As filed with the Securities and Exchange Commission
on May 31, 2024
Registration Statement No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MUSTANG BIO, INC.
(Exact name of registrant as specified in its
charter)
Delaware
(State or other jurisdiction of
incorporation or organization) |
47-3828760
(I.R.S. Employer
Identification No.) |
377 Plantation Street
Worcester, Massachusetts 01605
(781) 652-4500
(Address, including zip code, and telephone number,
including
area code, of registrant’s principal executive offices)
Manuel Litchman, M.D.
President and Chief Executive Officer
377 Plantation Street
Worcester, Massachusetts 01605
(781) 652-4500
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
With a copy to:
Rakesh Gopalan
Joseph Walsh
Troutman Pepper Hamilton Sanders LLP
301 S. College Street, 34th Floor
Charlotte, NC 28202
(704) 998-4050
Approximate date of commencement of proposed
sale to the public: From time to time after the effective date of this registration statement.
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please
check the following box: ¨
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check
the following box: x
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. ¨
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following
box. ¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨ |
Accelerated filer ¨ |
Non-accelerated filer x |
Smaller reporting company x |
Emerging growth company ¨ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨
The Registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This registration statement contains two prospectuses:
| · | a base prospectus, which covers the
offering, issuance and sale by us of up to $40,000,000 in the aggregate of our common stock,
preferred stock, warrants, debt securities and/or units consisting of some or all of
these securities; and |
| · | an At the Market Offerring Agreement
(“sales agreement”) prospectus covering the offering, issuance and sale by us
of up to a maximum aggregate offering price of $5,600,000 of our common stock that may be
issued and sold under the sales agreement dated May 31, 2024, with H.C. Wainwright &
Co., LLC. |
The base prospectus immediately follows this
explanatory note. The specific terms of any securities to be offered pursuant to the base prospectus will be specified in a prospectus
supplement to the base prospectus. The sales agreement prospectus immediately follows the base prospectus. Upon termination of the sales
agreement with H.C. Wainwright & Co., LLC, any portion of the $5,600,000 included in the sales agreement offering prospectus
that remains unsold pursuant to the sales agreement will be available for sale in other offerings pursuant to the base prospectus and
a corresponding prospectus supplement, and if no shares are sold under the sales agreement, the full $5,600,000 of securities not sold
may be sold in other offerings pursuant to the base prospectus and a corresponding prospectus supplement.
The information in this prospectus
is not complete and may be changed. We may not sell these securities or accept an offer to buy these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and
it is not soliciting offers to buy these securities in any jurisdiction where such offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED
MAY 31, 2024
PROSPECTUS
$40,000,000
Common Stock
Preferred Stock
Warrants
Debt Securities
Units
The following are types of securities that we
may offer, issue and sell from time to time, together or separately:
| · | shares
of our common stock; |
| · | shares of our preferred stock; |
| · | warrants; |
| · | debt securities; and |
| · | units consisting of any combination of our common stock, preferred stock,
warrants or debt securities. |
We may offer these securities in amounts, at
prices, and on terms determined at the time of offering, up to an aggregate amount of $40 million; however, as of the date of this prospectus,
under the limitations described below, we are currently only eligible to sell approximately $5.6 million of securities. We may sell these
securities directly to you through agents we select or through underwriters and dealers we select. If we use agents, underwriters or
dealers to sell these securities, we will name them and describe their compensation in a prospectus supplement. See “Plan of
Distribution.” You should read this prospectus and any applicable prospectus supplement carefully before you invest.
This prospectus provides a general description
of the securities we may offer. Each time we sell securities, we will provide specific terms of the securities offered in a supplement
to this prospectus. The prospectus supplement may also add, update or change information contained in this prospectus. You should read
this prospectus and the applicable prospectus supplement carefully, together with additional information described under the heading
“Where You Can Find More Information,” before you invest in any securities. This prospectus may not be used to consummate
a sale of securities unless accompanied by the applicable prospectus supplement.
Our common stock is traded on the Nasdaq Capital
Market under the symbol “MBIO.” On May 30, 2024, the per share closing price of our common stock as reported on the
Nasdaq Capital Market was $0.2114 per share.
The aggregate market value of our outstanding
common stock held by non-affiliates is approximately $26.5 million, which was calculated in accordance with General Instruction I.B.6
of Form S-3, based on 27,390,295 shares of common stock outstanding as of May 30, 2024, of which 25,284,938 shares are held
by non-affiliates, at the closing share price of $1.05 on April 1, 2024, which was the highest closing price of our common stock
reported on the the Nasdaq Capital Market within the last 60 days prior to the date of this filing.
In this prospectus we are offering up to $40
million of securities; however, pursuant to General Instruction I.B.6 of Form S-3, in no event will we
sell the securities described in this prospectus in a primary public offering with a value exceeding more than one-third of the aggregate
market value of our common stock held by non-affiliates in the twelve month period prior to the date of the sale of any such securities,
so long as the aggregate market value of our outstanding common stock held by non-affiliates remains below $75.0 million. As of the date
of this prospectus, under such rules and including our prior sales within the twelve-month period, we are only eligible to sell
up to approximately $5.6 million, of securities, until our circumstances, as described, change.
Investing in our securities involves a high
degree of risk. You should review carefully the risks and uncertainties described under the heading “Risk Factors” contained
in the applicable prospectus supplement and any related free writing prospectus, and under similar headings in the other documents that
are incorporated by reference into this prospectus as described on page 10 of this prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION
NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is ,
2024.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
In this prospectus, unless the context suggests
otherwise, references to “Mustang Bio,” “Mustang,” the “Company,” “we,” “us”
and “our” refer to Mustang Bio, Inc.
This prospectus is part of a “shelf”
registration statement that we filed with the Securities and Exchange Commission (“SEC”). By using a shelf registration statement,
we may sell our securities, as described in this prospectus, from time to time in one or more offerings. This prospectus provides you
with a general description of the securities offered by us. Each time we sell securities, we will provide a prospectus supplement to
this prospectus that contains specific information about the terms of such offering. The prospectus or prospectus supplement may also
add, update or change information contained in this prospectus.
You should rely only on the information contained
or incorporated by reference in this prospectus and any prospectus supplement or issuer free writing prospectus relating to a particular
offering. No person has been authorized to give any information or make any representations in connection with this offering other than
those contained or incorporated by reference in this prospectus, any accompanying prospectus supplement and any related issuer free writing
prospectus in connection with the offering described herein and therein, and, if given or made, such information or representations must
not be relied upon as having been authorized by us. Neither this prospectus nor any prospectus supplement nor any related issuer free
writing prospectus shall constitute an offer to sell or a solicitation of an offer to buy offered securities in any jurisdiction in which
it is unlawful for such person to make such an offering or solicitation. This prospectus does not contain all of the information included
in the registration statement. For a more complete understanding of the offering of the securities, you should refer to the registration
statement, including its exhibits. You should read the entire prospectus and any prospectus supplement and any related issuer free writing
prospectus, as well as the documents incorporated by reference into this prospectus or any prospectus supplement or any related issuer
free writing prospectus, before making an investment decision. Neither the delivery of this prospectus or any prospectus supplement or
any issuer free writing prospectus nor any sale made hereunder shall under any circumstances imply that the information contained or
incorporated by reference herein or in any prospectus supplement or issuer free writing prospectus is correct as of any date subsequent
to the date hereof or of such prospectus supplement or issuer free writing prospectus, as applicable.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE
A SALE OF SECURITIES UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
PROSPECTUS SUMMARY
This summary highlights selected information
from this prospectus and does not contain all of the information that may be important to you in making an investment decision. This
summary is qualified in its entirety by the more detailed information included elsewhere in this prospectus and/or incorporated by reference
herein. Before making your investment decision with respect to our securities, you should carefully read this entire prospectus, including
the information in our filings with the SEC incorporated by reference into this prospectus.
Our Business
Overview and Product Candidate Development
We are a clinical-stage biopharmaceutical company
focused on translating today’s medical breakthroughs in cell and gene therapies into potential cures for hematologic cancers, solid
tumors and rare genetic diseases. We aim to acquire rights to these technologies by licensing or otherwise acquiring an ownership interest
in the technologies, funding their research and development and eventually either out-licensing or bringing the technologies to market.
Our pipeline is currently focused in two core
areas: CAR T therapies for hematologic malignancies and CAR T therapies for solid tumors. For these therapies we have partnered with
world class research institutions, including the City of Hope National Medical Center (“COH” or “City of Hope”),
Fred Hutchinson Cancer Center (“Fred Hutch”), Nationwide Children’s Hospital (“Nationwide”) and the Mayo
Foundation for Medical Education and Research (“Mayo Clinic”).
CAR T Therapies
Our pipeline of CAR T therapies is being developed
under exclusive licenses from several world class research institutions. Our strategy is to license these technologies, support preclinical
and clinical research activities by our partners and transfer the underlying technology to our or our contract manufacturer’s cell
processing facility in order to conduct our own clinical trials.
We are developing CAR T therapy for hematologic
malignancies in partnership with Fred Hutch targeting CD20 (MB-106). In May 2021, we announced that the U.S. Food and Drug Administration
(“FDA”) accepted our Investigational New Drug (“IND”) Application for MB-106. As of December 2023, approximately
40 patients have been treated in an ongoing phase 1 clinical trial sponsored by Fred Hutch (ClinicalTrials.gov Identifier: NCT03277729),
and approximately 20 patients have been treated in an ongoing phase 1 clinical trial sponsored by us (ClinicalTrials.gov Identifier:
NCT05360238). In 2023, we received Safety Review Committee approval to continue dose escalation in all three active arms of the ongoing
Mustang-sponsored phase 1 trial. We presented the latest results, demonstrating a favorable safety profile, complete response rate, and
durability, from the ongoing Mustang-sponsored phase 1 trial at the 2023 American Society of Hematology (“ASH”) Annual Meeting.
As of December 31, 2023, the MB-106 Mustang-sponsored phase 1 trial is pending one patient to complete the final dose level required
to advance to phase 2 pivotal studies for treatment of patients with relapsed or refractory indolent B-cell non-Hodgkin lymphoma.
We are also developing CAR T therapy for solid
tumors in partnership with COH targeting IL13Rα2 (MB-101). In addition, we have partnered with Nationwide for a herpes simplex
virus type 1 (“HSV-1”) oncolytic virus (MB-108) in order to enhance the activity of MB-101 for the treatment of patients
with high-grade malignant brain tumors. The Phase 1 clinical trial sponsored by COH for MB-101 (ClinicalTrials.gov Identifier: NCT02208362)
has completed the treatment phase and patients continue to be assessed for long-term safety. A Phase 1 clinical trial sponsored by the
University of Alabama at Birmingham (“UAB”) for MB-108 (ClinicalTrials.gov Identifier: NCT03657576) began during the third
quarter of 2019. In October 2023, we announced that the FDA accepted our IND application for the combination of MB-101 and MB-108
– which is referred to as MB-109 – for the treatment of patients with IL13Rα2+relapsed or refractory glioblastoma
(“GBM”) and high-grade astrocytoma.
Finally, we are collaborating with the Mayo Clinic
to develop a novel technology that may be able to transform the administration of CAR T therapies and potentially be used as an off-the-shelf
therapy. We are evaluating plans to file an IND application for a multicenter Phase 1 clinical trial once a lead construct has been identified,
subject to allocation of resources.
On May 18, 2023, we announced a series of
changes resulting from a review of our portfolio of product candidates to determine the future strategy of our programs and the proper
allocation of our resources. Following this review, we determined to discontinue development of our MB-102 (CD123), MB-103 (HER2), MB-104
(CS1) and MB-105 (PSCA) programs, all of which were CAR T therapies being developed in partnership with City of Hope.
Terminated Gene Therapy Product Candidates
We formerly developed several gene therapy product
candidates, which included MB-117 and MB-217 (based on technologies licensed from St. Jude Children’s Research Hospital (“St.
Jude”)) and MB-110 (based on technologies licensed from Leiden University Medical Centre (“LUMC”)). In April 2024,
we entered into a termination and release agreement with St. Jude, pursuant to which we agreed to terminate the license agreement underpinning
the MB-117 and MB-217 product candidates in exchange for a mutual release of liability and forgiveness by St. Jude of all amounts previously
owing to them. Also in April 2024, we delivered a termination notice to LUMC pursuant to which we terminated the license agreement
underpinning the MB-110 product candidate; we are currently in discussions with LUMC regarding the terms that will govern such termination.
To date, we have not received approval for the
sale of any of our product candidates in any market and, therefore, have not generated any product sales from our product candidates.
In addition, we have incurred substantial operating losses since our inception, and expect to continue to incur significant operating
losses for the foreseeable future and may never become profitable. As of March 31, 2024, we had an accumulated deficit of $386.2
million.
Therapeutic Pipeline
Therapies for Oncology and Hematologic
Malignancies
MB - 106 (CD20 CAR T for B cell non-Hodgkin
lymphoma (NHL) and chronic lymphocytic leukemia (CLL))
We believe CD20 is a promising target for immunotherapy
of B-cell malignancies. CD20 is a B-cell lineage-specific phosphoprotein that is expressed in high, homogeneous density on the surface
of more than 95% of B-cell NHL and CLL. CD20 is stable on the cell surface with minimal shedding, internalization, or modulation upon
antibody binding and is present at only nanomolar levels as a soluble antigen. It is well established as an effective immunotherapy target,
with extensive studies demonstrating improved tumor responses and survival of B-NHL patients treated with rituximab and other anti-CD20
antibodies. Importantly, CD20 continues to be expressed on the lymphoma cells of most patients with relapsed B-NHL despite repetitive
rituximab treatments, and loss of CD20 expression is not a major contributor to treatment resistance. Thus, there is strong rationale
for testing CD20 CAR T cells as an immunotherapy for NHL.
More than 80,000 new cases of NHL are diagnosed
each year in the United States, and over 20,000 patients die of this group of diseases annually. Most forms of NHL, including follicular
lymphoma, mantle cell lymphoma, marginal zone lymphoma, lymphoplasmacytic lymphoma, and small lymphocytic lymphoma (“SLL”),
which account collectively for approximately 45% of all cases of NHL, are incurable with available therapies, except for allogenic stem
cell transplant (“allo-SCT”). However, many NHL patients are not suitable candidates for allo-SCT, and this treatment is
also limited by significant rates of morbidity and mortality due to graft-versus-host disease. Aggressive B-cell lymphomas such as diffuse
large B-cell lymphoma, the most common subtype of lymphoma, account for an additional 30-35% of NHL. The majority of patients with aggressive
B-NHL are successfully treated with combination chemotherapy, but a significant proportion relapse or have refractory disease, and the
outcome of these patients is poor. Innovative new treatments are therefore urgently needed.
Chronic lymphocytic leukemia/small lymphocytic
lymphoma (CLL/SLL) is a mature B cell neoplasm characterized by a progressive accumulation of monoclonal B lymphocytes. CLL is considered
to be identical (i.e., one disease with different manifestations) to the NHL SLL. The malignant cells seen in CLL and SLL have identical
pathologic and immunophenotypic features. The term CLL is used when the disease manifests primarily in the blood, whereas the term SLL
is used when involvement is primarily nodal.
CLL is the most common leukemia in adults in
Western countries, accounting for approximately 25 to 35 percent of all leukemias in the United States. An estimated 20,700 new cases
of CLL will be diagnosed in the United States in 2024. CLL is considered to be mainly a disease afflicting older adults, with a median
age at diagnosis of approximately 70 years; however, it is not unusual to make this diagnosis in younger individuals (e.g., from approximately
30 to 39 years of age). The incidence increases rapidly with increasing age. The natural history of CLL is extremely variable, with survival
times from initial diagnosis that range from approximately 2 to 20 years, and a median survival of approximately 10 years.
Most
patients will have a complete or partial response to initial therapy. However, conventional therapy for CLL is not curative and most
patients experience relapse. In addition, many patients will require a change in therapy due to intolerance. Since patients with
CLL are generally elderly with a median age older than 70 years, and due to the relatively benign course of the disease in the majority
of patients, only selected patients are candidates for intensive treatments such as allo-SCT. Innovative new treatments with
a favorable safety profile are therefore urgently needed for patients with relapsed and refractory disease.
Under their IND, Fred Hutch is currently conducting
a Phase 1/2 clinical study to evaluate the anti-tumor activity and safety of administering CD20-directed third-generation CAR T cells
incorporating both 4-1BB and CD28 co-stimulatory signaling domains (MB-106) to patients with relapsed or refractory B-cell NHL or CLL
(ClinicalTrials.gov Identifier: NCT03277729). Secondary endpoints of this study include safety and toxicity, preliminary antitumor activity
as measured by overall response rate and complete remission rate, progression-free survival, and overall survival. The study is also
assessing CAR T cell persistence and the potential immunogenicity of the cells. Finally, this study was designed so that, together with
Fred Hutch, we could determine a recommended Phase 2 dose. Fred Hutch intends to enroll approximately 50 subjects in this study, which
is being led by the Principal Investigator Mazyar Shadman, M.D., M.P.H., Associate Professor of Fred Hutch’s Clinical Research
Division.
The Fred Hutch IND was amended in 2019 to incorporate
an optimized manufacturing process that had been developed in collaboration with us.
In May 2021, we announced that the FDA issued
a safe to proceed letter for our IND application allowing for initiation of a multi-center Phase 1/2 clinical study of MB-106 in patients
with relapsed or refractory B cell NHL or CLL (Clinicaltrials.gov Identifier: NCT05360238). In August 2022, the first patient was
treated in our study.
In November 2021, Mustang was awarded a
grant of approximately $2.0 million from NCI of the National Institutes of Health. This two-year award partially funded the Mustang-sponsored
multicenter trial to assess the safety, tolerability and efficacy of MB-106. In August 2023, we fully utilized the grant.
In June 2022, MB-106 received Orphan Drug Designation for the
treatment of Waldenstrom macroglobulinemia (“WM”).
In December 2023, we presented preliminary
clinical data for the indolent lymphoma patients treated in the ongoing Phase 1/2 clinical study at the American Society of Hematology
(ASH) annual meeting. All 9 patients responded clinically to treatment; the observed overall response rate was 100%. All 5 follicular
lymphoma patients achieved a complete response. Among the WM patients 1 patient attained a very good partial response, and 2 patients
attained a partial response. The single patient with a hairy cell leukemia variant experienced stable disease. The safety profile demonstrated
that MB-106 was well tolerated with no occurrences of cytokine release syndrome (“CRS”) above grade 1, and no immune effector
cell-associated neurotoxicity syndrome (“ICANS”) of any grade was reported. Cell expansion and persistence were also demonstrated.
In the first quarter of 2024, we completed a
successful End-of-Phase 1 meeting with the FDA regarding a potential pivotal Phase 2 single-arm clinical trial for the treatment of WM.
Per the discussions, the FDA agreed with the proposed overall design of the pivotal trial for WM at the recommended dose of 1 x 107 CAR-T
cells/kg and requested only minimal modifications to the study protocol. No additional nonclinical studies are expected prior to Phase
2 or a Biologics License Application ("BLA") filing. Due to limited resources, and as a result of the reduction in work force
described below, we do not expect to initiate our pivotal Phase 2 single-arm clinical trial of MB-106 for the treatment of WM trial in
2024. Subject to available funds, we intend to rely on third party service providers to conduct study and manufacturing services to advance
our priority potential product candidates.
Also in the first quarter of 2024, we completed
enrollment of the indolent lymphoma arm in our multicenter Phase 1 trial. The tenth and final patient enrolled was a patient with follicular
lymphoma (FL) who achieved a complete response following treatment with 1 x 107 CAR-T cells/kg. As a result, the overall
complete response rate for FL in the Phase 1 portion of this trial was sustained at 100% (N=6), with no occurrence of CRS above grade
1 and no ICANS of any grade, despite not using prophylactic tocilizumab or dexamethasone.
In March 2024, we announced plans to collaborate
with Fred Hutch for a proof-of-concept Phase 1 investigator-sponsored clinical trial evaluating MB-106 in autoimmune diseases.
In March 2024, we were granted the Regenerative
Medicine Advanced Therapy (“RMAT”) designation by the FDA for the treatment of relapsed or refractory CD20 positive WM and
FL, based on potential improvement in response as seen in clinical data-to-date. Drugs eligible for RMAT designation are those intended
to treat, modify, reverse or cure a serious or life-threatening disease or condition, and that present preliminary clinical evidence
indicating the drug has the potential to address unmet medical needs for such disease or condition. RMAT designation provides regenerative
medicine advanced therapy products with the same benefits to expedite the development and review of a marketing application that are
available to drugs that receive Breakthrough Therapy Designation. These advantages include timely advice and interactive communications
with FDA, as well as proactive and collaborative involvement by senior FDA managers and experienced review and regulatory health project
management staff. A product designated as an RMAT also may be eligible for other FDA-expedited programs, such as Priority Review. The
FDA also may conduct a rolling review of products in its expedited programs, reviewing portions of a marketing application before the
complete application is submitted.
MB-109: Combination MB-101(IL13Rα2 CAR
T Cell Program for Glioblastoma) and MB-108 (HSV-1 oncolytic virus C134) as a Potential Treatment for IL13Rα2+ Relapsed or Refractory
Glioblastoma (GBM) and High-Grade Astrocytoma
An attractive novel approach to control glioblastoma
is adoptive cellular immunotherapy utilizing CAR T cells. CAR T cells can be engineered to recognize very specific antigenically distinct
tumor populations and to migrate through the brain parenchyma to kill malignant cells. In addition, oncolytic viruses (“OVs”)
have been developed to effectively infect and kill cancer cells in the tumor, as well as modify the microenvironment to increase tumor
immunogenicity and immune cell trafficking within the tumor. Due to these properties, OVs have been studied in combination with other
treatments to enhance the effectiveness of immunotherapies.
Preliminary anti-tumor activity has been observed
in clinical studies administering the OV (MB-108) and CAR T cell therapy (MB-101) as single agents; however, the combination has not
yet been explored. To determine if the combination of both therapies will result in a synergistic effect, investigators from COH developed
preclinical studies in orthotopic GBM models in nude mice. Dr. Christine Brown from City of Hope presented these preclinical studies
at the American Association for Cancer Research 2022 Annual Meeting. It was observed that co-treatment with HSV-1 OV and IL13Rα2-directed
CAR-T cells resulted in no additional adverse events beyond those seen with the individual therapies, and, more notably, that pre-treatment
with HSV-1 OV re-shaped the tumor microenvironment by increasing immune cell infiltrates and enhanced the efficacy of sub-therapeutic
doses of IL13Rα2-directed CAR-T cell therapy delivered either intraventricularly or intratumorally. These preclinical studies aimed
to provide a deeper understanding of this combination approach to support the potential benefit of a combination study that will evaluate
HSV-1 OV (MB-108) and IL13Rα2-directed CAR-T cells (MB-101).
In
October 2023, we received a safe-to-proceed “approval” from the FDA for our MB-109 IND application allowing us to initiate
a Phase 1, open-label, non-randomized, multicenter study of MB-109 in patients with IL13Ra2+
recurrent GBM and high-grade astrocytoma. In this Phase 1 clinical study, we intend to evaluate the combination of CAR-T cells (MB-101)
and the herpes simplex virus type 1 oncolytic virus (MB-108) in patients with IL13Ra2+ high-grade
gliomas. The design of this study involves first a lead in cohort, wherein patients are treated with MB-101 alone without prior MB-108
administration. After successful confirmation of the safety profile of MB-101 alone, the study will then investigate increasing doses
of intratumorally administered MB-108 followed by dual intratumoral (ICT) and intraventricular (ICV) administration of MB-101. Due to
limited resources, we do not currently expect to initiate this study until such time, if any, that additional resources become available
to us.
MB-101 (IL13Rα2 CAR T Cell Program for
Glioblastoma)
GBM is the most common brain and central nervous
system (“CNS”) cancer, accounting for approximately 49.1% of malignant primary brain and CNS tumors, approximately 54% of
all gliomas, and approximately 16% of all primary brain and CNS tumors. More than 14,490 new GBM cases were predicted to be diagnosed
in the U.S. for 2023. Malignant brain tumors are the second leading cause of cancer-related deaths in adolescents and young adults aged
15-39 and the most common cancer occurring among 15-19-year-olds in the U.S. While GBM is a rare disease 2-3 cases per 100,000 persons
per year in the U.S. and European Union (“EU”), it is quite lethal, with five-year survival rate historically under
10%, which has been virtually unchanged for decades. Standard of care therapy consists of maximal surgical resection, radiation, and
chemotherapy with temozolomide, which, while rarely curative, is shown to extend median overall survival from 4.5 to 15 months.
GBM remains difficult to treat due to the inherent resistance of the tumor to conventional therapies.
Immunotherapy approaches targeting brain tumors
offer promise over conventional treatments. IL13Rα2 is an attractive target for CAR T therapy, as it has limited expression
in normal tissue but is overexpressed on the surface of greater than 50% of GBM tumors. CAR-T cells are designed to express membrane-tethered
IL-13 receptor ligand (“IL-13”) mutated at a single site (glutamic acid at position 13 to a tyrosine; E13Y) with high affinity
for IL13Rα2 and reduced binding to IL13Rα1 in order to reduce healthy tissue targeting (Kahlon KS et al. Cancer Research. 2004;64:9160-9166).
We are developing an optimized CAR-T product
incorporating enhancements in CAR-T design and T cell engineering to improve antitumor potency and T cell persistence. These include
a second-generation hinge-optimized CAR containing mutations in the IgG4 linker to reduce off-target Fc interactions (Jonnalagadda M et
al. Molecular Therapy. 2015;23(4):757-768.), a 4-1BB (CD137) co-stimulatory signaling domain for improved survival and maintenance
of CAR T cells, and the extracellular domain of CD19 as a selection/tracking marker. In order to further improve persistence, either
central memory T-cells (TCM) or enriched CD62L+ naïve and memory T cells (TN/MEM) are isolated and enriched.
Our manufacturing process limits ex vivo expansion, which is designed to reduce T cell exhaustion and maintain a TCM or
TN/MEM phenotype. Based on experiments with CAR-Ts in mouse xenograft models of GBM, these CAR-modified TCM and
TN/MEM cells have been shown to be more potent and persistent than earlier generations of CAR-T cells.
Our academic partners at COH have recently completed the treatment
phase of their Phase 1 study, which was designed to assess the feasibility and safety of using TCM or TN/MEM enriched
IL13Rα2-specific CAR-engineered T cells for clinical study participants with IL13Rα2 recurrent/refractory malignant glioma
(ClinicalTrials.gov Identifier: NCT02208362). In this study, COH enrolled and treated 65 patients, with 58 patients receiving 3 cycles
of CAR T cells per the study protocol. MB-109: Combination MB-101(IL13Rα2 CAR T Cell Program for Glioblastoma) and MB-108 (HSV-1
oncolytic virus C134) as a Potential Treatment for IL13Rα2+ Relapsed or Refractory Glioblastoma (GBM) and High-Grade Astrocytoma.
Preliminary data indicated that the CAR-T cells were well tolerated, and no dose-limiting toxicities were observed in any of the study
arms nor where there any occurrences of CRS or treatment-related deaths. Of the 58 patients evaluable for disease response, 50% achieved
stable disease (SD) or better; 22%, including 8 patients with grade 4 gliomas, achieved SD or better for at least 90 days. Two patients
achieved partial response, and one patient achieved complete response on the study. In 2016 COH reported that a patient had achieved
a complete response to treatment based on the imaging and clinical features set forth by the Response Assessment in Neuro-Oncology Criteria
(“RANO”). This result was published as a case report in the New England Journal of Medicine (Brown CE et
al. NEJM. 2016;375:2561-9). As described in the paper, this patient diagnosed with recurrent multifocal glioblastoma
received multiple infusions of IL13Rα2-specific CAR-T cells over 220 days through two intracranial delivery routes –
infusions into the resected tumor cavity followed by infusions into the ventricular system. Intracranial infusions of IL13Rα2-targeted
CAR-T cells were not associated with any toxic effects of grade 3 or higher. After CAR-T cell treatment, regression of all intracranial
and spinal tumors was observed, along with corresponding increases in levels of cytokines and immune cells in the cerebrospinal fluid.
This clinical response was sustained for 7.5 months after the initiation of CAR T-cell therapy; however, the patient’s disease
eventually recurred at four new locations that were distinct and non-adjacent to the original tumors, and biopsy of one of these lesions
showed decreased expression of IL13Rα2.
Results from this COH study have laid the foundation
for potentially three new MB-101 studies listed below. Due to limited resources, we do not expect to initiate these studies until such
time, if any, that additional resources become available to us.
1. MB-101
with or without nivolumab and ipilimumab in treating patients with recurrent or refractory glioblastoma (currently enrolling patients;
ClinicalTrials.gov Identifier: NCT04003649) sponsored by COH;
2. MB-101
in treating patients with recurrent or refractory glioblastoma with a substantial component of leptomeningeal disease (currently
enrolling patients; ClinicalTrials.gov Identifier: NCT04661384) sponsored by COH;
3. MB-101
in combination with the herpes simplex virus type 1 oncolytic virus (MB-108) in treating patients with recurrent or refractory glioblastoma
or high-grade astrocytoma, as described above. This combination therapy, to be administered in a phase 1 two-center trial under our IND,
will be referred to as MB-109.
MB - 108 (HSV 1 oncolytic virus C134)
MB-108 is a next-generation oncolytic herpes
simplex virus (“oHSV”) that is conditionally replication competent; that is, it can replicate in tumor cells, but not in
normal cells, thus killing the tumor cells directly through this process. Replication of C134 in the tumor itself not only kills the
infected tumor cells but causes the tumor cell to act as a factory to produce new virus. These virus particles are released as the tumor
cell dies and can then proceed to infect other tumor cells in the vicinity and continue the process of tumor kill. In addition to this
direct oncolytic activity, the virus promotes an immune response against surviving tumor cells, which increases the antitumor effect
of the therapy. The virus expresses a gene from another virus from the same overall virus family, human cytomegalovirus, which allows
it to replicate better in the tumor cells than its first-generation predecessors. However, the virus has also been genetically engineered
to minimize the production of any toxic effects for the patient receiving the therapy.
To improve this virus over its first-generation
predecessors, modifications have focused on improving viral replication and spread within the tumor bed and on enhancing bystander damage
to uninfected tumor cells. These effects cumulatively should result in converting an immunologically cold tumor to an immunologically
hot tumor, which we anticipate will increase the efficacy of our IL13Rα2 directed CAR T for the treatment of GBM and high-grade
astrocytoma.
The O’Neal Comprehensive Cancer Center
at the UAB is the single clinical trial site for the Phase 1 trial of MB - 108, and this site has initiated a Phase 1 trial that began
enrolling patients in 2019 (ClinicalTrials.gov Identifier: NCT03657576). The primary objective of this study is to determine the safety
and tolerability of a single dose of MB-108 administered via a stereotactic intracerebral injection and to determine the maximally tolerated
dose (“MTD”) of the oncolytic virus. Secondary objectives are to obtain preliminary information about the potential benefit
of MB - 108 in the treatment of patients with recurrent malignant gliomas, including relevant data on markers of efficacy, including
time to tumor progression and patient survival. As of April 2023, 9 patients had been enrolled in this study.
In Vivo CAR T Platform
Technology
We are collaborating with the Mayo Clinic to
develop a novel technology that may be able to transform the administration of CAR T therapies and potentially be used as an off-the-shelf
therapy. The technology, developed by Larry R. Pease, Ph.D., principal investigator and former director of the Center for Immunology
and Immune Therapies at Mayo Clinic, is a new platform to administer CAR T therapy using a two-step approach. First, a peptide is administered
to the patient to drive the proliferation of the patient’s resident T cells. This is followed by the administration of a viral
CAR construct directly into the lymph nodes of the patient. In turn, the viral construct infects the activated T cells and effectively
forms CAR T cells in vivo in the patient. Successful implementation may lead to an off-the-shelf product with no need to isolate and
expand patient T cells ex vivo in a cell processing facility.
Preclinical proof-of-concept has been established, and the ongoing
development of this technology will take place at Mayo Clinic. We are evaluating plans to file an IND application for a multicenter Phase
1 clinical trial once a lead construct has been identified, subject to allocation of resources.
Recent Developments
Sale of Manufacturing Facility – Overview
of Transaction
On May 18, 2023, we entered into an Asset
Purchase Agreement (the “Original Asset Purchase Agreement”) with uBriGene (Boston) Biosciences, Inc., a Delaware corporation
(“uBriGene”), pursuant to which we agreed to sell our leasehold interest in our cell processing facility located in Worcester,
Massachusetts (the “Facility”), and associated assets relating to the manufacturing and production of cell and gene therapies
at the Facility to uBriGene (the “Transaction”). We and uBriGene subsequently entered into Amendment No. 1, dated as
of June 29, 2023, and Amendment No. 2, dated as of July 28, 2023, to the Original Asset Purchase Agreement (the Original
Asset Purchase Agreement, as so amended, the “Asset Purchase Agreement”).
On July 28, 2023 (the “Closing Date”),
pursuant to the Asset Purchase Agreement, we completed the sale of all of our assets that primarily relate to the manufacturing and production
of cell and gene therapies at the Facility (such operations, the “Transferred Operations” and such assets, the “Transferred
Assets”) to uBriGene for upfront consideration of $6 million cash (the “Base Amount”). The Transferred Assets that
were transferred to uBriGene on the Closing Date include, but are not limited to: (i) our leases of equipment and other personal
property and all other property, equipment, machinery, tools, supplies, inventory, fixtures and all other personal property primarily
related to the Transferred Operations, (ii) the data, information, methods, quality management systems, and intellectual property
primarily used for the purposes of the Transferred Operations, (iii) the records and filings, including customer and vendor lists,
production data, standard operating procedures and business records relating to, used in or arising under the Transferred Operations
and (iv) all transferrable business license, permits and approvals necessary to operate the Transferred Operations. As described
in greater detail below, certain Transferred Assets, including our lease of the Facility and contracts that are primarily used in the
Transferred Operations (the “Transferred Contracts”) did not transfer to uBriGene on the Closing Date.
Voluntary Notice to U.S. Committee on Foreign
Investment in the United States
uBriGene is an indirect, wholly owned subsidiary
of UBrigene (Jiangsu) Biosciences Co., Ltd., a Chinese contract development and manufacturing organization. Under the Asset Purchase
Agreement, we and uBriGene agreed to use our reasonable best efforts to obtain clearance for the Transaction from the U.S. Committee
on Foreign Investment in the United States (“CFIUS”), although obtaining such clearance was not a condition to closing the
Transaction. In accordance with the Asset Purchase Agreement, we and uBriGene previously submitted a voluntary joint notice to CFIUS
on August 10, 2023.
Following an initial 45-day review period and
subsequent 45-day investigation period, on November 13, 2023, CFIUS requested that we and uBriGene withdraw and re-file our joint
voluntary notice to allow more time for review and discussion regarding the nature and extent of national security risk posed by the
Transaction. Upon CFIUS’s request, we and uBriGene submitted a request to withdraw and re-file our joint voluntary notice to CFIUS,
and on November 13, 2023, CFIUS granted this request, accepted the joint voluntary notice and commenced a new 45-day review period
on November 14, 2023. CFIUS’s 45-day review ended on December 28, 2023. Since CFIUS had not concluded its review by December 28,
2023, the proceeding transitioned to a subsequent 45-day investigation period, which ended on February 12, 2024.
Following the 45-day review period and subsequent
45-day investigation period described above, on February 12, 2024, we and uBriGene requested permission to withdraw and re-file
our joint voluntary notice to allow more time for review and discussion regarding the nature and extent of national security risk posed
by the Transaction. Upon our joint request to withdraw and re-file their joint voluntary notice to CFIUS, on February 12, 2024,
CFIUS granted this request, accepted the joint voluntary notice and commenced a new 45-day review period on February 13, 2024. CFIUS’s
new 45-day review ended on March 28, 2024. Because CFIUS had not yet concluded its action, the proceeding transitioned to a second
45-day phase as CFIUS further investigated the Transaction. On March 28, 2024, CFIUS advised us that its investigation would be
completed no later than May 13, 2024.
On May 13, 2024, together with uBriGene and CFIUS, we executed
a National Security Agreement (the “NSA”), pursuant to which we and uBriGene agreed to abandon the Transaction and all other
transactions contemplated by the Asset Purchase Agreement and the agreements entered into in connection therewith. The execution of the
NSA was the result of CFIUS’ determination that such transactions posed a risk to the national security of the United States. We
disagree with this position but did not feel a meaningful likelihood existed that the Transaction would be consummated in light of CFIUS’
objections. The NSA imposes certain conditions on us and uBriGene and its affiliates. Most significantly, we agreed (i) not to effect
the Transaction with uBriGene or any of its affiliates; and (ii) to appoint a point of contact representative with whom CFIUS and
uBriGene’s designated contact person may interact as needed. The NSA also obligates uBriGene to sell, or otherwise dispose of,
the equipment assets purchased within 180 days after the execution of the NSA, with uBriGene able to eliminate some of its obligations
under the NSA if it is able to sell the equipment assets purchased back to us within 45 days after the execution of the NSA.
Notification of Non-Compliance with Nasdaq
Continued Listing Requirements
On March 13, 2024, we received a deficiency
letter (the “Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market (“Nasdaq”)
notifying us that we were not in compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq
Capital Market under Nasdaq Listing Rule 5550(b)(1). Nasdaq Listing Rule 5550(b)(1) requires companies listed on The Nasdaq
Capital Market to maintain stockholders’ equity of at least $2,500,000 (the “Stockholders’ Equity Requirement”).
As of December 31, 2023, we reported stockholders’ equity of $123,000. The Letter further noted that as of its date, we did
not have a market value of listed securities of $35 million, or net income from continued operations of $500,000 in the most recently
completed fiscal year or in two of the last three most recently completed fiscal years, the alternative quantitative standards for continued
listing on the Nasdaq Capital Market.
The Letter had no immediate
effect on our continued listing on the Nasdaq Capital Market, subject to our compliance with the other continued listing requirements.
In accordance with Nasdaq rules, we were provided 45 calendar days, or until April 29, 2024, to submit a plan to regain compliance
(the “Compliance Plan”). We submitted our Compliance Plan on April 29, 2024 and the Staff granted the our request for
an extension of 180 calendar days through September 9, 2024 to regain compliance with the Stockholders Equity Requirement.
On May 16, 2024,
we received a notice (the “Second Letter”) from the Staff of Nasdaq indicating that the bid price of our common stock had
closed below $1.00 per share for 31 consecutive business days and, as a result, we were not in compliance with Nasdaq Listing Rule 5550(a)(2),
which sets forth the minimum bid price requirement for continued listing on the Nasdaq Capital Market. The Second Letter from Nasdaq
had no immediate effect on the listing of our common stock on Nasdaq. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we were afforded
a 180-calendar day grace period, or until November 12, 2024, to regain compliance with the bid price requirement. Compliance can
be achieved by evidencing a closing bid price of at least $1.00 per share for a minimum of ten consecutive business days (but generally
not more than 20 consecutive business days) during the 180-calendar day grace period.
If we do not regain
compliance with the bid price requirement by November 12, 2024, we may be eligible for an additional 180-calendar day compliance
period so long as it satisfies the criteria for initial listing on Nasdaq and the continued listing requirement for market value of publicly
held shares and we provide written notice to Nasdaq of our intention to cure the deficiency during the second compliance period by effecting
a reverse stock split, if necessary. In the event we are not eligible for the second grace period, Nasdaq staff will provide written
notice that our common stock is subject to delisting; however, we may request a hearing before the Nasdaq Hearings Panel (the “Panel”),
which request, if timely made, would stay any further suspension or delisting action by the Staff pending the conclusion of the hearing
process and expiration of any extension that may be granted by the Panel. There can be no assurance that we would be successful in our
efforts to maintain the listing of our common stock on the Nasdaq Capital Market.
April 2024 Reduction in Work Force
On April 10, 2024,
our board of directors approved a reduction of our workforce by approximately 81% of our employee base in order to reduce costs and preserve
capital due to the fundraising environment and continued uncertainty regarding the CFIUS review of the sale of the Facility and the Transaction
with uBriGene. The workforce reduction took place primarily in April 2024 and is expected to be substantially completed in the second
quarter of 2024. As a result of these actions, we expect to incur personnel-related restructuring charges of approximately $0.2 million
in connection with one-time employee termination cash expenditures, which are expected to be incurred in the second quarter of 2024.
We may also incur other charges or cash expenditures not currently contemplated due to events that may occur as a result of, or associated
with, the workforce reduction or retention efforts. The estimates of the costs expected to be incurred, and the timing thereof, are subject
to various assumptions and actual costs may differ. We and our board of directors continue to evaluate all strategic and other alternatives
related to the business.
Due to limited resources, and as a result of
the reduction in work force described above, we do not expect to initiate our pivotal Phase 2 single-arm clinical trial of MB-106 for
the treatment of WM trial in 2024. Subject to available funds, we intend rely on third party service providers to conduct study and manufacturing
services to advance our priority potential product candidates.
Summary Risk Factors
Our business is subject to risks of which you
should be aware before making an investment decision. You should carefully consider the risk factors described under the heading “Risk
Factors,” and in the other reports and documents that we have filed with the SEC.
Corporate Information
We are a majority-controlled subsidiary of Fortress
Biotech, Inc. We were incorporated under the laws of the State of Delaware on March 13, 2015. Our principal executive offices
are located at 377 Plantation Street, Worcester, Massachusetts 01605, and our telephone number is 781-652-4500. We maintain a website
on the Internet at www.mustangbio.com and our e-mail address is info@mustangbio.com. Information on our website, or any other website,
is not incorporated by reference in this prospectus. We have included our website address in this prospectus solely as an inactive textual
reference.
Implications of Being a Smaller Reporting Company
We are a smaller reporting company as defined
in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may take advantage of certain of the scaled disclosures
available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) the market
value of our voting and non-voting common stock held by non-affiliates is less than $250 million measured on the last business day
of our second fiscal quarter or (ii) our annual revenue is less than $100 million during the most recently completed fiscal
year and the market value of our voting and non-voting common stock held by non-affiliates is less than $700 million measured on
the last business day of our second fiscal quarter. Specifically, as a smaller reporting company, we may choose to present only the two
most recent fiscal years of audited financial statements in our Annual Reports on Form 10-K and have reduced disclosure obligations
regarding executive compensation, and if we are a smaller reporting company with less than $100 million in annual revenue, we would
not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public
accounting firm.
RISK FACTORS
An investment in our securities involves a high
degree of risk. The prospectus supplement applicable to each offering of our securities will contain a discussion of the risks applicable
to an investment in our securities. Prior to making a decision about investing in our securities, you should carefully consider the specific
factors discussed under the heading “Risk Factors” in the applicable prospectus supplement, together with all of the
other information contained or incorporated by reference in the prospectus supplement or appearing or incorporated by reference in this
prospectus. Each of the referenced risks and uncertainties could adversely affect our business, operating results and financial condition,
as well as adversely affect the value of an investment in our securities.
FORWARD-LOOKING STATEMENTS
This prospectus contains predictive or “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of
current or historical fact contained in this prospectus, including statements that express our intentions, plans, objectives, beliefs,
expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions
are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,”
“will,” “should,” “would” and similar expressions, as they relate to us, are intended to identify
forward-looking statements.
These statements are based on current expectations,
estimates and projections made by management about our business, our industry and other conditions affecting our financial condition,
results of operations or business prospects. These statements are not guarantees of future performance and involve risks, uncertainties
and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or
forecasted in, or implied by, the forward-looking statements due to numerous risks and uncertainties. Factors that could cause such outcomes
and results to differ include, but are not limited to, risks and uncertainties arising from:
| · | expectations
for increases or decreases in expenses; |
| · | expectations
for the clinical and pre-clinical development, manufacturing, regulatory approval, and commercialization
of our pharmaceutical product candidates or any other products we may acquire or in-license; |
| · | use
of clinical research centers and other contractors; |
| · | expectations
for incurring capital expenditures to expand our research and development and manufacturing
capabilities; |
| · | expectations
for generating revenue or becoming profitable on a sustained basis; |
| · | expectations
or ability to enter into marketing and other partnership agreements; |
| · | expectations
or ability to enter into product acquisition and in-licensing transactions; |
| · | expectations
or ability to build our own commercial infrastructure to manufacture, market and sell our
product candidates, if approved; |
| · | expectations
for the acceptance of our product candidates, if approved, by doctors, patients or payors; |
| · | our
ability to compete against other companies and research institutions; |
| · | our
ability to attract, hire and retain qualified personnel, including the impact of our recently
announced reduction in work force; |
| · | our
ability to secure adequate protection for our intellectual property; |
| · | our
ability to attract and retain key personnel; |
| · | our
ability to obtain reimbursement for our products, if approved; |
| · | estimates
of the sufficiency of our existing cash and cash equivalents and investments to finance our
operating requirements, including expectations regarding the value and liquidity of our investments; |
| · | our
stock price and the volatility of the equity markets; |
| · | our
ability to comply with the requirements of Nasdaq to maintain the listing of our common stock
on the Nasdaq Capital Market; |
| · | expectations
for future capital requirements. |
Any forward-looking statements speak only as
of the date on which they are made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect
events or circumstances that may arise after the date of this prospectus, except as required by applicable law. Investors should evaluate
any statements made by us in light of these important factors. We qualify all of our forward-looking statements by these cautionary statements.
In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.
USE OF PROCEEDS
Unless otherwise indicated in the prospectus
supplement, the net proceeds from the sale of securities offered by this prospectus will be used for general corporate purposes and working
capital requirements, which may include, among other things, the advancement of our product candidates to obtain regulatory approval
from the U.S. Food and Drug Administration (the “FDA”), and in the event of FDA approval of our product candidates, towards
the milestone payments due to our licensor and supplier upon FDA approval of our product candidates. We have not determined the amounts
we plan to spend on the areas listed above or the timing of these expenditures, and we have no current plans with respect to acquisitions
as of the date of this prospectus. As a result, unless otherwise indicated in the prospectus supplement, our management will have broad
discretion to allocate the net proceeds of the offerings. Pending their ultimate use, we intend to invest the net proceeds in a variety
of securities, including commercial paper, government and non-government debt securities and/or money market funds that invest in such
securities.
DESCRIPTION OF SECURITIES WE MAY OFFER
The descriptions of the securities contained
in this prospectus, together with the applicable prospectus supplements, summarize all the material terms and provisions of the various
types of securities that we may offer. We will describe in the applicable prospectus supplement relating to any securities the particular
terms of the securities offered by that prospectus supplement. If indicated in the applicable prospectus supplement, the terms of the
securities may differ from the terms we have summarized below. We will also include information in the prospectus supplement, where applicable,
about material United States federal income tax considerations relating to the securities, and the securities exchange, if any, on which
the securities will be listed. This prospectus may not be used to consummate a sale of securities unless it is accompanied by a
prospectus supplement.
DESCRIPTION OF CAPITAL STOCK
Capital Stock
We are authorized to issue 200,000,000 shares
of common stock, par value of $0.0001 per share, of which 1,000,000 shares are designated as Class A common stock, and 2,000,000
of preferred stock, $0.0001 par value per share, of which 250,000 are designated as Class A Preferred Stock.
Common Stock
The holders of common stock are entitled to one
vote per share held.
As of May 30, 2024, there were 27,390,295
shares of our common stock outstanding held by 71 stockholders of record.
The undesignated preferred stock may be issued
from time to time in one or more series. Our board of directors is authorized to determine or alter the dividend rights, dividend rate,
conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions, if any), the redemption price or
prices, the liquidation preferences and other designations, powers, preferences and relative, participating, optional or other special
rights, if any, and the qualifications, limitations and restrictions granted to or imposed upon any wholly unissued series of preferred
stock, and to fix the number of shares of any series of preferred stock (but not below the number of shares of any such series then outstanding).
Class A Common Stock
Voting Rights
The holders of our Class A common stock
are entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Class A common
stock held by such holder are convertible. For a period of ten (10) years from issuance, the holders of the Class A common
stock have the right to appoint one member of the Board of Directors of the Company. To date, the holders of Class A common stock
have not yet appointed such director.
Preemptive, Conversion, or Similar Rights
Each share of Class A common stock is convertible,
at the option of the holder, into one fully paid and nonassessable share of common stock, subject to certain adjustments. If the Company,
at any time effects a subdivision or combination of the outstanding common stock (by any stock split, stock dividend, recapitalization,
reverse stock split or otherwise), the applicable conversion ratio in effect immediately before that subdivision is proportionately decreased
or increased, as applicable, so that the number of shares of common stock issuable on conversion of each share of Class A common
stock shall be increased or decreased, as applicable, in proportion to such increase or decrease in the aggregate number of shares of
common stock outstanding. Additionally, if any reorganization, recapitalization, reclassification, consolidation or merger involving
the Company occurs in which the common stock (but not the Class A common stock) is converted into or exchanged for securities, cash
or other property, then each share of Class A common stock becomes convertible into the kind and amount of securities, cash or other
property which a holder of the number of shares of common stock of the Company issuable upon conversion of one share of the Class A
common stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled
to receive pursuant to such transaction.
Class A Preferred Stock
The Class A Preferred Stock is identical
to undesignated common stock other than as to voting rights, conversion rights, and the PIK dividend right.
The holders of the outstanding shares of Class A
Preferred Stock receive on each January 1 (each a “PIK Dividend Payment Date”) after the original issuance date of the
Class A Preferred Stock until the date all outstanding Class A Preferred Stock is converted into common stock or redeemed (and
the purchase price is paid in full), pro rata per share dividends paid in additional fully paid and non-assessable shares of common stock
such that the aggregate number of shares of common stock issued pursuant to such PIK dividend is equal to 2.5% of the Corporation’s
fully-diluted outstanding capitalization on the date that is one business day prior to any PIK Dividend Payment Date (“PIK Record
Date”). In the event the Class A Preferred Stock converts into common stock, the holders shall receive all PIK dividends accrued
through the date of such conversion. No dividend or other distribution shall be paid, or declared and set apart for payment (other than
dividends payable solely in capital stock on the capital stock) on the shares of common stock until all PIK dividends on the Class A
Preferred Stock shall have been paid or declared and set apart for payment. All dividends are non-cumulative.
On any matter presented to the stockholders for their action or consideration
at any meeting of stockholders (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Class A
Preferred Stock shall be entitled to cast for each share of Class A Preferred Stock held by such holder as of the record date for
determining stockholders entitled to vote on such matter, the number of votes that is equal to one and one-tenth (1.1) times a fraction,
the numerator of which is the sum of (A) the number of shares of outstanding common stock and (B) the whole shares of common
stock in to which the shares of outstanding Class A common stock and the Class A Preferred Stock are convertible, and the denominator
of which is number of shares of outstanding Class A Preferred Stock. Thus, the Class A Preferred Stock will at all times constitute
a voting majority.
Each share of Class A Preferred Stock is
convertible, at the option of the holder, into one fully paid and nonassessable share of common stock, subject to certain adjustments.
If the Company, at any time effects a subdivision or combination of the outstanding common stock (by any stock split, stock dividend,
recapitalization, reverse stock split or otherwise), the applicable conversion ratio in effect immediately before that subdivision is
proportionately decreased or increased, as applicable, so that the number of shares of common stock issuable on conversion of each share
of Class A Preferred Stock shall be increased or decreased, as applicable, in proportion to such increase or decrease in the aggregate
number of shares of common stock outstanding. Additionally, if any reorganization, recapitalization, reclassification, consolidation
or merger involving the Company occurs in which the common stock (but not the Class A Preferred Stock) is converted into or exchanged
for securities, cash or other property, then each share of Class A Preferred Stock becomes convertible into the kind and amount
of securities, cash or other property which a holder of the number of shares of common stock of the Company issuable upon conversion
of one share of the Class A Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation
or merger would have been entitled to receive pursuant to such transaction.
Additional Features
Other features of our capital stock include:
| · | Dividend Rights. The holders
of outstanding shares of our common stock, including Class A common stock, are entitled
to receive dividends out of funds legally available at the times and in the amounts that
our Board of Directors may determine. All dividends are non-cumulative. |
| · | Voting Rights. The holders
of our common stock are entitled to one vote for each share of common stock held on all matters
submitted to a vote of the stockholders, including the election of directors. Our certificate
of incorporation and bylaws do not provide for cumulative voting rights. |
| · | No Preemptive or Similar Rights.
The holders of our common stock have no preemptive, conversion, or subscription rights, and
there are no redemption or sinking fund provisions applicable to our common stock. |
| · | Right to Receive Liquidation Distributions.
Upon our liquidation, dissolution, or winding-up, the assets legally available for distribution
to our stockholders would be distributable ratably among the holders of our common stock,
including Class A common stock, outstanding at that time after payment of other claims
of creditors, if any. |
| · | Fully Paid and Non-Assessable.
All of the outstanding shares of our common stock, including Class A common stock, and
the Class A Preferred Stock are duly issued, fully paid and non-assessable. |
Anti-Takeover Effects of Various Provisions of Delaware Law and
Mustang Bio’s Certificate of Incorporation and Bylaws
Provisions of the General
Corporation Law of the State of Delaware (“DGCL”) and our Certificate of Incorporation and Bylaws could make it more difficult
to acquire Mustang Bio by means of a tender offer, a proxy contest or otherwise, or to remove incumbent officers and directors. These
provisions, including those summarized below, may encourage certain types of coercive takeover practices and takeover bids.
Delaware
Anti-Takeover Statute. In general, Section 203 of the DGCL prohibits a publicly held Delaware corporation
from engaging in a “business combination” with an “interested stockholder” for a period of three years following
the time the person became an interested stockholder, unless the business combination or the acquisition of shares that resulted in a
stockholder becoming an interested stockholder is approved in a prescribed manner. Generally, a “business combination” includes
a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. Generally, an “interested
stockholder” is a person who, together with affiliates and associates, owns (or within three years prior to the determination of
interested stockholder status did own) 15% or more of a corporation’s voting stock. However, our Certificate of Incorporation provides
that we are not subject to the anti-takeover provisions of Section 203 of the DGCL.
Removal.
Subject to the rights of any holders of any outstanding series of our preferred stock, stockholders may remove our directors with or
without cause, by a vote of the stockholders. Removal will require the affirmative vote of holders of a majority of our voting stock.
Size
of Board and Vacancies. Our Bylaws provide that the number of directors be fixed exclusively by the board of directors.
Any vacancies may only be filled by a majority of the remaining directors, even if less than a quorum is present, or by a sole remaining
director. Any director appointed to fill a vacancy on our board of directors will be appointed until the next annual meeting and until
his or her successor has been elected and qualified.
Requirements
for Advance Notification of Stockholder Nominations and Proposals. Our Bylaws establish advance notice procedures
with respect to stockholder proposals and nomination of candidates for election as directors other than nominations made by or at the
direction of its board of directors or a committee of our board of directors.
Undesignated
Preferred Stock. Our board of directors is authorized to issue up to 2,000,000 shares of preferred stock without
additional stockholder approval, which preferred stock could have voting rights or conversion rights that, if exercised, could adversely
affect the voting power of the holders of common stock. The issuance of shares of preferred stock may have the effect of delaying, deferring
or preventing a change in control of the Company without any action by the Company’s stockholders.
Limitation on Liability of Directors and Indemnification
of Directors and Officers
Elimination
of Liability of Directors. The DGCL authorizes corporations to limit or eliminate the personal liability of directors
to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties as directors, and our Certificate
of Incorporation includes such an exculpation provision. Our Certificate of Incorporation provides that, to the fullest extent permitted
by the DGCL, no director will be personally liable to us or to our stockholders for monetary damages for breach of fiduciary duty as
a director except for liability (i) for any breach of the director’s duty of loyalty to the Company or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174
of the DGCL, or (iv) for any transaction from which the director derived any improper personal benefit. While our Certificate of
Incorporation provides directors with protection from awards for monetary damages for breaches of their duty of care, it does not eliminate
this duty. Accordingly, our Certificate of Incorporation has no effect on the availability of equitable remedies such as an injunction
or rescission based on a director’s breach of his or her duty of care. The provisions apply to an officer of Mustang Bio only if
he or she is a director of Mustang Bio and is acting in his or her capacity as director, and do not apply to officers of Mustang Bio
who are not directors.
Indemnification
of Directors, Officers and Employees. Our Bylaws require us to indemnify any person who was or is a party or is threatened
to be made a party to, or was otherwise involved in, a legal proceeding by reason of the fact that he or she is or was a director, officer
or employee or agent of Mustang Bio or, while a director, officer or employee of Mustang Bio, or is or was serving at the request of
Mustang Bio as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Mustang Bio and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction
or upon a plea of nolo contendere or its equivalent, would not, of itself, create a presumption that the person did not act
in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of Mustang Bio and, with
respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. We are authorized under
our Bylaws to carry directors’ and officers’ insurance protecting us, any director, officer or employee or agent of ours
or, against any expense, liability or loss, whether or not we have the power to indemnify the person under the DGCL. We may, to the extent
authorized from time to time, indemnify any of our agents to the fullest extent permitted with respect to directors, officers and employees
in our Bylaws.
The limitation of liability
and indemnification provisions in our Certificate of Incorporation and Bylaws may discourage stockholders from bringing a lawsuit against
our directors for breach of fiduciary duty. These provisions also may reduce the likelihood of derivative litigation against our directors
and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. By its terms, the indemnification
provided for in our Bylaws is not exclusive of any other rights that the indemnified party may be or become entitled to under any law,
agreement, vote of stockholders or directors, provisions of our Certificate of Incorporation or Bylaws or otherwise. Any amendment, alteration
or repeal of our Bylaws’ indemnification provisions is, by the terms of our Bylaws, prospective only and will not adversely affect
the rights of any indemnity in effect at the time of any act or omission occurring prior to such amendment, alteration or repeal.
DESCRIPTION OF PREFERRED STOCK
Preferred Stock
Class A Preferred Stock
Our Class A Preferred Stock is identical
to our common stock other than as to voting rights, conversion rights, and the PIK dividend right.
Voting Rights
On any matter presented to our stockholders for
their action or consideration at any meeting of our stockholders (or by written consent of stockholders in lieu of meeting), each holder
of outstanding shares of Class A Preferred Stock will be entitled to cast for each share of Class A Preferred Stock held by
such holder as of the record date for determining stockholders entitled to vote on such matter, the number of votes that is equal to
one and one-tenth (1.1) times a fraction, the numerator of which is the sum of (A) the number of shares of outstanding common stock
and (B) the whole shares of common stock in to which the shares of outstanding Class A common stock and the Class A Preferred
Stock are convertible, and the denominator of which is the number of shares of outstanding Class A Preferred Stock. Thus, the Class A
Preferred Stock will at all times constitute a voting majority. Except as provided by law or by the provisions of our Certificate of
Incorporation, the holders of Class A common stock and Class A Preferred Stock will vote together with the holders of common
stock as a single class.
Preemptive, Conversion, or Similar Rights
Each share of Class A Preferred Stock is
convertible, at the option of the holder, into one fully paid and nonassessable share of common stock, subject to certain adjustments.
If the Company, at any time effects a subdivision or combination of the outstanding common stock (by any stock split, stock dividend,
recapitalization, reverse stock split or otherwise), the applicable conversion ratio in effect immediately before that subdivision is
proportionately decreased or increased, as applicable, so that the number of shares of common stock issuable on conversion of each share
of Class A Preferred Stock shall be increased or decreased, as applicable, in proportion to such increase or decrease in the aggregate
number of shares of common stock outstanding. Additionally, if any reorganization, recapitalization, reclassification, consolidation
or merger involving the Company occurs in which the common stock (but not the Class A Preferred Stock) is converted into or exchanged
for securities, cash or other property, then each share of Class A Preferred Stock becomes convertible into the kind and amount
of securities, cash or other property which a holder of the number of shares of common stock of the Company issuable upon conversion
of one share of the Class A Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation
or merger would have been entitled to receive pursuant to such transaction.
Dividends
The holders of the outstanding shares of Class A
Preferred Stock receive on each January 1 (each a “PIK Dividend Payment Date”) after the original issuance date of the
Class A Preferred Stock until the date all outstanding Class A Preferred Stock is converted into common stock or redeemed (and
the purchase price is paid in full), pro rata per share dividends paid in additional fully paid and non-assessable shares of common stock
such that the aggregate number of shares of common stock issued pursuant to such PIK dividend is equal to 2.5% of the Company’s
fully-diluted outstanding capitalization on the date that is one business day prior to any PIK Dividend Payment Date (“PIK Record
Date”). In the event the Class A Preferred Stock converts into common stock, the holders shall receive all PIK dividends accrued
through the date of such conversion. No dividend or other distribution shall be paid, or declared and set apart for payment (other than
dividends payable solely in capital stock on the capital stock) on the shares of common stock until all PIK dividends on the Class A
Preferred Stock shall have been paid or declared and set apart for payment. All dividends are non-cumulative.
Undesignated Preferred Stock
The undesignated Preferred Stock may be issued
from time to time in one or more series. Our Board of Directors is authorized to determine or alter the dividend rights, dividend rate,
conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions, if any), the redemption price or
prices, the liquidation preferences and other designations, powers, preferences and relative, participating, optional or other special
rights, if any, and the qualifications, limitations and restrictions granted to or imposed upon any wholly unissued series of Preferred
Stock, and to fix the number of shares of any series of Preferred Stock (but not below the number of shares of any such series then outstanding).
DESCRIPTION
OF WARRANTS
We may issue warrants to purchase shares of our
common stock and/or preferred stock in one or more series together with other securities or separately, as described in each applicable
prospectus supplement.
The prospectus supplement relating to any warrants
we offer will include specific terms relating to the offering. These terms will include some or all of the following:
| · | the
title of the warrants; |
|
· |
the aggregate number of warrants offered; |
|
· |
the
designation, number and terms of the shares of common stock or preferred stock purchasable upon exercise of the warrants and procedures
by which those numbers may be adjusted; |
|
· |
the
exercise price of the warrants; |
|
· |
the dates or periods during which the warrants are exercisable; |
|
· |
the designation and terms of any securities with which the
warrants are issued; |
|
· |
if the warrants are issued as a unit with another security,
the date on and after which the warrants and the other security will be separately transferable; |
|
· |
if the exercise price is not payable in U.S. dollars, the
foreign currency, currency unit or composite currency in which the exercise price is denominated; |
|
· |
any minimum or maximum amount of warrants that may be exercised
at any one time; |
|
· |
any terms relating to the modification of the warrants; |
|
· |
any terms, procedures and limitations relating to the transferability,
exchange or exercise of the warrants; and |
|
· |
any other specific terms of the warrants. |
DESCRIPTION
OF DEBT SECURITIES
We may offer debt securities which may be senior,
subordinated or junior subordinated and may be convertible into shares of common stock or preferred stock. We will issue the debt securities
offered by this prospectus and any accompanying prospectus supplement under an indenture to be entered into between us and the trustee
identified in the applicable prospectus supplement. The terms of the debt securities will include those stated in the indenture and those
made part of the indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”) as in
effect on the date of the indenture. We have filed a copy of the form of indenture as an exhibit to the registration statement in which
this prospectus is included. The indenture will be subject to and governed by the terms of the Trust Indenture Act.
The following description briefly sets forth
certain general terms and provisions of the debt securities that we may offer. The particular terms of the debt securities offered by
any prospectus supplement and the extent, if any, to which these general provisions may apply to the debt securities, will be described
in the related prospectus supplement. Accordingly, for a description of the terms of a particular issue of debt securities, reference
must be made to both the related prospectus supplement and to the following description.
Debt Securities
The aggregate principal amount of debt securities
that may be issued under an applicable indenture is unlimited, subject only to the aggregate amount of the offering registered under
the registration statement of which this prospectus forms a part. The debt securities may be issued in one or more series as may be authorized
from time to time pursuant to a supplemental indenture entered into between us and the trustee or an order delivered by us to the trustee.
For each series of debt securities we offer, a prospectus supplement accompanying this prospectus will describe the following terms and
conditions of the series of debt securities that we are offering, to the extent applicable:
| · | title
and aggregate principal amount; |
|
· |
whether the debt securities will be senior, subordinated or junior
subordinated; |
|
· |
applicable subordination provisions, if any; |
|
· |
provisions regarding whether the debt securities will be
convertible or exchangeable into other securities or property of the Company or any other person; |
|
· |
percentage or percentages of principal amount at which the
debt securities will be issued; |
|
· |
interest rate(s) or the method for determining the interest
rate(s); |
|
· |
whether interest on the debt securities will be payable in
cash or additional debt securities of the same series; |
|
· |
dates on which interest will accrue or the method for determining
dates on which interest will accrue and dates on which interest will be payable; |
|
· |
whether the amount of payment of principal of, premium, if
any, or interest on the debt securities may be determined with reference to an index, formula or other method; |
|
· |
redemption, repurchase or early repayment provisions, including
our obligation or right to redeem, purchase or repay debt securities under a sinking fund, amortization or analogous provision; |
|
· |
if other than the debt securities’ principal amount,
the portion of the principal amount of the debt securities that will be payable upon declaration of acceleration of the maturity; |
|
· |
authorized denominations; |
|
· |
amount of discount or premium, if any, with which the debt
securities will be issued, including whether the debt securities will be issued as “original issue discount” securities; |
|
· |
the place or places where the principal of, premium, if any,
and interest on the debt securities will be payable; |
|
· |
where the debt securities may be presented for registration of
transfer, exchange or conversion; |
|
· |
the place or places where notices and demands to or upon
the Company in respect of the debt securities may be made; |
|
· |
whether the debt securities will be issued in whole or in
part in the form of one or more global securities; |
|
· |
if the debt securities will be issued in whole or in part
in the form of a book-entry security, the depository or its nominee with respect to the debt securities and the circumstances under which
the book-entry security may be registered for transfer or exchange or authenticated and delivered in the name of a person other than
the depository or its nominee; |
|
· |
whether a temporary security is to be issued with respect
to such series and whether any interest payable prior to the issuance of definitive securities of the series will be credited to the
account of the persons entitled thereto; |
|
· |
the terms upon which beneficial interests in a temporary
global security may be exchanged in whole or in part for beneficial interests in a definitive global security or for individual definitive
securities; |
|
· |
the guarantors, if any, of the debt securities, and the extent
of the guarantees and any additions or changes to permit or facilitate guarantees of such debt securities; |
|
· |
any covenants applicable to the particular debt securities
being issued; |
|
· |
any defaults and events of default applicable to the debt
securities, including the remedies available in connection therewith; |
|
· |
currency, currencies or currency units in which the purchase
price for, the principal of and any premium and any interest on, such debt securities will be payable; |
|
· |
time period within which, the manner in which and the terms
and conditions upon which the Company or the purchaser of the debt securities can select the payment currency; |
|
· |
securities exchange(s) on which the debt securities
will be listed, if any; |
|
· |
whether any underwriter(s) will act as market maker(s) for
the debt securities; |
|
· |
extent to which a secondary market for the debt securities
is expected to develop; |
|
· |
provisions relating to defeasance; |
|
· |
provisions relating to satisfaction and discharge of the
indenture; |
|
· |
any
restrictions or conditions on the transferability of the debt securities; |
|
· |
provisions relating to the modification of the indenture
both with and without the consent of holders of debt securities issued under the indenture; |
|
· |
any addition or change in the provisions related to compensation
and reimbursement of the trustee; |
|
· |
provisions, if any, granting special rights to holders upon
the occurrence of specified events; |
|
· |
whether the debt securities will be secured or unsecured,
and, if secured, the terms upon which the debt securities will be secured and any other additions or changes relating to such security;
and |
|
· |
any other terms of the debt securities that are not inconsistent
with the provisions of the Trust Indenture Act (but may modify, amend, supplement or delete any of the terms of the indenture with respect
to such series of debt securities). |
General
One or more series of debt securities may be
sold as “original issue discount” securities. These debt securities would be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of issuance is below market rates. One or more series of
debt securities may be variable rate debt securities that may be exchanged for fixed rate debt securities.
United States federal income tax consequences
and special considerations, if any, applicable to any such series will be described in the applicable prospectus supplement.
Debt securities may be issued where the amount
of principal and/or interest payable is determined by reference to one or more currency exchange rates, commodity prices, equity indices
or other factors. Holders of such debt securities may receive a principal amount or a payment of interest that is greater than or less
than the amount of principal or interest otherwise payable on such dates, depending upon the value of the applicable currencies, commodities,
equity indices or other factors. Information as to the methods for determining the amount of principal or interest, if any, payable on
any date, the currencies, commodities, equity indices or other factors to which the amount payable on such date is linked and certain
additional United States federal income tax considerations will be set forth in the applicable prospectus supplement.
The term “debt securities” includes
debt securities denominated in U.S. dollars or, if specified in the applicable prospectus supplement, in any other freely transferable
currency or units based on or relating to foreign currencies.
We expect most debt securities to be issued in
fully registered form without coupons and in denominations of $2,000 and any integral multiples thereof. Subject to the limitations provided
in the indenture and in the prospectus supplement, debt securities that are issued in registered form may be transferred or exchanged
at the principal corporate trust office of the trustee, without the payment of any service charge, other than any tax or other governmental
charge payable in connection therewith.
Global Securities
The debt securities of a series may be issued
in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depositary identified
in the prospectus supplement. Global securities will be issued in registered form and in either temporary or definitive form. Unless
and until it is exchanged in whole or in part for the individual debt securities, a global security may not be transferred except as
a whole by the depositary for such global security to a nominee of such depositary or by a nominee of such depositary to such depositary
or another nominee of such depositary or by such depositary or any such nominee to a successor of such depositary or a nominee of such
successor. The specific terms of the depositary arrangement with respect to any debt securities of a series and the rights of and limitations
upon owners of beneficial interests in a global security will be described in the applicable prospectus supplement.
Governing Law
The indenture and the debt securities will be
construed in accordance with and governed by the laws of the State of New York.
DESCRIPTION OF UNITS
We may issue, in one more series, units comprised
of shares of our common stock and/or preferred stock, warrants to purchase common stock and/or preferred stock, debt securities or any
combination of those securities. Each unit will be issued so that the holder of the unit is also the holder of each security included
in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement
under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time
or at any time before a specified date.
We may evidence units by unit certificates that
we issue under a separate agreement. We may issue the units under a unit agreement between us and one or more unit agents. If we elect
to enter into a unit agreement with a unit agent, the unit agent will act solely as our agent in connection with the units and will not
assume any obligation or relationship of agency or trust for or with any registered holders of units or beneficial owners of units. We
will indicate the name and address and other information regarding the unit agent in the applicable prospectus supplement relating to
a particular series of units if we elect to use a unit agent.
We will describe in the applicable prospectus supplement the terms
of the series of units being offered, including:
| · | the
designation and terms of the units and of the securities comprising the units, including
whether and under what circumstances those securities may be held or transferred separately; |
|
· |
any provisions of the governing unit agreement that differ
from those described herein; and |
|
· |
any provisions for the issuance, payment, settlement, transfer
or exchange of the units or of the securities comprising the units. |
The other provisions regarding our common stock,
preferred stock, warrants and debt securities as described in this section will apply to each unit to the extent such unit consists of
shares of our common stock, warrants and/or debt securities.
PLAN OF DISTRIBUTION
We may sell the securities covered in this prospectus
in one or more of the following ways:
| · | through
underwriters or dealers; |
| · | in short or long transactions; |
| · | directly to a limited number of purchasers or to a single purchaser; |
| · | through agents, including via an at-the-market program; or |
| · | through a combination of any of these methods of sale. |
Each
time that we use this prospectus to sell securities, we will also provide a prospectus supplement that contains the specific terms of
the offering. The prospectus supplement will set forth the terms of the offering of the securities, including:
| · | the
name or names of any underwriters, dealers or agents and the amounts of any securities underwritten
or purchased by each of them; and |
| · | the
purchase price of the securities being offered and the proceeds to us and any discounts, commissions or concessions allowed or reallowed
or paid to dealers. |
Any public offering price and any discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale of any securities,
the securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The securities
may be either offered to the public through underwriting syndicates represented by managing underwriters, or directly by underwriters.
Generally, the underwriters’ obligations to purchase the securities will be subject to certain conditions precedent. The underwriters
will be obligated to purchase all of the securities if they purchase any of securities. Only underwriters named in the applicable prospectus
supplement shall be underwriters of the securities offered thereby.
We may sell the securities through agents from
time to time. The prospectus supplement will name any agent involved in the offer or sale of the securities and any commissions we pay
to them. Generally, any agent will be acting on a best efforts basis for the period of its appointment.
We may authorize underwriters, dealers or agents
to solicit offers by certain purchasers to purchase the securities from us at the public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on a specified applicable date in the future. The contracts
will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth any commissions
we pay for solicitation of these contracts.
Agents and underwriters may be entitled to indemnification
by us against certain civil liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”),
or to contribution with respect to payments which the agents or underwriters may be required to make in respect thereof. Agents and underwriters
may be customers of, engage in transactions with, or perform services for us in the ordinary course of business.
We may enter into derivative transactions with
third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable
prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus
and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by
us or borrowed from us or others to settle those sales or to close out any related open borrowings of securities and may use securities
received from us in settlement of those derivatives to close out any related open borrowings of securities. The third party in such sale
transactions will be an underwriter and will be identified in the applicable prospectus supplement (or a post-effective amendment). We
may also use underwriters or such other third parties with whom we have a material relationship. We will describe the nature of any such
relationship in the applicable prospectus supplement.
At-the-Market Offerings
Upon written instruction from us, after entering
into a distribution agency agreement with us, a sales agent may use its commercially reasonable efforts to sell on our behalf, as our
agent, the shares of common stock offered as agreed upon by us and the sales agent. We will designate the maximum amount of shares of
common stock to be sold through the sales agent, on a daily basis or otherwise as we and the sales agent agree. Subject to the terms
and conditions of the applicable distribution agency agreement, the sales agent will use its commercially reasonable efforts to sell,
as our sales agent and on our behalf, all of the designated shares of common stock. We may instruct the sales agent not to sell shares
of common stock if the sales cannot be effected at or above the price designated by us in any such instruction. We may suspend the offering
of shares of common stock under any distribution agency agreement by notifying the sales agent. Likewise, the sales agent may suspend
the offering of shares of common stock under the applicable distribution agency agreement by notifying us of such suspension.
We also may sell shares to the sales agent as
principal for its own account at a price agreed upon at the time of sale. If we sell shares to the sales agent as principal, we will
enter into a separate agreement setting forth the terms of such transaction or such sales may be provided for in the distribution agreement
described above.
It is contemplated that the distribution agreements
entered into with sales agents will allow such sales agents to make sales in privately negotiated transactions and/or under any other
method permitted by law, including sales deemed to be an "at-the-market" offering as defined in Rule 415 promulgated under
the Securities Act, sales made directly on The Nasdaq Capital Market, the existing trading market for our common stock, or sales made
to or through a market maker other than on an exchange. The name of any such underwriter or agent involved in the offer and sale of our
common stock, the amounts underwritten, and the nature of its obligations to take our common stock will be described in the applicable
prospectus supplement.
LEGAL MATTERS
The validity of the securities being offered
hereby will be passed upon for us by Troutman Pepper Hamilton Sanders LLP, Charlotte, North Carolina. If legal matters in connection
with offerings made pursuant to this prospectus are passed upon by counsel for underwriters, dealers or agents, if any, such counsel
will be named in the prospectus supplement relating to such offerings.
EXPERTS
The financial statements of Mustang Bio, Inc.
as of December 31, 2023 and 2022, and for each of the years in the two-year period ended December 31, 2023, have been incorporated
by reference herein in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the December 31, 2023
financial statements contains an explanatory paragraph that states the Company’s expectation to generate operating losses and negative
operating cash flows in the future, and the need for additional funding to support its planned operations raise substantial doubt about
its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome
of that uncertainty.
WHERE YOU CAN FIND MORE INFORMATION
We are a public company and file reports with
the SEC on an annual basis using Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Additionally,
the SEC maintains a website that contains annual, quarterly, and current reports, proxy statements, and other information that issuers
(including us) file electronically with the SEC. The SEC’s website address is http://www.sec.gov. You can also obtain copies
of materials we file with the SEC from our Internet website found at www.mustangbio.com. Our common stock is listed on the Nasdaq
Capital Market under the symbol “MBIO”. We have not incorporated by reference into this prospectus the information on our
website, and you should not consider it to be a part of this prospectus.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference”
the information we file with it which means that we can disclose important information to you by referring you to those documents instead
of having to repeat the information in this prospectus and any supplements to this prospectus. The information incorporated by reference
is considered to be part of this prospectus and any supplements to this prospectus, and later information that we file with the SEC will
automatically update and supersede this information. This prospectus incorporates by reference the documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (1) after the date of the initial
registration statement, as amended, and prior to effectiveness of the registration statement, and (2) after the date of this prospectus
and prior to the termination of this offering. Such information will automatically update and supersede the information contained in
this prospectus and the documents listed below; provided, however, that we are not, unless specifically indicated, incorporating any
information furnished under Item 2.02 or Item 7.01 of any current report on Form 8-K, whether listed below or filed in
the future, or related exhibits furnished pursuant to Item 9.01 of Form 8-K:
|
d) |
Our Current Reports on
Form 8-K filed with the SEC on January 4, 2024, January 25, 2024, February 14, 2024, March 15, 2024,
March 29, 2024, April 12, 2024, May 2, 2024 and May 21, 2024; and |
All reports and other documents we subsequently
file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this offering, including
all such documents we may file with the SEC after the date of the initial registration statement and prior to and after the effectiveness
of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated
by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents.
A statement contained in a document incorporated by reference into this prospectus shall be deemed to be modified or superseded for purposes
of this prospectus to the extent that a statement contained in this prospectus, any prospectus supplement or in any other subsequently
filed document which is also incorporated in this prospectus modifies or replaces such statement. Any statements so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. We will furnish without charge to any
person (including any beneficial owner) a copy of any or all of the documents incorporated by reference, including exhibits to these documents,
upon written or oral request. Direct your request to: Corporate Secretary, Mustang Bio, Inc., 377 Plantation Street, Worcester, Massachusetts,
01605 or (781) 652-4500.
$40,000,000
Mustang
Bio, Inc.
Common
Stock
Preferred
Stock
Warrants
Debt
Securities
Units
PROSPECTUS
, 2024
The information in this prospectus
is not complete and may be changed. We may not sell these securities or accept an offer to buy these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and
it is not soliciting offers to buy these securities in any jurisdiction where such offer or sale is not permitted.
SUBJECT
TO COMPLETION, DATED MAY 31, 2024
PROSPECTUS
Up to $5,600,000
Common Stock
We have entered into an At the Market Offering
Agreement (the “sales agreement”) dated May 31, 2024, with H.C. Wainwright & Co., LLC, as Agent (“Wainwright”),
relating to the sale of shares of our common stock, par value $0.0001 per share, having an aggregate purchase price of $5,600,000. In
accordance with the terms of the sales agreement, pursuant to this prospectus and upon our delivery of a placement notice to the Agent,
we may offer and sell shares of our common stock having an aggregate offering price of up to $5,600,000 from time to time through the
Agent.
Our common stock is listed on the Nasdaq Capital
Market under the symbol “MBIO.” On May 30, 2024, the closing sale price of our common stock on the Nasdaq Capital Market
was $0.2114 per share.
Sales of our common stock, if any, under this
prospectus will be made by any method permitted that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated
under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on or through the Nasdaq
Capital Market, the existing trading market for our common stock, sales made to or through a market maker other than on an exchange or
otherwise, directly to Wainwright as principal, in negotiated transactions at market prices prevailing at the time of sale or at prices
related to such prevailing market prices, and/or in any other method permitted by law. The Agent is not required to sell any specific
number or dollar amount of securities, but will act as our sales agent using commercially reasonable efforts consistent with their normal
trading and sales practices to sell on our behalf all of the shares of common stock requested to be sold by us, on mutually agreed terms
between the Agent and us. There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
The Agent will be entitled to compensation under
the terms of the sales agreement at a commission rate of up to 3.0% of the gross proceeds of any shares of common stock sold under the
sales agreement. In connection with the sale of our common stock on our behalf, the Agent will be deemed to be an “underwriter”
within the meaning of the Securities Act and the compensation of the Agent may be deemed to be underwriting commissions or discounts.
See “Plan of Distribution” beginning on page 19 for additional information regarding the compensation to
be paid to the Agent. We have also agreed to provide indemnification and contribution to the Agent with respect to certain liabilities,
including liabilities under the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
As of May 30, 2024, the aggregate market
value of our outstanding common stock held by non-affiliates, or public float calculated for purposes of General Instruction I.B.6 of
Form S-3, was approximately $26.5 million, based on 27,390,295 shares of outstanding common stock as of May 30, 2024, of which
approximately 2,105,357 shares were held by affiliates, and a price of $1.05 per share, which was the price at which our common stock
was last sold on the Nasdaq Capital Market on April 1, 2024. We have sold $3.2 million of securities pursuant to General Instruction
I.B.6 of Form S-3 during the prior 12-calendar month period that ends on and includes the date of this prospectus (excluding this
offering). Accordingly, based on the foregoing, we are currently eligible under General Instruction I.B.6 of Form S-3 to offer and
sell shares of our common stock having an aggregate offering price of up to approximately $5,600,000. Pursuant to General Instruction
I.B.6 of Form S-3, in no event will we sell securities in a public primary offering with a value exceeding one-third of our public
float in any 12-month period so long as our public float remains below $75.0 million.
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page 12 of this prospectus as well as
the information under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2023 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, and in the other
documents incorporated by reference into this prospectus and the accompanying base prospectus for a discussion of the factors you
should carefully consider before investing in our securities.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus or the accompanying
base prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
H.C. Wainwright &
Co.
The date of this
prospectus , 2024.
Table of Contents
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement
on Form S-3 that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration
process. Under this prospectus, we may offer shares of our common stock having an aggregate offering price set forth on the cover page hereof,
from time to time at prices and on terms to be determined by market conditions at the time of offering.
Before buying any of the shares of common stock
offered hereby, we urge you to read carefully this prospectus, the accompanying base prospectus and all of the information incorporated
herein by reference in this prospectus and the accompanying base prospectus, as well as the additional information described below under
the heading “Incorporation of Certain Information by Reference.” These documents contain important information that
you should consider when making your investment decision.
We provide information to you about this offering
of our common stock in two separate documents that are bound together: (1) this prospectus, which describes the specific details
regarding this offering; and (2) the accompanying base prospectus, which provides general information, some of which may not apply
to this offering. Generally, when we refer to this “prospectus,” we are referring to both documents combined. If information
in this prospectus is inconsistent with the accompanying base prospectus, you should rely on this prospectus. To the extent there is a
conflict between the information contained in this prospectus, on the one hand, and the information contained in any document incorporated
by reference in this prospectus that was filed with the SEC before the date of this prospectus, on the other hand, you should rely on
the information in this prospectus, provided that if any statement in one of these documents is inconsistent with a statement in another
document having a later date—for example, a document incorporated by reference in this prospectus—the statement in the document
having the later date modifies or supersedes the earlier statement.
We have not, and the sales agent has not, authorized
anyone to provide you with information other than the information that we have provided or incorporated by reference in this prospectus,
the accompanying base prospectus or any other prospectus supplement and your reliance on any unauthorized information or representation
is at your own risk. This prospectus may be used only in jurisdictions where offers and sales of these securities are permitted. You should
assume that the information appearing in this prospectus is accurate only as of the date of this prospectus and that any information we
have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery
of this prospectus, or any sale of our common stock. Our business, financial condition and results of operations may have changed since
those dates.
We further note that the representations, warranties
and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference herein were made
solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties
to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties
or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied
on as accurately representing the current state of our affairs.
Unless otherwise indicated, information contained
or incorporated by reference in this prospectus or the accompanying base prospectus concerning our industry, including our general expectations
and market opportunity, is based on information from our own management estimates and research, as well as from industry and general publications
and research, surveys and studies conducted by third parties. Management estimates are derived from publicly available information, our
knowledge of our industry and assumptions based on such information and knowledge, which we believe to be reasonable. In addition, assumptions
and estimates of our and our industry’s future performance are necessarily uncertain due to a variety of factors, including those
described in section of this prospectus titled “Risk Factors.” These and other factors could cause our future performance
to differ materially from our assumptions and estimates.
We take no responsibility for, and can provide
no assurance as to the reliability of, any other information that others may give you. This prospectus and the accompanying prospectus
is an offer to sell only the securities offered hereby and only under circumstances and in jurisdictions where it is lawful to do so.
No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus,
accompanying prospectus, and any free writing prospectuses prepared by or on behalf of us or to which we have referred you or are incorporated
by reference. This prospectus is not an offer to sell securities, and it is not soliciting an offer to buy securities, in any jurisdiction
where the offer or sale is not permitted.
Unless otherwise stated, all references in this
prospectus to “we,” “us,” “our,” “Mustang,” the “Company” and similar designations
refer to Mustang Bio, Inc. and its consolidated subsidiaries.
FORWARD-LOOKING STATEMENTS
This prospectus contains predictive or “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of
current or historical fact contained in this prospectus, including statements that express our intentions, plans, objectives, beliefs,
expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions are
forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,”
“should,” “would” and similar expressions, as they relate to us, are intended to identify forward-looking statements.
These statements are based on current expectations,
estimates and projections made by management about our business, our industry and other conditions affecting our financial condition,
results of operations or business prospects. These statements are not guarantees of future performance and involve risks, uncertainties
and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or
forecasted in, or implied by, the forward-looking statements due to numerous risks and uncertainties. Factors that could cause such outcomes
and results to differ include, but are not limited to, risks and uncertainties arising from:
| · | expectations for increases or decreases in expenses; |
| · | expectations for the clinical and pre-clinical development, manufacturing, regulatory approval, and commercialization of our pharmaceutical
product candidates or any other products we may acquire or in-license; |
| · | use of clinical research centers and other contractors; |
| · | expectations for incurring capital expenditures to expand our research and development and manufacturing capabilities; |
| · | expectations for generating revenue or becoming profitable on a sustained basis; |
| · | expectations or ability to enter into marketing and other partnership agreements; |
| · | expectations or ability to enter into product acquisition and in-licensing transactions; |
| · | expectations
or ability to build our own commercial infrastructure to manufacture, market and sell our product candidates, if approved; |
| · | expectations for the acceptance of our product candidates, if approved, by doctors, patients or payors; |
| · | our ability to compete against other companies and research institutions; |
| · | our ability to attract, hire and retain qualified personnel, including the impact of our recently announced reduction in work force; |
| · | our ability to secure adequate protection for our intellectual property; |
| · | our ability to attract and retain key personnel; |
| · | our ability to obtain reimbursement for our products, if approved; |
| · | estimates of the sufficiency of our existing cash and cash equivalents and investments to finance our operating requirements, including
expectations regarding the value and liquidity of our investments; |
| · | our stock price and the volatility of the equity markets; |
| · | our ability to comply with the requirements of Nasdaq to maintain the listing of our common stock on the Nasdaq Capital Market; |
| · | expectations for future capital requirements. |
Any forward-looking statements speak only as of
the date on which they are made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect
events or circumstances that may arise after the date of this prospectus, except as required by applicable law. Investors should evaluate
any statements made by us in light of these important factors. We qualify all of our forward-looking statements by these cautionary statements.
In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.
PROSPECTUS SUMMARY
This
summary highlights information contained elsewhere in or incorporated by reference into this prospectus. Because this is a summary,
it may not contain all of the information that may be important to you and to your investment decision. The following summary is
qualified in its entirety by the more detailed information and financial statements and notes thereto included elsewhere in this
prospectus and the documents incorporated herein by reference and other documents to which we refer. You should
read “Risk Factors” beginning on page 12 of this prospectus, as well as the information
appearing under the caption “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2023 and Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 2024, as may be updated by our subsequently filed Exchange
Act reports, for more information about important risks that you should consider carefully before buying our securities.
References
in this prospectus to the “Company,” “we,” “us,” “our” and
similar words refer to Mustang Bio, Inc.
Our Business
Overview and Product Candidate Development
We are a clinical-stage biopharmaceutical company
focused on translating today’s medical breakthroughs in cell and gene therapies into potential cures for hematologic cancers, solid
tumors and rare genetic diseases. We aim to acquire rights to these technologies by licensing or otherwise acquiring an ownership interest
in the technologies, funding their research and development and eventually either out-licensing or bringing the technologies to market.
Our pipeline is currently focused in two core
areas: CAR T therapies for hematologic malignancies and CAR T therapies for solid tumors. For these therapies we have partnered with world
class research institutions, including the City of Hope National Medical Center (“COH” or “City of Hope”), Fred
Hutchinson Cancer Center (“Fred Hutch”), Nationwide Children's Hospital (“Nationwide”) and the Mayo Foundation
for Medical Education and Research (“Mayo Clinic”).
CAR T Therapies
Our pipeline of CAR T therapies is being developed
under exclusive licenses from several world class research institutions. Our strategy is to license these technologies, support preclinical
and clinical research activities by our partners and transfer the underlying technology to our or our contract manufacturer’s cell
processing facility in order to conduct our own clinical trials.
We are developing CAR T therapy for hematologic
malignancies in partnership with Fred Hutch targeting CD20 (MB-106). In May 2021, we announced that the U.S. Food and Drug Administration
(“FDA”) accepted our Investigational New Drug (“IND”) Application for MB-106. As of December 2023, approximately
40 patients have been treated in an ongoing phase 1 clinical trial sponsored by Fred Hutch (ClinicalTrials.gov Identifier: NCT03277729),
and approximately 20 patients have been treated in an ongoing phase 1 clinical trial sponsored by us (ClinicalTrials.gov Identifier: NCT05360238).
In 2023, we received Safety Review Committee approval to continue dose escalation in all three active arms of the ongoing Mustang-sponsored
phase 1 trial. We presented the latest results, demonstrating a favorable safety profile, complete response rate, and durability, from
the ongoing Mustang-sponsored phase 1 trial at the 2023 American Society of Hematology (“ASH”) Annual Meeting. As of December 31,
2023, the MB-106 Mustang-sponsored phase 1 trial is pending one patient to complete the final dose level required to advance to phase
2 pivotal studies for treatment of patients with relapsed or refractory indolent B-cell non-Hodgkin lymphoma.
We are also developing CAR T therapy for solid
tumors in partnership with COH targeting IL13Rα2 (MB-101). In addition, we have partnered with Nationwide for a herpes simplex virus
type 1 (“HSV-1”) oncolytic virus (MB-108) in order to enhance the activity of MB-101 for the treatment of patients with high-grade
malignant brain tumors. The Phase 1 clinical trial sponsored by COH for MB-101 (ClinicalTrials.gov Identifier: NCT02208362) has completed
the treatment phase and patients continue to be assessed for long-term safety. A Phase 1 clinical trial sponsored by the University of
Alabama at Birmingham (“UAB”) for MB-108 (ClinicalTrials.gov Identifier: NCT03657576) began during the third quarter of 2019.
In October 2023, we announced that the FDA accepted our IND application for the combination of MB-101 and MB-108 – which is
referred to as MB-109 – for the treatment of patients with IL13Rα2+relapsed or refractory glioblastoma (“GBM”)
and high-grade astrocytoma.
Finally, we are collaborating with the Mayo Clinic
to develop a novel technology that may be able to transform the administration of CAR T therapies and potentially be used as an off-the-shelf
therapy. We are evaluating plans to file an IND application for a multicenter Phase 1 clinical trial once a lead construct has been identified,
subject to allocation of resources.
On May 18, 2023, we announced a series of
changes resulting from a review of our portfolio of product candidates to determine the future strategy of our programs and the proper
allocation of our resources. Following this review, we determined to discontinue development of our MB-102 (CD123), MB-103 (HER2), MB-104
(CS1) and MB-105 (PSCA) programs, all of which were CAR T therapies being developed in partnership with City of Hope.
Terminated Gene Therapy Product Candidates
We formerly developed several gene therapy product
candidates, which included MB-117 and MB-217 (based on technologies licensed from St. Jude Children’s Research Hospital (“St.
Jude”)) and MB-110 (based on technologies licensed from Leiden University Medical Centre (“LUMC”)). In April 2024,
we entered into a termination and release agreement with St. Jude, pursuant to which we agreed to terminate the license agreement underpinning
the MB-117 and MB-217 product candidates in exchange for a mutual release of liability and forgiveness by St. Jude of all amounts previously
owing to them. Also in April 2024, we delivered a termination notice to LUMC pursuant to which we terminated the license agreement
underpinning the MB-110 product candidate; we are currently in discussions with LUMC regarding the terms that will govern such termination.
To date, we have not received approval for the
sale of any of our product candidates in any market and, therefore, have not generated any product sales from our product candidates.
In addition, we have incurred substantial operating losses since our inception, and expect to continue to incur significant operating
losses for the foreseeable future and may never become profitable. As of March 31, 2024, we had an accumulated deficit of $386.2
million.
Therapeutic Pipeline
Therapies for Oncology and Hematologic Malignancies
MB - 106 (CD20 CAR T for B cell non-Hodgkin
lymphoma (NHL) and chronic lymphocytic leukemia (CLL))
We believe CD20 is a promising target for immunotherapy
of B-cell malignancies. CD20 is a B-cell lineage-specific phosphoprotein that is expressed in high, homogeneous density on the surface
of more than 95% of B-cell NHL and CLL. CD20 is stable on the cell surface with minimal shedding, internalization, or modulation upon
antibody binding and is present at only nanomolar levels as a soluble antigen. It is well established as an effective immunotherapy target,
with extensive studies demonstrating improved tumor responses and survival of B-NHL patients treated with rituximab and other anti-CD20
antibodies. Importantly, CD20 continues to be expressed on the lymphoma cells of most patients with relapsed B-NHL despite repetitive
rituximab treatments, and loss of CD20 expression is not a major contributor to treatment resistance. Thus, there is strong rationale
for testing CD20 CAR T cells as an immunotherapy for NHL.
More than 80,000 new cases of NHL are diagnosed
each year in the United States, and over 20,000 patients die of this group of diseases annually. Most forms of NHL, including follicular
lymphoma, mantle cell lymphoma, marginal zone lymphoma, lymphoplasmacytic lymphoma, and small lymphocytic lymphoma (“SLL”),
which account collectively for approximately 45% of all cases of NHL, are incurable with available therapies, except for allogenic stem
cell transplant (“allo-SCT”). However, many NHL patients are not suitable candidates for allo-SCT, and this treatment is also
limited by significant rates of morbidity and mortality due to graft-versus-host disease. Aggressive B-cell lymphomas such as diffuse
large B-cell lymphoma, the most common subtype of lymphoma, account for an additional 30-35% of NHL. The majority of patients with aggressive
B-NHL are successfully treated with combination chemotherapy, but a significant proportion relapse or have refractory disease, and the
outcome of these patients is poor. Innovative new treatments are therefore urgently needed.
Chronic lymphocytic leukemia/small lymphocytic
lymphoma (CLL/SLL) is a mature B cell neoplasm characterized by a progressive accumulation of monoclonal B lymphocytes. CLL is considered
to be identical (i.e., one disease with different manifestations) to the NHL SLL. The malignant cells seen in CLL and SLL have identical
pathologic and immunophenotypic features. The term CLL is used when the disease manifests primarily in the blood, whereas the term SLL
is used when involvement is primarily nodal.
CLL is the
most common leukemia in adults in Western countries, accounting for approximately 25 to 35 percent of all leukemias in the United States.
An estimated 20,700 new cases of CLL will be diagnosed in the United States in 2024. CLL is considered to be mainly a disease afflicting
older adults, with a median age at diagnosis of approximately 70 years; however, it is not unusual to make this diagnosis in younger individuals
(e.g., from approximately 30 to 39 years of age). The incidence increases rapidly with increasing age. The natural history of CLL is extremely
variable, with survival times from initial diagnosis that range from approximately 2 to 20 years, and a median survival of approximately
10 years.
Most
patients will have a complete or partial response to initial therapy. However, conventional therapy for CLL is not curative and most patients
experience relapse. In addition, many patients will require a change in therapy due to intolerance. Since patients with CLL are generally
elderly with a median age older than 70 years, and due to the relatively benign course of the disease in the majority of patients, only
selected patients are candidates for intensive treatments such as allo-SCT. Innovative new treatments with a favorable safety
profile are therefore urgently needed for patients with relapsed and refractory disease.
Under their IND, Fred Hutch is currently conducting
a Phase 1/2 clinical study to evaluate the anti-tumor activity and safety of administering CD20-directed third-generation CAR T cells
incorporating both 4-1BB and CD28 co-stimulatory signaling domains (MB-106) to patients with relapsed or refractory B-cell NHL or CLL
(ClinicalTrials.gov Identifier: NCT03277729). Secondary endpoints of this study include safety and toxicity, preliminary antitumor activity
as measured by overall response rate and complete remission rate, progression-free survival, and overall survival. The study is also assessing
CAR T cell persistence and the potential immunogenicity of the cells. Finally, this study was designed so that, together with Fred Hutch,
we could determine a recommended Phase 2 dose. Fred Hutch intends to enroll approximately 50 subjects in this study, which is being led
by the Principal Investigator Mazyar Shadman, M.D., M.P.H., Associate Professor of Fred Hutch’s Clinical Research Division.
The Fred Hutch IND was amended in 2019 to incorporate
an optimized manufacturing process that had been developed in collaboration with us.
In May 2021, we announced that the FDA issued
a safe to proceed letter for our IND application allowing for initiation of a multi-center Phase 1/2 clinical study of MB-106 in patients
with relapsed or refractory B cell NHL or CLL (Clinicaltrials.gov Identifier: NCT05360238). In August 2022, the first patient was
treated in our study.
In November 2021, Mustang was awarded a grant
of approximately $2.0 million from NCI of the National Institutes of Health. This two-year award partially funded the Mustang-sponsored
multicenter trial to assess the safety, tolerability and efficacy of MB-106. In August 2023, we fully utilized the grant.
In June 2022, MB-106 received Orphan Drug
Designation for the treatment of Waldenstrom macroglobulinemia (“WM”).
In December 2023, we presented preliminary
clinical data for the indolent lymphoma patients treated in the ongoing Phase 1/2 clinical study at the American Society of Hematology
(ASH) annual meeting. All 9 patients responded clinically to treatment; the observed overall response rate was 100%. All 5 follicular
lymphoma patients achieved a complete response. Among the WM patients 1 patient attained a very good partial response, and 2 patients
attained a partial response. The single patient with a hairy cell leukemia variant experienced stable disease. The safety profile demonstrated
that MB-106 was well tolerated with no occurrences of cytokine release syndrome (“CRS”) above grade 1, and no immune effector
cell-associated neurotoxicity syndrome (“ICANS”) of any grade was reported. Cell expansion and persistence were also demonstrated.
In the first quarter of 2024, we completed a successful
End-of-Phase 1 meeting with the FDA regarding a potential pivotal Phase 2 single-arm clinical trial for the treatment of WM. Per the discussions,
the FDA agreed with the proposed overall design of the pivotal trial for WM at the recommended dose of 1 x 107 CAR-T cells/kg and requested
only minimal modifications to the study protocol. No additional nonclinical studies are expected prior to Phase 2 or a Biologics License
Application ("BLA") filing. Due to limited resources, and as a result of the reduction in work force described below, we do
not expect to initiate our pivotal Phase 2 single-arm clinical trial of MB-106 for the treatment of WM trial in 2024. Subject to available
funds, we intend to rely on third party service providers to conduct study and manufacturing services to advance our priority potential
product candidates.
Also in the first quarter of 2024, we completed
enrollment of the indolent lymphoma arm in our multicenter Phase 1 trial. The tenth and final patient enrolled was a patient with follicular
lymphoma (FL) who achieved a complete response following treatment with 1 x 107 CAR-T cells/kg. As a result, the overall
complete response rate for FL in the Phase 1 portion of this trial was sustained at 100% (N=6), with no occurrence of CRS above grade
1 and no ICANS of any grade, despite not using prophylactic tocilizumab or dexamethasone.
In March 2024, we announced plans to collaborate
with Fred Hutch for a proof-of-concept Phase 1 investigator-sponsored clinical trial evaluating MB-106 in autoimmune diseases.
In March 2024, we were granted the Regenerative
Medicine Advanced Therapy (“RMAT”) designation by the FDA for the treatment of relapsed or refractory CD20 positive WM and
FL, based on potential improvement in response as seen in clinical data-to-date. Drugs eligible for RMAT designation are those intended
to treat, modify, reverse or cure a serious or life-threatening disease or condition, and that present preliminary clinical evidence indicating
the drug has the potential to address unmet medical needs for such disease or condition. RMAT designation provides regenerative medicine
advanced therapy products with the same benefits to expedite the development and review of a marketing application that are available
to drugs that receive Breakthrough Therapy Designation. These advantages include timely advice and interactive communications with FDA,
as well as proactive and collaborative involvement by senior FDA managers and experienced review and regulatory health project management
staff. A product designated as an RMAT also may be eligible for other FDA-expedited programs, such as Priority Review. The FDA also may
conduct a rolling review of products in its expedited programs, reviewing portions of a marketing application before the complete application
is submitted.
MB-109: Combination MB-101(IL13Rα2 CAR
T Cell Program for Glioblastoma) and MB-108 (HSV-1 oncolytic virus C134) as a Potential Treatment for IL13Rα2+ Relapsed or Refractory
Glioblastoma (GBM) and High-Grade Astrocytoma
An attractive novel approach to control glioblastoma
is adoptive cellular immunotherapy utilizing CAR T cells. CAR T cells can be engineered to recognize very specific antigenically distinct
tumor populations and to migrate through the brain parenchyma to kill malignant cells. In addition, oncolytic viruses (“OVs”)
have been developed to effectively infect and kill cancer cells in the tumor, as well as modify the microenvironment to increase tumor
immunogenicity and immune cell trafficking within the tumor. Due to these properties, OVs have been studied in combination with other
treatments to enhance the effectiveness of immunotherapies.
Preliminary anti-tumor activity has been observed
in clinical studies administering the OV (MB-108) and CAR T cell therapy (MB-101) as single agents; however, the combination has not yet
been explored. To determine if the combination of both therapies will result in a synergistic effect, investigators from COH developed
preclinical studies in orthotopic GBM models in nude mice. Dr. Christine Brown from City of Hope presented these preclinical studies
at the American Association for Cancer Research 2022 Annual Meeting. It was observed that co-treatment with HSV-1 OV and IL13Rα2-directed
CAR-T cells resulted in no additional adverse events beyond those seen with the individual therapies, and, more notably, that pre-treatment
with HSV-1 OV re-shaped the tumor microenvironment by increasing immune cell infiltrates and enhanced the efficacy of sub-therapeutic
doses of IL13Rα2-directed CAR-T cell therapy delivered either intraventricularly or intratumorally. These preclinical studies aimed
to provide a deeper understanding of this combination approach to support the potential benefit of a combination study that will evaluate
HSV-1 OV (MB-108) and IL13Rα2-directed CAR-T cells (MB-101).
In
October 2023, we received a safe-to-proceed "approval" from the FDA for our MB-109 IND application allowing us to initiate
a Phase 1, open-label, non-randomized, multicenter study of MB-109 in patients with IL13Ra2+
recurrent GBM and high-grade astrocytoma. In this Phase 1 clinical study, we intend to evaluate the combination of CAR-T cells (MB-101)
and the herpes simplex virus type 1 oncolytic virus (MB-108) in patients with IL13Ra2+
high-grade gliomas. The design of this study involves first a lead in cohort, wherein patients are treated with MB-101 alone without prior
MB-108 administration. After successful confirmation of the safety profile of MB-101 alone, the study will then investigate increasing
doses of intratumorally administered MB-108 followed by dual intratumoral (ICT) and intraventricular (ICV) administration of MB-101. Due
to limited resources, we do not currently expect to initiate this study until such time, if any, that additional resources become available
to us.
MB-101 (IL13Rα2 CAR T Cell Program for
Glioblastoma)
GBM is the most common brain and central nervous
system (“CNS”) cancer, accounting for approximately 49.1% of malignant primary brain and CNS tumors, approximately 54% of
all gliomas, and approximately 16% of all primary brain and CNS tumors. More than 14,490 new GBM cases were predicted to be diagnosed
in the U.S. for 2023. Malignant brain tumors are the second leading cause of cancer-related deaths in adolescents and young adults aged
15-39 and the most common cancer occurring among 15-19-year-olds in the U.S. While GBM is a rare disease 2-3 cases per 100,000 persons
per year in the U.S. and European Union (“EU”), it is quite lethal, with five-year survival rate historically under 10%,
which has been virtually unchanged for decades. Standard of care therapy consists of maximal surgical resection, radiation, and chemotherapy
with temozolomide, which, while rarely curative, is shown to extend median overall survival from 4.5 to 15 months. GBM remains difficult
to treat due to the inherent resistance of the tumor to conventional therapies.
Immunotherapy approaches targeting brain tumors
offer promise over conventional treatments. IL13Rα2 is an attractive target for CAR T therapy, as it has limited expression
in normal tissue but is overexpressed on the surface of greater than 50% of GBM tumors. CAR-T cells are designed to express membrane-tethered
IL-13 receptor ligand (“IL-13”) mutated at a single site (glutamic acid at position 13 to a tyrosine; E13Y) with high affinity
for IL13Rα2 and reduced binding to IL13Rα1 in order to reduce healthy tissue targeting (Kahlon KS et al. Cancer Research. 2004;64:9160-9166).
We are developing an optimized CAR-T product incorporating
enhancements in CAR-T design and T cell engineering to improve antitumor potency and T cell persistence. These include a second-generation
hinge-optimized CAR containing mutations in the IgG4 linker to reduce off-target Fc interactions (Jonnalagadda M et al. Molecular
Therapy. 2015;23(4):757-768.), a 4-1BB (CD137) co-stimulatory signaling domain for improved survival and maintenance of CAR T
cells, and the extracellular domain of CD19 as a selection/tracking marker. In order to further improve persistence, either central memory
T-cells (TCM) or enriched CD62L+ naïve and memory T cells (TN/MEM) are isolated and enriched. Our manufacturing
process limits ex vivo expansion, which is designed to reduce T cell exhaustion and maintain a TCM or
TN/MEM phenotype. Based on experiments with CAR-Ts in mouse xenograft models of GBM, these CAR-modified TCM and
TN/MEM cells have been shown to be more potent and persistent than earlier generations of CAR-T cells.
Our academic partners at COH have recently completed
the treatment phase of their Phase 1 study, which was designed to assess the feasibility and safety of using TCM or TN/MEM enriched
IL13Rα2-specific CAR-engineered T cells for clinical study participants with IL13Rα2 recurrent/refractory malignant glioma
(ClinicalTrials.gov Identifier: NCT02208362). In this study, COH enrolled and treated 65 patients, with 58 patients receiving 3 cycles
of CAR T cells per the study protocol. MB-109: Combination MB-101(IL13Rα2 CAR T Cell Program for Glioblastoma) and MB-108 (HSV-1
oncolytic virus C134) as a Potential Treatment for IL13Rα2+ Relapsed or Refractory Glioblastoma (GBM) and High-Grade Astrocytoma.
Preliminary data indicated that the CAR-T cells were well tolerated, and no dose-limiting toxicities were observed in any of the study
arms nor where there any occurrences of CRS or treatment-related deaths. Of the 58 patients evaluable for disease response, 50% achieved
stable disease (SD) or better; 22%, including 8 patients with grade 4 gliomas, achieved SD or better for at least 90 days. Two patients
achieved partial response, and one patient achieved complete response on the study. In 2016 COH reported that a patient had achieved a
complete response to treatment based on the imaging and clinical features set forth by the Response Assessment in Neuro-Oncology Criteria
(“RANO”). This result was published as a case report in the New England Journal of Medicine (Brown CE et
al. NEJM. 2016;375:2561-9). As described in the paper, this patient diagnosed with recurrent multifocal glioblastoma
received multiple infusions of IL13Rα2-specific CAR-T cells over 220 days through two intracranial delivery routes –
infusions into the resected tumor cavity followed by infusions into the ventricular system. Intracranial infusions of IL13Rα2-targeted
CAR-T cells were not associated with any toxic effects of grade 3 or higher. After CAR-T cell treatment, regression of all intracranial
and spinal tumors was observed, along with corresponding increases in levels of cytokines and immune cells in the cerebrospinal fluid.
This clinical response was sustained for 7.5 months after the initiation of CAR T-cell therapy; however, the patient’s disease
eventually recurred at four new locations that were distinct and non-adjacent to the original tumors, and biopsy of one of these lesions
showed decreased expression of IL13Rα2.
Results from this COH study have laid the foundation
for potentially three new MB-101 studies listed below. Due to limited resources, we do not expect to initiate these studies until such
time, if any, that additional resources become available to us.
1. MB-101
with or without nivolumab and ipilimumab in treating patients with recurrent or refractory glioblastoma (currently enrolling patients;
ClinicalTrials.gov Identifier: NCT04003649) sponsored by COH;
2. MB-101
in treating patients with recurrent or refractory glioblastoma with a substantial component of leptomeningeal disease (currently
enrolling patients; ClinicalTrials.gov Identifier: NCT04661384) sponsored by COH;
3. MB-101
in combination with the herpes simplex virus type 1 oncolytic virus (MB-108) in treating patients with recurrent or refractory glioblastoma
or high-grade astrocytoma, as described above. This combination therapy, to be administered in a phase 1 two-center trial under our IND,
will be referred to as MB-109.
MB - 108 (HSV 1 oncolytic
virus C134)
MB-108 is a next-generation oncolytic herpes simplex
virus (“oHSV”) that is conditionally replication competent; that is, it can replicate in tumor cells, but not in normal cells,
thus killing the tumor cells directly through this process. Replication of C134 in the tumor itself not only kills the infected tumor
cells but causes the tumor cell to act as a factory to produce new virus. These virus particles are released as the tumor cell dies and
can then proceed to infect other tumor cells in the vicinity and continue the process of tumor kill. In addition to this direct oncolytic
activity, the virus promotes an immune response against surviving tumor cells, which increases the antitumor effect of the therapy. The
virus expresses a gene from another virus from the same overall virus family, human cytomegalovirus, which allows it to replicate better
in the tumor cells than its first-generation predecessors. However, the virus has also been genetically engineered to minimize the production
of any toxic effects for the patient receiving the therapy.
To improve this virus over its first-generation
predecessors, modifications have focused on improving viral replication and spread within the tumor bed and on enhancing bystander damage
to uninfected tumor cells. These effects cumulatively should result in converting an immunologically cold tumor to an immunologically
hot tumor, which we anticipate will increase the efficacy of our IL13Rα2 directed CAR T for the treatment of GBM and high-grade
astrocytoma.
The O’Neal Comprehensive Cancer Center at
the UAB is the single clinical trial site for the Phase 1 trial of MB - 108, and this site has initiated a Phase 1 trial that began enrolling
patients in 2019 (ClinicalTrials.gov Identifier: NCT03657576). The primary objective of this study is to determine the safety and tolerability
of a single dose of MB-108 administered via a stereotactic intracerebral injection and to determine the maximally tolerated dose (“MTD”)
of the oncolytic virus. Secondary objectives are to obtain preliminary information about the potential benefit of MB - 108 in the treatment
of patients with recurrent malignant gliomas, including relevant data on markers of efficacy, including time to tumor progression and
patient survival. As of April 2023, 9 patients had been enrolled in this study.
In Vivo CAR T Platform
Technology
We are collaborating with the Mayo Clinic to develop
a novel technology that may be able to transform the administration of CAR T therapies and potentially be used as an off-the-shelf therapy.
The technology, developed by Larry R. Pease, Ph.D., principal investigator and former director of the Center for Immunology and Immune
Therapies at Mayo Clinic, is a new platform to administer CAR T therapy using a two-step approach. First, a peptide is administered to
the patient to drive the proliferation of the patient’s resident T cells. This is followed by the administration of a viral CAR
construct directly into the lymph nodes of the patient. In turn, the viral construct infects the activated T cells and effectively forms
CAR T cells in vivo in the patient. Successful implementation may lead to an off-the-shelf product with no need to isolate and expand
patient T cells ex vivo in a cell processing facility.
Preclinical proof-of-concept has been established,
and the ongoing development of this technology will take place at Mayo Clinic. We are evaluating plans to file an IND application for
a multicenter Phase 1 clinical trial once a lead construct has been identified, subject to allocation of resources.
Recent Developments
Sale of Manufacturing Facility – Overview
of Transaction
On May 18, 2023, we entered into an Asset
Purchase Agreement (the “Original Asset Purchase Agreement”) with uBriGene (Boston) Biosciences, Inc., a Delaware corporation
(“uBriGene”), pursuant to which we agreed to sell our leasehold interest in our cell processing facility located in Worcester,
Massachusetts (the “Facility”), and associated assets relating to the manufacturing and production of cell and gene therapies
at the Facility to uBriGene (the “Transaction”). We and uBriGene subsequently entered into Amendment No. 1, dated as
of June 29, 2023, and Amendment No. 2, dated as of July 28, 2023, to the Original Asset Purchase Agreement (the Original
Asset Purchase Agreement, as so amended, the “Asset Purchase Agreement”).
On July 28, 2023 (the “Closing Date”),
pursuant to the Asset Purchase Agreement, we completed the sale of all of our assets that primarily relate to the manufacturing and production
of cell and gene therapies at the Facility (such operations, the “Transferred Operations” and such assets, the “Transferred
Assets”) to uBriGene for upfront consideration of $6 million cash (the “Base Amount”). The Transferred Assets that were
transferred to uBriGene on the Closing Date include, but are not limited to: (i) our leases of equipment and other personal property
and all other property, equipment, machinery, tools, supplies, inventory, fixtures and all other personal property primarily related to
the Transferred Operations, (ii) the data, information, methods, quality management systems, and intellectual property primarily
used for the purposes of the Transferred Operations, (iii) the records and filings, including customer and vendor lists, production
data, standard operating procedures and business records relating to, used in or arising under the Transferred Operations and (iv) all
transferrable business license, permits and approvals necessary to operate the Transferred Operations. As described in greater detail
below, certain Transferred Assets, including our lease of the Facility and contracts that are primarily used in the Transferred Operations
(the “Transferred Contracts”) did not transfer to uBriGene on the Closing Date.
Voluntary Notice to U.S. Committee on Foreign
Investment in the United States
uBriGene is an indirect, wholly owned subsidiary
of UBrigene (Jiangsu) Biosciences Co., Ltd., a Chinese contract development and manufacturing organization. Under the Asset Purchase
Agreement, we and uBriGene agreed to use our reasonable best efforts to obtain clearance for the Transaction from the U.S. Committee on
Foreign Investment in the United States (“CFIUS”), although obtaining such clearance was not a condition to closing the Transaction.
In accordance with the Asset Purchase Agreement, we and uBriGene previously submitted a voluntary joint notice to CFIUS on August 10,
2023.
Following an initial 45-day review period and
subsequent 45-day investigation period, on November 13, 2023, CFIUS requested that we and uBriGene withdraw and re-file our joint
voluntary notice to allow more time for review and discussion regarding the nature and extent of national security risk posed by the Transaction.
Upon CFIUS’s request, we and uBriGene submitted a request to withdraw and re-file our joint voluntary notice to CFIUS, and on November 13,
2023, CFIUS granted this request, accepted the joint voluntary notice and commenced a new 45-day review period on November 14, 2023.
CFIUS’s 45-day review ended on December 28, 2023. Since CFIUS had not concluded its review by December 28, 2023, the proceeding
transitioned to a subsequent 45-day investigation period, which ended on February 12, 2024.
Following the 45-day review period and subsequent
45-day investigation period described above, on February 12, 2024, we and uBriGene requested permission to withdraw and re-file our
joint voluntary notice to allow more time for review and discussion regarding the nature and extent of national security risk posed by
the Transaction. Upon our joint request to withdraw and re-file their joint voluntary notice to CFIUS, on February 12, 2024, CFIUS
granted this request, accepted the joint voluntary notice and commenced a new 45-day review period on February 13, 2024. CFIUS’s
new 45-day review ended on March 28, 2024. Because CFIUS had not yet concluded its action, the proceeding transitioned to a second
45-day phase as CFIUS further investigated the Transaction. On March 28, 2024, CFIUS advised us that its investigation would be completed
no later than May 13, 2024.
On May 13, 2024, together with uBriGene and
CFIUS, we executed a National Security Agreement (the “NSA”), pursuant to which we and uBriGene agreed to abandon the Transaction
and all other transactions contemplated by the Asset Purchase Agreement and the agreements entered into in connection therewith. The execution
of the NSA was the result of CFIUS’ determination that such transactions posed a risk to the national security of the United States.
We disagree with this position but did not feel a meaningful likelihood existed that the Transaction would be consummated in light of
CFIUS’ objections. The NSA imposes certain conditions on us and uBriGene and its affiliates. Most significantly, we agreed (i) not
to effect the Transaction with uBriGene or any of its affiliates; and (ii) to appoint a point of contact representative with whom
CFIUS and uBriGene’s designated contact person may interact as needed. The NSA also obligates uBriGene to sell, or otherwise dispose
of, the equipment assets purchased within 180 days after the execution of the NSA, with uBriGene able to eliminate some of its obligations
under the NSA if it is able to sell the equipment assets purchased back to us within 45 days after the execution of the NSA.
Notification of Non-Compliance with Nasdaq
Continued Listing Requirements
On March 13, 2024, we received a deficiency
letter (the “Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market (“Nasdaq”)
notifying us that we were not in compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq
Capital Market under Nasdaq Listing Rule 5550(b)(1). Nasdaq Listing Rule 5550(b)(1) requires companies listed on The Nasdaq
Capital Market to maintain stockholders’ equity of at least $2,500,000 (the “Stockholders’ Equity Requirement”).
As of December 31, 2023, we reported stockholders’ equity of $123,000. The Letter further noted that as of its date, we did
not have a market value of listed securities of $35 million, or net income from continued operations of $500,000 in the most recently
completed fiscal year or in two of the last three most recently completed fiscal years, the alternative quantitative standards for continued
listing on the Nasdaq Capital Market.
The Letter had no immediate
effect on our continued listing on the Nasdaq Capital Market, subject to our compliance with the other continued listing requirements.
In accordance with Nasdaq rules, we were provided 45 calendar days, or until April 29, 2024, to submit a plan to regain compliance
(the “Compliance Plan”). We submitted our Compliance Plan on April 29, 2024 and the Staff granted the our request for
an extension of 180 calendar days through September 9, 2024 to regain compliance with the Stockholders Equity Requirement.
On May 16, 2024,
we received a notice (the “Second Letter”) from the Staff of Nasdaq indicating that the bid price of our common stock had
closed below $1.00 per share for 31 consecutive business days and, as a result, we were not in compliance with Nasdaq Listing Rule 5550(a)(2),
which sets forth the minimum bid price requirement for continued listing on the Nasdaq Capital Market. The Second Letter from Nasdaq had
no immediate effect on the listing of our common stock on Nasdaq. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we were afforded
a 180-calendar day grace period, or until November 12, 2024, to regain compliance with the bid price requirement. Compliance can
be achieved by evidencing a closing bid price of at least $1.00 per share for a minimum of ten consecutive business days (but generally
not more than 20 consecutive business days) during the 180-calendar day grace period.
If we do not regain compliance
with the bid price requirement by November 12, 2024, we may be eligible for an additional 180-calendar day compliance period so long
as it satisfies the criteria for initial listing on Nasdaq and the continued listing requirement for market value of publicly held shares
and we provide written notice to Nasdaq of our intention to cure the deficiency during the second compliance period by effecting a reverse
stock split, if necessary. In the event we are not eligible for the second grace period, Nasdaq staff will provide written notice that
our common stock is subject to delisting; however, we may request a hearing before the Nasdaq Hearings Panel (the “Panel”),
which request, if timely made, would stay any further suspension or delisting action by the Staff pending the conclusion of the hearing
process and expiration of any extension that may be granted by the Panel. There can be no assurance that we would be successful in our
efforts to maintain the listing of our common stock on the Nasdaq Capital Market.
April 2024 Reduction in Work Force
On April 10, 2024,
our board of directors approved a reduction of our workforce by approximately 81% of our employee base in order to reduce costs and preserve
capital due to the fundraising environment and continued uncertainty regarding the CFIUS review of the sale of the Facility and the Transaction
with uBriGene. The workforce reduction took place primarily in April 2024 and is expected to be substantially completed in the second
quarter of 2024. As a result of these actions, we expect to incur personnel-related restructuring charges of approximately $0.2 million
in connection with one-time employee termination cash expenditures, which are expected to be incurred in the second quarter of 2024. We
may also incur other charges or cash expenditures not currently contemplated due to events that may occur as a result of, or associated
with, the workforce reduction or retention efforts. The estimates of the costs expected to be incurred, and the timing thereof, are subject
to various assumptions and actual costs may differ. We and our board of directors continue to evaluate all strategic and other alternatives
related to the business.
Due to limited resources, and as a result of the
reduction in work force described above, we do not expect to initiate our pivotal Phase 2 single-arm clinical trial of MB-106 for the
treatment of WM trial in 2024. Subject to available funds, we intend rely on third party service providers to conduct study and manufacturing
services to advance our priority potential product candidates.
Summary Risk Factors
Our business is subject to risks of which you
should be aware before making an investment decision. You should carefully consider the risk factors described under the heading “Risk
Factors,” and in the other reports and documents that we have filed with the SEC.
Corporate Information
We are a majority-controlled subsidiary of Fortress
Biotech, Inc. We were incorporated under the laws of the State of Delaware on March 13, 2015. Our principal executive offices
are located at 377 Plantation Street, Worcester, Massachusetts 01605, and our telephone number is 781-652-4500. We maintain a website
on the Internet at www.mustangbio.com and our e-mail address is info@mustangbio.com. Information on our website, or any other website,
is not incorporated by reference in this prospectus. We have included our website address in this prospectus solely as an inactive textual
reference.
Implications of Being a Smaller Reporting Company
We are a smaller reporting company as defined
in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may take advantage of certain of the scaled disclosures
available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) the market
value of our voting and non-voting common stock held by non-affiliates is less than $250 million measured on the last business day
of our second fiscal quarter or (ii) our annual revenue is less than $100 million during the most recently completed fiscal
year and the market value of our voting and non-voting common stock held by non-affiliates is less than $700 million measured on
the last business day of our second fiscal quarter. Specifically, as a smaller reporting company, we may choose to present only the two
most recent fiscal years of audited financial statements in our Annual Reports on Form 10-K and have reduced disclosure obligations
regarding executive compensation, and if we are a smaller reporting company with less than $100 million in annual revenue, we would
not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public
accounting firm.
THE OFFERING
Common Stock Offered by us Pursuant to this Prospectus |
|
Shares of our common stock having an aggregate offering price of up to $5,600,000. |
|
|
Common Stock to be Outstanding After the Offering |
|
Up to 53,880,361 shares of common stock, assuming sales of shares of our common stock in this offering at an offering price of $0.2114 per share, which was the last reported sale price of our common stock on the Nasdaq Capital Market on May 30, 2024. The actual number of shares of common stock issued will vary depending the sales price under this offering. |
|
|
|
Plan of Distribution |
|
“At
the market offering” that may be made from time to time on the Nasdaq Capital Market or other market for our common
stock in the United States through the Agent. See the section titled “Plan of Distribution” on page 19 of this
prospectus. |
|
|
Use of Proceeds |
|
We currently
intend to use the net proceeds from this offering, together with our existing cash, cash equivalents and marketable securities, for general
corporate purposes and working capital requirements, which may include, among other things, the advancement of our product candidates
to obtain regulatory approval from the FDA. We will, however, have broad discretion to allocate the net proceeds of this offering. See
the section titled “Use of Proceeds” on page 16 of this prospectus. |
|
|
Risk Factors |
|
See
“Risk Factors” beginning on page 12 of this prospectus and the other information included in, or incorporated by
reference into, this prospectus for a discussion of certain factors you should carefully consider before deciding to invest in
shares of our common stock. |
|
|
Nasdaq Capital Market Symbol |
|
MBIO |
The number of shares of common stock to be outstanding
after this offering is based on 27,390,295 shares of our common stock outstanding as of May 30, 2024, and excludes:
|
· |
54,459,204 shares of common stock issuable upon exercise of outstanding warrants having a weighted-average exercise price of $0.273 per share; |
|
|
|
|
· |
14,644 shares of common stock issuable upon the
vesting and settlement of outstanding restricted stock award/units;
|
|
· |
76,112 shares of common stock issuable upon the vesting and exercise of outstanding stock options; |
|
|
|
|
· |
56,359 shares of common stock issuable upon the conversion of the Class A common stock, at the holders’ election; |
|
|
|
|
· |
16,666 shares of common stock issuable upon the conversion of the Class A Preferred Stock, at the holders’ election; |
|
|
|
|
· |
421,941 shares of common stock issuable to Fortress for equity fee pursuant to the Founders Agreement; |
|
|
|
|
· |
393,725 shares of common stock reserved for issuance and available for future grant under our 2016 Incentive Plan; and |
|
|
|
|
· |
338,315 shares of common stock reserved for future issuance under the Mustang Bio, Inc. 2019 Employee Stock Purchase Plan, as amended (the “ESPP”), plus any future increases, including annual automatic evergreen increases, in the number of shares of common stock reserved for issuance thereunder. |
RISK FACTORS
Investment
in our common stock involves risks. Before deciding whether to invest in our common stock, you should consider carefully
the risk factors discussed below and those contained in the section entitled “Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 11, 2024, which is incorporated
herein by reference in its entirety, together with other information in the accompanying prospectuses, the information and documents incorporated
by reference herein and therein, and in any free writing prospectus that we have authorized for use in connection with this offering.
If any of the risks or uncertainties described in our SEC filings actually occurs, our business, financial condition, results of operations
or cash flow could be materially and adversely affected. This could cause the trading price of our common stock to decline, resulting
in a loss of all or part of your investment. The risks and uncertainties we have described are not the only ones facing our company. Additional
risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business operations.
Additional Risks Related to our Company, our Common Stock and this
Offering
There is substantial doubt about our ability
to continue as a going concern, which may hinder our ability to obtain future financing.
We are not yet generating revenue, have incurred
substantial operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future
as we execute on our product development plan and may never become profitable. As of March 31, 2024, we had cash and cash equivalents
of $1.3 million and an accumulated deficit of $386.2 million, and, as of December 31, 2023, we had cash and cash equivalents of $6.2
million and an accumulated deficit of $381.0 million. We do not believe that our cash is sufficient for the next twelve months. As a result,
there is substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern will depend on
our ability to obtain additional funding, as to which no assurances can be given. This offering is being conducted on a best-efforts basis,
from time to time as market conditions warrant, and we may sell fewer than all of the securities offered hereby and may receive significantly
less in net proceeds from this offering than the maximum amount set forth on the cover page of this prospectus. Furthermore, even
if we sell all the securities offered hereby and raise the maximum amount of proceeds, we may need to raise additional capital to fund
our operations and continue to support our planned development and commercialization activities. If we are unable to obtain funds when
needed or on acceptable terms, we may be required to curtail our current development programs, cut operating costs, forgo future development
and other opportunities or even terminate our operations.
We believe that the proceeds of this offering, combined with our limited funds currently on hand, will only be sufficient for us to operate
for a relatively limited amount of time. Since we will be unable to generate sufficient funds, if any, to fund our operations for at least
several years, we will need to seek additional equity or debt financing to provide the capital required to implement our business
plan. If we are unable to raise capital, we could be required to seek bankruptcy protection or other alternatives that would likely result
in our securityholders losing some or all of their investment in us.
We believe that the proceeds of this offering,
combined with our limited funds currently on hand, will only be sufficient for us to operate for a relatively limited amount of time.
Since we will be unable to generate sufficient, if any, revenue or cash flow to fund our operations for at least several years, we
will need to seek additional equity or debt financing to provide the capital required to implement our business plan.
We do not currently have any arrangements or credit
facilities in place as a source of funds. There can be no assurance that we will be able to raise sufficient additional capital on acceptable
terms, or at all. If such financing is not available on satisfactory terms, or is not available at all, we may be required to further
delay, scale back or eliminate the development of business opportunities and our operations and financial condition may be materially
adversely affected. Furthermore if we are unable to raise capital, we could be required to seek bankruptcy protection or other alternatives
that would likely result in our securityholders losing some or all of their investment in us.
The
actual number of shares we will issue and gross proceeds resulting from those sales, at any one time or in total, is uncertain.
Subject
to certain limitations in the sales agreement and compliance with applicable law, we have the discretion to deliver a placement notice
to the Agent at any time throughout the term of the sales agreement. The number of shares that are sold by the Agent after delivering
a placement notice will fluctuate based on the market price of our common stock during the sales period and limits we set with
the Agent in any instruction to sell shares, and the demand for our common stock during the sales period. Because the price per share
of each share sold will fluctuate based on the market price of our common stock during the sales period, it is not possible at this stage
to predict the number of shares or the gross proceeds to be raised in connection with those sales, if any, that will be ultimately issued.
The
common stock offered hereby will be sold in “at the market offerings,” and investors
who buy shares at different times will likely pay different prices.
Investors who purchase shares in this offering at different times
will likely pay different prices, and so may experience different outcomes in their investment results. We will have discretion, subject
to market demand, to vary the timing, prices and numbers of shares sold, and there is no minimum or maximum sales price. Investors may
experience a decline in the value of their shares as a result of share sales made at prices lower than the prices they paid.
We
are selling the securities offered in this prospectus on a “best efforts” basis and
may not be able to sell any of the securities offered herein.
We have engaged the Agent to act as our sales
agent in connection with this offering. While the Agent will use its reasonable best efforts to arrange for the sale of the securities,
the Agent is under no obligation to purchase any of the securities. As a result, there are no firm commitments to purchase any of the
securities in this offering. Consequently, there is no guarantee that we will be capable of selling all, or any, of the securities being
offered hereby.
We will have broad discretion in the use
of proceeds of this offering designated for general corporate purposes and working capital requirements.
Our management will have broad discretion over
the use and investment of the net proceeds of this offering. Accordingly, investors in this offering have only limited information concerning
our management’s specific intentions and will need to rely upon the judgment of our management with respect to the use of proceeds.
The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect
on our business and cause the price of our securities to decline. Pending the application of these funds, we may invest the net proceeds
from this offering in a manner that does not produce income or that loses value.
You will experience immediate and substantial
dilution.
The
offering price per share in this offering may exceed the net tangible book value per share of our common stock outstanding prior
to this offering. Assuming that shares of our common stock are sold at a price of $0.2114 per share, the last reported sale price of our
common stock on the Nasdaq Capital Market on May 30, 2024, for aggregate gross proceeds of $5.6 million, and after deducting commissions
and estimated offering expenses payable by us, you will experience immediate dilution of $0.14 per share, representing the difference
between our as adjusted pro forma net tangible book value per share as of March 31, 2024 after giving effect to this offering and
the assumed offering price, net of commissions and offering expenses. The exercise of outstanding stock options and warrants will result
in further dilution of your investment. See the section entitled “Dilution” below for a more detailed illustration of the
dilution you would incur if you participate in this offering.
You may experience future dilution as a result of future equity
offerings.
In
order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible
into or exchangeable for our common stock at prices that may not be the same as the price per share in this offering. We may sell shares
or other securities in any other offering at a price per share that is less than the price per share paid by investors in this offering,
and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share
at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions
may be higher or lower than the price per share paid by investors in this offering.
Fortress will continue to control a voting majority of our common
stock following the offering.
Pursuant
to the terms of the Class A Preferred Stock held by Fortress, Fortress is entitled to cast, for each share of Class A Preferred
Stock held by Fortress, the number of votes that is equal to one and one-tenth (1.1) times a fraction, the numerator of which is the sum
of the shares of outstanding common stock and the denominator of which is the number of shares of outstanding Class A Preferred
Stock. Accordingly, as long as Fortress owns any shares of Class A Preferred Stock, it will be able to control or significantly influence
all matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other business
combination transactions. The consummation of this offering will not impact Fortress’s holdings of Class A Preferred Stock,
so Fortress will continue to be able to exercise such control and influence over us. The interests of Fortress may not always coincide
with the interests of other stockholders, and Fortress may take actions that advance its own interests and are contrary to the desires
of our other stockholders. Moreover, this concentration of voting power may delay, prevent or deter a change in control of us even when
such a change may be in the best interests of all stockholders, could deprive our stockholders of an opportunity to receive a premium
for their common stock as part of a sale of Mustang or our assets, and might affect the prevailing market price of our common stock.
Our stock price can be volatile, which increases
the risk of litigation, and may result in a significant decline in the value of your investment.
The
trading price of our common stock has been and is likely to continue to be highly volatile and subject to wide fluctuations in
price in response to various factors, many of which are beyond our control. These factors include:
| · | the commencement, enrollment, or results of our current and future preclinical studies and clinical trials,
and the results of trials of our competitors or those of other companies in our market sector; |
| · | regulatory approval of our product candidates, or limitations to specific label indications or patient
populations for its use, or changes or delays in the regulatory review process; |
| · | manufacturing, supply or distribution delays or shortages; |
| · | our ability to identify and successfully acquire or in-license new product candidates on acceptable
terms; |
| · | FDA, state or international regulatory actions, including actions on regulatory applications any of our
product candidates; |
| · | legislative or regulatory changes; |
| · | judicial pronouncements interpreting laws and regulations; |
| · | changes in government programs; |
| · | announcements of new products, services or technologies, commercial relationships, acquisitions or other
events by us or our competitors; |
| · | market conditions in the pharmaceutical and biotechnology sectors; |
| · | fluctuations in stock market prices and trading volumes of similar companies; |
| · | changes in accounting principles; |
| · | litigation or public concern about the safety of our product candidates or similar product candidates; |
| · | sales of large blocks of our common stock, including sales by our executive officers, directors and significant
shareholders; and |
| · | our ability to obtain additional financing to advance our development operations. |
In
addition, equity markets in general, and the market for biotechnology and life sciences companies in particular, have experienced extreme
price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies traded in those
markets. These broad market and industry factors may materially affect the market price of our common stock, regardless of our
development and operating performance. In the past, following periods of volatility in the market price of a company’s securities,
securities class-action litigation has often been instituted against that company. Such litigation, if instituted against us, could cause
us to incur substantial costs to defend such claims and divert management’s attention and resources, which could seriously harm
our business.
We
do not intend to pay dividends on our common stock, so any returns will be limited to increases, if any, in our common stock’s
value. Your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our common stock.
We currently anticipate that we will retain future
earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for
the foreseeable future. Any future determination to declare dividends will be made at the discretion of our board of directors and will
depend on, among other factors, our financial condition, operating results, capital requirements, general business conditions and other
factors that our board of directors may deem relevant. Any return to stockholders will therefore be limited to the appreciation in the
value of their stock, if any.
If we are unable
to maintain compliance with all applicable continued listing requirements and standards of Nasdaq, our common stock may be delisted from
Nasdaq.
On March 13, 2024, we received a deficiency
letter (the “Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market (“Nasdaq”)
notifying us that we were not in compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq
Capital Market under Nasdaq Listing Rule 5550(b)(1). Nasdaq Listing Rule 5550(b)(1) requires companies listed on the Nasdaq
Capital Market to maintain stockholders’ equity of at least $2,500,000 (the “Stockholders’ Equity Requirement”).
As of December 31, 2023, we reported stockholders’ equity of $123,000. The Letter further noted that as of its date, we did
not have a market value of listed securities of $35 million, or net income from continued operations of $500,000 in the most recently
completed fiscal year or in two of the last three most recently completed fiscal years, the alternative quantitative standards for continued
listing on the Nasdaq Capital Market.
The Letter has no immediate
effect on our continued listing on the Nasdaq Capital Market, subject to our compliance with the other continued listing requirements.
In accordance with Nasdaq rules, we were provided 45 calendar days, or until April 29, 2024, to submit a plan to regain compliance
(the “Compliance Plan”). We submitted its Compliance Plan on May 16, 2024 and the Staff granted our request for an extension
of 180 calendar days through September 9, 2024 to regain compliance with the Stockholders Equity Requirement.
On
May 16, 2024, we received a notice (the “Second Letter”) from the Staff of Nasdaq indicating that the bid price of our
common stock had closed below $1.00 per share for 31 consecutive business days and, as a result, we were not in compliance with
Nasdaq Listing Rule 5550(a)(2), which sets forth the minimum bid price requirement for continued listing on the Nasdaq Capital Market.
The Second Letter from Nasdaq had no immediate effect on the listing of our common stock on Nasdaq. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A),
we were afforded a 180-calendar day grace period, or until November 12, 2024, to regain compliance with the bid price requirement.
Compliance can be achieved by evidencing a closing bid price of at least $1.00 per share for a minimum of ten consecutive business days
(but generally not more than 20 consecutive business days) during the 180-calendar day grace period.
If
we do not regain compliance with the bid price requirement by November 12, 2024, we may be eligible for an additional 180-calendar
day compliance period so long as we satisfy the criteria for initial listing on Nasdaq and the continued listing requirement for market
value of publicly held shares and we provide written notice to Nasdaq of its intention to cure the deficiency during the second compliance
period by effecting a reverse stock split, if necessary. In the event we are not eligible for the second grace period, Nasdaq staff will
provide written notice that our common stock is subject to delisting; however, we may request a hearing before the Nasdaq Hearings
Panel (the “Panel”), which request, if timely made, would stay any further suspension or delisting action by the Staff pending
the conclusion of the hearing process and expiration of any extension that may be granted by the Panel. Although we intend to take all
reasonable measures available to regain compliance under the Nasdaq Listing Rules and remain listed on the Nasdaq Capital Market,
there can be no assurance that we would be successful in its efforts to maintain listing on the Nasdaq Capital Market.
If we are delisted from
Nasdaq, there can be no assurance that our common stock will be eligible for trading on another stock exchange or quotation on an over-the-counter
market. If we are not able to obtain a listing on another stock exchange or quotation service for our common stock, it may be extremely
difficult or impossible for stockholders to sell their shares. Additionally, if we are delisted from Nasdaq, but obtain a substitute listing
or quotation service for our common stock, it will likely be on a market with less liquidity and our common stock may therefore experience
potentially more price volatility than it has historically experienced on Nasdaq. Stockholders may not be able to sell their shares of
common stock on any such substitute market in the quantities, at the times, or at the prices that could potentially be available on a
more liquid trading market. As a result of these factors, if our common stock is delisted from Nasdaq, the value and liquidity of our
common stock would likely be adversely affected. A delisting of our common stock from Nasdaq could also adversely affect our ability to
obtain financing for our operations and/or result in a loss of confidence by investors, employees and/or business partners.
USE OF PROCEEDS
We may issue and sell shares of our common stock
having aggregate sales proceeds of up to $5.6 million from time to time under this prospectus. The amount of the net proceeds to us from
this offering will depend upon the number of shares of our common stock sold and the price at which they are sold. There can be no assurance
that we will be able to sell any shares under or fully utilize the sales agreement.
We may use any net proceeds from the sale of securities
under this prospectus for general corporate purposes and working capital requirements, which may include, among other things, the advancement
of our product candidates to obtain regulatory approval from the FDA. As a result, our management will have broad discretion to allocate
the net proceeds of this offering. Pending their ultimate use, we intend to invest the net proceeds in a variety of securities, including
commercial paper, government and non-government debt securities and/or money market funds that invest in such securities.
DIVIDEND POLICY
We have never declared or paid any cash dividends
on our common stock and do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay dividends
will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements
and other factors our board of directors deems relevant.
DILUTION
Purchasers of the securities offered by this prospectus
will suffer immediate and substantial dilution in the net tangible book value per share of the common stock they purchase. Net tangible
book value per share represents the amount of total tangible assets less total liabilities, divided by the number of shares of our common
stock outstanding as of March 31, 2024. Our net tangible book value as of March 31, 2024 was approximately $(4.9) million, or
$(0.48) per share of our common stock.
Our pro forma net tangible book value as of March 31,
2024, was $(1.4) million or $(0.05) per common share. Pro forma net tangible book value per share represents total tangible assets less
total liabilities, divided by the number of shares of our common shares outstanding as of March 31, 2024, after giving effect to
the issuance of 1,160,000 shares of common stock in connection with the the public offering completed in May 2024 and the issuance
of 16,681,638 shares of common stock in connection with the exercise of certain pre-funded warrants.
Dilution in net tangible book value per share
represents the difference between the amount per share paid by purchasers in this offering and the net tangible book value per share of
our common stock immediately after this offering. After giving further effect to the sale of all of the common stock in this offering
at an assumed public offering price of $0.2114, which was the last reported sales price of our common stock on the Nasdaq Capital Market
on May 30, 2024, and after deducting the estimated placement agent fees and the estimated expenses payable by us, but excluding the
issuance of shares of common stock issuable to Fortress pursuant to the Founders Agreement, following the completion of this offering,
our as adjusted pro forma net tangible book value as of March 31, 2024 would have been approximately $3.6 million, or $0.07 per share
of common stock. This represents an immediate increase in pro forma net tangible book value of $0.12 per share to our existing stockholders
and an immediate dilution in as adjusted pro forma net tangible book value of $0.14 per share to new investors participating in this offering.
The following table illustrates
this calculation on a per share basis:
Assumed public offering price per share | |
$ | 0.21 | |
Net tangible book value per share as of March 31, 2024 | |
$ | (0.48 | ) |
Increase per share attributable to pro forma adjustments | |
$ | 0.43 | |
Pro forma net tangible book value per share on March 31, 2024 | |
$ | (0.05 | ) |
Increase in pro forma net tangible book value per share attributable to investors participating in this offering | |
$ | 0.12 | |
As adjusted pro forma net tangible book value per share after giving effect to the offering | |
$ | 0.07 | |
Dilution in as adjusted pro forma net tangible book value per share to investors participating in this offering | |
$ | 0.14 | |
The table above assumes for illustrative purposes
that an aggregate of 26,490,066 shares of our common stock are sold pursuant to this prospectus at a price of $0.2114 per share, the last
reported sale price of our common stock on the Nasdaq Capital Market on May 30, 2024, for aggregate gross proceeds of $5.6 million.
The shares sold in this offering, if any, will be sold from time to time at various prices. An increase of $0.10 per share in the price
at which the shares are sold from the assumed offering price, assuming all of our common stock in the aggregate amount of $5.6 million
is sold at that price, would result in an as adjusted pro forma net tangible book value per share after the offering of $0.08 per share
and would decrease the dilution in as adjusted pro forma net tangible book value to $0.13 per share to new investors in this offering,
after deducting commissions and estimated aggregate offering expenses payable by us. A decrease of $0.10 per share in the price at which
the shares are sold from the assumed offering price to $0.1114 per share, assuming all of our common stock in the aggregate amount of
$5.6 million is sold at that price, would result in an as adjusted pro forma net tangible book value per share after the offering of $0.05
per share and would increase the dilution in as adjusted pro forma net tangible book value of $0.16 per share to new investors in this
offering, after deducting commissions and estimated aggregate offering expenses payable by us. This information is supplied for illustrative
purposes only.
The number of shares of common stock to be outstanding
after this offering is based on 27,387,179 shares of our common stock outstanding pro forma as adjusted as of March 31, 2024, and
excludes:
|
· |
54,459,204 shares of common stock issuable upon exercise of outstanding warrants having a weighted-average exercise price of $0.273 per share; |
|
|
|
|
· |
23,222 shares of common stock issuable upon
the vesting and settlement of outstanding restricted stock units; |
|
|
|
|
· |
76,112 shares of common stock issuable upon the vesting and exercise of outstanding stock options; |
|
|
|
|
· |
56,359 shares of common stock issuable upon the conversion of the Class A common stock, at the holders’ election; |
|
|
|
|
· |
16,666 shares of common stock issuable upon the conversion of the Class A Preferred Stock, at the holders’ election; |
|
|
|
|
· |
421,941 shares of common stock issuable to Fortress for equity fee pursuant to the Founders Agreement; |
|
|
|
|
· |
345,782 shares of common stock reserved for issuance and available for future grant under our 2016 Incentive Plan; and |
|
|
|
|
· |
338,315 shares of common stock reserved for future issuance under the Mustang Bio, Inc. 2019 Employee Stock Purchase Plan, as amended (the “ESPP”), plus any future increases, including annual automatic evergreen increases, in the number of shares of common stock reserved for issuance thereunder. |
Except
as otherwise indicated, all information in this prospectus assumes no exercise of the outstanding stock options or warrants and no settlement
of the restricted stock units described above. In addition, we may choose to raise additional capital due to market conditions or strategic
considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital
is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution
to our stockholders. See “Risk Factors” beginning on page 12 of this prospectus.
PLAN OF DISTRIBUTION
We entered into the sales agreement with H.C.
Wainwright & Co., LLC, as Agent (“Wainwright”) on May 31, 2024, under which we may issue and sell shares of
our common stock having an aggregate gross sales price of up to $5.6 million from time to time through or to Wainwright acting as sales
agent or principal.
Upon delivery of a placement notice and subject
to the terms and conditions of the sales agreement, Wainwright may offer and sell shares of our common stock by any method permitted by
law deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act, including sales
made directly on or through the Nasdaq Capital Market, the existing trading market for our common stock, sales made to or through a market
maker other than on an exchange or otherwise, directly to Wainwright as principal, in negotiated transactions at market prices prevailing
at the time of sale or at prices related to such prevailing market prices, and/or in any other method permitted by law. We or Wainwright
may suspend the offering of common stock upon notice and subject to other conditions.
We
will pay Wainwright commissions, in cash, for its services in acting as agent in the sale of our common stock. Wainwright will be entitled
to compensation at a commission rate of up to 3.0% of the gross sales price per share sold. Because there is no minimum offering amount
required as a condition of this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable
at this time. We have also agreed to reimburse Wainwright for certain specified expenses in an amount up to $50,000, in addition to up
to $2,500 per due diligence update session for Wainwright’s counsel’s fees. We estimate that the total expenses for the offering,
excluding compensation and reimbursements payable to Wainwright under the terms of the sales agreement, will be approximately $160,000.
Settlement for sales of shares of common stock
will occur on the first trading day following the date on which any sales are made (or any such shorter settlement cycle as may be in
effect under Exchange Act Rule 15c6-1 from time to time), or on some other date that is agreed upon by us and Wainwright in connection
with a particular transaction, in return for payment of the net proceeds to us. Sales of our common stock as contemplated in this prospectus
will be settled through the facilities of The Depository Trust Company or by such other means as we and Wainwright may agree upon. There
is no arrangement for funds to be received in an escrow, trust or similar arrangement.
Wainwright will use its commercially reasonable
efforts, consistent with its sales and trading practices, to solicit offers to purchase the shares of common stock under the terms and
subject to the conditions set forth in the sales agreement. In connection with the sale of the shares of common stock on our behalf, Wainwright
will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of Wainwright will be
deemed to be underwriting commissions or discounts. We have agreed to provide indemnification and contribution to Wainwright against certain
civil liabilities, including liabilities under the Securities Act.
This offering of shares of our common stock pursuant
to the sales agreement will terminate upon termination of the sales agreement as permitted therein. We and Wainwright may each terminate
the sales agreement as provided therein.
To the extent required by Regulation M, Wainwright
will not engage in any market making activities involving our common stock while the offering is ongoing under this prospectus. Wainwright
and its affiliates have in the past and may in the future provide various investment banking, commercial banking and other financial services
for us and our affiliates, for which services they may in the future receive customary fees. Wainwright acted as our placement agent in
connection with our public offering that was consummated in May 2024, for which it received compensation.
This summary of the material provisions of the
sales agreement does not purport to be a complete statement of its terms and conditions. A copy of the sales agreement is filed with the
SEC and is incorporated by reference into the registration statement of which this prospectus is a part. See “Where You Can Find
More Information; Incorporation by Reference” above.
This prospectus in electronic format may be made
available on a website maintained by Wainwright, and Wainwright may distribute this prospectus electronically.
LEGAL MATTERS
The
validity of the securities being offered hereby will be passed upon for us by Troutman Pepper Hamilton Sanders LLP, Charlotte, North Carolina.
Ellenoff Grossman & Schole LLP, New York, New York, is counsel for Wainwright in connection with this offering.
EXPERTS
The financial statements of Mustang Bio, Inc.
as of December 31, 2023 and 2022, and for each of the years in the two-year period ended December 31, 2023, have been incorporated
by reference herein in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the December 31, 2023
financial statements contains an explanatory paragraph that states the Company’s expectation to generate operating losses and negative
operating cash flows in the future, and the need for additional funding to support its planned operations raise substantial doubt about
its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome
of that uncertainty.
WHERE YOU CAN FIND MORE INFORMATION
We are a public company and file reports with
the SEC on an annual basis using Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Additionally,
the SEC maintains a website that contains annual, quarterly, and current reports, proxy statements, and other information that issuers
(including us) file electronically with the SEC. The SEC's website address is http://www.sec.gov. You can also obtain copies of materials
we file with the SEC from our Internet website found at www.mustangbio.com. Our stock is listed on the Nasdaq Capital Market under
the symbol “MBIO”. We have not incorporated by reference into this prospectus the information on our website, and you should
not consider it to be a part of this prospectus.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference”
the information we file with it which means that we can disclose important information to you by referring you to those documents instead
of having to repeat the information in this prospectus and any supplements to this prospectus. The information incorporated by reference
is considered to be part of this prospectus and any supplements to this prospectus, and later information that we file with the SEC will
automatically update and supersede this information. This prospectus incorporates by reference the documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (1) after the date of the initial
registration statement, as amended, and prior to effectiveness of the registration statement, and (2) after the date of this prospectus
and prior to the termination of this offering. Such information will automatically update and supersede the information contained in this
prospectus and the documents listed below; provided, however, that we are not, unless specifically indicated, incorporating any information
furnished under Item 2.02 or Item 7.01 of any current report on Form 8-K, whether listed below or filed in the future,
or related exhibits furnished pursuant to Item 9.01 of Form 8-K:
|
d) |
Our Current Reports on Form 8-K filed with the SEC on January 4, 2024, January 25, 2024, February 14, 2024, March 15, 2024, March 29, 2024, April 12, 2024, May 2, 2024 and May 21, 2024; and |
All reports and other documents we subsequently
file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this offering, including
all such documents we may file with the SEC after the date of the initial registration statement and prior to and after the effectiveness
of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated
by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents.
A statement contained in a document incorporated by reference into this prospectus shall be deemed to be modified or superseded for purposes
of this prospectus to the extent that a statement contained in this prospectus, any prospectus supplement or in any other subsequently
filed document which is also incorporated in this prospectus modifies or replaces such statement. Any statements so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. We will furnish without charge to any
person (including any beneficial owner) a copy of any or all of the documents incorporated by reference, including exhibits to these documents,
upon written or oral request. Direct your request to: Corporate Secretary, Mustang Bio, Inc., 377 Plantation Street, Worcester,
Massachusetts, 01605 or (781) 652-4500.
Mustang Bio, Inc.
Up to $5,600,000
Common Stock
PROSPECTUS
H.C.
Wainwright & Co.
, 2024
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated costs
and expenses, other than underwriting discounts and commissions, payable by us in connection with the offering of the securities being
registered. All the amounts shown are estimates, except for the SEC registration fee.
SEC registration fee |
|
$ | 5,904 | |
Accounting fees and expenses |
|
| * | |
Legal fees and expenses |
|
| * | |
Transfer agent fees and expenses |
|
| * | |
Trustee fees and expenses |
|
| * | |
Printing and miscellaneous expenses |
|
| * | |
Total |
|
$ | * | |
* These fees are calculated based on the securities
offered and the number of issuances and accordingly cannot be estimated at this time. The applicable prospectus supplement will set forth
the aggregate amount of expenses payable in respect of any offering of securities.
Item 15. Indemnification of Directors and Officers
Under the General Corporation Law of the State
of Delaware (the “DGCL”), a corporation may include provisions in its certificate of incorporation that will relieve its directors
of monetary liability for breaches of their fiduciary duty to the corporation, except under certain circumstances, including a breach
of the director’s duty of loyalty, acts or omissions of the director not in good faith or which involve intentional misconduct or
a knowing violation of law, the approval of an improper payment of a dividend or an improper purchase by the corporation of stock or any
transaction from which the director derived an improper personal benefit. Our Amended and Restated Certificate of Incorporation, as amended,
eliminates the personal liability of directors to us or our stockholders for monetary damages for breach of fiduciary duty as a director
with certain limited exceptions set forth in the DGCL.
Section 145 of the DGCL grants to corporations
the power to indemnify each officer and director against liabilities and expenses incurred by reason of the fact that he or she is or
was an officer or director of the corporation if he or she acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his or her conduct was unlawful. Our Amended and Restated Certificate of Incorporation, as amended, and Amended and Restated
Bylaws, as amended, provide for indemnification of each of our officers and directors to the fullest extent permitted by the DGCL. Section 145
of the DGCL also empowers corporations to purchase and maintain insurance on behalf of any person who is or was an officer or director
of the corporation against liability asserted against or incurred by him in any such capacity, whether or not the corporation would have
the power to indemnify such officer or director against such liability under the provisions of Section 145 of the DGCL.
Item 16. Exhibits and Financial Statement Schedules
Exhibit |
|
Description
of Exhibit |
1.1* |
|
Form of Underwriting
Agreement. |
|
|
|
1.2 |
|
At the Market Offering Agreement, dated May 31, 2024, by and among the registrant and H.C. Wainwright & Co., LLC. |
|
|
|
3.1 |
|
Amended and Restated Certificate of Incorporation of Mustang Bio, Inc. (formerly Mustang Therapeutics, Inc.), dated July 26, 2016 (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 10 (File No. 000-5568) filed with the SEC on July 28, 2016). |
|
|
|
3.2 |
|
Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Mustang Bio, Inc., dated June 14, 2018 (incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q (File No. 001-38191) for the fiscal quarter ended June 30, 2018). |
3.3 |
|
Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Mustang Bio, Inc., dated September 30, 2019 (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (File No. 001-38191) filed with the SEC on September 30, 2019). |
|
|
|
3.4 |
|
Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Mustang Bio, Inc., dated December 4, 2020 (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (File No. 001-38191) filed with the SEC on December 4, 2020). |
|
|
|
3.5 |
|
Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Mustang Bio, Inc., dated June 17, 2021 (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (File No. 001-38191) filed with the SEC on June 22, 2021). |
|
|
|
3.6 |
|
Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Mustang Bio, Inc., dated July 5, 2022 (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (File No. 001-38191) filed with the SEC on July 7, 2022). |
|
|
|
3.7 |
|
Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Mustang Bio, Inc., dated April 3, 2023 (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (File No. 001-38191) filed with the SEC on April 3, 2023). |
|
|
|
3.8 |
|
Amended and Restated Bylaws of Mustang Bio, Inc. (incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K (File No. 001-38191) filed with the SEC on April 3, 2023). |
|
|
|
4.1 |
|
Specimen certificates evidencing shares of common stock, Class A common stock and Class A preferred stock (incorporated by reference to Exhibit 4.1 of the Registrant’s Form 10 (File No. 000-5568) filed with the SEC on July 28, 2016). |
|
|
|
4.2 |
|
Form of Warrant Agreement (incorporated by reference to Exhibit 4.2 of the Registrant’s Form 10 (File No. 000-5568) filed with the SEC on July 28, 2016). |
|
|
|
4.3 |
|
Common Stock Warrant issued by Mustang Bio, Inc. to NSC Biotech Venture Fund I, LLC, dated July 5, 2016 (incorporated by reference to Exhibit 10.5 of the Registrant’s Form 10 (File No. 000-5568) filed with the SEC on July 28, 2016). |
|
|
|
4.4 |
|
Warrant to Purchase Common Stock issued to Runway Growth Finance Corp., dated March 4, 2022 (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K (File No. 001-38191) filed with the SEC on March 8, 2022). |
|
|
|
4.5 |
|
Form of Pre-funded Warrant (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K (File No. 001-38191) filed with the SEC on October 30, 2023). |
|
|
|
4.6 |
|
Form of Warrant (incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K (File No. 001-38191) filed with the SEC on October 30, 2023). |
|
|
|
4.7 |
|
Form of Wainwright Warrant (incorporated by reference to Exhibit 4.3 of the Registrant’s Current Report on Form 8-K (File No. 001-38191) filed with the SEC on October 30, 2023). |
|
|
|
4.8 |
|
Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K (File No. 001-38191) filed with the SEC on May 2, 2024). |
|
|
|
4.9 |
|
Form of Series A-1, A-2, and A-3 Warrant (incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K (File No. 001-38191) filed with the SEC on May 2, 2024). |
|
|
|
4.10 |
|
Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.3 of the Registrant’s Current Report on Form 8-K (File No. 001-38191) filed with the SEC on May 2, 2024). |
|
|
|
4.11 |
|
Form of Indenture, between the Registrant and one or more trustees to be named. |
* To be filed by amendment or by a report filed
under the Securities Exchange Act of 1934, as amended, and incorporated herein by reference, if applicable.
‡ To be filed pursuant to Section 305(b)(2) of
the Trust Indenture Act of 1939 under the electronic form type “305B2” and in accordance with the requirements of Item 601(b)(25)
of Regulation S-K.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period
in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required
by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus
any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the
“Calculation of Registration Fee” table in the effective registration statement; and
(iii) To include any material
information with respect to the plan of distribution not previously disclosed in the registration statement or any material change
to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i),
(a)(1)(ii) and (a)(1)(iii) above do not apply if the information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the SEC by registrant pursuant to Section 13 and Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus
filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining
any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining
liability under the Securities Act to any purchaser:
(A) Each prospectus filed by the
registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus
was deemed part of and included in the registration statement; and
(B) Each prospectus required to be
filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating
to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by
Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier
of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering
described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such effective date.
(5) That, for the purpose of determining
liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes
that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to
such purchaser:
(i) Any preliminary prospectus or
prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other
free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities
provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that
is an offer in the offering made by the undersigned registrant to the purchaser.
(b) The undersigned registrant
hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant
to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrant
hereby undertakes that:
(1) For purposes of determining any
liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining
any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(e) The undersigned registrant
hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of
section 310 of the Securities Act in accordance with the rules and regulations prescribed by the SEC under section 305(b)(2) of
the Securities Act.
SIGNATURES
Pursuant to the requirements of the Securities
Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3
and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Worcester, Commonwealth of Massachusetts, on May 31, 2024.
|
Mustang Bio, Inc. |
|
|
|
|
By: |
/s/ Manuel Litchman, M.D. |
|
|
Manuel Litchman, M.D.
Chief Executive Officer and President |
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Manuel Litchman, M.D. and James Murphy, and each of them, as his or her true and lawful
attorneys-in-fact and agents, each with the full power of substitution, for him or her and in his or her name, place or stead, in any
and all capacities, to sign any and all amendments to this registration statement (including post-effective amendments), and to sign any
registration statement for the same offering covered by this registration statement that is to be effective upon filing pursuant to Rule 462(b) promulgated
under the Securities Act, and all post-effective amendments thereto, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or their or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature |
|
Title |
|
Date |
/s/ Manuel Litchman |
|
President, Chief Executive Officer and Director |
|
|
Manuel Litchman, M.D. |
|
(Principal Executive Officer) |
|
May 31, 2024 |
|
|
|
|
|
/s/ James Murphy |
|
Interim Chief Financial Officer |
|
|
James Murphy |
|
(Principal Financial and Accounting Officer) |
|
May 31, 2024 |
|
|
|
|
|
/s/ Michael S. Weiss |
|
Chairman of the Board of Directors and Executive |
|
|
Michael S. Weiss |
|
Chairman |
|
May 31, 2024 |
|
|
|
|
|
/s/ Adam Chill |
|
|
|
|
Adam Chill |
|
Director |
|
May 31, 2024 |
|
|
|
|
|
/s/ Neil Herskowitz |
|
|
|
|
Neil Herskowitz |
|
Director |
|
May 31, 2024 |
|
|
|
|
|
/s/ Lindsay A. Rosenwald |
|
|
|
|
Lindsay A. Rosenwald, M.D. |
|
Director |
|
May 31, 2024 |
|
|
|
|
|
/s/ Michael Zelefsky |
|
|
|
|
Michael Zelefsky, M.D. |
|
Director |
|
May 31, 2024 |
Exhibit 1.2
AT THE MARKET OFFERING AGREEMENT
May 31, 2024
H.C. Wainwright & Co., LLC
430 Park Avenue
New York, New York 10022
Ladies and Gentlemen:
Mustang Bio, Inc., a
corporation organized under the laws of Delaware (the “Company”), confirms its agreement (this “Agreement”)
with H.C. Wainwright & Co., LLC (the “Manager”) as follows:
1. Definitions.
The terms that follow, when used in this Agreement and any Terms Agreement, shall have the meanings indicated.
“Accountants” shall
have the meaning ascribed to such term in Section 4(m).
“Act”
shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Action”
shall have the meaning ascribed to such term in Section 3(p).
“Affiliate”
shall have the meaning ascribed to such term in Section 3(o).
“Applicable
Time” shall mean, with respect to any Shares, the time of sale of such Shares pursuant to this Agreement or any relevant Terms
Agreement.
“Base Prospectus”
shall mean the base prospectus contained in the Registration Statement at the Effective Time.
“Board”
shall have the meaning ascribed to such term in Section 2(b)(iii).
“Broker
Fee” shall have the meaning ascribed to such term in Section 2(b)(v).
“Business
Day” shall mean any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, that, for purposes of clarity, commercial banks shall not be deemed
to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential
employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of
any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The
City of New York generally are open for use by customers on such day.
“Commission”
shall mean the United States Securities and Exchange Commission.
“Common
Stock” shall have the meaning ascribed to such term in Section 2.
“Common
Stock Equivalents” shall have the meaning ascribed to such term in Section 3(g).
“Company
Counsel” shall have the meaning ascribed to such term in Section 4(l).
“DTC”
shall have the meaning ascribed to such term in Section 2(b)(vii).
“Effective
Date” shall mean each date and time that the Registration Statement and any post-effective amendment or amendments thereto became
or becomes effective.
“Effective
Time” shall mean the first date and time that the Registration Statement becomes effective.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated
thereunder.
“Execution
Time” shall mean the date and time that this Agreement is executed and delivered by the parties hereto.
“Free Writing
Prospectus” shall mean a free writing prospectus, as defined in Rule 405.
“GAAP”
shall have the meaning ascribed to such term in Section 3(m).
“Incorporated
Documents” shall mean the documents or portions thereof filed with the Commission on or prior to the Effective Date that are
incorporated by reference in the Registration Statement or the Prospectus and any documents or portions thereof filed with the Commission
after the Effective Date that are deemed to be incorporated by reference in the Registration Statement or the Prospectus.
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3(v).
“Issuer
Free Writing Prospectus” shall mean an issuer free writing prospectus, as defined in Rule 433.
“Losses”
shall have the meaning ascribed to such term in Section 7(d).
“Material
Adverse Effect” shall have the meaning ascribed to such term in Section 3(b).
“Material
Permits” shall have the meaning ascribed to such term in Section 3(t).
“Net Proceeds”
shall have the meaning ascribed to such term in Section 2(b)(v).
“Permitted
Free Writing Prospectus” shall have the meaning ascribed to such term in Section 4(g).
“Placement”
shall have the meaning ascribed to such term in Section 2(c).
“Proceeding”
shall have the meaning ascribed to such term in Section 3(b).
“Prospectus”
shall mean the Base Prospectus, as supplemented by the Prospectus Supplement included in the Registration Statement at the Effective Time
and any subsequently filed Prospectus Supplement.
“Prospectus
Supplement” shall mean the prospectus supplement relating to the Shares included in the Registration Statement at the Effective
Time and any other prospectus supplement relating to the Shares prepared and filed pursuant to Rule 424(b) from time to time.
“Registration
Statement” shall mean the shelf registration statement on Form S-3 registering $40,000,000 of securities of the Company
to be filed on or about the Execution Time, including exhibits and financial statements and any prospectus supplement relating to the
Shares that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to
Rule 430B, as amended on each Effective Date and, in the event any post-effective amendment thereto becomes effective, shall also
mean such registration statement as so amended.
“Representation
Date” shall have the meaning ascribed to such term in Section 4(k).
“Required
Approvals” shall have the meaning ascribed to such term in Section 3(e).
“Rule 158”,
“Rule 164”, “Rule 172”, “Rule 173”, “Rule 405”,
“Rule 415”, “Rule 424”, “Rule 430B” and “Rule 433”
refer to such rules under the Act.
“Sales
Notice” shall have the meaning ascribed to such term in Section 2(b)(i).
“SEC Reports”
shall have the meaning ascribed to such term in Section 3(m).
“Settlement
Date” shall have the meaning ascribed to such term in Section 2(b)(vii).
“Subsidiary”
shall have the meaning ascribed to such term in Section 3(a).
“Terms
Agreement” shall have the meaning ascribed to such term in Section 2(a).
“Time of
Delivery” shall have the meaning ascribed to such term in Section 2(c).
“Trading
Day” means a day on which the Trading Market is open for trading.
“Trading
Market” means the Nasdaq Capital Market.
2. Sale
and Delivery of Shares. The Company proposes to issue and sell through or to the Manager, as sales agent and/or principal, from time
to time during the term of this Agreement and on the terms set forth herein, up to such number of shares (the “Shares”)
of the Company’s common stock, $0.0001 par value per share (“Common Stock”), that does not exceed (a) the
number or dollar amount of shares of Common Stock registered on the Prospectus Supplement, pursuant to which the offering is being made,
(b) the number of authorized but unissued shares of Common Stock (less the number of shares of Common Stock issuable upon exercise,
conversion or exchange of any outstanding securities of the Company or otherwise reserved from the Company’s authorized capital
stock), or (c) the number or dollar amount of shares of Common Stock that would cause the Company or the offering of the Shares to
not satisfy the eligibility and transaction requirements for use of Form S-3, including, if applicable, General Instruction I.B.6
of Registration Statement on Form S-3 (the lesser of (a), (b) and (c), the “Maximum Amount”). Notwithstanding
anything to the contrary contained herein, the parties hereto agree that compliance with the limitations set forth in this Section 2
on the number and aggregate sales price of Shares issued and sold under this Agreement shall be the sole responsibility of the Company
and that the Manager shall have no obligation in connection with such compliance.
(a) Appointment
of Manager as Selling Agent; Terms Agreement. For purposes of selling the Shares through the Manager, the Company hereby appoints
the Manager as exclusive agent of the Company for the purpose of selling the Shares of the Company pursuant to this Agreement and the
Manager agrees to use its commercially reasonable efforts to sell the Shares on the terms and subject to the conditions stated herein.
The Company agrees that, whenever it determines to sell the Shares directly to the Manager as principal, it will enter into a separate
agreement (each, a “Terms Agreement”) in substantially the form of Annex I hereto, relating to such sale in
accordance with Section 2 of this Agreement.
(b) Agent
Sales. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, following the
effectiveness of the Registration Statement, the Company will issue and agrees to sell Shares from time to time through the Manager, acting
as sales agent, and the Manager agrees to use its commercially reasonable efforts to sell, as sales agent for the Company, on the following
terms:
(i) The
Shares are to be sold on a daily basis or otherwise as shall be agreed to by the Company and the Manager on any day that (A) is a
Trading Day, (B) the Company has instructed the Manager by telephone (confirmed promptly by electronic mail) to make such sales (“Sales
Notice”) and (C) the Company has satisfied its obligations under Section 6 of this Agreement. The Company will designate
the maximum amount of the Shares to be sold by the Manager daily (subject to the limitations set forth in Section 2(d)) and the minimum
price per Share at which such Shares may be sold. Subject to the terms and conditions hereof, the Manager shall use its commercially reasonable
efforts consistent with its normal trading and sales practices to sell on a particular day all of the Shares designated for the sale by
the Company on such day. The gross sales price of the Shares sold under this Section 2(b) shall be the market price for the
shares of Common Stock sold by the Manager under this Section 2(b) on the Trading Market at the time of sale of such Shares.
(ii) The
Company acknowledges and agrees that (A) there can be no assurance that the Manager will be successful in selling the Shares, (B) the
Manager will incur no liability or obligation to the Company or any other person or entity if it does not sell the Shares for any reason
other than a failure by the Manager to use its commercially reasonable efforts consistent with its normal trading and sales practices
and applicable law and regulations to sell such Shares as required under this Agreement, and (C) the Manager shall be under no obligation
to purchase Shares on a principal basis pursuant to this Agreement, except as otherwise specifically agreed by the Manager and the Company
pursuant to a Terms Agreement.
(iii) The
Company shall not authorize the issuance and sale of, and the Manager shall not be obligated to use its commercially reasonable efforts
to sell, any Share at a price lower than the minimum price therefor designated from time to time by the Company’s Board of Directors
(the “Board”), or a duly authorized committee thereof, or such duly authorized officers of the Company, and notified
to the Manager in writing. The Company or the Manager may, upon notice to the other party hereto by telephone (confirmed promptly by electronic
mail), suspend the offering of the Shares for any reason and at any time; provided, however, that such suspension or termination
shall not affect or impair the parties’ respective obligations with respect to the Shares sold hereunder prior to the giving of
such notice.
(iv) The
Manager may sell Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415
under the Act, including without limitation sales made directly on the Trading Market, on any other existing trading market for the Common
Stock or to or through a market maker. The Manager may also sell Shares in privately negotiated transactions, provided that the Manager
receives the Company’s prior written approval for any sales in privately negotiated transactions and if so provided in the “Plan
of Distribution” section of the Prospectus Supplement or a supplement to the Prospectus Supplement or a new Prospectus Supplement
disclosing the terms of such privately negotiated transaction.
(v) The
compensation to the Manager for sales of the Shares under this Section 2(b) shall be a placement fee of 3.0% of the gross sales
price of the Shares sold pursuant to this Section 2(b) (“Broker Fee”). The foregoing rate of compensation
shall not apply when the Manager acts as principal, in which case the Company may sell Shares to the Manager as principal at a price agreed
upon at the relevant Applicable Time pursuant to a Terms Agreement. The remaining proceeds, after deduction of the Broker Fee and deduction
of any transaction fees imposed by any clearing firm, execution broker, or governmental or self-regulatory organization in respect of
such sales, shall constitute the net proceeds to the Company for such Shares (the “Net Proceeds”).
(vi) The
Manager shall provide written confirmation (which may be by electronic mail) to the Company following the close of trading on the Trading
Market each day in which the Shares are sold under this Section 2(b) setting forth the number of the Shares sold on such day,
the aggregate gross sales proceeds and the Net Proceeds to the Company, and the compensation payable by the Company to the Manager with
respect to such sales.
(vii) Unless
otherwise agreed between the Company and the Manager, settlement for sales of the Shares will occur at 10:00 a.m. (New York City
time) on the first (1st) Trading Day (or any such shorter settlement cycle as
may be in effect pursuant to Rule 15c6-1 under the Exchange Act from time to time) following the date on which such sales
are made (each, a “Settlement Date”). On or before the Trading Day prior to each Settlement Date, the Company will,
or will cause its transfer agent to, electronically transfer the Shares being sold by crediting the Manager’s or its designee’s
account (provided that the Manager shall have given the Company written notice of such designee at least one Trading Day prior to the
Settlement Date) at The Depository Trust Company (“DTC”) through its Deposit and Withdrawal at Custodian System or
by such other means of delivery as may be mutually agreed upon by the parties hereto which Shares in all cases shall be freely tradable,
transferable, registered shares in good deliverable form. On each Settlement Date, the Manager will deliver the related Net Proceeds in
same day funds to an account designated by the Company. The Company agrees that, if the Company, or its transfer agent (if applicable),
defaults in its obligation to deliver duly authorized Shares on a Settlement Date, in addition to and in no way limiting the rights and
obligations set forth in Section 7 hereto, the Company will (i) hold the Manager harmless against any loss, claim, damage, or
reasonable, documented expense (including reasonable and documented legal fees and expenses), as incurred, arising out of or in connection
with such default by the Company, and (ii) pay to the Manager any commission, discount or other compensation to which the Manager
would otherwise have been entitled absent such default.
(viii) At
each Applicable Time, Settlement Date, and Representation Date, the Company shall be deemed to have affirmed each representation and warranty
contained in this Agreement as if such representation and warranty were made as of such date, modified as necessary to relate to the Registration
Statement and the Prospectus as amended as of such date. Any obligation of the Manager to use its commercially reasonable efforts to sell
the Shares on behalf of the Company shall be subject to the continuing accuracy of the representations and warranties of the Company herein,
to the performance by the Company of its obligations hereunder and to the continuing satisfaction of the additional conditions specified
in Section 6 of this Agreement.
(ix) If
the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares
of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar
transaction) (a “Distribution” and the record date for the determination of stockholders entitled to receive the Distribution,
the “Record Date”), the Company hereby covenants that, in connection with any sales of Shares pursuant to a Sales Notice
on the Record Date, the Company shall issue and deliver such Shares to the Manager on the Record Date and the Record Date shall be the
Settlement Date and the Company shall cover any additional costs of the Manager in connection with the delivery of Shares on the Record
Date.
(c) Term
Sales. If the Company wishes to sell the Shares pursuant to this Agreement in a manner other than as set forth in Section 2(b) of
this Agreement (each, a “Placement”), the Company will notify the Manager of the proposed terms of such Placement.
If the Manager, acting as principal, wishes to accept such proposed terms (which it may decline to do for any reason in its sole discretion)
or, following discussions with the Company wishes to accept amended terms, the Manager and the Company will enter into a Terms Agreement
setting forth the terms of such Placement. The terms set forth in a Terms Agreement will not be binding on the Company or the Manager
unless and until the Company and the Manager have each executed such Terms Agreement accepting all of the terms of such Terms Agreement.
In the event of a conflict between the terms of this Agreement and the terms of a Terms Agreement, the terms of such Terms Agreement will
control. A Terms Agreement may also specify certain provisions relating to the reoffering of such Shares by the Manager. The commitment
of the Manager to purchase the Shares pursuant to any Terms Agreement shall be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify the number of the Shares to be purchased by the Manager pursuant thereto, the price to be paid to the Company for such Shares,
any provisions relating to rights of, and default by, underwriters acting together with the Manager in the reoffering of the Shares, and
the time and date (each such time and date being referred to herein as a “Time of Delivery”) and place of delivery
of and payment for such Shares. Such Terms Agreement shall also specify any requirements for opinions of counsel, accountants’ letters
and officers’ certificates pursuant to Section 6 of this Agreement and any other information or documents required by the Manager.
(d) Maximum
Number of Shares. Under no circumstances shall the Company cause or request the offer or sale of any Shares if, after giving effect
to the sale of such Shares, the aggregate amount of Shares sold pursuant to this Agreement would exceed the lesser of (A) together
with all sales of Shares under this Agreement, the Maximum Amount, (B) the amount available for offer and sale under the currently
effective Registration Statement and (C) the amount authorized from time to time to be issued and sold under this Agreement by the
Board, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Manager in writing. Under no
circumstances shall the Company cause or request the offer or sale of any Shares pursuant to this Agreement at a price lower than the
minimum price authorized from time to time by the Board, a duly authorized committee thereof or a duly authorized executive officer, and
notified to the Manager in writing. Further, under no circumstances shall the Company cause or permit the aggregate offering amount of
Shares sold pursuant to this Agreement to exceed the Maximum Amount.
(e) Regulation
M Notice. Unless the exceptive provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act are satisfied
with respect to the Shares, the Company shall give the Manager at least one (1) Business Day’s prior notice of its intent to
sell any Shares in order to allow the Manager time to comply with Regulation M.
3. Representations
and Warranties. The Company represents and warrants to, and agrees with, the Manager at the Execution Time and the Effective Time
and on each such time that the following representations and warranties are repeated or deemed to be made pursuant to this Agreement,
as set forth below, except as set forth in the Registration Statement, the Prospectus or the Incorporated Documents.
(a) Subsidiaries.
All of the direct and indirect subsidiaries (individually, a “Subsidiary”) of the Company, if any, are set forth on
Exhibit 21.1 to the Company’s most recent Annual Report on Form 10-K filed with the Commission. The Company owns, directly
or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any “Liens”
(which for purposes of this Agreement shall mean a lien, charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction), and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
(b) Organization
and Qualification. The Company and each of the Subsidiaries, if any, is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite corporate power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation nor in default of any of the provisions of its respective certificate or articles of incorporation, bylaws
or other organizational or charter documents. Each of the Company and the Subsidiaries, if any, is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case
may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability
of this Agreement, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, from that set forth in the Registration Statement, the Base Prospectus, any Prospectus
Supplement, the Prospectus or the Incorporated Documents, or (iii) a material adverse effect on the Company’s ability to perform
in any material respect on a timely basis its obligations under this Agreement (any of (i), (ii) or (iii), a “Material Adverse
Effect”) and no “Proceeding” (which for purposes of this Agreement shall mean any action, claim, suit, investigation
or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced
or threatened) has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.
(c) Authorization
and Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and
the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company
and no further action is required by the Company, the Board or the Company’s stockholders in connection herewith other than in connection
with the Required Approvals. This Agreement has been duly executed and delivered by the Company and, when delivered in accordance with
the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its
terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Shares and the consummation
by it of the transactions contemplated hereby do not and will not (i) conflict with or violate any provision of the Company’s
or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict
with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation
of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment,
anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company
or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject
to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the
case of each of clauses (ii) and (iii), such as would not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, local or other governmental authority or other “Person”
(defined as an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind, including the Trading Market)
in connection with the execution, delivery and performance by the Company of this Agreement, other than (i) the filings required
by this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) the filing of application(s) or
notice(s) to and approval by the Trading Market for the listing of the Shares for trading thereon in the time and manner required
thereby, and (iv) such filings as are required to be made under applicable state securities laws and the rules and regulations
of the Financial Industry Regulatory Authority, Inc. (“FINRA”) (collectively, the “Required Approvals”).
(f) Issuance
of Shares. The Shares are duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized
capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement. On or after the Effective Date, the issuance
by the Company of the Shares has been registered under the Act and all of the Shares are freely transferable and tradable by the purchasers
thereof without restriction (other than any restrictions arising solely from an act or omission of such a purchaser). On or after the
Effective Date, the Shares are being issued pursuant to the Registration Statement and the issuance of the Shares has been registered
by the Company under the Act. The “Plan of Distribution” section within the Registration Statement permits the issuance
and sale of the Shares as contemplated by this Agreement. Upon receipt of the Shares, the purchasers of such Shares will have good and
marketable title to such Shares and the Shares will be freely tradable on the Trading Market.
(g) Capitalization.
The capitalization of the Company is as set forth in the SEC Reports. Except as set forth in the SEC Reports, the Company has not issued
any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of warrants,
employee stock options or the settlement of restricted stock units under the Company’s equity incentive plans, the issuance of shares
of Common Stock to employees pursuant to the Company’s employee stock purchase plan and pursuant to the conversion and/or exercise
of securities exercisable, exchangeable or convertible into Common Stock (“Common Stock Equivalents”) outstanding as
of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions contemplated by this Agreement. Except as set forth in
the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock
Equivalents or capital stock of any Subsidiary. The issuance and sale of the Shares will not obligate the Company or any Subsidiary to
issue shares of Common Stock or other securities to any Person. Except as set forth in the SEC Reports with respect to customary adjustments,
such as reverse stock split, there are no outstanding securities or instruments of the Company or any Subsidiary with any provision that
adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company
or any Subsidiary. Except as set forth in the SEC Reports, there are no outstanding securities or instruments of the Company or any Subsidiary
that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any
stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding
shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board or others is required
for the issuance and sale of the Shares. There are no stockholders agreements, voting agreements or other similar agreements with respect
to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the
Company’s stockholders.
(h) Registration
Statement. The Company meets the requirements for use of Form S-3 under the Act and has prepared and filed with the Commission
the Registration Statement, including a related Base Prospectus, for registration under the Act of the offering and sale of the Shares.
On or after the Effective Date, such Registration Statement is effective and available for the offer and sale of the Shares as of the
date hereof. As filed, the Base Prospectus contains all information required by the Act and the rules thereunder, and, except to
the extent the Manager shall agree in writing to a modification, shall be in all substantive respects in the form furnished to the Manager
prior to the Execution Time or prior to any such time this representation is repeated or deemed to be made. The Registration Statement
contains all exhibits and schedules as required by the Act. Each of the Registration Statement and any post-effective amendment thereto,
if any, at the time it became effective, complied in all material respects with the Act and the Exchange Act and did not and will not
contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Registration Statement, at the Execution Time, each such time this representation is repeated or
deemed to be made, and at all times during which a prospectus is required by the Act to be delivered (whether physically or through compliance
with Rule 172, 173 or any similar rule) in connection with any offer or sale of the Shares, meets the requirements set forth in Rule 415(a)(1)(x).
The Company meets the transaction requirements as set forth in General Instruction I.B.1 of Form S-3 or, if applicable, as set forth
in General Instruction I.B.6 of Form S-3 with respect to the aggregate market value of securities being sold pursuant to this offering
and during the twelve (12) months prior to such time that this representation is repeated or deemed to be made.
(i) Accuracy
of Incorporated Documents. The Incorporated Documents, when they were filed with the Commission, conformed in all material respects
to the requirements of the Exchange Act and the rules thereunder, and none of the Incorporated Documents, when they were filed with
the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made not misleading; and any further documents so filed and incorporated
by reference in the Registration Statement, the Base Prospectus, the Prospectus Supplement or the Prospectus, when such documents are
filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the rules thereunder,
as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading.
(j) Ineligible
Issuer. (i) At the earliest time after the filing of the Registration Statement that the Company or another offering participant
made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Shares and (ii) as of the Execution Time and on each such
time this representation is repeated or deemed to be made (with such date being used as the determination date for purposes of this clause (ii)),
the Company was not and is not an Ineligible Issuer (as defined in Rule 405), without taking account of any determination by the
Commission pursuant to Rule 405 that it is not necessary that the Company be considered an Ineligible Issuer.
(k) Free
Writing Prospectus. The Company is eligible to use Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus does not
include any information the substance of which conflicts with the information contained in the Registration Statement, including any Incorporated
Documents and any prospectus supplement deemed to be a part thereof that has not been superseded or modified; and each Issuer Free Writing
Prospectus does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading. The foregoing sentence does not apply
to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished
to the Company by the Manager specifically for use therein. Any Issuer Free Writing Prospectus that the Company is required to file pursuant
to Rule 433(d) has been, or will be, filed with the Commission in accordance with the requirements of the Act and the rules thereunder.
Each Issuer Free Writing Prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) or that was
prepared by or behalf of or used by the Company complies or will comply in all material respects with the requirements of the Act and
the rules thereunder. The Company will not, without the prior consent of the Manager, prepare, use or refer to, any Issuer Free Writing
Prospectuses.
(l) Proceedings
Related to Registration Statement. The Registration Statement is not the subject of a pending proceeding or examination under Section 8(d) or
8(e) of the Act, and the Company is not the subject of a pending proceeding under Section 8A of the Act in connection with the
offering of the Shares. The Company has not received any notice that the Commission has issued or intends to issue a stop-order with respect
to the Registration Statement or that the Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement,
either temporarily or permanently, or intends or has threatened in writing to do so.
(m) SEC
Reports. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under
the Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the one (1) calendar year
preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and the Prospectus
Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates,
or to the extent corrected or modified by a subsequent amendment, the SEC Reports complied in all material respects with the requirements
of the Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. 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 Commission with respect thereto
as in effect at the time of filing (or to the extent corrected or modified by a subsequent amendment). Such financial statements have
been prepared in all material respects 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 and its consolidated Subsidiaries 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.
(n) [RESERVED]
(o) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within
the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date on which this representation is being
made, (i) there has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material
Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to
be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the
Company has not materially altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital
stock, (v) the Company has not issued any equity securities to any officer, director or “Affiliate” (defined as
any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with
a Person, as such terms are used in and construed under Rule 144 under the Act), except pursuant to existing Company equity incentive
plans, and (vi) no executive officer of the Company or member of the Board has resigned from any position with the Company. The Company
does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Shares
contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists with respect
to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial condition that would be
required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has
not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.
(p) Litigation.
Except as set forth in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or,
to the knowledge of the Company, threatened in writing against or affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) that would have a Material Adverse Effect. None of the Actions set forth in the SEC Reports,
(i) adversely affects or challenges the legality, validity or enforceability of this Agreement or the Shares or (ii) would,
if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor
any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company,
there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer
of the Company, except for such matters that would not, individually or in the aggregate, have or reasonably be expected to result in
a Material Adverse Effect. The Commission has not issued any stop order or other order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the Exchange Act or the Act.
(q) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company,
which would reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company
nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any
of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state, local and foreign
laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where
the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(r) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received written notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not
such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other
governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except in each case as would not have or reasonably be expected
to result in a Material Adverse Effect.
(s) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all applicable
federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient
air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively,
“Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees,
demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations,
issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits
licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and
(iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i),
(ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect.
(t) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits would not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification
of any Material Permit.
(u) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good
and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each
case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment
of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which
is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance, except
where the failure to so comply would not reasonably be expected to result in a Material Adverse Effect.
(v) Intellectual
Property. The Company and the Subsidiaries have, or have 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
necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to
so have would have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither
the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the 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,
except as would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary has received, since
the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any
knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as would not have or reasonably
be expected to not have a Material Adverse Effect. To the knowledge of the Company, all Intellectual Property Rights are enforceable and
there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have
taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where
failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has
no knowledge of any facts that would preclude it from having valid license rights or clear title to the Intellectual Property Rights.
The Company has no knowledge that it lacks or will be unable to obtain any rights or licenses to use all Intellectual Property Rights
that are necessary to conduct its business as described in the Pricing Prospectus and Prospectus.
(w) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited
to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has been notified that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business without a significant increase in cost.
(x) Affiliate
Transactions. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the
knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company
or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing
of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge
of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director,
trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees
for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits,
including stock option agreements under any equity incentive plan of the Company.
(y) Sarbanes
Oxley Compliance. The Company and the Subsidiaries are in compliance in all material respects with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002, as amended, that are effective as of the date hereof, and any and all applicable rules and regulations
promulgated by the Commission thereunder that are effective as of the date hereof. The Company and the Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have
established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company
in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified
in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure
controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report
under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures
based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over
financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or
is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.
(z) Certain
Fees. Other than payments to be made to the Manager, no brokerage or finder’s fees or commissions are or will be payable by
the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other
Person with respect to the transactions contemplated by this Agreement. The Manager shall have no obligation with respect to any fees
or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due
in connection with the transactions contemplated by this Agreement.
(aa) No
Other Sales Agency Agreement. The Company has not entered into any other sales agency agreements or other similar arrangements
with any agent or any other representative in respect of at the market offerings of the Shares that are currently
effective.
(bb) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares from the Manager
pursuant to this Agreement, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company”
subject to registration under the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so as
to reasonably ensure that it or its Subsidiaries will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(cc) Listing
and Maintenance Requirements. The Common Stock is listed on the Trading Market and the issuance of the Shares as contemplated by this
Agreement does not contravene the rules and regulations of the Trading Market. The Common Stock is registered pursuant to Section 12(b) or
12(g) of the Exchange Act, and the Company has taken no action designed to terminate, or which to its knowledge is likely to have
the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that
the Commission is contemplating terminating such registration. Except as set forth in the SEC Reports, the Company has not, in the 12
months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to
the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as set forth
in the SEC Reports, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository
Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with such electronic transfer.
(dd) Application
of Takeover Protections. The Company and the Board have taken all necessary action, if any, in order to render inapplicable any control
share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover
provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation
that is or could become applicable to the Shares.
(ee) Solvency.
Based on the consolidated financial condition of the Company as of the date hereof, (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect
of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such
debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt) within one year from
the date hereof. The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization
or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the date hereof. The SEC Reports set
forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company
or any Subsidiary has commitments. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness. For the purposes
of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000
(other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated
balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases
required to be capitalized in accordance with GAAP.
(ff) Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect, for the two (2) years preceding the date hereof and the date this representation is repeated or deemed to be made,
the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income
and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes
and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and
declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods
subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such
claim.
(gg) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other
person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf
of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended.
(hh) Accountants.
The Company’s independent registered public accounting firm is set forth in the SEC Reports. To the knowledge and belief of the
Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express
its opinion with respect to the financial statements to be included in the next Annual Report of the Company.
(ii) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any
of the Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Manager in connection with the Shares.
(jj) FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food,
Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled,
tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”),
such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance
with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use,
premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices,
product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would
not have a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge, threatened in writing, action (including
any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company
or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication
from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of,
the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any
Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the
withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on
any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any
of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its
Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries,
and which, either individually or in the aggregate, would have a Material Adverse Effect. The properties, business and operations of the
Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations
of the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United
States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving
or clearing for marketing any product being developed or proposed to be developed by the Company.
(kk) Equity
Incentive Plans. Each award granted by the Company under the Company’s equity incentive plans was granted (i) in accordance
with the terms of the Company’s equity incentive plans and (ii) with an exercise price (as applicable) at least equal to the
fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock
option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no
and has been no Company policy or practice to knowingly grant, awards under its equity incentive plans prior to, or otherwise knowingly
coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or
its Subsidiaries or their financial results or prospects.
(ll) Cybersecurity.
(i)(x) To the Company’s knowledge, there has been no material security breach or other compromise of or relating to any of
the Company’s or any Subsidiary’s information technology and computer systems, networks, hardware, software, data (including
the data of its respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment
or technology (collectively, “IT Systems and Data”), except for those as would not cause a Material Adverse Effect,
and (y) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably
be expected to result in, any security breach or other compromise to its IT Systems and Data that would cause a Material Adverse Effect;
(ii) the Company and the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders,
rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations
relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access,
misappropriation or modification, except as would not, individually or in the aggregate, have a Material Adverse Effect; (iii) the
Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential
information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company and
the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practices.
(mm) Compliance
with Data Privacy Laws. (i) To the best of the Company’s knowledge, the Company and the Subsidiaries are, and at all times
during the past three years were, in compliance with all applicable data privacy and security laws and regulations, including, as applicable,
the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively, “Privacy Laws”);
(ii) the Company and the Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance
with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling and analysis
of Personal Data (the “Policies”); (iii) the Company provides accurate notice of its applicable Policies to its
customers, employees, third party vendors and representatives as required by Privacy Laws; and (iv) applicable Policies provide accurate
and sufficient notice of the Company’s then-current privacy practices relating to its subject matter, and do not contain any material
omissions of the Company’s then-current privacy practices, as required by Privacy Laws. “Personal Data”
means (i) a natural person’s name, street address, telephone number, email address, photograph, social security number, bank
information, or customer or account number; (ii) any information which would qualify as “personally identifying information”
under the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by GDPR; and (iv) any other
piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis
of any identifiable data related to an identified person’s health or sexual orientation. (i) None of such disclosures made
or contained in any of the Policies have been inaccurate, misleading, or deceptive in violation of any Privacy Laws and (ii) the
execution, delivery and performance of this Agreement will not result in a breach of any Privacy Laws or Policies. Neither the Company
nor the Subsidiaries, (i) has, to the knowledge of the Company, received written notice of any actual or potential liability of the
Company or the Subsidiaries under, or actual or potential violation by the Company or the Subsidiaries of, any of the Privacy Laws; (ii) is
currently conducting or paying for, in whole or in part, any investigation, remediation or other corrective action pursuant to any regulatory
request or demand pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement by or with any court or arbitrator
or governmental or regulatory authority that imposed any obligation or liability under any Privacy Law.
(nn) Office
of Foreign Assets Control. Neither the Company nor any of its Subsidiaries, nor to the knowledge of the Company, any of the directors,
officers or employees of the Company or its Subsidiaries, is an individual or entity that is, or is owned or controlled by an individual
or entity that is: (i) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of
Foreign Assets Control, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions
authority (collectively, “Sanctions”), nor (ii) located, organized or resident in a country or territory that
is the subject of Sanctions. Neither the Company nor any of its Subsidiaries will, directly or indirectly, use the proceeds of the transactions
contemplated hereby, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other individual
or entity: (i) to fund or facilitate any activities or business of or with any individual or entity or in any country or territory
that, at the time of such funding or facilitation, is the subject of Sanctions or (ii) in any other manner that will result in a
violation of Sanctions by any individual or entity (including any individual or entity participating in the transactions contemplated
hereby, whether as underwriter, advisor, investor or otherwise). For the past five years, neither the Company nor any of its Subsidiaries
has knowingly engaged in, and is not now knowingly engaged in, any dealings or transactions with any individual or entity, or in any country
or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.
(oo) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning
of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Manager’s request.
(pp) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a
bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
(qq) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable
financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or
any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(rr) FINRA
Member Shareholders. There are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the
knowledge of the Company, any five percent (5%) or greater stockholder of the Company, except as set forth in the Registration Statement,
the Base Prospectus, any Prospectus Supplement or the Prospectus.
4. Agreements.
The Company agrees with the Manager that:
(a) Right
to Review Amendments and Supplements to Registration Statement and Prospectus. During any period when the delivery of a prospectus
relating to the Shares is required (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173
or any similar rule) to be delivered under the Act in connection with the offering or the sale of Shares, the Company will not file any
amendment to the Registration Statement or supplement (including any Prospectus Supplement) to the Base Prospectus unless the Company
has furnished to the Manager a copy for its review prior to filing and will not file any such proposed amendment or supplement to which
the Manager reasonably objects. The Company will cause any supplement to the Prospectus filed after the Effective Time to be properly
completed, in a form approved by the Manager, and will file such supplement with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed thereby and will provide evidence reasonably satisfactory to the Manager of such
timely filing. The Company will promptly advise the Manager (i) when the Prospectus, and any supplement thereto, shall have been
filed (if required) with the Commission pursuant to Rule 424(b), (ii) when, during any period when the delivery of a prospectus
(whether physically or through compliance with Rule 172, 173 or any similar rule) is required under the Act in connection with the
offering or sale of the Shares, any amendment to the Registration Statement shall have been filed or become effective (other than any
annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act), (iii) of any request by
the Commission or its staff for any amendment of the Registration Statement, or for any supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement
or of any notice objecting to its use or the institution or threatening of any proceeding for that purpose and (v) of the receipt
by the Company of any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The Company will use its commercially reasonable efforts to prevent the
issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon
such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or relief from such
occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement
and using its best efforts to have such amendment or new registration statement declared effective as soon as practicable.
(b) Subsequent
Events. If, at any time on or after an Applicable Time but prior to the related Settlement Date, any event occurs as a result of which
the Registration Statement or Prospectus would include any untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Company will (i) notify
promptly the Manager so that any use of the Registration Statement or Prospectus may cease until such are amended or supplemented; (ii) amend
or supplement the Registration Statement or Prospectus to correct such statement or omission; and (iii) supply any such amendment
or supplement to the Manager in such quantities as the Manager may reasonably request.
(c) Notification
of Subsequent Filings. During any period when the delivery of a prospectus relating to the Shares is required (including in circumstances
where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement, file a new registration statement or supplement the Prospectus to comply with the Act
or the Exchange Act or the respective rules thereunder, including in connection with use or delivery of the Prospectus, the Company
promptly will (i) notify the Manager of any such event, (ii) subject to Section 4(a), prepare and file with the Commission
an amendment or supplement or new registration statement which will correct such statement or omission or effect such compliance, (iii) use
its commercially reasonable efforts to have any amendment to the Registration Statement or new registration statement declared effective
as soon as practicable in order to avoid any disruption in use of the Prospectus and (iv) supply any supplemented Prospectus to the
Manager in such quantities as the Manager may reasonably request.
(d) Earnings
Statements. As soon as practicable, the Company will make generally available to its security holders and to the Manager an earnings
statement or statements of the Company and its Subsidiaries which will satisfy the provisions of Section 11(a) of the Act and
Rule 158. For the avoidance of doubt, the Company’s compliance with the reporting requirements of the Exchange Act shall be
deemed to satisfy the requirements of this Section 4(d).
(e) Delivery
of Registration Statement. Upon the request of the Manager, the Company will furnish to the Manager and counsel for the Manager, without
charge, signed copies of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus by the Manager
or dealer may be required by the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173
or any similar rule), as many copies of the Prospectus and each Issuer Free Writing Prospectus and any supplement thereto as the Manager
may reasonably request. The Company will pay the expenses of printing or other production of all documents relating to the offering.
(f) Qualification
of Shares. The Company will arrange, if necessary, for the qualification of the Shares for sale under the laws of such jurisdictions
as the Manager may designate and will maintain such qualifications in effect so long as required for the distribution of the Shares; provided
that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take
any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the Shares, in
any jurisdiction where it is not now so subject.
(g) Free
Writing Prospectus. The Company agrees that, unless it has or shall have obtained the prior written consent of the Manager, and the
Manager agrees with the Company that, unless it has or shall have obtained, as the case may be, the prior written consent of the Company,
it has not made and will not make any offer relating to the Shares that would constitute an Issuer Free Writing Prospectus or that would
otherwise constitute a “free writing prospectus” (as defined in Rule 405) required to be filed by the Company with the
Commission or retained by the Company under Rule 433. Any such free writing prospectus consented to by the Manager or the Company
is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has treated
and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (ii) it has complied
and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus,
including in respect of timely filing with the Commission, legending and record keeping.
(h) Subsequent
Equity Issuances. The Company shall not deliver any Sales Notice hereunder (and any Sales Notice previously delivered shall not apply
during such three (3) Trading Days) for at least three (3) Trading Days prior to any date on which the Company or any Subsidiary
offers, sells, issues, contracts to sell, contracts to issue or otherwise disposes of, directly or indirectly, any other shares of Common
Stock or any Common Stock Equivalents (other than the Shares), subject to Manager’s right to waive this obligation, provided that,
without compliance with the foregoing obligation, the Company may issue and sell Common Stock pursuant to any employee equity plan, stock
ownership plan or dividend reinvestment plan of the Company in effect at the Execution Time and the Company may issue Common Stock issuable
upon the conversion or exercise of Common Stock Equivalents outstanding at the Execution Time.
(i) Market
Manipulation. Until the termination of this Agreement, the Company will not take, directly or indirectly, any action designed to or
that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or
manipulation in violation of the Act, Exchange Act or the rules and regulations thereunder of the price of any security of the Company
to facilitate the sale or resale of the Shares or otherwise violate any provision of Regulation M under the Exchange Act.
(j) Notification
of Incorrect Certificate. The Company will, at any time during the term of this Agreement, as supplemented from time to time, advise
the Manager immediately after it shall have received notice or obtained knowledge thereof, of any information or fact that would alter
or affect any opinion, certificate, letter and other document provided to the Manager pursuant to Section 6 herein.
(k) Certification
of Accuracy of Disclosure. Upon commencement of the offering of the Shares under this Agreement (and upon the recommencement of the
offering of the Shares under this Agreement following the termination of a suspension of sales hereunder lasting more than thirty (30)
Trading Days), and each time that (i) the Registration Statement or Prospectus shall be amended or supplemented, other than by means
of Incorporated Documents, (ii) the Company files its Annual Report on Form 10-K under the Exchange Act, (iii) the Company
files its quarterly reports on Form 10-Q under the Exchange Act, (iv) the Company files a Current Report on Form 8-K containing
amended financial information (other than information that is furnished and not filed), if the Manager reasonably determines that the
information in such Form 8-K is material, or (v) the Shares are delivered to the Manager as principal at the Time of Delivery
pursuant to a Terms Agreement (such commencement or recommencement date and each such date referred to in (i), (ii), (iii), (iv) and
(v) above, a “Representation Date”), unless waived by the Manager, the Company shall furnish or cause to be furnished
to the Manager promptly a certificate dated and delivered on the Representation Date, in form and substance reasonably satisfactory to
the Manager to the effect that the statements contained in the certificate referred to in Section 6 of this Agreement which were
last furnished to the Manager are true and correct at the Representation Date, as though made at and as of such date (except that such
statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such date) or, in
lieu of such certificate, a certificate of the same tenor as the certificate referred to in said Section 6, modified as necessary
to relate to the Registration Statement and the Prospectus as amended and supplemented to the date of delivery of such certificate. The
requirement to furnish or cause to be furnished a certificate under this Section 4(k) shall be waived for any Representation
Date occurring at a time at which no instruction to the Manager to sell Shares pursuant to this Agreement has been delivered by the Company
or is pending. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following any Representation Date when
the Company relied on such waiver and did not provide the Manager a certificate pursuant to this Section 4(k), then before the Company
instructs the Manager to sell Shares pursuant to this Agreement, the Company shall provide the Manager such certificate.
(l) Bring
Down Opinions; Negative Assurance. Within five (5) Trading Days of each Representation Date, unless waived by the Manager, the
Company shall furnish or cause to be furnished forthwith to the Manager and to counsel to the Manager a written opinion of counsel to
the Company (“Company Counsel”), including a negative assurance representation, addressed to the Manager and dated
and delivered within five (5) Trading Days of such Representation Date, in form and substance reasonably satisfactory to the Manager.
The requirement to furnish or cause to be furnished an opinion (but not with respect to a negative assurance representation) under this
Section 4(l) shall be waived for any Representation Date other than a Representation Date on which a material amendment to the
Registration Statement or Prospectus is made or the Company files its Annual Report on Form 10-K or a material amendment thereto
under the Exchange Act, unless the Manager reasonably requests such deliverable required by this Section 4(l) in connection
with a Representation Date, upon which request such deliverable shall be deliverable hereunder. The
requirement to furnish or cause to be furnished an opinion and/or negative assurance representation under
this Section 4(l) shall be waived for any Representation Date occurring at a time at which no instruction to the Manager to
sell Shares pursuant to this Agreement has been delivered by the Company or is pending. Notwithstanding the foregoing, if the Company
subsequently decides to sell Shares following any Representation Date when the Company relied on such waiver and did not provide the Manager
an opinion and/or negative assurance representation pursuant to this Section 4(l),
then before the Company instructs the Manager to sell Shares pursuant to this Agreement, the Company shall provide the Manager such opinion.
(m) Auditor
Bring Down “Comfort” Letter. Within five (5) Trading Days of each Representation Date, unless waived by the Manager,
the Company shall cause (1) the Company’s auditors (the “Accountants”), or other independent accountants
satisfactory to the Manager forthwith to furnish the Manager a letter, and (2) the Chief Financial Officer of the Company forthwith
to furnish the Manager a certificate, in each case dated within five (5) Trading Days of such Representation Date, in form and substance
satisfactory to the Manager, of the same tenor as the letters and certificate referred to in Section 6 of this Agreement but modified
to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letters and certificate. The
requirement to furnish or cause to be furnished a “comfort” letter under this Section 4(m) shall be waived for any
Representation Date other than a Representation Date on which a material amendment to the Registration Statement or Prospectus is made
or the Company files its Annual Report on Form 10-K or a material amendment thereto under the Exchange Act, unless the Manager reasonably
requests the deliverables required by this Section 4(m) in connection with a Representation Date, upon which request such deliverable
shall be deliverable hereunder. The requirement to furnish or cause to be furnished a “comfort”
letter under this Section 4(m) shall be waived for any Representation Date occurring at a time at which no instruction to the
Manager to sell Shares pursuant to this Agreement has been delivered by the Company or is pending. Notwithstanding the foregoing, if the
Company subsequently decides to sell Shares following any Representation Date when the Company relied on such waiver and did not provide
the Manager a “comfort” letter pursuant to this Section 4(m), then before the Company instructs the Manager to sell Shares
pursuant to this Agreement, the Company shall provide the Manager such letter.
(n) Due
Diligence Session. Upon commencement of the offering of the Shares under this Agreement (and upon the recommencement of the offering
of the Shares under this Agreement following the termination of a suspension of sales hereunder lasting more than thirty (30) Trading
Days), and at each Representation Date, the Company will conduct a due diligence session, in form and substance, reasonably satisfactory
to the Manager, which shall include representatives of management, Accountants and Company Counsel. The Company shall cooperate timely
with any reasonable due diligence request from or review conducted by the Manager or its agents from time to time in connection with the
transactions contemplated by this Agreement, including, without limitation, providing information and available documents and access to
appropriate corporate officers and the Company’s agents during regular business hours, and timely furnishing or causing to be furnished
such certificates, letters and opinions from the Company, its officers and its agents, as the Manager may reasonably request. The Company
shall reimburse the Manager for Manager’s counsel’s fees in each such due diligence update session, up to a maximum of $2,500
per update, plus any incidental expense incurred by the Manager in connection therewith. The requirement
to conduct a due diligence session under this Section 4(n) shall be waived for any Representation Date occurring at a time at
which no instruction to the Manager to sell Shares pursuant to this Agreement has been delivered by the Company or is pending. Notwithstanding
the foregoing, if the Company subsequently decides to sell Shares following any Representation Date when the Company relied on such waiver
and did not conduct a due diligence session pursuant to this Section 4(n), then before the Company instructs the Manager to sell
Shares pursuant to this Agreement, the Company shall conduct a due diligence session in accordance with this Section 4(n).
(o) Acknowledgment
of Trading. The Company consents to the Manager trading in the Common Stock for the Manager’s own account and for the account
of its clients at the same time as sales of the Shares occur pursuant to this Agreement or pursuant to a Terms Agreement.
(p) Disclosure
of Shares Sold. The Company will disclose in its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, as applicable,
the number of Shares sold through the Manager under this Agreement, the Net Proceeds to the Company and the compensation paid by the Company
with respect to sales of Shares pursuant to this Agreement during the relevant quarter; and, if required by any subsequent change in Commission
policy or request, more frequently by means of a Current Report on Form 8-K or a further Prospectus Supplement.
(q) Rescission
Right. If to the knowledge of the Company, the conditions set forth in Section 6 shall not have been satisfied as of the applicable
Settlement Date, the Company will offer to any person who has agreed to purchase Shares from the Company as the result of an offer to
purchase solicited by the Manager the right to refuse to purchase and pay for such Shares.
(r) Bring
Down of Representations and Warranties. Each acceptance by the Company of an offer to purchase the Shares hereunder, and each execution
and delivery by the Company of a Terms Agreement, shall be deemed to be an affirmation to the Manager that the representations and warranties
of the Company contained in or made pursuant to this Agreement are true and correct as of the date of such acceptance or of such Terms
Agreement as though made at and as of such date, and an undertaking that such representations and warranties will be true and correct
as of the Settlement Date for the Shares relating to such acceptance or as of the Time of Delivery relating to such sale, as the case
may be, as though made at and as of such date (except that such representations and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented relating to such Shares).
(s) Reservation
of Shares. The Company shall ensure that there are, at all times, sufficient shares of Common Stock to provide for the issuance, free
of any preemptive rights, out of its authorized but unissued shares of Common Stock or shares of Common Stock held in treasury, of the
maximum aggregate number of Shares authorized for issuance by the Board pursuant to the terms of this Agreement. The Company will use
its commercially reasonable efforts to cause the Shares to be listed for trading on the Trading Market and to maintain such listing.
(t) Obligation
Under Exchange Act. During any period when the delivery of a prospectus relating to the Shares is required (including in circumstances
where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under the Act, the Company
will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the
Exchange Act and the regulations thereunder.
(u) DTC
Facility. The Company shall cooperate with the Manager and use its commercially reasonable efforts to permit the Shares to be eligible
for clearance and settlement through the facilities of DTC.
(v) Use
of Proceeds. The Company will apply the Net Proceeds from the sale of the Shares in the manner set forth in the Prospectus.
(w) Filing
of Prospectus Supplement. If any sales are made pursuant to this Agreement which are not made in “at the market” offerings
as defined in Rule 415, including, without limitation, any Placement pursuant to a Terms Agreement, the Company shall file a Prospectus
Supplement describing the terms of such transaction, the amount of Shares sold, the price thereof, the Manager’s compensation, and
such other information as may be required pursuant to Rule 424 and Rule 430B, as applicable, within the time required by Rule 424.
(x) Additional
Registration Statement. To the extent that the Registration Statement is not available for the sales of the Shares as contemplated
by this Agreement, the Company shall file a new registration statement with respect to any additional shares of Common Stock necessary
to complete such sales of the Shares and shall cause such registration statement to become effective as promptly as practicable. After
the effectiveness of any such registration statement, all references to “Registration Statement” included in this Agreement
shall be deemed to include such new registration statement, including all documents incorporated by reference therein pursuant to Item 12
of Form S-3, and all references to “Base Prospectus” included in this Agreement shall be deemed to include the
final form of base prospectus, including all documents incorporated therein by reference, included in any such registration statement
at the time such registration statement became effective.
5. Payment
of Expenses. The Company agrees to pay the costs and expenses incident to the performance of its obligations under this Agreement,
whether or not the transactions contemplated hereby are consummated, including without limitation: (i) the preparation, printing
or reproduction and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), the
Prospectus and each Issuer Free Writing Prospectus, and each amendment or supplement to any of them; (ii) the printing (or reproduction)
and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement,
the Prospectus, and each Issuer Free Writing Prospectus, and all amendments or supplements to any of them, as may, in each case, be reasonably
requested for use in connection with the offering and sale of the Shares; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Shares, including any stamp or transfer taxes in connection with the original issuance and sale of
the Shares; (iv) the printing (or reproduction) and delivery of this Agreement, any blue sky memorandum and all other agreements
or documents printed (or reproduced) and delivered in connection with the offering of the Shares; (v) the registration of the Shares
under the Exchange Act, if applicable, and the listing of the Shares on the Trading Market; (vi) any registration or qualification
of the Shares for offer and sale under the securities or blue sky laws of the several states (including filing fees and the reasonable
fees and expenses of counsel for the Manager relating to such registration and qualification); (vii) the transportation and other
expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of the Shares;
(viii) the fees and expenses of the Company’s accountants and the fees and expenses of counsel (including local and special
counsel) for the Company; (ix) the filing fee under FINRA Rule 5110; (x) the reasonable fees and expenses of the Manager’s
counsel, not to exceed $50,000 (excluding any periodic due diligence fees provided for under Section 4(n)), which shall be paid upon
the Effective Time; and (xi) all other costs and expenses incident to the performance by the Company of its obligations hereunder.
6. Conditions
to the Obligations of the Manager. The obligations of the Manager under this Agreement and any Terms Agreement shall be subject to
(i) the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time, each
Representation Date, and as of each Applicable Time, Settlement Date and Time of Delivery, (ii) the performance by the Company of
its obligations hereunder and (iii) the following additional conditions:
(a) Effectiveness
of the Registration Statement; Filing of Prospectus Supplement. The Registration Statement shall have been declared effective by the
Commission and the Prospectus, and any supplement thereto, required by Rule 424 to be filed with the Commission shall have been filed
in the manner and within the time period required by Rule 424(b) with respect to any sale of Shares; each Prospectus Supplement
shall have been filed in the manner required by Rule 424(b) within the time period required hereunder and under the Act; any
other material required to be filed by the Company pursuant to Rule 433(d) under the Act, shall have been filed with the Commission
within the applicable time periods prescribed for such filings by Rule 433; and no stop order suspending the effectiveness of the
Registration Statement or any notice objecting to its use shall have been issued and no proceedings for that purpose shall have been instituted
or threatened.
(b) Delivery
of Opinion. The Company shall have caused the Company Counsel to furnish to the Manager its opinion and negative assurance representation,
dated as of such date and addressed to the Manager in form and substance acceptable to the Manager.
(c) Delivery
of Officer’s Certificate. The Company shall have furnished or caused to be furnished to the Manager a certificate of the Company
signed by the Chief Executive Officer or the President and the principal financial or accounting officer of the Company, dated as of such
date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Prospectus, any Prospectus
Supplement and any documents incorporated by reference therein and any supplements or amendments thereto and this Agreement and that:
(i) the
representations and warranties of the Company in this Agreement are true and correct on and as of such date with the same effect as if
made on such date and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to such date;
(ii) no
stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no proceedings
for that purpose have been instituted or, to the Company’s knowledge, threatened; and
(iii) since
the date of the most recent financial statements included in the Registration Statement, the Prospectus and the Incorporated Documents,
there has been no Material Adverse Effect on the condition (financial or otherwise), earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in
or contemplated in the Registration Statement and the Prospectus.
(d) Delivery
of Accountants’ “Comfort” Letter. The Company shall have requested and caused the Accountants to have furnished
to the Manager letters (which may refer to letters previously delivered to the Manager), dated as of such date, in form and substance
satisfactory to the Manager, confirming that they are independent accountants within the meaning of the Act and the Exchange Act and the
respective applicable rules and regulations adopted by the Commission thereunder and that they have performed an audit of any audited
financial information of the Company, and/or a review of any unaudited interim financial information of the Company included or incorporated
by reference in the Registration Statement and the Prospectus and provide customary “comfort” as to such review in form and
substance satisfactory to the Manager.
(e) No
Material Adverse Event. Since the respective dates as of which information is disclosed in the Registration Statement, the Prospectus
and the Incorporated Documents, except as otherwise stated therein, there shall not have been (i) any change or decrease in previously
reported results specified in the letter or letters referred to in paragraph (d) of this Section 6 or (ii) any change,
or any development involving a prospective change, in or affecting the condition (financial or otherwise), earnings, business or properties
of the Company and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Registration Statement, the Prospectus and the Incorporated Documents (exclusive of any amendment
or supplement thereto) the effect of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment
of the Manager, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Shares
as contemplated by the Registration Statement (exclusive of any amendment thereof), the Incorporated Documents and the Prospectus (exclusive
of any amendment or supplement thereto).
(f) Payment
of All Fees. The Company shall have paid the required Commission filing fees relating to the Shares within the time period required
by Rule 456(b)(1)(i) of the Act without regard to the proviso therein and otherwise in accordance with Rules 456(b) and
457(r) of the Act and, if applicable, shall have updated the “Calculation of Registration Fee” table in accordance with
Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration Statement or on the cover page of a prospectus
filed pursuant to Rule 424(b).
(g) No
FINRA Objections. FINRA shall not have raised any objection with respect to the fairness and reasonableness of the terms and arrangements
under this Agreement.
(h) Shares
Listed on Trading Market. The Shares shall have been listed and admitted and authorized for trading on the Trading Market, and satisfactory
evidence of such actions shall have been provided to the Manager.
(i) Other
Assurances. Prior to each Settlement Date and Time of Delivery, as applicable, the Company shall have furnished to the Manager such
further information, certificates and documents as the Manager may reasonably request.
If any of the conditions specified
in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Manager and counsel for
the Manager, this Agreement and all obligations of the Manager hereunder may be canceled at, or at any time prior to, any Settlement Date
or Time of Delivery, as applicable, by the Manager. Notice of such cancellation shall be given to the Company in writing or by telephone
and confirmed in writing by electronic mail.
The
documents required to be delivered by this Section 6 shall be delivered to the office of Ellenoff Grossman & Schole LLP,
counsel for the Manager, at 1345 Avenue of the Americas, New York, New York 10105, email: capmkts@egsllp.com, on each such date
as provided in this Agreement.
7. Indemnification
and Contribution.
(a) Indemnification
by Company. The Company agrees to indemnify and hold harmless the Manager, the directors, officers, employees and agents of the Manager
and each person who controls the Manager within the meaning of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration
Statement for the registration of the Shares as originally filed or in any amendment thereof, or in the Base Prospectus, any Prospectus
Supplement, the Prospectus, any Issuer Free Writing Prospectus, or in any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading, or arise out of or are based upon any Proceeding, commenced or threatened (whether or not the Manager is a target of or
party to such Proceeding) or result from or relate to any breach of any of the representations, warranties, covenants or agreements made
by the Company in this Agreement, and agrees to reimburse each such indemnified party for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by the Manager specifically for inclusion therein. This indemnity agreement
will be in addition to any liability that the Company may otherwise have.
(b) Indemnification
by Manager. The Manager agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to the Manager, but only with reference to written information relating to the Manager
furnished to the Company by the Manager specifically for inclusion in the documents referred to in the foregoing indemnity; provided,
however, that in no case shall the Manager be responsible for any amount in excess of the Broker Fee applicable to the Shares and
paid hereunder. This indemnity agreement will be in addition to any liability which the Manager may otherwise have.
(c) Indemnification
Procedures. Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify
the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve
it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action
and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided
in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party’s
choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought
(in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory
to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel to represent the indemnified party
in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party
shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants
in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional
to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party.
An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) Contribution.
In the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 7 is unavailable to or insufficient
to hold harmless an indemnified party for any reason, the Company and the Manager agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same)
(collectively “Losses”) to which the Company and the Manager may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and by the Manager on the other from the offering of the Shares;
provided, however, that in no case shall the Manager be responsible for any amount in excess of the Broker Fee applicable
to the Shares and paid hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the
Company and the Manager severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and of the Manager on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed
to be equal to the total net proceeds from the offering (before deducting expenses) received by it, and benefits received by the Manager
shall be deemed to be equal to the Broker Fee applicable to the Shares and paid hereunder as determined by this Agreement. Relative fault
shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information provided by the Company on the one hand or the Manager on
the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Manager agree that it would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding
the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 7, each person who controls the Manager within the meaning of either the Act or the Exchange Act and each director, officer,
employee and agent of the Manager shall have the same rights to contribution as the Manager, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement
and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms
and conditions of this paragraph (d).
8. Termination.
(a) The
Company shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement relating
to the solicitation of offers to purchase the Shares in its sole discretion at any time upon ten (10) Business Days’ prior
written notice. Any such termination shall be without liability of any party to any other party except that (i) with respect to any
pending sale, through the Manager for the Company, the obligations of the Company, including in respect of compensation of the Manager,
shall remain in full force and effect notwithstanding the termination and (ii) the provisions of Sections 5, 6, 7, 8, 9, 10,
12, the second sentence of 13, 14 and 15 of this Agreement shall remain in full force and effect notwithstanding such termination.
(b) The
Manager shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement relating
to the solicitation of offers to purchase the Shares in its sole discretion at any time. Any such termination shall be without liability
of any party to any other party except that the provisions of Sections 5, 6, 7, 8, 9, 10, 12, the second sentence of 13, 14 and 15
of this Agreement shall remain in full force and effect notwithstanding such termination.
(c) This
Agreement shall remain in full force and effect until such date that this Agreement is terminated pursuant to Sections 8(a) or
(b) above or otherwise by mutual agreement of the parties, provided that any such termination by mutual agreement shall in all cases
be deemed to provide that Sections 5, 6, 7, 8, 9, 10, 12, the second sentence of 13, 14 and 15 of this Agreement shall remain in
full force and effect.
(d) Any
termination of this Agreement shall be effective on the date specified in such notice of termination, provided that such termination shall
not be effective until the close of business on the date of receipt of such notice by the Manager or the Company, as the case may be.
If such termination shall occur prior to the Settlement Date or Time of Delivery for any sale of the Shares, such sale of the Shares shall
settle in accordance with the provisions of Section 2(b) of this Agreement.
(e) In
the case of any purchase of Shares by the Manager pursuant to a Terms Agreement, the obligations of the Manager pursuant to such Terms
Agreement shall be subject to termination, in the absolute discretion of the Manager, by prompt oral notice given to the Company prior
to the Time of Delivery relating to such Shares, if any, and confirmed promptly by electronic mail, if since the time of execution of
the Terms Agreement and prior to such delivery and payment, (i) trading in the Common Stock shall have been suspended by the Commission
or the Trading Market or trading in securities generally on the Trading Market shall have been suspended or limited or minimum prices
shall have been established on such exchange, (ii) a banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national
emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of
the Manager, impractical or inadvisable to proceed with the offering or delivery of the Shares as contemplated by the Prospectus (exclusive
of any amendment or supplement thereto).
9. Representations
and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company
or its officers and of the Manager set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by the Manager or the Company or any of the officers, directors, employees, agents or controlling persons referred
to in Section 7, and will survive delivery of and payment for the Shares.
10. Notices.
All communications hereunder will be in writing and effective only on receipt, and will be mailed, delivered, or e-mailed to the addresses
of the Company and the Manager, respectively, set forth on the signature page hereto.
11. Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors,
employees, agents and controlling persons referred to in Section 7, and no other person will have any right or obligation hereunder.
12. No
Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and sale of the Shares pursuant to this Agreement is an
arm’s-length commercial transaction between the Company, on the one hand, and the Manager and any affiliate through which it may
be acting, on the other, (b) the Manager is acting solely as sales agent and/or principal in connection with the purchase and sale
of the Company’s securities and not as a fiduciary of the Company and (c) the Company’s engagement of the Manager in
connection with the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore,
the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether
the Manager has advised or is currently advising the Company on related or other matters). The Company agrees that it will not claim that
the Manager has rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection
with such transaction or the process leading thereto.
13. Integration.
This Agreement and any Terms Agreement supersede all prior agreements and understandings (whether written or oral) between the Company
and the Manager with respect to the subject matter hereof. Notwithstanding anything herein to the contrary, the letter agreements, dated
January 31, 2024, as amended, and May 30, 2024, by and between the Company and the Manager, shall continue to be effective and
the terms therein shall continue to survive and be enforceable by the Manager in accordance with their terms, provided that, in the event
of a conflict between the terms of the letter agreements and this Agreement, the terms of this Agreement shall prevail.
14. Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in
the case of an amendment, by the Company and the Manager. No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right.
15. Applicable
Law. This Agreement and any Terms Agreement will be governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York. Each of the Company and the Manager: (i) agrees
that any legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted exclusively in New York Supreme
Court, County of New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection
which it may have or hereafter to the venue of any such suit, action or proceeding, and (iii) irrevocably consents to the exclusive
jurisdiction of the New York Supreme Court, County of New York, and the United States District Court for the Southern District of New
York in any such suit, action or proceeding. Each of the Company and the Manager further agrees to accept and acknowledge service of any
and all process which may be served in any such suit, action or proceeding in the New York Supreme Court, County of New York, or in the
United States District Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified
mail to the Company’s address shall be deemed in every respect effective service of process upon the Company, in any such suit,
action or proceeding, and service of process upon the Manager mailed by certified mail to the Manager’s address shall be deemed
in every respect effective service process upon the Manager, in any such suit, action or proceeding. If either party shall commence an
action or proceeding to enforce any provision of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed
by the other party for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.
16. Waiver
of Jury Trial. The Company hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial
by jury in any legal proceeding arising out of or relating to this Agreement, any Terms Agreement or the transactions contemplated hereby
or thereby.
17. Counterparts.
This Agreement and any Terms Agreement may be executed in one or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon one and the same agreement. Counterparts may be delivered via electronic mail
(including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic
Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered
shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
***************************
18. Headings.
The section headings used in this Agreement and any Terms Agreement are for convenience only and shall not affect the construction hereof.
If the foregoing is in accordance
with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance
shall represent a binding agreement among the Company and the Manager.
Very truly yours,
Mustang Bio, Inc.
By: | /s/ Manuel Litchman | |
Name: Manuel Litchman, M.D. | |
Title: President & CEO | |
| | |
Address for Notice: | |
377 Plantation Street | |
Worcester, Massachusetts 01605 | |
Attention: Manuel Litchman, M.D. | |
E-mail: MLitchman@mustangbio.com | |
| |
The foregoing Agreement is hereby confirmed and accepted as of the date first written above. |
| |
H.C. Wainwright &
Co., LLC | |
| | |
By: | /s/ Edward D. Silvera | |
| Name: Edward D. Silvera | |
| Title: Chief Operating Officer | |
| |
Address for Notice: | |
430 Park Avenue | |
New York, New York 10022 | |
Attention: Chief Executive Officer | |
E-mail: notices@hcwco.com | |
Exhibit 4.11
MUSTANG BIO, INC.
and
Trustee
INDENTURE
Dated as of ________________________
DEBT SECURITIES
CROSS-REFERENCE TABLE(1)
Section of
Trust Indenture Act
of 1939, as amended |
|
Section of
Indenture |
310(a) |
|
6.09 |
310(b) |
|
6.08 |
|
|
6.10 |
310(c) |
|
Inapplicable |
311(a) |
|
6.13 |
311(b) |
|
6.13 |
311(c) |
|
Inapplicable |
312(a) |
|
4.01 |
|
|
4.04 |
312(b) |
|
4.04(c) |
312(c) |
|
4.04(c) |
313(a) |
|
4.03 |
313(b) |
|
4.03 |
313(c) |
|
4.03 |
313(d) |
|
4.03 |
314(a) |
|
3.05 and 4.02 |
314(b) |
|
Inapplicable |
314(c) |
|
2.04 |
|
|
8.04 |
|
|
9.01(c) |
|
|
10.01(b) |
|
|
11.05 |
314(d) |
|
Inapplicable |
314(e) |
|
11.05 |
314(f) |
|
Inapplicable |
315(a) |
|
6.01 |
|
|
6.02 |
315(b) |
|
5.11 |
315(c) |
|
6.01 |
315(d) |
|
6.01 |
|
|
6.02 |
315(e) |
|
5.12 |
316(a) |
|
5.09 |
|
|
5.10 |
|
|
7.04 |
316(b) |
|
5.06 |
|
|
5.10 |
316(c) |
|
7.02 |
317(a) |
|
5.04 |
317(b) |
|
3.04 |
318(a) |
|
11.07 |
(1) |
This Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions. |
Table
of Contents
|
|
|
Page |
ARTICLE 1 |
DEFINITIONS |
1 |
Section 1.01 |
|
Certain Terms Defined |
1 |
ARTICLE 2 |
SECURITIES |
5 |
Section 2.01 |
|
Forms Generally |
5 |
Section 2.02 |
|
Form of Trustee’s Certificate of Authentication |
5 |
Section 2.03 |
|
Amount Unlimited; Issuable in Series |
6 |
Section 2.04 |
|
Authentication and Delivery of Securities |
7 |
Section 2.05 |
|
Execution of Securities |
7 |
Section 2.06 |
|
Certificate of Authentication |
9 |
Section 2.07 |
|
Denomination and Date of Securities; Payments of Interest |
9 |
Section 2.08 |
|
Registration, Transfer and Exchange |
9 |
Section 2.09 |
|
Mutilated, Defaced, Destroyed, Lost and Stolen Securities |
11 |
Section 2.10 |
|
Cancellation of Securities; Destruction Thereof |
11 |
Section 2.11 |
|
Temporary Securities |
12 |
ARTICLE 3 |
COVENANTS OF THE ISSUER |
12 |
Section 3.01 |
|
Payment of Principal and Interest |
12 |
Section 3.02 |
|
Offices for Payments, Etc. |
12 |
Section 3.03 |
|
Appointment to Fill a Vacancy in Office of Trustee |
13 |
Section 3.04 |
|
Paying Agents |
13 |
Section 3.05 |
|
Written Statement to Trustee |
13 |
ARTICLE 4 |
SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE |
14 |
Section 4.01 |
|
Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders |
14 |
Section 4.02 |
|
Reports by the Issuer |
14 |
Section 4.03 |
|
Reports by the Trustee |
14 |
Section 4.04 |
|
Preservation of Information; Communication with Securityholders |
14 |
ARTICLE 5 |
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT |
14 |
Section 5.01 |
|
Event of Default Defined; Acceleration of Maturity; Waiver of Default |
14 |
Section 5.02 |
|
Collection of Debt by Trustee; Trustee May Prove Debt |
16 |
Section 5.03 |
|
Application of Proceeds |
17 |
Section 5.04 |
|
Suits for Enforcement |
18 |
Section 5.05 |
|
Restoration of Rights on Abandonment of Proceedings |
18 |
Section 5.06 |
|
Limitations on Suits by Securityholders |
18 |
Section 5.07 |
|
Unconditional Right of Securityholders to Institute Certain Suits |
18 |
Section 5.08 |
|
Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default |
19 |
Section 5.09 |
|
Control by Holders of Securities |
19 |
Section 5.10 |
|
Waiver of Past Defaults |
19 |
Section 5.11 |
|
Trustee to Give Notice of Default |
19 |
Section 5.12 |
|
Right of Court to Require Filing of Undertaking to Pay Costs |
20 |
ARTICLE 6 |
CONCERNING THE TRUSTEE |
20 |
Section 6.01 |
|
Duties and Responsibilities of the Trustee; During Default; Prior to Default |
20 |
Section 6.02 |
|
Certain Rights of the Trustee |
20 |
Section 6.03 |
|
Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof |
21 |
Section 6.04 |
|
Trustee and Agents May Hold Securities; Collections, Etc. |
21 |
Section 6.05 |
|
Moneys Held by Trustee |
21 |
Section 6.06 |
|
Compensation and Indemnification of Trustee and Its Prior Claim |
22 |
Section 6.07 |
|
Right of Trustee to Rely on Officer’s Certificate, Etc. |
22 |
Section 6.08 |
|
Disqualification; Conflicting Interests |
22 |
Section 6.09 |
|
Persons Eligible for Appointment as Trustee |
22 |
Section 6.10 |
|
Resignation and Removal; Appointment of Successor Trustee |
22 |
Section 6.11 |
|
Acceptance of Appointment by Successor Trustee |
23 |
Section 6.12 |
|
Merger, Conversion, Consolidation or Succession to Business of Trustee |
24 |
Section 6.13 |
|
Preferential Collection of Claims Against the Issuer |
24 |
ARTICLE 7 |
CONCERNING THE SECURITYHOLDERS |
24 |
Section 7.01 |
|
Evidence of Action Taken by Securityholders |
24 |
Section 7.02 |
|
Proof of Execution of Instruments and of Holding of Securities |
24 |
Section 7.03 |
|
Holders to Be Treated as Owners |
25 |
Section 7.04 |
|
Securities Owned by Issuer Deemed Not Outstanding |
25 |
Section 7.05 |
|
Right of Revocation of Action Taken |
25 |
ARTICLE 8 |
SUPPLEMENTAL INDENTURES |
26 |
Section 8.01 |
|
Supplemental Indentures Without Consent of Securityholders |
26 |
Section 8.02 |
|
Supplemental Indentures With Consent of Securityholders |
27 |
Section 8.03 |
|
Effect of Supplemental Indenture |
27 |
Section 8.04 |
|
Documents to Be Given to Trustee |
28 |
Section 8.05 |
|
Notation on Securities in Respect of Supplemental Indentures |
28 |
ARTICLE 9 |
CONSOLIDATION, MERGER, SALE OR CONVEYANCE |
28 |
Section 9.01 |
|
Issuer May Consolidate, Etc., on Certain Terms |
28 |
Section 9.02 |
|
Successor Issuer Substituted |
28 |
ARTICLE 10 |
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE; UNCLAIMED MONEYS |
29 |
Section 10.01 |
|
Satisfaction and Discharge of Indenture; Defeasance |
29 |
Section 10.02 |
|
Application by Trustee of Funds Deposited for Payment of Securities |
31 |
Section 10.03 |
|
Repayment of Moneys Held by Paying Agent |
31 |
Section 10.04 |
|
Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years |
31 |
Section 10.05 |
|
Indemnity for U.S. Government Obligations |
32 |
ARTICLE 11 |
MISCELLANEOUS PROVISIONS |
32 |
Section 11.01 |
|
No Recourse |
32 |
Section 11.02 |
|
Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities |
32 |
Section 11.03 |
|
Successors and Assigns of Issuer Bound by Indenture |
32 |
Section 11.04 |
|
Notices and Demands on Issuer, Trustee and Holders of Securities |
32 |
Section 11.05 |
|
Officer’s Certificates and Opinions of Counsel; Statements to Be Contained Therein |
33 |
Section 11.06 |
|
Payments Due on Saturdays, Sundays and Holidays |
34 |
Section 11.07 |
|
Conflict of Any Provision of Indenture With Trust Indenture Act of 1939 |
34 |
Section 11.08 |
|
New York Law to Govern |
34 |
Section 11.09 |
|
Counterparts |
34 |
Section 11.10 |
|
Effect of Headings |
34 |
Section 11.11 |
|
Actions by Successor |
34 |
Section 11.12 |
|
Severability |
34 |
ARTICLE 12 |
REDEMPTION OF SECURITIES AND SINKING FUNDS |
34 |
Section 12.01 |
|
Applicability of Article |
34 |
Section 12.02 |
|
Notice of Redemption; Partial Redemptions |
34 |
Section 12.03 |
|
Payment of Securities Called for Redemption |
35 |
Section 12.04 |
|
Exclusion of Certain Securities from Eligibility for Selection for Redemption |
36 |
Section 12.05 |
|
Mandatory and Optional Sinking Funds |
36 |
THIS INDENTURE, dated as of between Mustang Bio, Inc.,
a Delaware corporation (the “Issuer”), and ____________, a ____________ (the “Trustee”),
W I T N E S S E T H :
WHEREAS, the Issuer may from time to time duly
authorize the issue of its senior debentures, notes or other evidences of indebtedness to be issued in one or more series (the “Securities”)
up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of this Indenture;
WHEREAS, the Issuer has duly authorized the execution
and delivery of this Indenture to provide, among other things, for the authentication, delivery and administration of the Securities;
and
WHEREAS, all things necessary to make this Indenture
a valid indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases
of the Securities by the holders thereof, the Issuer and the Trustee mutually covenant and agree for the equal and proportionate benefit
of the respective holders from time to time of the Securities as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Certain
Terms Defined. The following terms (except as otherwise expressly provided or unless the context otherwise clearly requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section. All
other terms used in this Indenture that are defined in the Trust Indenture Act of 1939 or the definitions of which in the Securities Act
of 1933, as amended, are referred to in the Trust Indenture Act of 1939, including terms defined therein by reference to the Securities
Act of 1933, as amended (except as herein otherwise expressly provided or unless the context otherwise clearly requires), shall have the
meanings assigned to such terms in said Trust Indenture Act of 1939 and in said Securities Act of 1933 as in force at the date of this
Indenture. All accounting terms used herein and not expressly defined shall have the meanings assigned to such terms in accordance with
generally accepted accounting principles, and the term “generally accepted accounting principles” means such accounting
principles as are generally accepted in the United States at the time of any computation. The words “herein”, “hereof”
and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision. The terms defined in this Article have the meanings assigned to them in this Article and include the plural
as well as the singular.
“Additional Amounts” means any
additional amounts that are required by this Indenture or by any Security, under circumstances specified herein or therein, to be paid
by the Issuer in respect of certain taxes, assessments or other governmental charges imposed on Holders specified there and which are
owing to such Holders.
“Applicable Procedures” means,
with respect to a Depositary, as to any matter at any time, the policies and procedures of such Depositary, if any, that are applicable
to such matter at such time.
“Board of Directors” means either
the Board of Directors of the Issuer or any committee of such Board duly authorized to act on its behalf.
“Board Resolution” means a copy
of one or more resolutions, certified by the secretary or an assistant secretary of the Issuer to have been duly adopted by the Board
of Directors and to be in full force and effect, and delivered to the Trustee.
“Business Day” means, with respect
to any Security, a day that in the city (or in any of the cities, if more than one) in which amounts are payable, as specified in the
form of such Security, is not a day on which banking institutions are authorized or required by law or regulation to close.
“Capital Stock” means (a) in
the case of a corporation, corporate stock, (b) in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate stock, (c) in the case of a partnership or limited
liability company, partnership interests (whether general or limited) or membership interests, and (d) any other interest or participation
that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person,
but excluding from all of the foregoing any Debt securities convertible into Capital Stock, whether or not such Debt securities include
any right of participation with Capital Stock.
“Commission” means the Securities
and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time after
the execution and delivery of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust
Indenture Act of 1939, then the body performing such duties on such date.
“Common Stock” means the shares
of common stock, par value $0.0001 per share, of the Issuer as the same exists at the date of execution and delivery of this Indenture
or as such stock may be reconstituted from time to time.
“Corporate Trust Office” means
the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered,
which office is, at the date as of which this Indenture is dated, located at ___________________.
“Debt” of any Person means any
debt for money borrowed which is created, assumed, incurred or guaranteed in any manner by such Person or for which such Person is otherwise
responsible or liable, and shall expressly include any such guaranty thereof by such Person. For the purpose of computing the amount of
the Debt of any Person there shall be excluded all Debt of such Person for the payment or redemption or satisfaction of which money or
securities (or evidences of such Debt, if permitted under the terms of the instrument creating such Debt) in the necessary amount shall
have been deposited in trust with the proper depositary, whether upon or prior to the maturity or the date fixed for redemption of such
Debt; and, in any instance where Debt is so excluded, for the purpose of computing the assets of such Person there shall be excluded the
money, securities or evidences of Debt deposited by such Person in trust for the purpose of paying or satisfying such Debt.
“Depositary” means, with respect
to the Securities of any series issuable or issued in the form of one or more Global Securities, the Person designated as Depositary by
the Issuer pursuant to Section 2.04 until a successor Depositary shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter “Depositary” shall mean or include each Person who is then a Depositary hereunder, and
if at any time there is more than one such Person, “Depositary” as used with respect to the Securities of any such
series shall mean the Depositary with respect to the Global Securities of that series.
“Dollar” means the currency
of the United States of America as at the time of payment is legal tender for the payment of public and private debts.
“Event of Default” means any
event or condition specified as such in Section 5.01.
“Foreign Currency” means a currency
issued by the government of a country other than the United States.
“Global Security” means a Security
evidencing all or a part of a series of Securities, issued to the Depositary for such series in accordance with Section 2.04, and
bearing the legend prescribed in Section 2.04.
“Holder”, “holder”,
“holder of Securities”, “Securityholder” or other similar terms mean the Person in whose name such
Security is registered in the Security register kept by the Issuer for that purpose in accordance with the terms hereof.
“Indenture” means this instrument
as originally executed and delivered or, if amended or supplemented as herein provided, as so amended or supplemented or both, and shall
include the forms and terms of particular series of Securities established as contemplated hereunder.
“interest”, unless the context
otherwise requires, refers to interest, and when used with respect to non-interest bearing Securities, refers to interest payable after
maturity, if any.
“Issuer” means Mustang Bio, Inc.,
a Delaware corporation, and, subject to Article 9, its successors and assigns.
“Issuer Order” means a written
statement, request or order of the Issuer signed in its name by the chairman of the Board of Directors, the president or any vice president
of the Issuer.
“Notice of Default” shall have
the meaning set forth in Section 5.01(c).
“Officer’s Certificate”
means a certificate signed by the chairman of the Board of Directors, the president, any vice president, the treasurer, the secretary
or any assistant secretary of the Issuer and delivered to the Trustee. Each such certificate shall comply with Section 314 of the
Trust Indenture Act of 1939 and, except to the extent provided herein, shall include the statements provided for in Section 11.05.
“Opinion of Counsel” means an
opinion in writing signed by the general corporate counsel or such other legal counsel who may be an employee of or counsel to the Issuer
and who shall be satisfactory to the Trustee. Each such opinion shall comply with Section 314 of the Trust Indenture Act of 1939
and shall include the statements provided for in Section 11.05, if and to the extent required hereby.
“original issue date” of any
Security (or portion thereof) means the earlier of (a) the date of such Security or (b) the date of any Security (or portion
thereof) for which such Security was issued (directly or indirectly) on registration of transfer, exchange or substitution.
“Original Issue Discount Security”
means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration
of the maturity thereof pursuant to Section 5.01.
“Outstanding”, when used with
reference to Securities, shall, subject to the provisions of Section 7.04, mean, as of any particular time, all Securities authenticated
and delivered by the Trustee under this Indenture, except
(i) Securities
theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
(ii) Securities,
or portions thereof, for the payment or redemption of which cash or U.S. Government Obligations (as provided for in Section 10.01
(a) and Section 10.01(b)) in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent
(other than the Issuer) or shall have been set aside, segregated and held in trust by the Issuer for the Holders of such Securities (if
the Issuer shall act as its own paying agent); provided, that if such Securities, or portions thereof, are to be redeemed prior
to the maturity thereof, notice of such redemption shall have been given as herein provided, or provision satisfactory to the Trustee
shall have been made for giving such notice;
(iii) Securities
as to which Legal Defeasance shall have been effected pursuant to Section 10.01(b);
(iv) Securities
in substitution for which other Securities shall have been authenticated and delivered, or which shall have been paid, pursuant to the
terms of Section 2.09 (except with respect to any such Security as to which proof satisfactory to the Trustee is presented that such
Security is held by a Person in whose hands such Security is a legal, valid and binding obligation of the Issuer), Securities converted
into Common Stock or any other securities of the Company pursuant hereto and Securities not deemed outstanding pursuant to Section 12.02;
and
(v) Securities
as to which any property deliverable upon conversion thereof has been delivered (or such delivery has been made available), or as to which
any other particular conditions have been satisfied, in each case as may be provided for such Securities as contemplated in Section 2.03.
In determining whether the Holders of the requisite
principal amount of Outstanding Securities of any or all series have given any request, demand, authorization, direction, notice, consent
or waiver hereunder, (A) the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such
purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof pursuant to Section 5.01, (B) if, as of such date, the principal amount payable at the
Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall
be the amount as specified or determined as contemplated by Section 2.03, and (C) the principal amount of a Security denominated
in one or more foreign currencies, composite currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar
equivalent, determined as of such date in the manner provided as contemplated by Section 2.03, of the principal amount of such Security
(or, in the case of a Security described in clause (A) or (B) above, of the amount determined as provided in such clause).
“Person” means any individual,
corporation, partnership, limited partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
“principal” whenever used with
reference to the Securities or any Security or any portion thereof, shall be deemed to include “and premium, if any”.
“record date” shall have the
meaning set forth in Section 2.07.
“Responsible Officer”, when
used with respect to the Trustee, means the chairman of the board of directors, any vice chairman of the board of directors, the chairman
of the trust committee, the chairman of the executive committee, any vice chairman of the executive committee, the president, any vice
president, the cashier, the secretary, the treasurer, any trust officer, any assistant trust officer, any assistant vice president, any
assistant cashier, any assistant secretary, any assistant treasurer, or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred because of his or her knowledge of and familiarity with the particular subject.
“Security” or “Securities”
has the meaning stated in the first recital of this Indenture, or, as the case may be, Securities that have been authenticated and delivered
under this Indenture.
“Security Registrar” shall have
the meaning set forth in Section 4.01(b).
“Subsidiary” means any corporation
or other entity (including, without limitation, partnerships, limited liability companies, joint ventures and associations) of which at
least a majority of the outstanding Capital Stock having by the terms thereof (without regard to the occurrence of any contingency) ordinary
voting power for the election of directors (or persons performing similar functions) of such corporation or other entity (irrespective
of whether or not at the time the Capital Stock of any other class or classes of such corporation or other entity shall have or might
have voting power by reason of the occurrence of any such contingency) is at the time directly or indirectly owned by the Issuer, or by
one or more Subsidiaries of the Issuer, or by the Issuer and one or more other Subsidiaries of the Issuer.
“Trust Indenture Act of 1939”
(except as otherwise provided in Sections 8.01 and 8.02) means the Trust Indenture Act of 1939 as in force at the date as of which this
Indenture was originally executed.
“Trustee” means the Person identified
as “Trustee” in the first paragraph hereof and, subject to the provisions of Article 6, shall also include any
successor trustee. “Trustee” shall also mean or include each Person who is then a trustee hereunder and if at any time
there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the trustee
with respect to the Securities of such series.
“U.S. Government Obligation”
means (a) a direct obligation of the United States of America, backed by its full faith and credit, or (b) an obligation of
a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which
is unconditionally guaranteed as a full faith and credit obligation by the United States of America.
“vice president”, when used
with respect to the Issuer or the Trustee, means any vice president, whether or not designated by a number or a word or words added before
or after the title of “vice president”.
“Yield to Maturity” means the
yield to maturity on a series of securities, calculated at the time of issuance of such series, or, if applicable, at the most recent
redetermination of interest on such series, and calculated in accordance with accepted financial practice.
ARTICLE 2
SECURITIES
Section 2.01 Forms
Generally. The Securities of each series shall be substantially in such form (not inconsistent with this Indenture) as shall be established
by or pursuant to one or more Board Resolutions (as set forth in a Board Resolution or, to the extent established pursuant to (rather
than set forth in) a Board Resolution, an Officer’s Certificate detailing such establishment) or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or legends or endorsements, not inconsistent with the provisions
of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto, or with any rules of
any securities exchange or to conform to general usage, all as may be determined by the officers executing such Securities as evidenced
by their execution of such Securities.
The definitive Securities shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities
as evidenced by their execution of such Securities.
Section 2.02 Form of
Trustee’s Certificate of Authentication. The Trustee’s certificate of authentication on all Securities shall be in substantially
the following form:
This is one of the Securities of the series designated
herein and referred to in the within-mentioned Indenture.
|
as Trustee |
|
|
|
By: |
|
|
|
Authorized Officer |
Section 2.03 Amount
Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series.
The terms of a series of Securities shall be established prior to the initial issuance thereof in or pursuant to one or more Board Resolutions,
or, to the extent established pursuant to (rather than set forth in) a Board Resolution, in an Officer’s Certificate detailing such
establishment and/or established in one or more indentures supplemental hereto. The terms of such series reflected in such Board Resolution,
Officer’s Certificate, or supplemental indenture may include the following or any additional or different terms:
(i) the
designation of the Securities of the series (which may be part of a series of Securities previously issued);
(ii) the
terms and conditions, if applicable, upon which conversion or exchange of the Securities into Common Stock or any other securities of
the Company will be effected, including the initial conversion or exchange price or rate and any adjustments thereto, the conversion or
exchange period and other provisions in addition to or in lieu of those described herein;
(iii) any
limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities
of the series pursuant to Section 2.08, 2.09, 2.11, 8.05 or 12.03);
(iv) if
other than Dollars, the Foreign Currency in which the Securities of that series are denominated;
(v) the
date or dates on which the principal of the Securities of the series is payable or the method used to determine those dates and the right,
if any, to extend such date or dates;
(vi) the
rate or rates at which the Securities of the series shall bear interest, if any, or the method by which such rate or rates shall be determined;
the record date or dates for the determination of holders to whom interest is payable; the date or dates from which such interest shall
accrue and on which such interest shall be payable or the method by which such date or dates shall be determined; the right, if any, to
extend the interest payment periods and the duration of that extension; and the basis upon which interest shall be calculated if other
than that of a 360-day year of twelve 30-day months;
(vii) the
place or places where the principal of and any interest on Securities of the series shall be payable (if other than as provided in Section 3.02);
(viii) whether
or not the Securities will be secured or unsecured, and the terms of any secured debt;
(ix) the
price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the series may be redeemed,
in whole or in part, at the option of the Issuer, pursuant to any sinking fund or otherwise;
(x) the
obligation, if any, of the Issuer to redeem, purchase or repay Securities of the series pursuant to any mandatory redemption, sinking
fund or analogous provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which
and any terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant
to such obligation;
(xi) if
other than denominations of $1,000 and any integral multiple of $1,000 in excess thereof, the denominations in which Securities of the
series shall be issuable;
(xii) if
other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration
of acceleration of the maturity thereof;
(xiii) if
other than the currency in which the Securities of that series are denominated, the currency in which payment of the principal of or interest
on the Securities of such series shall be payable;
(xiv) if
the principal of or interest on the Securities of the series is to be payable, at the election of the Issuer or a Holder thereof, in a
currency other than that in which the Securities are denominated, the period or periods within which, and the terms and conditions upon
which, such election may be made;
(xv) if
the amount of payments of principal of and interest on the Securities of the series may be determined with reference to an index based
on a currency other than that in which the Securities of the series are denominated, or by reference to one or more currency exchange
rates, securities or baskets of securities, commodity prices or indices, the manner in which such amounts shall be determined;
(xvi) if
Sections 10.01(b) or 10.01(c) are inapplicable to Securities of such series;
(xvii) whether
and under what circumstances the Issuer will pay Additional Amounts on the Securities of any series and, if so, whether the Issuer will
have the option to redeem such Securities rather than pay such Additional Amounts;
(xviii) if
the Securities of such series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Security
of such series) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms
of such certificates, documents or conditions;
(xix) any
trustees, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the Securities of such series;
(xx) any
other events of default or covenants with respect to the Securities of such series in addition to or in lieu of those contained in this
Indenture;
(xxi) if
the Securities of the series may be issued in exchange for surrendered Securities of another series, or for other securities of the Issuer,
pursuant to the terms of such Securities or securities or of any agreement entered into by the Issuer, the ratio of the principal amount
of the Securities of the series to be issued to the principal amount of the Securities or securities to be surrendered in exchange, and
any other material terms of the exchange; and
(xxii) any
other terms of the series.
The Issuer may from time to time, without notice
to or the consent of the holders of any series of Securities, create and issue further Securities of any such series ranking equally with
the Securities of such series in all respects (or in all respects other than (1) the payment of interest accruing prior to the issue
date of such further Securities or (2) the first payment of interest following the issue date of such further Securities). Such further
Securities may be consolidated and form a single series with the Securities of such series and have the same terms as to status, redemption
or otherwise as the Securities of such series.
Section 2.04 Authentication
and Delivery of Securities. The Issuer may deliver Securities of any series executed by the Issuer to the Trustee for authentication
together with the applicable documents referred to below in this Section, and the Trustee shall thereupon authenticate and deliver such
Securities to or upon the order of the Issuer (contained in the Issuer Order referred to below in this Section) or pursuant to such procedures
acceptable to the Trustee and to such recipients as may be specified from time to time by an Issuer Order. The maturity date, original
issue date, interest rate and any other terms of the Securities of such series shall be determined by or pursuant to such Issuer Order
and procedures. If provided for in such procedures, such Issuer Order may authorize authentication and delivery pursuant to oral instructions
from the Issuer or its duly authorized agent, which instructions shall be promptly confirmed in writing. In authenticating such Securities
and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive,
and (subject to Section 6.01) shall be fully protected in relying upon:
(i) an
Issuer Order requesting such authentication and setting forth delivery instructions if the Securities are not to be delivered to the Issuer;
(ii) any
Board Resolution, Officer’s Certificate and/or executed supplemental indenture referred to in Sections 2.01 and 2.03 by or pursuant
to which the forms and terms of the Securities were established;
(iii) an
Officer’s Certificate setting forth the form or forms and terms of the Securities stating that the form or forms and terms of the
Securities have been established pursuant to Sections 2.01 and 2.03 and comply with this Indenture, and covering such other matters as
the Trustee may reasonably request; and
(iv) an
Opinion of Counsel to the effect that:
(i) the
form or forms and terms of such Securities have been established pursuant to Sections 2.01 and 2.03 and comply with this Indenture,
(ii) the
authentication and delivery of such Securities by the Trustee are authorized under the provisions of this Indenture, and
(iii) such
Securities when authenticated and delivered by the Trustee and issued by the Issuer in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute valid and binding obligations of the Issuer.
The Trustee shall have the right to decline to
authenticate and deliver any Securities under this Section if the Trustee, being advised by counsel, determines that such action
may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of directors or board of trustees, executive committee,
or a trust committee of directors or trustees or Responsible Officers shall determine that such action would expose the Trustee to personal
liability to existing Holders or would affect the Trustee’s own rights, duties or immunities under the Securities, this Indenture
or otherwise.
The Issuer shall execute and the Trustee shall,
in accordance with this Section with respect to the Securities of a series, authenticate and deliver one or more Global Securities
that (i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of all of the Securities of
such series issued and not yet cancelled, (ii) shall be registered in the name of the Depositary for such Global Security or Securities
or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s
instructions and (iv) shall bear a legend substantially to the following effect:
“UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE
OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.”
Each Depositary designated pursuant to this Section must,
at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered under the Securities Exchange
Act of 1934, as amended, and any other applicable statute or regulation.
Section 2.05 Execution
of Securities. The Securities shall be signed on behalf of the Issuer by the chairman of its Board of Directors, any vice chairman
of its Board of Directors, its chief executive officer, its principal financial officer, its president, any vice president or its treasurer.
Such signatures may be the manual or facsimile signatures of the present or any future such officers. Typographical and other minor errors
or defects in any such reproduction of any such signature shall not affect the validity or enforceability of any Security that has been
duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have
signed any of the Securities shall cease to be such officer before the Security so signed shall be authenticated and delivered by the
Trustee or disposed of by the Issuer, such Security nevertheless may be authenticated and delivered or disposed of as though the person
who signed such Security had not ceased to be such officer of the Issuer; and any Security may be signed on behalf of the Issuer by such
persons as, at the actual date of the execution of such Security, shall be the proper officers of the Issuer, although at the date of
the execution and delivery of this Indenture any such person was not such an officer.
Section 2.06 Certificate
of Authentication. Only such Securities as shall bear thereon a certificate of authentication substantially in the form hereinbefore
recited, executed by the Trustee by the manual signature of one of its authorized officers, shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. The execution of such certificate by the Trustee upon any Security executed by the
Issuer shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the
Holder is entitled to the benefits of this Indenture.
Section 2.07 Denomination
and Date of Securities; Payments of Interest. The Securities of each series shall be issuable in denominations established
as contemplated by Section 2.03 or, if not so established, in denominations of $1,000 and any integral multiple of $1,000 in excess
thereof. The Securities of each series shall be numbered, lettered or otherwise distinguished in such manner or in accordance with such
plan as the officers of the Issuer executing the same may determine with the approval of the Trustee, as evidenced by the execution and
authentication thereof. Unless otherwise indicated in a Board Resolution, Officer’s Certificate or supplemental indenture for a
particular series, interest will be calculated on the basis of a 360-day year of twelve 30-day months.
Each Security shall be dated the date of its authentication.
The Securities of each series shall bear interest, if any, from the date, and such interest shall be payable on the dates, established
as contemplated by Section 2.03.
The Person in whose name any Security of any series
is registered at the close of business on any record date applicable to a particular series with respect to any interest payment date
for such series shall be entitled to receive the interest, if any, payable on such interest payment date notwithstanding any transfer,
exchange or conversion of such Security subsequent to the record date and prior to such interest payment date, except if and to the extent
the Issuer shall default in the payment of the interest due on such interest payment date for such series, in which case such defaulted
interest shall be paid to the Persons in whose names Outstanding Securities for such series are registered at the close of business on
a subsequent record date (which shall be not less than five Business Days prior to the date of payment of such defaulted interest) established
by notice given by or on behalf of the Issuer to the Holders of Securities not less than 15 days preceding such subsequent record date.
The term “record date” as used with respect to any interest payment date (except a date for payment of defaulted interest)
for the Securities of any series shall mean the date specified as such in the terms of the Securities of such series established as contemplated
by Section 2.03, or, if no such date is so specified, if such interest payment date is the first day of a calendar month, the 15th
day of the immediately preceding calendar month or, if such interest payment date is the 15th day of a calendar month, the first day of
such calendar month, whether or not such record date is a Business Day.
Section 2.08 Registration,
Transfer and Exchange. The Issuer will keep at each office or agency to be maintained for the purpose as provided in Section 3.02
for each series of Securities a register or registers in which, subject to such reasonable regulations as it may prescribe, it will provide
for the registration of Securities of such series and the registration of transfer of Securities of such series. Such register shall be
in written form in the English language or in any other form capable of being converted into such form within a reasonable time. At all
reasonable times such register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer
of any Security of any series at any such office or agency to be maintained for the purpose as provided in Section 3.02, the Issuer
shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Security or Securities
of the same series, maturity date, interest rate and original issue date in authorized denominations for a like aggregate principal amount.
At the option of the Holder thereof, Securities
of any series (except a Global Security) may be exchanged for a Security or Securities of such series having authorized denominations
and an equal aggregate principal amount, upon surrender of such Securities to be exchanged at the agency of the Issuer that shall be maintained
for such purpose in accordance with Section 3.02 and upon payment, if the Issuer shall so require, of the charges hereinafter provided.
Whenever any Securities are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive. All Securities surrendered upon any exchange or transfer provided
for in this Indenture shall be promptly cancelled and disposed of by the Trustee and the Trustee will deliver a certificate of disposition
thereof to the Issuer.
All Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or the Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder or his or her attorney
duly authorized in writing.
The Issuer may require payment of a sum sufficient
to cover any stamp or other tax or other governmental charge that may be imposed in connection with any exchange or registration of transfer
of Securities. No service charge shall be made for any such transaction.
The Issuer shall not be required to exchange or
register a transfer of (a) any Securities of any series for a period of 15 days immediately preceding the first delivery of notice
of redemption of Securities of such series to be redeemed or (b) any Securities selected, called or being called for redemption,
in whole or in part, except, in the case of any Security to be redeemed in part, the portion thereof not so to be redeemed.
Notwithstanding any other provision of this Section 2.08,
unless and until it is exchanged in whole or in part for Securities in definitive registered form, a Global Security representing all
or a portion of the Securities of a series may not be transferred except as a whole by the Depositary for such series to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any
such nominee to a successor Depositary for such series or a nominee of such successor Depositary.
If at any time the Depositary for the Securities
of a series notifies the Issuer that it is unwilling or unable to continue as Depositary for the Securities of such series or if at any
time the Depositary for the Securities of a series shall no longer be eligible under Section 2.04, the Issuer shall appoint a successor
Depositary with respect to the Securities of such series. If a successor Depositary for the Securities of such series is not appointed
by the Issuer within 90 days after the Issuer receives such notice or becomes aware of such ineligibility, the Issuer’s determination
pursuant to Section 2.03 that the Securities of such series be represented by a Global Security shall no longer be effective and
the Issuer will execute, and the Trustee, upon receipt of an Officer’s Certificate for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver, Securities of such series in definitive registered form, in any authorized denominations,
in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing the Securities of such
series, in exchange for such Global Security or Securities.
The Issuer may at any time and in its sole discretion
determine that the Securities of any series issued in the form of one or more Global Securities shall no longer be represented by a Global
Security or Securities. In such event the Issuer will execute, and the Trustee, upon receipt of an Officer’s Certificate for the
authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive
registered form, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Global Security
or Securities representing such series, in exchange for such Global Security or Securities.
The Depositary for such Global Security may surrender
such Global Security in exchange in whole or in part for Securities of the same series in definitive registered form in accordance with
the two preceding paragraphs or on such other terms as are acceptable to the Issuer and such Depositary. Thereupon, the Issuer shall execute,
and the Trustee shall authenticate and deliver, without service charge,
(i) to
the Person specified by such Depositary a new Security or Securities of the same series, of any authorized denominations as requested
by such Person, in an aggregate principal amount equal to and in exchange for such Person’s beneficial interest in the Global Security;
and
(ii) to
such Depositary a new Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of Securities authenticated and delivered pursuant to clause (i) above.
Upon the exchange of a Global Security for Securities
in definitive registered form, in authorized denominations, such Global Security shall be cancelled by the Trustee. Securities in definitive
registered form issued in exchange for a Global Security pursuant to this Section 2.08 shall be registered in such names and in such
authorized denominations as the Depositary for such Global Security, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to or as directed by the Persons in whose names such
Securities are so registered.
All Securities issued upon any transfer or exchange
of Securities shall be valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture,
as the Securities surrendered upon such transfer or exchange.
Section 2.09 Mutilated,
Defaced, Destroyed, Lost and Stolen Securities. In case any temporary or definitive Security shall become mutilated or defaced or
be destroyed, lost or stolen, the Issuer in its discretion may execute, and upon the written request of any officer of the Issuer, the
Trustee shall authenticate and deliver, a new Security of the same series, maturity date, interest rate and original issue date, bearing
a number or other distinguishing symbol not contemporaneously outstanding, in exchange and substitution for the mutilated or defaced Security,
or in lieu of and substitution for the Security so destroyed, lost or stolen. In every case the applicant for a substitute Security shall
furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as may be required by them
to indemnify and defend and to save each of them harmless and, in every case of destruction, loss or theft, evidence to their satisfaction
of the destruction, loss or theft of such Security and of the ownership thereof and in the case of mutilation or defacement shall surrender
the Security to the Trustee.
Upon the issuance of any substitute Security, the
Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the Trustee) connected therewith. In case any Security which has matured or
is about to mature or has been called for redemption in full, or is being surrendered for conversion in full, shall become mutilated or
defaced or be destroyed, lost or stolen, the Issuer may, instead of issuing a substitute Security (with the Holder’s consent, in
the case of convertible Securities), pay or authorize the payment of the same or convert, or authorize conversion of the same (without
surrender thereof except in the case of a mutilated or defaced Security), if the applicant for such payment shall furnish to the Issuer
and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as any of them may require to save each of them
harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Issuer and the Trustee and any agent
of the Issuer or the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof.
Every substitute Security of any series issued
pursuant to the provisions of this Section by virtue of the fact that any such Security is destroyed, lost or stolen shall constitute
an additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Security shall be at any time enforceable
by anyone and shall be entitled to all the benefits of (but shall be subject to all the limitations of rights set forth in) this Indenture
equally and proportionately with any and all other Securities of such series duly authenticated and delivered hereunder. All Securities
shall be held and owned upon the express condition that, to the extent permitted by law, the foregoing provisions are exclusive with respect
to the replacement or payment or conversion of mutilated, defaced or destroyed, lost or stolen Securities and shall preclude any and all
other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement
or payment of negotiable instruments or other securities without their surrender.
Section 2.10 Cancellation
of Securities; Destruction Thereof. All Securities surrendered for exchange for Securities of the same series or for payment, redemption,
registration of transfer or conversion or for credit against any payment in respect of a sinking or analogous fund, if surrendered to
the Issuer or any agent of the Issuer or the Trustee, shall be delivered to the Trustee for cancellation or, if surrendered to the Trustee,
shall be cancelled by it; and no Securities shall be issued in lieu thereof except as expressly permitted by any of the provisions of
this Indenture. The Trustee shall dispose of cancelled Securities held by it and deliver a certificate of disposition to the Issuer. If
the Issuer shall acquire any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the Debt represented
by such Securities unless and until the same are delivered to the Trustee for cancellation.
Section 2.11 Temporary
Securities. Pending the preparation of definitive Securities for any series, the Issuer may execute and the Trustee shall authenticate
and deliver temporary Securities for such series (printed, lithographed, typewritten or otherwise reproduced, in each case in form satisfactory
to the Trustee). Temporary Securities of any series shall be issuable in any authorized denomination, and substantially in the form of
the definitive Securities of such series but with such omissions, insertions and variations as may be appropriate for temporary Securities,
all as may be determined by the Issuer with the concurrence of the Trustee as evidenced by the execution and authentication thereof. Temporary
Securities may contain such reference to any provisions of this Indenture as may be appropriate. Every temporary Security shall be executed
by the Issuer and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect,
as the definitive Securities. Without unreasonable delay the Issuer shall execute and shall furnish definitive Securities of such series
and thereupon temporary Securities of such series may be surrendered in exchange therefor without charge at each office or agency to be
maintained by the Issuer for that purpose pursuant to Section 3.02 and the Trustee shall authenticate and deliver in exchange for
such temporary Securities of such series an equal aggregate principal amount of definitive Securities of the same series having authorized
denominations. Until so exchanged, the temporary Securities of any series shall be entitled to the same benefits under this Indenture
as definitive Securities of such series, unless the benefits of the temporary Securities are limited pursuant to Section 2.03.
Section 2.12 CUSIP
Numbers. The Issuer in issuing the Securities may use “CUSIP” numbers if then generally in use and, if so, the Trustee
may use “CUSIP” numbers in notices of redemption as a convenience to Holders. Any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the Securities. No such redemption shall be affected by any
defect in or omission of such numbers.
ARTICLE 3
COVENANTS
OF THE ISSUER
Section 3.01 Payment
of Principal and Interest. The Issuer covenants and agrees for the benefit of each series of Securities that it will duly and punctually
pay or cause to be paid the principal of, and interest on, each of the Securities of such series (together with any Additional Amounts
payable pursuant to the terms of such Securities) at the place or places, at the respective times and in the manner provided in such Securities
and in this Indenture. The interest on Securities (together with any Additional Amounts payable pursuant to the terms of such Securities)
shall be payable only to or upon the written order of the Holders thereof and at the option of the Issuer may be paid by mailing checks
for such interest payable to or upon the written order of such Holders at their last addresses as they appear on the Security register
of the Issuer.
Section 3.02 Offices
for Payments, Etc. The Issuer will maintain (i) in ____________, an agency where the Securities of each series may be presented
for payment, an agency where the Securities of each series may be presented for exchange and conversion, if applicable, as provided in
this Indenture and an agency where the Securities of each series may be presented for registration of transfer as in this Indenture provided
and (ii) such further agencies in such places as may be determined for the Securities of such series pursuant to Section 2.03.
The Issuer will maintain in ____________ an agency
where notices and demands to or upon the Issuer in respect of the Securities of any series or this Indenture may be served.
The Issuer will give to the Trustee written notice
of the location of each such agency and of any change of location thereof. In case the Issuer shall fail to maintain any agency required
by this Section to be located in ____________, or shall fail to give such notice of the location or of any change in the location
of any of the above agencies, presentations and demands may be made and notices may be served at the Corporate Trust Office of the Trustee.
The Issuer may from time to time designate one
or more additional agencies where the Securities of a series may be presented for payment, where the Securities of that series may be
presented for exchange or conversion, if applicable, as provided in this Indenture and pursuant to Section 2.03 and where the Securities
of that series may be presented for registration of transfer as in this Indenture provided, and the Issuer may from time to time rescind
any such designation, as the Issuer may deem desirable or expedient; provided, however, that no such designation or rescission
shall in any manner relieve the Issuer of its obligation to maintain the agencies provided for in this Section. The Issuer will give to
the Trustee prompt written notice of any such designation or rescission thereof.
Section 3.03 Appointment
to Fill a Vacancy in Office of Trustee. The Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint,
in the manner provided in Section 6.10, a Trustee, so that there shall at all times be a Trustee with respect to each series of Securities
hereunder.
Section 3.04 Paying
Agents. Whenever the Issuer shall appoint a paying agent other than the Trustee with respect to the Securities of any series, it will
cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provisions of this Section,
(i) that
it will hold all sums received by it as such agent for the payment of the principal of or interest on the Securities of such series (whether
such sums have been paid to it by the Issuer or by any other obligor on the Securities of such series) in trust for the benefit of the
Holders of the Securities of such series or of the Trustee,
(ii) that
it will give the Trustee notice of any failure by the Issuer (or by any other obligor on the Securities of such series) to make any payment
of the principal of or interest on the Securities of such series when the same shall be due and payable, and
(iii) that
at any time during the continuance of any such failure, upon the written request of the Trustee, it will forthwith pay to the Trustee
all sums so held in trust by such paying agent.
The Issuer will, on or prior to each due date of
the principal of or interest on the Securities of such series, deposit with the paying agent a sum sufficient to pay such principal or
interest so becoming due, and (unless such paying agent is the Trustee) the Issuer will promptly notify the Trustee of any failure to
take such action.
If the Issuer shall act as its own paying agent
with respect to the Securities of any series, it will, on or before each due date of the principal of or interest on the Securities of
such series, set aside, segregate and hold in trust for the benefit of the Holders of the Securities of such series a sum sufficient to
pay such principal or interest so becoming due. The Issuer will promptly notify the Trustee of any failure to take such action.
Anything in this Section to the contrary notwithstanding,
but subject to Section 10.01, the Issuer may at any time, for the purpose of obtaining a satisfaction and discharge with respect
to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be paid to the Trustee all sums held in
trust for any such series by the Issuer or any paying agent hereunder, as required by this Section, such sums to be held by the Trustee
upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section is subject to the provisions of Sections 10.03 and 10.04.
Section 3.05 Written
Statement to Trustee. So long as any Securities are Outstanding hereunder, the Issuer will deliver to the Trustee, within 120 days
after the end of each fiscal year of the Issuer ending after the date hereof, a written statement covering the previous fiscal year (which
need not comply with Section 11.05), signed by its principal executive officer, its principal financial officer or its principal
accounting officer, stating whether or not, to the best knowledge of such officer, the Issuer is in default in the performance and observance
of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided
hereunder), and, if the Issuer shall be in default, specifying all such defaults of which such officer may have knowledge and the nature
and status thereof.
ARTICLE 4
SECURITYHOLDERS
LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE
Section 4.01 Issuer
to Furnish Trustee Information as to Names and Addresses of Securityholders. The Issuer covenants and agrees that it will furnish
or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require of the names and addresses of the Holders
of the Securities of each series pursuant to Section 312 of the Trust Indenture Act of 1939:
(i) semiannually
and not more than 15 days after each record date for the payment of interest on such Securities, as hereinabove specified, as of such
record date and on dates to be determined pursuant to Section 2.03 for non-interest bearing Securities in each year, and
(ii) at
such other times as the Trustee may request in writing, within 30 days after receipt by the Issuer of any such request as of a date not
more than 15 days prior to the time such information is furnished, provided, that, if and so long as the Trustee shall be the Security
registrar (the “Security Registrar”) for such series, such list shall not be required to be furnished.
Section 4.02 Reports
by the Issuer. The Issuer covenants to comply with Section 314(a) of the Trust Indenture Act of 1939 insofar as it relates
to information, documentation, and other reports which the Issuer may be required to file with the Commission pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934, as amended.
Section 4.03 Reports
by the Trustee. Any Trustee’s report required under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted
on or before in each year following the date hereof, so long as any Securities are Outstanding hereunder, and shall be dated as of a date
convenient to the Trustee but no more than 60 nor less than 45 days prior thereto. The Trustee shall comply with Sections 313(b), 313(c) and
313(d) of the Trust Indenture Act of 1939.
Section 4.04 Preservation
of Information; Communication with Securityholders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable,
all information as to the names and addresses of the holders of Securities contained in the most recent list furnished to it as provided
in Section 4.01 and as to the names and addresses of holders of Securities received by the Trustee in its capacity as Security Registrar
(if acting in such capacity).
(i) The
Trustee may destroy any list furnished to it as provided in Section 4.01 upon receipt of a new list so furnished.
(ii) Securityholders
may communicate as provided in Section 312(b) of the Trust Indenture Act of 1939 with other Securityholders with respect to
their rights under this Indenture or under the Securities. The Issuer, the Trustee, the Security Registrar and any other Person shall
have the protection of Section 312(c) of the Trust Indenture Act of 1939.
ARTICLE 5
REMEDIES
OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
Section 5.01 Event
of Default Defined; Acceleration of Maturity; Waiver of Default. “Event of Default”, with respect to Securities
of any series wherever used herein, means any one of the following events which shall have occurred and be continuing (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(i) default
in the payment of any installment of interest upon any of the Securities of such series as and when the same shall become due and payable,
and continuance of such default for a period of 30 days (or such other period as may be established for the Securities of such series
as contemplated by Section 2.03); or
(ii) default
in the payment of all or any part of the principal on any of the Securities of such series as and when the same shall become due and payable
either at maturity, upon redemption, by declaration or otherwise (and, if established for the Securities of such series as contemplated
by Section 2.03, the continuance of such default for a specified period); or
(iii) default
in the performance, or breach, of any covenant or agreement of the Issuer in respect of the Securities of such series (other than a covenant
or agreement in respect of the Securities of such series a default in the performance or breach of which is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified
mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in principal amount of the Outstanding
Securities of such series, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice
is a “Notice of Default” hereunder; or
(iv) a
court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Issuer in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of the Issuer or for all or substantially all of its property and assets or ordering
the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 90 consecutive
days; or
(v) the
Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession
by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Issuer or for any substantial part
of its property and assets, or make any general assignment for the benefit of creditors; or
(vi) any
other Event of Default provided for in such series of Securities.
If an Event of Default described in clauses (a),
(b), (c) or (f) occurs and is continuing, then, and in each and every such case, unless the principal of all of the Securities
of such series shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of such series then Outstanding hereunder (each such series voting as a separate class) by notice in writing
to the Issuer (and also to the Trustee if given by Securityholders), may declare the entire principal (or, if the Securities of such series
are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series) of all Securities
of such series and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall
become immediately due and payable. If an Event of Default described in clauses (d) or (e) occurs and is continuing, then and
in each and every such case, the entire principal (or, if any Securities are Original Issue Discount Securities, such portion of the principal
as may be specified in the terms thereof) of all the Securities then Outstanding and interest accrued thereon, if any, shall automatically
become immediately due and payable.
The foregoing provisions, however, are subject
to the condition that if, at any time after the principal of the Securities of any series shall have been so declared due and payable,
and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Issuer
shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of such
series and the principal of any and all Securities of such series which shall have become due otherwise than by acceleration (with interest
upon such principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest,
at the same rate as the rate of interest specified in the Securities of such series to the date of such payment or deposit) and such amount
as shall be sufficient to cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee except as a result of negligence or bad faith, and if any and all Events of
Default under the Indenture with respect to such series, other than the non-payment of the principal of Securities of such series which
shall have become due solely by such acceleration, shall have been cured, waived or otherwise remedied as provided herein, then and in
every such case the Holders of a majority in aggregate principal amount of all the Securities of such series then Outstanding, by written
notice to the Issuer and to the Trustee, may waive all defaults with respect to such series and rescind and annul such declaration and
its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair
any right consequent thereon.
Unless otherwise indicated in the Board Resolution,
Officer’s Certificate or supplemental indenture for a series of Original Issue Discount Securities, for all purposes under this
Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and declared due and payable
pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be such portion of the principal
thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be
due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall
constitute payment in full of such Original Issue Discount Securities.
Section 5.02 Collection
of Debt by Trustee; Trustee May Prove Debt. The Issuer covenants that (a) in case default shall be made in the payment of
any installment of interest on any of the Securities of any series when such interest shall have become due and payable, and such default
shall have continued for a period of 30 days or (b) in case default shall be made in the payment of all or any part of the principal
of any of the Securities of any series when the same shall have become due and payable, whether upon maturity of the Securities of such
series or upon any redemption or by declaration or otherwise—then, upon demand of the Trustee, the Issuer will pay to the Trustee
for the benefit of the Holders of the Securities of such series the whole amount that then shall have become due and payable on all Securities
of such series for principal or interest, as the case may be (with interest to the date of such payment upon the overdue principal and,
to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest at the same rate
as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series);
and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable
compensation to the Trustee and each predecessor trustee, their respective agents, attorneys and counsel, and any expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor trustee except as a result of its negligence or bad faith.
In case the Issuer shall fail forthwith to pay
such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute
any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings
to judgment or final decree, and may enforce any such judgment or final decree against the Issuer or other obligor upon such Securities
and collect in the manner provided by law out of the property of the Issuer or other obligor upon such Securities, wherever situated,
the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative
to the Issuer or any other obligor upon the Securities under Title 11 of the United States Code or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator
or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or its property,
or in case of any other comparable judicial proceedings relative to the Issuer or other obligor upon the Securities of any series, or
to the creditors or property of the Issuer or such other obligor, the Trustee, irrespective of whether the principal of any Securities
shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise:
(i) to
file and prove a claim or claims for the whole amount of principal and interest (or, if the Securities of any series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in the terms of such series) owing and unpaid in respect
of the Securities of any series, and to file such other papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee and each
predecessor trustee, except as a result of negligence or bad faith) and of the Securityholders allowed in any judicial proceedings relative
to the Issuer or other obligor upon the Securities of any series, or to the creditors or property of the Issuer or such other obligor,
(ii) unless
prohibited by applicable law and regulations, to vote on behalf of the Holders of the Securities of any series in any election of a trustee
or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
(iii) to
collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver or liquidator, custodian or
other similar official is hereby authorized by each of the Securityholders to make payments to the Trustee, and, in the event that the
Trustee shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Trustee, each predecessor trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor trustee except as a result of negligence
or bad faith and all other amounts due to the Trustee or any predecessor trustee pursuant to Section 6.06.
Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities of any series or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Securityholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy
or similar person.
All rights of action and of asserting claims under
this Indenture, or under any of the Securities of any series, may be enforced by the Trustee without the possession of any of the Securities
of such series or the production thereof on any trial or other proceedings relative thereto, and any such action or proceedings instituted
by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of
the expenses, disbursements and compensation of the Trustee, each predecessor trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Securities in respect of which such action was taken.
In any proceedings brought by the Trustee (and
also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party), the Trustee
shall be held to represent all the Holders of the Securities in respect to which such action was taken, and it shall not be necessary
to make any Holders of such Securities parties to any such proceedings.
Section 5.03 Application
of Proceeds. Any moneys collected by the Trustee pursuant to this Article in respect of any series shall be applied in the following
order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal or interest, upon
presentation of the several Securities in respect of which monies have been collected and stamping (or otherwise noting) thereon the payment,
or issuing Securities of such series in reduced principal amounts in exchange for the presented Securities of like series if only partially
paid, or upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due to the
Trustee or any predecessor trustee pursuant to Section 6.06;
SECOND: In case the principal of the Securities
of such series in respect of which moneys have been collected shall not have become and be then due and payable, to the payment of interest
on the Securities of such series in default in the order of the maturity of the installments of such interest, with interest (to the extent
that such interest has been collected by the Trustee) upon the overdue installments of interest, to the extent permitted by applicable
law, at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in such
Securities, such payments to be made ratably to the Persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Securities
of such series in respect of which moneys have been collected shall have become and shall be then due and payable, to the payment of the
whole amount then owing and unpaid upon all the Securities of such series for principal and interest, with interest upon the overdue principal,
and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest, to the extent permitted
by applicable law, at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified
in the Securities of such series; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon
the Securities of such series, then to the payment of such principal and interest, without preference or priority of principal over interest,
or of interest over principal, or of any installment of interest over any other installment of interest, or of any Security of such series
over any other Security of such series, ratably to the aggregate of such principal and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any,
to the Issuer or any other Person lawfully entitled thereto.
Section 5.04 Suits
for Enforcement. In case an Event of Default has occurred, has not been waived and is continuing, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, either at law or in equity or in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture
or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.
Section 5.05 Restoration
of Rights on Abandonment of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture and such
proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and
in every such case (subject to any determination in such proceeding) the Issuer and the Trustee shall be restored respectively to their
former positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee and the Securityholders shall continue
as though no such proceedings had been taken.
Section 5.06 Limitations
on Suits by Securityholders. No Holder of any Security of any series shall have any right by virtue, or by availing itself, of any
provision of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with
respect to this Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other
remedy hereunder, unless such Holder previously shall have given to the Trustee written notice of default and of the continuance thereof,
as hereinbefore provided, and unless also the Holders of not less than 25% in aggregate principal amount of the Securities of such series
then Outstanding shall have made written request upon the Trustee to institute such action or proceedings in its own name as trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred
therein or thereby and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute
any such action or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to
Section 5.09; it being understood and intended, and being expressly covenanted by the Holder of every Security of a particular series
with every other Holder of Securities of such series and the Trustee, that no one or more Holders of Securities of any series shall have
any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights
of any other such Holder of Securities of such series, or to obtain or seek to obtain priority over or preference to any other such Holder
of such series or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common
benefit of all Holders of Securities of the applicable series. For the protection and enforcement of the provisions of this Section, each
and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.
Section 5.07 Unconditional
Right of Securityholders to Institute Certain Suits. Notwithstanding any other provision in this Indenture and any provision of any
Security, the right of any Holder of any Security to receive payment of the principal of and interest on such Security on or after the
respective due dates expressed in such Security in accordance with the terms hereof and thereof, or to institute suit for the enforcement
of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder; it being
understood and intended, and being expressly covenanted by the Holder of every Security of a particular series with every other Holder
of Securities of such series and the Trustee, that no one or more Holders of Securities of any series shall have any right in any manner
whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other such Holder
of Securities of such series, or to obtain or seek to obtain priority over or preference to any other such Holder of Securities of such
series or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit
of all Holders of Securities of the applicable series. For the protection and enforcement of the provisions of this Section, each and
every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.
Section 5.08 Powers
and Remedies Cumulative; Delay or Omission Not Waiver of Default. Except as provided in Section 5.06, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders of Securities is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder
or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder
of Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any
such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein; and, subject to Section 5.06,
every power and remedy given by this Indenture or by law to the Trustee or to the Holders of Securities may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the Holders of Securities.
Section 5.09 Control
by Holders of Securities. The Holders of a majority in aggregate principal amount of the Securities of each series affected (with
each series voting as a separate class) at the time Outstanding shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the
Securities of such series by this Indenture; provided, that such direction shall not be otherwise than in accordance with law and the
provisions of this Indenture and provided, further, that (subject to the provisions of Section 6.01) the Trustee shall have the right
to decline to follow any such direction if the Trustee, being advised by counsel, shall determine that the action or proceeding so directed
may not lawfully be taken or if the Trustee in good faith by its board of directors, the executive committee, or a trust committee of
directors or Responsible Officers of the Trustee shall determine that the action or proceedings so directed would involve the Trustee
in personal liability or if the Trustee in good faith shall so determine that the actions or forbearances specified in or pursuant to
such direction would be unduly prejudicial to the interests of Holders of the Securities of all series so affected not joining in the
giving of said direction, it being understood that (subject to Section 6.01) the Trustee shall have no duty to ascertain whether
or not such actions or forbearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right
of the Trustee in its discretion to take any action deemed proper by the Trustee and which is not inconsistent with such direction or
directions by Securityholders.
Section 5.10 Waiver
of Past Defaults. The Holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding,
by notice to the Trustee, may on behalf of the Holders of all the Securities of such series waive any existing default in the performance
of any of the covenants contained herein or established pursuant to Section 2.03 with respect to such series and its consequences,
except an uncured default in the payment of the principal of, or interest on, any of the Securities of that series as and when the same
shall become due by the terms of such Securities; and may rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration. In the case of any such waiver, the Issuer, the Trustee and the Holders of the Securities
of such series shall be restored to their former positions and rights hereunder, respectively, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured, and
not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or Event
of Default or impair any right consequent thereon.
Section 5.11 Trustee
to Give Notice of Default. The Trustee shall, within 90 days after the occurrence of a default with respect to the Securities of any
series, give notice of all defaults with respect to that series known to the Trustee to all Holders of Securities of such series in the
manner and to the extent provided in Sections 4.03 and 11.04, unless in each case such defaults shall have been cured before the giving
of such notice (the term “defaults” for the purpose of this Section being hereby defined to mean any event or
condition which is, or with notice or lapse of time or both would become, an Event of Default); provided, that, except in the case
of default in the payment of the principal of or interest on any of the Securities of such series, or in the payment of any sinking fund
installment on such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors or trustees and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Securityholders of such series.
Section 5.12 Right
of Court to Require Filing of Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder of any Security by his
or her acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion
assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Securityholder or group of Securityholders of any series holding in
the aggregate more than 10% in aggregate principal amount of the Securities of such series, or to any suit instituted by any Securityholder
for the enforcement of the payment of the principal of or interest on any Security of such series, on or after the respective due dates
expressed in such Security or established pursuant to this Indenture.
ARTICLE 6
CONCERNING
THE TRUSTEE
Section 6.01 Duties
and Responsibilities of the Trustee; During Default; Prior to Default. With respect to the Holders of any series of Securities issued
hereunder, the Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a particular series and after
the curing or waiving of all Events of Default which may have occurred with respect to such series, undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture. In case an Event of Default with respect to the Securities of a
series has occurred (and has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances
in the conduct of his or her own affairs.
No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct.
Section 6.02 Certain
Rights of the Trustee. In furtherance of and subject to the Trust Indenture Act of 1939 and subject to Section 6.01:
(i) in
the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any statements, certificates or opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but, in the case of any such statements, certificates or opinions which by any provision hereof are specifically required
to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the
requirements of this Indenture;
(ii) the
Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;
(iii) the
Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction
of the Holders pursuant to Section 5.09 relating to the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;
(iv) none
of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of its rights or powers if there shall be reasonable ground
for believing that the repayment of such funds or adequate indemnity against such liability is not reasonably assured to it;
(v) the
Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, Officer’s Certificate or any other
certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note, security or other paper or
document believed by it to be genuine and to have been signed or presented by the proper party or parties;
(vi) any
request, direction, order or demand of the Issuer mentioned herein shall be sufficiently evidenced by an Officer’s Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to
the Trustee by a copy thereof certified by the secretary or an assistant secretary of the Issuer;
(vii) the
Trustee may consult with counsel and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;
(viii) the
Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request, order or direction
of any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities that might be incurred therein or thereby;
(ix) the
Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture;
(x) prior
to the occurrence of an Event of Default hereunder and after the curing or waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond, debenture, note, security, or other paper or document unless requested in
writing so to do by the Holders of not less than a majority in aggregate principal amount of the Securities of all series affected then
Outstanding; provided, that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or liabilities
as a condition to proceeding; the reasonable expenses of every such investigation shall be paid by the Issuer or, if paid by the Trustee
or any predecessor trustee, shall be repaid by the Issuer upon demand; and
(xi) the
Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys
not regularly in its employ and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder.
Section 6.03 Trustee
Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof. The recitals contained herein and in the
Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Issuer, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Issuer of any of the Securities
or of the proceeds thereof.
Section 6.04 Trustee
and Agents May Hold Securities; Collections, Etc. The Trustee or any agent of the Issuer or the Trustee, in its individual or
any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not the Trustee or such
agent and may otherwise deal with the Issuer and receive, collect, hold and retain collections from the Issuer with the same rights it
would have if it were not the Trustee or such agent.
Section 6.05 Moneys
Held by Trustee. Subject to the provisions of Section 10.04 hereof, all moneys received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except
to the extent required by mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or the Trustee shall be under any
liability for interest on any moneys received by it hereunder.
Section 6.06 Compensation
and Indemnification of Trustee and Its Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to, such reasonable compensation (which shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust) as the Issuer and the Trustee may from time to time agree in writing and, except as otherwise expressly
provided herein, the Issuer covenants and agrees to pay or reimburse the Trustee and each predecessor trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all agents and other persons
not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. The Issuer
also covenants to indemnify the Trustee and each predecessor trustee for, and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this Indenture
or the trusts hereunder and its duties hereunder, including the costs and expenses of defending itself against or investigating any claim
of liability in the premises. The obligations of the Issuer under this Section to compensate and indemnify the Trustee and each predecessor
trustee and to pay or reimburse the Trustee and each predecessor trustee for expenses, disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture. Such additional indebtedness shall be a senior
claim to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the
benefit of the Holders of particular Securities, and the Securities are hereby subordinated to such senior claim.
Section 6.07 Right
of Trustee to Rely on Officer’s Certificate, Etc. Subject to Sections 6.01 and 6.02, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering
or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s
Certificate delivered to the Trustee, and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall
be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof.
Section 6.08 Disqualification;
Conflicting Interests. If the Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of
the Trust Indenture Act of 1939, the Trustee and the Issuer shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act of 1939.
Section 6.09 Persons
Eligible for Appointment as Trustee. The Trustee for each series of Securities hereunder shall at all times be a corporation having
a combined capital and surplus of at least $50,000,000 and shall be eligible in accordance with the provisions of Section 310(a) of
the Trust Indenture Act of 1939. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements
of a Federal, State or District of Columbia supervising or examining authority, then, for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition
so published.
Section 6.10 Resignation
and Removal; Appointment of Successor Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may at any time
resign with respect to one or more or all series of Securities by giving written notice of resignation to the Issuer and by delivering
notice of such resignation to the Holders of then Outstanding Securities of each series affected at their addresses as they shall appear
on the Security register. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees
with respect to the applicable series by written instrument in duplicate, executed by authority of the Board of Directors, one copy of
which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or trustees. If no successor trustee
shall have been so appointed with respect to any series and have accepted appointment within 30 days after the delivery of such notice
of resignation, the resigning trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or
any Securityholder who has been a bona fide Holder of a Security or Securities of the applicable series for at least six months may, on
behalf of himself or herself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.
(i) In
case at any time any of the following shall occur:
(i) the
Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture Act of 1939 with respect to any series
of Securities after written request therefor by the Issuer or by any Securityholder who has been a bona fide Holder of a Security or Securities
of such series for at least six months; or
(ii) the
Trustee shall cease to be eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act of 1939 and
shall fail to resign after written request therefor by the Issuer or by any Securityholder; or
(iii) the
Trustee shall become incapable of acting with respect to any series of Securities, or shall be adjudged bankrupt or insolvent, or a receiver
or liquidator of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case, (A) the Issuer
may remove the Trustee with respect to the applicable series of Securities and appoint a successor trustee for such series by written
instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee
so removed and one copy to the successor trustee, or, (B) subject to Section 315(e) of the Trust Indenture Act of 1939,
any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months may on behalf of
itself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment
of a successor trustee with respect to such series. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(ii) The
Holders of a majority in aggregate principal amount of the Securities of each series at the time Outstanding may at any time remove the
Trustee with respect to Securities of such series and, with the consent of the Issuer, appoint a successor trustee with respect to the
Securities of such series by delivering to the Trustee so removed, to the successor trustee so appointed and to the Issuer the evidence
provided for in Section 7.01 of the action in that regard taken by the Securityholders.
(iii) Any
resignation or removal of the Trustee with respect to any series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.10 shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 6.11.
Section 6.11 Acceptance
of Appointment by Successor Trustee. Any successor trustee appointed as provided in Section 6.10 shall execute and deliver to
the Issuer and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor trustee with respect to all or any applicable series shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations with respect to such series of its
predecessor hereunder, with like effect as if originally named as trustee for such series hereunder; but, nevertheless, on the written
request of the Issuer or of the successor trustee, upon payment of its charges then unpaid, the trustee ceasing to act shall, subject
to Section 10.04, pay over to the successor trustee all moneys at the time held by it hereunder and shall execute and deliver an
instrument transferring to such successor trustee all such rights, powers, duties and obligations. Upon request of any such successor
trustee, the Issuer shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim upon all property or funds held
or collected by such trustee to secure any amounts then due it pursuant to the provisions of Section 6.06.
If a successor trustee is appointed with respect
to the Securities of one or more (but not all) series, the Issuer, the predecessor trustee and each successor trustee with respect to
the Securities of any applicable series shall execute and deliver an indenture supplemental hereto which shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the predecessor trustee with respect
to the Securities of any series as to which the predecessor trustee is not retiring shall continue to be vested in the predecessor trustee,
and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one trustee, it being understood that nothing herein or in such supplemental indenture shall constitute
such trustees co-trustees of the same trust and that each such trustee shall be trustee of a trust or trusts under separate indentures.
No successor trustee with respect to any series
of Securities shall accept appointment as provided in this Section 6.11 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 310(b) of the Trust Indenture Act of 1939 and eligible under the provisions
of Section 310(a) of the Trust Indenture Act of 1939.
Upon acceptance of appointment by any successor
trustee as provided in this Section 6.11, the Issuer shall deliver notice thereof to the Holders of Securities of each series affected,
by delivering such notice to such Holders at their addresses as they shall appear on the Security register. If the acceptance of appointment
is substantially contemporaneous with the resignation, then the notice called for by the preceding sentence may be combined with the notice
called for by Section 6.10. If the Issuer fails to deliver such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be given at the expense of the Issuer.
Section 6.12 Merger,
Conversion, Consolidation or Succession to Business of Trustee. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall
be a party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder;
provided, that such corporation shall be qualified under the provisions of Section 310(b) of the Trust Indenture Act
of 1939 and eligible under the provisions of Section 310(a) of the Trust Indenture Act of 1939, without the execution or filing
of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
In case, at the time such successor to the Trustee
shall succeed to the trusts created by this Indenture, any of the Securities of any series shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Securities so
authenticated; and, in case at that time any of the Securities of any series shall not have been authenticated, any successor to the Trustee
may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor trustee; and in all such
cases such certificate shall have the full force which it is anywhere in the Securities of such series or in this Indenture provided that
the certificate of the Trustee shall have; provided, that the right to adopt the certificate of authentication of any predecessor
trustee or to authenticate Securities of any series in the name of any predecessor trustee shall apply only to its successor or successors
by merger, conversion or consolidation.
Section 6.13 Preferential
Collection of Claims Against the Issuer. The Trustee shall comply with Section 311(a) of the Trust Indenture Act of 1939,
excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act of 1939. A Trustee who has resigned
or been removed shall be subject to Section 311(a) of the Trust Indenture Act of 1939 to the extent included therein.
ARTICLE 7
CONCERNING
THE SECURITYHOLDERS
Section 7.01 Evidence
of Action Taken by Securityholders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided
by this Indenture to be given or taken by a specified percentage in principal amount of the Securityholders of any or all series may be
embodied in and evidenced by one or more instruments of substantially similar tenor signed by such specified percentage of Securityholders
in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective
when such instrument or instruments are delivered to the Trustee. Proof of execution of any instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Indenture and (subject to Sections 6.01 and 6.02) conclusive in favor of the Trustee
and the Issuer, if made in the manner provided in this Article.
Section 7.02 Proof
of Execution of Instruments and of Holding of Securities. Subject to Sections 6.01 and 6.02, the execution of any instrument by a
Holder or his agent or proxy may be proved in accordance with such reasonable rules and regulations as may be prescribed by the Trustee
or in such manner as shall be satisfactory to the Trustee.
The holding of Securities shall be proved by the
Security register or by a certificate of the registrar thereof. The Issuer may set a record date for purposes of determining the identity
of Holders of any series entitled to vote or consent to any action referred to in Section 7.01, which record date may be set at any
time or from time to time by notice to the Trustee, for any date or dates (in the case of any adjournment or reconsideration) not more
than 60 days nor less than five days prior to the proposed date of such vote or consent, and thereafter, notwithstanding any other provisions
hereof, only Holders of such series of record on such record date shall be entitled to so vote or give such consent or revoke such vote
or consent. Notice of such record date may be given before or after any request for any action referred to in Section 7.01 is made
by the Issuer.
Section 7.03 Holders
to Be Treated as Owners. The Issuer, the Trustee and any agent of the Issuer or of the Trustee may deem and treat the Person in whose
name any Security shall be registered upon the Security register for such series as the absolute owner of such Security (whether or not
such Security shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment
of or on account of the principal of, and, subject to the provisions of this Indenture, interest on, such Security and for all other purposes;
and neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be affected by any notice to the contrary. All
such payments so made to any such Person, or upon his or her order, shall be valid, and, to the extent of the sum or sums so paid, effectual
to satisfy and discharge the liability for moneys payable.
Section 7.04 Securities
Owned by Issuer Deemed Not Outstanding. In determining whether the Holders of the requisite aggregate principal amount of Outstanding
Securities of any or all series have concurred in any direction, consent or waiver under this Indenture, Securities that are owned by
the Issuer or any other obligor on the Securities with respect to which such determination is being made or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities
with respect to which such determination is being made shall be disregarded and deemed not to be Outstanding for the purpose of any such
determination, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent
or waiver, only Securities which the Trustee knows are so owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to
act with respect to such Securities and that the pledgee is not the Issuer or any other obligor upon the Securities or any Person directly
or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities.
In case of a dispute as to such right, the advice of counsel shall be full protection in respect of any decision made by the Trustee in
accordance with such advice.
Section 7.05 Right
of Revocation of Action Taken. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 7.01,
of the taking of any action by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as
the case may be, specified in this Indenture in connection with such action, any Holder of a Security the serial number of which is shown
by the evidence to be included among the serial numbers of the Securities the Holders of which have consented to such action may, by filing
written notice at the Corporate Trust Office and upon proof of holding as provided in this Article, revoke such action so far as concerns
such Security. Except as aforesaid, any such action taken by the Holder of any Security shall be conclusive and binding upon such Holder
and upon all future Holders and owners of such Security and of any Securities issued in exchange or substitution therefor or on registration
of transfer thereof, irrespective of whether or not any notation in regard thereto is made upon any such Security. Any action taken by
the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this
Indenture in connection with such action shall be conclusively binding upon the Issuer, the Trustee and the Holders of all the Securities
affected by such action.
ARTICLE 8
SUPPLEMENTAL
INDENTURES
Section 8.01 Supplemental
Indentures Without Consent of Securityholders. The Issuer, when authorized by a resolution of its Board of Directors, and the Trustee
may from time to time and at any time, without the consent of any of the Securityholders, enter into an indenture or indentures supplemental
hereto in form satisfactory to the Trustee for one or more of the following purposes:
(i) to
convey, transfer, assign, mortgage or pledge to the Trustee as security for the Securities of one or more series any property or assets;
(ii) to
evidence the succession of another Person to the Issuer, or successive successions, and the assumption by such successor of the covenants,
agreements and obligations of the Issuer pursuant to, or to otherwise comply with, Article 9;
(iii) to
comply with the requirements of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture
Act of 1939, as amended;
(iv) to
add to the covenants of the Issuer such further covenants, restrictions, conditions or provisions as its Board of Directors and the Trustee
shall consider to be for the protection of the Holders of Securities, and to make the occurrence, or the occurrence and continuance, of
a default in any such additional covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all
or any of the several remedies provided in this Indenture as herein set forth; provided, that in respect of any such additional covenant,
restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such an Event
of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the right of the Holders of a
majority in aggregate principal amount of the Securities of such series to waive such an Event of Default;
(v) to
cure any ambiguity, defect or inconsistency, or to conform this Indenture or any supplemental indenture to the description of the Securities
set forth in any prospectus, prospectus supplement or offering memorandum related to such series of Securities;
(vi) to
provide for or add guarantors for the Securities of one or more series;
(vii) to
establish the form or terms of Securities of any series as permitted by Sections 2.01 and 2.03;
(viii) to
evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one trustee, pursuant to the requirements of Section 6.11;
(ix) to
add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any
such addition, change or elimination (i) shall not apply to any Securities issued prior to, and Outstanding as of the date of, the
execution of such supplemental indenture and entitled to the benefits of such provision or (ii) shall become effective only when
there are no Securities Outstanding hereunder;
(x) to
make any change to the Securities of any series so long as no Securities of such series are Outstanding; and
(xi) to
make any other change that does not adversely affect the interests of the Holders of the Securities in any material respect.
The Trustee shall join with the Issuer in the execution
of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to
enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions
of this Section may be executed without the consent of the Holders of any of the Securities at the time Outstanding, notwithstanding
any of the provisions of Section 8.02.
Section 8.02 Supplemental
Indentures With Consent of Securityholders. With the consent (evidenced as provided in Article 7) of the Holders of not less
than a majority in aggregate principal amount of the Securities at the time Outstanding of one or more series affected by such supplemental
indenture (voting as separate series), the Issuer, when authorized by a resolution of the Board of Directors, and the Trustee may, from
time to time and at any time, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any
manner the rights of the Holders of the Securities of each such consenting series; provided, that no such supplemental indenture
shall, without the consent of the Holder of each Security so affected, (a) extend the final maturity of any Security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption
thereof, or make the principal thereof (including any amount in respect of original issue discount) or interest thereon payable in any
currency other than that provided in the Securities or in accordance with the terms thereof, or reduce the amount of the principal of
an Original Issue Discount Security that would be due and payable upon an acceleration of the maturity thereof pursuant to Section 5.01
or the amount thereof provable in bankruptcy pursuant to Section 5.02, or (b) waive a continuing default in the payment of principal
of any Security or interest thereon , other than any such default in payment that resulted solely from such acceleration, or change a
provision related to the waiver of past defaults or changes or impair the right of any Securityholder to institute suit for the payment
or conversion thereof or, if the Securities provide therefor, any right of repayment at the option of the Securityholder, or (c) modify
any of the provisions of this section except to increase any required percentage or to provide that certain other provisions cannot be
modified or waived without the consent of the Holder of each Security so affected, or (d) reduce the aforesaid percentage of Securities
of any series, the consent of the Holders of which is required for any such supplemental indenture or the consent of Holders of which
is required for any modification, amendment or waiver of compliance with certain provisions of this Indenture or certain defaults hereunder
and their consequences provided for in this Indenture.
A supplemental indenture which changes or eliminates
any covenant, Event of Default or other provision of this Indenture (1) that has been expressly included solely for the benefit of
one or more particular series of Securities, if any, or (2) which modifies the rights of Holders of Securities of one or more series
with respect to any covenant, Event of Default or provision, shall be deemed not to affect the rights under this Indenture of the Holders
of Securities of any other series with respect to which such covenant, Event of Default or other provision has not been included or so
modified.
Upon the request of the Issuer, accompanied by
a Board Resolution authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the
consent of Securityholders as aforesaid and other documents, if any, required by Section 7.01, the Trustee shall join with the Issuer
in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the
Securityholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient
if such consent shall approve the substance thereof.
Promptly after the execution by the Issuer and
the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall give a notice thereof to the Holders
of then Outstanding Securities of each series affected thereby, by delivering a notice thereof to such Holders, and in each case such
notice shall set forth in general terms the substance of such supplemental indenture. Any failure of the Trustee to deliver such notice,
or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.
Section 8.03 Effect
of Supplemental Indenture. Any supplemental indenture executed pursuant to the provisions of this Article 8 shall comply with
the provisions of the Trust Indenture Act as then in effect. Upon the execution of any supplemental indenture pursuant to the provisions
hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations
of rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuer and the Holders of Securities of each series
affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
Section 8.04 Documents
to Be Given to Trustee. The Trustee, subject to the provisions of Sections 6.01 and 6.02, may receive an Officer’s Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article 8 complies with
the applicable provisions of this Indenture.
Section 8.05 Notation
on Securities in Respect of Supplemental Indentures. Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article may bear a notation in form approved by the Trustee for such series
as to any matter provided for by such supplemental indenture or as to any action taken by Securityholders. If the Issuer or the Trustee
shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Board of Directors,
to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Issuer, authenticated by the
Trustee and delivered in exchange for the Securities of such series then Outstanding.
ARTICLE 9
CONSOLIDATION,
MERGER, SALE OR CONVEYANCE
Section 9.01 Issuer
May Consolidate, Etc., on Certain Terms. The Issuer shall not consolidate with or merge into any other Person (in a transaction
in which the Issuer is not the surviving corporation) or convey, transfer or lease its properties and assets substantially as an entirety
to any Person, unless (a) the Person formed by such consolidation or into which the Issuer is merged or the Person which acquires
by conveyance or transfer, or which leases, the properties and assets of the Issuer substantially as an entirety (i) shall be a corporation,
limited liability company, partnership or trust, (ii) shall be organized and validly existing under the laws of the United States
of America, any State thereof or the District of Columbia and (iii) shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of, interest
on and any Additional Amounts with respect to all the Securities and the performance or observance of every covenant of this Indenture
on the part of the Issuer to be performed, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the
Trustee, by the Person formed by such consolidation or into which the Issuer shall have been merged or by the Person which shall have
acquired the Issuer’s assets; (b) immediately after giving effect to such transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and (c) the Issuer
has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.
The restrictions in this Section 9.01 shall
not apply to (i) the merger or consolidation of the Issuer with one of its affiliates, if the Board of Directors determines in good
faith that the purpose of such transaction is principally to change the Issuer’s State or jurisdiction of incorporation or convert
the Issuer’s form of organization to another form, or (ii) the merger of the Issuer with or into a single direct or indirect
wholly owned Subsidiary.
Nothing contained in this Article shall apply
to, limit or impose any requirements upon the consolidation or merger of any Person into the Issuer where the Issuer is the survivor of
such transaction, or the acquisition by the Issuer, by purchase or otherwise, of all or any part of the property of any other Person (whether
or not affiliated with the Issuer).
Section 9.02 Successor
Issuer Substituted. Upon any consolidation of the Issuer with, or merger of the Issuer into, any other Person or any conveyance, transfer
or lease of the properties and assets of the Issuer substantially as an entirety in accordance with Section 9.01, the successor Person
formed by such consolidation or into which the Issuer is merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such successor
Person had been named as the Issuer herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of
all obligations and covenants under this Indenture and the Securities.
In case of any such consolidation, merger, sale,
lease or conveyance, such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued
as may be appropriate.
ARTICLE 10
SATISFACTION
AND DISCHARGE OF INDENTURE; DEFEASANCE; UNCLAIMED MONEYS
Section 10.01 Satisfaction
and Discharge of Indenture; Defeasance. (a) If at any time
(i) the
Issuer shall have paid or caused to be paid the principal of and interest on and any Additional Amounts with respect to all the Securities
of any series Outstanding hereunder (other than Securities of such series which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.09) as and when the same shall have become due and payable, or(ii) the
Issuer shall have delivered to the Trustee for cancellation all Securities of any series theretofore authenticated (other than any Securities
of such series which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.09),
or
(iii) in
the case of any series of Securities the exact amount (including the currency of payment) of principal of and interest and Additional
Amounts due on which on the dates referred to in clause (B) below can be determined at the time of making the deposit referred to
in such clause,
(A) all the Securities of such series
not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable
within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and
(B) the Issuer shall have irrevocably
deposited or caused to be deposited with the Trustee as trust funds the entire amount in cash (other than moneys repaid by the Trustee
or any paying agent to the Issuer in accordance with Section 10.04) or, in the case of any series of Securities the payments on which
may only be made in Dollars, U.S. Government Obligations maturing as to principal and interest in such amounts and at such times as will
insure the availability of cash sufficient to pay on any subsequent interest payment date all interest due on such interest payment date
on the Securities of such series and to pay at maturity or upon redemption all Securities of such series (in each case other than any
Securities of such series which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.09)
not theretofore delivered to the Trustee for cancellation, including principal, interest and Additional Amounts due or to become due to
such date of maturity, as the case may be, and if, in any case described in (i), (ii) or (iii), the Issuer shall also pay or cause
to be paid all other sums payable hereunder by the Issuer, including amounts due the Trustee pursuant to Section 6.06, with respect
to Securities of such series, then this Indenture shall cease to be of further effect with respect to Securities of such series (except
as to (1) rights of registration of transfer, conversion and exchange of Securities of such series and the Issuer’s right of
optional redemption, (2) substitution of mutilated, defaced, destroyed, lost or stolen Securities, (3) rights of Holders of
Securities to receive, solely from the trust fund described in Section 10.01(a)(iii)(B), payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon acceleration) and remaining rights of the Holders to receive, solely
from the trust fund described in Section 10.01(a)(iii)(B), sinking fund payments, if any, (4) the rights (including the Trustee’s
rights under Section 10.05) and immunities of the Trustee hereunder and the Trustee’s obligations under Sections 10.02 and
10.04 and (5) the obligations of the Issuer under Section 3.02), and the Trustee, on demand of the Issuer accompanied by an
Officer’s Certificate and an Opinion of Counsel which complies with Section 11.05 and at the cost and expense of the Issuer,
shall execute proper instruments acknowledging such satisfaction of and discharging this Indenture with respect to such series. The Issuer
agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred and to compensate the Trustee for
any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Securities of such series.
(iv) The
following subsection shall apply to the Securities of each series unless specifically otherwise provided in a Board Resolution, Officer’s
Certificate or indenture supplemental hereto provided pursuant to Section 2.03. In addition to the right to discharge of the Indenture
pursuant to subsection (a) above, the Issuer, at its option and at any time, by written notice by an officer delivered to the Trustee,
may elect to have all of its obligations with respect to all Outstanding Securities of a series discharged (“Legal Defeasance”),
such discharge to be effective on the date that the conditions set forth in clauses (i) through (iv) and (vi) of Section 10.01(d) are
satisfied, and thereafter the Issuer shall be deemed to have paid and discharged the entire Debt on all the Securities of such series,
and satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned and this Indenture
shall cease to be of further effect with respect to Securities of such series (except as to (1) rights of registration of transfer,
conversion and exchange of Securities of such series, (2) substitution of apparently mutilated, defaced, destroyed, lost or stolen
Securities, (3) rights of Holders of Securities to receive, solely from the trust fund described in Section 10.01(d)(i), payments
of principal thereof, interest thereon and any Additional Amounts with respect thereto, upon the original stated due dates therefor (but
not upon acceleration) and remaining rights of the Holders to receive, solely from the trust fund described in Section 10.01(d)(i),
sinking fund payments, if any, (4) the rights (including the Trustee’s rights under Section 10.05) and immunities of the
Trustee hereunder and the Trustee’s obligations with respect to the Securities of such series under Sections 10.02 and 10.04 and
(5) the obligations of the Issuer under Section 3.02).
(ii) The
following subsection shall apply to the Securities of each series unless specifically otherwise provided in a Board Resolution, Officer’s
Certificate or indenture supplemental hereto provided pursuant to Section 2.03. In addition to the right to discharge of the Indenture
pursuant to subsection (a) and to Legal Defeasance pursuant to subsection (b), above, the Issuer, at its option and at any time,
by written notice executed by an officer delivered to the Trustee, may elect to have its obligations under any covenant contained in this
Indenture or in the Board Resolution or supplemental indenture relating to such series pursuant to Section 2.03 discharged with respect
to all Outstanding Securities of a series, this Indenture and any indentures supplemental to this Indenture with respect to such series
(“Covenant Defeasance”), such discharge to be effective on the date the conditions set forth in clauses (i) through
(iii) and (v) through (vi) of Section 10.01(d) are satisfied, and such Securities shall thereafter be deemed
to be not “Outstanding” for the purposes of any direction, waiver, consent or declaration of Securityholders (and any consequences
thereof) in connection with such covenants, but shall continue to be “Outstanding” for all other purposes under this Indenture.
For this purpose, such Covenant Defeasance means that, with respect to the Outstanding Securities of a series, the Issuer may omit to
comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of reference in any such covenant to any
other provision herein or in any other document and such omission to comply shall not constitute an Event of Default under Section 5.01(c) or
otherwise, but except as specified in this Section 10.01(c), the remainder of the Issuer’s obligations under the Securities
of such series, this Indenture, and any indentures supplemental to this Indenture with respect to such series shall be unaffected thereby.
(iii) The
following shall be the conditions to the application of Legal Defeasance (to the extent set forth in subsection (b)) or Covenant Defeasance
(to the extent set forth in subsection (c)) to the Securities of the applicable series:
(i) the
Issuer irrevocably deposits or causes to be deposited in trust with the Trustee or, at the option of the Trustee, with a trustee satisfactory
to the Trustee and the Company under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, cash
or U.S. Government Obligations that will generate cash sufficient to pay principal of and interest on the Outstanding Securities of such
series to maturity or redemption, as the case may be, and to pay all other amounts payable by it hereunder, provided that (A) the
trustee of the irrevocable trust, if any, shall have been irrevocably instructed to pay such funds or the proceeds of such U.S. Government
Obligations to the Trustee and (B) the Trustee shall have been irrevocably instructed to apply such funds or the proceeds of such
U.S. Government Obligations to (x) the principal and interest on all Securities of such series on the date that such principal or
interest is due and payable and (y) any mandatory sinking fund payments on the day on which such payments are due and payable in
accordance with the terms of the Indenture and the Securities of such series, and the Issuer shall also pay or cause to be paid all other
amounts payable hereunder with respect to such series;
(ii) the
Issuer delivers to the Trustee an Officer’s Certificate stating that all conditions precedent specified herein relating to Legal
Defeasance or Covenant Defeasance, as the case may be, have been complied with, and an Opinion of Counsel to the same effect;
(iii) no
Event of Default under subsection (a), (b), (d) or (e) of Section 5.01 shall have occurred and be continuing, and no event
which with notice or lapse of time or both would become such an Event of Default shall have occurred and be continuing, on the date of
such deposit;
(iv) in
the event of an election for Legal Defeasance under subsection (b), the Issuer shall have delivered to the Trustee an Opinion of Counsel
stating that (A) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since
the date of this instrument, there has been a change in the applicable Federal income tax law, in either case (A) or (B) to
the effect that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit, defeasance and discharge to be effected with respect to such Securities and will
be subject to Federal income tax on the same amounts, in the same manner and at the same times as would be the case if such deposit, defeasance
and discharge were not to occur;
(v) in
the event of an election for Covenant Defeasance under subsection (c), the Issuer shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit
and Covenant Defeasance to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in
the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur; and
(vi) notwithstanding
any other provisions of this subsection (d), such defeasance shall be effected in compliance with any additional or substitute terms,
conditions or limitations that may be imposed on the Issuer pursuant to Section 2.03.
After such irrevocable deposit made pursuant to
this Section 10.01(d) and satisfaction of the other applicable conditions set forth in this subsection (d), the Trustee upon
request shall execute proper instruments acknowledging the discharge of the Issuer’s obligations pursuant to this Section 10.01.
Section 10.02 Application
by Trustee of Funds Deposited for Payment of Securities. Subject to Section 10.04, all moneys deposited with the Trustee (or
other trustee) pursuant to Section 10.01 shall be held in trust and applied by it to the payment, either directly or through any
paying agent (including the Issuer acting as its own paying agent), to the Holders of the particular Securities of such series for the
payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal
and interest; but such money need not be segregated from other funds except to the extent required by law.
Section 10.03 Repayment
of Moneys Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture with respect to Securities of
any series, all moneys then held by any paying agent under the provisions of this Indenture with respect to such series of Securities
shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys.
Section 10.04 Return
of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or any paying
agent for the payment of the principal of, interest on or Additional Amounts in respect of any Security of any series and not applied
but remaining unclaimed for two years after the date upon which such principal, interest or additional amount shall have become due and
payable, shall be repaid to the Issuer by the Trustee for such series or such paying agent, and the Holder of the Securities of such series
shall thereafter look only to the Issuer for any payment which such Holder may be entitled to collect, and all liability of the Trustee
or any paying agent with respect to such moneys shall thereupon cease.
Section 10.05 Indemnity
for U.S. Government Obligations. The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Government Obligations deposited pursuant to Section 10.01 or the principal or interest received in respect
of such obligations.
ARTICLE 11
MISCELLANEOUS
PROVISIONS
Section 11.01 No
Recourse. No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim
based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, past, present
or future as such, of the Issuer or of any predecessor or successor corporation, either directly or through the Issuer or any such predecessor
or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations,
and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers
or directors as such, of the Issuer or of any predecessor or successor corporation, or any of them, because of the creation of the indebtedness
hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities
or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution
or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director as such, because
of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issuance of such Securities.
Section 11.02 Provisions
of Indenture for the Sole Benefit of Parties and Holders of Securities. Nothing in this Indenture or in the Securities, expressed
or implied, shall give or be construed to give to any person, firm or corporation, other than the parties hereto and their successors
and the Holders of the Securities any legal or equitable right, remedy or claim under this Indenture or under any covenant or provision
herein contained, all such covenants and provisions being for the sole benefit of the parties hereto and their successors and of the Holders
of the Securities.
Section 11.03 Successors
and Assigns of Issuer Bound by Indenture. All the covenants, stipulations, promises and agreements contained in this Indenture by
or on behalf of the Issuer shall bind its successors and assigns, whether so expressed or not.
Section 11.04 Notices
and Demands on Issuer, Trustee and Holders of Securities. Any notice or demand which by any provision of this Indenture is required
or permitted to be given or served by the Trustee or by the Holders of Securities to or on the Issuer may be delivered, given or served
by being deposited postage prepaid, first-class mail (except as otherwise specifically provided herein) addressed (until another address
of the Issuer is filed by the Issuer with the Trustee) to Mustang Bio, Inc., 377 Plantation Street, Street Worcester, Massachusetts
01605 Attn: Corporate Secretary.
Any notice, direction, request or demand by the
Issuer or any Holder of Securities to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if
given or made at _______, Attn: _______.
Where this Indenture provides for notice to Holders
of Securities, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder entitled thereto, at his, her or its last address as it appears in the Security register. In case, by
reason of the suspension of or irregularities in regular mail service, it shall be impracticable to mail notice of any event to Holders
of Securities when said notice is required to be given pursuant to any provision of this Indenture or of the Securities, then any manner
of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice.
In case, by reason of the suspension of or irregularities
in regular mail service, it shall be impracticable to mail notice to the Holders when such notice is required to be given pursuant to
any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice of any
event to a Holder of a Global Security, such notice shall be sufficiently given if given to the Depositary for such Security (or its designee),
pursuant to the Applicable Procedures of the Depositary, not later than the latest date, if any, and not earlier than the earliest date,
if any, prescribed for the giving of such notice.
Neither the failure to give notice, nor any defect
in any notice so given, to any particular Holder of a Security shall affect the sufficiency of such notice with respect to other Holders
of Securities given as provided above.
Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive such notice either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon such waiver.
Section 11.05 Officer’s
Certificates and Opinions of Counsel; Statements to Be Contained Therein. Upon any application or demand by the Issuer to the Trustee
to take any action under any of the provisions of this Indenture, the Issuer shall furnish to the Trustee an Officer’s Certificate
stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case
of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include
(a) a statement that the person making such certificate or opinion has read such covenant or condition, (b) a brief statement
as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or
opinion are based, (c) a statement that, in the opinion of such person, he or she has made such examination or investigation as is
necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with and
(d) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer
of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of or representations by counsel, unless
such officer knows that the certificate or opinion or representations with respect to the matters upon which his or her certificate, statement
or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates to factual matters, information with respect to which
is in the possession of the Issuer, upon the certificate, statement or opinion of or representations by an officer or officers of the
Issuer, unless such counsel knows that the certificate, statement or opinion or representations with respect to the matters upon which
his or her certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous.
Any certificate, statement or opinion of an officer
of the Issuer or of counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of or representations
by an accountant or firm of accountants in the employ of the Issuer, unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting matters upon which his or her certificate, statement or opinion
may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm
of public accountants filed with and directed to the Trustee shall contain a statement that such firm is independent.
Section 11.06 Payments
Due on Saturdays, Sundays and Holidays. If the date of maturity of interest on or principal of the Securities of any series or the
date fixed for redemption or repayment of any such Security, or the last day on which a Holder has the right to convert any Security,
shall not be a Business Day, then payment of interest or principal, or any conversion, need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date fixed for redemption
or on such last day for conversion, and no interest shall accrue for the period after such date.
Section 11.07 Conflict
of Any Provision of Indenture With Trust Indenture Act of 1939. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture by operation of Sections 310 to 317, inclusive, of the Trust
Indenture Act of 1939, such incorporated provision shall control.
Section 11.08 New
York Law to Govern. This Indenture and each Security shall be deemed to be a contract under the laws of the State of New York, and
for all purposes shall be governed by and construed in accordance with the laws of such State without regard to any principle of conflict
of laws that would require or permit the application of the laws of any other jurisdiction, except as may otherwise be required by mandatory
provisions of law.
Section 11.09 Counterparts.
This Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
Section 11.10 Effect
of Headings. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
Section 11.11 Actions
by Successor. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board
of directors or its equivalent, committee or officer of the Issuer shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the time be the lawful successor of the Issuer.
Section 11.12 Severability.
In case any one or more of the provisions contained in this Indenture or in the Securities of any series shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions
of this Indenture or of such Securities, but this Indenture and such Securities shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
ARTICLE 12
REDEMPTION
OF SECURITIES AND SINKING FUNDS
Section 12.01 Applicability
of Article. The provisions of this Article shall be applicable to the Securities of any series which are redeemable before their
maturity or to any sinking fund for the retirement of Securities of a series, except as otherwise specified, as contemplated by Section 2.03
for Securities of such series.
Section 12.02 Notice
of Redemption; Partial Redemptions. Notice of redemption to the Holders of Securities of any series to be redeemed as a whole or in
part at the option of the Issuer shall be given by providing notice of such redemption at least 10 days and not more than 60 days prior
to the date fixed for redemption to such Holders of Securities of such series at their last addresses as they shall appear upon the Security
register. Any notice which is given in the manner herein provided shall be conclusively presumed to have been duly given, whether or not
the Holder receives the notice. Failure to give notice or any defect in the notice to the Holder of any Security of a series designated
for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security of such
series.
The notice of redemption to each such Holder shall
specify the principal amount of each Security of such series held by such Holder to be redeemed, the date fixed for redemption, the redemption
price, the place or places of payment, that payment will be made upon presentation and surrender of such Securities, that such redemption
is pursuant to the mandatory or optional sinking fund, or both, if such be the case, that interest accrued to the date fixed for redemption
will be paid as specified in such notice and that on and after said date interest thereon or on the portions thereof to be redeemed will
cease to accrue and shall also specify, if applicable, the conversion price then in effect and the date on which the right to convert
such Securities or the portions thereof to be redeemed will expire. In case any Security of a series is to be redeemed in part only, the
notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date
fixed for redemption, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed
portion thereof will be issued.
The notice of redemption of Securities of any series
to be redeemed at the option of the Issuer shall be given by the Issuer or, at the Issuer’s request, by the Trustee in the name
and at the expense of the Issuer.
On or before the redemption date specified in the
notice of redemption given as provided in this Section, the Issuer will deposit with the Trustee or with one or more paying agents (or,
if the Issuer is acting as its own paying agent, set aside, segregate and hold in trust as provided in Section 3.04) an amount of
money sufficient to redeem on the redemption date all the Securities of such series so called for redemption (other than those Securities
theretofore surrendered for conversion into Common Stock or any other securities of the Company in accordance with their terms) at the
appropriate redemption price, together with accrued interest to the date fixed for redemption. If any Security called for redemption is
converted pursuant hereto and in accordance with the terms thereof, any money deposited with the Trustee or any paying agent or so segregated
and held in trust for the redemption of such Security shall be paid to the Issuer upon the Issuer’s request, or, if then held by
the Issuer, shall be discharged from such trust. The Issuer will deliver to the Trustee at least 10 days prior to the date the notice
required to be delivered to the Holders is to be sent (unless a shorter time period shall be acceptable to the Trustee) an Officer’s
Certificate (which need not comply with Section 11.05) stating the aggregate principal amount of Securities to be redeemed. In case
of a redemption at the election of the Issuer prior to the expiration of any restriction on such redemption, the Issuer shall deliver
to the Trustee, prior to the giving of any notice of redemption to Holders pursuant to this Section, an Officer’s Certificate stating
that such restriction has been complied with.
If less than all the Securities of a series are
to be redeemed, the Trustee shall select, in such manner as it shall deem appropriate and fair, Securities of such series to be redeemed
in whole or in part. Securities may be redeemed in part in multiples equal to the minimum authorized denomination for Securities of such
series or any multiple thereof. The Trustee shall promptly notify the Issuer in writing of the Securities of such series selected for
redemption and, in the case of any Securities of such series selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities of
any series shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of
such Security which has been or is to be redeemed. If any Security selected for partial redemption is surrendered for conversion after
such selection, the converted portion of such Security shall be deemed (so far as may be possible) to be the portion selected for redemption.
Section 12.03 Payment
of Securities Called for Redemption. If notice of redemption has been given as above provided, the Securities or portions of Securities
specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption, and on and after said date (unless the Issuer shall default in
the payment of such Securities at the redemption price, together with interest accrued to said date) interest on the Securities or portions
of Securities so called for redemption shall cease to accrue, and such Securities shall cease from and after the date fixed for redemption
to be convertible into Common Stock or any other securities of the Company (to the extent otherwise convertible in accordance with their
terms), if applicable, and cease to be entitled to any benefit or security under this Indenture, and except as provided in the paragraph
below, the Holders thereof shall have no right in respect of such Securities except the right to receive the redemption price thereof
and unpaid interest to the date fixed for redemption. On presentation and surrender of such Securities at a place of payment specified
in said notice, said Securities or the specified portions thereof shall be paid and redeemed by the Issuer at the applicable redemption
price, together with interest accrued thereon to the date fixed for redemption; provided, that payment of interest becoming due
on or prior to the date fixed for redemption shall be payable to the Holders of such Securities registered as such on the relevant record
date subject to the terms and provisions of Sections 2.03 and 2.07 hereof.
If any Security called for redemption shall not
be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest from the date fixed
for redemption at the rate of interest or Yield to Maturity (in the case of an Original Issue Discount Security) borne by such Security
and, if applicable, such Security shall remain convertible into Common Stock or any other securities of the Company until the principal
of such Security shall have been paid or duly provided for.
Upon presentation of any Security redeemed in part
only, the Issuer shall execute and the Trustee shall authenticate and deliver to or on the order of the Holder thereof, at the expense
of the Issuer, a new Security or Securities of such series, of authorized denominations, in principal amount equal to the unredeemed portion
of the Security so presented.
Section 12.04 Exclusion
of Certain Securities from Eligibility for Selection for Redemption. Securities shall be excluded from eligibility for selection for
redemption if they are identified by registration and certificate number in an Officer’s Certificate delivered to the Trustee at
least 40 days prior to the last date on which notice of redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by, either (a) the Issuer or (b) an entity specifically identified in such written statement as directly
or indirectly controlling or controlled by or under direct or indirect common control with the Issuer.
Section 12.05 Mandatory
and Optional Sinking Funds. The minimum amount of any sinking fund payment provided for by the terms of the Securities of any series
is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided
for by the terms of the Securities of any series is herein referred to as an “optional sinking fund payment”. The date
on which a sinking fund payment is to be made is herein referred to as the “sinking fund payment date”.
In lieu of making all or any part of any mandatory
sinking fund payment with respect to any series of Securities in cash, the Issuer may at its option (a) deliver to the Trustee Securities
of such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory sinking fund) by the Issuer
or receive credit for Securities of such series (not previously so credited) theretofore purchased or otherwise acquired (except as aforesaid)
by the Issuer and delivered to the Trustee for cancellation pursuant to Section 2.10 and, if applicable, receive credit for Securities
(not previously so credited) converted into Common Stock or any other securities of the Company and so delivered to the Trustee for cancellation,
(b) receive credit for optional sinking fund payments (not previously so credited) made pursuant to this Section, or (c) receive
credit for Securities of such series (not previously so credited) redeemed by the Issuer through any optional redemption provision contained
in the terms of such series. Securities so delivered or credited shall be received or credited by the Trustee at the sinking fund redemption
price specified in such Securities.
On or before the 60th day next preceding each sinking
fund payment date for any series, the Issuer will deliver to the Trustee an Officer’s Certificate (which need not contain the statements
required by Section 11.05) (a) specifying the portion of the mandatory sinking fund payment to be satisfied by payment of cash
and the portion to be satisfied by credit of Securities of such series and the basis for such credit, (b) stating that none of the
Securities of such series for which credit will be taken has theretofore been so credited, (c) stating that no defaults in the payment
of interest or Events of Default with respect to such series have occurred (which have not been waived or cured) and are continuing and
(d) stating whether or not the Issuer intends to exercise its right to make an optional sinking fund payment with respect to such
series and, if so, specifying the amount of such optional sinking fund payment which the Issuer intends to pay on or before the next succeeding
sinking fund payment date. Any Securities of such series to be credited and required to be delivered to the Trustee in order for the Issuer
to be entitled to credit therefor as aforesaid which have not theretofore been delivered to the Trustee shall be delivered for cancellation
pursuant to Section 2.10 to the Trustee with such Officer’s Certificate (or reasonably promptly thereafter if acceptable to
the Trustee). Such Officer’s Certificate shall be irrevocable and upon its receipt by the Trustee the Issuer shall become unconditionally
obligated to make all the cash payments or payments therein referred to, if any, on or before the next succeeding sinking fund payment
date. Failure of the Issuer, on or before any such 60th day, to deliver such Officer’s Certificate and Securities specified in this
paragraph, if any, shall not constitute a default but shall constitute, on and as of such date, the irrevocable election of the Issuer
that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in
cash without the option to deliver or credit Securities of such series in respect thereof.
If the sinking fund payment or payments (mandatory
or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking
fund payments made in cash shall exceed $50,000 (or the equivalent thereof in any Foreign Currency or a lesser sum in Dollars or in any
Foreign Currency if the Issuer shall so request) with respect to the Securities of any particular series, such cash shall be applied on
the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together
with accrued interest to the date fixed for redemption. If such amount shall be $50,000 (or the equivalent thereof in any Foreign Currency)
or less and the Issuer makes no such request then it shall be carried over until a sum in excess of $50,000 (or the equivalent thereof
in any Foreign Currency) is available, which delay in accordance with this paragraph shall not be a default or breach of the obligation
to make such payment. The Trustee shall select, in the manner provided in Section 12.02, for redemption on such sinking fund payment
date a sufficient principal amount of Securities of such series to which such cash may be applied, as nearly as may be, and shall (if
requested in writing by the Issuer) inform the Issuer of the serial numbers of the Securities of such series (or portions thereof) so
selected. The Trustee, in the name and at the expense of the Issuer (or the Issuer, if it shall so request the Trustee in writing), shall
cause notice of redemption of the Securities of such series to be given in substantially the manner provided in Section 12.02 (and
with the effect provided in Section 12.03) for the redemption of Securities of such series in part at the option of the Issuer. The
amount of any sinking fund payments not so applied or allocated to the redemption of Securities of such series shall be added to the next
cash sinking fund payment for such series and, together with such payment, shall be applied in accordance with the provisions of this
Section. Any and all sinking fund moneys held on the stated maturity date of the Securities of any particular series (or earlier, if such
maturity is accelerated), which are not held for the payment or redemption of particular Securities of such series, shall be applied,
together with other moneys, if necessary, sufficient for the purpose, to the payment of the principal of, and interest on, the Securities
of such series at maturity. The Issuer’s obligation to make a mandatory or optional sinking fund payment shall automatically be
reduced by an amount equal to the sinking fund redemption price allocable to any Securities or portions thereof called for redemption
pursuant to the preceding paragraph on any sinking fund payment date and converted into Common Stock in accordance with the terms of such
Securities; provided that, if the Trustee is not the conversion agent for the Securities, the Issuer or such conversion agent shall
give the Trustee written notice on or prior to the date fixed for redemption of the principal amount of Securities or portions thereof
so converted.
On or before each sinking fund payment date, the
Issuer shall pay to the Trustee in cash or shall otherwise provide for the payment of all interest accrued to the date fixed for redemption
on Securities to be redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed
any Securities of a series with sinking fund moneys or give any notice of redemption of Securities for such series by operation of the
sinking fund during the continuance of a default in payment of interest on such Securities or of any Event of Default except that, where
delivery of notice of redemption of any Securities shall theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Issuer a sum sufficient for such redemption. Except as aforesaid, any moneys
in the sinking fund for such series at the time when any such default or Event of Default shall occur, and any moneys thereafter paid
into the sinking fund, shall, during the continuance of such default or Event of Default, be deemed to have been collected under Article 5
and held for the payment of all such Securities. In case such Event of Default shall have been waived as provided in Section 5.10,
or the default cured on or before the 60th day preceding the sinking fund payment date in any year, such moneys shall thereafter be applied
on such sinking fund payment date in accordance with this Section to the redemption of such Securities.
[Signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of _________________, 20____.
|
MUSTANG BIO, INC. |
|
By: |
|
|
|
Name: |
|
|
Title: |
|
|
|
Attest: |
|
By: |
|
|
|
Name: |
|
|
Title: |
|
|
|
_______________________________, Trustee |
|
By: |
|
|
|
Name: |
|
|
Title: |
[Signature Page to Indenture]
Exhibit 5.1
Troutman Pepper Hamilton Sanders LLP |
|
301 S College Street, Suite 3400 |
Charlotte, NC 28202 |
|
troutman.com |
May 31, 2024
Mustang Bio, Inc.
377 Plantation Street
Worcester, Massachusetts 01605
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Mustang Bio, Inc.,
a Delaware corporation (the “Company”), in connection with the Company’s registration statement on Form S-3
(the “Registration Statement”), including the prospectus that is part of the Registration Statement (the “Base
Prospectus”) and the At the Market Offering Agreement prospectus that is part of the Registration Statement (the “ATM
Prospectus”), filed on the date hereof, with the Securities and Exchange Commission under the Securities Act of 1933, as amended
(the “Securities Act”). The Base Prospectus provides that it will be supplemented in the future by one or more prospectus
supplements (each, a “Prospectus Supplement”). The Base Prospectus, as supplemented by the various Prospectus Supplements,
will provide for the issuance and sale from time to time by the Company of up to an aggregate of $40,000,000 (subject to the limitations
of General Instruction I.B.6 of Form S-3, if then applicable) of any or all of (i) shares of common stock, $0.0001 par value
per share (the “Common Stock”), of the Company, (ii) shares of preferred stock, par value $0.0001 per share (the
“Preferred Stock”), of the Company, (iii) one or more series of debt securities of the Company, which may include
convertible debt securities of the Company that constitute a part of or that are issuable upon the conversion or exercise of other Securities
in the Registration Statement (the “Debt Securities”), (iv) warrants to purchase shares of Common Stock, Preferred
Stock or Debt Securities, or all three (the “Warrants”), (v) units comprised of one or more shares of Common Stock,
shares of Preferred Stock, Debt Securities and/or Warrants, in any combination (the “Units”), or (vi) any combination
of the foregoing securities. The Common Stock (including the ATM Shares (as defined below)), Preferred Stock, Debt Securities, Warrants
and Units are collectively herein referred to as the “Registered Securities.” The Registered Securities may be offered
and sold by the Company from time to time pursuant to Rule 415(a)(5) under the Securities Act as set forth in the Base Prospectus,
as supplemented by the various Prospectus Supplements that may be filed under the Securities Act. This opinion letter is furnished to
you at your request to enable you to fulfill the requirements of Item 601(b)(5) of Regulation S-K, in connection with the filing
of the Registration Statement.
The Debt Securities will be issued pursuant to
one or more indentures in substantially the form filed as an exhibit to the Registration Statement, as amended or supplemented from time
to time (each, an “Indenture”), between the Company, as obligor, and a trustee chosen by the Company and qualified
to act as such under the Trust Indenture Act of 1939, as amended (the “Trustee”).
The ATM Prospectus relates to the sale by the
Company of shares of Common Stock having an aggregate offering price of up to $5,600,000 (the “ATM Shares”) under an
At the Market Offering Agreement dated May 31, 2024 (the “ATM Agreement”), by and among the Company and H.C. Wainwright &
Co., LLC.
We have reviewed the corporate proceedings taken
by the Company with respect (1) the filing of the Registration Statement by the Company and (2) the offer, sale and issuance
of the Registered Securities by the Company, subject to in the case of each offer, sale and issuance of Registered Securities, a specific
further authorization for the offer, sale, issuance, execution, delivery and performance by proper action (the “Authorizing Resolutions”)
of the Company’s board of directors (the “Board”). We have also examined and relied upon originals or copies
of such corporate records, documents, agreements or other instruments of the Company, and such certificates and records of public officials,
and such other papers, as we have deemed necessary or appropriate in connection herewith. As to all matters of fact (including, without
limitation, factual conclusions and characterizations and descriptions of purpose, intention or other state of mind) we have relied entirely
upon certificates of officers of the Company, and have assumed, without independent inquiry, the accuracy of those certificates.
In rendering this opinion, we have assumed the
genuineness and authenticity of all signatures on original documents; the legal capacity of all natural persons; the authenticity of all
documents submitted to us as originals; the conformity to originals of all documents submitted to us as certified or photocopies; the
accuracy and completeness of all documents and records reviewed by us; the accuracy, completeness and authenticity of certificates issued
by any governmental official, office or agency and the absence of change in the information contained therein from the effective date
of any such certificate; and the due authorization, execution and delivery of all documents where authorization, execution and delivery
are prerequisites to the effectiveness of such documents.
For purposes of this opinion letter, we have assumed that:
(i) the issuance, sale, amount, and terms of each of the Registered Securities
to be offered from time to time by the Company will be duly authorized and established by proper action of the Board (other than the ATM
Shares which have been duly and established by proper action of the Board), and in accordance with the Amended and Restated Certificate
of Incorporation of the Company, as amended from time to time (the “Certificate of Incorporation”), the Amended and
Restated By-Laws of the Company, as amended from time to time (the “Bylaws”), and applicable Delaware law, and that,
at the time of each such issuance and sale of such Registered Securities, the Company will continue to be validly existing and in good
standing under the laws of the State of Delaware, with the requisite corporate power and authority to issue and sell all such Registered
Securities at such time;
(ii) any
shares of Common Stock (including the ATM Shares and any such shares issuable upon exercise of Warrants) issued by the Company pursuant
to the Registration Statement, the Base Prospectus, the ATM Prospectus and the related Prospectus Supplement, from time to time will not
exceed the maximum authorized number of shares of Common Stock under the Certificate of Incorporation, as the same may have been amended,
minus that number of shares of Common Stock that may have been issued and are outstanding, or are reserved for issuance for other purposes,
at such time;
(iii) any
shares of Preferred Stock (including any such shares issuable upon exercise of Warrants) issued by the Company pursuant to the Registration
Statement, the Base Prospectus and the related Prospectus Supplement, from time to time will not exceed the maximum authorized number
of shares of Preferred Stock under the Certificate of Incorporation, as the same may have been amended, minus that number of shares of
Common Stock that may have been issued and are outstanding, or are reserved for issuance for other purposes, at such time;
(iv) any
Warrants issued by the Company pursuant to the Registration Statement, the Base Prospectus and the related Prospectus Supplement, from
time to time, will be issued under one or more valid, binding, and enforceable warrant agreements (each a “Warrant Agreement”);
the Board will have taken all necessary corporate action to authorize the creation of and the terms of such Warrants and the issuance
of the Common Stock and/or Preferred Stock to be issued upon exercise of such Warrants and to approve the Warrant Agreement; neither such
Warrants nor such Warrant Agreement will include any provision that is unenforceable, that violates any applicable law or results in a
default under or breach of any agreement or instrument binding upon the Company; such Warrants or certificates representing such Warrants
will have been duly executed, countersigned, registered and delivered in accordance with the provisions of such Warrant Agreement; the
issuance and sale of the Warrants will not violate any applicable law or result in a default under or breach of any agreement or instrument
binding upon the Company and will comply with any requirements or restrictions imposed by any court or governmental body having jurisdiction
over the Company;
(v) any
Debt Securities issued by the Company pursuant to the Registration Statement, the Base Prospectus and the related Prospectus Supplement,
from time to time, will be issued under and in conformity with, a valid, binding and enforceable Indenture, which shall be delivered by
the Trustee, and the Trustee will have all requisite power and authority to effect the transactions contemplated by such Indenture, and
the Trustee or an authenticating agent for the Trustee will duly authenticate the Debt Securities pursuant to the applicable Indenture,
and the applicable Indenture will be the valid and binding obligation of the Trustee and will be enforceable against the Trustee in accordance
with its terms. We are expressing no opinion herein as to the application of or compliance with any foreign, federal or state law or regulation
to the power, authority or competence of any party, other than the Company, to the applicable Indenture;
(vi) any
Units issued by the Company pursuant to the Registration Statement, the Base Prospectus and the related Prospectus Supplement may be issued
pursuant to a valid, binding and enforceable Unit Agreement (the “Unit Agreement”) between the Company and a bank or
trust company as unit agent;
(vii) New
York law may apply to the applicable Indenture, the Warrants, any underwriting agreement or other agreement but New York law does not
apply generally;
(viii) all
requisite third-party consents necessary to register and/or issue the Registered Securities have been obtained by the Company;
(ix) certificates
representing shares of Common Stock, if any, will have been duly executed, countersigned, registered and delivered, or if uncertificated,
valid book-entry notations will have been made in the share register of the Company, in each case in accordance with the provisions of
the Company’s Certificate of Incorporation and Bylaws, each as amended and then in effect; and
(x) all
Registered Securities will be offered and sold in compliance with applicable federal and state securities or “blue sky” laws
and in the manner specified in the Registration Statement and the applicable Prospectus Supplement.
Subject to the limitations set forth below, we
have made such examination of law as we have deemed necessary for the purposes of expressing the opinions set forth in this letter. Such
opinions are limited solely to matters governed by the General Corporation Law of the State of Delaware and the internal laws of the State
of New York, in each case without regard to conflict or choice of law principles and as applied by courts located in the particular jurisdiction,
the applicable provisions of the Delaware Constitution, the reported judicial decisions interpreting such laws of the State of Delaware.
Based upon the foregoing, we are of the opinion that:
1. The
Common Stock, when (a) Authorizing Resolutions with respect to Common Stock have been adopted, (b) the terms for the offer and
sale of the Common Stock have been established in conformity with such Authorizing Resolutions, (c) such Common Stock has been issued
and sold as contemplated by the Registration Statement, the Base Prospectus, the ATM Prospectus and the applicable Prospectus Supplement
and (d) the Company has received the consideration provided for in the applicable Prospectus Supplement and any applicable definitive
purchase, underwriting or similar agreement, which must have a value not less than the par value thereof, or upon conversion, exchange
or exercise of Preferred Stock or Warrants in accordance with the terms of such Registered Security or the instrument governing such Registered
Security providing for such conversion, exchange or otherwise, will be validly issued, fully paid and nonassessable.
2. The
Preferred Stock, when (a) Authorizing Resolutions with respect to Preferred Stock have been adopted, (b) the terms for the offer
and sale of the Preferred Stock have been established in conformity with such Authorizing Resolutions, (c) such Preferred Stock has
been issued and sold as contemplated by the Registration Statement, the Base Prospectus and the applicable Prospectus Supplement and (d) the
Company has received the consideration provided for in the applicable Prospectus Supplement and any applicable definitive purchase, underwriting
or similar agreement, which must have a value not less than the par value thereof, or upon conversion, exchange or exercise of Warrants,
in accordance with the terms of such Registered Security or the instrument governing such Registered Security providing for such conversion,
exchange or otherwise, will be validly issued, fully paid and nonassessable.
3. The
Warrants, when (a) Authorizing Resolutions with respect to the Warrants have been adopted, (b) the terms of such Warrants and
for their issuance and sale have been established in conformity with such Authorizing Resolutions, (c) such Warrants have been issued
and sold as contemplated by the Registration Statement, the Base Prospectus and the applicable Prospectus Supplement, (d) the Company
has received the consideration provided for in the applicable supplement to the Base Prospectus and any applicable definitive purchase,
underwriting or similar agreement and (e) such Warrants have been authenticated or countersigned in accordance with the provisions
of the Warrant Agreement , will be valid and binding obligations of the Company enforceable against the Company in accordance with their
respective terms.
4. The
Debt Securities, when (a) Authorizing Resolutions with respect to such Debt Securities have been adopted, (b) the terms of such
Debt Securities and for their issuance and sale have been established in conformity with such Authorizing Resolutions and the Indenture,
(d) such Debt Securities have been issued and sold as contemplated by the Registration Statement, the Base Prospectus and the applicable
Prospectus Supplement, (e) the Company has received the consideration provided for in the applicable Prospectus Supplement and any
applicable definitive purchase, underwriting or similar agreement and (f) such Debt Securities have been executed and delivered against
the payment specified therefor and pursuant to an Indenture duly authorized, executed and delivered by the Company and the Trustee, will
be valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms.
5. The
Units, when (a) Authorizing Resolutions with respect to the Units have been adopted, (b) the terms of such Units and for their
issuance and sale have been established in conformity with such Authorizing Resolutions, (c) such Units have been issued and sold
as contemplated by the Registration Statement, the Base Prospectus and the applicable Prospectus Supplement, (d) the Company has
received the consideration provided for in the applicable Prospectus Supplement and any applicable definitive purchase, underwriting or
similar agreement and (e) such Units have been authenticated or countersigned in accordance with the Unit Agreement, if applicable,
will be valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms.
6. The
ATM Shares have been duly authorized for issuance, and following effectiveness of the Registration Statement, when the ATM Shares have
been issued and sold in accordance with the ATM Agreement, and as described in the Registration Statement and ATM Prospectus, and in accordance
with resolutions duly adopted or to be duly adopted by the Board or a pricing committee thereof with respect to the offer, sale and issuance
of the ATM Shares, the ATM Shares will be validly issued, fully paid and nonassessable.
In addition, our opinions in paragraphs 3, 4,
5 and 6 above are subject to: (a) the effect of bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to or affecting the rights and remedies of creditors; (b) the effect of general
principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless of whether enforcement is considered in a proceeding in equity
or at law, and the discretion of the court before which any proceeding therefore may be brought; (c) the unenforceability under certain
circumstances under law or court decisions of provisions providing for the indemnification of, or contribution to, a party with respect
to a liability where such indemnification or contribution is contrary to public policy; (d) the rights or remedies available to any
party for violations or breaches of any provisions of the Warrants, Debt Securities or Units, as applicable that are immaterial or the
enforcement of which would be unreasonable under the then existing circumstances; (e) the rights or remedies available to any party
for material violations or breaches that are the proximate result of actions taken by any party to the Warrants, Debt Securities, or Units,
as applicable, other than the party against whom enforcement is sought, which actions such other party is not entitled to take pursuant
to the Warrants, Debt Securities or Units, as applicable, or that otherwise violate applicable laws; (f) the rights or remedies available
to any party that takes discretionary action that is arbitrary, unreasonable or capricious, or is not taken in good faith or in a commercially
reasonable manner, whether or not the Warrants, Debt Securities or Units, as applicable permit such action; or (g) the effect of
the exercise of judicial discretion, whether in a proceeding in equity or at law.
This opinion letter is given as of the date hereof,
and we express no opinion as to the effect of subsequent events or changes in law occurring or becoming effective after the date hereof.
We assume no obligation to update this opinion letter or otherwise advise you with respect to any facts or circumstances or changes in
law that may hereafter occur or come to our attention.
We hereby consent to the filing of this opinion
as an exhibit to the Registration Statement and to the reference to this firm under the heading “Legal Matters” in the Base
Prospectus and ATM Prospectus included in the Registration Statement. In rendering this opinion and giving this consent, we do not admit
that we are an “expert” within the meaning of the Securities Act.
Very truly yours,
/s/ Troutman Pepper Hamilton Sanders LLP
Troutman Pepper Hamilton Sanders LLP
Exhibit 23.1
Consent of Independent Registered Public Accounting
Firm
We consent to the use of our report dated March
11, 2024, with respect to the financial statements of Mustang Bio, Inc., incorporated herein by reference, and to the reference to our
firm under the heading "Experts" in the base prospectus and the sales agreement prospectus.
/s/ KPMG LLP
Boston, Massachusetts
May 31, 2024
Exhibit 107
Calculation of Filing Fee Tables
Form S-3
(Form Type)
Mustang Bio, Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered and Carry Forward Securities
|
Security
Type |
Security Class
Title |
Fee
Calculation or
Carry Forward
Rule |
Amount
Registered (1) |
Proposed
Maximum
Offering
Price Per
Unit (2) |
Maximum
Aggregate Offering
Price |
Fee Rate |
Amount of
Registration Fee |
Newly Registered Securities |
Fees to Be Paid |
Equity |
Common stock, par value $0.001 per share (4)(5) |
457(o) |
|
|
|
|
|
|
Equity |
Preferred stock, par value $0.001 per share (4) |
457(o) |
|
|
|
|
|
|
Debt |
Debt Securities |
457(o) |
|
|
|
|
|
|
Other |
Warrants (6) |
457(o) |
|
|
|
|
|
|
Other |
Units (7) |
457(o) |
|
|
|
|
|
|
Unallocated (Universal) Shelf |
Unallocated (Universal) Shelf |
457(o) |
|
|
$40,000,000(1)(2) |
$0.00014760 |
$5,904 |
|
Total Offering Amounts |
|
$40,000,000 |
|
$5,904 |
|
Total Fees Previously Paid |
|
|
|
- |
|
Total Fee Offsets |
|
|
|
- |
|
Net Fee Due |
|
|
|
$5,904 |
| (1) | There are being registered hereunder, an indeterminate number or amount, as the case may be, of common
stock, preferred stock, debt securities, warrants and/or units, as may be offered by the registrant from time to time, which together
shall have an aggregate initial offering price not to exceed $40,000,000. If any debt securities are issued at an original issue
discount, then the principal amount of such debt securities shall be in such greater amount as shall result in an aggregate initial offering
price not to exceed $40,000,000, less the aggregate dollar amount of all securities previously issued hereunder. The securities included
hereunder may be sold separately or with other securities registered hereunder. The securities included hereunder also include an indeterminate
number of securities as may be issued upon conversion of or exchange for preferred stock, debt securities or units that provide for conversion
or exchange, upon exercise of warrants, or pursuant to the anti-dilution provisions of any of such securities. In addition, pursuant to
Rule 416 of the Securities Act of 1933, as amended, or the Securities Act, this registration statement also covers any additional
securities that may be offered or issued in connection with any stock splits, stock dividends or similar transactions. Includes rights
to acquire common stock or preferred stock of the registrant under any shareholder rights plan then in effect, if applicable under the
terms of any such plan. |
| (2) | The proposed maximum offering price per security will be determined from time to time by the registrant
in connection with the issuance of the securities registered by this registration statement. The proposed maximum aggregate offering price
has been estimated solely for the purpose of calculating the registration fee. In no event will the aggregate maximum offering price of
all securities issued under this registration statement exceed $40,000,000 and the amount of securities sold pursuant to this registration
statement will not exceed the limit in Instruction I.B.6.(a) of Form S-3, as applicable. The amount registered is not specified
as to each class of securities to be registered hereunder pursuant to Instruction 2.A.iii.b. of Item 16(b) of Form S-3 under
the Securities Act. |
| (3) | Calculated in accordance with Rule 457(o) under the Securities Act based on the maximum aggregate
offering price. |
| (4) | Shares of preferred stock or common stock may be issuable upon conversion of debt securities registered
hereunder. No separate consideration will be received for such preferred stock, depositary shares or common stock. |
| (5) | Shares of common stock may be issuable upon conversion of shares of preferred stock registered hereunder.
No separate consideration will be received for such shares of common stock. |
| (6) | Warrants will represent rights to purchase debt securities, common stock or preferred stock registered
hereby. Because the warrants will provide a right only to purchase such securities offered hereunder, no additional registration fee is
required. |
| (7) | Units may be purchased under a unit agreement and will represent an interest in one or more securities
registered under the registration statement including shares of common stock or preferred stock, debt securities or warrants, in any combination,
which may or may not be separable from one another. |
Grafico Azioni Mustang Bio (NASDAQ:MBIO)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni Mustang Bio (NASDAQ:MBIO)
Storico
Da Dic 2023 a Dic 2024