EXECUTION VERSION

Cooperation Agreement

 

This Cooperation Agreement (this “Agreement”) is made and entered into as of August 18, 2022 (the “Effective Date”) by and among Catalyst Biosciences, Inc., a Delaware corporation (the “Company”), and each of the parties listed on Exhibit A hereto (each, an “Investor” and collectively, the “Investors” or, with their respective controlled Affiliates, except as noted on Exhibit A, the “Investor Group”). The Company and each of the Investors are each herein referred to as a “party” and collectively, the “parties.”)

 

 

 

 

 

 

 

 

 

During the Standstill Period (defined in Section 4) each of the Investors agrees to vote all shares of Common Stock beneficially owned by each Investor and its Affiliates (as defined below) in favor of the election of any director nominee nominated by the Board; provided, however, nothing in this Agreement (including without limitation with respect to Section 4 below) shall restrict an Investor from voting freely on any stockholder approval for any merger, material acquisition or disposition, or a liquidation and winding up of the Company that is submitted by the Company for stockholder approval.

 

On the same day that JDS1 fulfills its obligations under this Agreement under Sections 1(a) and 1(b) above, and no later than two (2) hours following the later of (a) the Section 271 Litigation Dismissal Time, and (b) the Section 220 Litigation Dismissal Time (such deadline hereinafter referred to as the “Expense Reimbursement Payment Deadline”), the Company shall pay to JDS1, via same-day wire transfer of immediately available funds, and following the wire transfer instructions communicated by JDS1, via e- mail or otherwise, to the Company’s Chief Executive Officer, Interim Chief Financial Officer, or the legal counsel referenced in Section 12 hereof, the amount of $400,000 (the “Expense Reimbursement Amount”), as reimbursement for JDS1’s out-of-pocket fees and expenses (including legal expenses) incurred in connection with its involvement with the Company through the Effective Date, including, but not limited to its filings with the Securities and Exchange Commission (the “SEC”), its notices and correspondence to the Company, its proxy contest against the Company, its stockholder inspection demand, the Section 271 Litigation and the Section 220 Litigation against the Company, its engagement with the Company’s Representatives, and the negotiation and execution of this Agreement. If the Expense Reimbursement Payment Deadline occurs after the cut-off time of the transferring financial institutions, the Company shall have until 11:00 a.m. EDT of the next Business Day following the day of the Expense Reimbursement Payment Deadline to transfer the Expense Reimbursement Amount without incurring the Late Payment Fees and Interests (defined below). For the avoidance of doubt, it is expressly understood that JDS1 shall not be required to provide the Company with any documentation with respect to its expenses incurred. The Company acknowledges that the Company’s agreement to pay JDS1 the Expense Reimbursement Amount by the Expense Reimbursement Payment Deadline is a key, material, bargained- for element to this Agreement without which JDS1 would not have agreed, pursuant to the terms hereof, to withdraw the Section 271 Litigation, the Section 220 Litigation, and enter into this Agreement. If the Company does not make payment to JDS1 of the Expense Reimbursement Amount by the Expense Reimbursement Payment Deadline, JDS1 shall be entitled to all fees and expenses, including attorneys’ fees and litigation and court costs that it incurs in connection with its efforts to collect the Expense Reimbursement Amount as well as interest accruing from and after the Expense Reimbursement Payment Deadline on the unpaid balance of the Expense Reimbursement Amount (the “Late Payment Fees and Interests”). Such interest shall accrue at a rate equal to the annualized Federal Funds Rate plus ten percent (10%) and shall be compounded daily.

 

 

Each Investor agrees that, for the period commencing immediately following the payment of the Expense Reimbursement Amount pursuant to Section 3 (the “Releases Effectiveness Time”) and ending on the earliest of (i) the one year anniversary of the Agreement, or (ii) a material breach by the Company of its obligations under this Agreement which is not cured within five (5) Business Days after written notice from any Investor (the “Standstill Period”), neither it nor any of its controlled Affiliates will, and it will cause each of its controlled Affiliates not to, directly or indirectly, acting alone or in concert with others:

 

 

 

 

 

 

 

 

Except as expressly provided in Section 2, each of the Investors shall be entitled to (i) vote any shares of Common Stock that it beneficially owns as it determines in its sole discretion, and (ii) disclose, publicly or otherwise, how it intends to vote or act with respect to any securities of the Company, any stockholder proposal or other matter to be voted on by the stockholders of the Company and the reasons therefor. This Section 4 shall not restrict the ability of the Investors and each of their Affiliates and other Representatives to privately communicate with the Company and its Representatives so long as such private communications would not be reasonably expected to trigger public disclosure obligations for any party.

 

 

The Company represents and warrants to the Investors that (a) the Company has the corporate power and authority to execute this Agreement and to bind it thereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) the execution, delivery and performance of this Agreement by the Company does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, or any material agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound.

 

 

Each Investor, on behalf of itself, severally and not jointly represents and warrants to the Company that (a) as of the Effective Date, such Investor beneficially owns only the number of shares of Common Stock as described opposite its name on Exhibit A, and Exhibit A includes all Affiliates of any Investors that own any securities of the Company beneficially or of record, (b) this Agreement has been duly and validly authorized, executed and delivered by such Investor, and constitutes a valid and binding obligation and agreement of such Investor, enforceable against such Investor in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) such Investor has the authority to execute this Agreement on behalf of itself and the applicable Investor associated with that signatory’s name, and to bind such Investor to the terms hereof, and (d) the execution, delivery and performance of this Agreement by such Investor does not and will not (i)  violate or conflict with any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which such member is a party or by which it is bound.

 

From the Releases Effectiveness Time and until the end of the Standstill Period, each party hereby covenants and agrees that it shall not, and shall not permit any of its Affiliates or Representatives to, directly or indirectly, alone or in concert with others, encourage, pursue, or assist any other person to threaten or initiate any lawsuit, claim, or other proceeding before any court (each, a “Legal Proceeding”) against the other party, any of its Affiliates, or its Representatives, except for (a) any Legal Proceeding initiated primarily to remedy a breach of or to enforce this Agreement, or (b) counterclaims with respect to any proceeding initiated by or on behalf of one party or its Affiliates against any other party or its Affiliates; provided, however, that the foregoing shall not prevent any party or any of its Representatives from responding to oral questions, interrogatories, requests for information or documents, subpoenas, civil investigative demands or similar processes (each, a “Legal Requirement”) in connection with any Legal Proceeding if such Legal Proceeding has not been initiated by, on behalf of, or at the direct or indirect suggestion of such party or any of its Representatives; provided, further, that in the event any party or any of its Representatives receives such Legal Requirement, such party shall give prompt written notice of such Legal Requirement to the other party (except where such notice would be legally prohibited or not practicable). Each party represents and warrants to each other party that neither it nor any assignee has filed any Legal Proceeding or is aware of any Legal Proceeding, or a Legal Requirement related thereto, against any other party that has not been disclosed to such other party prior to the date hereof. It is understood and that in consideration of the mutual promises and covenants contained herein, and after consultation with their respective counsel, the Company, on the one hand, and each other party, on the other hand, on behalf of themselves and for all of their past and present affiliated, associated, related, parent and subsidiary companies, joint venturers, limited liability companies, and partnerships, successors, assigns, and the respective owners, officers, directors, nominees for election to the Board, agents, employees, shareholders, members, consultants and attorneys, Affiliates, Immediate Family members, and other Representatives of each of them (collectively “Affiliated Persons”), irrevocably and unconditionally release, acquit and forever discharge the other and all of their Affiliated Persons, from any and all causes of action, claims, actions, rights, judgments, obligations, damages, demands, losses, controversies, contentions, complaints, promises, accountings, bonds, bills, debts, dues, sums of money, expenses, specialties and fees and costs (whether direct, indirect or consequential, incidental or otherwise including, without limitation, attorney’s fees or court costs, of whatever nature) incurred in connection therewith of any kind whatsoever, whether known or unknown, suspected or unsuspected, in their own right and derivatively, in law or in equity or liabilities of whatever kind or character (the “Claims”), which the parties have or may have against one another based upon events occurring prior to the date of the execution of this Agreement, including, without limitation, arising out of or related to the Section 271 Litigation, the Section 220 Litigation, the engagement and interactions between the Investors and the Company (either directly or through their respective Representatives), the parties’ communications with other investors in the Company, and the proxy solicitations conducted by each of the Company and the Investor Group in connection with the Company’s 2022 Annual Meeting of Stockholders (the “Released Matters”). The parties acknowledge that this general release of claims includes, but is not limited to, any and all statutory and common law claims for, among other things, fraud and breach of fiduciary duty based upon events occurring prior to the Effective Date. The parties intend that the foregoing release be broad with respect to the Released Matters, provided, however, this release and waiver of Claims does not release any rights and duties under this Agreement and shall not include any actions or claims any party may have for breach of, or to enforce, the terms of this Agreement.

 

Each of the parties to this Agreement represents and warrants that it has not heretofore transferred or assigned, or purported to transfer or assign, to any person, firm, or corporation any claims, demands,obligations, losses, causes of action, damages, penalties, costs, expenses, attorneys’ fees, liabilities, or indemnities herein released.

The Company, on the one hand, and the Investors, on the other hand, on behalf of themselves and their Affiliated Persons, each acknowledge that as of the Effective Date, the parties may have claims against an Affiliated Person that a party does not know or suspect to exist in his, her or its favor, including, but not limited to claims that, had they been known, might have affected the decision to enter into this Agreement, or to provide the general release set forth in this Section 7. In connection with any such claims, the parties agree that they intend to waive, relinquish, and release any and all provisions, rights, and benefits any state or territory of the United States or other jurisdiction that purports to limit the application of a release to unknown claims, or to facts unknown at the time this Agreement was entered into. Without limiting the foregoing, the parties expressly waive any right or protection under Section 1542 of the California Civil Code, which provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY. In connection with the foregoing waiver, the parties acknowledge that they, or any of them, may (including after the Effective Date) discover facts in addition to or different from those known or believed by them to be true with respect to the subject matter of this Agreement, but it is the intention of the parties to complete, fully, finally, and forever compromise, settle, release, discharge, and extinguish any and all claims that they may have against each other and their Affiliated Person, known or unknown, suspected or unsuspected, contingent or absolute, accrued or unaccrued, apparent or unapparent, that now exist or previously existed, without regard to the subsequent discovery of additional or different facts. The parties acknowledge that the foregoing waiver is a key, material, bargained-for element to this Agreement and the general release that is part of it.

 

 

 

  (i)           No later than two (2) Business Days following the Effective Date, the Investor Group shall file an amendment to its Schedule 13D with respect to the Company that has been filed with the SEC, reporting the entry into this Agreement, amending applicable items to conform to their obligations hereunder and appending or incorporating by reference this Agreement as an exhibit thereto. The Investor Group shall provide the Company and its counsel a reasonable opportunity to review and comment on the Schedule 13D prior to such filing, which comments shall be considered in good faith.

 

 

This Agreement is being entered into for the purpose of avoiding litigation, uncertainty, controversy and legal expense, constitutes a compromise and settlement entered into by each party hereto, and shall not in any event constitute, be construed or deemed a concession or admission of any liability or wrongdoing of any of the parties hereto.

 

Each of the Investors, on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other party hereto may occur in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached and that such injury would not be adequately compensable in monetary damages. It is accordingly agreed that the Investors or any Investor, on the one hand, and the Company, on the other hand (the “Moving Party”), shall each be entitled to seek specific enforcement of, and injunctive or other equitable relief to prevent any violation of, the terms hereof, and the other party hereto agrees to (i) waive any requirement under any applicable law for the Moving Party to post any bond, and (ii) not take any action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available at law or in equity. This specific performance remedy shall not be the exclusive remedy for any violation of this Agreement. Any action for specific performance brought pursuant to this Section 10 shall be brought exclusively in a Delaware state court.

 

 

As used in this Agreement:

 

 

 

 

 

 

 

Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; or (ii) one (1) Business Day after deposit with a nationally recognized overnight delivery service and concurrently sent by e-mail, in each case properly addressed to the party to receive the same. The addresses and e-mail addresses for such communications shall be:

 

Catalyst Biosciences, Inc.

Attention: Nassim Usman, Ph.D.

611 Gateway Blvd., Suite 710

South San Francisco, CA 94080

Telephone: (650) 871-0761

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

Orrick, Herrington & Sutcliffe LLP

Attention: Stephen Thau

51 W 52nd St

New York, NY 10019

Telephone: (212) 506-5076

 

 

Gottfried Legal Advisory PLLC

Attention: Keith E. Gottfried

655 15th Street NW, Suite 800

Washington, DC 20005-5705

Telephone: (202) 627-0256

E-mail: Keith.Gottfried@gottfriedadvisory.com.

and

Hunton Andrews Kurth LLP

Attention: Ryan P. Phair

2200 Pennsylvania Avenue NW

Washington, DC 20037

Telephone (202) 955-1921

 

 

This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware, without regard to conflict of law principles thereof, and each party irrevocably submits to the personal jurisdiction of the Chancery Court of Delaware as the exclusive venue for adjudication of any dispute hereunder.

 

 

This Agreement, together with the Exhibits hereto, constitutes the full and entire understanding and agreement among the parties with regard to the subject matter hereof, and supersedes all prior agreements and understandings, whether written or oral, with respect to the subject matter hereof. The Company may enter into a materially similar agreement with one or more other investors but any such agreement shall constitute a separate obligation and one investor shall not become a third party beneficiary of another investor’s agreement.

 

 

Each party acknowledges that it has received adequate information to enter into this Agreement, that it has not relied on any promise, representation or warranty, express or implied not contained in this Agreement and that it has been represented by counsel in connection with this Agreement. Accordingly, any rule of law or any legal decision that would provide any party with a defense to the enforcement of the terms of this Agreement against such party shall have no application and is expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties.

 

 

If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable. The parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the purposes of such invalid or unenforceable provision.

 

 

This Agreement may be modified, amended or otherwise changed only in a writing signed by all of the parties, or, in the case of a writing required to be signed by the Investors, the Investor Representative.

 

 

This Agreement shall terminate at the end of the Standstill Period or other date established by mutual written agreement of the parties hereto. Notwithstanding the foregoing, the provisions of Sections 7 and 9 thru Section 22 shall survive the termination of this Agreement. No termination of this Agreement shall relieve any party from liability for any breach of this Agreement prior to such termination.

 

 

This Agreement shall bind the successors and permitted assigns of the parties, and inure to the benefit of any successor or permitted assign of any of the parties; provided, however, that no party may assign this Agreement without the prior written consent of the other parties. No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any person other than the parties hereto and the persons and entities released pursuant to Section 7 and their respective successors and assigns.

 

This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto. Counterparts delivered by electronic transmission shall be deemed to be originally signed counterparts.

 

 

For the avoidance of doubt, the Investors are entering into this Agreement on a several, and not joint, basis. Any liability arising hereunder with respect to a specific Investor shall only apply to such specific Investor and shall not be shared among any other Investor a party hereto.

 

 

Each Investor hereby irrevocably appoints Julian D. Singer as its attorney-in-fact and representative (the “Investor Representative”), in such Investor’s place and stead, to do any and all things and to execute any and all documents and give and receive any and all notices or instructions in connection with this Agreement and the transactions contemplated hereby. The Company shall be entitled to rely, as being binding on each Investor, upon any action taken by the Investor Representative or upon any document, notice, instruction, or other writing given or executed by the Investor Representative.

(Signature page follows)

	JDS1 , LLC
	By:	/s/ Julian D.Singer
	Name:	Julian D. Singer
	Title:	Managing Member

	CCUR Holdings, Inc.
	By:	/s/ Igor Volshteyn
	Name:	Igor Volshteyn
	Title:	Chief Executive Officer and President

	CIDM II, LLC
	By:	/s/Julian D.Singer
	Name:	Julian D. Singer
	Title:	Managing Member

 

¹

Exhibit B

Form of Stipulation of Dismissal with Prejudice

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

 

 

STIPULATION OF

DISMISSAL WITH PREJUDICE

[Signatures on following page.]

ASHBY & GEDDES			POTTER ANDERSON &
			CORROON LLP
/s/ DRAFT
Catherine A. Gaul (#4310)			/s/ DRAFT
Michael J. Vail (#6994)			Matthew F. Davis (#4696)
500 Delaware Avenue, 8th Floor			Mathew A. Golden (#6035)
P.O. Box 1150			Hercules Plaza – Sixth Floor
Wilmington, DE 19899			1313 North Market Street
(302) 654-1888			Wilmington, Delaware 19801
			(302) 984-6000

Exhibit C

Form of Stipulation of Dismissal with Prejudice

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

 

STIPULATION OF

 

[Signatures on following page.]

 

 

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