Document:

Exhibit 10.2

 

EXECUTION COPY

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of July 14, 2017 by and between Strongbridge Biopharma plc, an Irish public limited company (the “Company”), and CRG Partners III L.P., CRG Partners III — Parallel Fund “A” L.P., CRG Partners III - Parallel Fund “B” (Cayman) L.P., CRG Partners III (Cayman) Lev AIV I L.P., and CRG Partners III (Cayman) Unlev AIV I L.P. (collectively, the “Purchaser”).

 

RECITALS

 

A.            The Company and the Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506(b) of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act.

 

B.            Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Term Loan Agreement (the “Loan Agreement”) and the parties’ obligations thereunder are conditioned upon the execution and delivery of this Agreement and the Purchaser’s purchase of  approximately $3.0 million of the Company’s ordinary shares, par value $0.01 per share (the “Ordinary Shares”) hereunder.

 

C.                                    The Purchaser wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the number of Ordinary Shares, set forth below the Purchaser’s name on the signature page of this Agreement (the “Shares”).

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser hereby agree as follows:

 

ARTICLE I.
 DEFINITIONS

 

1.1        Definitions.  In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1:

 

“Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or, to the Company’s Knowledge, threatened in writing against the Company, any Subsidiary or any of their respective properties or any officer, director or employee of the Company or any Subsidiary acting in his or her capacity as an officer, director or employee before or by any federal, state, county, local or foreign court, arbitrator, governmental or administrative agency, regulatory authority, stock market, stock exchange or trading facility.

 

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act.  With respect to the Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as the Purchaser will be deemed to be an Affiliate of the Purchaser.

 

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

 

“Agreements and Instruments” has the meaning set forth in Section 3.1(d).

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

 

“Closing” means the closing of the purchase and sale of the Shares pursuant to this Agreement.

 

“Closing Date” means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied or waived, as the case may be, or such other date as the parties may agree, which need not be the date hereof.

 

“Commission” has the meaning set forth in the Recitals.

 

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

 

“Company Counsel” means Reed Smith LLP, with offices located at 599 Lexington Avenue, 22nd Floor, New York, New York 10022.

 

“Company Deliverables” has the meaning set forth in Section 2.2(a).

 

“Company’s Knowledge” means with respect to any statement made to the Company’s Knowledge, that the statement is based upon the actual or constructive knowledge of the executive officers of the Company having responsibility for the matter or matters that are the subject of the statement, after a reasonable inquiry.

 

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

 

“Disclosure Materials” means the SEC Reports, the Form 6-K required to be filed pursuant to Section 4.5 of this Agreement (including the exhibits thereto and documents incorporated by reference therein), and all schedules and exhibits to the Loan Agreement.

 

“Disclosure Schedules” means the Disclosure Schedules delivered by the Company concurrently with the execution and delivery of this Agreement.

 

“DTC” has the meaning set forth in Section 4.1(c).

 

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

 

“First Tranche” means the first Borrowing  under that certain Term Loan Agreement, dated as of July 14, 2017, by and among Strongbridge U.S. Inc., Strongbridge Biopharma plc, Cortendo AB (publ), Cortendo Cayman Ltd., as borrowers, the subsidiary guarantors from time to time party thereto, the lenders from time to time party hereto, and CRG SERVICING LLC, as administrative agent and collateral agent.

 

“GAAP” means U.S. generally accepted accounting principles, applied on a consistent basis during the periods involved.

 

“Intellectual Property” has the meaning set forth in Section 3.1(o).

 

“Irish Counsel” means Arthur Cox, with offices located at the Arthur Cox Building, Earlsfort Terrace, Dublin 2, Ireland.

 

“Irrevocable Transfer Agent Instructions” means, with respect to the Company, the Irrevocable Transfer Agent Instructions, in substantially the form of Exhibit B, executed by the Company and delivered to and acknowledged in writing by the Transfer Agent.

 

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“Lien” means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind.

 

“Loan Agreement” has the meaning set forth in the Recitals.

 

“Material Adverse Effect” means a material adverse effect on the results of operations, assets, prospects, business or financial condition of the Company and the Subsidiaries, taken as a whole, except that effects caused by changes or circumstances affecting general market conditions in the U.S. economy or which are generally applicable to the industry in which the Company operates, provided that such effects are not borne disproportionately by the Company, shall not be deemed a Material Adverse Effect.

 

“Material Contract” means any contract of the Company that has been filed or is required to be filed as an exhibit to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.

 

“OFAC” has the meaning set forth in Section 3.1(ee).

 

“Ordinary Shares” has the meaning set forth in the Recitals, and also includes any other class of securities into which the Ordinary Shares may hereafter be reclassified or changed into.

 

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

 

“Outside Date” means the thirtieth day following the date of this Agreement.

 

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

 

“Press Release” has the meaning set forth in Section 4.5.

 

“Principal Trading Market” means the Trading Market on which the Ordinary Shares are primarily listed on and quoted for trading, which, as of the date of this Agreement and the Closing Date, shall be the NASDAQ Global Select Market.

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Purchase Price” means $6.98 per Share.

 

“Purchaser” has the meaning set forth in the Recitals.

 

“Purchaser Deliverables” has the meaning set forth in Section 2.2(b).

 

“Purchaser Party” has the meaning set forth in Section 4.6.

 

“Regulation D” has the meaning set forth in the Recitals.

 

“Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its Subsidiaries.

 

“Required Approvals” means (i) filings required by applicable federal, state, local or foreign securities laws, (ii) the filing of a Notice of Sale of Securities on Form D with the Commission under Regulation D 

 

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of the Securities Act, (iii) the filing of any requisite notices and/or application(s) to the Principal Trading Market for the issuance and sale of the Shares and the listing of the Shares for trading or quotation, as the case may be, thereon in the time and manner required thereby, (iv) the filings required in accordance with Section 4.5 of this Agreement and (v) those that have been made or obtained prior to the date of this Agreement.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“SEC Reports” has the meaning set forth in Section 3.1(h).

 

“Secretary’s Certificate” has the meaning set forth in Section 2.2(a)(vii).

 

“Securities Act” has the meaning set forth in the Recitals.

 

“Shares” has the meaning set forth in the Recitals.

 

“Short Sales” include, without limitation, (i) all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements (including on a total return basis), and (ii) sales and other transactions through non-U.S. broker dealers or foreign regulated brokers (but shall not be deemed to include the location and/or reservation of borrowable shares of Ordinary Shares).

 

“Stock Certificates” has the meaning set forth in Section 2.2(a)(ii).

 

“Subscription Amount” means the aggregate amount to be paid for the Shares purchased hereunder as indicated on the Purchaser’s signature page to this Agreement next to the heading “Aggregate Purchase Price (Subscription Amount)” in United States dollars and in immediately available funds.

 

“Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a) of the Disclosure Schedules, and shall, where applicable, include any subsidiary of the Company formed or acquired after the date hereof.

 

“Trading Affiliate” has the meaning set forth in Section 3.2(h).

 

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

 

“Trading Market” means whichever of the New York Stock Exchange, the NYSE Alternext and the NYSE MKT (formerly the American Stock Exchange), the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin Board on which the Ordinary Shares are listed or quoted for trading on the date in question.

 

“Transaction Documents” means this Agreement, the schedules and exhibits attached hereto, the Loan Agreement, the Irrevocable Transfer Agent Instructions and any other documents or agreements explicitly contemplated hereunder.

 

“Transfer Agent” means Computershare, Inc., or any successor transfer agent for the Company.

 

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ARTICLE II.
 PURCHASE AND SALE

 

2.1        Closing.

 

(a)           Amount.  Subject to the terms and conditions set forth in this Agreement, at the Closing, the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, such number of Ordinary Shares equal to the quotient resulting from dividing (i) the Subscription Amount by (ii) the Purchase Price, rounded down to the nearest whole Share.

 

(b)           Closing.  The Closing of the purchase and sale of the Shares shall take place at the offices of Reed Smith LLP, 599 Lexington Avenue, 22nd Floor, New York, New York on the Closing Date or at such other locations or remotely by facsimile transmission or other electronic means as the parties may mutually agree.

 

(c)           Form of Payment.  Except as may otherwise be agreed to by the Company and the Purchaser, on the Closing Date, the Purchaser shall wire its Subscription Amount, in United States dollars and in immediately available funds, to the account of the Company, in accordance with instructions delivered to the Purchaser on or prior to the Closing Date.  On the Closing Date, the Company shall irrevocably instruct the Transfer Agent to deliver to the Purchaser one or more stock certificates, free and clear of all restrictive and other legends (except as expressly provided in Section 4.1(b) hereof), evidencing the number of Shares the Purchaser is purchasing as is set forth on the Purchaser’s signature page to this Agreement next to the heading “Number of Shares to be Acquired”, within three (3) Trading Days after the Closing.

 

2.2        Closing Deliveries.    (a)        On or prior to the Closing, the Company shall issue, deliver or cause to be delivered to the Purchaser the following (the “Company Deliverables”):

 

(i)            this Agreement, duly executed by the Company;

 

(ii)           facsimile copies of one or more stock certificates, free and clear of all restrictive and other legends (except as provided in Section 4.1(b) hereof), evidencing the Shares subscribed for by the Purchaser hereunder, registered in the name of the Purchaser (the “Stock Certificate”), with the original Stock Certificates delivered within three (3) Trading Days of Closing;

 

(iii)          a legal opinion from each of Company Counsel and Irish Counsel, dated as of the Closing Date and in substantially the forms attached hereto as Exhibit A, executed by such counsel and addressed to the Purchaser;

 

(v)          duly executed Irrevocable Transfer Agent Instructions acknowledged in writing by the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis, the Stock Certificate;

 

(vi)         a certificate of the Secretary of the Company (the “Secretary’s Certificate”), dated as of the Closing Date, (a) certifying the resolutions adopted by the Board of Directors of the Company or a duly authorized committee thereof approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Shares, (b) certifying the current versions of the certificate or articles of incorporation, as amended, and by-laws of the Company, (c) certifying as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company and (d) certifying the good standing of the Company in Ireland, in substantially the form attached hereto as Exhibit D;

 

(vii)        the Compliance Certificate referred to in Section 5.1(i);

 

(viii)                        such other information, certificates and documents as the Purchaser may reasonably request.

 

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(b)           On or prior to the Closing, the Purchaser shall deliver or cause to be delivered to the Company the following (the “Purchaser Deliverables”):

 

(i)            this Agreement, duly executed by the Purchaser;

 

(ii)           the Subscription Amount, in United States dollars and in immediately available funds, by wire transfer to the Company; and

 

(iii)          a fully completed and duly executed Accredited Investor Questionnaire, satisfactory to the Company, in the form attached hereto as Exhibit C.

 

ARTICLE III.
 REPRESENTATIONS AND WARRANTIES

 

3.1        Representations and Warranties of the Company.  Except as set forth in the correspondingly numbered Section of the Disclosure Schedules, the Company hereby represents and warrants as of the date hereof and the Closing Date (except for the representations and warranties that speak as of a specific date, which shall be made as of such date), to the Purchaser:

 

(a)                                 Good Standing of Subsidiaries.  Each Subsidiary has been duly organized and is validly existing as a corporation, partnership or limited company, as applicable, in good standing under the laws of the jurisdiction of its incorporation or organization (or such equivalent concept, as applicable under the laws of such jurisdiction), has corporate or similar power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Materials and is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required (or such equivalent concept, as applicable under the laws of such jurisdiction), whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or to be in good standing (or such equivalent concept) would not result in a Material Adverse Effect.  Except as disclosed in the Disclosure Materials, all of the issued and outstanding share capital or capital stock, as the case may be, of each Subsidiary has been duly authorized and validly issued, is fully paid and are not subject to calls for any additional payments (non-assessable) and is owned by the Company, directly or through its Subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity.  None of the outstanding share capital or capital stock, as the case may be, of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary.  The only Subsidiaries of the Company are the Subsidiaries listed on Schedule 3.1(a) of the Disclosure Schedules.

 

(b)                                 Due Incorporation and Foreign Qualification of the Company.  The Company has been duly incorporated and is validly existing as a public company limited by shares under the laws of Ireland and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Materials and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required (or such equivalent concept, as applicable under the laws of such jurisdiction), whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect.

 

(c)                                  Authorization; Enforcement; Validity.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder.  The Company’s execution and delivery of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of the Shares) have been duly authorized by all necessary corporate action on the part of the Company, and no further corporate action is required by the Company, its Board of Directors or its stockholders in connection therewith other than in connection with the Required Approvals.  Each of the Transaction Documents to which it is a party has been (or upon delivery will have been) duly executed by the Company and is, or when delivered in accordance with the terms hereof, will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and 

 

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remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(d)                                 Absence of Violations, Defaults and Conflicts.  Neither the Company nor any of its Subsidiaries is (A) in violation of its memorandum and articles of association, charter, bylaws or similar organizational document, (B) other than as set forth in Schedule 3.1(d) of the Disclosure Schedules, in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which it or any of them may be bound or to which any of the properties or assets of the Company or any Subsidiary is subject (collectively, “Agreements and Instruments”), or (C) in violation of any law, statute, rule, regulation, judgment, order, writ or decree of any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over the Company or any of its Subsidiaries or any of their respective properties, assets or operations, except for such violations that would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein and compliance by the Company with its obligations hereunder have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event under, or result in the creation or imposition of any lien, charge or encumbrance upon any properties or assets of the Company or any Subsidiary pursuant to, the Agreements and Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that would not, singly or in the aggregate, result in a Material Adverse Effect), nor will such action result in any violation of (i) the provisions of the memorandum and articles of association, charter, bylaws or similar organizational document of the Company or any of its Subsidiaries or (ii) any law, statute, rule, regulation, judgment, order, writ or decree of any governmental entity.

 

(e)                                  Absence of Further Requirements.  No filing with, or authorization, approval, consent, waiver, license, order, registration, qualification or decree of, any Governmental Entity, court or other person or entity is necessary or required for the performance by the Company of its obligations hereunder, in connection with the execution, delivery and performance by the Company of the Transaction Documents, including the offering, issuance or sale of the Shares hereunder other than the Required Approvals.

 

(f)                                   Authorization, Issuance and Description of Shares.  The Shares have been duly authorized and, when issued and paid for in accordance with the terms of the Transaction Documents, will be duly and validly issued, fully paid and nonassessable and free and clear of all Liens, and shall not be subject to preemptive or similar rights of shareholders.  Assuming the accuracy of the representations and warranties of the Purchaser in this Agreement, the Shares will be issued in compliance with all applicable federal, state and local securities laws.  The Ordinary Shares conform to all statements relating thereto contained in the Disclosure Materials and such description conforms to the rights set forth in the instruments defining the same.  The Purchaser will not be subject to personal liability by reason of being such a holder of such Shares.

 

(g)                                  Capitalization.  The authorized, issued and outstanding share capital of the Company is as set forth on Schedule 3.1(g) of the Disclosure Schedules, which Schedule 3.1(g) shall also include the number of Ordinary Shares owned beneficially, and of record, by Affiliates of the Company as of the date hereof.  The outstanding share capital of the Company has been duly authorized and validly issued and is fully paid, not subject to calls for any additional payments (non-assessable) and were issued in compliance with all federal, state and local securities laws.  None of the outstanding share capital of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except as a result of the purchase and sale of the Shares or as set forth in the Disclosure Materials or Schedule 3.1(g) of the Disclosure Schedules, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any Ordinary Shares, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional Ordinary Shares.  The issuance and sale of the Shares will not obligate the Company to issue Ordinary Shares or other securities to any Person (other than the Purchaser) and will not result in a right of any holder of 

 

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Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.  No further approval or authorization of any shareholder, the Company’s Board of Directors or other person or entity is required for the issuance and sale of the Shares.  No approval of the shareholders of the Company under the rules or regulations of the Commission, the rules of the Principal Trading Market or any other applicable law is required for the Company to issue and deliver the Shares to the Purchaser. Except as set forth in the Disclosure Materials, there are no stockholders agreements, voting agreements or other agreements with respect to the Company’s capital stock to which the Company is a party or, to the Company’s Knowledge, between or among any of the Company’s stockholders.

 

(h)                                 SEC Reports; Disclosure Materials.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Securities Act and Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective filing dates, or to the extent corrected by a subsequent restatement, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act.  Each of the Material Contracts to which the Company or any Subsidiary is a party or to which the property or assets of the Company or any of its Subsidiaries are subject has been filed as an exhibit to the SEC Reports.  The Company does not have pending before the Commission any request for confidential treatment of information.

 

(i)                                     Financial Statements.  The financial statements included in the Disclosure Materials, together with the related schedules and notes, present fairly, in all material respects, (A) the financial position of the Company, its consolidated Subsidiaries and its acquired businesses at the dates indicated and (B) the statement of operations, shareholders’ equity and cash flows of the Company, its consolidated Subsidiaries and its acquired businesses for the periods specified; said financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved, except in the case of unaudited, interim financial statements, subject to normal year-end audit adjustments and the exclusion of certain footnotes as permitted by the applicable rules of the Commission.  The supporting schedules, if any, present fairly in accordance with GAAP the information required to be stated therein.

 

(j)                                    No Material Adverse Change in Business.  Except as set forth on Schedule 3.1(j) of the Disclosure Schedules or as disclosed in the Disclosure Materials, since December 31, 2016, (A) there have been no events, occurrence or developments that have had or would be reasonably expected to have a Material Adverse Effect, (B) there have been no transactions entered into by the Company or any of its Subsidiaries, which are material with respect to the Company and its Subsidiaries considered as one enterprise and (C) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its share capital.

 

(k)                                 Absence of Proceedings.  Except as disclosed in the Disclosure Materials, there is no action, suit, proceeding, inquiry or investigation before or brought by any Governmental Entity or any other person or entity now pending or, to the Company’s Knowledge, threatened, against or affecting the Company or any of its Subsidiaries, directors or officers which would reasonably be expected to result in a Material Adverse Effect, or which would reasonably be expected to materially and adversely affect their respective properties or assets or the consummation of the transactions contemplated in the Transaction Documents or the performance by the Company of its obligations hereunder or thereunder.

 

(l)                                     Compliance.  Neither the Company nor any of its Subsidiaries (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any of its Subsidiaries under), nor has the Company or any of its Subsidiaries received written notice of a claim that it is in default under, or that it is in violation of, any Material Contract (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is in violation of, or in receipt of written notice that it is in violation of, any statute, 

 

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rule or regulation of any governmental authority, except in each case as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

(m)                             Possession of Licenses and Permits.  The Company and its Subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate federal, state, local or foreign regulatory authorities (collectively, “Governmental Entities”) necessary to conduct the current business of the Company or as proposed to be conducted or operated by it, each as set forth in the Disclosure Materials, except where the failure so to possess would not, singly or in the aggregate, result in a Material Adverse Effect.  The Company and its Subsidiaries are in compliance with the terms and conditions of all Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect.  All of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any of its Subsidiaries has received any notice of proceedings relating to the revocation or modification of any Governmental License.

 

(n)                                 Title to Property.  The Company and its Subsidiaries have good and marketable title to all real and personal property owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (A) are described in the Disclosure Materials or (B) do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its Subsidiaries; and all of the leases and subleases relating to the business of the Company and its Subsidiaries, and under which the Company or any of its Subsidiaries holds properties described in the Disclosure Materials, are in full force and effect, and neither the Company nor any such Subsidiary has any notice of any claim of any sort that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease, except to the extent that any claim or adverse effect on the Company’s rights thereto would not reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor its Subsidiaries own any real property.

 

(o)                                 Possession of Intellectual Property.  The Company and each of its Subsidiaries owns, possesses or has licenses to all patents, patent applications, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated by them and as currently proposed to be conducted (the “Company Intellectual Property”), each as disclosed in the Disclosure Materials, and neither the Company nor any of its Subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Company Intellectual Property or of any facts or circumstances which would render invalid any Company Intellectual Property, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity, singly or in the aggregate, would result in a Material Adverse Effect.  To the Company’s Knowledge:  (i) except as disclosed in the Disclosure Materials, there are no third parties who have any ownership or license rights to any Company Intellectual Property, except for customary reversionary rights of third-party licensors with respect to the Intellectual Property that is disclosed in the Disclosure Materials as exclusively licensed to the Company or its Subsidiaries; and (ii) there is no infringement by third parties of any Company Intellectual Property.  There is no pending or, to the Company’s Knowledge, threatened action, suit, proceeding or claim by others: (A) challenging the Company’s rights in or to any Company Intellectual Property; (B) challenging the validity, enforceability or scope of any Company Intellectual Property; or (C) asserting that the Company or any of its Subsidiaries infringes, misappropriates or otherwise violates, or would, upon the commercialization of any product or service under development by the Company, infringe, misappropriate or otherwise violate, any Intellectual Property rights of others.  The Company and its Subsidiaries have complied in all material respects with the terms of each agreement pursuant to which Intellectual Property has been licensed to the Company or its Subsidiaries, and, to the Company’s knowledge, all such agreements are in full force and effect.  To the Company’s Knowledge, there are no material defects in any of the patents or patent applications included in the Company Intellectual Property. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of Company Intellectual Property, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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(p)                                 Insurance.  The Company and its Subsidiaries carry or are entitled to the benefits of insurance, with financially sound and reputable insurers, in such amounts and covering such risks as is generally maintained by companies of established repute engaged in the same or similar business, and all such insurance is in full force and effect.  The Company has no reason to believe that it or any of its Subsidiaries will not be able (A) to renew its existing insurance coverage as and when such policies expire or (B) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Effect.  Neither of the Company nor any of its Subsidiaries has been denied any insurance coverage which it has sought or for which it has applied.

 

(q)                                 Transactions With Affiliates and Employees.  Except as set forth in the Disclosure Materials, none of the officers, directors or Affiliates of the Company and, to the Company’s Knowledge, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act for any reporting period.

 

(r)                                    Foreign Private Issuer. The Company is a “foreign private issuer” within the meaning of Rule 405 under the Securities Act.  No shareholder approval is required under the laws of the Company’s country of domicile for the issuance of the Shares or any other transactions contemplated by the Transaction Documents.

 

(s)                                   Internal Accounting Controls.  The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any differences.

 

(t)                                    Certain Fees.   No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or the Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company, with respect to the offer and sale of the Shares. The Purchaser shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this paragraph (t) that may be due in connection with the transactions contemplated by the Transaction Documents.  The Company shall indemnify, pay, and hold the Purchaser harmless against, any liability, loss or expense (including, without limitation, attorneys’ fees and out-of-pocket expenses) arising in connection with any such right, interest or claim.

 

(u)                                 Investment Company.   The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares and the borrowing of funds contemplated by the Loan Agreement, will not be, or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act of 1940, as amended.

 

(v)                                 Disclosure.  All of the disclosure furnished by or on behalf of the Company to the Purchaser regarding the Company and its Subsidiaries, their businesses and the transactions contemplated hereby is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that the Purchaser does not make nor has it made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2.

 

(w)                               Payment of Taxes.  All United States federal, Irish and other material non-U.S. income tax returns of the Company and its Subsidiaries required by law to be filed have been filed and all material taxes whether or not shown on such returns, which are due and payable, have been paid, except assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided. Except as

 

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described in the Disclosure Materials, no tax return filed by the Company is currently subject to an audit or other administrative or judicial proceeding, and no such audit or other proceeding is pending or, to the Company’s Knowledge, threatened. The Company and its Subsidiaries have filed all other material tax returns that are required to have been filed by them pursuant to applicable foreign, state, local or other law, and has paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company and its Subsidiaries, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been established by the Company. To the Company’s Knowledge, the charges, accruals and reserves on the books of the Company in respect of any income, corporation or other tax liability for any years not finally determined are adequate to meet any assessments or re-assessments for additional tax for any years not finally determined.

 

(x)                                 Transfer Taxes.  There are no transfer taxes or other similar fees or charges under Irish or federal law or the laws of any state, or any political subdivision thereof, or any other foreign jurisdiction required to be paid by the Company in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated herein (including the issue and sale of the Shares).

 

(y)                                 Validity of Choice of Law.  The choice of the law of the State of New York as the governing law of this Agreement is a valid choice of law under the laws of Ireland and, except as disclosed in the Disclosure Materials, will be honored by courts in Ireland. The Company has the power to submit, and pursuant to this Agreement, has legally, validly, effectively and irrevocably submitted, to the personal jurisdiction of each United States federal court and Texas state court located in the city of Houston, Texas, United States, and the Company has legally, validly, effectively and irrevocably designated, appointed and authorized an agent for service of process in any action arising out of or relating to this Agreement or the Shares in any Texas federal or state court.

 

(z)                                  No General Solicitation. Neither the Company nor, to the Company’s Knowledge, any person acting on behalf of the Company has offered or sold any of the Shares by any form of general solicitation or general advertising.

 

(aa)                          Foreign Corrupt Practices.  None of the Company, nor any of its Subsidiaries, officers or directors or, to the Company’s Knowledge, any agent, employee, Affiliate or other person acting on behalf of the Company or any of its Subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company and, to the Company’s Knowledge, its Affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

 

(bb)                          Money Laundering Laws.  The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the Company’s Knowledge, threatened.

 

(cc)                            Acknowledgment Regarding Purchaser’s Purchase of Shares.  The Company acknowledges and agrees that the Purchaser is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby.  The Company further acknowledges that the Purchaser is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by the Purchaser or any of its respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchaser’s purchase of the Shares. The Company further represents to the Purchaser that the Company’s decision to enter into this Agreement

 

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and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(dd)                          Absence of Manipulation.  Neither the Company nor any Affiliate of the Company has taken, nor will the Company or any Affiliate take, directly or indirectly any action which is designed, or would reasonably be expected, to cause or result in, or which constitutes, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares or to result in a violation of Regulation M under the Exchange Act.

 

(ee)                            OFAC.  None of the Company, any of its Subsidiaries or, to the Company’s Knowledge, any director, officer, agent, employee, Affiliate or representative of the Company or any of its Subsidiaries is an individual or entity currently the subject or target of any sanctions administered or enforced by the United States Government, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council (“UNSC”), the European Union, Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company located, organized or resident in a country or territory that is the subject of Sanctions; and the Company will not directly or indirectly use the proceeds of the sale of the Shares, or lend, contribute or otherwise make available such proceeds to any Subsidiaries, joint venture partners or other Person, to fund any activities of or business with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.

 

(ff)                              Regulatory Matters.  Except as described in the Disclosure Materials, and except as would not, individually or in the aggregate, result in a Material Adverse Effect:  (i) neither the Company nor any of its Subsidiaries has received any written notice of adverse filing, warning letter, untitled letter or other correspondence or notice from the U.S. Food and Drug Administration or other relevant regulatory authorities, or any other court or arbitrator or federal, state, local or foreign governmental or regulatory authority, alleging or asserting material noncompliance with the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 301 et seq.) (the “FFDCA”), or similar state, federal or foreign law or regulation; (ii) the Company and any Subsidiary, and to the Company’s Knowledge, their respective directors, officers, employees or agents, are and since January 1, 2012 have been in compliance with applicable health care laws, including without limitation, the FFDCA and the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), the Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a), the U.S. Civil False Claims Act (31 U.S.C. §3729 et seq.), 18 U.S.C. §§286 and 287, and the health care fraud criminal provisions under the U.S. Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) (42 U.S.C. Section 1320d et seq.), the exclusion laws (42 U.S.C. §1320a-7), HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (42 U.S.C. §17921 et seq.), the U.S. Controlled Substances Act (21 U.S.C. Section 801 et seq.), each as amended, and the regulations promulgated thereunder; and all other comparable local, state, federal, national, supranational and foreign laws, and the regulations promulgated thereunder, (collectively, “Health Care Laws”); (iii) neither the Company nor any Subsidiary has received written notice of any ongoing claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental Entity or third party alleging that any product operation or activity is in violation of any Health Care Laws or has any knowledge that any such Governmental Entity or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (iv) neither the Company nor any Subsidiary has received written notice that any Governmental Entity has taken, is taking or intends to take action to limit, suspend, modify or revoke any applicable Permit or has any knowledge that any such Governmental Entity is considering such action; (v) the Company and each Subsidiary has filed, obtained, maintained or submitted all reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Health Care Laws and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete, correct and not misleading on the date filed (or were corrected or supplemented by a subsequent submission); (vi) neither the Company nor any Subsidiary has, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post-sale warning, “dear doctor” letter, or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect or violation and, to the Company’s Knowledge, no third party has initiated or conducted any such notice or action; and (vii) neither the Company nor any Subsidiary or any of their respective directors, officers, employees or agents is or has been

 

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debarred, suspended or excluded, or has been convicted of any crime or engaged in any conduct that would result in a debarment, suspension or exclusion from any federal or state government health care program.

 

(gg)                            Clinical Matters. The preclinical and clinical studies and tests described in the Disclosure Materials conducted by or, to the Company’s Knowledge, on behalf of the Company, have been and, if still pending, are being conducted in all material respects in accordance with experimental protocols, procedures and controls pursuant to all Health Care Laws and applicable Governmental Licenses; the descriptions of the results of such preclinical and clinical studies and tests contained in the Disclosure Materials are accurate and complete in all material respects and fairly present the data derived from such preclinical and clinical studies and tests; except to the extent disclosed in the Disclosure Materials, the Company is not aware of any preclinical or clinical studies or tests, the results of which the Company believes reasonably call into question the preclinical or clinical study or test results described or referred to in the Disclosure Materials when viewed in the context in which such results are described; and neither the Company nor any of the Subsidiaries has received any written notices or correspondence from any Governmental Entity requiring the termination, suspension or material modification of any preclinical or clinical study or test conducted by or on behalf of the Company.

 

(hh)                          Private Placement. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Purchaser as contemplated hereby.  The issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Principal Trading Market.

 

(ii)                                  Application of Takeover Protections.  The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate or articles of incorporation or the laws of Ireland that is or could become applicable to the Company or Purchaser as a result of the Purchaser and the Company fulfilling their obligations or exercising their rights under this Agreement, including without limitation as a result of the Company’s issuance of the Shares and the Purchaser’s ownership of the Shares.

 

(jj)                                Compliance with Rule 506.  None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale is disqualified from relying on Rule 506 of Regulation D under the Securities Act (“Rule 506”) for any of the reasons stated in Rule 506(d) in connection with the issuance and sale of the Shares to the Purchaser pursuant to this Agreement.  The Company has exercised reasonable care, including without limitation, conducting a factual inquiry that is appropriate in light of the circumstances, into whether any such disqualification under Rule 506(d) exists, but has assumed the accuracy of the Purchaser’s representations and warranties.  The Company has furnished to the Purchaser, a reasonable time prior to the date hereof, a description in writing of any matters that would have triggered disqualification under Rule 506(d), in compliance with the disclosure requirements of Rule 506(e).  The Company has exercised reasonable care, including without limitation, conducting a factual inquiry that is appropriate in light of the circumstances, into whether any such disqualification under Rule 506(d) would have existed and whether any disclosure is required to be made to the Purchaser under Rule 506(e).  Any outstanding securities of the Company (of any kind or nature) that were issued in reliance on Rule 506 have been issued in compliance with Rule 506(d) and (e) and no party has any reasonable basis for challenging any such reliance on Rule 506 in connection therewith.

 

(kk)                          Bank Holding Company Act.  The Company is not subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) or to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).  The Company does not own or control, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.  The Company does not exercise a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA or to regulation by the Federal Reserve.

 

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(ll)                                  No Disagreements with Accountants and Lawyers.  There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed or engaged by the Company which could affect the Company’s ability to perform any of its obligations under any of the Transaction Documents.

 

(mm)                  Listing and Maintenance Requirements.  The Ordinary Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to the Company’s Knowledge, is likely to have the effect of, terminating the registration of the Ordinary Shares under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.  The Company has not received notice from the Trading Market to the effect that the Company is not in compliance with the listing or maintenance requirements of the Trading Market.  The Company is, and has no reason to believe that it will not upon issuance of the Shares and for the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.  The issuance of the Shares hereunder does not contravene the rules of the Trading Market.

 

(nn)                          Sarbanes-Oxley.  The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof.  The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and has taken advantage of relief from certain reporting requirements and other burdens that are otherwise applicable generally to public companies. The Company has taken the exemption from auditor attestation on the effectiveness of its internal controls over financial reporting as permitted under the JOBS Act.

 

(oo)                          U.S. Real Property Holdings Corporation.  The Company is not and has never been a U.S. real property holding corporation, within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended (the “Code”), and the Company shall so certify upon Purchaser’s request.

 

(pp)                          Books and Records.  The minute books of the Company contain records that are in all material respects accurate of all meetings and other actions of its directors and shareholders from the time of incorporation of the Company to the Closing Date.  The other books and records of the Company have in all material respects been maintained in accordance with prudent business practices and are accurate in all material respects.

 

(qq)                          No Additional Agreements.  The Company does not have any agreement or understanding with the Purchaser with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.

 

(rr)                                No Integrated Offering. Neither the Company, nor any of its Affiliates, nor any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

 

3.2                               Representations and Warranties of the Purchaser.  The Purchaser represents and warrants as of the date hereof and as of the Closing Date to the Company as follows:

 

(a)                                 Organization; Authority.  The Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by the Purchaser and performance by the Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or, if the Purchaser is not a corporation, such partnership, limited liability company or other applicable like action, on the part of the Purchaser.  Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against it

 

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in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

 

(b)                                 Conflicts.  The execution, delivery and performance by the Purchaser of this Agreement and the consummation by the Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of the Purchaser, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Purchaser is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Purchaser to perform its obligations hereunder.

 

(c)                                  Investment Intent.  The Purchaser understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Shares as principal for its own account and not with a view to, or for distributing or reselling the Shares or any part thereof in violation of the Securities Act or any applicable state securities laws, provided, however, that by making the representations herein, the Purchaser does not agree to hold any of the Shares for any minimum period of time and reserves the right, subject to the provisions of this Agreement, at all times to sell or otherwise dispose of all or any part of the Shares pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state securities laws.  The Purchaser is acquiring the Shares hereunder in the ordinary course of its business. The Purchaser does not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution of any of the Shares (or any securities which are derivatives thereof) to or through any person or entity; the Purchaser is not a registered broker-dealer under Section 15 of the Exchange Act or an entity engaged in a business that would require it to be so registered as a broker-dealer.

 

(d)                                 Purchaser Status.  At the time the Purchaser was offered the Shares, it was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act. Purchaser hereby represents that neither it nor any of its Rule 506(d) Related Parties is a “bad actor” within the meaning of Rule 506(d) promulgated under the Securities Act. For purposes of this Agreement, “Rule 506(d) Related Party” shall mean a person or entity covered by the “Bad Actor disqualification” provision of Rule 506(d) of the Securities Act.

 

(e)                                  General Solicitation.  The Purchaser is not purchasing the Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement.

 

(f)                                   Experience of Purchaser.  The Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment.  The Purchaser is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.

 

(g)                                  Access to Information.  The Purchaser acknowledges that it has had the opportunity to review the Disclosure Materials and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of the Purchaser or its representatives or counsel shall modify, amend or affect the Purchaser’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents.  The Purchaser has sought such

 

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accounting, legal and tax advice as it has considered necessary to make an informed decision with respect to its acquisition of the Shares.

 

(h)                                 Certain Trading Activities.  Other than with respect to the transactions contemplated herein, since the time that the Purchaser was first contacted by the Company or any other Person regarding the transactions contemplated hereby, neither the Purchaser nor any Affiliate of the Purchaser which (x) had knowledge of the transactions contemplated hereby, (y) has or shares discretion relating to the Purchaser’s investments or trading or information concerning the Purchaser’s investments, including in respect of the Shares, and (z) is subject to the Purchaser’s review or input concerning such Affiliate’s investments or trading (collectively, “Trading Affiliates”) has directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser or Trading Affiliate, effected or agreed to effect any purchases or sales of the securities of the Company (including, without limitation, any Short Sales involving the Company’s securities). Notwithstanding the foregoing, in the case of a Purchaser and/or Trading Affiliate that is, individually or collectively, a multi-managed investment bank or vehicle whereby separate portfolio managers manage separate portions of the Purchaser’s or Trading Affiliate’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of the Purchaser’s or Trading Affiliate’s assets, the representation set forth above shall apply only with respect to the portion of assets managed by the portfolio manager that have knowledge about the financing transaction contemplated by this Agreement.  Other than to other Persons party to this Agreement and Purchaser’s advisors, the Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect short sales or similar transactions in the future.

 

(i)                                     Brokers and Finders.  No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or the Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Purchaser.

 

(j)                                    Independent Investment Decision.  The Purchaser has independently evaluated the merits of its decision to purchase the Shares pursuant to the Transaction Documents.  The Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Purchaser in connection with the purchase of the Shares constitutes legal, tax or investment advice.  The Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Shares.

 

(k)                                 Reliance on Exemptions.  The Purchaser understands that the Shares being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of the Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Shares.

 

(l)                                     No Governmental Review.   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 Shares or the fairness or suitability of the investment in the Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.

 

(l)                                     Regulation M.  The Purchaser is aware that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of Ordinary Shares and other activities with respect to the Ordinary Shares by the Purchaser.

 

(m)                             Beneficial Ownership.    The purchase by the Purchaser of the Shares issuable to it at the Closing will not result in the Purchaser (individually or together with any other Person with whom the Purchaser has identified, or will have identified, itself as part of a “group” in a public filing made with the Commission involving the Company’s securities) acquiring, or obtaining the right to acquire, in excess of 29.999% of the outstanding

 

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shares of Ordinary Shares or the voting power of the Company on a post transaction basis that assumes that such Closing shall have occurred.  The Purchaser does not presently intend to, alone or together with others, make a public filing with the Commission to disclose that it has (or that it together with such other Persons have) acquired, or obtained the right to acquire, as a result of such Closing (when added to any other securities of the Company that it or they then own or have the right to acquire), in excess of 29.999% of the outstanding shares of Ordinary Shares or the voting power of the Company on a post transaction basis that assumes that each Closing shall have occurred.

 

(n)                                 Residency.  The Purchaser’s residence (if an individual) or offices in which its investment decision with respect to the Shares was made (if an entity) are located at the address immediately below the Purchaser’s name on its signature page hereto.

 

The Company and the Purchaser acknowledge and agree that no party to this Agreement has made or makes any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Article III and the Transaction Documents.

 

ARTICLE IV.
 OTHER AGREEMENTS OF THE PARTIES

 

4.1                               Transfer Restrictions.

 

(a)                                 Compliance with Laws.  Except as specifically provided for elsewhere in this Article IV, the Purchaser covenants that the Shares may be disposed of only pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and in compliance with any applicable state and federal securities laws.  In connection with any transfer of the Shares other than (i) pursuant to an effective registration statement, (ii) to the Company, (iii) pursuant to Rule 144 (provided that the Purchaser provides the Company with reasonable assurances (in the form of seller and, if applicable, broker representation letters) that the securities may be sold pursuant to such rule) or (iv) in connection with a bona fide pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act.

 

(b)                                 Legends.  Certificates evidencing the Shares shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form, until such time as they are not required under Section 4.1(c):

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

The Company acknowledges and agrees that the Purchaser may from time to time pledge, and/or grant a security interest in, some or all of the legended Shares in connection with applicable securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin loan.  Such a pledge would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee, secured party or pledgor

 

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shall be required in connection with the pledge, but such legal opinion shall be required in connection with a subsequent transfer or foreclosure following default by the Purchaser transferee of the pledge.  No notice shall be required of such pledge, but Purchaser’s transferee shall promptly notify the Company of any such subsequent transfer or foreclosure.  The Purchaser acknowledges that the Company shall not be responsible for any pledges relating to, or the grant of any security interest in, any of the Shares or for any agreement, understanding or arrangement between the Purchaser and its pledgee or secured party.  At the Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Shares may reasonably request in connection with a pledge or transfer of the Shares, including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder.  The Purchaser acknowledges and agrees that, except as otherwise provided in Section 4.1(c), any Shares subject to a pledge or security interest as contemplated by this Section 4.1(b) shall continue to bear the legend set forth in this Section 4.1(b) and be subject to the restrictions on transfer set forth in Section 4.1(a).

 

(c)                                  Removal of Legends.

 

(i)                                     The legend set forth in Section 4.1(b) above shall be removed and the Company shall issue a certificate without such legend or any other legend to the holder of the applicable Shares upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at the Depository Trust Company (“DTC”), if (i) such Shares are registered for resale under the Securities Act (provided that, if the Purchaser is selling pursuant to the effective registration statement registering the Shares for resale, the Purchaser agrees to only sell such Shares during such time that such registration statement is effective and not withdrawn or suspended, and only as permitted by such registration statement), (ii) such Shares are sold or transferred pursuant to Rule 144, or (iii) such Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such securities and without volume or manner-of-sale restrictions.  Following the date on which Rule 144 becomes available for the resale of the Shares, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such securities and without volume or manner-of-sale restrictions, the Company shall cause Company Counsel to issue to the Transfer Agent a legal opinion regarding the Purchaser’s ability to resell the Shares pursuant to Rule 144.  Any fees (with respect to the Transfer Agent, Company Counsel or otherwise) associated with the issuance of such opinion or the removal of such legend shall be borne by the Company.  Following such time as a legend is no longer required for certain Shares, the Company will no later than three (3) Trading Days following the delivery by the Purchaser to the Company (with notice to Company Counsel) of a legended certificate representing Shares (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer), and an opinion of counsel to the extent required by Section 4.1(a), deliver or cause to be delivered to the Purchaser a certificate representing such Shares that is free from all restrictive and other legends.  The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1(c).  Certificates for Shares subject to legend removal hereunder may be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with DTC as directed by the Purchaser.

 

(ii)                                  The Company agrees that following such time as the legend is no longer required, it will, no later than three (3) Trading Days following the delivery by the Purchaser to the Transfer Agent of a (i) certificate representing Shares issued with a restrictive legend if such Shares are certificated, or (ii) written notice requesting the removal of any restrictive legend from the entry in the applicable balance account evidencing such Shares, as the case may be, (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to the Purchaser such Shares, free from all restrictive and other legends, by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by the Purchaser.  The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Article IV.

 

(iii)                               If the Purchaser shall make a sale or transfer of any Shares either pursuant to (x) Rule 144 or (y) a registration statement, and in each case shall have delivered to the Company or the Company’s transfer agent the certificate representing the applicable Shares containing a restrictive legend which are the subject of such sale or transfer and a representation letter in customary form (the date of such sale or transfer and delivery being the “Share Delivery Date”) and (1) the Company shall fail to deliver or cause to be delivered to the Purchaser a

 

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certificate representing such Shares that is free from all restrictive or other legends by 6:00 p.m. (New York City time) on the third Trading Day on which the Ordinary Shares are listed or quoted for trading following the Share Delivery Date and (2) following such third Trading Day after the Share Delivery Date and prior to the time such Shares are received free from restrictive legends, the Purchaser, or any third party on behalf of the Purchaser, purchases (in an open market transaction or otherwise) Ordinary Shares to deliver in satisfaction of a sale by the Purchaser of such Shares (a “Buy-In”), then, in addition to any other rights available to the Purchaser under the Transaction Documents and applicable law, the Company shall pay in cash to the Purchaser (for costs incurred either directly by the Purchaser or on behalf of a third party) the amount by which the total purchase price paid for the Ordinary Shares as a result of the Buy-In (including brokerage commissions, if any) exceed the proceeds received by the Purchaser as a result of the sale to which such Buy-In relates. The Purchaser shall provide the Company written notice indicating the amounts payable to the Purchaser in respect of the Buy-In. The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth herein.

 

(d)                                 Irrevocable Transfer Agent Instructions.  The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer agent, in substantially the form of Exhibit C attached hereto (the “Irrevocable Transfer Agent Instructions”). The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 4.1(d) (or instructions that are consistent therewith) will be given by the Company to its transfer agent in connection with this Agreement, and that the Shares shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the other Transaction Documents and applicable law. The Company acknowledges that a breach by it of its obligations under this Section 4.1(d) will cause irreparable harm to the Purchaser.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 4.1(d) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 4.1(d), that the Purchaser shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.

 

(e)                                  Acknowledgement.  The Purchaser hereunder acknowledges its primary responsibilities under the Securities Act and accordingly will not sell or otherwise transfer the Shares or any interest therein without complying with the requirements of the Securities Act.

 

(f)                                   Transfer to Affiliates.  Notwithstanding any other provision of this Article IV to the contrary, no registration statement or opinion of counsel shall be required for a transfer of the Shares by the Purchaser to an Affiliate of the Purchaser so long as the transferee of such Shares is an “accredited investor” and agrees to be subject to the terms hereof to the same extent as transferor in its capacity as a Purchaser herein.

 

4.2                               Furnishing of Information.  In order to enable the Purchaser to sell the Shares under Rule 144, until such time as the Purchaser holds no Shares, the Company shall use its commercially reasonable efforts to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. During such twelve (12) month period, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchaser and make publicly available in accordance with Rule 144(c) such information as is required for the Purchaser to sell the Shares under Rule 144.

 

4.3                               Acknowledgment of Dilution.  The Company acknowledges that the issuance of the Shares may result in dilution of the outstanding Ordinary Shares of the Company, which dilution may be substantial under certain market conditions.  The Company further acknowledges that its obligations under this Agreement, including, without limitation, its obligation to issue the Shares pursuant to this Agreement, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against the Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

 

4.4                               Integration.  The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that will be integrated with the offer or sale of the Shares

 

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in a manner that would require the registration under the Securities Act of the sale of the Shares to the Purchaser, or that will be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

 

4.5                               Securities Laws Disclosure; Publicity.  On or before 9:00 A.M., New York City time, on the second (2nd) Trading Day immediately following the execution of this Agreement, the Company will file a Current Report on Form 6-K with the Commission describing the Transaction Documents (and including as exhibits to such Current Report on Form 6-K, the Loan Agreement and this Agreement).  Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Purchaser or an Affiliate of the Purchaser, or include the name of the Purchaser or an Affiliate of the Purchaser in any press release or filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of the Purchaser, except (i) as required by federal securities law in connection with the filing of final Transaction Documents (including signature pages thereto) with the Commission and (ii) to the extent such disclosure is required by law, request of the Staff of the Commission or Trading Market regulations, in which case the Company shall provide the Purchaser with two (2) days prior written notice of such disclosure permitted under this subclause (ii).  From and after the filing of the Form 6-K, the Purchaser shall not be in possession of any material, non-public information received from the Company, any Subsidiary or any of their respective officers, directors, employees or agents, that is not disclosed in the Press Release unless the Purchaser shall have executed a written agreement regarding the confidentiality and use of such information.  The Purchaser covenants that until such time as the transactions contemplated by this Agreement are required to be publicly disclosed by the Company as described in this Section 4.5, the Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

 

4.6                               Indemnification of Purchaser.  Subject to the provisions of this Section 4.6, the Company will indemnify and hold the Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser in any capacity, or its Affiliates, by any stockholder of the Company who is not an Affiliate of the Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of the Purchaser’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings the Purchaser may have with any such stockholder or any violations by the Purchaser of state or federal securities laws or any conduct by the Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance). Promptly after receipt by any Person (the “Indemnified Person”) of notice of any demand, claim or circumstances which would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which indemnity may be sought pursuant to this Section 4.6, such Indemnified Person shall promptly notify the Company in writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all reasonable fees and expenses;  provided, however, that the failure of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the extent that the Company is actually and materially prejudiced by such failure to notify. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the reasonable and documented fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified Person shall have mutually agreed to the retention of such counsel; (ii) the Company shall have failed promptly to assume the defense of such proceeding and to employ counsel reasonably satisfactory to such Indemnified Person in such proceeding; or (iii) in the reasonable judgment of counsel to such Indemnified Person, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. The Company shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld,

 

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delayed or conditioned. Without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, delayed or conditioned, the Company shall not effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person 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 Person from all liability arising out of such proceeding.

 

4.7                               Principal Trading Market Listing.  In the time and manner required by the Principal Trading Market, the Company shall prepare and file with such Principal Trading Market an additional shares listing application covering all of the Shares and shall use its commercially reasonable efforts to take all steps necessary to cause all of the Shares to be approved for listing on the Principal Trading Market as promptly as possible thereafter.

 

4.8                               Form D; Blue Sky.  The Company agrees to timely file a Form D with respect to the Shares as required under Regulation D and to provide a copy thereof, promptly upon the written request of the Purchaser.  The Company, on or before the Closing Date, shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Shares for sale to the Purchaser under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification) and shall provide evidence of such actions promptly upon the written request of the Purchaser.

 

4.9                               Delivery of Shares After Closing. The Company shall deliver, or cause to be delivered, the Shares purchased by the Purchaser to the Purchaser within three (3) Trading Days of the Closing Date.

 

4.10                     Short Sales and Confidentiality After The Date Hereof.  The Purchaser shall not, and shall cause its Trading Affiliates not to, engage, directly or indirectly, in any transactions in the Company’s securities (including, without limitation, any Short Sales involving the Company’s securities) during the period from the date hereof until the earlier of such time as (i) the transactions contemplated by this Agreement are first publicly announced as required by and described in Section 4.5 or (ii) this Agreement is terminated in full pursuant to Section 6.18.  The Purchaser covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company as described in Section 4.5, the Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents and Disclosure Schedules.  Notwithstanding the foregoing, the Purchaser makes no representation, warranty or covenant that it will not engage in Short Sales in the securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.5.

 

4.11                        Non-Public Information.  Purchaser acknowledges that some of the information provided by the Company in connection with the purchase of the Shares may constitute “material non-public information” within the meaning of Rule 10b-5 of the Exchange Act.  Purchaser acknowledges and agrees that Purchaser is prohibited from any buying or selling of the Company’s securities on the basis of material non-public information until after the information either becomes publicly available by the Company (such as in the Company’s SEC Reports) or ceases to be material. Purchaser acknowledges that it is aware of the restrictions of applicable securities laws, including Sections 9 and 10 of the Exchange Act and Rule 10b-5 under the Exchange Act, relating to the trading in securities of an issuer, including while in possession of material non-public information regarding that issuer.

 

4.12                        Tax Matters.

 

(a)                                 PFIC Reporting.  The Company hereby agrees to reasonably cooperate with the Purchaser in order to permit the Purchaser to determine whether the Company is at any time a “passive foreign investment company” (as defined in Section 1297(a) of the Code (a “PFIC”).  In furtherance of the foregoing, the Company shall, within ninety (90) days after the end of each taxable year, notify the Purchaser of its good faith belief as to whether the Company or any current or future direct or indirect Subsidiary of the Company was a PFIC for such taxable year.  If the Company or any Subsidiary thereof is determined to be a PFIC, the Company (i) shall promptly after the determination thereof notify the Purchaser, (ii) shall timely provide such information to the Purchaser as the Purchaser may reasonably request to enable the Purchaser (or its direct or indirect owners) to complete its U.S. Internal Revenue Service Form 8621 with respect to such entity and (iii) shall use reasonable best efforts, to provide such statements, information and documentation as the Purchaser (or its direct or indirect owners) reasonably believes is necessary for it to make an election to treat such entity as a “qualified electing fund” under

 

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Section 1295 of the Code.  The Company shall not be liable to the Purchaser if its statement of belief, or any information provided pursuant to this Section 4.14(a), is found to be incorrect, unless such statement of belief or information was not reached or provided in good faith by the Company or was the result of the Company’s gross negligence.

 

(b)                                 Controlled Foreign Corporation. If the Purchaser (or any of its direct or indirect owners) is an “United States shareholder” within the meaning of Section §951(b) of the Code (a “10% U.S. Shareholder”) of the Company at any point during a taxable year, then the Company hereby agrees to reasonably cooperate with the Purchaser in order to permit the Purchaser (or any of its direct or indirect owners) to determine whether the Company is a “controlled foreign corporation” within the meaning of Section 957 of the Code (“CFC”).  In furtherance of the foregoing, the Company shall, within ninety (90) days after the end of such taxable year, notify the Purchaser of its good faith belief, based on the information available to the Company, as to whether the Company is or is likely to have become a CFC for such taxable year.  In making the annual determination described above, the Company agrees to inquire of any of its shareholders that hold 10% or more of its voting stock and is not a 10% U.S. Shareholder whether such shareholder has any direct or indirect owners that could be a 10% U.S. Shareholder of the Company, but shall not be responsible for whether any such shareholder replies, or replies accurately, to such inquiry.  If the Company is or is likely to have become a CFC, then the Company shall use reasonable best efforts, to provide the Purchaser all information reasonably requested by the Purchaser so that the Purchaser (or any of its direct or indirect owners) may timely comply with its filing obligations under the Code, including but not limited to Internal Revenue Service Form 5471.  The Company shall not be liable to the Purchaser if its statement of belief, or any information provided pursuant to this Section 4.14(b), is found to be incorrect, unless such statement of belief or information was not reached or provided in good faith by the Company or was the result of gross negligence.

 

ARTICLE V.
 CONDITIONS PRECEDENT TO CLOSING

 

5.1                               Conditions Precedent to the Obligations of the Purchaser to Purchase Shares.  The obligation of the Purchaser to acquire Shares at the Closing is subject to the fulfillment to the Purchaser’s satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by the Purchaser:

 

(a)                                 Representations and Warranties.  The representations and warranties of the Company contained herein shall be true and correct in all material respects (except for those representations and warranties which are qualified as to materiality, in which case such representations and warranties shall be true and correct in all respects) as of the date when made and as of the Closing Date, as though made on and as of such date, except for such representations and warranties that speak as of a specific date.

 

(b)                                 Performance.  The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing.

 

(c)                                  No Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

 

(d)                                 Consents.  The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary for consummation of the purchase and sale of the Shares (including all Required Approvals), all of which shall be and remain so long as necessary in full force and effect.

 

(e)                                  Adverse Changes.  Since the date of execution of this Agreement, no event or series of events shall have occurred that has had or would reasonably be expected to have a Material Adverse Effect.

 

(f)                                   Listing.  The NASDAQ Global Select Market shall have approved the listing of additional shares application for the Shares.

 

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(g)                                  No Suspensions of Trading in Ordinary Shares.  The Ordinary Shares shall not have been suspended, as of the Closing Date, by the Commission or the Principal Trading Market from trading on the Principal Trading Market nor shall suspension by the Commission or the Principal Trading Market have been threatened, as of the Closing Date, either (A) in writing by the Commission or the Principal Trading Market or (B) by falling below the minimum listing maintenance requirements of the Principal Trading Market.

 

(h)                                 Company Deliverables.  The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a).

 

(i)                                     Compliance Certificate.  The Company shall have delivered to the Purchaser a certificate, dated as of the Closing Date and signed by its Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in Sections 5.1(a) and (b) in substantially the form attached hereto as Exhibit E.

 

(j)                                    Amendment to 2016 Securities Purchase Agreement.  The Company shall have entered into a valid amendment to that certain Securities Purchase Agreement, dated December 22, 2016, by and among the Company and each purchaser identified on the signature pages thereto (the “2016 SPA”), binding upon all Persons holding rights pursuant to Section 4.13 of the 2016 SPA, to the effect that the transactions contemplated by the Transaction Documents (including the sale and issuance of the Shares hereunder) shall not be subject to the provisions of Section 4.13 of the 2016 SPA, and such amendment shall remain in full force and effect through the Closing.

 

(k)                                 Termination.  This Agreement shall not have been terminated in accordance with Section 6.18 herein.

 

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

 

(a)                                 Representations and Warranties.  The representations and warranties made by the Purchaser in Section 3.2 hereof shall be true and correct in all material respects (except for those representations and warranties which are qualified as to materiality, in which case such representations and warranties shall be true and correct in all respects) as of the date when made, and as of the Closing Date as though made on and as of such date, except for representations and warranties that speak as of a specific date.

 

(b)                                 Performance.  The Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Purchaser at or prior to the Closing Date.

 

(c)                                  No Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

 

(d)                                 Consents.  The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary for consummation of the purchase and sale of the Shares, all of which shall be and remain so long as necessary in full force and effect.

 

(e)                                  Purchaser Deliverables.  The Purchaser shall have delivered its Purchaser Deliverables in accordance with Section 2.2(b).

 

(f)                                   Listing.  The NASDAQ Global Select Market shall have approved the listing of additional shares application for the Shares.

 

23

 

(g)                                  Termination.  This Agreement shall not have been terminated in accordance with Section 6.18 herein.

 

ARTICLE VI.
 MISCELLANEOUS

 

6.1                               Fees and Expenses.  The Company and the Purchaser shall each pay the fees and expenses of their respective advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party in connection with the negotiation, preparation, execution, delivery and performance of this Agreement, in each case in accordance with the terms of and subject to the “Expense Cap” as defined under the Fee Letter, dated on or about the date hereof, from CRG Servicing LLC, a Delaware limited liability company, as administrative agent and collateral agent for the Lenders (as defined under the Loan Agreement described thereunder), to the Company, Cortendo AB (publ.), Strongbridge U.S. Inc. and Cortendo Cayman Ltd.  The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the Shares to the Purchaser.

 

6.2                               Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.  At or after the Closing, and without further consideration, the Company and the Purchaser will execute and deliver to the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents.

 

6.3                               Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via electronic mail or facsimile (provided the sender receives a machine-generated confirmation of successful transmission) at the e-mail address or facsimile number specified in this Section 6.3 prior to 5:00 P.M., New York City time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via electronic mail or facsimile at the email address or facsimile number specified in this Section 6.3 on a day that is not a Trading Day or later than 5:00 P.M., New York City time, on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as follows:

 

	
If to the Company:
    	
 
    	
Strongbridge Biopharma   plc
    
	
 
    	
 
    	
900 Northbrook Drive
    
	
 
    	
 
    	
Trevose, PA 19053
    
	
 
    	
 
    	
Telephone No.: (610)   254-9200
    
	
 
    	
 
    	
Attention: A. Brian   Davis
    
	
 
    	
 
    	
E-mail:   b.davis@strongbridgebio.com
    
	
 
    	
 
    	
Strongbridge Biopharma   plc
    
	
 
    	
 
    	
 
    
	
With a copy to:
    	
 
    	
Reed Smith LLP
    
	
 
    	
 
    	
599 Lexington Avenue
    
	
 
    	
 
    	
22nd Floor
    
	
 
    	
 
    	
New York, NY 10022
    
	
 
    	
 
    	
Telephone No.: (212)   521-5400
    
	
 
    	
 
    	
Facsimile No.: (212)   521-5450
    
	
 
    	
 
    	
Attention: Aron Izower
    
	
 
    	
 
    	
E-mail:   aizower@reedsmith.com
    
	
 
    	
 
    	
 
    
	
If to the Purchaser:
    	
 
    	
To the address set   forth under the Purchaser’s name on the signature page hereof; or such   other address as may be designated in writing hereafter, in the same manner,   by such Person.
    

 

24

 

6.4                               Amendments; Waivers; No Additional Consideration.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchaser.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

 

6.5                               Construction.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.  This Agreement shall be construed as if drafted jointly by the parties, 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 or any of the Transaction Documents.

 

6.6                               Successors and Assigns.  The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors and permitted assigns.  This Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the prior written consent of the Purchaser.  The Purchaser may assign its rights hereunder in whole or in part to any Person to whom the Purchaser assigns or transfers any Shares in compliance with the Transaction Documents and applicable law, provided such transferee shall agree in writing to be bound, with respect to the transferred Shares, by the terms and conditions of this Agreement that apply to the “Purchaser”.

 

6.7                               No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except (i) the Placement Agent are intended third party beneficiaries of Article III hereof and (ii) each Purchaser Party is an intended third party beneficiary of Section 4.9.

 

6.8                               Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the Texas Courts.  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Texas Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such Texas Court, or that such Proceeding has been commenced in an improper or inconvenient forum.  Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

6.9                               Survival.  Subject to applicable statute of limitations, the representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Shares.

 

6.10                        Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  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

 

25

 

behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

6.11                        Severability.  If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

6.12                        Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever the Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then the Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

6.13                        Replacement of Shares.  If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company and the Transfer Agent of such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit of that fact and an agreement to indemnify and hold harmless the Company and the Transfer Agent for any losses in connection therewith or, if required by the Transfer Agent, a bond in such form and amount as is required by the Transfer Agent.  The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Shares.  If a replacement certificate or instrument evidencing any Shares is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.

 

6.14                        Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Purchaser and the Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation (other than in connection with any action for a temporary restraining order) the defense that a remedy at law would be adequate.

 

6.15                        Payment Set Aside.  To the extent that the Company makes a payment or payments to the Purchaser pursuant to any Transaction Document or the Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

6.16                        Adjustments in Share Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution payable in shares of Ordinary Shares (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares of Ordinary Shares), combination or other similar recapitalization or event occurring after the date hereof and prior to the Closing, each reference in any Transaction Document to a number of shares or a price per share shall be deemed to be amended to appropriately account for such event.

 

6.17                        Termination. This Agreement may be terminated and the sale and purchase of the Shares abandoned at any time prior to the Closing by either the Company or the Purchaser upon written notice to the other, if the Closing has not been consummated on or prior to 5:00 P.M., New York City time, on the Outside Date; provided, however, that the right to terminate this Agreement under this Section 6.17 shall not be available to any Person whose failure to comply with its obligations under this Agreement has been the cause of or resulted in the

 

26

 

failure of the Closing to occur on or before such time.  Nothing in this Section 6.17 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.  Upon a termination in accordance with this Section 6.17, the Company and the Purchaser shall not have any further obligation or liability (including arising from such termination) to the other.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

27

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

	
 
    	
 
    	
Strongbridge Biopharma   plc
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ A. Brian Davis
    
	
 
    	
 
    	
 
    	
Name: A. Brian Davis
    
	
 
    	
 
    	
 
    	
Title: Chief Financial   Officer
    

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

	
 
    	
 
    	
NAME OF PURCHASER:
    	
CRG Partners III L.P.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Nathan Hukill
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Nathan Hukill
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Aggregate Purchase   Price (Subscription Amount): $501,003.46
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Number of Shares to be   Acquired: 71,777
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Tax ID No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address for Notice:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
1000 Main Street, Suite   2500 
   Houston, TX 77002
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Attn: Portfolio   Reporting
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Telephone No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Facsimile No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
E-mail Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Delivery   Instructions:
    	
 
    	
 
    
	
(if   different than above)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
c/o
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone No.:
    	
 
    	
 
    
					

 

 

	
 
    	
 
    	
NAME OF PURCHASER:
    	
CRG Partners III — Parallel   Fund “A” L.P.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Nathan Hukill
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Nathan Hukill
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Aggregate Purchase   Price (Subscription Amount): $248,997.54
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Number of Shares to be   Acquired: 35,673
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Tax ID No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address for Notice:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
1000 Main Street, Suite   2500 
   Houston, TX 77002
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Attn: Portfolio   Reporting
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Telephone No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Facsimile No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
E-mail Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Delivery   Instructions:
    	
 
    	
 
    
	
(if   different than above)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
c/o
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone No.:
    	
 
    	
 
    
					

 

 

	
 
    	
 
    	
NAME OF PURCHASER:
    	
CRG Partners III (Cayman) Lev   AIV I L.P.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: 
    	
/s/ Nathan Hukill
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Nathan Hukill
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Aggregate Purchase   Price (Subscription Amount): $906,897.44
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Number of Shares to be   Acquired: 129,928
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Tax ID No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address for Notice:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
1000 Main Street, Suite   2500 
   Houston, TX 77002
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Attn: Portfolio   Reporting
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Telephone No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Facsimile No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
E-mail Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Delivery   Instructions:
    	
 
    	
 
    
	
(if   different than above)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
c/o
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone No.:
    	
 
    	
 
    
					

 

 

	
 
    	
 
    	
NAME OF PURCHASER:
    	
CRG Partners III (Cayman) Unlev   AIV I L.P.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: 
    	
/s/ Nathan Hukill
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Nathan Hukill
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Aggregate Purchase   Price (Subscription Amount): $158,097.00
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Number of Shares to be   Acquired: 22,650
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Tax ID No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address for Notice:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
1000 Main Street, Suite   2500 
   Houston, TX 77002
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Attn: Portfolio   Reporting
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Telephone No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Facsimile No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
E-mail Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Attention:
    
	
 
    	
 
    	
 
    
	
Delivery   Instructions:
    	
 
    	
 
    
	
(if   different than above)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
c/o
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone No.:
    	
 
    	
 
    
					

 

 

	
 
    	
 
    	
NAME OF PURCHASER:
    	
CRG Partners III Parallel Fund   “B” (Cayman) L.P.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: 
    	
/s/ Nathan Hukill
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Nathan Hukill
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Aggregate Purchase   Price (Subscription Amount): $1,185,001.58
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Number of Shares to be   Acquired: 169,771
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Tax ID No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address for Notice:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
1000 Main Street, Suite   2500 
   Houston, TX 77002
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Attn: Portfolio   Reporting
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Telephone No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Facsimile No.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
E-mail Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Attention:
    
	
 
    	
 
    	
 
    
	
Delivery   Instructions:
    	
 
    	
 
    
	
(if   different than above)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
c/o
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone No.:
    	
 
    	
 
    
					

 

 

EXHIBITS:

 

A:                                   Form of Opinion of Company Counsel

B:                                   Form of Irrevocable Transfer Agent Instructions

C:                                   Accredited Investor Questionnaire

D:                                   Form of Secretary’s Certificate

E:                                    Form of Officer’s Certificate

 

 

EXHIBIT A

 

FORM OF OPINION OF COMPANY COUNSEL

 

To be given by Irish Company Counsel:

 

1.              The Company is a public limited company, is duly incorporated and validly existing under the laws of Ireland with the requisite corporate power and authority to own, lease and operate properties and assets, and to conduct its business as described in the Company’s Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission on March 24, 2016, to execute and deliver the Transaction Documents and to perform its obligations thereunder, including, without limitation, to issue, sell and deliver the Shares under the Agreement.

 

2.              The Shares will, on: (i) the issuance of the Shares (by the entry of the name of the registered owner thereof in the register of members of the Company confirming that such Shares have been issued credited as fully paid), and (ii) the subscription and payment therefor, by the holder of such Shares in accordance with the constitution of the Company and in the manner provided for by the Purchase Agreement, be validly issued, fully paid and non-assessable (which term, when used herein, means that the holder of such Shares is not liable, solely by virtue of holding such Shares, for additional assessments or calls on such Shares by the Company or its creditors); and

 

3.              All corporate action on the part of the Company necessary for the authorization, execution and delivery of the Agreement by the Company, the authorization, sale, issuance and delivery of the Shares and the performance by the Company of its obligations under the Agreement has been taken by the Company. The Agreement has been duly and validly executed and delivered by the Company and each of them constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with their respective terms.

 

4.              No approval of the shareholders of the Company is required for the execution and delivery of the Purchase Agreement, and the offer, sale or issuance of the Shares, or the consummation by the Company of any other transaction contemplated by the Agreement.

 

To be given by U.S. Company Counsel:

 

5.              The execution and delivery of the Transaction Documents and the issuance and sale by the Company of the Shares to the Purchaser pursuant to the Purchase Agreement do not and will not (A) contravene or violate any provision of New York or federal law, or any rule or regulation thereunder, in each case that, in our experience, is typically applicable to transactions of the nature contemplated by the Purchase Agreement and is applicable to the Company, (B) to our knowledge, result in any breach of, violation of or constitute a default under any currently effective decree, judgment or order currently applicable to the Company, or (C) result in any breach of or constitute a default under any of the Material Contracts.

 

6.              No consent, approval, authorization or order of, or registration, declaration or filing with, any federal, New York court, other governmental or regulatory authority or agency is required for the execution and delivery of the Purchase Agreement, and the offer, sale or issuance of the Shares, or the consummation by the Company of any other transaction contemplated by the Agreement, except for the Form D with respect to the Shares as required under Regulation D, and such consents, approvals, authorizations, orders and registrations or filings as may be required under applicable state securities laws, as to which we express no opinion, from FINRA (as to which we express no opinion).

 

7.              Subject to the accuracy of the Purchaser’s representations in Section 3.2 of the Agreement, the offer, sale and issuance of the Shares in conformity with the terms of the Agreement constitute transactions exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended.

 

8.              The Company is not, and, immediately after giving effect to the offering and sale of the Shares, will not be an “investment company” or an entity controlled by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.

 

 

EXHIBIT B

 

FORM OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

 

 

[STRONGBRIDGE LETTERHEAD]

 

                     , 2017

 

Computershare

Transfer Agent and Registrar

ATTN: Paul Amante

480 Washington Blvd

Jersey City, NJ 07310

 

Ladies and Gentlemen:

 

You are hereby authorized and requested, as Registrar and Transfer Agent of the ordinary shares of Strongbridge Biopharma plc (the “Corporation”), to issue share certificates representing an aggregate of           ordinary shares (the “Shares”) in such names and amounts set forth in Schedule A hereto.

 

Please issue and countersign the share certificates in the names of the entities set forth in Schedule A, and deliver such certificate by certified overnight delivery to the addresses corresponding to such entities set forth in Schedule A hereto.  Please also update the records on Computershare’s system for the Shares at the time of sale of the Shares on         , 2017.

 

The Shares should bear a restrictive legend acknowledging that, among other things, the Shares are restricted under U.S. securities laws.  The required legend that should appear on the Shares is set forth in the attached Schedule B.

 

[Signature Page Follows]

 

 

	
 
    	
 
    	
Very truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
STRONGBRIDGE BIOPHARMA   PLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Received and   Acknowledged:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
COMPUTERSHARE TRUST   COMPANY, N.A.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    

 

 

 

SCHEDULE A

 

ORDINARY SHARE RECIPIENTS

 

	
Purchaser Exact
   Name
    	
 
    	
Address for Notice
    	
 
    	
Address for
   Delivery
    	
 
    	
Tax ID
    	
 
    	
Share Amount
    
	
CRG   Partners III L.P.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CRG   Partners III — Parallel Fund “A” L.P.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CRG   Partners III (Cayman) L.P.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CRG   Partners III Parallel Fund “B” (Cayman) L.P.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

SCHEDULE B

 

Share Certificate Legend

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

 

EXHIBIT C

 

ACCREDITED INVESTOR QUESTIONNAIRE

 

 

STRONGBRIDGE BIOPHARMA PLC
  ACCREDITED INVESTOR QUESTIONNAIRE

 

Ladies and Gentlemen:

 

The undersigned hereby represents that the undersigned has read the definition of “Accredited Investor” from Rule 501 of Regulation D attached hereto as Exhibit A and certifies that either (check one):

 

o            The undersigned is an “Accredited Investor” (please check the appropriate box on Exhibit A to indicate which of the categories listed describes the investing entity or individual); or

 

o            The undersigned is not an “Accredited Investor.”

 

The foregoing representation is true and accurate as of the date first written below. The undersigned acknowledges and agrees that Strongbridge Biopharma plc will be entitled to rely on the truth and accuracy of the foregoing.

 

	
 
    	
 
    	
Very truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[NAME OF INVESTOR]
    
	
 
    	
 
    	
 
    
	
Dated:              ,   2017
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Its:
    	
 
    
	
 
    	
 
    	
Print Title (if   applicable)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Address   (at the State of Domicile):
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Daytime   Telephone Number:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Email:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Daytime   Fax Number:
    	
 
    	
 
    

 

 

EXHIBIT A

 

Rule 501.            Definitions and Terms Used in Regulation D.

 

As used in Regulation D, the following terms have the meaning indicated:

 

(a)                                 Accredited Investor.  “Accredited investor” shall mean any person who comes within any of the following categories, or who the issuer reasonably believes comes within any of the following categories, at the time of the sale of the securities to that person:

 

o                                    Any natural person whose individual net worth(11), or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000 (excluding the value of such person’s primary residence);

 

o                                    Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;

 

o                                    Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

 

o                                    Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

 

o                                    Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

 

(11)  In calculating net worth, an individual may include equity in his or her personal property and real estate (other than his or her primary residence), cash, short-term investments, stock and securities.  Inclusion of equity in personal property and real estate (other than an individual’s primary residence) should be based on the fair market value of such property less debt secured by such property.  An individual may not include the value of his or her primary residence in calculating net worth and may exclude the amount of any indebtedness secured by his or her primary residence up to the fair market value of the residence. The amount of any indebtedness secured by an individual’s primary residence in excess of fair market value of the residence must be included as a liability in calculating net worth.  An individual must also include as a liability any increase in the amount of debt secured by his or her primary residence incurred within 60 days prior to the date of his or her subscription for the Securities unless such debt is incurred in connection with the acquisition of the primary residence.

 

 

o                                    Any director, executive officer or general partner of the issuer of the securities being offered or sold, or any director, executive officer or general partner of a general partner of that issuer;

 

o                                    Any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii);

 

o                                    Any entity in which all of the equity owners are Accredited Investors.

 

 

EXHIBIT D

 

FORM OF SECRETARY’S CERTIFICATE

 

 

STRONGBRIDGE BIOPHARMA PLC

 

SECRETARY’S CERTIFICATE

 

I, Stephen J. Long, the duly elected, qualified and acting Chief Legal Officer and Secretary of Strongbridge Biopharma plc, an Irish public limited company (registered no. 562659) (the “Company”), do hereby certify that:

 

(a)                                 A true and complete copy of resolutions relating to the issuance of         ordinary shares of the Company to those persons identified in the Securities Purchase Agreement, dated as of            , 2017, by and between the Company and the purchaser named therein, as adopted by the Board of Directors of the Company by unanimous written consent dated as of        , 2017, is attached hereto as Exhibit A; and such resolutions have not been amended or revoked and are in full force and effect on the date hereof;

 

(b)                                 Attached hereto as Exhibit B are true and complete copies of the Company’s (i) Certificate of Incorporation and (ii) Memorandum and Articles of Association.  Such Certificate of Incorporation and Memorandum and Articles of Association have not been amended or modified in any way and each remains in full force and effect on and as of the date hereof; and

 

(c)                                  The persons listed below have been duly elected to, and presently hold, the office or offices in the Company set opposite his or her name and each signature set opposite each name is a true and correct copy of such officer’s signature.

 

	
Name
    	
 
    	
Office
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Matthew Pauls
    	
 
    	
Chief Executive Officer
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
A. Brian Davis
    	
 
    	
Chief Financial Officer
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Stephen J. Long
    	
 
    	
Chief Legal Counsel and Secretary
    	
 
    	
 
    

 

(d)                                 Attached hereto is a letter of status from the Irish companies registration office dated as of          , 2017, confirming the Company’s subsistence as of such date.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the undersigned has signed this Certificate this     day of          , 2017.

 

	
 
    	
 
    
	
 
    	
Stephen   J. Long
    
	
 
    	
Chief   Legal Counsel and Secretary
    

 

The undersigned, the Chief Executive Officer of the Company, does hereby certify that Stephen Long is, and at all times since March 2015 has been, the duly elected, qualified and acting Secretary of the Company and that the signature appearing above is his genuine signature.

 

 

	
 
    	
 
    
	
 
    	
Matthew   Pauls
    
	
 
    	
Chief   Executive Officer
    

 

 

EXHIBIT E

 

FORM OF OFFICER’S CERTIFICATE

 

 

STRONGBRIDGE BIOPHARMA PLC

 

OFFICER’S CERTIFICATE

 

                      , 2017

 

Reference is made to that certain Securities Purchase Agreement, dated as of         , 2017, by and among Strongbridge Biopharma plc, an Irish public limited company (the “Company”), and the Purchaser.  Capital Terms used herein and not defined have the meanings ascribed to them in the Securities Purchase Agreement.

 

I, A. Brian Davis, in my capacity as the Chief Financial Officer of the Company, hereby certify as follows:

 

1)             The representations and warranties of the Company contained in the Securities Purchase Agreement are true and correct in all material respects (except for those representations and warranties which are qualified as to materiality, in which case such representations and warranties are true and correct in all respects) as of the date made and as of the date hereof, as though made on and as of the date hereof, except that such representations and warranties that relate to an earlier date were true and correct on and as of such earlier date.

 

2)             The Company has performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the date hereof.

 

3)             The execution and delivery of the Securities Purchase Agreement, and the issuance and sale by the Company of the Shares to the Purchaser pursuant to the Securities Purchase Agreement, do not and will not result in any breach of, violation of, or constitute a default under, any currently effective decree, judgment or order currently applicable to the Company.

 

4)             The undersigned is a duly elected or appointed, qualified and acting officer of the Company, holding the office of Chief Financial Officer; said officer has been authorized to execute and deliver on behalf of the Company any instruments, consents or agreements required under the Securities Purchase Agreement to which the Company is a party that he has executed and delivered.

 

[Signature page follows]

 

 

IN WITNESS WHEREOF, the undersigned has signed this Officers’ Certificate as of the date first set forth above.

 

 

	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
A. Brian Davis
    
	
 
    	
Title:
    	
Chief Financial OfficerExhibit 10.3

 

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY OF THE SECURITIES REPRESENTED HEREBY.

 

WARRANT TO PURCHASE ORDINARY SHARES

OF

STRONGBRIDGE BIOPHARMA PLC

 

Dated as of July 14, 2017 (the “Issue Date”)

Void after the date specified in Section 8

 

	
 
    	
Warrant to Purchase
    [NUMBER] Ordinary Shares

(subject to adjustment)
    

 

THIS CERTIFIES THAT, for value received, [NAME]., or its registered assigns (the “Holder”), is entitled, subject to the provisions and upon the terms and conditions set forth herein, to purchase from STRONGBRIDGE BIOPHARMA PLC, a public limited company incorporated under the laws of Ireland (the “Company”), that number of shares (the “Shares”) of the Company’s ordinary shares, of nominal value $0.01 per share (the “Ordinary Shares”), at such times and at the price per Share, set forth in Section 1. The term “Warrant” as used herein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein. This Warrant is issued in connection with the transactions described in the Term Loan Agreement, dated as of July 14, 2017, by and between the Company, the Subsidiary Guarantors from time to time party thereto, the Lenders from time to time party thereto and CRG Servicing LLC.

 

The following is a statement of the rights of the Holder and the conditions to which this Warrant is subject, and to which Holder, by acceptance of this Warrant, agrees:

 

1. Number and Price of Shares; Exercise Period.

 

(a) Number of Shares. Subject to any previous exercise of the Warrant, the Holder shall have the right to purchase up to [NUMBER] Shares, as may be adjusted pursuant hereto prior to (or in connection with) the expiration of this Warrant as provided in Section 8.

 

(b) Exercise Price. The exercise price per Share shall be equal to $7.37, subject to adjustment pursuant hereto (the “Exercise Price”), provided however, the exercise price shall never be less than the nominal value of an Ordinary Share.

 

(c) Exercise Period. This Warrant shall be exercisable, in whole or in part, prior to (or in connection with) the expiration of this Warrant as set forth in Section 8.

 

2. Exercise of the Warrant.

 

(a) Exercise. The purchase rights represented by this Warrant may be exercised at the election of the Holder, in whole or in part, in accordance with Section 1, by:

 

1

 

(i) the tender to the Company at its principal office (or such other office or agency as the Company may designate) of a notice of exercise in the form of Exhibit A (the “Notice of Exercise”), duly completed and executed by or on behalf of the Holder, together with the surrender of this Warrant; and

 

(ii) the payment to the Company of an amount equal to (x) the Exercise Price multiplied by (y) the number of Shares being purchased, by wire transfer or certified, cashier’s or other check acceptable to the Company and payable to the order of the Company.

 

(b) Net Issue Exercise. In lieu of exercising this Warrant pursuant to Section 2(a)(ii), if the fair market value of one Share is greater than the Exercise Price (at the date of calculation as set forth below), the Holder may elect to receive a number of Shares, paid-up to their nominal value, equal to the value of this Warrant (or of any portion of this Warrant being canceled) by surrender of this Warrant at the principal office of the Company (or such other office or agency as the Company may designate) together with a properly completed and executed Notice of Exercise reflecting such election and the payment to the Company of an amount equal to (x) the nominal value of a Share multiplied by (y) the number of Shares being purchased (the “Nominal Value Payment Amount”), by wire transfer or certified, cashier’s or other check acceptable to the Company and payable to the order of the Company, in which event the Company shall issue to the Holder that number of Shares computed using the following formula:

 

	
X
    	
=   
    	
Y (A – B)
    	
 
    
	
 
    	
 
    	
A
    	
 
    

 

Where:

 

	
X
    	
=
    	
The number of Shares to be issued to the Holder
    
	
 
    	
 
    	
 
    
	
Y
    	
=
    	
The number of Shares to be purchased (as specified   in paragraph 1 of the applicable Notice of Exercise)
    
	
 
    	
 
    	
 
    
	
A
    	
=
    	
The fair market value of one Ordinary Share (at the   date of such calculation)
    
	
 
    	
 
    	
 
    
	
B
    	
=
    	
The Exercise Price (as adjusted to the date of such   calculation) less the nominal value of one Ordinary Share
    

 

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

 

(i)            if the Ordinary Shares are traded on any securities exchange or quoted on an established automated over-the-counter market, the fair market value shall be deemed to be the average of the closing prices over a ten (10) Trading Day period ending five (5) Trading Days before the date of calculation; or

 

(ii)           if at any time the Ordinary Shares are not listed on any securities exchange or quoted on an established automated over-the-counter market, the fair market value of Ordinary Shares shall be the price per Ordinary Share which the Company could obtain from a willing buyer (not a current employee or director) for Ordinary Shares sold by the Company, from authorized but unissued Ordinary Shares, as determined in good faith by its Board of Directors, unless the Company shall become subject to a Reorganization, in which case the fair market value of the Ordinary Shares shall be deemed to be the per share value received by the holders of the Company’s Ordinary Shares pursuant to such Reorganization.

 

For purposes hereof, the date of calculation shall be the date the Holder sends to the Company a Notice of Exercise.  “Trading Day” means a day in which trading in the Ordinary Shares generally occurs on The Nasdaq Global Select Market or if the Ordinary Shares are not then listed on The Nasdaq Global Select Market, on the principal other U.S. national or regional securities exchange on which the Ordinary Shares are then listed, or if the Ordinary Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Ordinary Shares are then traded.  If the Ordinary Shares are not so listed or traded, “Trading Day” means any Business Day.  “Business Day” means any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.

 

2

 

(c) Exercise Prior to Expiration. To the extent this Warrant is not previously exercised as to all Shares subject hereto, and if the fair market value of one Share is greater than the Exercise Price then in effect, this Warrant shall be deemed automatically exercised pursuant to Section 2(b) (even if not surrendered) immediately before its expiration and the Holder shall be deemed to have provided, in connection with such exercise, an undertaking to pay the Nominal Value Payment Amount to the Company in cash on demand.  For purposes of such automatic exercise, the fair market value of one Share upon such expiration shall be determined pursuant to Section 2(b).  To the extent this Warrant or any portion thereof is deemed automatically exercised pursuant to this Section 2(c), the Company agrees to promptly notify the Holder of the number of Shares, if any, the Holder is to receive by reason of such automatic exercise.

 

(d) Share Certificates. This Warrant shall be deemed to have been exercised and the Shares issuable upon such exercise shall be deemed to have been issued immediately prior to the close of business on the date this Warrant is exercised in accordance with its terms, and the person entitled to receive the Shares issuable upon such exercise shall be treated for all purposes as the holder of record of such Shares as of the close of business on such date. As promptly as reasonably practicable on or after such date, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for that number of Shares issuable upon such exercise. In the event that this Warrant is exercised in part and has not expired, the Company shall execute and deliver a new Warrant reflecting the number of Shares that remain subject to this Warrant.

 

(e) No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. In lieu of such fractional share to which the Holder would otherwise be entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction.

 

(f) Conditional Exercise. The Holder may exercise this Warrant conditioned upon (and effective immediately prior to) consummation of any transaction that would cause the expiration of this Warrant pursuant to Section 8 by so indicating in the notice of exercise.

 

(g) Reservation of Shares. The Company agrees during the term this Warrant is exercisable to reserve and keep available from its authorized and unissued Ordinary Shares such number of Ordinary Shares as shall from time to time be sufficient to effect the exercise of this Warrant; and if at any time the number of authorized but unissued Ordinary Shares shall not be sufficient for purposes of the exercise of this Warrant in accordance with its terms, without limitation of such other remedies as may be available to the Holder, the Company will use all reasonable efforts to take such corporate action as may be necessary to increase its authorized and unissued Ordinary Shares of the Company to a number of Ordinary Shares as shall be sufficient for such purposes. The Company represents and warrants that all Shares that may be issued upon the exercise of this Warrant will, when issued in accordance with the terms hereof, be validly issued, fully paid and nonassessable.

 

(h) Issued Securities.  The Company represents and warrants to the Holder that all issued and outstanding Ordinary Shares or any other securities of the Company have been duly authorized and validly issued and are fully paid and nonassessable.  All outstanding Ordinary Shares and any other securities were issued in full compliance with all federal and state securities laws.  In addition, as of the date immediately preceding the date of this Warrant:

 

(i)    A description of the Company’s capitalization attached hereto as Schedule A is true and complete, in all material respects, as of the Issue Date.

 

(ii)   Except for this Warrant and as otherwise disclosed on Schedule A, there are no other options, warrants, conversion privileges or other rights presently outstanding to purchase or otherwise acquire any authorized but unissued shares of the Company’s share capital or other securities of the Company.

 

3. Replacement of the Warrant. Subject to the receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at the expense of the Holder shall execute and deliver, 

 

3

 

in lieu of this Warrant, a new warrant of like tenor and amount.

 

4. Transfer of the Warrant.

 

(a) Warrant Register. The Company shall maintain a register (the “Warrant Register”) containing the name and address of the Holder or Holders. Until this Warrant is transferred on the Warrant Register in accordance herewith, the Company may treat the Holder as shown on the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary. Any Holder of this Warrant (or of any portion of this Warrant) may change its address as shown on the Warrant Register by written notice to the Company requesting a change.

 

(b) Warrant Agent. The Company may appoint an agent for the purpose of maintaining the Warrant Register referred to in Section 4(a), issuing the Shares or other securities then issuable upon the exercise of this Warrant, exchanging this Warrant, replacing this Warrant or conducting related activities.

 

(c) Transferability of the Warrant. Subject to the provisions of this Warrant with respect to compliance with the Securities Act of 1933, as amended (the “Securities Act”), as set forth in Section 5, title to this Warrant may be transferred by endorsement (by the transferor and the transferee executing the assignment form attached as Exhibit B (the “Assignment Form”)) and delivery in the same manner as a negotiable instrument transferable by endorsement and delivery.

 

(d) Exchange of the Warrant upon a Transfer. On surrender of this Warrant (and a properly endorsed Assignment Form) for exchange, subject to the provisions of this Warrant with respect to compliance with the Securities Act and limitations on assignments and transfers, the Company shall issue to or on the order of the Holder a new warrant or warrants of like tenor, in the name of the Holder or as the Holder (on payment by the Holder of any applicable transfer taxes) may direct, for the number of shares issuable upon exercise hereof, and the Company shall register any such transfer upon the Warrant Register. This Warrant (and the securities issuable upon exercise of this Warrant) must be surrendered to the Company or its warrant or transfer agent, as applicable, as a condition precedent to the sale, pledge, hypothecation or other transfer of any interest in any of the securities represented hereby.

 

(e) Taxes. In no event shall the Company be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of any certificate in a name other than that of the Holder, and the Company shall not be required to issue or deliver any such certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid or is not payable.

 

5. Compliance with Securities Laws. By acceptance of this Warrant, the Holder agrees to comply with the following:

 

(a) Restrictions on Transfers. Any transfer of this Warrant or the Shares (the “Securities”) must be in compliance with all applicable federal and state securities laws. The Holder agrees not to make any sale, assignment, transfer, pledge or other disposition of all or any portion of the Securities, or any beneficial interest therein, unless and until the transferee thereof has agreed in writing for the benefit of the Company to take and hold such Securities subject to, and to be bound by, the terms and conditions set forth in this Warrant to the same extent as if the transferee were the original Holder hereunder, and either:

 

(i) there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement, or

 

(ii) (A) such Holder shall have given prior written notice to the Company of such Holder’s intention to make such disposition and shall have furnished the Company with a reasonable detailed description of the manner and circumstances of the proposed disposition, (B) the transferee shall have made the representations set forth in Section 10 with respect to itself as a Holder and (C) if requested by the Company, such Holder shall have furnished the Company, at the Holder’s expense, with (i) evidence reasonably satisfactory to the Company that such disposition will not require registration of such Securities under the Securities Act or (ii) a legal 

 

4

 

opinion to the effect that the transfer of such Securities may be effected in compliance with the terms of the Securities Act.  Notwithstanding the foregoing, compliance with clauses (B) and (C) above shall not be required for any transfer in compliance with Rule 144 and compliance with clause (C) above shall not be required for any transfer by the Holder to any affiliate of the Holder (or any fund or partnership under common control with one of more general partners or managing members of, or shares the same management company with, the Holder) or a transfer by the Holder to any of the Holder’s partners, members or other equity owners, or retired partners, members or other equity owners or the estate of any partners, members or other equity owners or retired partners, members or other equity owners.

 

(b) Investment Representation Statement. Unless this Warrant is exercised pursuant to an effective registration statement under the Securities Act that includes the Shares with respect to which the Warrant was exercised or pursuant to Section 2(b) that results in the Shares issued upon exercise being eligible for resale under Rule 144, it shall be a condition to any exercise of this Warrant that the Holder shall have confirmed the representations set forth in Section 10 hereof.

 

(c) Securities Law Legend. Subject to Section 5(e), the Securities shall (unless otherwise permitted by the provisions of this Warrant) be stamped or imprinted with a legend substantially similar to the following (in addition to any legend required by state securities laws):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS CERTIFICATE MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY OF THE SECURITIES REPRESENTED HEREBY.

 

(d) Instructions Regarding Transfer Restrictions. Subject to Section 5(e), the Holder consents to the Company making a notation on its records and giving instructions to any transfer agent in order to implement the restrictions on transfer established in this Section 5.

 

(e) Removal of Legend. The legend referring to federal and state securities laws identified in Section 5(c) stamped on a certificate evidencing the Shares and the transfer instructions and record notations with respect to the Securities shall be removed promptly upon request by the Holder and the Company shall issue a certificate without such legend to the holder of such Securities if (i) such Securities are registered under the Securities Act, (ii) such securities are eligible for resale under Rule 144, or (iii) such holder provides the Company with an opinion of counsel reasonably acceptable to the Company to the effect that a sale or transfer of such securities may be made without registration or qualification.

 

(f) Compliance with Securities Laws. The Holder is aware of the restrictions imposed by the United States securities laws on the purchase or sale of securities by any person who has received material, non-public information from the issuer of such securities and on the communication of such information to any other person when it is reasonably foreseeable that such other person is likely to purchase or sell such securities in reliance upon such information.

 

6. Adjustments. Subject to the expiration of this Warrant pursuant to Section 8, the number and kind of shares purchasable hereunder and the Exercise Price therefor are subject to adjustment from time to time, as follows:

 

(a) Merger or Reorganization. If at any time there shall be any reorganization, recapitalization, merger or consolidation (a “Reorganization”) involving the Company (other than as otherwise provided for herein or as would cause the expiration of this Warrant under Section 8) in which Ordinary Shares of the Company are 

 

5

 

converted into or exchanged for securities, cash or other property, then, as a part of such Reorganization, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, the kind and amount of securities, cash or other property of the successor corporation resulting from such Reorganization (collectively, “Reference Property”), equivalent in value to that which a holder of the Shares deliverable upon exercise of this Warrant would have been entitled to receive in such Reorganization if the right to purchase the Shares hereunder had been exercised immediately prior to such Reorganization. In any such case, appropriate adjustment (as determined in good faith by the Board of Directors of the successor corporation) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after such Reorganization to the end that the provisions of this Warrant shall be applicable after the event, as near as reasonably may be, in relation to any shares or other securities deliverable after that event upon the exercise of this Warrant. Without limiting the foregoing, in connection with any Reorganization, upon the closing thereof, the successor or surviving entity shall assume the obligations of this Agreement.  The provisions of this Section 6(a) shall similarly apply to successive Reorganizations.

 

(b) Reclassification of Shares. If the securities issuable upon exercise of this Warrant are changed into the same or a different number of securities of any other class or classes by reclassification, capital reorganization or otherwise (other than as otherwise provided for herein) (a “Reclassification”), then, in any such event, in lieu of the number of Shares which the Holder would otherwise have been entitled to receive, the Holder shall have the right thereafter to exercise this Warrant for a number of Shares of such other class or classes of shares that a holder of the number of securities deliverable upon exercise of this Warrant immediately before that change would have been entitled to receive in such Reclassification, all subject to further adjustment as provided herein with respect to such other shares.

 

(c) Subdivisions and Combinations. In the event that the outstanding Ordinary Shares are subdivided (by shares split, by payment of a shares dividend or otherwise) into a greater number of Ordinary Shares, the number of Shares issuable upon exercise of the this Warrant immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately increased, and the Exercise Price shall be proportionately decreased, and in the event that the outstanding Ordinary Shares are combined (by reclassification or otherwise) into a lesser number of Ordinary Shares, the number of Shares issuable upon exercise of the this Warrant immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately decreased, and the Exercise Price shall be proportionately increased.

 

(d) Notice of Adjustments. Upon any adjustment in accordance with this Section 6, the Company shall give notice thereof to the Holder, which notice shall state the event giving rise to the adjustment, the Exercise Price as adjusted and the number of securities or other property purchasable upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation of each. The Company shall, upon the written request of any Holder, furnish or cause to be furnished to such Holder a certificate setting forth (i) such adjustments, (ii) the Exercise Price at the time in effect and (iii) the number of securities and the amount, if any, of other property that at the time would be received upon exercise of this Warrant.

 

7. Notification of Certain Events. Prior to the expiration of this Warrant pursuant to Section 8, in the event that the Company shall authorize:

 

(a) the issuance of any dividend or other distribution on the share capital of the Company (other than (i) dividends or distributions otherwise provided for in Section 6, (ii) repurchases of Ordinary Shares issued to or held by employees, officers, directors or consultants of the Company or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right of said repurchase; (iii) repurchases of Ordinary Shares issued to or held by employees, officers, directors or consultants of the Company or its subsidiaries pursuant to rights of first refusal or first offer contained in agreements providing for such rights; or (iv) repurchases of Ordinary Shares in connection with the settlement of disputes with any shareholder ), whether in cash, property, shares or other securities;

 

(b) the voluntary liquidation, dissolution or winding up of the Company; or

 

(c) any transaction resulting in the expiration of this Warrant pursuant to Section 8(b);

 

6

 

the Company shall send to the Holder of this Warrant at least ten (10) calendar days prior written notice of the date on which a record shall be taken for any such dividend or distribution specified in clause (a) or the expected effective date of any such other event specified in clause (b) or (c), as applicable. The notice provisions set forth in this section may be shortened or waived prospectively or retrospectively by the consent of the Holder of this Warrant.

 

8. Expiration of the Warrant. This Warrant shall expire and shall no longer be exercisable as of the earlier of:

 

(a) 5:00 p.m., Pacific time, on July 14, 2024; or

 

(b) (i) the acquisition of the Company by another entity by means of any transaction or series of related transactions to which the Company is a party (including, without limitation, any share acquisition, reorganization, merger or consolidation, but excluding any sale of shares for capital raising purposes and any transaction effected primarily for purposes of changing the Company’s jurisdiction of incorporation) other than a transaction or series of related transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction or series of related transactions receive voting securities of such other surviving or resulting entity (or if the Company or such other surviving or resulting entity is a wholly-owned subsidiary immediately following such acquisition, its parent), or (ii) a sale, lease or other disposition of all or substantially all of the assets of the Company and its subsidiaries taken as a whole by means of any transaction or series of related transactions, except where such sale, lease or other disposition is to a wholly-owned subsidiary of the Company; provided that the holders of Shares in the transaction described in (i) or (ii) above receive cash or cash equivalents in such transaction with an aggregate value per Ordinary Share greater than two times the Exercise Price.

 

9. No Rights as a Shareholder. Nothing contained herein shall entitle the Holder to any rights as a shareholder of the Company or to be deemed the holder of any securities that may at any time be issuable on the exercise of the rights hereunder for any purpose nor shall anything contained herein be construed to confer upon the Holder, as such, any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of shares, reclassification of shares, change of nominal value or change of shares to no nominal value, consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or any other rights of a shareholder of the Company until this Warrant shall have been exercised.

 

10. Representations and Warranties of the Holder. By acceptance of this Warrant, the Holder represents and warrants to the Company as follows:

 

(a) No Registration. The Holder understands that the Securities have not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Holder’s representations as expressed herein or otherwise made pursuant hereto.

 

(b) Investment Intent. The Holder is acquiring the Securities for investment for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, any distribution thereof. The Holder has no present intention of selling, granting any participation in, or otherwise distributing the Securities, nor does it have any contract, undertaking, agreement or arrangement for the same.

 

(c) Investment Experience. The Holder has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company, and has such knowledge and experience in financial or business matters so that it is capable of evaluating the merits and risks of its investment in the Company and protecting its own interests.

 

(d) Speculative Nature of Investment. The Holder understands and acknowledges that its investment in the Company is highly speculative and involves substantial risks. The Holder can bear the economic risk of its investment and is able, without impairing its financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of its investment.

 

7

 

(e) Accredited Investor. The Holder is an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by the Securities and Exchange Commission and agrees to submit to the Company such further assurances of such status as may be reasonably requested by the Company. The Holder has furnished or made available any and all information requested by the Company or otherwise necessary to satisfy any applicable verification requirements as to “accredited investor” status. Any such information is true, correct, timely and complete.

 

(f) Residency. The residency of the Holder (or, in the case of a partnership or corporation, such entity’s principal place of business) is correctly set forth on the signature page hereto.

 

(g) Restrictions on Resales. The Holder acknowledges that the Securities must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available. The Holder is aware of the provisions of Rule 144 promulgated under the Securities Act, which permit resale of shares purchased in a private placement subject to the satisfaction of certain conditions, which may include, among other things, the availability of certain current public information about the Company; the resale occurring not less than a specified period after a party has purchased and paid for the security to be sold; the number of shares being sold during any three-month period not exceeding specified limitations; the sale being effected through a “broker’s transaction,” a transaction directly with a “market maker” or a “riskless principal transaction” (as those terms are defined in the Securities Act or the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder); and the filing of a Form 144 notice, if applicable. The Holder acknowledges and understands that the Company may not be satisfying the current public information requirement of Rule 144 at the time the Holder wishes to sell the Securities and that, in such event, the Holder may be precluded from selling the Securities under Rule 144 even if the other applicable requirements of Rule 144 have been satisfied. The Holder acknowledges that, in the event the applicable requirements of Rule 144 are not met, registration under the Securities Act or an exemption from registration will be required for any disposition of the Securities. The Holder understands that, although Rule 144 is not exclusive, the Securities and Exchange Commission has expressed its opinion that persons proposing to sell restricted securities received in a private offering other than in a registered offering or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales and that such persons and the brokers who participate in the transactions do so at their own risk.

 

(h) Authorization. The Holder has full legal capacity, power and authority to execute and deliver this Warrant and to perform its obligations hereunder. This Warrant constitutes the valid and binding obligations of the Holder, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.

 

11. Miscellaneous.

 

(a) Amendments. Except as expressly provided herein, neither this Warrant nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument referencing this Warrant and signed by the Company and the Holder of this Warrant.

 

(b) Waivers. No waiver of any single breach or default shall be deemed a waiver of any other breach or default theretofore or thereafter occurring.

 

(c) Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail (if to the Holder) or otherwise delivered by hand, messenger or courier service addressed:

 

(i) if to the Holder, to the Holder at the Holder’s address, facsimile number or electronic mail address as show on the signature page hereto, or at such other current address as the Holder shall have furnished to the Company; or

 

(ii) if to the Company, to the attention of the Chief Executive Officer or Chief 

 

8

 

Financial Officer of the Company at the Company’s address, facsimile number or electronic mail address as shown on the signature page hereto, or at such other current address as the Company shall have furnished to the Holder.

 

Each such notice or other communication shall for all purposes of this Warrant be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier service, freight prepaid, specifying next-business-day delivery, one business day after deposit with the courier), or (ii) if sent via mail, at the earlier of its receipt or five days after the same has been deposited in a regularly-maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent via facsimile, upon confirmation of facsimile transfer or, if sent via electronic mail, upon confirmation of delivery when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient’s next business day. In the event of any conflict between the Company’s books and records and this Warrant or any notice delivered hereunder, the Company’s books and records will control absent fraud or error.

 

(d) Governing Law. This Warrant and all actions arising out of or in connection with this Warrant shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law provisions of the State of New York, or of any other state.

 

(e) Jurisdiction and Venue.  The Company agrees that any suit, action or proceeding with respect to this Agreement or any other Loan Document to which it is a party or any judgment entered by any court in respect thereof may be brought initially in the federal or state courts in Houston, Texas or in the courts of its own corporate domicile and irrevocably submits to the non-exclusive jurisdiction of each such court for the purpose of any such suit, action, proceeding or judgment. This Section 13.10(a) is for the benefit of the Holder only and, as a result, Holder shall not be prevented from taking proceedings in any other courts with jurisdiction. Nothing herein shall in any way be deemed to limit the ability of the Holder to serve any such process or summonses in any other manner permitted by applicable law. The Company irrevocably waives to the fullest extent permitted by law any objection that it may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Warrant and hereby further irrevocably waives to the fullest extent permitted by law any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. A final judgment (in respect of which time for all appeals has elapsed) in any such suit, action or proceeding shall be conclusive and may be enforced in any court to the jurisdiction of which the Company is or may be subject, by suit upon judgment.

 

(f) Titles and Subtitles. The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant. All references in this Warrant to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

 

(g) Severability. If any provision of this Warrant becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Warrant, and such illegal, unenforceable or void provision shall be replaced with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, unenforceable or void provision. The balance of this Warrant shall be enforceable in accordance with its terms.

 

(h) Waiver of Jury Trial. EACH OF THE HOLDER AND THE COMPANY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS WARRANT.

 

(i) California Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS WARRANT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS WARRANT ARE EXPRESSLY CONDITIONED UPON THE 

 

9

 

QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

 

(j) Saturdays, Sundays and Holidays. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or U.S. federal holiday, then such action may be taken or such right may be exercised on the next succeeding day that is not a Saturday, Sunday or U.S. federal holiday.

 

(k) Rights and Obligations Survive Exercise of the Warrant. Except as otherwise provided herein, the rights and obligations of the Company and the Holder under this Warrant shall survive exercise of this Warrant.

 

(l) Entire Agreement. Except as expressly set forth herein, this Warrant (including the exhibits attached hereto) constitutes the entire agreement and understanding of the Company and the Holder with respect to the subject matter hereof and supersede all prior agreements and understandings relating to the subject matter hereof.

 

(signature page follows)

 

10

 

The Company and the Holder sign this Warrant as of the date stated on the first page.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
STRONGBRIDGE BIOPHARMA PLC
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
900 Northbrook Drive
    
	
 
    	
Suite 200
    
	
 
    	
Trevose, PA 19053
    
	
 
    	
 
    
	
 
    	
Attn:
    	
 
    
	
 
    	
Tel.:
    	
(610) 254-9200
    
	
 
    	
Fax:
    	
 
    
	
 
    	
Email:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
With a copy (which   shall not constitute notice) to:
    
	
 
    	
 
    
	
 
    	
Reed Smith LLP
    
	
 
    	
599 Lexington Avenue
    
	
 
    	
New York, New York   10022
    
	
 
    	
Attention: Aron Izower
    
	
 
    	
Tel.: (212) 549-0393
    
	
 
    	
Fax: (212) 521-5450
    
	
 
    	
Email:   aizower@reedsmith.com
    
				

 

 

	
AGREED   AND ACKNOWLEDGED,
    	
 
    
	
 
    	
 
    
	
HOLDER:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Address for Notices:
    	
 
    

 

11

 

SCHEDULE A

 

Capitalization

 

	
Class & Number of 
   Shares
    	
 
    	
Par Value
    	
 
    	
Authorized
    	
 
    	
Issued
    	
 
    	
Outstanding
    	
 
    
	
Preferred Shares
    	
 
    	
$
    	
0.01
    	
 
    	
100,000,000
    	
 
    	
0
    	
 
    	
0
    	
 
    
	
Ordinary Shares
    	
 
    	
$
    	
0.01
    	
 
    	
600,000,000
    	
 
    	
35,335,026
    	
 
    	
35,335,026
    	
 
    
	
Deferred   Ordinary Shares
    	
 
    	
€
    	
0.01
    	
 
    	
40,000
    	
 
    	
40,000
    	
 
    	
40,000
    	
 
    

 

Outstanding Options:  5,906,205 with weighted average exercise price of $7.53.

 

Outstanding Warrants —

 

·                  7,000,000 Warrants with exercise price of $2.50

 

·                  428,571 Warrants with exercise price of $2.45

 

Outstanding Restricted Stock Units:  222,000

 

12

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

	
TO:
    	
[           ] (the “Company”) 
    
	
 
    	
 
    
	
Attention:
    	
CHIEF FINANCIAL OFFICER
    
	
 
    	
 
    
	
(1)
    	
Exercise. The undersigned elects   to purchase the following pursuant to the terms of the attached warrant:
    
	
 
    	
 
    
	
 
    	
Number of   shares:
    
	
 
    	
 
    
	
 
    	
Type of   security:
    
	
 
    	
 
    
	
(2)
    	
Method of Exercise. The   undersigned elects to exercise the attached warrant pursuant to:
    
	
 
    	
 
    
	
 
    	
[ ]                       A cash   payment, and tenders herewith payment of the purchase price for such   shares in full, together with all applicable transfer taxes, if any.
    
	
 
    	
 
    
	
 
    	
[ ]                       The net   issue exercise provisions of Section 2(b) of the attached warrant.
    
	
 
    	
 
    
	
(3)
    	
Conditional Exercise. Is this   a conditional exercise pursuant to Section 2(f):
    
	
 
    	
 
    
	
 
    	
[ ]   Yes [ ] No
    
	
 
    	
 
    
	
 
    	
If “Yes,”   indicate the applicable condition:
    
	
 
    	
 
    
	
(4)
    	
Share Certificate. Please   issue a certificate or certificates representing the shares in the name of:
    
	
 
    	
 
    
	
 
    	
[ ]                       The undersigned
    
	
 
    	
 
    
	
 
    	
[ ]                       Other—Name:
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
(5)
    	
Unexercised Portion of the Warrant.   Please issue a new warrant for the unexercised portion of the attached   warrant in the name of:
    
	
 
    	
 
    
	
 
    	
[ ]                       The   undersigned
    
	
 
    	
 
    
	
 
    	
[ ]                       Other—Name:
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
[ ]                       Not   applicable
    
	
 
    	
 
    
	
(6)
    	
[Investment Intent. The   undersigned represents and warrants that the aforesaid shares are being   acquired for investment for its own account and not with a view to, or for   resale in connection with, the distribution thereof, and that the undersigned   has no present intention of selling, granting any participation in, or 
    

 

A-1

 

	
 
    	
otherwise distributing the shares, nor does it have   any contract, undertaking, agreement or arrangement for the same, and all   representations and warranties of the undersigned set forth in   Section 10 of the attached warrant are true and correct as of the date   hereof. ](1) 
    

 

	
 
    	
 
    
	
 
    	
(Print name of the warrant holder)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Signature)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Name and title of signatory, if applicable)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Date)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Fax number)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Email address)
    

 

(1)  Include if exercised pursuant to Section 2(a).

 

A-1-2

 

EXHIBIT B

 

ASSIGNMENT FORM

 

	
ASSIGNOR:
    	
 
    
	
 
    	
 
    
	
COMPANY:
    	
 
    
	
 
    	
 
    
	
WARRANT:
    	
THE WARRANT TO PURCHASE   SHARES OF ORDINARY SHARES ISSUED ON JULY 14, 2017 (THE “WARRANT”)
    
	
 
    	
 
    
	
DATE:
    	
 
    

 

(1)                                 Assignment. The undersigned registered holder of the Warrant (“Assignor”) assigns and transfers to the assignee named below (“Assignee”) all of the rights of Assignor under the Warrant, with respect to the number of shares set forth below:

 

	
 
    	
Name of Assignee:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Address of Assignee:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Number of Shares Assigned:
    	
 
    

 

and does irrevocably constitute and appoint                        as attorney to make such transfer on the books of Strongbridge Biopharma plc, maintained for the purpose, with full power of substitution in the premises.

 

(2)                                 Obligations of Assignee. Assignee agrees to take and hold the Warrant and any shares to be issued upon exercise of the rights thereunder (the “Securities”) subject to, and to be bound by, the terms and conditions set forth in the Warrant to the same extent as if Assignee were the original holder thereof.

 

(3)                                 [Investment Intent. Assignee represents and warrants that the Securities are being acquired for investment for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and that Assignee has no present intention of selling, granting any participation in, or otherwise distributing the shares, nor does it have any contract, undertaking, agreement or arrangement for the same, and all representations and warranties set forth in Section 10 of the Warrant are true and correct as to Assignee as of the date hereof.](2)

 

(2)  Include to the extent required pursuant to Section 5(a).

 

B-1

 

Assignor and Assignee are signing this Assignment Form on the date first set forth above.

 

 

	
ASSIGNOR
    	
 
    	
ASSIGNEE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Print name of Assignor)
    	
 
    	
(Print name of Assignee)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Signature of Assignor)
    	
 
    	
(Signature of Assignee)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Print name of signatory, if applicable)
    	
 
    	
(Print name of signatory, if applicable)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Print title of signatory, if applicable)
    	
 
    	
(Print title of signatory, if applicable)
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

B-2

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