Argos Therapeutics, Inc. (NASDAQ:ARGS) Files An 8-K Entry into a Material Definitive Agreement

Argos Therapeutics, Inc. (NASDAQ:ARGS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry Into a Material Definitive Agreement

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On September 22, 2017 (the “Effective Date”), Argos Therapeutics, Inc. (the “Company”) entered into a satisfaction and release agreement (the “Satisfaction and Release Agreement”) with Invetech Pty Ltd (“Invetech”). The Company and Invetech are parties to a Development Agreement, dated October 29, 2014 (the “Development Agreement”) under which Invetech has agreed to develop and provide prototypes of the automated production system that the Company intends to use for the manufacture of the Company’sArcelis-based products. Under the Satisfaction and Release Agreement, the Company agreed to make, issue and deliver to Invetech (i) a cash payment of $500,000, (ii) 1,142,857 shares of the Company’s common stock (the “Common Shares”) and (iii) an unsecured convertible promissory note in the original principal amount of $5,200,000 (the “Note”) on account of and in full satisfaction and release of all payment obligations of the Company to Invetech arising under the Development Agreement. The Satisfaction and Release Agreement provides for a full satisfaction and release of any and all obligations of the Company to Invetech arising under the Development Agreement prior to the date of the Satisfaction and Release Agreement.

Note

The original principal amount of the Note is $5,200,000. The maturity date for the payment of principal and interest under the Note is September 30, 2020. The Note bears interest at a rate of 6.0% per annum, which interest will compound annually. The Note is not secured by any assets of the Company.

The Company is required to make quarterly installment payments under the Note for the fiscal quarters ending December 31, 2017 and March 31, 2018, each in an aggregate amount of up to $400,000, consisting of (i) cash in the amount of $200,000 and (ii) if certain specified conditions are met as of the corresponding payment date, up to $200,000 of shares of the Company’s common stock. For the fiscal quarters ending June 30, 2018 through March 31, 2019, the Company is required to make quarterly installment payments under the Note, each in an aggregate amount of up to $300,000, consisting of (i) cash in the amount of $150,000 and (ii) if certain specified conditions are met as of the corresponding payment date, up to $150,000 of shares of the Company’s common stock. For the fiscal quarters ending June 30, 2019 through June 30, 2020, the Company is required to make quarterly installment payments under the Note, each in an amount of $150,000, payable in cash.

The Note also provides that on the anniversary of the issue date of the Note for each of the first three years following the issue date, the outstanding principal amount of the Note, if any, plus accrued and unpaid interest thereon shall automatically be deemed to be reduced by $250,000, if and only if the Company has paid all debt service payments due under the Note on or prior to the relevant anniversary date and no event of default, fundamental transaction or change of control, each as defined in the Note, has occurred on or prior to such anniversary date.

As detailed further below, Invetech may exercise its conversion rights upon: (i) maturity of the Note, (ii) certain change of control events, and (iii) certain events of default. In each case, the number of shares of common stock issuable upon such complete or partial conversion of the Note is determined by dividing the portion of the principal and accrued or unpaid interest to be converted by $0.50 per share (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction).

Maturity of the Note. Upon maturity of the Note or at any time within 75 days of such maturity, Invetech may, at its option, elect to convert any amount of the outstanding principal and accrued interest into shares of the Company’s common stock. The Company will be required to pay any amount not so converted in cash.
Change of Control. Upon a change of control to which Invetech has a redemption right, Invetech may, at its option, elect to convert any amount of the outstanding principal and accrued interest, less any remaining installment payments required to be made in cash, into shares of the Company’s common stock. The Company will be required to pay any amount not so converted in cash.
Default. Upon the occurrence of certain events of default, Invetech may, at its option, elect to convert any amount of the outstanding principal and accrued interest into shares of the Company’s common stock. The Company will be required to pay any amount not so converted in cash.

Subject to the aforementioned conversion rights of Invetech, the Company may prepay the Note in whole or in part at any time without penalty or premium.

Registration Rights Agreement

On September 22, 2017, in connection with entering into the Satisfaction and Release Agreement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with Invetech, under which the Company has agreed to register for resale the Common Shares and the shares of the Company’s common stock issued or issuable upon conversion of the Note (the “Conversion Shares” and, together with the Common Shares, the “Securities”). Under the Registration Rights Agreement, the Company has agreed to use its best efforts to file a registration statement covering the Securities within 45 days of the Effective Date, and to use its best efforts to keep such registration statement effective until the date the Securities have been sold or may be sold to Rule 144 without restriction.

In the event that a registration statement has not been filed by the Company within 45 days of the Effective Date (subject to extension under certain circumstances), the Company has agreed to pay to Invetech, as liquidated damages, $10,000 for each 30-day period or pro rata for any portion thereof during which no such registration statement is filed. Moreover, in the event (i)the registration statement is not declared effective by the Securities and Exchange Commission (the “SEC”) by the 105th day following the Effective Date, or (ii)after the registration statement has been declared effective by the SEC, the registration statement is not available to cover any sales of Securities, then the Company has agreed to pay Invetech, as liquidated damages, $10,000 for each 30-day period or pro rata for any portion thereof following the date by which the Registration Statement should have been effective, subject to specified exceptions.

Invetech has also agreed to limit the daily volume of any sales it may decide to make of the Company’s common stock to no more than 10% of the average daily volume over the previous twenty trading days.

The Company has granted Invetech, and Invetech has granted to the Company, customary indemnification rights in connection with the registration statement.

The foregoing descriptions of the Satisfaction and Release Agreement and the Registration Rights Agreement are qualified in their entirety by reference to the full text of the Satisfaction and Release Agreement and the Registration Rights Agreement, copies of which are filed as Exhibits 10.1 and 10.2 hereto, respectively, and incorporated by reference herein. The foregoing description of the Note is qualified in its entirety by reference to the full text of the Note, the form of which is included as an exhibit to the Satisfaction and Release Agreement in Exhibit 10.1, and incorporated by reference herein

Item 1.01 Unregistered Sales of Equity Securities.

The information contained above in Item 1.01 is hereby incorporated by reference into this Item 1.01. Based in part upon the representations of Invetech, the Securities will be issued and sold in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) set forth in Section 4(a)(2) of the Securities Act. The Securities have not been registered under the Securities Act or any state securities laws, and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from the registration requirements. The sale of the Securities will not involve a public offering. Invetech represented that it is an accredited investor, as such term is defined in Rule 501(a) of Regulation D under the Securities Act, and that it is acquiring the Securities for investment purposes only and not with a view to any resale, distribution or other disposition of the Securities in violation of the United States federal securities laws, and the Company took reasonable steps to verify that Invetech is an accredited investor, as such term is defined in Rule 501(a) of Regulation D under the Securities Act.

Item 1.01 Financial Statements and Exhibits.

(d) Exhibits


ARGOS THERAPEUTICS INC Exhibit
EX-10.1 2 exh_101.htm EXHIBIT 10.1 Exhibit 10.1   SATISFACTION AND RELEASE AGREEMENT   This SATISFACTION AND RELEASE AGREEMENT (the “Agreement”) is dated as of the 22nd day of September,…
To view the full exhibit click here

About Argos Therapeutics, Inc. (NASDAQ:ARGS)

Argos Therapeutics, Inc. (Argos) is an immuno-oncology company. The Company is focused on the development and commercialization of individualized immunotherapies for the treatment of cancer and infectious diseases based on its technology platform called Arcelis. The Company’s Arcelis technology platform utilizes biological components from a patient’s own cancer cells or virus to generate individualized immunotherapies. The Company is engaged in the development of AGS-003 for the treatment of metastatic renal cell carcinoma (mRCC), and other cancers. It is conducting a pivotal Phase III clinical trial of AGS-003 plus sunitinib or another targeted therapy for the treatment of newly diagnosed mRCC under a special protocol assessment (SPA). It is engaged in the development of AGS-004 for the treatment of Human Immunodeficiency Virus (HIV). It has conducted over three clinical trials of AGS-004, including a Phase IIb clinical trial, Phase IIa clinical trial and Phase I clinical trial.

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