Document:

Exhibit 4.22

 

EXECUTION COPY

 

THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR, SUBJECT TO SECTION 11 HEREOF, AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL) REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT, OR SUCH LAWS.

 

WARRANT AGREEMENT

 

To Purchase American Depositary Shares of

 

MOTIF BIO PLC

 

Dated as of November 14, 2017 (the “Effective Date”)

 

WHEREAS, Motif Bio Plc, a public limited company incorporated in England and Wales (the “Company”), is the direct parent of Motif BioSciences Inc., a Delaware corporation (the “Borrower”);

 

WHEREAS, the Borrower has entered into a Loan and Security Agreement of even date herewith (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Loan Agreement”) with Hercules Capital, Inc., a Maryland corporation (the “Warrantholder”), in its capacity as administrative and collateral agent, and the lenders party thereto (the “Lenders”);

 

WHEREAS, the Company acknowledges and agrees that it shall derive direct and indirect benefits from the provision of loans and other financial accommodations by the Warrantholder and the Lenders to the Borrower pursuant to the Loan Agreement;

 

WHEREAS, the Company has agreed to guarantee the obligations of the Borrower to the Warrantholder and the Lenders;

 

WHEREAS, pursuant to the Loan Agreement and as additional consideration to the Warrantholder for, among other things, its agreements in the Loan Agreement, the Company has agreed to issue to the Warrantholder this Warrant Agreement, evidencing the right to purchase American Depositary Shares of the Company (this “Warrant”, “Warrant Agreement”, or this “Agreement”);

 

NOW, THEREFORE, in consideration of the Warrantholder having executed and delivered the Loan Agreement and provided the financial accommodations contemplated therein, and in consideration of the mutual covenants and agreements contained herein, the Company and Warrantholder agree as follows:

 

 

SECTION 1.                                                 GRANT OF THE RIGHT TO PURCHASE SHARES.

 

(a)                                 For value received, the Company hereby grants to the Warrantholder, and the Warrantholder is entitled, upon the terms and subject to the conditions hereinafter set forth, to subscribe for and purchase from the Company, up to 73,452 Shares (as defined below) at a purchase price per Share equal to the Exercise Price (as defined below) . The number of Shares and the Exercise Price are subject to adjustment as provided in Section 8. As used herein, the following terms shall have the following meanings:

 

“Act” means the Securities Act of 1933, as amended.

 

“Business Day” means any day other than Saturday, Sunday or any other day on which banking institutions in the State of New York are closed for business.

 

“Deposit Agreement” means that certain Deposit Agreement dated November 17, 2016 by and among the Company, The Bank of New York Mellon as Depositary, and the Owners and Holders (each as defined therein) of American Depositary Shares, as amended and in effect from time to time.

 

“Depositary” has the meaning given in the Deposit Agreement.

 

“Exercise Price” means $9.53, subject to adjustment from time to time in accordance with the provisions of this Warrant.

 

“Liquid Sale” means the closing of a Merger Event in which the consideration received by the Company and/or its shareholders and/or holders of Shares, as applicable, consists solely of immediately available funds and/or Marketable Securities.

 

“Marketable Securities” in connection with a Merger Event means securities meeting all of the following requirements: (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by the Warrantholder in connection with the Merger Event were the Warrantholder to exercise this Warrant on or prior to the closing thereof is then traded on a national securities exchange or over-the-counter market, and (iii) following the closing of such Merger Event, the Warrantholder would not be restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be received by the Warrantholder in such Merger Event were the Warrantholder to exercise this Warrant in full on or prior to the closing of such Merger Event, except to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Merger Event.

 

“Merger Event” means any of the following: (i) a sale, assignment or other transfer or disposition of all or substantially all assets of the Company, (ii) any merger or consolidation involving the Company in which the Company is not the surviving entity or in which the outstanding Shares and/or shares of the Company’s capital stock are otherwise converted into or exchanged for shares of capital stock or other securities or property of another entity, or (iii) any sale by holders of the outstanding Shares and/or the holders of Ordinary Shares in a single transaction or series of related transactions of such securities constituting a majority of the outstanding voting power of the Company.

 

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“Ordinary Shares” means the Company’s ordinary shares, par value £0.01 per  share.

 

“Purchase Price” means, with respect to any exercise of this Warrant, an amount equal to the then-effective Exercise Price multiplied by the number of Shares as to which this Warrant is then exercised.

 

“Shares” means the Company’s American Depositary Shares issued by the Depositary under the Deposit Agreement.

 

SECTION 2.                                                 TERM OF THE AGREEMENT.

 

The term of this Agreement and the right to purchase Shares as granted herein shall commence on the Effective Date and, subject to Section 8(a) below, shall be exercisable until 5:00 p.m. (Eastern Time) on the fifth (5th) anniversary of the Effective Date.

 

SECTION 3.                                                 EXERCISE OF THE PURCHASE RIGHTS.

 

(a)                                 Exercise. Subject to the terms and conditions hereof, the purchase rights set forth in this Agreement may be exercised by the Warrantholder, in whole or in part, at any time, or from time to time, prior to the expiration of the term set forth in Section 2, by (i) tendering to the Company at its respective address set forth herein a notice of exercise in the form attached hereto as Exhibit I (the “Notice of Exercise”), duly completed and executed; and (ii) delivery of the Purchase Price to the Company.  Promptly following the Warrantholder’s delivery of the Notice of Exercise and the clearance of the funds in payment of the Purchase Price in accordance with the terms set forth below, and in no event later than three (3) Business Days thereafter, the Company shall (x) issue and deposit with the Depositary a number of Ordinary Shares that will be represented by the number of Shares to which the Warrantholder is entitled in respect of that exercise, and (y) cause the Depositary to execute and deliver to that Warrantholder a Receipt (as defined in the Deposit Agreement) evidencing the number of Shares purchased, or credit the same via book entry to the Warrantholder. The Company shall withhold any and all taxes which must be withheld with respect to the issuance and delivery of Shares upon exercise of this Warrant. The Company shall execute the acknowledgment of exercise in the form attached hereto as Exhibit II (the “Acknowledgment of Exercise”) indicating the number of Shares which remain subject to future purchases under this Warrant, if any.

 

The Purchase Price may be paid at the Warrantholder’s election either (i) in cash, by certified or bank check or by wire transfer of immediately available funds to an account designated in writing by the Company (“Cash Exercise”), or (ii) by surrender of all or a portion of this Warrant for Shares to be exercised under this Agreement (“Net Issuance”). If the Warrantholder elects the Net Issuance method: (i) the Company shall, subject to receipt by the Company of the Issuance Price (as defined below), cause the Depositary to issue Shares totaling “X” as calculated in accordance with formula (1) specified below; (ii) the Warrantholder, as a condition of making that exercise, shall pay the Company in full, in cash by check or in immediately available funds, an amount (“Z”) calculated in accordance with formula (2) specified below (“Issuance Price”); and (iii) without delay following receipt of the Issuance Price, the Company shall pay the Warrantholder, in cash by check or in immediately available funds, the rounding difference (“D”), if any, calculated in accordance with formula (3) specified below:

 

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Where:                                                         X =                             the number of Shares to be issued to the Warrantholder, rounded down to the nearest whole number, with respect to such Net Issuance.

 

Y =                             the number of Shares as to which this Agreement is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Purchase Price).

 

Z =                              the Issuance Price payable by the Warrantholder to the Company with respect to such Net Issuance.

 

A =                             the then-current fair market value of one (1) Share at the time of exercise of this Warrant.

 

B =                             the then-effective Exercise Price.

 

C = the then-nominal value of one Ordinary Share, at the time of issuance of such Shares, multiplied by the number of Ordinary Shares receivable by a holder of a Share upon conversion of one Share to Ordinary Shares.

 

D =                             the rounding difference (if any) payable by the Company to the Warrantholder with respect to such Net Issuance.

 

For purposes of the above calculation, the current fair market value of a Share shall be determined as follows:

 

(i)                                     at all times when Shares traded on a national securities exchange, inter- dealer quotation system or over-the-counter bulletin board service, the average of the closing prices over a five (5) day period ending three days before the day the current fair market value of the Shares is being determined;

 

(ii)                                  if the exercise is in connection with a Merger Event, the fair market value of a Share shall be deemed to be the per Share value received by the holders of the outstanding Shares pursuant to such Merger Event as determined in accordance with the definitive transaction documents executed among the parties in connection therewith; or

 

(iii)                               in cases other than as described in the foregoing clauses (i) and (ii), the current fair market value of a Share shall be determined in good faith by the Company’s Board of Directors.

 

Upon partial exercise by either Cash Exercise or Net Issuance, prior to the expiration or earlier termination hereof, the Company shall promptly issue an amended Agreement representing the remaining number of Shares purchasable hereunder. All other terms

 

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and conditions of such amended Agreement shall be identical to those contained herein, including, but not limited to the Effective Date hereof.

 

(b)                                 Exercise Prior to Expiration. To the extent this Warrant is not previously exercised as to all Shares subject hereto prior to the expiration of the term set forth in Section 2 hereof, and if the then-current fair market value of one Share is greater than the Exercise Price then in effect, this Agreement shall be deemed automatically exercised in full on a Net Issuance basis pursuant to Section 3(a) (even if not surrendered) as of immediately before its expiration determined in accordance with Section 2. For purposes of such automatic exercise, the fair market value of one Share upon such expiration shall be determined pursuant to Section 3(a). To the extent this Warrant or any portion hereof is deemed automatically exercised pursuant to this Section 3(b), the Company shall promptly notify the Warrantholder of the number of Shares if any, the Warrantholder is to receive by reason of such automatic exercise and, subject to receipt of the Issuance Price with respect to the Net Issuance, (x) promptly issue and deposit with the Depositary a number of Ordinary Shares that will be represented by the number of Shares to which the Warrantholder is entitled in respect of such exercise, and (y) promptly cause the Depositary to execute and deliver to that Warrantholder a Receipt (as defined in the Deposit Agreement) evidencing the number of Shares purchased, or credit the same via book entry to the Warrantholder.

 

(c)                                  Treatment on Liquid Sale. Notwithstanding anything contained in this Agreement to the contrary, in the case of a Liquid Sale where the then-current fair market value of one Share (as determined as of the closing of such Liquid Sale in accordance with the definitive agreements executed by the parties in connection therewith) to be paid to the holders thereof is greater than the Exercise Price then in effect, the Company shall, contingent upon such closing, cause this Warrant to be exchanged for the consideration that the Warrantholder would have received in respect of the Shares issuable on exercise hereof had it exercised this Warrant in full by Cash Exercise as of immediately prior to such closing, net of the Purchase Price therefor, as and when such consideration is paid to the holders of the outstanding Shares.

 

(d)                                 Admission. At any time when the Ordinary Shares are admitted to trading on AIM or listed on the Official List of the Financial Conduct Authority, the Company shall apply for the Ordinary Shares to be issued pursuant to any exercise of this Warrant to be admitted to trading on AIM or listed on the Official List of the Financial Conduct Authority (as applicable).

 

(e)                                  Currency.                                           Payment by the Warrantholder of the Issuance Price and/or any other amounts designated in UK Pounds or other non-US Dollar currency may be made in US Dollars using the applicable closing exchange rate published in the on-line edition of the Wall Street Journal for the business day immediately preceding the date on which such payment is made.

 

SECTION 4.                                                 RESERVATION AND DEPOSIT OF SHARES.

 

During the term of this Agreement, the Company shall, at all times and at its sole expense, reserve a sufficient number of authorized Ordinary Shares, free from all liens, claims and encumbrances thereon, to provide for the issuance to the Warrantholder of the Shares upon exercise of this Warrant.

 

SECTION 5.                                                 NO FRACTIONAL SHARES OR SCRIP.

 

No fractional Shares or scrip representing fractional Shares shall be issued upon the exercise of this Agreement, but should any fractional Share interest arise, then in lieu of such

 

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fractional Share the Company shall make a cash payment therefor in an amount equal to the product of (a)(i) the then-fair market value of one Share (determined in accordance with Section 3(a) above, less (ii) the Exercise Price then in effect, multiplied by (b) such fraction of a Share.

 

SECTION 6.                                                 NO RIGHTS AS SHAREHOLDER

 

Without limitation of any provision hereof, the Warrantholder acknowledges and agrees that (i) this Agreement does not entitle the Warrantholder to any voting rights or other rights as a holder of Shares unless and until the exercise hereof and then only with respect to the Shares issued upon such exercise, (ii) ownership of Shares does not entitle the holder thereof to any rights as a holder of Ordinary Shares.

 

SECTION 7.                                                 WARRANTHOLDER REGISTRY.

 

The Company shall maintain a registry showing the name and address of the registered holder of this Agreement. The Warrantholder’s initial address, for purposes of such registry, is set forth in Section 12(g) below. The Warrantholder may change such address by giving written notice of such changed address to the Company.

 

SECTION 8.                                                 ADJUSTMENT RIGHTS.

 

The Exercise Price and the number of Shares purchasable hereunder are subject to adjustment from time to time, as follows:

 

(a)                                 Merger Event. In connection with a Merger Event that is not a Liquid Sale, the Company shall cause the successor or surviving entity to assume this Warrant and the obligations of the Company hereunder on the closing thereof, and thereafter this Warrant shall be exercisable for the same number and type of securities or other property as the Warrantholder would have received in consideration for the Shares issuable hereunder had it exercised this Warrant in full as of immediately prior to such closing, at an aggregate Exercise Price no greater than the aggregate Exercise Price in effect as of immediately prior to such closing, and subject to further adjustment from time to time in accordance with the provisions of this Warrant. The provisions of this Section 8(a) shall similarly apply to successive non-Liquid Sale Merger Events.

 

(b)                                 Reclassification of Shares. Except for Merger Events subject to Section 8(a), if the Company at any time shall, by combination, reclassification, exchange or subdivision of securities or otherwise, change any of the securities as to which purchase rights under this Agreement exist into the same or a different number of securities of any other class or classes of securities, this Agreement shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities which were subject to the purchase rights under this Agreement immediately prior to such combination, reclassification, exchange, subdivision or other change. The provisions of this Section 8(b) shall similarly apply to successive combination, reclassification, exchange, subdivision or other change.

 

(c)                                  Subdivision or Combination of Shares. If the Company or Depositary at any time shall combine or subdivide the outstanding Shares, or if the Company shall at any time combine or subdivide its outstanding Ordinary Shares in respect of which the Shares are issued, (i)                    in the case of a subdivision, the Exercise Price shall be proportionately decreased (solely to the extent that such decrease would not result in a contravention of section 580 of the UK Companies Act 2006) and the number of Shares for which this Warrant is exercisable shall be proportionately increased, or (ii) in the case of a combination, the Exercise Price shall be proportionately

 

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increased and the number of Shares for which this Warrant is exercisable shall be proportionately decreased.

 

(d)                                 Dividends. If the Company or Depositary at any time while this Agreement is outstanding and unexpired shall:

 

(i)                                     pay a dividend with respect to the outstanding Shares or the Ordinary Shares in respect of which the Shares are issued, payable in additional Shares, then the Exercise Price shall be adjusted, from and after the date of determination of holders of Shares entitled to receive such dividend, to that price determined by multiplying the Exercise Price in effect immediately prior to such date of determination by a fraction (A) the numerator of which shall be the total number of Shares outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be the total number of Shares outstanding immediately after such dividend or distribution, and the number of Shares for which this Warrant is exercisable shall be proportionately increased; or

 

(ii)                                  make any other dividend or distribution on or with respect to the outstanding Shares or the Ordinary Shares in respect of which the Shares are issued, except any dividend or distribution specifically provided for in any other clause of this Section 8, then, in each such case, provision shall be made by the Company such that the Warrantholder shall receive upon exercise or conversion of this Warrant a proportionate share of any such dividend or distribution as though it were the holder of the Shares issuable on exercise hereof as of the record date fixed for the determination of the holders of Shares entitled to receive such dividend or distribution.

 

(e)                                  Notice of Certain Events. If: (i) the Company or Depositary shall declare any dividend or distribution upon the outstanding Shares or the Ordinary Shares of the Company in respect of which the Shares are issued, payable in shares, cash, property or other securities (provided that the Warrantholder (in its capacity as agent under the Loan Agreement) and the Lenders consent to such dividend); (ii) the Company or Depositary shall offer for subscription pro rata to the holders of outstanding Shares any additional Shares or any other security of any class, or other rights to acquire same; (iii) there shall be any Merger Event; or (iv) there shall be any voluntary dissolution, liquidation or winding up of the Company or the Depositary; then, in connection with each such event, the Company shall give the Warrantholder notice thereof at the same time and in the same manner as it gives notice thereof to the holders of outstanding Shares. In addition, if at any time the number of Shares outstanding is reduced such that the number of Shares or other securities issuable upon exercise of this Warrant shall exceed five percent (5%) of the then outstanding Shares, then, within three (3) Business Days of such event, the Company shall give the Warrantholder written notice thereof.

 

SECTION 9.                                                 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.

 

(a)         Reservation of Shares. The Company covenants and agrees that it shall take any and all actions, and shall cause the Depositary to take any and all actions, necessary so that all Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and non-assessable, and will be free of any taxes, liens, charges or encumbrances of any nature whatsoever; provided, that the Shares issuable pursuant to this Agreement may be subject to restrictions on transfer under US state and/or federal securities laws. The Company has made available to the Warrantholder true, correct and complete copies of the Deposit Agreement currently in effect together with all other agreements

 

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and documents governing the Shares. The issuance of certificates or book-entry credit for Shares upon exercise of this Warrant shall be made without charge to the Warrantholder for any issuance tax in respect thereof, or other cost incurred by the Depositary in connection with such exercise and related issuance of Shares.

 

(b)         Due Authority. The execution and delivery by the Company of this Agreement and the performance of all obligations of the Company hereunder, including the issuance to the Warrantholder of the right to acquire the Shares, have been duly authorized by all necessary corporate action on the part of the Company. This Agreement: (i) does not violate the Deposit Agreement or the Company’s organizational and other governing documents; (ii) does not contravene any law or governmental rule, regulation or order applicable to the Company; and (iii) except as could not reasonably be expected to have a Material Adverse Effect (as defined in the Loan Agreement), does not and will not contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument to which the Company or Depositary is a party or by which it is bound. This Agreement constitutes a legal, valid and binding agreement of the Company, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally (including, without limitation, fraudulent conveyance laws) and by general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

(c)          Consents and Approvals. No consent or approval of, giving of notice to, registration with, or taking of any other action in respect of any US or non-US state, federal or other governmental authority or agency is required with respect to the execution, delivery and performance by the Company of its obligations under this Agreement, except for the filing of notices pursuant to Regulation D promulgated under the Act (“Regulation D”) and any filing required by applicable state securities law, which filings, if required, will be effective by the time required thereby.

 

(d)         Exempt Transaction. Subject to the accuracy of the Warrantholder’s representations in Section 10, the issuance of the Shares upon exercise of this Agreement will constitute a transaction exempt from (i) the registration requirements of Section 5 of the Act, in reliance upon Section 4(a)(2) thereof, and (ii) the qualification requirements of the applicable US state securities laws.

 

(e)          Information Rights.  At all times (if any) prior to the earlier to occur of (x) the date on which all Shares issued on exercise of this Warrant have been sold, or (y) the expiration or earlier termination of this Warrant, when the Company shall not be required to file reports pursuant to Section 13 or 15(d) of the Exchange Act or shall not have timely filed all such required reports, the Warrantholder shall be entitled to the information rights contained in Section 7.1(b) — (f) of the Loan Agreement, and in any such event Section 7.1(b) — (f) of the Loan Agreement is hereby incorporated into this Agreement by this reference as though fully set forth herein, provided, however, that the Company shall not be required to deliver a Compliance Certificate once all Indebtedness (as defined in the Loan Agreement) owed by the Borrower and the Company to Warrantholder and the Lenders has been repaid.

 

(f)           [Intentionally Omitted].

 

(g)          Rule 144 Compliance. The Company shall, at all times during the period commencing on the first date on which any Shares issued on exercise of this Warrant may be sold by the Warrantholder pursuant to Rule 144 without volume limitation or other restriction and ending on the earlier to occur of (i) the date of sale or other disposition by Warrantholder of all Shares issued on exercise of this Warrant, or (ii) the expiration or earlier termination of this Warrant if the Warrant has not been exercised in full or in part on such date, use all commercially reasonable efforts to timely file all reports required under the Exchange Act and otherwise timely

 

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take all actions necessary to permit the Warrantholder to sell or otherwise dispose of this Warrant and the Shares issued on exercise hereof pursuant to Rule 144, provided that the foregoing shall not apply in the event of a Merger Event following which the successor or surviving entity is not subject to the reporting requirements of the Exchange Act. If the Warrantholder proposes to sell Shares issuable upon the exercise of this Agreement in compliance with Rule 144, then, upon the Warrantholder’s written request to the Company, the Company shall furnish to the Warrantholder, within five (5) Business Days after receipt of such request, a written statement confirming the Company’s compliance with the filing and other requirements of Rule 144.

 

SECTION 10.                                          REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.

 

This Agreement has been entered into by the Company in reliance upon the following representations and covenants of the Warrantholder:

 

(a)         Investment Purpose. This Warrant and the Shares issued on exercise hereof will be acquired for investment and not with a view to the sale or distribution of any part thereof in violation of applicable federal and state securities laws, and the Warrantholder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.

 

(b)         Private Issue. The Warrantholder understands that (i) the Shares issuable upon exercise of this Agreement are not, as of the Effective Date, registered under the Act or qualified under applicable US state securities laws, and (ii) the Company’s reliance on exemption from such registration is predicated on the representations set forth in this Section 10.

 

(c)          Financial Risk. The Warrantholder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment.

 

(d)         Accredited Investor. The Warrantholder is an “accredited investor” within the meaning of Rule 501 of Regulation D.

 

(e)          Restricted Securities. Without limitation of the Company’s obligations under Section 9(f) above, the Warrantholder understands that unless and until a registration statement is effective under the Act covering the resale of the Shares issuable upon exercise of this Warrant, it may be required to hold such securities and may not be able to sell such securities when desired. The Warrantholder also understands that any sale of this Warrant or Shares issued hereunder that may be made by it in reliance upon Rule 144 may be made only in accordance with the terms and conditions thereof.

 

(f)           No Short Sales. The Warrantholder has not at any time on or prior to the Effective Date engaged in any short sales or equivalent transactions in the Shares or the Ordinary Shares in respect of which the Shares are issued. Warrantholder agrees that at all times from and after the Effective Date and on or before the expiration or earlier termination of this Warrant, it shall not engage in any short sales or equivalent transactions in the Shares or the Ordinary Shares in respect of which the Shares are issued.

 

SECTION 11. TRANSFERS.

 

Subject to compliance with applicable US federal and state securities laws, this Agreement and all rights hereunder are transferable, in whole or in part, without charge to the holder hereof (except for transfer taxes) upon surrender of this Agreement properly endorsed. Each taker and holder of this Agreement, by taking or holding the same, consents and agrees that this Agreement, when endorsed in blank, shall be deemed negotiable, and that the holder hereof, when this Agreement shall have been so endorsed and its transfer recorded on the Company’s

 

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books, shall be treated by the Company and all other persons dealing with this Agreement as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented by this Agreement. The transfer of this Agreement shall be recorded on the books of the Company upon receipt by the Company of a notice of transfer in the form attached hereto as Exhibit III (the “Transfer Notice”), at its principal offices and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. Until the Company receives such Transfer Notice, the Company may treat the registered owner hereof as the owner for all purposes. Notwithstanding anything herein or in any legend to the contrary, the Company shall not require an opinion of counsel in connection with any sale, assignment or other transfer by the Warrantholder of this Warrant (or any portion hereof or any interest herein) or of any Shares issued upon any exercise hereof to an affiliate (as defined in Regulation D) of the Warrantholder, provided that such affiliate is an “accredited investor” as defined in Regulation D.

 

SECTION 12. MISCELLANEOUS.

 

(a)         Effective Date. The provisions of this Agreement shall be construed and shall be given effect in all respects as if it had been executed and delivered by the Company on the date hereof. This Agreement shall be binding upon any successors or assigns of the Company.

 

(b)         Remedies. In the event of any default hereunder, the non-defaulting party may proceed to protect and enforce its rights either by suit in equity and/or by action at law, including but not limited to an action for damages as a result of any such default, and/or an action for specific performance for any default where the Warrantholder will not have an adequate remedy at law and where damages will not be readily ascertainable.

 

(c)          No Impairment of Rights. The Company will not, by amendment of its organizational or other governing documents or the Deposit Agreement, or through any other means, avoid or seek to avoid the observance or performance of any of the terms of this Agreement, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate in order to protect the rights of the Warrantholder against impairment.

 

(d)         [Reserved].

 

(e)          Attorneys’ Fees. In any litigation, arbitration or court proceeding between the Company and the Warrantholder relating hereto, the prevailing party shall be entitled to attorneys’ fees and expenses and all costs of proceedings incurred in enforcing this Agreement. For the purposes of this Section 12(e), attorneys’ fees shall include without limitation fees incurred in connection with the following: (i) contempt proceedings; (ii) discovery; (iii) any motion, proceeding or other activity of any kind in connection with an insolvency proceeding; (iv) garnishment, levy, and debtor and third party examinations; and (v) post-judgment motions and proceedings of any kind, including without limitation any activity taken to collect or enforce any judgment.

 

(f)           Severability. In the event any one or more of the provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable, the remaining provisions of this Agreement shall be unimpaired, and the invalid, illegal or unenforceable provision shall be replaced by a mutually acceptable valid, legal and enforceable provision, which comes closest to the intention of the parties underlying the invalid, illegal or unenforceable provision.

 

(g)          Notices. Except as otherwise provided herein, any notice, demand, request, consent, approval, declaration, service of process or other communication that is required, contemplated, or permitted under this Agreement or with respect to the subject matter hereof shall be in writing, and shall be deemed to have been validly served, given, delivered, and received upon the earlier

 

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of: (i) personal delivery to the party to be notified, (ii) when sent by confirmed telex, electronic transmission or facsimile if sent during normal business hours of the recipient, if not, then on the next Business Day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, and shall be addressed to the party to be notified as follows:

 

If to the Warrantholder:

 

HERCULES CAPITAL, INC.

Legal Department

Attention: Chief Legal Officer

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

Facsimile: 650-473-9194

Telephone: 650-289-3060

 

If to the Company:

 

Motif Bio Plc

Attention: Chief Financial Officer

125 Park Avenue, 25th Floor

New York, NY 10011

Facsimile:

Telephone:

Email:

 

or to such other address as each party may designate for itself by like notice.

 

(h)         Entire Agreement; Amendments. This Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof, and supersedes and replaces in their entirety any prior proposals, term sheets, letters, negotiations or other documents or agreements, whether written or oral, with respect to the subject matter hereof. None of the terms of this Agreement may be amended except by an instrument executed by each of the parties hereto.

 

(i)             Headings. The various headings in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any provisions hereof.

 

(j)            Advice of Counsel. Each of the parties represents to each other party hereto that it has discussed (or had an opportunity to discuss) with its counsel this Agreement and, specifically, the provisions of Sections 12(n), 12(o), 12(p), 12(q) and 12(r).

 

(k)         No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

 

(l)             No Waiver. No omission or delay by the Warrantholder at any time to enforce any right or remedy reserved to it, or to require performance of any of the terms, covenants or provisions hereof by the Company at any time designated, shall be a waiver of any such right or

 

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remedy to which the Warrantholder is entitled, nor shall it in any way affect the right of the Warrantholder to enforce such provisions thereafter during the term of this Agreement.

 

(m)     Survival. All agreements, representations and warranties contained in this Agreement or in any document delivered pursuant hereto shall be for the benefit of the Warrantholder and shall survive the execution and delivery of this Agreement and the expiration or other termination of this Agreement.

 

(n)         Governing Law. This Agreement has been negotiated and delivered to the Warrantholder in the State of New York, and shall be deemed to have been accepted by the Warrantholder in the State of New York. Delivery of Shares to the Warrantholder by the Company or Depositary under this Agreement is due in the State of New York. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction.

 

(o)         Consent to Jurisdiction and Venue. All judicial proceedings arising in or under or related to this Agreement may be brought in any state or federal court of competent jurisdiction located in the State of New York.  By execution and delivery of this Agreement, each party hereto generally and unconditionally: (i) consents to personal jurisdiction in New York County, State of New York; (ii) waives any objection as to jurisdiction or venue in New York County, State of New York; (iii) agrees not to assert any defense based on lack of jurisdiction or venue in the aforesaid courts; and (iv) irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. Service of process on any party hereto in any action arising out of or relating to this Agreement shall be effective if given in accordance with the requirements for notice set forth in Section 12(g), and shall be deemed effective and received as set forth in Section 12(g).  Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of either party to bring proceedings in the courts of any other jurisdiction.

 

(p)         Mutual Waiver of Jury Trial. Because disputes arising in connection with complex financial transactions are most quickly and economically resolved by an experienced and expert person and the parties wish applicable state and federal laws to apply (rather than arbitration rules), the parties desire that their disputes arising under or in connection with this Warrant be resolved by a judge applying such applicable laws. EACH OF THE COMPANY AND THE WARRANTHOLDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM (COLLECTIVELY, “CLAIMS”) ASSERTED BY THE COMPANY AGAINST THE WARRANTHOLDER OR ITS ASSIGNEE OR BY THE WARRANTHOLDER OR ITS ASSIGNEE AGAINST THE COMPANY RELATING TO THIS WARRANT. This waiver extends to all such Claims, including Claims that involve persons or entities other the Company and the Warrantholder; Claims that arise out of or are in any way connected to the relationship between the Company and the Warrantholder; and any Claims for damages, breach of contract, specific performance, or any equitable or legal relief of any kind, arising out of this Agreement.

 

(q)         Arbitration. If the Mutual Waiver of Jury Trial set forth in Section 12(p) is ineffective or unenforceable, the parties agree that all Claims shall be submitted to binding arbitration in accordance with the commercial arbitration rules of JAMS, such arbitration to occur before one arbitrator, which arbitrator shall be a retired New York state judge or a retired Federal court judge. Such proceeding shall be conducted in New York County, State of New York, with New York rules of evidence and discovery applicable to such arbitration. The decision of the arbitrator shall be binding on the parties, and shall be final and nonappealable to the maximum

 

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extent permitted by law. Any judgment rendered by the arbitrator may be entered in a court of competent jurisdiction and enforced by the prevailing party as a final judgment of such court.

 

(r)            Pre-arbitration Relief. In the event Claims are to be resolved by arbitration, either party may seek from a court of competent jurisdiction identified in Section 12(o), any prejudgment order, writ or other relief and have such prejudgment order, writ or other relief enforced to the fullest extent permitted by law notwithstanding that all Claims are otherwise subject to resolution by binding arbitration.

 

(s)           Counterparts. This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts (including by facsimile or electronic delivery (PDF), and by different parties hereto in separate counterparts, each of which when so delivered shall be deemed an original, but all of which counterparts shall constitute but one and the same instrument.

 

(t)            Specific Performance. The parties hereto hereby declare that it is impossible to measure in money the damages which will accrue to the Warrantholder or the Company by reason of the other party’s failure to perform any of the obligations under this Agreement and agree that the terms of this Agreement shall be specifically enforceable by the Warrantholder and the Company. If the Warrantholder and the Company institutes any action or proceeding to specifically enforce the provisions hereof, any person against whom such action or proceeding is brought hereby waives the claim or defense therein that the Company or the Warrantholder, respectively has an adequate remedy at law, and such person shall not offer in any such action or proceeding the claim or defense that such remedy at law exists.

 

(u)         Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.

 

(v)         Legends. To the extent required by applicable laws, this Warrant and the Shares issuable hereunder may be imprinted with a restricted securities legend in substantially the following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION RELATED THERETO OR, SUBJECT TO SECTION 11 OF THE WARRANT AGREEMENT DATED NOVEMBER 14, 2017, BETWEEN MOTIF BIO PLC (THE “COMPANY”) AND HERCULES CAPITAL, INC., AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL) REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR SUCH LAWS.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement to be executed by its officers thereunto duly authorized as of the Effective Date.

 

 

	
COMPANY:
    	
MOTIF BIO PLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert Dickey IV
    
	
 
    	
Name:
    	
Robert Dickey IV
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
WARRANTHOLDER:
    	
HERCULES CAPITAL, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Zhuo Huang
    
	
 
    	
Name:
    	
Zhuo Huang
    
	
 
    	
Title:
    	
Associate General Counsel
    

 

Signature Page to Warrant Agreement

 

 

EXHIBIT I

 

NOTICE OF EXERCISE

 

To:                             [                               ]

 

(1)                                 The undersigned Warrantholder hereby elects to purchase [           ] American Depositary Shares of Motif Bio Plc (the “Company”), pursuant to the terms of the Warrant Agreement dated November 14, 2017 (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Warrant Agreement”) between the Company and the Warrantholder, and tenders herewith payment of the Purchase Price in full, together with all applicable transfer taxes, if any. [NET ISSUANCE: elects pursuant to Section 3(a) of the Warrant Agreement to effect a Net Issuance and tender payment of the Issuance Price.]

 

(2)                                 Please issue a certificate or certificates or book-entry credit(s) representing said Shares in the name of the undersigned or in such other name as is specified below.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Name)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Address)
    
	
 
    	
 
    
	
 
    	
 
    
	
WARRANTHOLDER:
    	
HERCULES   CAPITAL, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

15

 

EXHIBIT II

 

ACKNOWLEDGMENT OF EXERCISE

 

The undersigned [                            ], hereby acknowledges receipt of the “Notice of Exercise” from Hercules Capital, Inc. to purchase [          ] American Depositary Shares of Motif Bio Plc, pursuant to the terms of the Warrant Agreement by and between Motif Bio Plc and Hercules Capital, Inc. dated November 14, 2017 (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Agreement”), and further acknowledges that [            ] shares remain subject to purchase under the terms of the Agreement.

 

 

	
COMPANY:
    	
[                ]
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
 
    

 

16

 

EXHIBIT III

 

TRANSFER NOTICE

 

(To transfer or assign the foregoing Agreement execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Agreement and all rights evidenced thereby are hereby transferred and assigned to

 

	
 
    	
 
    
	
(Please   Print)
    	
 
    
	
 
    	
 
    
	
whose   address is
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Holder’s   Signature:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Holder’s   Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature   Guaranteed:
    	
 
    	
 
    
						

 

NOTE: The signature to this Transfer Notice must correspond with the name as it appears on the face of the Agreement, without alteration or enlargement or any change whatever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Agreement.

 

17Exhibit 4.23

 

EXECUTION COPY

 

REGISTRATION AGREEMENT

 

THIS REGISTRATION AGREEMENT is entered into as of November 14, 2017 by and between Motif Bio Plc, a public limited company incorporated in England and Wales (the “Company”), and Hercules Capital, Inc., a Maryland corporation (“Hercules”).

 

RECITALS

 

WHEREAS, in connection with the transactions contemplated by that certain Loan and Security Agreement of even date herewith (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Loan Agreement”), among Motif BioSciences Inc., a Delaware corporation (the “Borrower”), Hercules and the lenders party thereto (the “Lenders”), the Company has issued to Hercules that certain Warrant Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Warrant”), representing the right of Hercules to purchase certain American Depositary Shares of the Company (together with any securities for which the outstanding American Depositary Shares of the Company are exchanged or substituted pursuant to a reorganization, recapitalization, exchange offer or the like, “American Depositary Shares”);

 

WHEREAS, the Company is the direct parent of Motif BioSciences Inc., a Delaware corporation (the “Borrower”), and the Company acknowledges and agrees that it shall derive direct and indirect benefits from the provision of loans and other financial accommodations by Hercules and the Lenders to the Borrower pursuant to the Loan Agreement;

 

WHEREAS, as additional consideration to Hercules for its agreements in the Loan Agreement, the Company has agreed to use commercially reasonable efforts to cause the Registrable Securities (as defined below) to be registered for re-sale by Hercules (and/or its assignees or transferees) under the Securities Act (as defined below) pursuant to and in accordance with this Agreement;

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I
 DEFINITIONS

 

Section 1.1 Definitions. In addition to the definitions set forth above, the following  terms, as used herein, have the following meanings:

 

“Affiliate” of any Person means any other Person directly or indirectly controlling or controlled by or under common control with such Person. For the purposes of this definition, “control” when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

 

“Agreement” means this Registration Agreement, as it may be amended, supplemented or restated from time to time.

 

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in the City of New York, New York are authorized by law to close.

 

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

 

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

 

“Holder” means Hercules together with any successor thereto and/or any assignee of the Warrant or any portion thereof.

 

“Indemnified Party” has the meaning set forth in Section 2.7.

 

“Indemnifying Party” has the meaning set forth in Section 2.7.

 

“Person” means an individual or a corporation, partnership, limited liability company, association, trust, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

“Registrable Securities” means the American Depositary Shares issued and issuable upon exercise of the Warrant, together with all American Depositary Shares, if any, issued to Holder in respect thereof by way of a share dividend or split or otherwise, until the earliest of (i) a registration statement (including a Shelf Registration Statement) covering such American Depositary Shares has been declared effective by the Commission and such American Depositary Shares have been disposed of pursuant to such effective registration statement, (ii) such American Depositary Shares can be publicly sold under Rule 144 without volume limitation or other restriction and, upon any proposed sale by Holder pursuant to Rule 144, counsel for the Company shall have delivered all required legal opinions, if any, necessary for the Company’s transfer agent to effect such sale within two (2) business days thereafter, or (iii) the third (3rd) anniversary of the effective date of the Shelf Registration Statement.

 

“Registration Expenses” has the meaning set forth in Section 2.4.

 

“Required Date” means the date that is one hundred eighty (180) days after the date hereof.

 

“Resale Shelf Registration” has the meaning set forth in Section 2.1(a).

 

“Rule 144” means Rule 144 promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto that may be promulgated by the Commission.

 

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

 

“Shelf Registration Statement” has the meaning set forth in Section 2.1(a).

 

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“Suspension Notice” means any written notice delivered by the Company pursuant to Section 2.11 with respect to the suspension of rights under a Shelf Registration Statement or any prospectus contained therein.

 

“Underwriter” means a securities dealer who purchases any Registrable Securities as principal and not as part of such dealer’s market-making activities.

 

ARTICLE II
 REGISTRATION

 

Section 2.1                                    Shelf Registration.

 

(a)                                 Subject to Section 2.11, the Company agrees that it shall, promptly following the date hereof, prepare and file with the Commission, and thereafter use commercially reasonable efforts to cause to become effective as soon thereafter as practicable but in no event later than the Required Date, a “shelf” registration statement with respect to the resale of the Registrable Securities (“Resale Shelf Registration”) by Holder on Form S-3 or F-3 (or, if the Company is not then eligible to use Form S-3 or F- 3, such other appropriate form) for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act (the “Shelf Registration Statement”) and permitting the resale of such Registrable Securities by such Holder in accordance with the methods of distribution set forth in the Shelf Registration Statement. The Company shall use commercially reasonable efforts to keep such Shelf Registration Statement continuously effective for a period ending when all American Depositary Shares issued and issuable under the Warrant and covered by the Shelf Registration Statement are no longer Registrable Securities. Holder shall be named as a selling securityholder in the Shelf Registration Statement and the related prospectus.

 

(b)                                 [Intentionally Omitted].

 

(c)                                  Registration Term. The Company shall prepare and file such additional registration statements as necessary and use commercially reasonable efforts to cause such registration statements to be declared effective by the Commission so that a Shelf Registration Statement remains continuously effective, subject to Section 2.11, with respect to the Registrable Securities as and for the periods required under Section 2.1(a).

 

Section 2.2                                    [Intentionally Omitted].

 

Section 2.3 Registration Procedures; Filings; Information. Subject to Section 2.11 hereof, in connection with any Shelf Registration Statement under Section 2.1(a), the Company will use commercially reasonable efforts to effect the registration of the Registrable Securities covered thereby in accordance with the intended method of disposition thereof as quickly as practicable, but in no event later than the Required Date. In connection with any Shelf Registration Statement:

 

(a)                                 The Company will, if requested, prior to filing a Shelf Registration Statement or prospectus or any amendment or supplement thereto, furnish to Holder copies of such registration statement as proposed to be filed, and thereafter furnish to

 

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Holder, such number of conformed copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as Holder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by Holder.

 

(b)                                 After the filing of a Shelf Registration Statement, the Company will promptly notify Holder of any stop order issued or threatened by the Commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered and promptly notify Holder of the removal of such stop order.

 

(c)                                  The Company will use commercially reasonable efforts to (i) register or qualify the Registrable Securities under such other securities or “blue sky” laws of such jurisdictions in the United States (where such registration or qualification is required in order to sell in such jurisdiction and an exemption does not apply) as Holder reasonably (in light of Holder’s intended plan of distribution) requests and (ii) cause such  Registrable Securities to be registered with or qualified by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be reasonably necessary or advisable to enable Holder to consummate the disposition of the Registrable Securities owned by Holder; provided that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (c), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction.

 

(d)                                 The Company will immediately notify Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the Company’s receipt of any notification of the suspension of the qualification of any Registrable Securities covered by a Shelf Registration Statement for sale in any jurisdiction and will immediately notify Holder of the removal or lifting of any such suspension; or (ii) the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and promptly make available to Holder any such supplement or amendment.

 

(e)                                  The Company will otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission.

 

(f)                                   The Company will use commercially reasonable efforts to cause all Registrable Securities covered by such Shelf Registration Statement to be listed on the primary securities exchange on which the American Depositary Shares are then listed.

 

(g)                                  The Company may require Holder to promptly furnish in writing to the Company such information regarding Holder, the Registrable Securities held by it and the intended method of distribution of the Registrable Securities as the Company may from time to time reasonably request and as may be legally required in connection with such

 

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registration. Holder further agrees to furnish to the Company as soon as reasonably practicable all information required to be disclosed in order to make information previously furnished to the Company in writing by Holder and included by the Company in the Shelf Registration not materially misleading.

 

(h)                                 Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.3(b) or 2.3(d) or upon receipt of a Suspension Notice, Holder will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until Holder’s receipt of written notice from the Company that such disposition may be made and, in the case of clause (ii) of Section 2.3(d) or, if applicable, Section 2.11, copies of any supplemented or amended prospectus contemplated by clause (ii) of Section 2.3(d) or, if applicable, prepared under Section 2.11, and Holder will deliver to the Company all copies then in Holder’s possession, other than permanent file copies, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. Holder agrees that it will immediately notify the Company at any time when a prospectus relating to the registration of such Registrable Securities is required to be delivered under the Securities Act of the happening of an event as a result of which information previously furnished by Holder to the Company in writing for inclusion in such prospectus contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made.

 

Section 2.4 Registration Expenses. In connection with any registration  statement required to be filed hereunder, the Company shall pay the following registration expenses incurred in connection with the registration hereunder (the “Registration Expenses”): (i) all registration and filing fees, (ii) fees and expenses of compliance with securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), (iii) printing expenses, (iv) internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (v) the fees and expenses incurred in connection with the listing of the Registrable Securities, (vi) all fees and disbursements of counsel for the Company and all fees and expenses for independent certified public accountants retained by the Company, (vii) all fees and expenses of any special experts retained by the Company in connection with such registration; and (viii) not more than $20,000 in reasonable fees and expenses of not more than one (1) counsel to Holder. The Company shall have no obligation to pay any broker or underwriter fees, discounts or commissions attributable to the sale of Registrable Securities, or, except as otherwise set forth in this Agreement, any out-of-pocket expenses of Holder (or any agents who manages its accounts) or any transfer taxes relating to the registration or sale of the Registrable Securities.

 

Section 2.5 Indemnification by the Company. To the extent permitted by law, the Company will indemnify and hold harmless Holder, its partners, members, managers, officers and directors and each person, if any, who controls Holder within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such 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 (collectively a

 

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“Violation”) by the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein 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 not misleading, or (iii) any violation or alleged violation of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by such registration statement; and the Company will pay as incurred to Holder and/or each such partner, member, manager, officer, director, underwriter or controlling person for any legal or other expenses reasonably incurred by he, it or them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 2.5 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, delayed or conditioned, 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 by Holder under an instrument duly executed by Holder and stated to be specifically for use in connection with such registration.

 

Section 2.6 Indemnification by Holder. To the extent permitted by law, Holder will indemnify and hold harmless the Company, each of its directors and officers and each person, if any, who controls the Company within the meaning of the Securities Act, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer or controlling person may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such 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 (1) in reliance upon and in conformity with written information furnished by Holder under an instrument duly executed by Holder and stated to be specifically for use in connection with such registration, or (2) subject to the Company having complied with its obligations under Sections 2.3(a), (b) and (d) and 2.11 hereof, as a result of Holder’s failure to deliver any prospectus as required by applicable law or delivers same while a stop order or Suspension Notice is then in effect; and Holder will pay as incurred any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, or underwriter in connection with investigating or defending any such loss, claim, damage, liability or action if it is judicially determined that there was such a Violation; provided, however, that the indemnity agreement contained in this Section 2.6 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 Holder, which consent shall not be unreasonably withheld, delayed or conditioned; provided further, that in no event shall any indemnity under this Section 2.6 exceed the net proceeds from the offering and sale of Registrable Securities actually received by Holder.

 

Section 2.7 Conduct of Indemnification Proceedings.  In  case  any  proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 2.5 or 2.6, such person (an “Indemnified Party”) shall promptly notify the person against whom such indemnity may be sought (an “Indemnifying Party”) in writing and the Indemnifying Party shall assume the defense thereof,

 

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including the employment of counsel reasonably satisfactory to such Indemnified Party, and  shall assume the payment of all fees and expenses; provided, however, that the failure of any Indemnified Party to give such notice will not relieve such Indemnified Party of any obligations under Section 2.5 or 2.6, except to the extent such Indemnified Party is materially prejudiced by such failure. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) representation of the Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between the Indemnified Party and the Indemnified Party. It is understood that the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by (i) in the case of Persons indemnified pursuant to Section 2.5 hereof, Holder, and (ii) in the case of Persons indemnified pursuant to Section 2.6, the Company. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment. No Indemnifying Party shall, without the prior written consent  of the Indemnified Party, which consent shall not be unreasonably withheld, delayed or conditioned, consent to any entry of judgment or effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.

 

Section 2.8  Contribution.  If the indemnification provided for in Section 2.5 or 2.6  hereof is unavailable to an Indemnified Party or insufficient in respect of any losses, claims, damages or liabilities referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of the Company and of Holder in connection with such statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state  a material fact relates to information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

The Company and Holder agree that it would not be just and equitable if contribution pursuant to this Section 2.8 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding

 

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paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

Section 2.9                                    [Intentionally Omitted]. 

 

Section 2.10                             [Intentionally Omitted].

 

Section 2.11                             Suspension of Use of Registration Statement.

 

(a)                                 Notwithstanding anything to the contrary in this Agreement, if the Board of Directors of the Company determines in its reasonable good faith judgment that the filing of a Shelf Registration Statement under Section 2.1(a) or the use of any related prospectus would be materially detrimental to the Company because such action would require the disclosure of material information that the Company has a bona fide business purpose for preserving as confidential or the disclosure of which would materially impede the Company’s ability to consummate a significant transaction, and that the Company is not otherwise required by applicable securities laws or regulations to disclose, upon written notice of such determination by the Company to Holder which shall be signed by the Chief Executive Officer, President or any Executive Vice President of the Company certifying thereto, the rights of the Holder to offer, sell or distribute any Registrable Securities pursuant to a Resale Shelf Registration or to require the Company to take action with respect to the registration or sale of any Registrable Securities pursuant to a Shelf Registration Statement shall be suspended until the earliest of (i) the date upon which the Company notifies Holder in writing that suspension of such rights for the grounds set forth in this Section 2.11(a) is no longer necessary and they may resume use of the applicable prospectus, (ii) the date upon which copies of the applicable supplemented or amended prospectus is distributed to Holder, and (iii) up to 90 consecutive days after the notice to Holder; provided, that the Company shall not be entitled to exercise any such right more than two (2) times in any twelve month period or less than 30 days from the termination of the prior such suspension period. The  Company agrees to give the notice under (i) above as promptly as practicable following the date that such suspension of rights is no longer necessary.

 

(b)                                 If all reports required to be filed by the Company pursuant to the Exchange Act have not been filed by the required date without regard to any extension, or if the consummation of any business combination by the Company has occurred or is probable for purposes of Rule 3-05 or Article 11 of Regulation S-X promulgated under the Securities Act or any similar successor rule, upon written notice thereof by the Company to Holder, the rights of the Holder to offer, sell or distribute any Registrable Securities pursuant to a Shelf Registration Statement or to require the Company to take action with respect to the registration or sale of any Registrable Securities pursuant to a Shelf Registration Statement shall be suspended until the date on which the Company has filed such reports or obtained and filed the financial information required by Rule 3-05 or Article 11 of Regulation S-X to be included or incorporated by reference, as applicable, in a Shelf Registration Statement, and the Company shall notify Holder as promptly as practicable when such suspension is no longer required.

 

8

 

Section 2.12                             [Intentionally Omitted].

 

Section 2.13 Survival. The obligations of the Company and Holder under Sections 2.4 through 2.8 inclusive shall survive completion of any offering of Registrable Securities in a registration statement and the termination of this agreement.

 

ARTICLE III 

MISCELLANEOUS

 

Section 3.1  Remedies.  In addition to being entitled to exercise all rights provided   herein and granted by law, including recovery of damages, Holder shall be entitled to specific performance of the rights under this Agreement. The Company agrees that monetary damages may not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

 

Section 3.2  Amendments and Waivers.   The provisions of this Agreement, including   the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, in each case without the written consent of the Company and Holder. No failure or delay by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon any breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

 

Section 3.3 Notices. All notices and other communications in connection with this Agreement shall be made in writing by hand delivery, registered first-class mail, fax, or air courier guaranteeing overnight delivery to a party at its address as set forth in Section 12(g) of the Warrant or to such other address as a party may hereafter specify in writing in accordance with the requirements of such Section. All such notices and communications shall be deemed to have been duly given at the times set forth in Section 12(g) of the Warrant.

 

Section 3.4 Successors and Assigns; Assignment of  Registration  Rights.  This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties. Holder may assign its rights under this Agreement without the consent of the Company in connection with a transfer of the Warrant or any portion thereof.

 

Section 3.5 Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Each party shall become bound by this Agreement immediately upon affixing its signature hereto.

 

Section 3.6 Governing Law. This Agreement shall be governed by and construed in accordance with the internal domestic laws of the State of New York, without regard to its conflict of laws provisions.

 

Section 3.7 Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable,

 

9

 

the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

Section 3.8 Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement with respect to the subject matter hereof and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of such subject matter, and supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

Section 3.9 Headings. The headings in this Agreement are  for  convenience  of  reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 3.10 Termination. The obligations of the  parties  hereunder  shall  terminate when no Holder holds Registrable Securities, except, in each case, for any obligations under Sections 2.4, 2.5, 2.6, 2.7, 2.8 and Article III.

 

[Remainder of page left blank intentionally; signature page follows]

 

10

 

IN WITNESS WHEREOF, the undersigned have executed this Registration Agreement as of the date first written above.

 

 

	
 
    	
MOTIF BIO PLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert Dickey IV
    
	
 
    	
Name:
    	
Robert Dickey IV
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HERCULES CAPITAL, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Zhuo Huang
    
	
 
    	
Name:
    	
Zhuo Huang
    
	
 
    	
Title:
    	
Associate General   Counsel
    

 

Signature Page to Registration Agreement

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