Document:

Exhibit 10.5

  

SPONSOR WARRANTS PURCHASE AGREEMENT

 

THIS SPONSOR WARRANTS
PURCHASE AGREEMENT, dated as of February 25, 2021 (as it may from time to time be amended, this “Agreement”),
is entered into by and between Ibere Pharmaceuticals, a Cayman Islands exempted company (the “Company”),
and PIPV Capital LLC, a Delaware limited liability company (the “Purchaser”).

 

WHEREAS, the Company
intends to consummate an initial public offering of the Company’s units (the “Public Offering”),
each unit consisting of one Class A ordinary share of the Company, par value $0.0001 per share (each, an “Ordinary
Share”), and one-half of one redeemable warrant;

 

WHEREAS, each whole warrant
entitles the holder to purchase one Ordinary Share at an exercise price of $11.50 per Ordinary Share; and

 

WHEREAS, the Purchaser
has agreed to purchase an aggregate of 4,475,000 warrants (or up to 4,835,000 warrants if the over-allotment option in connection
with the Public Offering is exercised in full) (the “Sponsor Warrants”), each Sponsor Warrant entitling
the holder to purchase one Ordinary Share at an exercise price of $11.50 per Ordinary Share, as set forth in the Company’s
registration statement on Form S-1 related to the Public Offering (the “Registration Statement”).

 

NOW THEREFORE, in consideration
of the mutual promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:

 

AGREEMENT

 

Section 1.       
Authorization, Purchase and Sale; Terms of the Sponsor Warrants.

 

A.     
Authorization of the Sponsor Warrants. The Company has duly authorized the issuance and sale of the Sponsor Warrants
to the Purchaser.

 

B.      
Purchase and Sale of the Sponsor Warrants.

 

(i)          
As payment in full for the 4,475,000 Sponsor Warrants being purchased under this Agreement, Purchaser shall pay $4,475,000
(the “Purchase Price”), by wire transfer of immediately available funds or by such other method as may
be reasonably acceptable to the Company, to the trust account (the “Trust Account”) at a financial institution
to be chosen by the Company, maintained by Continental Stock Transfer & Trust Company, acting as trustee, at least one (1)
business day prior to the date of effectiveness of the Registration Statement.

 

(ii)         
In the event that the over-allotment option is exercised in full or in part, Purchaser shall purchase up to an additional
360,000 Sponsor Warrants (the “Additional Sponsor Warrants”), in the same proportion as the amount of
the over-allotment option that is exercised, and simultaneously with such purchase of Additional Sponsor Warrants, as payment in
full for the Additional Sponsor Warrants being purchased hereunder, and at least one (1) business day prior to the closing of all
or any portion of the over-allotment option, Purchaser shall pay $1.00 per Additional Sponsor Warrant, up to an aggregate amount
of $360,000, by wire transfer of immediately available funds or by such other method as may be reasonably acceptable to the Company,
to the Trust Account.

   

(iii)        
The closing of the purchase and sale of the Sponsor Warrants shall take place simultaneously with the closing of the Public
Offering (the “Initial Closing Date”). The closing of the purchase and sale of the Additional Sponsor
Warrants, if applicable, shall take place simultaneously with the closing of all or any portion of the over-allotment option (such
closing date, together with the Initial Closing Date, the “Closing Dates” and each, a “Closing
Date”). The closing of the purchase and sale of each of the Sponsor Warrants and the Additional Sponsor Warrants
shall take place at the offices of Ellenoff Grossman & Schole LLP, 1345 Avenue of the Americas, New York, New York, 10105,
or such other place as may be agreed upon by the parties hereto.

 

 

     

     

    

C.      
Terms of the Sponsor Warrants.

 

(i)          
Each Sponsor Warrant shall have the terms set forth in a Warrant Agreement to be entered into by the Company and a warrant
agent, in connection with the Public Offering (a “Warrant Agreement”).

 

(ii)         
At or prior to the time of the Initial Closing Date, the Company and the Purchaser shall enter into a registration rights
agreement (the “Registration Rights Agreement”) pursuant to which the Company will grant certain registration
rights to the Purchaser relating to the Sponsor Warrants and the Ordinary Shares underlying the Sponsor Warrants.

 

Section 2.            
Representations and Warranties of the Company. As a material inducement to the Purchaser to enter into this Agreement and purchase
the Sponsor Warrants, the Company hereby represents and warrants to the Purchaser (which representations and warranties shall survive
the Closing Date) that:

 

A.      Organization
and Corporate Power. The Company is an exempted company duly incorporated, validly existing and in good standing under
the laws of the Cayman Islands and is qualified to do business in every jurisdiction in which the failure to so qualify would
reasonably be expected to have a material adverse effect on the financial condition, operating results or assets of the Company.
The Company possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this
Agreement and the Warrant Agreement.

 

B.      Authorization; No Breach.

 

(i)          
The execution, delivery and performance of this Agreement and the Sponsor Warrants have been duly authorized by the Company
as of each Closing Date. This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance
with its terms. Upon issuance in accordance with, and payment pursuant to, the terms of the Warrant Agreement and this Agreement,
the Sponsor Warrants will constitute valid and binding obligations of the Company, enforceable in accordance with their terms as
of each Closing Date.

  

(ii)        
The execution and delivery by the Company of this Agreement and the Sponsor Warrants, the issuance and sale of the Sponsor
Warrants, the issuance of the Ordinary Shares upon exercise of the Sponsor Warrants and the fulfillment, of and compliance with,
the respective terms hereof and thereof by the Company, do not and will not as of each Closing Date (a) conflict with or result
in a breach of the terms, conditions or provisions of, (b) constitute a default under, (c) result in the creation of any lien,
security interest, charge or encumbrance upon the Company’s share capital or assets under, (d) result in a violation of,
or (e) require any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with,
any court or administrative or governmental body or agency pursuant to, the amended and restated memorandum and articles of association
of the Company (in effect on the date hereof or as may be amended prior to completion of the contemplated Public Offering), or
any material law, statute, rule or regulation to which the Company is subject, or any agreement, order, judgment or decree to which
the Company is subject, except for any filings required after the date hereof under federal or state securities laws.

 

C.      Title
to Securities. Upon issuance in accordance with, and payment pursuant to, and registration in the register of members of the
Company, the terms hereof and the Warrant Agreement, the Ordinary Shares issuable upon exercise of the Sponsor Warrants will be
duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof
and the Warrant Agreement, the Purchaser will have good title to the Sponsor Warrants and the Ordinary Shares issuable upon exercise
of such Sponsor Warrants, free and clear of all liens, claims and encumbrances of any kind, other than (i) transfer restrictions
hereunder and under the other agreements contemplated hereby, (ii) transfer restrictions under federal and state securities laws,
and (iii) liens, claims or encumbrances imposed due to the actions of the Purchaser.

 

D.      Governmental
Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is
required in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the
Company of any other transactions contemplated hereby.

 

Section 3.           
Representations and Warranties of the Purchaser. As a material inducement to the Company to enter into this Agreement and issue
and sell the Sponsor Warrants to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations
and warranties shall survive each Closing Date) that:

 

 

    	 	2	 

     

    

A.    Organization
and Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out the transactions
contemplated by this Agreement.

 

B.    Authorization;
No Breach.

 

(i)          
This Agreement constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to
or affecting creditors’ rights and to general equitable principles (whether considered in a proceeding in equity or law). 

 

(ii)        
The execution and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof
by the Purchaser does not and shall not as of each Closing Date conflict with or result in a breach by the Purchaser of the terms,
conditions or provisions of any agreement, instrument, order, judgment or decree to which the Purchaser is subject.

 

C.     Investment
Representations.

 

(i)          
The Purchaser is acquiring the Sponsor Warrants and, upon exercise of the Sponsor Warrants, the Ordinary Shares issuable
upon such exercise (collectively, the “Securities”), for the Purchaser’s own account, for investment
purposes only and not with a view towards, or for resale in connection with, any public sale or distribution thereof.

 

(ii)         
The Purchaser is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D under the
Securities Act of 1933, as amended (the “Securities Act”), and the Purchaser has not experienced a disqualifying
event as enumerated pursuant to Rule 506(d) of Regulation D under the Securities Act.

 

(iii)        
The Purchaser understands that the Securities are being offered and will be sold to it in reliance on specific exemptions
from the registration requirements of the United States federal and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Purchaser’s compliance with, the representations and warranties of the Purchaser set forth
herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire such Securities.

 

(iv)        
The Purchaser did not enter into this Agreement as a result of any general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D under the Securities Act.

 

(v)         
The Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Securities which have been requested by the Purchaser. The Purchaser has been afforded
the opportunity to ask questions of the executive officers and directors of the Company. The Purchaser understands that its investment
in the Securities involves a high degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary
to make an informed investment decision with respect to the acquisition of the Securities.

 

(vi)        
The Purchaser understands that no United States federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities
by the Purchaser nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

  

(vii)       
The Purchaser understands that: (a) the Securities have not been and are not being registered under the Securities Act or
any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder
or (2) sold in reliance on an exemption therefrom; and (b) except as specifically set forth in the Registration Rights Agreement,
neither the Company nor any other person is under any obligation to register the Securities under the Securities Act or any state
securities laws or to comply with the terms and conditions of any exemption thereunder. While such Purchaser understands that Rule
144 under the Securities Act is not available for the resale of securities initially issued by shell companies (other than business
combination related shell companies) or issuers that have been at any time previously a shell company, such Purchaser understands
that Rule 144 includes an exception to this prohibition if the following conditions are met: (i) the issuer of the securities that
was formerly a shell company has ceased to be a shell company; (ii) the issuer of the securities is subject to the reporting requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); (iii)
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding
12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports;
and (iv) at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting
its status as an entity that is not a shell company.

 

 

    	 	3	 

     

    

(viii)     
The Purchaser has such knowledge and experience in financial and business matters, knowledge of the high degree of risk
associated with investments in the securities of companies in the development stage such as the Company, is capable of evaluating
the merits and risks of an investment in the Securities and is able to bear the economic risk of an investment in the Securities
in the amount contemplated hereunder for an indefinite period of time. The Purchaser has adequate means of providing for its current
financial needs and contingencies and will have no current or anticipated future needs for liquidity which would be jeopardized
by the investment in the Securities. The Purchaser can afford a complete loss of its investments in the Securities.

 

(ix)        
The Purchaser understands that the Sponsor Warrants shall bear the legend substantially in the form set forth in the Warrant
Agreement.

 

Section 4.           
Conditions of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and pay for the Sponsor Warrants
are subject to the fulfillment, on or before each Closing Date, of each of the following conditions:

 

A.   
Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall
be true and correct at and as of such Closing Date as though then made.

 

B.     Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before such Closing Date.

 

C.     No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Warrant Agreement. 

 

D.    Warrant
Agreement and Registration Rights Agreement. The Company shall have entered into the Warrant Agreement and the Registration
Rights Agreement, each on terms satisfactory to the Purchaser. 

 

E.     Corporate
Consents. The Company shall have obtained the consent of its Board of Directors authorizing the execution, delivery and performance
of this Agreement and the Warrant Agreement and the issuance and sale of the Sponsor Warrants hereunder. 

 

Section 5.          
Conditions of the Company’s Obligations. The obligations of the Company to the Purchaser under this Agreement are subject
to the fulfillment, on or before each Closing Date, of each of the following conditions: 

 

A.    Representations
and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct
at and as of such Closing Date as though then made. 

 

B.    
Performance. The Purchaser shall have performed and complied with all agreements, obligations and conditions contained
in this Agreement that are required to be performed or complied with by the Purchaser on or before such Closing Date.

 

C.    
No Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have
been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Warrant Agreement.

 

 

    	 	4	 

     

    

D.    
Warrant Agreement and Registration Rights Agreement. The Company shall have entered into the Warrant Agreement and
the Registration Rights Agreement. 

 

E.     
Corporate Consents. The Company shall have obtained the consent of its Board of Directors authorizing the execution,
delivery and performance of this Agreement and the Warrant Agreement and the issuance and sale of the Sponsor Warrants hereunder. 

 

Section 6.          Termination.
This Agreement may be terminated at any time after May 31, 2021 upon the election by either the Company or the Purchaser entitled
to purchase a majority of the Sponsor Warrants upon written notice to the other parties if the closing of the Public Offering does
not occur prior to such date.

 

Section 7.          Survival
of Representations and Warranties. All of the representations and warranties contained herein shall survive each Closing Date.

 

Section 8.          Definitions.
Terms used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the Registration Statement.

 

Section 9.          Miscellaneous.

 

A.     Successors and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in
this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors of
the parties hereto whether so expressed or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may
not assign this Agreement, other than assignments by the Purchaser to affiliates thereof.

 

B.    
Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

 

C.     Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than
one party, but all such counterparts taken together shall constitute one and the same agreement. In the event that any signature
is delivered by facsimile transmission or by e-mail delivery of a “pdf” format data file, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect
as if such facsimile or “pdf” signature page were an original thereof. 

 

D.    
Descriptive Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only
and do not constitute a substantive part of this Agreement. The use of the word “including” in this Agreement
shall be by way of example rather than by limitation. 

 

E.     
Governing Law. This Agreement shall be deemed to be a contract made under the laws of the State of New York and for
all purposes shall be construed in accordance with the internal laws of the State of New York. 

 

F.     
Amendments. This Agreement may not be amended, modified or waived as to any particular provision, except by a written
instrument executed by all parties hereto.

 

 

[Signature page follows]  

 

 

    	 	5	 

     

    

IN WITNESS WHEREOF,
the parties
hereto have
executed this Agreement
to be effective as of
the date first
set forth above.

   

	 	COMPANY:
	 	 	 
	 	IBERE
    PHARMACEUTICALS
	 	 	 
	 	By:	/s/ Osagie Imasogie
	 	 	Name:
                           Osagie Imasogie

        

	 	 	Title: Chief ExecutiveOfficer
	 	 	 
	 	PURCHASER:
	 	 	 
	 	PIPV CAPITAL LLC
	 	 	 
	 	By:	/s/ Osagie Imasogie
	 	 	Name: Osagie Imasogie
	 	 	Title: Managing Member

  

 

[Signature page to Sponsor Warrants Purchase
Agreement]

 

 

    	 	6kldo-ex43_12.htm

 

Exhibit 4.3

Description of the Registrant’s Securities Registered Pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended

The summary of the general terms and provisions of the registered securities of  Kaleido Biosciences, Inc. (“Kaleido” “we,” or “our”) set forth below does not purport to be complete and is subject to and qualified in its entirety by reference to our Amended and Restated Certificate of Incorporation (our “certificate of incorporation”) and our Amended and Restated By-laws (our “by-laws” and, together with our certificate of incorporation, our “Charter Documents”), each of which is incorporated by reference as an exhibit to our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission. We encourage you to read our Charter Documents and the applicable provisions of the General Corporation Law of the State of Delaware (the “DGCL”) for additional information.

Authorized Capital Stock 

Our authorized capital stock consists of One Hundred Sixty Million (160,000,000) shares of common stock, $0.001 par value per share, and Ten Million (10,000,000) shares of preferred stock, $0.001 par value per share. 

Common stock 

We are authorized to issue one class of common stock. Only our common stock is registered under Section 12 of the Securities Exchange Act of 1934, as amended. 

Our common stock is listed on the Nasdaq Global Market under the trading symbol “KLDO”.

The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.

Voting

Under the provisions of our certificate of incorporation, holders of our common stock are entitled to one vote for each share of common stock held of record for the election of directors and on all matters submitted to a vote of stockholders. Our certificate of incorporation does not provide cumulative voting rights to holders of our common stock.  

Our by-laws provide that, except as required by law or our Charter Documents, all matters will be decided by the vote of the majority of the votes properly cast for such matter. 

Dividends

Holders of our common stock are entitled to receive dividends ratably, if any, as may be declared by our board of directors out of legally available funds, subject to any preferential dividend rights of any preferred stock then outstanding. 

 

ACTIVE/102494083.1

 

Other Rights

Upon our dissolution, liquidation or winding up, holders of our common stock are entitled to share ratably in our net assets legally available after the payment of all our debts and other liabilities, subject to the preferential rights of any preferred stock then outstanding. Holders of our common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future. Except as described under “Anti-takeover effects of Delaware Law, our certificate of incorporation and our by-laws” below, a majority vote of the holders of common stock is generally required to take action under our certificate of incorporation and by-laws. 

Preferred stock

Our board of directors is authorized, without action by the stockholders, to designate and issue up to an aggregate of 10,000,000 shares of preferred stock in one or more series. Our board of directors can designate the rights, preferences and privileges of the shares of each series and any of its qualifications, limitations or restrictions. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of common stock. The issuance of preferred stock, while providing flexibility in connection with possible future financings and acquisitions and other corporate purposes could, under certain circumstances, have the effect of restricting dividends on our common stock, diluting the voting power of our common stock, impairing the liquidation rights of our common stock, or delaying, deferring or preventing a change in control of our company, which might harm the market price of our common stock. See also “Anti-takeover effects of Delaware Law, our certificate of incorporation and our by-laws” and “Undesignated preferred stock” below. 

Our board of directors will make any determination to issue such shares based on its judgment as to our Company’s best interests and the best interests of our stockholders. We have no shares of preferred stock outstanding as of the date of our Annual Report on Form 10-K with which this Exhibit  is filed as an exhibit and we have no current plans to issue any shares of preferred stock.

Anti-takeover effects of Delaware Law, our certificate of incorporation and our by-laws 

Certain provisions of the DGCL and our Charter Documents could have the effect delaying, deferring or preventing another party from acquiring control of us and encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts. These provisions include the items described below.

Board composition and filling vacancies

Our certificate of incorporation provides for the division of our board of directors into three classes serving staggered three-year terms, with one class being elected each year. Our certificate of incorporation also provides that directors may be removed only for cause and then only by the affirmative vote of the holders of two-thirds or more of the shares then entitled to vote at an election of directors. Furthermore, any vacancy on our board of directors, however occurring, including a vacancy resulting from an increase in the size of our board, may only be filled by the affirmative vote of a majority of our directors then in office even if less than a quorum. The classification of directors, together with the limitations on removal of directors and treatment of vacancies, has the effect of making it more difficult for stockholders to change the composition of our board of directors.

 

ACTIVE/102494083.1

 

No written consent of stockholders

Our certificate of incorporation provides that all stockholder actions are required to be taken by a vote of the stockholders at an annual or special meeting, and that stockholders may not take any action by written consent in lieu of a meeting. This limit may lengthen the amount of time required to take stockholder actions and would prevent the amendment of our by-laws or removal of directors by our stockholders without holding a meeting of stockholders.

Meetings of stockholders

Our certificate of incorporation and by-laws provide that only a majority of the members of our board of directors then in office may call special meetings of stockholders and only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders. Our by-laws limit the business that may be conducted at an annual meeting of stockholders to those matters properly brought before the meeting.

Advance notice requirements

Our by-laws establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. Our by-laws specify the requirements as to form and content of all stockholders’ notices. These requirements may preclude stockholders from bringing matters before the stockholders at an annual or special meeting.

Amendment to certificate of incorporation and by-laws

Any amendment of our certificate of incorporation must first be approved by a majority of our board of directors, and if required by law or our certificate of incorporation, must thereafter be approved by a majority of the outstanding shares entitled to vote on the amendment and a majority of the outstanding shares of each class entitled to vote thereon as a class, except that the amendment of the provisions relating to stockholder action, board composition, limitation of liability and the amendment of our by-laws and certificate of incorporation must be approved by not less than two-thirds of the outstanding shares entitled to vote on the amendment, and not less than two-thirds of the outstanding shares of each class entitled to vote thereon as a class. Our by-laws may be amended by the affirmative vote of a majority of the directors then in office, subject to any limitations set forth in the by-laws, and may also be amended by the affirmative vote of at least two-thirds of the outstanding shares entitled to vote on the amendment, or, if our board of directors recommends that the stockholders approve the amendment, by the affirmative vote of the majority of the outstanding shares entitled to vote on the amendment, in each case voting together as a single class.

Undesignated preferred stock

Our certificate of incorporation provides for 10,000,000 authorized shares of preferred stock. The existence of authorized but unissued shares of convertible preferred stock may enable our board of directors to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise. For example, if in the due exercise of its fiduciary obligations, our board of directors were to determine that a takeover proposal is not in the best interests of our stockholders, our board of directors could cause shares of convertible preferred stock to be issued without stockholder approval in one or more private offerings or other transactions that might dilute the voting or other rights of the 

 

ACTIVE/102494083.1

 

proposed acquirer or insurgent stockholder or stockholder group. In this regard, our certificate of incorporation grants our board of directors broad power to establish the rights and preferences of authorized and unissued shares of convertible preferred stock. The issuance of shares of convertible preferred stock could decrease the amount of earnings and assets available for distribution to holders of shares of common stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may have the effect of delaying, deterring or preventing a change in control of us.

Choice of forum

Our by-laws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any state law claim for: (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim of breach of a fiduciary duty or other wrongdoing by any of our directors, officers, employees or agents to us or our stockholders; (3) any action asserting a claim against us arising pursuant to any provision of the General Corporation Law of the State of Delaware or our certificate of incorporation or by-laws; (4) any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or by-laws; or (5) any action asserting a claim governed by the internal affairs doctrine.

Our by-laws also provide that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and to have consented to this choice of forum provision. It is possible that a court of law could rule that the choice of forum provisions contained in our by-laws are inapplicable or unenforceable if they are challenged in a proceeding or otherwise. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation and by-laws has been challenged in legal proceedings.

Delaware takeover statute 

We are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a three-year period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:

 

	
 
	
•
	
before the stockholder became interested, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

 

	
 
	
•
	
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances, but not the outstanding voting stock owned by the interested stockholder; or

 

	
 
	
•
	
at or after the time the stockholder became interested, the business combination was approved by our board of directors and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

 

ACTIVE/102494083.1

 

Section 203 defines a business combination to include:

 

	
 
	
•
	
any merger or consolidation involving the corporation and the interested stockholder;

 

	
 
	
•
	
any sale, transfer, lease, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;

 

	
 
	
•
	
subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

 

	
 
	
•
	
subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; and

 

	
 
	
•
	
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

 

In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.

 

ACTIVE/102494083.1

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