Exhibit 10.1

 

Execution Version

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into
as of April 20, 2017 by and among Syros Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and the Investors identified on Exhibit A attached
hereto (each an “Investor” and collectively the “Investors”).

 

RECITALS

 

A.            The Company and the Investors are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Section 4(a)(2) of the 1933 Act (as defined below);

 

B.            The Investors wish to purchase from the Company, and the Company
wishes to sell and issue to the Investors, upon the terms and subject to the
conditions stated in this Agreement, an aggregate of 2,592,591 shares (the
“Shares”) of the Company’s Common Stock, par value $0.001 per share (the “Common
Stock”); and

 

C.            Contemporaneously with the sale of the Shares, the parties hereto
will execute and deliver a Registration Rights Agreement, in the form attached
hereto as Exhibit B (the “Registration Rights Agreement”), pursuant to which the
Company will agree to provide certain registration rights in respect of the
Shares under the 1933 Act, and the rules and regulations promulgated thereunder,
and applicable state securities laws.

 

In consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.             Definitions.  For the purposes of this Agreement, the following
terms shall have the meanings set forth below:

 

“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly through one or more intermediaries Controls, is controlled by, or
is under common Control with, such Person.

 

“Business Day” means a day, other than a Saturday or Sunday, on which banks in
New York City are open for the general transaction of business.

 

“Closing” has the meaning set forth in Section 3.1.

 

“Closing Date” has the meaning set forth in Section 3.1.

 

“Common Stock Equivalents” means any securities of the Company which would
entitle the holder thereof to acquire at any time Common Stock, including
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock.

 

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“Company Covered Person” means, with respect to the Company as an “issuer” for
purposes of Rule 506 promulgated under the 1933 Act, any Person listed in the
first paragraph of Rule 506(d)(1).

 

“Company Intellectual Property” has the meaning set forth in Section 4.14.

 

“Company’s Knowledge” means the actual knowledge of the executive officers (as
defined in Rule 405 under the 1933 Act) of the Company.

 

“Control” (including the terms “controlling”, “controlled by” or “under common
control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

 

“Environmental Laws” has the meaning set forth in Section 4.15.

 

“FDA” has the meaning set forth in Section 4.30.

 

“GAAP” has the meaning set forth in Section 4.17.

 

“Losses” has the meaning set forth in Section 8.2.

 

“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, financial condition or business of the
Company and its subsidiary taken as a whole, (ii) the legality or enforceability
of any of the Transaction Documents or (iii) the ability of the Company to
perform its obligations under the Transaction Documents, except that for
purposes of Section 6.1(i) of this Agreement, in no event shall a change in the
market price of the Common Stock alone constitute a “Material Adverse Effect”;
provided that the foregoing exception shall not apply to the underlying causes
giving rise to or contributing to such change or prevent any of such underlying
causes from being taken into account in determining whether a Material Adverse
Effect has occurred.

 

“Material Contract” means any contract, instrument or other agreement to which
the Company is a party or by which it is bound that has been filed or was
required to have been filed as an exhibit to the SEC Filings pursuant to
Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.

 

“Nasdaq” means the Nasdaq Global Select Market.

 

“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.

 

“Placement Agents” means J.P. Morgan Securities LLC and Cowen and Company LLC.

 

“Press Release” has the meaning set forth in Section 9.7.

 

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“Principal Trading Market” means the Trading Market on which the Common Stock is
primarily listed on and quoted for trading, which, as of the date of this
Agreement and the Closing Date, shall be the Nasdaq Global Select Market.

 

“Registration Rights Agreement” has the meaning set forth in the recitals to
this Agreement.

 

“Required Investors” has the meaning set forth in the Registration Rights
Agreement.

 

“SEC Filings” has the meaning set forth in Section 4.

 

“Shares” has the meaning set forth in the recitals to this Agreement.

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the 1934 Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock).

 

“Trading Day” means (i) a day on which the Common Stock is listed or quoted and
traded on its Principal Trading Market (other than the OTC Bulletin Board), or
(ii) if the Common Stock is not listed on a Trading Market (other than the OTC
Bulletin Board), a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported in the “pink sheets”
by OTC Markets Group Inc. (or any similar organization or agency succeeding to
its functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.

 

“Trading Market” means whichever of the New York Stock Exchange, the NYSE MKT,
the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital
Market or the OTC Bulletin Board on which the Common Stock is listed or quoted
for trading on the date in question.

 

“Transfer Agent” has the meaning set forth in Section 7.4(a).

 

“Transaction Documents” means this Agreement and the Registration Rights
Agreement.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“1933 Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

 

“1934 Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.

 

2.             Purchase and Sale of the Shares. On the Closing Date, upon the
terms and subject to the conditions set forth herein, the Company will issue and
sell, and the Investors will purchase, severally and not jointly, for a price
per Share of $13.50, the number of Shares set

 

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forth opposite the name of such Investor under the heading “Number of Shares to
be Purchased” on Exhibit A attached hereto.

 

3.             Closing.

 

3.1.         Upon the satisfaction of the conditions set forth in Section 6, the
completion of the purchase and sale of the Shares (the “Closing”) shall occur
remotely via exchange of documents and signatures at a time (the “Closing Date”)
to be agreed to by the Company and the Investors but (i) in no event earlier
than the third Business Day after the date hereof and (ii) in no event later
than the fifth Business Day after the date hereof, and of which the Investors
will be notified in advance by the Placement Agents.

 

3.2.         On the Closing Date, each Investor shall deliver or cause to be
delivered to the Company, via wire transfer of immediately available funds
pursuant to the wire instructions delivered to such Investor by the Company on
or prior to the Closing Date, an amount equal to the purchase price to be paid
by the Investor for the Shares to be acquired by it as set forth opposite the
name of such Investor under the heading “Aggregate Purchase Price of Shares” on
Exhibit A attached hereto.

 

3.3.         At or before the Closing, the Company shall deliver or cause to be
delivered to each Investor a number of Shares, registered in the name of the
Investor (or its nominee in accordance with its delivery instructions), equal to
the number of Shares set forth opposite the name of such Investor under the
heading “Number of Shares to be Purchased” on  Exhibit A attached hereto.  The
Shares shall be delivered via a book-entry record through the Company’s transfer
agent.  Unless the Company and an Investor otherwise mutually agree with respect
to such Investor’s Shares, at Closing settlement shall occur on a “delivery
versus payment” basis.

 

4.             Representations and Warranties of the Company.  The Company
hereby represents and warrants to the Investors that (for purposes of these
representations and warranties in their entirety, references in this Agreement
to the “Company” refer to Syros Pharmaceuticals, Inc. and its wholly owned
subsidiary, except as otherwise indicated herein or as the context otherwise
requires):

 

4.1.         Organization, Good Standing and Qualification.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority to carry on its business as now conducted and to own or lease its
properties.  The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property makes such qualification or
leasing necessary unless the failure to so qualify has not had and would not
reasonably be expected to have a Material Adverse Effect.  Syros Securities
Corporation, a Massachusetts corporation, is the only subsidiary of the Company
and is wholly-owned by the Company.  The Company’s subsidiary is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite power and authority to carry on its business
as now conducted and to own or lease its properties.  The Company’s subsidiary
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the

 

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conduct of its business or its ownership or leasing of property makes such
qualification or leasing necessary unless the failure to so qualify has not had
and would not reasonably be expected to have a Material Adverse Effect.  All of
the issued and outstanding capital stock of the Company’s subsidiary has been
duly authorized and validly issued, is fully paid and nonassessable and is owned
by the Company free and clear of any security interest, mortgage, pledge, lien,
encumbrance or adverse claim.

 

4.2.         Authorization.  The Company has the requisite corporate power and
authority and has taken all requisite corporate action necessary for, and no
further action on the part of the Company, its officers, directors and
stockholders is necessary for, (i) the authorization, execution and delivery of
the Transaction Documents, (ii) the authorization of the performance of all
obligations of the Company hereunder or thereunder, and (iii) the authorization,
issuance (or reservation for issuance) and delivery of the Shares.  The
Transaction Documents constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability, relating to or affecting creditors’
rights generally and to general equitable principles.

 

4.3.         Capitalization.  The Company is authorized under its Certificate of
Incorporation to issue 200,000,000 shares of Common Stock.  The Company’s
disclosure of its issued and outstanding capital stock in its most recent SEC
Filing containing such disclosure was accurate in all material respects as of
the date indicated in such SEC Filing.  All of the issued and outstanding shares
of the Company’s capital stock have been duly authorized and validly issued and
are fully paid and nonassessable; none of such shares were issued in violation
of any pre-emptive rights; and such shares were issued in compliance in all
material respects with applicable state and federal securities law and any
rights of third parties.  No Person is entitled to pre-emptive or similar
statutory or contractual rights with respect to the issuance by the Company of
any securities of the Company, including, without limitation, the Shares. 
Except for stock options approved pursuant to Company stock-based compensation
plans described in the SEC Filings, there are no outstanding warrants, options,
convertible securities or other rights, agreements or arrangements of any
character under which the Company is or may be obligated to issue any equity
securities of any kind, except as contemplated by this Agreement.  Except for
the Registration Rights Agreement, there are no voting agreements, buy-sell
agreements, option or right of first purchase agreements or other agreements of
any kind among the Company and any of the securityholders of the Company
relating to the securities of the Company held by them.  Except as provided in
the Registration Rights Agreement, and except as provided in that certain Second
Amended and Restated Investors’ Rights Agreement, dated as of October 9, 2014,
among the Company and certain investors signatory thereto, no Person has the
right to require the Company to register any securities of the Company under the
1933 Act, whether on a demand basis or in connection with the registration of
securities of the Company for its own account or for the account of any other
Person.

 

The issuance and sale of the Shares hereunder will not obligate the Company to
issue shares of Common Stock or other securities to any other Person (other than
the Investors) and will not result in the adjustment of the exercise,
conversion, exchange or reset price of any outstanding security.

 

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The Company does not have outstanding stockholder purchase rights or “poison
pill” or any similar arrangement in effect giving any Person the right to
purchase any equity interest in the Company upon the occurrence of certain
events.

 

4.4.         Valid Issuance.  The Shares have been duly and validly authorized
and, when issued and paid for pursuant to this Agreement, will be validly
issued, fully paid and nonassessable, and shall be free and clear of all
encumbrances and restrictions (other than those created by the Investors),
except for restrictions on transfer set forth in the Transaction Documents or
imposed by applicable securities laws.

 

4.5.         Consents.  The execution, delivery and performance by the Company
of the Transaction Documents and the offer, issuance and sale of the Shares
require no consent of, action by or in respect of, or filing with, any Person,
governmental body, agency, or official other than (a) filings that have been
made pursuant to applicable state securities laws, (b) post-sale filings
pursuant to applicable state and federal securities laws, (c) filings pursuant
to the rules and regulations of Nasdaq and (d) filing of the registration
statement required to be filed by the Registration Rights Agreement, each of
which the Company has filed or undertakes to file within the applicable time. 
Subject to the accuracy of the representations and warranties of each Investor
set forth in Section 5 hereof, the Company has taken all action necessary to
exempt (i) the issuance and sale of the Shares and (ii) the other transactions
contemplated by the Transaction Documents from the provisions of any stockholder
rights plan or other “poison pill” arrangement, any anti-takeover, business
combination or control share law or statute binding on the Company or to which
the Company or any of its assets and properties is subject that is or could
reasonably be expected to become applicable to the Investors as a result of the
transactions contemplated hereby, including without limitation, the issuance of
the Shares and the ownership, disposition or voting of the Shares by the
Investors or the exercise of any right granted to the Investors pursuant to this
Agreement or the other Transaction Documents.

 

4.6.         Use of Proceeds.  The net proceeds of the sale of the Shares
hereunder shall be used by the Company for working capital and general corporate
purposes.

 

4.7.         No Material Adverse Change.  Since December 31, 2016, except as
identified and described in the SEC Filings filed at least one Trading Day prior
to the date hereof, there has not been:

 

(i)            any change in the consolidated assets, liabilities, financial
condition or operating results of the Company from that reflected in the
financial statements included in the Company’s Annual Report on Form 10-K for
the year ended December 31, 2016, except for changes in the ordinary course of
business which have not had and would not reasonably be expected to have a
Material Adverse Effect, individually or in the aggregate;

 

(ii)           any declaration or payment by the Company of any dividend, or any
authorization or payment by the Company of any distribution, on any of the
capital stock of the Company, or any redemption or repurchase by the Company of
any securities of the Company;

 

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(iii)          any material damage, destruction or loss, whether or not covered
by insurance, to any assets or properties of the Company;

 

(iv)          any waiver, not in the ordinary course of business, by the Company
of a material right or of a material debt owed to it;

 

(v)           any satisfaction or discharge of any lien, claim or encumbrance or
payment of any obligation by the Company, except in the ordinary course of
business and which is not material to the assets, properties, financial
condition, operating results or business of the Company (as such business is
presently conducted);

 

(vi)          any change or amendment to the Company’s Certificate of
Incorporation or Bylaws, or material change to any material contract or
arrangement by which the Company is bound or to which any of its assets or
properties is subject;

 

(vii)         any material labor difficulties or, to the Company’s Knowledge,
labor union organizing activities with respect to employees of the Company;

 

(viii)        any material transaction entered into by the Company other than in
the ordinary course of business;

 

(ix)          the loss of the services of any key employee, or material change
in the composition or duties of the senior management of the Company; or

 

(x)           any other event or condition of any character that has had or
would reasonably be expected to have a Material Adverse Effect.

 

4.8.         SEC Filings. The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the
1933 Act and the 1934 Act, including pursuant to Section 13(a) or 15(d) thereof,
for the one year preceding the date hereof (or such shorter period as the
Company was required by law or regulation to file such material) (collectively,
the “SEC Filings”).  At the time of filing thereof, the SEC Filings complied in
all material respects with the requirements of the 1933 Act or the 1934 Act, as
applicable, and the rules and regulations of the SEC thereunder. All material
agreements to which the Company is a party or to which the property or assets of
the Company is subject are included as part of or identified in the SEC Filings,
to the extent such agreements are required to be included or identified pursuant
to the rules and regulations of the SEC.

 

4.9.         No Conflict, Breach, Violation or Default.  The execution, delivery
and performance of the Transaction Documents by the Company and the issuance and
sale of the Shares in accordance with the provisions thereof will not, except
(solely in the case of clause (i)(b) and clause (ii)) for such violations,
conflicts or defaults as would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect, (i) conflict with or result in
a breach or violation of (a) any of the terms and provisions of, or constitute a
default under, the Company’s Certificate of Incorporation or the Company’s
Bylaws, both as in effect on the date hereof (true and complete copies of which
have been made available to the Investors through the Electronic Data Gathering,
Analysis, and Retrieval system (the “EDGAR system”)), or (b) assuming the
accuracy of the representations and warranties in Section 5, any applicable

 

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statute, rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over the Company or its
subsidiary, or any of their assets or properties, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, result in the creation of any lien, encumbrance
or other adverse claim upon any of the properties or assets of the Company or
its subsidiary or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any Material Contract.  This Section does not relate to matters with respect to
tax status, which are the subject of Section 4.10, employee relations and labor
matters, which are the subject of Section 4.13, or environmental laws, which are
the subject of Section 4.15.

 

4.10.       Tax Matters.  The Company and its subsidiary have timely prepared
and filed all tax returns required to have been filed by them with all
appropriate governmental agencies and timely paid all taxes shown thereon or
otherwise owed by them.  The charges, accruals and reserves on the books of the
Company in respect of taxes for all fiscal periods are adequate in all material
respects, and there are no material unpaid assessments against the Company nor,
to the Company’s Knowledge, any basis for the assessment of any additional
taxes, penalties or interest for any fiscal period or audits by any federal,
state or local taxing authority except for any assessment which is not material
to the Company.  All taxes and other assessments and levies that the Company is
required to withhold or to collect for payment have been duly withheld and
collected and paid to the proper governmental entity or third party when due. 
There are no tax liens or claims pending or, to the Company’s Knowledge,
threatened against the Company or any of its assets or property.  There are no
outstanding tax sharing agreements or other such arrangements between the
Company and any other corporation or entity.

 

4.11.       Title to Properties.  The Company and its subsidiary have good and
marketable title to all real properties and all other properties and assets
owned by them, in each case free from liens, encumbrances and defects, except
such as would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect; and the Company and its subsidiary hold any
leased real or personal property under valid and enforceable leases with no
exceptions, except such as would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect.

 

4.12.       Certificates, Authorities and Permits.  The Company possesses
adequate certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by it, except
where failure to so possess would not reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect. The Company has not
received any written notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that would reasonably
be expected to have a Material Adverse Effect, individually or in the aggregate,
on the Company.

 

4.13.       Labor Matters.

 

(a)              The Company is not party to or bound by any collective
bargaining agreements or other agreements with labor organizations.  To the
Company’s Knowledge, the Company has not violated in any material respect any
laws, regulations, orders or contract terms

 

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affecting the collective bargaining rights of employees or labor organizations,
or any laws, regulations or orders affecting employment discrimination, equal
opportunity employment, or employees’ health, safety, welfare, wages and hours.

 

(b)              No material labor dispute with the employees of the Company, or
with the employees of any principal supplier, manufacturer, customer or
contractor of the Company, exists or, to the Company’s Knowledge, is threatened
or imminent.

 

4.14.       Intellectual Property.  Except as expressly contemplated by the SEC
Filings, the Company owns, possesses, licenses or has other rights to use, the
patents and patent applications, copyrights, trademarks, service marks, trade
names, service names and trade secrets described in the SEC Filings as necessary
or material for use in connection with its business and which the failure to so
have would have or reasonably be expected to result in a Material Adverse Effect
(collectively, the “Company Intellectual Property”).  There is no pending or, to
the Company’s Knowledge, threatened action, suit, proceeding or claim by any
Person that the Company’s business as now conducted infringes or otherwise
violates any patent, trademark, copyright, trade secret or other proprietary
rights of another.  To the Company’s Knowledge, there is no existing
infringement by another Person of any of the Company Intellectual Property that
would have or would reasonably be expected to have a Material Adverse Effect.
The Company has taken reasonable security measures to protect the secrecy,
confidentiality and value of all of the Company Intellectual Property, except
where failure to do so would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

 

4.15.       Environmental Matters.  The Company is not in violation of any
statute, rule, regulation, decision or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, “Environmental Laws”), has not released any hazardous substances
regulated by Environmental Law onto any real property that it owns or operates,
and has not received any written notice or claim it is liable for any off-site
disposal or contamination pursuant to any Environmental Laws, which violation,
release, notice, claim, or liability would reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect, and to the Company’s
Knowledge, there is no pending or threatened investigation that would reasonably
be expected to lead to such a claim.

 

4.16.       Legal Proceedings.  There are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company or
its subsidiary is or may reasonably be expected to become a party or to which
any property of the Company or its subsidiary is or may reasonably be expected
to become the subject that, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.

 

4.17.       Financial Statements.  The financial statements included in each SEC
Filing comply in all material respects with applicable accounting requirements
and the rules and regulations of the SEC with respect thereto as in effect at
the time of filing (or to the extent corrected by a subsequent restatement) and
present fairly, in all material respects, the consolidated financial position of
the Company as of the dates shown and its consolidated results of operations and
cash flows for the periods shown, subject in the case of unaudited financial

 

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statements to normal, immaterial year-end audit adjustments, and such
consolidated financial statements have been prepared in conformity with United
States generally accepted accounting principles applied on a consistent basis
during the periods involved (“GAAP”) (except as may be disclosed therein or in
the notes thereto, and except that the unaudited financial statements may not
contain all footnotes required by GAAP, and, in the case of quarterly financial
statements, except as permitted by Form 10-Q under the 1934 Act).  Except as set
forth in the financial statements of the Company included in the SEC Filings
filed prior to the date hereof, the Company has not incurred any liabilities,
contingent or otherwise, except those incurred in the ordinary course of
business, consistent (as to amount and nature) with past practices since the
date of such financial statements, none of which, individually or in the
aggregate, have had or would reasonably be expected to have a Material Adverse
Effect.

 

4.18.       Insurance Coverage.  The Company maintains in full force and effect
insurance coverage that is customary for comparably situated companies for the
business being conducted and properties owned or leased by the Company, and the
Company reasonably believes such insurance coverage to be adequate against all
liabilities, claims and risks against which it is customary for comparably
situated companies to insure.

 

4.19.       Compliance with Nasdaq Continued Listing Requirements.  The Company
is in compliance with applicable Nasdaq continued listing requirements.  There
are no proceedings pending or, to the Company’s Knowledge, threatened against
the Company relating to the continued listing of the Common Stock on Nasdaq and
the Company has not received any notice of, nor to the Company’s Knowledge is
there any reasonable basis for, the delisting of the Common Stock from Nasdaq.

 

4.20.       Brokers and Finders.  Other than the Placement Agents, no Person
will have, as a result of the transactions contemplated by the Transaction
Documents, any valid right, interest or claim against or upon the Company or an
Investor for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the
Company. No Investor shall have any obligation with respect to any fees, or with
respect to any claims made by or on behalf of other Persons for fees, in each
case of the type contemplated by this Section 4.20 that may be due in connection
with the transactions contemplated by this Agreement or the Transaction
Documents.

 

4.21.       No Directed Selling Efforts or General Solicitation.  Neither the
Company nor any Person acting on its behalf has conducted any general
solicitation or general advertising (as those terms are used in Regulation D
promulgated under the 1933 Act) in connection with the offer or sale of any of
the Shares.

 

4.22.       No Integrated Offering.  Neither the Company nor its subsidiary nor
any Person acting on their behalf has, directly or indirectly, made any offers
or sales of any Company security or solicited any offers to buy any Company
security, under circumstances that would adversely affect reliance by the
Company on Section 4(a)(2) for the exemption from registration for the
transactions contemplated hereby or would require registration of the Shares
under the 1933 Act.

 

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4.23.       Private Placement.  Assuming the accuracy of the representations and
warranties of the Investors set forth in Section 5, the offer and sale of the
Shares to the Investors as contemplated hereby is exempt from the registration
requirements of the 1933 Act. The issuance and sale of the Shares does not
contravene the rules and regulations of Nasdaq.

 

4.24.       Questionable Payments.  Neither the Company nor its subsidiary nor,
to the Company’s Knowledge, any of their current or former directors, officers,
employees, agents or other Persons acting on behalf of the Company or its
subsidiary, has on behalf of the Company or its subsidiary in connection with
its business: (a) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity;
(b) made any direct or indirect unlawful payments to any governmental officials
or employees from corporate funds; (c) established or maintained any unlawful or
unrecorded fund of corporate monies or other assets which is in violation of
law; (d) made any false or fictitious entries on the books and records of the
Company; or (e) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment of any nature.

 

4.25.       Transactions with Affiliates.  None of the executive officers or
directors of the Company and, to the Company’s Knowledge, none of the employees
of the Company is presently a party to any transaction with the Company (other
than as holders of stock options and/or warrants, and for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the Company’s Knowledge, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

 

4.26.       Internal Controls.  The Company has established and maintains
disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under
the 1934 Act), which are designed to ensure that material information relating
to the Company, including its subsidiary, is made known to the Company’s
principal executive officer and its principal financial officer by others within
those entities.  Since the end of the Company’s most recent audited fiscal year,
there have been no significant deficiencies or material weaknesses in the
Company’s internal control over financial reporting (whether or not remediated)
and no change in the Company’s internal control over financial reporting that
has materially affected, or would reasonably be expected to materially affect,
the Company’s internal control over financial reporting. The Company is not
aware of any change in its internal controls over financial reporting that has
occurred during its most recent fiscal quarter that has materially affected, or
would reasonably be expected to materially affect, the Company’s internal
control over financial reporting.

 

4.27.       Disclosures.  Neither the Company nor any Person acting on its
behalf has provided the Investors or their agents or counsel with any
information that constitutes or would reasonably be expected to constitute
material, non-public information concerning the Company or its subsidiary, other
than with respect to the transactions contemplated hereby which will be
disclosed in the Press Release (as defined below).  The SEC Filings do not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not

 

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misleading.  The Company understands and confirms that the Investors will rely
on the foregoing representations in effecting transactions in securities of the
Company.

 

4.28.       Required Filings. Except for the transactions contemplated by this
Agreement, including the acquisition of the Shares contemplated hereby, no event
or circumstance has occurred or information exists with respect to the Company
or its business, properties, operations or financial condition, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed
(assuming for this purpose that the SEC Filings are being incorporated by
reference into an effective registration statement filed by the Company under
the 1933 Act).

 

4.29.       Investment Company.  The Company is not required to be registered
as, and is not an Affiliate of, and immediately following the Closing will not
be required to register as, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

 

4.30.       Tests and Preclinical and Clinical Trials.  The studies, tests and
preclinical and clinical trials conducted by or, to the Company’s Knowledge, on
behalf of the Company that are described in the SEC Filings were and, if still
pending, are being, conducted in all material respects in accordance with the
protocols submitted to the U.S. Food and Drug Administration (the “FDA”) or any
foreign governmental body exercising comparable authority, procedures and
controls pursuant to, where applicable, accepted professional and scientific
standards, and all applicable laws and regulations; the descriptions of the
studies, tests and preclinical and clinical trials conducted by or, to the
Company’s Knowledge, on behalf of the Company, and the results thereof,
contained in the SEC Filings are accurate and complete in all material respects;
the Company is not aware of any other studies, tests or preclinical and clinical
trials, the results of which call into question the results described in the SEC
Filings; and the Company has not received any notices or correspondence from the
FDA, any foreign, state or local governmental body exercising comparable
authority or any Institutional Review Board requiring the termination,
suspension, material modification or clinical hold of any studies, tests or
preclinical or clinical trials conducted by or on behalf of the Company.

 

4.31.       Manipulation of Price.  The Company has not, and, to the Company’s
Knowledge, no Person acting on its behalf has taken, directly or indirectly, any
action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of any
of the Shares.

 

4.32.       Anti-Bribery and Anti-Money Laundering Laws.  Each of the Company,
its subsidiary and any of their respective officers, directors, supervisors,
managers, agents, or employees, are and have at all times been in compliance
with and its participation in the offering will not violate: (A) anti-bribery
laws, including but not limited to, any applicable law, rule, or regulation of
any locality, including but not limited to any law, rule, or regulation
promulgated to implement the OECD Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions, signed December 17,
1997, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, the
U.K. Bribery Act 2010, or any other law, rule or regulation of similar purposes
and scope or (B) anti-money laundering laws, including but not limited to,
applicable federal, state, international, foreign or other laws, regulations or

 

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government guidance regarding anti-money laundering, including, without
limitation, Title 18 US. Code section 1956 and 1957, the Patriot Act, the Bank
Secrecy Act, and international anti-money laundering principles or procedures by
an intergovernmental group or organization, such as the Financial Action Task
Force on Money Laundering, of which the United States is a member and with which
designation the United States representative to the group or organization
continues to concur, all as amended, and any Executive order, directive, or
regulation pursuant to the authority of any of the foregoing, or any orders or
licenses issued thereunder.

 

4.33.       Compliance.  The Company is not (i) in default under or in violation
of (and no event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company under), nor has
the Company received written notice of a claim that it is in default under or
that it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived),
(ii) in violation of any judgment, decree or order of any court, arbitrator or
governmental body specifically naming the Company or (iii) in violation of any
statute, rule, ordinance or regulation of any governmental authority, including
without limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as could not have
or reasonably be expected to result in a Material Adverse Effect.

 

4.34.       No Bad Actors.  No “bad actor” disqualifying event described in
Rule 506(d)(1)(i)-(viii) of the 1933 Act (a “Disqualification Event”) is
applicable to the Company or, to the Company’s knowledge, any Company Covered
Person, except (i) for a Disqualification Event as to which
Rule 506(d)(2)(ii—iv) or (d)(3) is applicable and (ii) no such representation is
made with respect to the Placement Agents, or any of their respective general
partners, managing members, directors, executive officers or other officers.

 

4.35.       No Additional Agreements.  The Company has no other agreements or
understandings (including, without limitation, side letters) with any Investor
to purchase Shares on terms more favorable to such Investor than as set forth
herein.

 

4.36.       Shell Company Status.  The Company is not, and has never been, an
issuer identified in Rule 144(i)(1).

 

5.             Representations and Warranties of the Investors.  Each of the
Investors hereby severally, and not jointly, represents and warrants to the
Company that:

 

5.1.         Organization and Existence.  Such Investor is a validly existing
corporation, limited partnership, limited liability company or other legal
entity and has all requisite corporate, partnership or limited liability company
power and authority to enter into and consummate the transactions contemplated
by the Transaction Documents and to carry out its obligations hereunder and
thereunder, and to invest in the Shares pursuant to this Agreement.

 

5.2.         Authorization.  The execution, delivery and performance by such
Investor of the Transaction Documents to which such Investor is a party have
been duly authorized and each has been duly executed and when delivered will
constitute the valid and legally binding

 

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obligation of such Investor, enforceable against such Investor in accordance
with their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability,
relating to or affecting creditors’ rights generally and to general equitable
principles.

 

5.3.         Purchase Entirely for Own Account.  The Shares to be received by
such Investor hereunder will be acquired for such Investor’s own account, not as
nominee or agent, and not with a view to the resale or distribution of any part
thereof in violation of the 1933 Act, and such Investor has no present intention
of selling, granting any participation in, or otherwise distributing the same in
violation of the 1933 Act without prejudice, however, to such Investor’s right
at all times to sell or otherwise dispose of all or any part of such Shares in
compliance with applicable federal and state securities laws.  Nothing contained
herein shall be deemed a representation or warranty by such Investor to hold the
Shares for any period of time.  Such Investor is not a broker-dealer registered
with the SEC under the 1934 Act or an entity engaged in a business that would
require it to be so registered.

 

5.4.         Investment Experience.  Such Investor acknowledges that it can bear
the economic risk and complete loss 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 contemplated hereby.

 

5.5.         Disclosure of Information.  Such Investor has had an opportunity to
receive, review and understand all information related to the Company requested
by it and to ask questions of and receive answers from the Company regarding the
Company, its business and the terms and conditions of the offering of the
Shares, and has conducted and completed its own independent due diligence.  Such
Investor acknowledges that copies of the SEC Filings are available on the EDGAR
system.  Based on the information such Investor has deemed appropriate, and
without reliance upon any Placement Agent, it has independently made its own
analysis and decision to enter into the Transaction Documents.  Such Investor is
relying exclusively on its own sources of information, investment analysis and
due diligence (including professional advice it deems appropriate) with respect
to the execution, delivery and performance of the Transaction Documents, the
Shares and the business, condition (financial and otherwise), management,
operations, properties and prospects of the Company, including but not limited
to all business, legal, regulatory, accounting, credit and tax matters.  Neither
such inquiries nor any other due diligence investigation conducted by such
Investor shall modify, limit or otherwise affect such Investor’s right to rely
on the Company’s representations and warranties contained in this Agreement.

 

5.6.         Restricted Securities.  Such Investor understands that the Shares
are characterized as “restricted securities” under the U.S. 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 1933 Act only in
certain limited circumstances.

 

5.7.         Legends.  It is understood that, except as provided below,
certificates evidencing the Shares may bear the following or any similar legend:

 

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(a)              “The securities represented hereby have not been registered
with the Securities and Exchange Commission or the securities commission of any
state in reliance upon an exemption from registration under the Securities Act
of 1933, as amended, and, accordingly, may not be transferred unless (i) such
securities have been registered for sale pursuant to the Securities Act of 1933,
as amended, (ii) such securities may be sold pursuant to Rule 144, or (iii) the
Company has received an opinion of counsel reasonably satisfactory to it that
such transfer may lawfully be made without registration under the Securities Act
of 1933, as amended; provided that solely with respect to this subsection (iii),
the holder of the securities is not required to deliver an opinion with respect
to a transfer without consideration to an affiliate of such holder.”

 

(b)           If required by the authorities of any state in connection with the
issuance of sale of the Shares, the legend required by such state authority.

 

5.8.         Accredited Investor.  Such Investor is an (a) “accredited investor”
within the meaning of Rule 501(a) (1), (2), (3) or (7) under the 1933 Act and
(b) an “Institutional Account” as defined in FINRA Rule 4512(c) .  Such Investor
has executed and delivered to the Company a questionnaire in substantially the
form attached hereto as Exhibit C (the “Investor Questionnaire”), which such
Investor represents and warrants is true, correct and complete. Such investor is
a sophisticated institutional investor with sufficient knowledge and experience
in investing in private equity transactions to properly evaluate the risks and
merits of its purchase of the Shares.

 

5.9.         Placement Agents.  Such Investor hereby acknowledges and agrees
that (a) each of the Placement Agents is acting solely as placement agent in
connection with the execution, delivery and performance of the Transaction
Documents and is not acting as an underwriter or in any other capacity and is
not and shall not be construed as a fiduciary for such Investor, the Company or
any other person or entity in connection with the execution, delivery and
performance of the Transaction Documents, (b) no Placement Agent has made or
will make any representation or warranty, whether express or implied, of any
kind or character, or has  provided any advice or recommendation in connection
with the execution, delivery and performance of the Transaction Documents,
(c) no Placement Agent will have any responsibility with respect to (i) any
representations, warranties or agreements made by any person or entity under or
in connection with the execution, delivery and performance of the Transaction
Documents, or the execution, legality, validity or enforceability (with respect
to any person) thereof, or (ii) the business, affairs, financial condition,
operations, properties or prospects of, or any other matter concerning the
Company, and (d) no Placement Agent will have any liability or obligation
(including without limitation, for or with respect to any losses, claims,
damages, obligations, penalties, judgments, awards, liabilities, costs, expenses
or disbursements incurred by such Investor, the Company or any other person or
entity), whether in contract, tort or otherwise, to such Investor, or to any
person claiming through it, in respect of the execution, delivery and
performance of the Transaction Documents.

 

5.10.       No General Solicitation.  Such Investor did not learn of the
investment in the Shares as a result of any general solicitation or general
advertising.

 

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5.11.       Brokers and Finders.  No Person will have, as a result of the
transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company or an Investor for any commission,
fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of such Investor.

 

5.12        Short Sales and Confidentiality Prior to the Date Hereof.  Other
than consummating the transactions contemplated hereunder, such Investor has
not, nor has any Person acting on behalf of or pursuant to any understanding
with such Investor, directly or indirectly executed any purchases or sales,
including Short Sales, of the securities of the Company during the period
commencing as of the time that such Investor was first contacted by the Company,
a Placement Agent or any other Person regarding the transactions contemplated
hereby and ending immediately prior to the date hereof.  Notwithstanding the
foregoing, in the case of an Investor that is a multi-managed investment vehicle
whereby separate portfolio managers manage separate portions of such Investor’s
assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such
Investor’s assets, the representation set forth above shall only apply with
respect to the portion of assets managed by the portfolio manager that made the
investment decision to purchase the Shares covered by this Agreement.  Other
than to other Persons party to this Agreement, such Investor has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction).
Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein
shall constitute a representation or warranty, or preclude any actions, with
respect to the identification of the availability of, or securing of, available
shares to borrow in order to effect Short Sales or similar transactions in the
future.

 

5.13        No Government Recommendation or Approval.  Such Investor understands
that no United States federal or state agency, or similar agency of any other
country, has reviewed, approved, passed upon, or made any recommendation or
endorsement of the Company or the purchase of the Shares.

 

5.14        No Intent to Effect a Change of Control.  Such Investor has no
present intent to effect a “change of control” of the Company as such term is
understood under the rules promulgated pursuant to Section 13(d) of the 1934
Act.

 

5.16        Residency. Such Investor’s office in which its investment decision
with respect to the Shares was made is located at the address immediately below
such Investor’s name on its signature page hereto.

 

5.17        No Conflicts. The execution, delivery and performance by such
Investor of the Transaction Documents and the consummation by such Investor of
the transactions contemplated hereby and thereby will not (i) result in a
violation of the organizational documents of such Investor or (ii) 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 agreement, indenture or
instrument to which such Investor is a party, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws) applicable to such Investor, except in the case of
clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations
which would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of such Investor to perform its
obligations hereunder.

 

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6.             Conditions to Closing.

 

6.1.         Conditions to the Investors’ Obligations.  The obligation of each
Investor to purchase Shares at the Closing is subject to the fulfillment to such
Investor’s satisfaction, on or prior to the Closing Date, of the following
conditions, any of which may be waived by such Investor (as to itself only):

 

(a)              The representations and warranties made by the Company in
Section 4 hereof shall be true and correct as of the date hereof and as of the
Closing Date, as though made on and as of such date, except to the extent any
such representation or warranty expressly speaks as of an earlier date, in which
case such representation or warranty shall be true and correct as of such
earlier date.  The Company shall have performed in all material respects all
obligations and covenants herein required to be performed by it on or prior to
the Closing Date.

 

(b)              The Company shall have obtained any and all consents, permits,
approvals, registrations and waivers necessary for consummation of the purchase
and sale of the Shares and the consummation of the other transactions
contemplated by the Transaction Documents, all of which shall be in full force
and effect.

 

(c)              The Company shall have executed and delivered the Registration
Rights Agreement.

 

(d)              The Company shall have filed with Nasdaq a Notification Form:
Listing of Additional Shares for the listing of the Shares, and Nasdaq shall
have raised no objection to the consummation of the transactions contemplated by
the Transaction Documents.

 

(e)              No judgment, writ, order, injunction, award or decree of or by
any court, or judge, justice or magistrate, including any bankruptcy court or
judge, or any order of or by any governmental authority, shall have been issued,
and no action or proceeding shall have been instituted by any governmental
authority, enjoining or preventing the consummation of the transactions
contemplated hereby or in the other Transaction Documents.

 

(f)              The Company shall have delivered a Certificate, executed on
behalf of the Company by its Chief Executive Officer or its Chief Financial
Officer, dated as of the Closing Date, certifying to the fulfillment of the
conditions specified in subsections (a), (b), (d), (e), (i) and (j) of this
Section 6.1.

 

(g)              The Company shall have delivered a Certificate, executed on
behalf of the Company by its Secretary, dated as of the Closing Date, certifying
the resolutions adopted by the Board of Directors of the Company approving the
transactions contemplated by this Agreement and the other Transaction Documents
and the issuance of the Shares, certifying the current versions of the
Certificate of Incorporation and Bylaws of the Company and certifying as to the
signatures and authority of persons signing the Transaction Documents and
related documents on behalf of the Company.

 

(h)              The Investors shall have received an opinion from Wilmer Cutler
Pickering Hale and Dorr LLP, the Company’s counsel, dated as of the Closing
Date, in form and

 

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substance reasonably acceptable to the Investors and addressing such legal
matters as the Investors may reasonably request.

 

(i)               There shall have been no Material Adverse Effect with respect
to the Company since the date hereof.

 

(j)               No stop order or suspension of trading shall have been imposed
by Nasdaq, the SEC or any other governmental or regulatory body with respect to
public trading in the Common Stock.

 

6.2.         Conditions to Obligations of the Company.  The Company’s obligation
to sell and issue Shares at the Closing is subject to the fulfillment to the
satisfaction of the Company on or prior to the Closing Date of the following
conditions, any of which may be waived by the Company:

 

(a)              The representations and warranties made by the Investors in
Section 5 hereof shall be true and correct as of the date hereof and as of the
Closing Date as though made on and as of such date.  The Investors shall have
performed in all material respects all obligations and covenants herein required
to be performed by them on or prior to the Closing Date.

 

(b)              The Investors shall have executed and delivered the
Registration Rights Agreement and each Investor Questionnaire.

 

(c)              Any Investor purchasing Shares at the Closing shall have paid
in full its purchase price to the Company.

 

6.3.         Termination of Obligations to Effect Closing; Effects.

 

(a)              The obligations of the Company, on the one hand, and the
Investors, on the other hand, to effect the Closing shall terminate as follows:

 

(i)            Upon the mutual written consent of the Company and Investors that
agreed to purchase a majority of the Shares to be issued and sold pursuant to
this Agreement;

 

(ii)           By the Company if any of the conditions set forth in Section 6.2
shall have become incapable of fulfillment, and shall not have been waived by
the Company;

 

(iii)          By an Investor (with respect to itself only) if any of the
conditions set forth in Section 6.1 shall have become incapable of fulfillment,
and shall not have been waived by the Investor; or

 

(iv)          By either the Company or any Investor (with respect to itself
only) if the Closing has not occurred on or prior to April 27, 2017;

 

provided, however, that, except in the case of clause (i) above, the party
seeking to terminate its obligation to effect the Closing shall not then be in
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement or the other Transaction

 

18

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Documents if such breach has resulted in the circumstances giving rise to such
party’s seeking to terminate its obligation to effect the Closing.

 

(b)              In the event of termination by the Company or any Investor of
its obligations to effect the Closing pursuant to this Section 6.3, written
notice thereof shall be given to the other Investors by the Company and the
other Investors shall have the right to terminate their obligations to effect
the Closing upon written notice to the Company and the other Investors.  Nothing
in this Section 6.3 shall be deemed to release any party from any liability for
any breach by such party of the terms and provisions of this Agreement or the
other Transaction Documents or to impair the right of any party to compel
specific performance by any other party of its obligations under this Agreement
or the other Transaction Documents.

 

7.             Covenants and Agreements of the Company.

 

7.1.         No Conflicting Agreements.  The Company will not take any action,
enter into any agreement or make any commitment that would conflict or interfere
in any material respect with the Company’s obligations to the Investors under
the Transaction Documents.

 

7.2.         Nasdaq Listing.  The Company will use commercially reasonable
efforts to continue the listing and trading of its Common Stock on Nasdaq and,
in accordance therewith, will use commercially reasonable efforts to comply in
all material respects with the Company’s reporting, filing and other obligations
under the bylaws or rules of such market or exchange, as applicable.

 

7.3.         Reporting Status.  The Company shall timely file all reports
required to be filed with the SEC pursuant to the 1934 Act, and the Company
shall not terminate its status as an issuer required to file reports under the
1934 Act even if the 1934 Act or the rules and regulations thereunder would
otherwise permit such termination.

 

7.4.         Termination of Covenants.  The provisions of Sections 7.1, 7.2 and
7.3 shall terminate and be of no further force and effect on the date on which
the Company’s obligations under the Registration Rights Agreement to register or
maintain the effectiveness of any registration covering the Registrable
Securities (as such term is defined in the Registration Rights Agreement) shall
terminate.

 

7.5.         Removal of Legends.

 

(a)              In connection with any sale, assignment, transfer or other
disposition of the Shares by an Investor pursuant to Rule 144 or pursuant to any
other exemption under the 1933 Act such that the purchaser acquires freely
tradable shares and upon compliance by the Investor with the requirements of
this Agreement, if requested by the Investor, the Company shall cause the
transfer agent for the Common Stock (the “Transfer Agent”) to remove any
restrictive legends related to the book entry account holding such Shares and
make a new, unlegended entry for such book entry Shares sold or disposed of
without restrictive legends, provided that the Company has received from the
Investor customary representations and other documentation reasonably acceptable
to the Company in connection therewith.

 

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(b)              Subject to receipt from the Investor by the Company and the
Transfer Agent of customary representations and other documentation reasonably
acceptable to the Company and the Transfer Agent in connection therewith, upon
the earliest of such time as the Shares (i) have been sold or transferred
pursuant to an effective registration statement, (ii) have been sold pursuant to
Rule 144, or (iii) are eligible for resale under Rule 144(b)(1) or any successor
provision (such earliest date, the “Effective Date”), the Company shall
(A) deliver to the Transfer Agent irrevocable instructions that the Transfer
Agent shall make a new, unlegended entry for such book entry Shares, and
(B) cause its counsel to deliver to the Transfer Agent one or more opinions to
the effect that the removal of such legends in such circumstances may be
effected under the 1933 Act if required by the Transfer Agent to effect the
removal of the legend in accordance with the provisions of this Agreement. The
Company agrees that following the Effective Date or at such time as such legend
is no longer required under this Section 7.5, it will, within three Trading Days
of the delivery by an Investor to the Company or the Transfer Agent of a
certificate representing shares issued with a restrictive legend and receipt
from the Investor by the Company and the Transfer Agent of customary
representations and other documentation reasonably acceptable to the Company and
the Transfer Agent in connection therewith, deliver or cause to be delivered to
such Investor a certificate representing such Shares that is free from all
restrictive and other legends. Shares subject to legend removal hereunder may be
transmitted by the Transfer Agent to the Investor by crediting the account of
the Investor’s prime broker with the DTC System as directed by such Investor. 
The Company shall be responsible for the fees of its Transfer Agent and all DTC
fees associated with such issuance.

 

(c)              Each Investor, severally and not jointly with the other
Investors, agrees with the Company (i) that such Investor will sell any Shares
pursuant to either the registration requirements of the 1933 Act, including any
applicable prospectus delivery requirements, or an exemption therefrom,
(ii) that if Shares are sold pursuant to a registration statement, they will be
sold in compliance with the plan of distribution set forth therein and
(iii) that if, after the effective date of the registration statement covering
the resale of the Shares, such registration statement is not then effective and
the Company has provided notice to such Investor to that effect, such Investor
will sell Shares only in compliance with an exemption from the registration
requirements of the 1933 Act.

 

7.6.         Subsequent Equity Sales.

 

(a)              From the date hereof until forty-five (45) days after the
Closing Date, without the consent of the Required Investors, the Company shall
not (A) issue shares of Common Stock or Common Stock Equivalents or (B) file
with the SEC a registration statement under the 1933 Act relating to any shares
of Common Stock or Common Stock Equivalents, except pursuant to the terms of
agreements to which the Company is currently a party.  Notwithstanding the
foregoing, the provisions of this Section 7.5(a) shall not apply to (i) the
issuance of the Shares hereunder, (ii) the issuance of Common Stock or Common
Stock Equivalents upon the conversion or exercise of any securities of the
Company outstanding on the date hereof or outstanding pursuant to clause
(iii) or (v) below, (iii) the issuance of any Common Stock or Common Stock
Equivalents pursuant to any Company stock-based compensation plans, (iv) the
filing of a registration statement on Form S-8 under the Securities Act to
register the offer and sale of securities on a newly adopted stock-based
compensation plan, or (v) the issuance of any Common Stock or Common Stock
Equivalents in connection with a transaction

 

20

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with an unaffiliated third party that includes a bona fide commercial
relationship with the Company (including any joint venture, marketing or
distribution arrangement, strategic alliance, collaboration agreement or
corporate partnering, intellectual property license agreement or acquisition
agreement or other strategic transaction or debt financing transaction with the
Company); provided, however, that the aggregate number of shares of Common Stock
issued pursuant to clause (v) during the forty-five (45) day restricted period
shall not exceed 10% of the total number of shares of Common Stock issued and
outstanding immediately following the Closing.

 

(b)           The Company shall not, and shall use its commercially reasonable
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the 1933 Act) that will be integrated with the offer or
sale of the Shares in a manner that would require the registration under the
1933 Act of the sale of the Shares to the Investors, or that will be integrated
with the offer or sale of the Shares for purposes of the rules and regulations
of any trading market such that it would require stockholder approval prior to
the closing of such other transaction unless stockholder approval is obtained
before the closing of such subsequent transaction.

 

7.7.         Fees.  The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or broker’s commissions (other
than for Persons engaged by any Investor) relating to or arising out of the
transactions contemplated hereby, including, without limitation, any fees or
commissions payable to the Placement Agents.

 

7.8.         Short Sales and Confidentiality After the Date Hereof.  Each
Investor covenants that neither it nor any Affiliates acting on its behalf or
pursuant to any understanding with it will execute any Short Sales during the
period from the date hereof until the earlier of such time as (i) the
transactions contemplated by this Agreement are first publicly announced or
(ii) this Agreement is terminated in full.  Notwithstanding the foregoing, in
the case of an Investor that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Investor’s assets
and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Investor’s
assets, the covenant set forth above shall only apply with respect to the
portion of assets managed by the portfolio manager that made the investment
decision to purchase the Shares covered by this Agreement.  Each Investor
covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company, such Investor will maintain the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction). Each
Investor understands and acknowledges that the SEC currently takes the position
that coverage of Short Sales of shares of the Common Stock “against the box”
prior to effectiveness of a resale registration statement with securities
included in such registration statement would be a violation of Section 5 of the
1933 Act, as set forth in Item 239.10 of the Securities Act Rules Compliance and
Disclosure Interpretations compiled by the Office of Chief Counsel, Division of
Corporation Finance.

 

21

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8.             Survival and Indemnification.

 

8.1.         Survival.  The representations, warranties, covenants and
agreements contained in this Agreement shall survive the Closing of the
transactions contemplated by this Agreement for the applicable statute of
limitations.

 

8.2.         Indemnification.  The Company agrees to indemnify and hold harmless
each Investor and its Affiliates, and their respective directors, officers,
trustees, members, managers, employees, investment advisers and agents, from and
against any and all losses, claims, damages, liabilities and expenses (including
without limitation reasonable and documented attorney fees and disbursements and
other documented out-of-pocket expenses reasonably incurred in connection with
investigating, preparing or defending any action, claim or proceeding, pending
or threatened and the costs of enforcement thereof) (collectively, “Losses”) to
which such Person may become subject as a result of any breach of
representation, warranty, covenant or agreement made by or to be performed on
the part of the Company under the Transaction Documents, and will reimburse any
such Person for all such amounts as they are incurred by such Person solely to
the extent such amounts have been finally judicially determined not to have
resulted from such Person’s fraud or willful misconduct.

 

8.3.         Conduct of Indemnification Proceedings.  Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying party
has agreed in writing to pay such fees or expenses, (b) the indemnifying party
shall have failed to assume the defense of such claim and employ counsel
reasonably satisfactory to such person or (c) in the reasonable judgment of any
such person, based upon written advice of its counsel, a conflict of interest
exists between such person and the indemnifying party with respect to such
claims (in which case, if the person notifies the indemnifying party in writing
that such person elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such claim on behalf of such person); and provided, further, that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations hereunder, except to the
extent that such failure to give notice shall materially adversely affect the
indemnifying party in the defense of any such claim or litigation.  It is
understood that the indemnifying party shall not, in connection with any
proceeding in the same jurisdiction, be liable for fees or expenses of more than
one separate firm of attorneys at any time for all such indemnified parties.  No
indemnifying party will, except with the consent of the indemnified party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect of such
claim or litigation.  No indemnified party will, except with the consent of the
indemnifying party, consent to entry of any judgment or enter into any
settlement.

 

9.             Miscellaneous.

 

9.1.         Successors and Assigns.  This Agreement may not be assigned by a
party hereto without the prior written consent of the Company or each of the
Investors, as applicable,

 

22

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provided, however, that an Investor may assign its rights and delegate its
duties hereunder in whole or in part to an Affiliate or to a third party
acquiring some or all of its Shares in a transaction complying with applicable
securities laws without the prior written consent of the Company or the other
Investors, provided such assignee agrees in writing to be bound by the
provisions hereof that apply to Investors.  The provisions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted
successors and assigns of the parties.  Without limiting the generality of the
foregoing, in the event that the Company is a party to a merger, consolidation,
share exchange or similar business combination transaction in which the Common
Stock is converted into the equity securities of another Person, from and after
the effective time of such transaction, such Person shall, by virtue of such
transaction, be deemed to have assumed the obligations of the Company hereunder,
the term “Company” shall be deemed to refer to such Person and the term “Shares”
shall be deemed to refer to the securities received by the Investors in
connection with such transaction.  Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective permitted successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

 

9.2.         Counterparts; Faxes; E-mail.  This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.  This Agreement may
also be executed via facsimile or e-mail, which shall be deemed an original.

 

9.3.         Titles and Subtitles.  The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

 

9.4.         Notices.  Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
facsimile or e-mail, then such notice shall be deemed given upon receipt of
confirmation of complete facsimile transmittal or confirmation of receipt of n
e-mail transmission, (iii) if given by mail, then such notice shall be deemed
given upon the earlier of (A) receipt of such notice by the recipient or
(B) three days after such notice is deposited in first class mail, postage
prepaid, and (iv) if given by an internationally recognized overnight air
courier, then such notice shall be deemed given one Business Day after delivery
to such carrier.  All notices shall be addressed to the party to be notified at
the address as follows, or at such other address as such party may designate by
ten days’ advance written notice to the other party:

 

If to the Company:

 

Syros Pharmaceuticals, Inc.
620 Memorial Drive, Suite 300

Cambridge, Massachusetts

Attention: Chief Executive Officer
Email: nsimonian@syros.com

 

23

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With a copy to:

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, Massachusetts 02109

Attention: Steven D. Singer

Fax: (617) 526-5000

 

If to the Investors:

 

Only to the addresses set forth on the signature pages hereto.

 

9.5.         Expenses.  The Company shall pay the reasonable legal fees and
expenses of Greenberg Traurig, LLP, counsel to certain Investors, incurred by
such Investors in connection with the transactions contemplated by the
Transaction Documents, not to exceed $20,000, which amount shall be paid
directly by the Company to Greenberg Traurig, LLP at the Closing.  Except as set
forth above and elsewhere in the Transaction Documents, the parties hereto shall
pay their own costs and expenses in connection herewith regardless of whether
the transactions contemplated hereby are consummated; it being understood that
each of the Company and each Investor has relied on the advice of its own
respective counsel.

 

9.6.         Amendments and Waivers.  Prior to Closing, no amendment or waiver
of any provision of this Agreement will be effective with respect to any party
unless made in writing and signed by a duly authorized representative of such
party.  Following the Closing, any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Required Investors.  Notwithstanding the
foregoing, this Agreement may not be amended and the observance of any term of
this Agreement may not be waived with respect to any Investor without the
written consent of such Investor unless such amendment or waiver applies to all
Investors in the same fashion. Any amendment or waiver effected in accordance
with this paragraph shall be binding upon (i) prior to Closing, each Investor
that signed such amendment or waiver and (ii) following the Closing, each holder
of any Shares purchased under this Agreement at the time outstanding, and in
each case, each future holder of all such Shares and the Company.

 

9.7.         Publicity.  Except as set forth below, no public release or
announcement concerning the transactions contemplated hereby shall be issued by
the Investors without the prior consent of the Company (which consent shall not
be unreasonably withheld), except as such release or announcement may be
required by law or the applicable rules or regulations of any securities
exchange or securities market, in which case the Investors shall allow the
Company reasonable time to comment on such release or announcement in advance of
such Issuance.  Notwithstanding the foregoing, each Investor may identify the
Company and the value of such Investor’s security holdings in the Company in
accordance with applicable investment reporting and disclosure regulations or
internal policies without prior notice to or consent from the Company.  The
Company shall not include the name of any Investor or any Affiliate or
investment adviser of such Investor in any press release or public announcement
(which, for the avoidance of doubt, shall not include any SEC Filing to the
extent such disclosure is required by SEC rules and regulations) without the
prior written consent of such Investor.  By 8:30 a.m.

 

24

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(New York City time) on the Business Day immediately following the date this
Agreement is executed, the Company shall issue a press release disclosing all
material terms of transactions contemplated by this Agreement and any other
material, nonpublic information that the Company may have provided any Investor
at any time prior to the filing of such press release (the “Press Release”). 
From and after the issuance of the Press Release, no Investor shall be in
possession of any material, non-public information received from the Company,
any subsidiary or any of their respective officers, directors, employees or
agents (including the Placement Agents).  No later than 5:30 p.m. (New York City
time) on the first Business Day following the date this Agreement is executed,
the Company will file a Current Report on Form 8-K (the “8-K Filing”) attaching
the press release described in the foregoing sentence as well as copies of the
Transaction Documents.  In addition, the Company will make such other filings
and notices in the manner and time required by the SEC or Nasdaq.  The Company
shall not, and shall cause each of its officers, directors, employees and
agents, not to, provide any Investor with any such material, nonpublic
information regarding the Company from and after the filing of the Press Release
without the express prior written consent of such Investor.

 

9.8.         Severability.  Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.  To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.

 

9.9.         Benefit of Agreement.  Each of the Placement Agents is an intended
third-party beneficiary of the representations and warranties of each Investor
set forth in Section 5 of this Agreement.

 

9.10.       Entire Agreement.  This Agreement, including the signature pages,
Exhibits, and the other Transaction Documents constitute the entire agreement
among the parties hereof with respect to the subject matter hereof and thereof
and supersede all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter hereof and thereof.

 

9.11.       Further Assurances.  The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.

 

9.12.       Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the choice of law principles
thereof.  Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York located in New York County
and the United States District Court for the Southern District of New York for
the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Agreement and the transactions contemplated hereby.  Service of
process in connection with any

 

25

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such suit, action or proceeding may be served on each party hereto anywhere in
the world by the same methods as are specified for the giving of notices under
this Agreement.  Each of the parties hereto irrevocably consents to the
jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court.  Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum. 
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

9.13.       Independent Nature of Investors’ Obligations and Rights.  The
obligations of each Investor under any Transaction Document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document.  The decision of each Investor to
purchase Shares pursuant to the Transaction Documents has been made by such
Investor independently of any other Investor.  Nothing contained herein or in
any Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents.  Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Shares or enforcing its rights under the Transaction
Documents.  Each Investor shall be entitled to independently protect and enforce
its rights, including, without limitation, the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose.  The Company acknowledges that each of the
Investors has been provided with the same Transaction Documents for the purpose
of closing a transaction with multiple Investors and not because it was required
or requested to do so by any Investor.  It is expressly understood and agreed
that each provision contained in this Agreement is between the Company and an
Investor, solely, and not between the Company and the Investors collectively and
not between and among the Investors.

 

[remainder of page intentionally left blank]

 

26

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IN WITNESS WHEREOF, the parties have executed this Agreement or caused their
duly authorized officers to execute this Agreement as of the date first above
written.

 

COMPANY:

SYROS PHARMACEUTICALS, INC.

 

 

 

 

 

By:

/s/ Nancy Simonian

 

 

Name: Nancy Simonian

 

 

Title: Chief Executive Officer

 

--------------------------------------------------------------------------------

 

INVESTOR:

Salthill Investors (Bermuda) L.P.
By: Wellington Management Company
LLP, as investment adviser

 

 

 

 

 

 

 

By:

/s/ Emily Babalas

 

 

Name:Emily D. Babalas

 

 

Title:Managing Director and Counsel

 

--------------------------------------------------------------------------------

 

INVESTOR:

Salthill Partners, L.P.
By: Wellington Management Company
LLP, as investment adviser

 

 

 

 

 

 

 

By:

/s/ Emily Babalas

 

 

Name:Emily D. Babalas

 

 

Title:Managing Director and Counsel

 

29

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INVESTOR:

Hawkes Bay Master Investors (Cayman) LP
By: Wellington Management Company LLP,
as investment adviser

 

 

 

 

 

 

 

By:

/s/ Emily Babalas

 

 

Name:Emily D. Babalas

 

 

Title:Managing Director and Counsel

 

30

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INVESTOR:

Wellington Trust Company, National
Association Multiple Collective Investment
Funds Trust, Biotechnology Portfolio
By: Wellington Management Company LLP,
as investment adviser

 

 

 

 

 

By:

/s/ Emily Babalas

 

 

Name: Emily D. Babalas

 

 

Title: Managing Director and Counsel

 

31

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INVESTOR:

 

 

 

 

 

 

 

 

 

By:

/s/ David Greenhouse

 

 

Name:David Greenhouse

 

 

Title:Managing Partner

 

32

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INVESTOR:

 

 

 

 

 

 

 

 

 

By:

/s/ James Silverman

 

 

Name: James Silverman

 

 

Title: Managing Director

 

33

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INVESTOR:

 

 

 

 

 

 

 

 

 

By:

/s/ Srinivas Akkaraju

 

 

Name: Srinivas Akkaraju

 

 

Title: Managing General Partner

 

34

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INVESTOR:

 

 

 

 

 

 

 

 

 

By:

/s/ Eli Casdin

 

 

Name: Eli Casdin

 

 

Title: CIO

 

35

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INVESTOR:

CRMA SPV, L.P.

 

 

 

 

 

 

 

By:

/s/ Bihua Chen

 

 

Name: Bihua Chen

 

 

Title: Managing Member of the Special LP

 

36

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INVESTOR:

Cormorant Global Healthcare Master Fund, LP

 

 

 

 

 

 

 

By:

/s/ Bihua Chen

 

 

Name: Bihua Chen

 

 

Title: Managing Member of the GP

 

37

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INVESTOR:

 

 

 

 

 

By: Baker Bros. Advisors LP, Management Company and Investment Adviser to BAKER
BROTHERS LIFE SCIENCES, L.P., pursuant to authority granted to it by Baker
Brothers Life Sciences Capital, L.P., general partner to BAKER BROTHERS LIFE
SCIENCES, L.P., and not as the general partner

By: Baker Bros. Advisors LP, Management Company and Investment Adviser to 667,
L.P., pursuant to authority granted to it by Baker Biotech Capital, L.P.,
general partner to 667, L.P., and not as the general partner

 

 

/s/ Scott Lessing

 

/s/ Scott Lessing

By: Scott L. Lessing, President

 

By: Scott L. Lessing, President

 

38

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EXHIBIT A

 

Schedule of Investors

 

Investor Name

 

Number of Shares to
be Purchased

 

Aggregate Purchase
Price of Shares

 

Hawkes Bay Master Investors (Cayman) LP

 

623,774

 

$

8,420,949.00

 

Salthill Investors (Bermuda) L.P.

 

64,541

 

$

871,303.50

 

Salthill Partners, L.P.

 

144,573

 

$

1,951,735.50

 

Wellington Trust Company, National Association Multiple Collective Investment
Funds Trust, Biotechnology Portfolio

 

130,075

 

$

1,756,012.50

 

Samsara BioCapital, LP

 

740,740

 

$

9,999,990.00

 

Baker Brothers Life Sciences, L.P.

 

333,741

 

$

4,505,503.50

 

667, L.P.

 

36,629

 

$

494,491.50

 

Cormorant Global Healthcare Master Fund, LP

 

246,459

 

$

3,327,196.50

 

CRMA SPV, L.P.

 

49,837

 

$

672,799.50

 

Special Situations Life Sciences Fund, L.P.

 

74,074

 

$

999,999.00

 

Casdin Master Fund LP

 

74,074

 

$

999,999.00

 

Opaleye L.P.

 

74,074

 

$

999,999.00

 

TOTAL

 

2,592,591

 

$

34,999,978.50

 

 

39

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EXHIBIT B

 

Registration Rights Agreement

 

40

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EXHIBIT C

 

Investor Questionnaire

 

41

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