Exhibit 10.7

 

 

 

REGISTRATION RIGHTS AGREEMENT

dated as of July 3, 2018

by and between

ATHENEX, INC.,

 

and

PERCEPTIVE LIFE SCIENCES MASTER FUND, LTD.

 

 

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TABLE OF CONTENTS

Page

Article I DEFINITIONS AND INTERPRETATION

2

 

Section 1.1

Definitions

2

 

Section 1.2

Interpretation and Rules of Construction

5

Article II TRANSFER RESTRICTIONS; REGISTRATION RIGHTS

5

 

Section 2.1

Transfer Restrictions

5

 

Section 2.2

Restrictive Legend; Execution by the Company

6

 

Section 2.3

Notice of Proposed Transfers

7

 

Section 2.4

Registration

7

 

Section 2.5

Effectiveness

8

 

Section 2.6

Rights to Piggyback Registration

9

 

Section 2.7

Obligations of the Company

10

 

Section 2.8

Furnish Information

11

 

Section 2.9

Indemnification

11

 

Section 2.10

Rule 144 Reporting

14

Article III GENERAL PROVISIONS

15

 

Section 3.1

Confidentiality

15

 

Section 3.2

Termination

15

 

Section 3.3

Notices

15

 

Section 3.4

Entire Agreement

16

 

Section 3.5

Governing Law

16

 

Section 3.6

Dispute Resolution

16

 

Section 3.7

Severability

17

 

Section 3.8

Assignments and Transfers; No Third Party Beneficiaries

17

 

Section 3.9

Construction

17

 

Section 3.10

Counterparts

18

 

Section 3.11

Aggregation of Shares

18

 

Section 3.12

Specific Performance

18

 

Section 3.13

Amendment; Waiver

18

 

Section 3.14

Public Announcements

18

 

 

 

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REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of July 3, 2018 by and between Athenex, Inc., a company incorporated under
the laws of the State of Delaware (the “Company”) and Perceptive Life Sciences
Master Fund, Ltd., a Cayman Islands exempted company (the “Investor”).

RECITALS

WHEREAS, Investor has agreed to purchase from the Company, and the Company has
agreed to sell to Investor, shares of common stock, par value US$0.001 per share
(the “Common Stock”) of the Company, on the terms and conditions set forth in
the Share Purchase Agreement dated as of June 29, 2018 between the Company and
Investor (the “Share Purchase Agreement”); and

WHEREAS, it is a condition to the Closing that the parties hereto enter into
this Agreement to set forth certain rights and obligations of the parties hereto
in connection with the transactions contemplated under the Share Purchase
Agreement.

NOW, THEREFORE, in consideration of the premises set forth above, the mutual
promises and covenants set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

Article I
DEFINITIONS AND INTERPRETATION

Section 1.1Definitions

. In this Agreement, except to the extent otherwise provided or that the context
otherwise requires:

“Affiliate” means, in respect of a Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person, and (i) in the case of a natural
person, shall include, without limitation, such Person’s spouse, parents,
children, siblings, mother-in-law and father-in-law and brothers and
sisters-in-law, (ii) in the case of a Shareholder, shall include (A) any Person
who holds shares as a nominee for such Shareholder, (B) any shareholder of such
Shareholder, (C) any Person which has a direct and indirect interest in such
Shareholder (including, if applicable, any general partner or limited partner)
or any fund manager thereof; (D) any Person that directly or indirectly
controls, is controlled by, under common control with, or is managed by such
Shareholder or its fund manager, (E) the relatives of any individual referred to
in (B) above, and (F) any trust controlled by or held for the benefit of such
individuals. For the purpose of this definition, “control” (and correlative
terms) shall mean the direct or indirect power, whether by contract, equity
ownership or otherwise, to direct the policies or management of a Person,
provided that the direct or indirect ownership of twenty-five percent (25%) or
more of the voting power of a Person is deemed to constitute control of that
Person;

“Agreement” has the meaning set forth in the Preamble;

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“Articles” means the Company’s Certificate of Incorporation, as amended from
time to time;

“beneficial ownership” or “beneficially own” or similar term means beneficial
ownership as defined under Rule 13d-3 under the Exchange Act;

“Board” and “Board of Directors” means the Board of Directors of the Company;

“Business Day” has the meaning as defined in the Articles;

“Claim Notice” has the meaning set forth in Section 2.9(c);

“Closing” means the closing of the transactions contemplated under the Share
Purchase Agreement, being the date hereof;

“Commission” means the United States Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act or other
governmental agency administering the securities laws in the jurisdiction in
which the Company’s securities are registered or being registered;

“Common Stock” has the meaning set forth in the Recitals;

“Company” has the meaning set forth in the Preamble;

“Confidential Information” has the meaning set forth in Section 3.1;

“Director(s)” means the director(s) of the Company;

“Email” has the meaning set forth in Section 3.3;

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended;

“Form S-3” has the meaning set forth in Section 2.4(a);

“Group Company” means the Company’s material subsidiaries, material consolidated
affiliated entities and their material subsidiaries and “Group Companies” shall
mean all of them;

“Hong Kong” means the Hong Kong Special Administrative Region of the People’s
Republic of China;

“Investor” has the meaning set forth in the Preamble;

“Nasdaq” means the Nasdaq Global Select Market;

“Permitted Transferee” has the meaning set forth in Section 3.8;

“Person” means an individual, corporation, partnership, limited liability
company, association, trust, unincorporated organization, or other entity;

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“Prospectus” means (i) the prospectus included in any Registration Statement, as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus, and (ii) any “free writing prospectus” as defined
in Rule 405 under the 1933 Act.

“register,” “registered” and “registration” means (i) a registration effected by
preparing and filing a registration statement in compliance with the Securities
Act, and the declaration or ordering of the effectiveness of such registration
statement, or (ii) in the context of a public offering in a jurisdiction other
than the United States, a registration, qualification or filing under the
applicable securities laws of such other jurisdiction;

“Registrable Securities” means (i) the Subject Shares, (ii) shares of the Common
Stock of the Company issued as a dividend or other distribution with respect to,
or in exchange for or in replacement of, any of the Subject Shares, directly, or
indirectly, whether by merger, amendment to Articles, stock split, dividend,
recapitalization, or otherwise; and (iii) any other shares of the Common Stock
issued to the Investor upon exercise of the warrants pursuant to the Warrant.
Notwithstanding the foregoing, “Registrable Securities” shall not include any
Registrable Securities sold by a Person in a transaction in which rights under
Section 2 are not assigned in accordance with this Agreement or any Registrable
Securities sold in a public offering, whether sold pursuant to Rule 144, or in a
registered offering, or otherwise;  

“Registration Expenses” means all expenses incurred by the Company in complying
with Section 2.4 hereof, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses, the
expense of any special audits incident to or required by any such registration
and the reasonable fees and disbursements of one counsel for the Investor (which
fees and disbursements of counsel shall be subject to an aggregate cap of
US$35,000), and any fee charged by any depositary bank, transfer agent or share
registrar, but excluding Selling Expenses. For the avoidance of doubt, the
Company shall pay all expenses incurred in connection with a registration
pursuant to Section 2 notwithstanding the cancellation or delay of the
registration proceeding for any reason;

“Restricted Securities” means the securities of the Company required to bear the
legend set forth in Section 2.2 hereof;

“Rule 144” has the meaning set forth in Section 2.3;

“Securities” means any share of the Common Stock or any equity interest of, or
shares of any class in the share capital (common, preferred or otherwise) of,
the Company and any convertible securities, options, warrants and any other type
of equity or equity-linked securities convertible, exercisable or exchangeable
for any such equity interest or shares of any class in the share capital of the
Company;

“Securities Act” means the United States Securities Act of 1933 as amended from
time to time, also referred to herein as the “Act”;

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“Selling Expenses” means all underwriting discounts and selling commissions;

“Share Purchase Agreement” has the meaning set forth in the Recitals;

“Shareholder” or “Shareholders” means Persons who hold the shares of the Common
Stock from time to time;

“Subject Shares” means the shares of the Common Stock issued to Investor at the
Closing;

“Transaction Documents” means this Agreement, the Share Purchase Agreement, the
Warrant Agreement and each of the other agreements and documents entered into or
delivered by the parties hereto in connection with the transactions contemplated
hereby or thereby;

“Violation” has the meaning set forth in Section 2.9(a); and

“Warrant” means the Warrant, dated July 3, 2018, between the Company and the
Investor, pursuant to which the Company has agreed to issue to the Investor a
warrant with the right to purchase a number of shares of Common Stock subject to
the terms and conditions as set forth therein.

Section 1.2Interpretation and Rules of Construction

. In this Agreement, except to the extent otherwise provided or that the context
otherwise requires:

(a)when a reference is made in this Agreement to an Article or Section, such
reference is to an Article or Section of this Agreement;

(b)the headings for this Agreement are for reference purposes only and do not
affect in any way the meaning or interpretation of this Agreement;

(c)the words “hereof,” “herein” and “hereunder” and words of similar import,
when used in this Agreement, refer to this Agreement as a whole and not to any
particular provision of this Agreement;

(d)all terms defined in this Agreement have the defined meanings when used in
any certificate or other document made or delivered pursuant hereto, unless
otherwise defined therein;

(e)the definitions contained in this Agreement are applicable to the singular as
well as the plural forms of such terms; and

(f)references to a Person are also to its successors and permitted assigns.

Article II
TRANSFER RESTRICTIONS; REGISTRATION RIGHTS

Section 2.1Transfer Restrictions

The Restricted Securities (including the Subject Shares) shall not be sold,
assigned, transferred or pledged except upon the conditions specified in this
Section 2, which conditions are

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intended to, inter alia, ensure compliance with the provisions of applicable
securities laws. Investor will cause any proposed purchaser, assignee,
transferee or pledgee of any such shares held by such holder to agree in writing
to take and hold such securities subject to the provisions and upon the
conditions specified in this Agreement.

Section 2.2Restrictive Legend; Execution by the Company

.

(a)Each certificate (if any) representing the Subject Shares, and any
replacement securities issued in respect of the Subject Shares, shall (unless
otherwise permitted by the provisions of Section 2.3 below) be stamped or
otherwise imprinted with legends substantially in the following form (in
addition to any legend required under applicable federal, state, local or
non-United States law):

(i)“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE TRANSFERRED, SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT
RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH
LAWS.  ANY ATTEMPT TO TRANSFER, SELL, OFFER TO SELL, PLEDGE, HYPOTHECATE OR
OTHERWISE DISPOSE OF THIS INSTRUMENT IN VIOLATION OF THESE RESTRICTIONS SHALL BE
VOID.”

(ii)“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND MAY ONLY BE
SOLD, DISPOSED OF OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH THE REGISTRATION
RIGHTS AGREEMENT, DATED JULY 3, 2018 AND/OR THE SHARE PURCHASE AGREEMENT, DATED
JUNE 29, 2018, ENTERED INTO BY THE HOLDER OF THESE SHARES AND THE COMPANY.
COPIES OF SUCH AGREEMENTS ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
SUCH LOCK-UP IS BINDING ON TRANSFEREES OF THESE SHARES. BY ACCEPTING ANY
INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO
AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID AGREEMENTS AS
APPLICABLE.”

(b)Investor consents to the Company making a notation on its records and giving
instructions to any transfer agent of the Restricted Securities in order to
implement the restrictions on transfer established in this Section 2.2.

(c)The Company agrees that it will cause the certificates evidencing the shares
of the Common Stock to bear the legend required by this Section 2.2, and it
shall supply, free of charge, a copy of this Agreement to any holder of a
certificate evidencing shares of the Common Stock containing such legend upon
written request from such holder to the Company at its principal office. The
parties hereto do hereby agree that the failure to cause the certificates
evidencing the appropriate shares of the Common Stock to bear the legend
required by this Section 2.2 and/or failure of the Company to supply, free of
charge, a copy of this Agreement as provided under this Section 2.2 shall not
affect the validity or enforcement of this Agreement.

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Section 2.3Notice of Proposed Transfers

.

The holder of each certificate representing the Subject Shares by acceptance
thereof agrees to comply in all respects with the provisions of this Section
2.3. Prior to any proposed sale, assignment, transfer or pledge of any Subject
Shares (other than (a) a transfer not involving a change in beneficial
ownership, (b) in transactions involving the distribution without consideration
of the Subject Shares by the holder to any of its partners, members, or retired
partners or members, or to the estate of any of its partners or members or
retired partners or members, (c) in transactions in compliance with Rule 144
promulgated under the Securities Act (“Rule 144”), (d) transfers by members that
are entities to affiliated entities or funds (United States based or non-United
States based), and (e) transfers to the Company by any holder of the Subject
Shares pursuant to the Company’s repurchase option set forth in any agreement
entered into as of or after the date hereof if such agreement is approved by a
majority of the Board), Investor shall give written notice to the Company of
Investor’s intention to effect such transfer, sale, assignment or pledge. Each
such notice shall describe the manner and circumstances of the proposed
transfer, sale, assignment or pledge in sufficient detail, and if reasonably
requested by the Company, shall be accompanied, at such holder’s expense, by
either (a) a written opinion of legal counsel who shall be, and whose legal
opinion shall be, reasonably satisfactory to the Company addressed to the
Company, to the effect that the proposed transfer of the Subject Shares may be
effected without registration under the Securities Act, or (b) a “no action”
letter from the Commission to the effect that the transfer of such securities
without registration will not result in a recommendation by the staff of the
Commission that action be taken with respect thereto, whereupon the holder of
such Subject Shares shall be entitled to transfer such Subject Shares in
accordance with the terms of the notice delivered by the holder to the Company.
For the avoidance of doubt, it shall not be reasonable for the Company to
request that a notice be accompanied by any such opinion or “no action” letter
if, among other things, both the transferor and the transferee have certified in
writing that each of them is not a U.S. Person (as defined under Rule 902 of
Regulation S promulgated under the Securities Act). Notwithstanding any of the
foregoing exceptions to the notice requirements, all transferees shall be bound
by the obligations of the transferor in this Agreement. Each certificate
evidencing the Restricted Securities transferred as above provided shall bear,
except if such transfer is made pursuant to Rule 144, the appropriate
restrictive legends set forth in Section 2.2 above, except that such certificate
shall not bear such restrictive legends if in the opinion of counsel for such
holder and the Company such legend is not required in order to establish
compliance with any provision of the Securities Act.

Section 2.4Registration

.

(a)Promptly following the date of the Closing (the “Closing Date”) but no later
than ninety (90) days after the Closing Date (the “Filing Deadline”), the
Company shall prepare and file with the Commission one registration statement on
Form S-3 (or, if Form S-3 is not then available to the Company, on Form S-1)
(the “Registration Statement”) covering the resale of the Registrable
Securities.  Subject to any Commission comments, such Registration Statement
shall include the plan of distribution attached hereto as Exhibit A; provided,
however, that Investor shall not be named as an “underwriter” in the
Registration Statement without the Investor’s prior written consent.  Such
Registration Statement shall not include any shares of Common Stock or other
securities for the account of any other holder without the prior written consent
of the Investor. The Registration Statement (and each amendment or supplement
thereto,

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and each request for acceleration of effectiveness thereof) shall be provided to
the Investor and its counsel for reasonable advance comment prior to its filing
or other submission.

(b)Expenses. The Company shall pay all Registration Expenses incurred in
connection with each registration requested pursuant to this Section 2.4.
Investor shall bear such its proportionate share (based upon the total number of
shares sold in such registration other than for the account of the Company) of
any Selling Expenses incurred in connection with such registration of
securities.

(c)Maximum Frequency. Except as otherwise provided herein, Investor may request
registration of Registrable Securities two (2) times under this Section 2.4.

(d)Deferral. Notwithstanding the foregoing, if the Company shall furnish to
Investor a certificate signed by the CEO of the Company stating that in the good
faith judgment of the Board, it would be materially detrimental to the Company
and its shareholders for such  registration statement to be filed, then the
Company shall have the right to defer such filing for a period of not more than
ninety (90) days after receipt of the request of Investor; provided, however,
that the Company may not utilize this right more than once in any twelve (12)
month period; provided, further that during such ninety (90) day period, the
Company shall not file any registration statement pertaining to the public
offering of any securities of the Company.

Section 2.5Effectiveness

(a)The Company shall use best efforts to have the Registration Statement
declared effective as soon as practicable.  The Company shall notify the
Investor by facsimile or e-mail as promptly as practicable, and in any event,
within twenty-four (24) hours, after any Registration Statement is declared
effective and shall simultaneously provide the Investor with copies of any
related Prospectus to be used in connection with the sale or other disposition
of the securities covered thereby.  If (A) a Registration Statement covering the
Registrable Securities is not declared effective by the Commission prior to the
earlier of (i) five (5) Business Days after the Commission shall have informed
the Company that no review of the Registration Statement will be made or that
the Commission has no further comments on the Registration Statement or (ii) the
120th day after the Closing Date (the 150th day if the Commission reviews the
Registration Statement), or (B) after a Registration Statement has been declared
effective by the Commission (the “Effectiveness Deadline”), sales cannot be made
continuously pursuant to such Registration Statement for any reason (including
without limitation by reason of a stop order, or the Company’s failure to update
the Registration Statement) (each such event, a “Default”).  In the event that a
Default occurs then, in addition to any other rights the Investor may have
hereunder or under applicable law, on the first day of the occurrence of the
Default, and on the same day of each succeeding month (if the applicable Default
shall not have been cured by such date) until the applicable Default is cured,
the Company shall pay to each Investor an amount in cash, as liquidated damages
and not as a penalty (“Liquidated Damages”), equal to 1.0% of the aggregate
purchase price paid by Investor pursuant to the Purchase Agreement for any
Registrable Securities held by such Investor on the date of the Default and the
same day of each succeeding month. The parties agree that in no event shall the
aggregate amount of Liquidated Damages payable to Investor exceed, in the
aggregate, twenty-five percent (25%) of the aggregate purchase price paid by
Investor pursuant to the Purchase Agreement.  If the Company fails to pay any
Liquidated

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Damages pursuant to this in full within five (5) Business Days after the date
payable, the Company will pay interest thereon at a rate of 1.5% per month (or
such lesser maximum amount that is permitted to be paid by applicable law) to
the Investor, accruing daily from the date such Liquidated Damages are due until
such amounts, plus all such interest thereon, are paid in full.  The Liquidated
Damages pursuant to the terms hereof shall apply on a daily pro-rata basis for
any portion of a month prior to the cure of a Default, except in the case of the
first occurrence of the Default. The Effectiveness Deadline for a Registration
Statement shall be extended without default or Liquidated Damages hereunder in
the event that the Company’s failure to obtain the effectiveness of the
Registration Statement on a timely basis results from the failure of Investor to
timely provide the Company with information requested by the Company and
necessary to complete the Registration Statement in accordance with the
requirements of the Securities Act (in which case the Effectiveness Deadline
would be extended with respect to Registrable Securities held by Investor).

(b)Rule 415; Cutback  If at any time the Commission takes the position that the
offering of some or all of the Registrable Securities in a Registration
Statement is not eligible to be made on a delayed or continuous basis under the
provisions of Rule 415 under the 1933 Act or requires any Investor to be named
as an “underwriter”, the Company shall use its commercially reasonable best
efforts to persuade the Commission that the offering contemplated by the
Registration Statement is a valid secondary offering and not an offering “by or
on behalf of the issuer” as defined in Rule 415 and that none of the Investor is
an “underwriter”.  The Investor shall have the right to participate or have
their counsel participate in any meetings or discussions with the Commission
regarding the Commission’s position and to comment or have their counsel comment
on any written submission made to the Commission with respect thereto.  No such
written submission shall be made to the Commission to which the Investor’s
counsel reasonably objects.  In the event that, despite the Company’s best
efforts and compliance with the terms of this Section 2.5(b), the Commission
refuses to alter its position, the Company shall (i) remove from the
Registration Statement such portion of the Registrable Securities (the “Cut Back
Shares”) and/or (ii) agree to such restrictions and limitations on the
registration and resale of the Registrable Securities as the Commission may
require to assure the Company’s compliance with the requirements of Rule 415
(collectively, the “Commission Restrictions”); provided, however, that the
Company shall not agree to name any Investor as an “underwriter” in such
Registration Statement without the prior written consent of such Investor.  No
Liquidated Damages shall accrue as to any Cut Back Shares until such date as the
Company is able to effect the registration of such Cut Back Shares in accordance
with any Commission Restrictions (such date, the “Restriction Termination Date”
of such Cut Back Shares). From and after the Restriction Termination Date
applicable to any Cut Back Shares, all of the provisions of this Section 2
(including the Liquidated Damages provisions) shall again be applicable to such
Cut Back Shares; provided, however, that (i) the Filing Deadline for the
Registration Statement including such Cut Back Shares shall be ten (10) Business
Days after such Restriction Termination Date, and (ii) the date by which the
Company is required to obtain effectiveness with respect to such Cut Back Shares
shall be the 90th day immediately after the Restriction Termination Date.  For
the avoidance of doubt, for purposes of this Section 2.5(b), the term “best
efforts” shall not require the Company to institute or maintain any action, suit
or proceeding against the Commission or any member of the Staff of the
Commission.

Section 2.6Rights to Piggyback Registration

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(a)If at any time following the date of this Agreement that any Registrable
Securities remain outstanding (A) there is not one or more effective
Registration Statements covering all of the Registrable Securities and (B) the
Company proposes for any reason to register any shares of Common Stock under the
1933 Act (other than pursuant to a registration statement on Form S-4 or Form
S-8 (or a similar or successor form)) with respect to an offering of Common
Stock by the Company for its own account or for the account of any of its
stockholders, it shall at each such time promptly give written notice to the
holders of the Registrable Securities of its intention to do so (but in no event
less than thirty (30) days before the anticipated filing date) and, to the
extent permitted under the provisions of Rule 415 under the 1933 Act, include in
such registration all Registrable Securities with respect to which the Company
has received written requests for inclusion therein within fifteen (15) days
after receipt of the Company’s notice (a “Piggyback Registration”).  Such notice
shall offer the holders of the Registrable Securities the opportunity to
register such number of shares of Registrable Securities as each such holder may
request and shall indicate the intended method of distribution of such
Registrable Securities.

(a)Notwithstanding the foregoing, (A) if such registration involves an
underwritten public offering, the Investor must sell their Registrable
Securities to, if applicable, the underwriter(s) at the same price and subject
to the same underwriting discounts and commissions that apply to the other
securities sold in such offering (it being acknowledged that the Company shall
be responsible for other expenses as set forth in Section 2.4(b)) and subject to
the Investor entering into customary underwriting documentation for selling
stockholders in an underwritten public offering, and (B) if, at any time after
giving written notice of its intention to register any Registrable Securities
pursuant to Section 2.6(a) and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to cause such registration statement to become
effective under the 1933 Act, the Company shall deliver written notice to the
Investors and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration; provided, however,
that nothing contained in this Section 2.6(b) shall limit the Company’s
liabilities and/or obligations under this Agreement, including, without
limitation, the obligation to pay liquidated damages under Section 2.5.  If the
managing underwriter(s) for the underwritten public offering advise the Company
that the number of shares proposed to be included in the offering exceeds the
number that can reasonably be sold in the offering, then the shares to be
included in such offering shall be allocated, first, to the account of the
Company, in the event that the public offering relates to a primary offering by
or on behalf of the Company, or, if the offering is being made pursuant to a
demand registration rights granted to one or more holders of Common Stock, such
holders, second, to the Investor, and third, to any other holder of Common Stock
having the right to include its shares in such offering.

Section 2.7Obligations of the Company

Whenever required to effect the registration of any Registrable Securities under
this Agreement, the Company shall keep Investor advised in writing as to the
initiation of such registration and as to the completion thereof, and shall, at
its expense promptly:

(a)Registration Statement. Prepare and file with the Commission a registration
statement with respect to such Registrable Securities and use its commercially
reasonable efforts

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to cause such registration statement to become effective, and keep any such
registration statement effective for a period of one hundred and twenty (120)
days or until Investor has completed the distribution described in the
Registration Statement relating thereto, whichever occurs first.

(b)Amendments and Supplements. Prepare and file with the Commission such
amendments and supplements to the Registration Statement and the Prospectus used
in connection with such registration statement as may be necessary to comply
with the provisions of the Securities Act or other applicable securities laws
with respect to the disposition of all securities covered by such registration
statement.

(c)Registration Statements and Prospectuses. Furnish to Investor such number of
copies of Registration Statements and Prospectuses, including a preliminary
prospectus, in conformity with the requirements of the Securities Act or other
applicable securities laws, and such other documents as it may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by it that are included in such registration.

(d)Blue Sky. Use its best efforts to register and qualify the securities covered
by such registration statement under such other securities or blue sky laws of
such jurisdictions as shall be reasonably requested by Investor, provided that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.

(e)Notification. Notify Investor at any time when a prospectus relating to its
Registrable Securities is required to be delivered under the Securities Act or
other applicable securities laws of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing.

(f)Listing on Securities Exchange(s). Cause all such Registrable Securities
registered pursuant hereto to be listed on the Nasdaq, or such other
internationally recognized exchange, for long as the Company’s securities are
listed on such exchange.

Section 2.8Furnish Information

.

It shall be a condition precedent to the obligations of the Company to take any
action pursuant to Section 2.4 with respect to the Registrable Securities of
Investor, that Investor shall furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of such securities as shall be reasonably requested in writing by
the Company to timely effect the registration of its Registrable Securities.

Section 2.9Indemnification

.

The following indemnification provisions shall apply in the event any
Registrable Securities are included in a registration statement under Section
2.4:

(a)By the Company. To the extent permitted by law, the Company will indemnify
and hold harmless Investor, and the partners, officers, directors, employees,
trustees

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and legal counsel of Investor and each Person, if any, who controls Investor
within the meaning of Section 15 of the Securities Act against any expenses,
losses, claims, damages, or liabilities (joint or several) (or actions in
respect thereof) to which they may become subject under the Securities Act, the
Exchange Act or other applicable law, insofar as such expenses, losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations (each a
“Violation”):

(i)any untrue statement or alleged untrue statement of a material fact contained
in any registration statement, offering circular, preliminary prospectus, final
prospectus or other document, or any amendments or supplements thereto;

(ii)the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading; or

(iii)any violation or alleged violation of the Securities Act, the Exchange Act,
any federal or state or foreign securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or other applicable
securities law in connection with the offering covered by such registration
statement; and the Company will reimburse Investor, its partners, officers,
directors, employees, legal counsel or controlling Person for any legal or other
expenses reasonably incurred by them, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
Section 2.9(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld), nor
shall the Company be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
Investor, underwriter or controlling Person of Investor.

(b)By Investor. To the extent permitted by law, Investor will indemnify and hold
harmless the Company and the partners, officers, directors, employees, trustees
and legal counsel of the Company and each Person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, and any other
Shareholder selling securities under such registration statement or any of such
other Shareholder’s partners, directors, officers, employees, trustees and legal
counsel of such Shareholder and each Person, if any, who controls such
Shareholder within the meaning of Section 15 of the Securities Act, against any
expenses, losses, claims, damages or liabilities (joint or several) (or actions
in respect thereof) to which the Company or any such director, officer,
employee, trustee, legal counsel, controlling Person or other such Shareholder,
partner or director, officer, employee or controlling Person of such other
Shareholder may become subject under the Securities Act, the Exchange Act or
other applicable law, insofar as such expenses, losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by Investor to the Company expressly for inclusion in such
Registration Statement or Prospectus or amendment or supplement thereto, which
constituted by the Investor an untrue statement of a material fact or any
omission of a material fact required to be stated in the Registration Statement

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or Prospectus or preliminary Prospectus or amendment or supplement thereto or
necessary to make the statements therein not misleading: and Investor will
reimburse any legal or other expenses reasonably incurred by the Company or any
such director, officer, employee, controlling Person or other Shareholder,
partner, officer, employee, director or controlling Person of such other
Shareholder in connection with investigating or defending any such loss, claim,
damage, liability or action: provided, however, that the indemnity agreement
contained in this Section 2.9(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of Investor, which consent shall not be
unreasonably withheld; and provided, further that the total amounts payable in
indemnity by Investor under this Section 2.9(b) plus any amount under Section
2.9(e) in respect of any Violation shall not exceed the net proceeds received by
Investor in the registered offering out of which such Violation arises.

(c)Notice. Promptly after receipt by an indemnified party under this Section 2.9
of notice of the commencement of any claim or action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.9, deliver to the
indemnifying party a written notice of the commencement thereof (a “Claim
Notice”) and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the reasonable fees
and expenses to be paid by the indemnifying party (i) during the period from the
delivery of a Claim Notice until retention of counsel by the indemnifying party;
and (ii) if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to conflict of interests
between such indemnified party and any other party represented by such counsel
in such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall
relieve such indemnifying party of liability to the indemnified party under this
Section 2.9 to the extent the indemnifying party is prejudiced as a result
thereof, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 2.9.

(d)Defect Eliminated in Final Prospectus. The foregoing indemnity agreements of
the Company and Investor are subject to the condition that, insofar as they
relate to any untrue statement, alleged untrue statement, omission or alleged
omission made in a preliminary prospectus or free writing prospectus on file
with the Commission at the time the registration statement becomes effective,
such indemnity agreement shall not inure to the benefit of any Person if an
amended prospectus is filed with the Commission and delivered pursuant to the
Securities Act at or prior to the time of sale (including, without limitation, a
contract of sale, and as further contemplated by Rule 159 promulgated under the
Securities Act) to the Person asserting the loss, liability, claim or damage.

(e)Contribution. In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either
(i) Investor exercising rights under this Agreement, or any controlling Person
of Investor, makes a claim for indemnification pursuant to this Section 2.9 but
it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact

13

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that this Section 2.9 provides for indemnification in such case, or
(ii) contribution under the Securities Act may be required on the part of
Investor or any such controlling Person in circumstances for which
indemnification is provided under this Section 2.9; then, and in each such case,
the Company and Investor will contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (after contribution from
others) in such proportion so that Investor is responsible for the portion
represented by the percentage that the public offering price of its Registrable
Securities offered by and sold under the registration statement bears to the
public offering price of all securities offered by and sold under such
registration statement, and the Company and any other selling Shareholders are
responsible for the remaining portion; provided, however, that, in any such
case: (A) Investor will not be required to contribute any amount in excess of
the net proceeds received by Investor from the public offering price of all such
Registrable Securities offered and sold by Investor pursuant to such
registration statement; and (B) no Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.

(f)Survival. The obligations of the Company and Investor under this Section 2.9
shall survive until the fifth (5th) anniversary of the completion of any
offering of Registrable Securities pursuant to a registration statement,
regardless of the expiration of any statutes of limitation or extensions of such
statutes.

Section 2.10Rule 144 Reporting

.

With a view to making available to Investor the benefits of certain rules and
regulations of the Commission which may permit the sale of the Restricted
Securities to the public without registration, the Company agrees to use its
commercially reasonable efforts to:

(a)Make and keep public information available, as those terms are understood and
defined in Rule 144 or any similar or analogous rule promulgated under the
Securities Act, at all times after the effective date of the first registration
filed by the Company for an offering of its securities to the general public;

(b)File with the Commission, in a timely manner, all reports and other documents
required of the Company under the Securities Act or the Exchange Act, at all
times after the effective date of the first registration under the Securities
Act filed by the Company; and

(c)So long as Investor owns any Restricted Securities, furnish to Investor
forthwith upon request, (i) a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144, and of the Exchange
Act (at any time after it has become subject to such reporting requirements),
(ii) a copy of the most recent annual, interim, quarterly or other report of the
Company, and (iii) such other reports and documents as Investor may reasonably
request in availing itself of any rule or regulation of the Commission allowing
it to sell any such securities without registration.

14

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Article III
GENERAL PROVISIONS

Section 3.1Confidentiality

.  Each party hereto hereby agrees that it will, and will cause its respective
Affiliates and its and their respective representatives to, hold in strict
confidence any non-public records, books, contracts, instruments, computer data
and other data and information concerning the other parties hereto, whether in
written, verbal, graphic, electronic or any other form provided by any party
hereto (except to the extent that such information has been (a) previously known
by such party on a non-confidential basis from a source other than the other
parties hereto or its representatives, provided that, to such party’s knowledge,
such source is not prohibited from disclosing such information to such party or
its representatives by a contractual, legal or fiduciary obligation to the other
parties hereto or its representatives, (b) in the public domain through no
breach of this Agreement by such party, (c) independently developed by such
party or on its behalf, or (d) later lawfully acquired from other sources) (the
“Confidential Information”). In the event that a party hereto is requested or
required by law, governmental authority, rules of stock exchanges, or other
applicable judicial or governmental order to disclose any Confidential
Information concerning any of the other parties hereto, such party shall, to the
extent legally permissible, notify the other party prior to making any such
disclosure by providing the other party with the text of the disclosure
requirement and draft disclosure at least 24 hours prior to making any such
disclosure, and, if requested by another party, assist such other party to limit
or minimize such disclosure.

Section 3.2Termination

. Unless expressly provided otherwise herein, in addition to the other
termination provisions in this Agreement, this Agreement shall terminate, and
have no further force and effect, upon the earliest of: (a) a written agreement
to that effect, signed by all parties hereto, and (b) the date following the
Closing on which Investor no longer holds any shares of the Common Stock of the
Company; provided that, notwithstanding the foregoing, Article II shall survive
any termination of this Agreement until the specific provisions thereof
terminate in accordance with their express terms.

Section 3.3Notices

. All notices, requests and other communications to any party hereunder shall be
in writing (including facsimile transmission and electronic mail transmission
(“Email”), so long as a receipt of such Email is requested and received) and
shall be given:

If to the Company:

Athenex, Inc.

 

Address:

Conventus Building, 1001 Main Street, Suite 600, Buffalo, NY 14203, United
States of America

 

Email:tbair@athenex.com
Facsimile:+1 716 800 6818

Attention:Teresa Bair, Vice President, Legal Affairs & Corporate Development

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with a copy to:

Simpson Thacher & Bartlett LLP

Address:35/F, ICBC Tower

3 Garden Road Central, Hong Kong

Email:dfertig@stblaw.com

Facsimile:+852 2514-7694

Attention:Daniel Fertig

If to Investor:

Perceptive Life Sciences Master Funds, Ltd.

Address:51 Astor Place, 10th floor

New York, NY 10003

Email:Adam@perceptivelife.com

Attention: Adam Stone

with a copy to:

Tannenbaum Helpern Syracuse Hirschtritt LLP

Address:900 Third Avenue

New York, NY 10022

Email:lallouz@thsh.com

Facsimile: +1 646 390-7005

Attention:David R. Lallouz

A party may change or supplement the addresses given above, or designate
additional addresses, for the purposes of this Section 3.3 by giving the other
parties written notice of the new address in the manner set forth above.

Section 3.4Entire Agreement

. This Agreement and the other Transaction Documents, together with all the
schedules and exhibits hereto and thereto and the certificates and other written
instruments delivered in connection therewith from time to time on and following
the date hereof, constitute and contain the entire agreement and understanding
of the parties with respect to the subject matter hereof and thereof, and
supersedes any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties respecting the subject
matter hereof and thereof. Each party expressly represents and warrants that it
is not relying on any oral or written representations, warranties, covenants or
agreements outside of this Agreement and the other Transaction Documents.

Section 3.5Governing Law

. This Agreement shall be governed by and construed in accordance with the law
of the State of New York, without regard to conflict of law principles.

Section 3.6Dispute Resolution

. 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

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and the transactions contemplated hereby. Service of process in connection with
any 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.
To the extent that the Company has or hereafter may acquire any immunity (on the
grounds of sovereignty or otherwise) from the jurisdiction of any court or from
any legal process with respect to itself or its property, the Company
irrevocably waives, to the fullest extent permitted by law, such immunity in
respect of any such suit, action or proceeding. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

Section 3.7Severability

. If any provision of this Agreement is found to be invalid or unenforceable,
then such provision shall be construed, to the extent feasible, so as to render
the provision enforceable and to provide for the consummation of the
transactions contemplated hereby on substantially the same terms as originally
set forth herein, and if no feasible interpretation would save such provision,
it shall be severed from the remainder of this Agreement, which shall remain in
full force and effect unless the severed provision is essential to the rights or
benefits intended by the parties. In such event, the parties shall use
commercially reasonable efforts to negotiate, in good faith, a substitute, valid
and enforceable provision or agreement, which most nearly effects the parties’
intent in entering into this Agreement.

Section 3.8Assignments and Transfers; No Third Party Beneficiaries

. Except as otherwise provided herein, this Agreement and the rights and
obligations of the Company and Investor hereunder shall inure to the benefit of,
and be binding upon, their respective successors and permitted assigns and legal
representatives, but shall not otherwise be for the benefit of any third
party.  Notwithstanding anything to the contrary, without the prior written
consent of the Company, the Investor may not assign any of its rights under this
Agreement except to an Affiliate of the Investor (a “Permitted Transferee”),
provided, however, that no Permitted Transferee or any other person may be
assigned any of the foregoing rights unless the Company is given written notice
by the assigning party stating the name and address of the assignee and
identifying the securities of the Company as to which the rights in question are
being assigned; and any such transferee shall execute and deliver to the Company
and Investor a Deed of Adherence (in the same form and substance as set out in
Schedule 1 hereto), subject to the terms and conditions hereof.

Section 3.9Construction

. Each of the parties has participated in the drafting and negotiation of this
Agreement. If an ambiguity or question of intent or interpretation arises, this
Agreement must be construed as if it is drafted by all the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of authorship of any of the provisions of this Agreement.

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Section 3.10Counterparts

. This Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other
parties. A facsimile or “PDF” signature shall be considered due execution and
shall be binding upon the signatory thereto with the same force and effect as if
the signature were an original.

Section 3.11Aggregation of Shares

. All Securities held or acquired by Investor and/or its Permitted Transferees
shall be aggregated together for the purpose of determining the availability of
any rights of Investor under this Agreement.

Section 3.12Specific Performance

. The parties hereto acknowledge and agree irreparable harm may occur for which
money damages would not be an adequate remedy in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that, in
addition to any other remedies at law or in equity, the parties to this
Agreement shall be entitled to injunction to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement without
posting any bond or other undertaking.

Section 3.13Amendment; Waiver

. This Agreement may be amended, modified or supplemented only by a written
instrument duly executed by all the parties hereto. The observance of any
provision in this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by the written consent
of the party against whom such waiver is to be effective. Any amendment or
waiver effected in accordance with this Section 3.13 shall be binding upon the
parties hereof and their respective assigns. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to any party, upon any
breach, default or noncompliance by another party under this Agreement, shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach, default or noncompliance, or any acquiescence therein, or of
or in any similar breach, default or noncompliance thereafter occurring.

Section 3.14Public Announcements

. Without limiting any other provision of this Agreement, the parties hereto, to
the extent permitted by applicable law, will consult with each other before
issuance, and provide each other the opportunity to review, comment upon and
agree on any press release or public statement with respect to this Agreement,
the other Transaction Documents and the transactions contemplated hereby and
thereby and the ongoing business relationship among the parties. The parties
hereto will not issue any such press release or make any such public statement
without the prior written consent of the other party, except as may be required
by law or any listing agreement with or requirement of the Nasdaq or any other
applicable securities exchange, provided that the disclosing party shall, to the
extent permitted by applicable law or any listing agreement with or requirement
of the Nasdaq or any other applicable securities exchange, and if reasonably
practicable, inform the other parties about the disclosure to be made pursuant
to such requirements prior to the disclosure.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above
written.

ATHENEX, INC.

 

By:/s/ Johnson Y.N. Lau

Name:Johnson Y.N. Lau

Title: Chairman and CEO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, the parties have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above
written.

 

PERCEPTIVE LIFE SCIENCES MASTER FUND, LTD.

 

By:/s/ James H. Mannix

Name:James H. Mannix

Title:Chief Operating Officer

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Exhibit A

Plan of Distribution

The selling stockholders, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from a selling stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of their shares of common stock or interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded or
in private transactions.  These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or at
negotiated prices.

The selling stockholders may use any one or more of the following methods when
disposing of shares or interests therein:

 

-

ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 

-

block trades in which the broker-dealer will attempt to sell the shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction;

 

-

purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 

-

an exchange distribution in accordance with the rules of the applicable
exchange;

 

-

privately negotiated transactions;

 

-

short sales effected after the date the registration statement of which this
Prospectus is a part is declared effective by the SEC;

 

-

through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;

 

-

broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;

 

-

a combination of any such methods of sale; and

 

-

any other method permitted by applicable law.

The selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common

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stock, from time to time, under this prospectus, or under an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act amending the list of selling stockholders to include the pledgee, transferee
or other successors in interest as selling stockholders under this
prospectus.  The selling stockholders also may transfer the shares of common
stock in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.

In connection with the sale of our common stock or interests therein, the
selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume.  The selling
stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities.  The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

The aggregate proceeds to the selling stockholders from the sale of the common
stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any.  Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents.  We will not receive any of the proceeds from this offering.
Upon any exercise of the warrants by payment of cash, however, we will receive
the exercise price of the warrants.

The selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of that
rule.

The selling stockholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be
“underwriters” within the meaning of Section 2(11) of the Securities Act.  Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities
Act.  Selling stockholders who are “underwriters” within the meaning of Section
2(11) of the Securities Act will be subject to the prospectus delivery
requirements of the Securities Act.

To the extent required, the shares of our common stock to be sold, the names of
the selling stockholders, the respective purchase prices and public offering
prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.

In order to comply with the securities laws of some states, if applicable, the
common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers.  In addition, in some states the common stock may
not be sold unless it has been registered or qualified

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for sale or an exemption from registration or qualification requirements is
available and is complied with.

We have advised the selling stockholders that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling stockholders and their affiliates.  In
addition, to the extent applicable we will make copies of this prospectus (as it
may be supplemented or amended from time to time) available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act.  The selling stockholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.

We have agreed to indemnify the selling stockholders against liabilities,
including liabilities under the Securities Act and state securities laws,
relating to the registration of the shares offered by this prospectus.

We have agreed with the selling stockholders to keep the registration statement
of which this prospectus constitutes a part effective until the earlier of (1)
such time as all of the shares covered by this prospectus have been disposed of
pursuant to and in accordance with the registration statement or (2) the date on
which all of the shares may be sold without restriction pursuant to Rule 144 of
the Securities Act.

 

 

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Schedule 1

FORM OF DEED OF ADHERENCE

 

THIS DEED is made the      day of         20[ ] by [ ] of [ ] (the “Permitted
Transferee”) and is supplemental to the Registration Rights Agreement dated July
3, 2018 made between Athenex, Inc. (the “Company”), and Perceptive Life Sciences
Master Fund, Ltd. (such agreement as amended, restated or supplemented from time
to time, the “Registration Rights Agreement”).

 

WITNESSETH as follows:

 

The Permitted Transferee confirms that it has been provided with a copy of the
Registration Rights Agreement and all amendments, restatements and supplements
thereto and hereby covenants with each of the parties to the Registration Rights
Agreement from time to time to observe, perform and be bound by all the terms
and conditions of the Registration Rights Agreement which are capable of
applying to the Permitted Transferee to the intent and effect that the Permitted
Transferee shall be deemed as and with effect from the date hereof to be a party
to the Registration Rights Agreement and to be subject to the obligations
thereof.

 

The address and facsimile number at which notices are to be served on the
Permitted Transferee under the Registration Rights Agreement and the person for
whose attention notices are to be addressed are as follows:

 

[to insert contact details]

 

Words and expressions defined in the Registration Rights Agreement shall have
the same meaning in this Deed. This Deed shall be governed by and construed in
accordance with the laws of the State of New York.

 

This Deed shall take effect as a deed poll for the benefit of the Company,
[Perceptive Life Sciences Master Fund, Ltd.] and any other parties to the
Registration Rights Agreement.

 

IN WITNESS whereof the Permitted Transferee has executed this Deed the day and
year first above written.

 

THE COMMON SEAL of [ ].

 

was hereunto affixed          )

 

in the presence of:               )

 

 

 

(Director)

 

 

 

(Director/Secretary)