

 

C.         No Other Amendments. Except as set forth in Part A above, all the terms and provisions of the Sales Agreement shall continue in full force and effect.

 

D.        Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile or other electronic transmission.

 

E.         Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the principles of conflicts of laws.

 

[Remainder of page intentionally left blank.]

 

If the foregoing correctly sets forth the understanding between us, please so indicate in the space provided below for that purpose.

	 	
Very truly yours,

	 	 
	 	
VIRNETX HOLDING CORPORATION

	 	 	 
	 	
By:

	 	
/s/ Kendall Larsen

	 	 	 	
Name: Kendall Larsen

	 	 	 	
Title: Chief Executive Officer

	 	
ACCEPTED as of the date first above written:

	 	 
	 	
COWEN AND COMPANY, LLC

	 	 	 
	 	
By:

	 	
/s/ Robert Sine

	 	 	 	
Name: Robert Sine

	 	 	 	
Title: Managing Director

 

 

[Signature Page – Amendment No. 1 to Sales Agreement]EX-10.23

 Exhibit 10.23 

NON-QUALIFIED STOCK OPTION AGREEMENT 

INDUCEMENT AWARD 
  

					
	Name of Optionee:	  	Jeffrey Hatfield	  	
			
	No. of Option Shares:	  	1,100,000	  	
			
	Option Exercise Price per Share:	  	$3.40	  	
			
	Grant Date:	  	October 9, 2017	  	
			
	Expiration Date:	  	October 8, 2027	  	

 Zafgen, Inc. (the “Company”) hereby grants to the Optionee named above an option (the “Stock
Option”) to purchase on or prior to the Expiration Date specified above all or part of the number of shares of Common Stock, par value $0.001 per share (the “Stock”) of the Company specified above at the Option Exercise Price per
Share specified above subject to the terms and conditions set forth herein. This Stock Option has been granted as an inducement pursuant to Rule 5635(c)(4) of the Marketplace Rules of the Nasdaq Stock Market, Inc. This Stock Option is not intended
to be an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended. Capitalized terms used, but not defined herein, shall have the meanings given to such terms in the employment offer letter, by and
between the Company and the Optionee, dated as of October 3, 2017, as the same may be amended or restated from time to time. 
 1.
Exercisability Schedule. No portion of this Stock Option may be exercised until such portion shall have become exercisable as set forth in Schedule A. Except as set forth on Schedule A attached hereto, and subject to the
discretion of the Company’s Board of Directors or the Compensation Committee thereof (the “Administrator”) to accelerate the exercisability schedule hereunder, this Stock Option shall be exercisable with respect to Option Shares so
long as Optionee remains an employee of the Company or a subsidiary thereof on the dates when such Option Shares are earned. 
 Once
exercisable, this Stock Option shall continue to be exercisable at any time or times prior to the close of business on the Expiration Date. 

2. Manner of Exercise. 

(a) The Optionee may exercise this Stock Option only in the following manner: from time to time on or prior to the Expiration Date of this
Stock Option, the Optionee may give written notice to the Company of his election to purchase some or all of the Option Shares purchasable at the time of such notice. This notice shall specify the number of Option Shares to be purchased. 

  

 Payment of the purchase price for the Option Shares may be made by one or more of the following
methods: (i) in cash, by certified or bank check or other instrument acceptable to the Company; (ii) through the delivery (or attestation to the ownership) of shares of the Company’s common stock (the “Stock”) that have been
purchased by the Optionee on the open market or that are beneficially owned by the Optionee and are not then subject to any restrictions under any Company plan and that otherwise satisfy any holding periods as may be required by the Company;
(iii) by the Optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the option
purchase price, provided that in the event the Optionee chooses to pay the option purchase price as so provided, the Optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the
Company shall prescribe as a condition of such payment procedure; (iv) by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Stock issuable upon exercise by the largest whole number of
shares with a fair market value that does not exceed the aggregate exercise price; or (v) a combination of (i), (ii), (iii) and (iv) above. Payment instruments will be received subject to collection. 

The transfer to the Optionee on the records of the Company or of the transfer agent of the Option Shares will be contingent upon (i) the
Company’s receipt from the Optionee of the full purchase price for the Option Shares, as set forth above, and (ii) the fulfillment of any other requirements contained herein or in any other agreement or provision of laws. In the event the
Optionee chooses to pay the purchase price by previously-owned shares of common stock through the attestation method, the number of shares of common stock transferred to the Optionee upon the exercise of the Stock Option shall be net of the shares
attested to. 
 (b) The shares of Stock purchased upon exercise of this Stock Option shall be transferred to the Optionee on the records of
the Company or of the transfer agent upon compliance to the satisfaction of the Company with all requirements under applicable laws or regulations in connection with such transfer and with the requirements hereof. The determination of the Company as
to such compliance shall be final and binding on the Optionee. The Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Stock subject to this Stock Option unless and until this
Stock Option shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to the Optionee, and the Optionee’s name shall have been entered as the stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such shares of Stock. 

(c) The minimum number of shares with respect to which this Stock Option may be exercised at any one time shall be 100 shares, unless the
number of shares with respect to which this Stock Option is being exercised is the total number of shares subject to exercise under this Stock Option at the time. 

(d) Notwithstanding any other provision hereof, no portion of this Stock Option shall be exercisable after the Expiration Date hereof. 

  
 2 

 3. Termination of Employment. If the Optionee’s employment by the Company or a
subsidiary thereof is terminated, the period within which to exercise the Stock Option may be subject to earlier termination as set forth below. 

(a) Termination Due to Death. If the Optionee’s employment terminates by reason of the Optionee’s death, any portion of this
Stock Option outstanding on such date, to the extent exercisable on the date of death, may thereafter be exercised by the Optionee’s legal representative or legatee for a period of 12 months from the date of death or until the Expiration Date,
if earlier. Any portion of this Stock Option that is not exercisable on the date of death shall terminate immediately and be of no further force or effect. 

(b) Termination Due to Disability. If the Optionee’s employment terminates by reason of the Optionee’s Disability, any portion
of this Stock Option outstanding on such date, to the extent exercisable on the date of such Disability, may thereafter be exercised by the Optionee for a period of 12 months from the date of Disability or until the Expiration Date, if earlier. Any
portion of this Stock Option that is not exercisable on the date of Disability shall terminate immediately and be of no further force or effect. 

(c) Other Termination. If the Optionee’s employment terminates for any reason other than the Optionee’s Death, or the
Optionee’s Disability, and unless otherwise determined by the Administrator, any portion of this Stock Option outstanding on such date may be exercised, to the extent exercisable on the date of termination, for a period of three months from the
date of termination or until the Expiration Date, if earlier. Any portion of this Stock Option that is not exercisable on the date of termination shall terminate immediately and be of no further force or effect. 

4. Transferability. This Agreement is personal to the Optionee, is non-assignable and is not
transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution. This Stock Option is exercisable, during the Optionee’s lifetime, only by the Optionee, and thereafter, only by the
Optionee’s legal representative or legatee. 
 5. Tax Withholding. The Optionee shall, not later than the date as of which the
exercise of this Stock Option becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Company for payment of any Federal, state, and local taxes required by law to be withheld on account
of such taxable event. The Company shall have the authority to cause the minimum required tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock to be issued to the Optionee a number of shares of Stock
with an aggregate fair market value that would satisfy the minimum withholding amount due. 
 6. No Obligation to Continue Employment.
Neither the Company nor any subsidiary thereof is obligated by or as a result of this Agreement to continue the Optionee in employment and this Agreement shall not interfere in any way with the right of the Company or any subsidiary to terminate the
employment of the Optionee at any time. 

  
 3 

 7. Integration. This Agreement constitutes the entire agreement between the parties with
respect to this Stock Option and supersedes all prior agreements and discussions between the parties concerning such subject matter. 
 8.
Data Privacy Consent. In order to administer this Agreement and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process
any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of
the Plan and/or this Agreement (the “Relevant Information”). By entering into this Agreement, the Optionee (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information;
(ii) waives any privacy rights the Optionee may have with respect to the Relevant Information; (iii) authorizes the Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the
Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate. The Optionee shall have access to, and the right to change, the Relevant Information. Relevant Information will only be used in accordance with applicable
law. 
 9. Notices. Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be
mailed or delivered to the Optionee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing. 

 

			
	ZAFGEN, INC.
		
	By:	 	 /s/ Patricia Allen

		 	Name: Patricia Allen

 The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned.
Electronic acceptance of this Agreement pursuant to the Company’s instructions to the Optionee (including through an online acceptance process) is acceptable. 
  

					
	Dated: October 9, 2017	  	                            	  	 /s/ Jeffrey Hatfield

		  		  	Jeffrey Hatfield

  
 4 

 Schedule A 

Vesting Terms 
 [Omitted]

  
 5

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