COMMON STOCK PURCHASE AGREEMENT
Exhibit 10.2
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is entered into as of June 6, 2016, by and among Ultragenyx Pharmaceutical Inc., a Delaware corporation (the “Company”), and Takeda Pharmaceutical Company Limited, a Japanese corporation (“Purchaser”).
WHEREAS, the Company desires to issue and sell to Purchaser up to Seventy Five Million Dollars ($75,000,000) worth of shares (the “Shares”) of common stock, par value $0.001 per share, of the Company (the “Common Stock”), which Shares shall be authorized and issued in accordance with the terms of this Agreement (the “Common Stock Financing”);
WHEREAS, prior to or concurrently with the consummation of the transactions contemplated hereby, and as a condition to the willingness of, and material inducement to, Purchaser to enter into this Agreement, the Company and Purchaser shall enter into a Collaboration and License Agreement of even date herewith (the “Collaboration Agreement”); and
WHEREAS, subject to the terms and conditions set forth in this Agreement, Purchaser desires to purchase from the Company the Shares.
NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants and conditions set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
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1. |
PURCHASE AND SALE |
1.1Sale and Issuance of Shares. In consideration of the Collaboration Agreement and in express reliance upon the representations, warranties and covenants set forth herein, and subject to the terms and conditions set forth in this Agreement, the Company shall issue and sell to Purchaser, and Purchaser shall purchase from the Company, the Shares; provided that in no event shall the aggregate number of Shares subject to issuance pursuant to this Section 1 exceed twenty percent (20%) of the total outstanding shares of the Company’s Common Stock calculated as of the Initial Closing (as defined below).
1.2Initial Closing. The initial purchase and sale of the Shares shall take place remotely via the exchange of documents and signatures at 10:00 a.m. on the Effective Date, as defined in the Collaboration Agreement (the “Effective Date”), or at such other time as the Company and Purchaser shall mutually agree (which time, date and place are referred to in this Agreement as the “Initial Closing”). At the Initial Closing, the Company shall instruct American Stock Transfer & Trust Company, LLC (the “Transfer Agent”) to register the issuance of the Initial Closing Shares (as defined below) via book entry, against delivery to the Company by Purchaser at the Initial Closing of Forty Million Dollars ($40,000,000) (the “Initial Closing Consideration”), payable in immediately available funds by wire transfer to an account or accounts designated by the Company. The “Initial Closing Shares” shall mean that number of shares of Common Stock equal to Twenty Five Million ($25,000,000) divided by the Bloomberg volume-weighted average price for a share of Common Stock on the NASDAQ Global Select Market for the 30 trading day period ending on the last day on which the NASDAQ Global Select Market is open (a “Trading Day”) prior to the Execution Date, as defined in the Collaboration Agreement, rounded to the nearest whole share. For the avoidance of doubt, the Initial Closing Consideration represents Twenty Five Million Dollars ($25,000,000) worth of Common Stock plus a Fifteen Million Dollar ($15,000,000) premium, which premium represents the consideration paid in return for certain rights under the Collaboration Agreement, including rights under Sections 8.1 and 8.3 of the Collaboration Agreement.
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
1.3Second Tranche Closing. During the period beginning on the three-month anniversary of the Effective Date and ending on the one-year anniversary thereof, the Company shall have the right, but not the obligation, to direct Purchaser, by its delivery to Purchaser of a Second Tranche Notice (as defined below), to purchase the Second Tranche Shares (as defined below) pursuant to this Section 1.3, and Purchaser thereupon shall have the obligation to purchase the Second Tranche Shares, subject to the conditions set forth in this Agreement, provided that the Collaboration Agreement has not been suspended or terminated in accordance with Section 15.7(d) of the Collaboration Agreement. A “Second Tranche Notice” shall mean an irrevocable written notice specifying a closing date for the purchase of the Second Tranche Shares pursuant to this Section 1.3 (the “Second Tranche Closing”), which notice shall be delivered no less than ten (10) Trading Days prior to the date of the Second Tranche Closing. At the Second Tranche Closing, the Company shall instruct the Transfer Agent to register the Second Tranche Shares (as defined below) via book entry against delivery to the Company by Purchaser at or before the Second Tranche Closing of Twenty Five Million Dollars ($25,000,000) (the “Second Tranche Consideration”), payable in immediately available funds by wire transfer to an account or accounts designated by the Company. The “Second Tranche Shares” shall mean that number of shares of Common Stock equal to Twenty Five Million Dollars ($25,000,000) divided by the Bloomberg volume- weighted average price for a share of Common Stock on the NASDAQ Global Select Market for the 30 Trading Day period ending on the last Trading Day prior to the Second Tranche Notice, rounded to the nearest whole share.
1.4Third Tranche Closing. During the 30 calendar day period following the [***] (as defined in the Collaboration Agreement), the Company shall have the right, but not the obligation, to direct Purchaser, by its delivery to Purchaser of a Third Tranche Notice (as defined below), to purchase the Third Tranche Shares (as defined below) pursuant to this Section 1.4, and Purchaser thereupon shall have the obligation to purchase the Third Tranche Shares, subject to the conditions set forth in this Agreement, provided that the Collaboration Agreement has not been suspended or terminated in accordance with Section 15.7(d) of the Collaboration Agreement. The Company shall notify Purchaser in writing within 5 business days after [***]. A “Third Tranche Notice” shall mean an irrevocable written notice specifying a closing date for the purchase of the Third Tranche Shares pursuant to this Section 1.4 (the “Third Tranche Closing”), which notice shall be delivered no less than ten (10) Trading Days prior to the date of the Third Tranche Closing. At the Third Tranche Closing, the Company shall instruct the Transfer Agent to register such issuance via book entry the Third Tranche Shares (as defined below) against delivery to the Company by Purchaser at or before the Third Tranche Closing of Ten Million Dollars ($10,000,000) (the “Third Tranche Consideration”), payable in immediately available funds by wire transfer to an account or accounts designated by the Company. The “Third Tranche Shares” shall mean that number of shares of Common Stock equal to Ten Million Dollars ($10,000,000) divided by the Bloomberg volume-weighted average price for a share of Common Stock on the NASDAQ Global Select Market for the 30 Trading Day period ending on the last Trading Day prior to the Third Tranche Notice, rounded to the nearest whole share. For clarity, each of the Initial Closing, Second Tranche Closing and Third Tranche Closing shall be referred to as a “Closing.”
1.5Capital Adjustments. If after the date hereof (A) the Company shall pay a dividend in securities of the Company (other than in Common Stock) or of other property (including cash) on the Common Stock, or (B) there shall occur any merger, consolidation, capital reorganization or reclassification in which the Common Stock is converted or exchanged for securities, cash or other property, the class or series of stock constituting the Common Stock for purposes of this Agreement, shall be appropriately adjusted to reflect such other dividend, merger, consolidation, capital reorganization or reclassification. After any event referenced in clauses (A) and (B) of the preceding sentence is consummated, all references herein to the Common Stock shall be deemed to refer to the capital stock or
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
property (including cash) into or for which the Common Stock was converted or exchanged, with the necessary changes in detail.
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2. |
REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
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As of the date of each Closing, the Company represents and warrants to Purchaser that, subject to exceptions and disclosures set forth in any part or subpart of the Company Disclosure Schedule corresponding to the particular Section or subsection of this Section 2, or any exceptions or disclosures set forth in any other part or subpart of the Company Disclosure Schedule to the extent it is reasonably apparent from the wording or any such exception or disclosure that such exception or disclosure is applicable to qualify such representation or warranty, and (i) in the case of the Initial Closing, only to the extent specifically referenced in the applicable representation or warranty, disclosures in the SEC Filings (as defined below) and (ii) in the case of the Second Tranche Closing and Third Tranche Closing, disclosures in the SEC Filings, provided that in cases (i) or (ii), in any event excluding any disclosure of risks included in any “risk factors,” “forward-looking statements” disclaimer or other statements that are similarly predictive or forward-looking in nature, the statements contained in this Section 2 are true, complete and correct (except that those statements which address matters only as of a particular date are true, correct and complete as of such date). The Company shall deliver an updated and current Company Disclosure Schedule prior to each Closing.
2.1Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on its business as now conducted and as it is described in the SEC Filings. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would or would be reasonably expected to have, individually or in the aggregate, a material adverse effect on (i) the business, properties or financial condition of the Company, (ii) the Shares or (iii) the enforceability of this Agreement (a “Material Adverse Effect”); provided that none of the following shall be taken into account in determining whether there is a Material Adverse Effect: (a) any change in the market price or trading volume of the Company’s stock; (b) any event, circumstance, change or effect in the industries in which the Company or its subsidiaries operates generally or the United States or European economy generally, financial markets or political conditions generally; (c) any act of terrorism, military action or war (whether or not declared), national or international calamity or similar event or any escalation or worsening thereof; (d) any event, circumstance, change or effect arising from or relating to any change in legal requirements or generally accepted accounting principles (“GAAP”) (or interpretations of any legal requirements or GAAP); or (e) any change or effect attributable to the consummation of the transactions contemplated hereby, or the public announcement of the execution of, this Agreement (provided any such public announcement is not in breach of this Agreement); provided, in each case, that such effects do not, individually or in the aggregate, have a materially disproportionate adverse impact on the Company, taken as a whole, relative to any other “person” as such term is defined under Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act (“Person”) in the industries or markets in which the Company operates.
2.2Certificate of Incorporation and Bylaws. The certificate of incorporation, bylaws and documents of similar substance (the “Governing Documents”) of the Company and its subsidiaries that are on file with the United States Securities and Exchange Commission (the “SEC”) are current, complete and correct copies thereof as in effect on the date hereof. The Governing Documents of the Company and its subsidiaries are in full force and effect. The Company and each subsidiary of the Company are in compliance with the terms of their respective Governing Documents.
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2.3 |
Capitalization. |
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CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
(a)The authorized capital stock of the Company consists of 275,000,000 shares of capital stock, of which 250,000,000 are designated as Common Stock and 25,000,000 are designated as preferred stock, $0.001 par value per share (“Preferred Stock”). As of the close of business on the date that is two Trading Days prior to the date of this Agreement, (i) 39,039,083 shares of Common Stock were issued and outstanding, all of which were validly issued and fully paid, nonassessable and free of preemptive rights; (ii) 5,128,090 shares of Common Stock were issuable (and such number was reserved for issuance) upon exercise of options to purchase Common Stock or as restricted stock units payable in Common Stock (the “Options”) outstanding as of such date; (iii) 149,700 shares of Common Stock were issuable (and such number was reserved for issuance) upon exercise of warrants to purchase Common Stock (the “Warrants”) outstanding as of such date; and (iv) no shares of Preferred Stock were issued and outstanding.
(b)As of the close of business on the last Trading Day immediately preceding the date of this Agreement, except for (i) the Options and (ii) the Warrants, there were no options, warrants or other rights to acquire capital stock or other equity interests from the Company, or securities convertible into or exchangeable for such capital stock or other equity interests. Other than (A) shares of capital stock reserved for issuance as provided in this Section 2.3 and (B) options to purchase Common Stock or other equity awards issued in accordance with the Company’s 2011 Equity Incentive Plan or 2014 Incentive Plan and shares subject to purchase under the 2014 Employee Stock Purchase Plan (collectively, the “Awards”), the Company has not issued any shares of its capital stock or other equity interests, or securities convertible into or exchangeable for such capital stock or other equity interests except as set forth in its filings under the Securities Act of 1933, as amended (“Securities Act”) and the Exchange Act. All outstanding shares of Common Stock and all shares of Common Stock subject to issuance upon exercise of the Options, the Awards and the Warrants, upon issuance prior to the Closing on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights. The Shares to be issued in connection with the Agreement, when issued as contemplated herein, will be duly authorized, validly issued, fully paid and nonassessable, will not be in violation of any preemptive rights and will be free and clear of all liens, charges, restrictions, claims, rights of first refusal and encumbrances except as set forth in this Agreement and the Company’s Governing Documents. The issuance and sale of the Shares will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchaser) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.
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2.4 |
Authorization; Enforceability. |
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(a)The Company has all requisite corporate power and authority to execute, deliver and perform, as applicable, this Agreement and to issue and sell the Shares in accordance with the terms hereof.
(b)All corporate action on the part of the Company and its officers and directors necessary for (i) the authorization, execution, delivery and performance of all obligations of the Company under this Agreement has been taken and (ii) the issuance and sale by the Company of the Shares hereunder has been taken. This Agreement constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms, except (A) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally or by equitable principles and (B) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies (the “Equitable Exceptions”). No action on the part of the Company’s stockholders is necessary for the authorization, execution, delivery or performance of the Company’s obligations hereunder.
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
(a)The Company has timely filed with or furnished to the SEC all registration statements, prospectuses, forms, reports, definitive proxy statements, schedules and documents required to be filed by it under the Securities Act or the Exchange Act, as the case may be (collectively, the “SEC Filings”). Each SEC Filing, as amended or supplemented, if applicable, (i) as of its date, or, if amended, as of the date of the last such amendment, complied in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the Xxxxxxxx-Xxxxx Act of 2002, as amended (the “Xxxxxxxx-Xxxxx Act”), as the case may be, and the rules and regulations of the SEC thereunder, applicable to such SEC Filing, and (ii) did not, at the time it was filed (or at the time it became effective in the case of registration statements), or, if amended, as of the date of the last such amendment, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. As of the Initial Closing, the Company meets the “Registrant Requirements” for eligibility to use Form S-3 set forth in General Instruction I.A to Form S-3. As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to the SEC Filings and, to the Company’s knowledge, none of the SEC Filings is the subject of ongoing SEC review, outstanding SEC comment or outstanding SEC investigation.
(b)Each of the consolidated financial statements (including, in each case, any notes thereto) contained in the SEC Filings, as amended, supplemented or restated, if applicable, was prepared in accordance with GAAP applied (except as may be indicated in the notes thereto and, in the case of unaudited quarterly financial statements, as permitted by the Form 10-Q under the Exchange Act) on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto), and each presented fairly, in all material respects, the consolidated financial position, results of operations and cash flows of the Company and the consolidated subsidiaries of the Company as of the respective dates thereof and for the respective periods indicated therein (subject, in the case of unaudited quarterly financial statements, to normal year-end adjustments).
(c)The Company and its subsidiaries have implemented and maintain a system of internal control over financial reporting (as required by Rule 13a-15(a) under the Exchange Act) that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with GAAP for external purposes and includes policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and to maintain accountability of assets, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on its financial statements, and such system of internal control over financial reporting is reasonably effective.
(d)The Company has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(d) of the Exchange Act) that are designed 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 frames specified by the SEC’s rules and forms (and such disclosure controls and procedures are reasonably effective), and has disclosed, based on its most recent evaluation of its system of internal control over financial reporting prior to the date of this Agreement, to the Company’s independent registered accountant and the audit committee of the Board of
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
Directors (A) any significant deficiencies and material weaknesses to the Company’s Knowledge in the design or operation of its internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) and (B) to the Company’s Knowledge any fraud that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
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2.6 |
No Conflict; Required Filings and Consents. |
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(a)The execution and delivery of this Agreement by the Company does not, and the performance of this Agreement by the Company will not, (i) conflict with or violate any provision of the Governing Documents of the Company or its subsidiaries, (ii) assuming that all consents, approvals, authorizations and permits described in the Collaboration Agreement have been obtained, conflict with or violate any law applicable to the Company or by which any property or asset of the Company is bound or affected or (iii) conflict with, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any Material Contract (as defined below).
(b)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 federal, national, supranational, state, provincial, municipal, local or other government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body of competent jurisdiction (“Governmental Authority”) or other Person in connection with the execution, delivery and performance by the Company of the issuance of the Shares, other than (i) (A) the filing of a prospectus (and potentially the filing of a registration statement) with the SEC in accordance with the requirements of Section 7.2 below, (B) filings required by applicable Blue Sky Laws, (C) the filing of a Notice of Sale of Securities on Form D with the SEC under Regulation D of the Securities Act, (D) the filing of any requisite notices and/or application(s) to the NASDAQ Global Select Market for the issuance and sale of the Shares and the listing of the Shares thereon in the time and manner required thereby, (E) any filing required by the Collaboration Agreement, and (F) those that have been made or obtained prior to the date of this Agreement, or (ii) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
2.7Employees and Employee Matters. Except as would not reasonably be expected to have a Material Adverse Effect, the Company has complied with all federal, state and local laws relating to the hiring of employees, consultants and advisors and the employment of labor, including provisions thereof relating to wages, hours, equal opportunity, collective bargaining and the payment of social security and other taxes. The Company is not delinquent in material payments to any of its employees for any wages, salaries, commissions, bonuses or other direct compensation for any services performed by them to date or amounts required to be reimbursed to such employees or upon any termination of the employment of any such employees.
2.8Material Contracts. Except as disclosed in the SEC Filings, neither the Company nor any of its assets, properties, businesses or operations is a party to, bound or affected by, or receives benefits under any contract which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) (a “Material Contract”). Except as would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect, (i) each Material Contract is valid and binding on the Company and, to the Company’s knowledge, each other party thereto, and in full force and effect, (ii) each Material Contract is enforceable against the Company and, to the Company’s knowledge, the other parties thereto in accordance with the terms thereof, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights generally and by the application of general principles
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
of equity and (iii) the Company has not received written notice of any violation or default under (or any condition which with the passage of time or the giving of notice would cause such a violation of or default under) any Material Contract.
2.9Litigation. There is no material action, suit or proceeding pending or, to the Company’s knowledge, currently threatened against the Company or against any director, officer or employee of the Company. The Company is not a party to, or subject to the provisions of, any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no material action, suit, proceeding or investigation by the Company currently pending or that the Company intends to initiate.
2.10Taxes. Except as would not reasonably be expected to have a Material Adverse Effect,
(i) all federal, state and local tax returns, reports and declarations of the Company required by law to be filed have been duly filed, (ii) all taxes and other fees due thereon have been paid and (iii) the Company has set aside on its books provisions reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There is no tax lien, whether imposed by any federal, state, county or local taxing authority, outstanding against the assets, properties or business of the Company. 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 know of no basis for any such claim.
2.11Listing and Maintenance Requirements. 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, 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. The Company is in compliance with the requirements of the NASDAQ Global Select Market for continued listing of the Common Stock thereon and has not received any notification that the NASDAQ Global Select Market is contemplating terminating such listing. The Company has no reason to believe that it will not upon issuance of the Shares continue to be in compliance with all such listing and maintenance requirements. The issuance of the Shares hereunder does not contravene the rules of the NASDAQ Global Select Market.
2.12Offering Exemption. Based in part on the representations of Purchaser set forth in Section 4.2 below, the offer, sale and issuance of the Shares in conformity with the terms of this Agreement are exempt from the registration requirements of the Securities Act and are exempt from the qualification or registration requirements of applicable state securities laws. Neither the Company nor its affiliates, nor any agent on its or their behalf, (i) has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the Common Stock Financing, (ii) has solicited or will solicit any offers to sell or has offered to sell or will offer to sell all or any part of the Shares to any Person or Persons so as to bring the sale of the Shares by the Company within the registration provisions of the Securities Act or any state securities laws or (iii) has issued any shares of Common Stock or shares of any series of Preferred Stock or other securities or instruments convertible into, exchangeable for or otherwise entitling the holder thereof to acquire shares of Common Stock which would be integrated with the sale of the Shares to Purchaser for purposes of the Securities Act or of any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated, nor will the Company or any of its subsidiaries or affiliates take any action or steps that would require registration of any of the Shares under the Securities Act.
2.13Affiliate Transactions. No employee, officer, director or 10% or greater shareholder of the Company or member of his or her immediate family (each a “Covered Person”) is currently indebted
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
to the Company, nor is the Company indebted (or committed to make loans or extend or guarantee credit) to any Covered Person. Except as disclosed in the SEC Filings, as of the date hereof, no Covered Person has any direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation that competes with the Company (except for ownership of stock not to exceed 1% of the outstanding capital stock of any publicly traded company that may compete with the Company).
2.14Investment Company Act. The Company is not, and is not an Affiliate (as defined below) of, and after giving effect to the Common Stock Financing, will not be and will not be an Affiliate of, an “investment company” or an entity “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940. For purposes of this Agreement, “Affiliate” shall mean 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 405 under the Securities Act.
2.15Brokers or Finders. The Company has not retained any brokers, consultants or advisors in connection with this Agreement, and has no agreements to pay any commission or compensation in the nature of a finder’s or broker’s fee arising out of this Agreement or the transactions contemplated hereby.
2.16Compliance with Rule 506. None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale is disqualified from relying on Rule 506 of Regulation D under the Securities Act (“Rule 506”) for any of the reasons stated in Rule 506(d) in connection with the issuance and sale of the Shares to Purchaser pursuant to this Agreement. The Company has exercised reasonable care, including without limitation, conducting a factual inquiry that is appropriate in light of the circumstances, into whether any such disqualification under Rule 506(d) exists, but has assumed the accuracy of the Purchaser’s representations and warranties. The Company has furnished to Purchaser, a reasonable time prior to the date hereof, a description in writing of any matters that would have triggered disqualification under Rule 506(d) but which occurred before September 23, 2013, in each case, in compliance with the disclosure requirements of Rule 506(e). The Company has exercised reasonable care, including without limitation, conducting a factual inquiry that is appropriate in light of the circumstances, into whether any such disqualification under Rule 506(d) would have existed and whether any disclosure is required to be made to Purchaser under Rule 506(e). Any outstanding securities of the Company (of any kind or nature) that were issued in reliance on Rule 506 at any time on or after September 23, 2013 have been issued in compliance with Rules 506(d) and (e) and no party has any reasonable basis for challenging any such reliance on Rule 506 in connection therewith.
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3. |
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE COMPANY AS OF THE INITIAL CLOSING |
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As of the date of the Initial Closing only, the Company represents and warrants to Purchaser that, subject to exceptions and disclosures set forth in any part or subpart of the Company Disclosure Schedule corresponding to the particular Section or subsection of this Section 3, or any exceptions or disclosures set forth in any other part or subpart of the Company Disclosure Schedule to the extent it is reasonably apparent from the wording or any such exception or disclosure that such exception or disclosure is applicable to qualify such representation or warranty, and disclosures in the SEC Filings, excluding any disclosure of risks included in any “risk factors,” “forward-looking statements” disclaimer or other statements that are similarly predictive or forward-looking in nature, the statements contained in this
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
Section 3 are true, complete and correct (except that those statements which address matters only as of a particular date are true, correct and complete as of such date).
3.1Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Filings, except as specifically set forth in a subsequent SEC Filing filed at least one (1) Trading Day prior to the date hereof: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any 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 altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to the holders of its Common Stock or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the SEC 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 or is reasonably expected to occur or exist with respect to the Company or its business, properties, operations, assets or financial condition, that would be required to be disclosed by the Company under applicable securities laws if the Company were publicly offering securities pursuant to an effective registration statement under the Securities Act 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.
3.2Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s employees is a member of a union that relates to such employee’s relationship with the Company, the Company is not a party to any collective bargaining agreement, and the Company believes that its relationships with its employees are good. The Company is in compliance with all 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 could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
3.3Environmental Matters. The Company is in compliance with and has not received notice of any actual or potential liability under or relating to, or actual or potential violation of, applicable federal, state and local laws, rules and regulations relating to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety or the environment which are applicable to its business (the “Environmental Laws”). The Company has not received notice of any actual or potential liability under or relating to, or actual or potential violation of, any Environmental Laws, including for the investigation or remediation of any release or threat of release of hazardous materials, and has no knowledge of any event or condition that would reasonably be expected to result in any such notice. The Company is not conducting or paying for, in whole or in part, any investigation, remediation or other corrective action pursuant to any Environmental Law at any location, and is not a party to any order, decree or agreement that imposes any obligation or liability under any Environmental Law. There are no costs or liabilities associated with Environmental Laws of or relating to the Company, except for any such matter, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company is not aware of any facts or issues regarding its compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws, that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, and the Company does not anticipate material capital expenditures relating to any Environmental Laws.
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
3.4Title to Assets. Except as set forth in the SEC Filings, the Company has good and marketable title in all personal property owned by the Company that is material to the business of the Company, in each case free and clear of all liens, except for 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 liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company are held by it under valid, subsisting and enforceable leases with which the Company are in compliance.
3.5Insurance. The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the business in which the Company is engaged, including, but not limited to, directors and officers insurance. The Company does not have any reason to believe 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.
3.6Registration Rights. Except as provided for in this Agreement or as set forth in the SEC Filings, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company.
3.7Application of Takeover Protections. The Company and the Board of Directors 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 the laws of its state of incorporation that is or could become applicable to Purchaser as a result of Purchaser and the Company fulfilling their obligations or exercising their rights under this Agreement, including without limitation as a result of the Company’s issuance of the Shares and the Purchaser’s ownership of the Shares.
3.8Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, 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 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.
3.9Accountants. The Company’s independent registered public accounting firm is Ernst & Young LLP. 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 Company’s Annual Report for the fiscal year ending December 31, 2016.
3.10Office of Foreign Assets Control. Neither the Company nor, to the Company’s knowledge, any director, officer, agent, employee or Person acting on behalf of the Company, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.
3.11Money Laundering. The operations of the Company 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
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
3.12Acknowledgement. The Company acknowledges and agrees that Purchaser is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges that Purchaser is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any advice given by Purchaser or any of their respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to Purchaser’s purchase of the Shares. The Company further represents to Purchaser that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
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4. |
REPRESENTATIONS AND WARRANTIES OF PURCHASER |
As a material inducement to the Company to enter into and perform its obligations under this Agreement, Purchaser represents and warrants to the Company as follows:
4.1Authorization; Enforceability. Purchaser has all requisite power and authority to execute, deliver and perform this Agreement. All action on the part of Purchaser and, as applicable, its directors, officers, members, partners and shareholders, necessary for the authorization, execution, delivery and performance of all obligations of Purchaser under this Agreement has been taken. This Agreement constitutes the valid and legally binding obligations of Purchaser, enforceable in accordance with their terms, except as limited by the Equitable Exceptions.
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4.2 |
Investor Representations. |
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(a)The Shares acquired by Purchaser hereunder will be acquired by Purchaser for its own account for investment purposes and not with a view to distribution in violation of the Securities Act. Purchaser does not presently have any contract, undertaking or agreement with any Person to sell, transfer or grant participation rights to such Person or to any other Person with respect to any of the Shares acquired by Purchaser hereunder.
(b)Purchaser is an “accredited investor” within the meaning of Rule 501(a) promulgated under the Securities Act.
(c)Purchaser understands that the Shares are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances. Purchaser acknowledges and agrees that the Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available or the Company receives an opinion of counsel reasonably satisfactory to the Company that such registration is not required. Purchaser has been advised or is aware of the provisions of Rule 144 promulgated under the Securities Act as in effect from time to time (“Rule 144”), which permit limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions.
(d)Purchaser acknowledges and agrees that it can bear the economic risk of its investment in the Shares and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Shares. Purchaser believes that it has
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
received all the information it considers necessary or appropriate for deciding whether to purchase the Shares acquired by Purchaser hereunder. Purchaser further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Shares.
(e)Purchaser has not agreed to incur, directly or indirectly, any liability for brokerage or finders’ fees, agents’ commissions or other similar charges in connection with this Agreement or any of the transactions contemplated hereby.
(f)Purchaser is not relying and has not relied on any representations or warranties whatsoever regarding the subject matter of this Agreement, express or implied, except for the representations and warranties in Section 2 and Section 3, including the Company Disclosure Schedule. Such representations and warranties by the Company constitute the sole and exclusive representations and warranties of the Company in connection with the transactions contemplated by this Agreement and Purchaser understands, acknowledges and agrees that all other representations and warranties of any kind or nature whether express, implied or statutory are specifically disclaimed by the Company.
(g)In connection with the due diligence investigation of the Company by Purchaser and its affiliates, stockholders, directors, officers, employees, agents, representatives or advisors, Purchaser and its affiliates, stockholders, directors, officers, employees, agents, representatives and advisors have received and may continue to receive after the date hereof from the Company and its affiliates, stockholders, directors, officers, employees, consultants, agents, representatives and advisors certain estimates, projections, forecasts and other forward-looking information, as well as certain business plan information, regarding the Company and its business and operations. Purchaser hereby acknowledges that there are uncertainties inherent in attempting to make such estimates, projections, forecasts and other forward-looking statements, as well as in such business plans, and that Purchaser will have no claim against the Company, or any of its affiliates, stockholders, directors, officers, employees, consultants, agents, representatives or advisors, or any other Person with respect thereto unless any such information is expressly addressed or included in a representation or warranty contained in this Agreement. Accordingly, Purchaser hereby acknowledges and agrees that neither the Company nor any of its respective affiliates, stockholders, directors, officers, employees, consultants, agents, representatives or advisors, nor any other Person, has made or is making any express or implied representation or warranty with respect to such estimates, projections, forecasts, forward-looking statements or business plans unless any such information is expressly addressed or included in a representation or warranty contained in this Agreement.
4.3Compliance with Laws. Neither Purchaser nor, to Purchaser’s knowledge, any director, officer, agent, employee or Person acting on behalf of Purchaser, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department. Purchaser represents and warrants to the Company as of each Closing as follows: if Purchaser is not a United States person (as defined by Section 7701(a)(30) of the Code), Purchaser has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Shares. Purchaser’s subscription and payment for and continued beneficial ownership of the Shares will not violate any applicable securities or other laws of Purchaser’s jurisdiction.
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5. |
CONDITIONS TO PURCHASER’S OBLIGATIONS AT CLOSING |
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
The obligations of Purchaser under this Agreement to purchase and pay for the Shares being purchased by Purchaser at each Closing are subject to the satisfaction or waiver, at or prior to the applicable Closing, of the following conditions:
5.1Representations and Warranties. The representations and warranties of the Company contained in Section 2 and Section 3 of this Agreement and in Section 13.1 and Section 13.3 of the Collaboration Agreement shall be true, correct and complete on and as of the Initial Closing and the representations and warranties contained in Section 2 shall be true, correct and complete as of the Second Tranche Closing and Third Tranche Closing (except that those representations and warranties which address matters only as of a particular date need only be measured as of the specific date) except that any inaccuracies in such representations and warranties will be disregarded if they collectively do not constitute and would not reasonably be expected to have a Material Adverse Effect on the Company (it being understood that for purposes of determining the accuracy of any representation or warranties all Material Adverse Effect and other materiality qualifications contained in such representations and warranties will be disregarded).
5.2Performance. The Company shall have performed and complied in all material respects with all other conditions, covenants and agreements contained in this Agreement required to be performed or complied with by it on or before the applicable Closing.
5.3Legal Investment. On the date of the applicable Closing, the sale and issuance of the Shares shall be legally permitted by all laws and regulations to which Purchaser and the Company are subject.
5.4No Suspension. Trading in the Common Stock shall not have been suspended by the SEC or the NASDAQ Global Select Market.
5.5Consents and Approvals. Any consent required for the consummation of the transactions contemplated by this Agreement, including without limitation, the issuance of the Shares, shall have been obtained (collectively, “Consents”). If applicable, the waiting period (or any extension thereof) under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, required in order for the Collaboration Agreement to become effective shall have expired or been terminated.
5.6Qualifications. All authorizations, approvals or permits, if any, of any Governmental Authority that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall have been duly obtained and shall be effective on and as of the applicable Closing.
5.7No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any Governmental Authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
5.8Collaboration Agreement. The Company shall have executed the Collaboration Agreement and the Effective Date of the Collaboration Agreement shall have occurred.
5.9Legal Opinion. Purchaser shall have received from Xxxxxx LLP, counsel for the Company, an opinion, dated as of the Initial Closing, in form and substance reasonably satisfactory to counsel for Purchaser.
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
5.10Compliance Certificate. Purchaser shall have received a compliance certificate, executed by the Chief Executive Officer and Chief Financial Officer of the Company, dated as of the date of the Closing, to the effect that the conditions specified in Sections 5.1 and 5.2 have been satisfied.
5.11 Secretary’s Certificate . Purchaser shall have received a certificate of the Company’s Secretary certifying as to (A) the Company’s certificate of incorporation and bylaws, (B) the resolutions of the Board of Directors approving this Agreement and the transactions contemplated hereby, and (C) good standing certificates with respect to the Company from the applicable authority(ies) in Delaware and any other jurisdiction in which the Company is qualified to do business, dated a recent date before the Closing.
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6. |
CONDITIONS TO THE COMPANY’S OBLIGATIONS AT CLOSING |
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The obligations of the Company under this Agreement to sell and issue to Purchaser the Shares to be purchased by Purchaser at each Closing are subject to the satisfaction or waiver, at or prior to the applicable Closing, of the following conditions:
6.1Representations and Warranties. The representations and warranties of Purchaser contained in Section 4 shall be true, correct and complete in all respects on and as of the applicable Closing with the same force and effect as if they had been made at such time (except that those representations and warranties which address matters only as of a particular date need only be true, correct and complete in all material respects as of such date).
6.2Performance. Purchaser shall have performed and complied with all other conditions, covenants and agreements contained in this Agreement required to be performed or complied with by Purchaser on or before the applicable Closing.
6.3Qualifications. All authorizations, approvals or permits, if any, of any Governmental Authority that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall have been duly obtained and shall be effective on and as of the applicable Closing.
6.4No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any Governmental Authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
6.5Consents and Approvals. Any Consent required for the consummation of the transactions contemplated by this Agreement, including without limitation, the issuance of the Shares, shall have been obtained. If applicable, the waiting period (or any extension thereof) under the Xxxx- Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, required in order for the Collaboration Agreement to become effective shall have expired or been terminated.
6.6Collaboration Agreement. The Company shall have executed the Collaboration Agreement and the Effective Date of the Collaboration Agreement shall have occurred.
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7. |
COVENANTS |
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7.1Purchaser Lock-Up. Purchaser covenants and agrees as follows:
(a)Purchaser will not, without the prior written consent of the Company, during the period commencing on the date of each Closing and, subject to the terms set forth herein, ending (i) 180
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
days after the Initial Closing with respect to the Shares purchased in the Initial Closing, or (ii) 90 days after the Second Tranche Closing or Third Tranche Closing, as applicable with respect to the Shares purchased in such Closing (each, a “Lock-Up Period”), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any Shares purchased in such Closing or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of the Shares purchased in such Closing, in cash or otherwise. Notwithstanding the foregoing, Purchaser may transfer the Shares to any of its shareholders or Affiliates; provided that in the case of any transfer or distribution pursuant to this subparagraph during the Lock-Up Period, each donee or transferee shall sign and deliver a lock-up letter with terms substantially similar to the terms of this Section 7.1.
(b)Notwithstanding anything to the contrary contained herein, Purchaser agrees that Purchaser shall not effect any sale, transfer or other disposition of any Shares unless: (a) such sale, transfer or other disposition is effected pursuant to an effective registration statement under the Securities Act; (b) such sale, transfer or other disposition is made in conformity with the requirements of Rule 144, as evidenced by a broker’s letter and a representation letter executed by Purchaser (reasonably satisfactory in form and content to the Company) stating that such requirements have been met; or (c) counsel reasonably satisfactory to the Company (which may be counsel to the Company) shall have advised the Company in a written opinion letter (reasonably satisfactory in form and content to the Company), upon which the Company may rely, that such sale, transfer or other disposition will be exempt from the registration requirements of the Securities Act.
(c)Notwithstanding any other provision of this Section 7.1, this Section 7.1 shall not prohibit or restrict any disposition of Common Stock by Purchaser in connection with (i) a bona fide tender offer by a Person other than Purchaser or the Company that is not opposed by the Board of Directors and involving a Change of Control of the Company (as defined below); or (ii) an issuer tender offer by the Company; provided, that in the event that the tender offer is not completed, the Shares shall remain subject to the restrictions contained in this Section 7.1. For the purposes of this Agreement, a “Change of Control” means the transfer, in one transaction or a series of related transactions, to a person or group of affiliated persons, of shares of capital stock of the Company if, after such transfer, the stockholders of the Company immediately prior to such transfer do not own at least twenty percent (20%) of the outstanding voting securities of the Company (or the surviving entity).
(d)Purchaser acknowledges and agrees that stop transfer instructions will be given to the Company’s transfer agent with respect to the Shares until the expiration of the Lock-Up Period.
(a)As soon as practicable, and in any event within thirty (30) days following the Initial Closing, the Company shall register the Shares purchased at the Initial Closing on an active Form S-3 or file a new Form S-3 registration statement (or such other form appropriate for such purpose) under the Securities Act. For each Additional Closing, if at any time when it is eligible to use a Form S-3 registration statement, the Company shall as soon as practicable, and in any event within thirty (30) days after the date of purchase by Purchaser, either register on an active Form S-3 or file a new Form S-3 registration statement (or such other form appropriate for such purpose) under the Securities Act covering all Registrable Shares (as defined below) then purchased by Purchaser (and, at the discretion of the Company, other registrable shares held by other shareholders), subject to the limitations of Sections 7.2(b) and 7.2(c). The Company shall maintain the effectiveness of any registration statements with respect to the Registrable Shares in accordance with the terms hereof for a period ending on the date on
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
which all Registrable Shares covered by such registration statement have been sold pursuant to such registration statement or have otherwise ceased to be Registrable Shares. The Company and the Purchaser agree that the Purchaser will suffer damages if the Company fails to fulfill its obligations under this Section 7.2(a) and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, if: (i) a registration statement is not filed with the Commission within the time period contemplated hereby; or (ii) a registration statement is not declared effective by the Commission within the time period contemplated hereby (each such event referred to in the foregoing clauses (i) and (ii), a “Registration Default”), then in such event as relief for the damages to Purchaser for the Registration Default, and not as a penalty, the Company hereby agrees to pay to Purchaser, an amount in cash equal to 1.0% of the aggregate purchase price of the unregistered Registrable Shares held by Purchaser for each 30-day period (prorated for periods totaling less than 30 days) following the Registration Default until the earlier to occur of: (1) such time as when the Company cures the Registration Default; and (2) the six (6) month anniversary of the applicable Closing Date. The payments to which a Holder shall be entitled pursuant to this Section 7.2(a) are referred to herein as “Additional Payment Amounts”. The Company shall pay Additional Payment Amounts, if any, to Holders on the earlier of: (1) the last day of the calendar month during which such Additional Payment Amounts are incurred; and (2) the third Business Day following the date on which the Registration Default giving rise to the Additional Payment Amounts is cured.
(b)Notwithstanding the foregoing obligations, if the Company furnishes to Purchaser a certificate signed by the Company’s Chief Executive Officer stating that in the good faith judgment of the Board of Directors it would be materially detrimental to the Company and its shareholders for a registration statement with respect to Registrable Shares to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or
(iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period not to exceed 60 days after the applicable Closing Date for the purchase of such Registrable Shares; provided, that the Company may not invoke this right more than once in any twelve (12) month period.
(c)The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 7.2(a) during the period that is 30 days before the Company’s good faith estimate of the date of filing with the SEC of, and ending on a date that is 90 days after the effective date of, a Company-initiated registration statement pertaining to an underwritten public offering for the Company’s account, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; provided, however, that a “Company-initiated registration statement” shall not include a registration statement on Forms S-4 or S-8 (or any similar or successor form providing for the registration of securities in connection with mergers, acquisitions, exchange offers, subscription offers, dividend reinvestment plans or stock option or other executive or employee benefit or compensation plans). A registration shall not be counted as “effected” for purposes of this Section 7.2(c) until such time as the applicable registration statement has been declared effective by the SEC, unless Purchaser withdraws its request for such registration, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Section 7.2(c).
(d)All expenses, other than Selling Expenses (as defined below), incurred in connection with registrations, filings or qualifications pursuant to this Section 7.2, including all registration, filing and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements, shall be borne and paid by the Company.
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
All Selling Expenses shall be borne by the Purchaser; or if there are other selling shareholders with shares being registered pursuant to such registration statement, then pro rata by the selling shareholders based on the number of shares sold by such selling shareholder in the offering.
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(e) |
For the purposes of this Section 7.2, |
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(i)“Losses” means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an 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 (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.
(ii)“Registrable Shares” means the Shares held by Purchaser including, without limitation, any shares of Common Stock paid, issued or distributed in respect of any such Shares by way of stock dividend, stock split or distribution, or in connection with a combination of shares, recapitalization, reorganization, merger or consolidation, or otherwise, but excluding shares of Common Stock acquired in the open market before or after the date hereof, provided, however, that the Shares will cease to be “Registrable Shares” when (A) the Shares have been sold pursuant to an effective registration statement or (B) the Shares proposed to be sold by Purchaser, in the opinion of counsel satisfactory to the Company, may be distributed to the public without any limitation pursuant to Rule 144 (or any successor provision then in effect).
(f)With a view to making available to Purchaser the benefits of Rule 144, for a period of one year following the date of the latest Closing pursuant to this Agreement, the Company covenants that it will (i) use its commercially reasonable efforts to file in a timely manner all reports and other documents required, if any, to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted thereunder and (ii) make available information necessary to comply with Rule 144 with respect to resales of the Registrable Shares under the Securities Act, at all times, all to the extent required from time to time to enable Purchaser to sell Registrable Shares without registration under the Securities Act within the limitation of the exemptions provided by (A) Rule 144 (if available with respect to resales of the Registrable Shares), as such rule may be amended from time to time or (B) any other rules or regulations now existing or hereafter adopted by the SEC.
(g)To the extent permitted by law, the Company will indemnify and hold harmless Purchaser, and the partners, members, officers, directors, and stockholders of Purchaser; legal counsel and accountants for Purchaser; any underwriter (as defined in the Securities Act) for Purchaser; and each Person, if any, who controls Purchaser or underwriter within the meaning of the Securities Act or the Exchange Act, against any Losses, and the Company will pay to Purchaser, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Losses may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 7.2(g) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
the Company be liable for any Losses to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any the Purchaser, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.
(h)To the extent permitted by law, Purchaser agrees to indemnify and hold harmless the Company, each of the directors of the Company, each of the officers of the Company who shall have signed a registration statement, and each other Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act, against any Losses to which they or any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (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 a registration statement or any document incorporated by reference in such document, 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, in light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that any such Loss 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 strict conformity with written information furnished to the Company by or on behalf of Purchaser for use therein; provided, however, that the indemnity agreement contained in this Section 7.2(h) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Purchaser, which consent shall not be unreasonably withheld;. The maximum aggregate amount of indemnifiable Losses that may be recovered from the Purchaser under the provisions of this Section 7.2(h) shall be the aggregate value of the consideration received for the Shares.
(i)Promptly after receipt by an indemnified party under this Section 7.2 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 7.2, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 7.2, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 7.2.
(j)To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 7.2 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 7.2 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 7.2, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject
CONFIDENTIAL TREATMENT REQUESTED
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(after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case (x) Purchaser will not be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by Purchaser pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
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7.3 |
Notifications. |
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(a)Prior to each Closing, the Company will promptly advise Purchaser in writing of any notice or other communication from any third Person alleging that the consent of a third Person is required in connection with the transactions contemplated by this Agreement.
(b)Prior to each Closing, each party shall promptly notify the other of any action, suit or proceeding that is instituted or specifically threatened in writing against such party to restrain, prohibit or otherwise challenge the legality of any transaction contemplated by this Agreement.
7.4Standstill. During the period commencing on the Effective Date and ending on the earliest of (i) five (5) years following the Effective Date, [***] neither the Purchaser nor any of Purchaser’s representatives or affiliates will, in any manner, directly or indirectly:
(a)make, effect, initiate or cause (i) any [***] to the extent that [***] would result in [***], (ii) any [***] of any [***] or any [***] of the Company, (iii) any [***] involving [***], or involving [***] or any [***] or (iv) any [***] provided, however, that notwithstanding the provisions of this Section 7.4(a)(i), [***] as a result of a [***] shall not be required to [***] even though such action [***];
(b)[***] with respect to the [***];
CONFIDENTIAL TREATMENT REQUESTED
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(d)[***] of this Section 7.4;
(e)[***] of this sentence;
(f)[***] of this sentence;
(g)[***]; or
(h)[***] in this Section 7.4.
Notwithstanding the foregoing, it is understood and agreed that [***] by this Section 7.4, and [***] by this Section 7.4; [***].
7.5Commercial Reasonable Efforts. Each Party will use its commercially reasonable efforts to satisfy in a timely fashion each of the conditions to be satisfied by it under Section 5 and Section 6 of this Agreement.
7.6Securities Laws Disclosure; Publicity. The Company shall, by 9:00 a.m. (New York City time) on the Trading Day immediately following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and shall, within four (4) Trading Days following the date hereof, file a Current Report on Form 8-K disclosing the material terms of the transactions contemplated hereby and including this Agreement as an exhibit thereto. The Company and Purchaser shall consult with each other regarding the substance of any public disclosure by either party regarding this Agreement or the Collaboration Agreement (including the filing of either agreement as an exhibit to a periodic filing with the SEC) and regarding the issuance of any other press releases with respect to the transactions contemplated hereby, and neither the Company nor Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of Purchaser, or without the prior consent of Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.
7.7Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Shares under this Agreement or under any other agreement among the Company and Purchaser.
CONFIDENTIAL TREATMENT REQUESTED
Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to omitted portions marked “***”.
7.8Indemnification of Purchaser. Subject to the provisions of this Section 7.8, the Company will indemnify and hold Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur due to a claim by a third party as a result of or relating to any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Parties, with respect to any of the transactions contemplated by this Agreement (unless such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under this Agreement or any agreements or understandings such Purchaser Parties may have with any such stockholder or any violations by such Purchaser Parties of state or federal securities laws or any conduct by such Purchaser Parties which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of