Exhibit 4.2
THIS SHORT TERM PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THIS NOTE MAY NOT BE SOLD, TRANSFERRED, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT.
SHORT TERM PROMISSORY NOTE
Boston, Massachusetts
July__, 2022
FOR VALUE RECEIVED, unless converted pursuant to Section 5(y) hereof, Gelesis Holdings Inc., a Delaware corporation (the “Company”), promises to pay to [______] (together with its successors and permitted assigns who become holders of this Note, the “Holder”) with a principal address listed on the signature page hereto, the principal investment amount listed on the signature page hereto, and to pay interest on the outstanding principal balance of this Note in accordance with Section 3 hereof.
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If a Default pursuant to Sections 5(a) and 5(b) occurs and is continuing, the Holder, by written notice to the Company, may declare due and payable the unpaid principal balance and all accrued interest on this Note. Upon the occurrence of a Default pursuant to Section 5(c), the unpaid principal balance and all interest accrued thereon shall automatically be due and payable immediately, without notice from or other action by the Holder. If a Default with respect to this Note occurs and is continuing, the Holder may pursue any available remedy by proceeding at law or in equity to collect any amounts due with respect to this Note or to enforce the performance of any provision of this Note.
The Holder shall have all rights and remedies available to it upon any Default and all amounts past due shall continue to accrue interest at the interest rate applicable to this Note until the earlier of conversion pursuant to Section 5(y) or the time at which all obligations under this Note are paid in full. Upon the occurrence of a Default pursuant to Section 5(a) that has not been cured by the Company within five (5) days after such Default:
(x) the Company agrees to immediately issue, or to the extent the Stockholders’ Approval pursuant to Section 6 has not yet been obtained, to issue immediately upon receipt of the Stockholders’ Approval, a warrant (the “Warrant”) for the purchase of Common Stock in form attached hereto as Exhibit A (the “Warrant Agreement”), which shall entitle the Holder to purchase at an exercise price per share of $0.01 a number of shares of Common Stock equal to (i) (A) 0.2 multiplied by (B) the amount of outstanding principal and accrued interest under this Note as of the date of conversion pursuant to Section 5(y) hereof, divided by (ii) the volume weighted average price of each share of Common Stock, as reported by the New York Stock Exchange, for the last
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five (5) trading days (as of any applicable measurement date, the “Common Stock VWAP”) occurring immediately prior to the date of exercise; and
(y) the Holder may elect, at its option, by written notice to the Company (a “Conversion Notice”), to convert the amount of outstanding principal and accrued interest under this Note into a number of shares of Common Stock (the “Conversion Securities”) equal to (i) the amount of outstanding principal and accrued interest under this Note as of the date of such conversion, divided by (ii) the lesser of the price per share of (A) the Common Stock, as reported by the New York Stock Exchange, as of 4:00 P.M. Eastern Time on the date of the Conversion Notice or (B) the Common Stock VWAP as of the day prior to the date of the Conversion Notice.
As promptly as practicable after the conversion of this Note, the Company at its expense shall issue and deliver to the Holder, upon surrender of the Note, a certificate or certificates for the number of full Conversion Securities issuable upon such conversion.
Notwithstanding anything in this Note to the contrary, the Holders’ right to convert this Note and receive the Conversion Securities shall be subject to the Company obtaining the Stockholders’ Approval.
The Company shall reserve and keep available out of its authorized but unissued Common Stock such number of shares issuable as Conversion Securities and such number of Warrant Shares (as defined in the Warrant Agreement) upon the full exercise of the Warrant. During the term of this Note, the Company shall not take any action which would cause the number of authorized but unissued Common Stock to be less than the number of such shares required to be reserved hereunder for issuance as Conversion Securities and upon full exercise of the Warrant.
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[Signatures Appear on the Next Page]
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IN WITNESS WHEREOF, the Company and the Holder have executed this Short Term Promissory Note as of the date first above written.
GELESIS HOLDINGS INC.
By:
Name: Yishai Zohar
Title: Chief Executive Officer
TO BE COMPLETED BY HOLDER:
Print Name of Holder:
Print Address of Holder:
Amount of Investment: $
Signature of Investor: By:
Name:
Title:
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Exhibit A
Form of Warrant
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