Document:

sldb-ex102_110.htm

 

Exhibit 10.2

STOCK PURCHASE AGREEMENT

By and Between

SOLID BIOSCIENCES INC.

AND

ULTRAGENYX PHARMACEUTICAL INC.

Dated as of October 22, 2020

 
 

Table of Contents

 

Page

	
1.
	
Definitions1
	
 

	
 
	
1.1
	
Defined Terms1
	
 

	
 
	
1.2
	
Additional Defined Terms3
	
 

	
2.
	
Purchase and Sale of Common Stock4
	
 

	
3.
	
Closing Date; Deliveries4
	
 

	
 
	
3.1
	
Closing Date4
	
 

	
 
	
3.2
	
Deliveries4
	
 

	
4.
	
Representations and Warranties of the Company5
	
 

	
 
	
4.1
	
Organization, Good Standing and Qualification5
	
 

	
 
	
4.2
	
Capitalization and Voting Rights5
	
 

	
 
	
4.3
	
Subsidiaries6
	
 

	
 
	
4.4
	
Authorization6
	
 

	
 
	
4.5
	
No Defaults6
	
 

	
 
	
4.6
	
No Conflicts7
	
 

	
 
	
4.7
	
No Governmental Authority or Third Party Consents7
	
 

	
 
	
4.8
	
Valid Issuance of Shares7
	
 

	
 
	
4.9
	
Litigation7
	
 

	
 
	
4.10
	
Licenses and Other Rights; Compliance with Laws8
	
 

	
 
	
4.11
	
Company SEC Documents; Financial Statements; Nasdaq Stock Market8
	
 

	
 
	
4.12
	
Absence of Certain Changes9
	
 

	
 
	
4.13
	
Internal Controls; Disclosure Controls and Procedures9
	
 

	
 
	
4.14
	
Intellectual Property10
	
 

	
 
	
4.15
	
Tax Returns, Payments and Elections11
	
 

	
 
	
4.16
	
Offering11
	
 

	
 
	
4.17
	
No Integration11
	
 

	
 
	
4.18
	
Brokers’ or Finders’ Fees11
	
 

	
 
	
4.19
	
Not Investment Company11
	
 

	
 
	
4.20
	
Insurance11
	
 

	
 
	
4.21
	
No General Solicitation11
	
 

	
 
	
4.22
	
Foreign Corrupt Practices12
	
 

	
 
	
4.23
	
U.S. Real Property Holding Corporation12
	
 

			
	
 
	
-i-
	
 

 
 

Table of Contents

(continued)

Page

	
 
	
4.24
	
Title to Assets.12
	
 

	
 
	
4.25
	
Office of Foreign Assets Control12
	
 

	
 
	
4.26
	
Money Laundering..12
	
 

	
5.
	
Representations and Warranties of the Investor12
	
 

	
 
	
5.1
	
Organization; Good Standing12
	
 

	
 
	
5.2
	
Authorization13
	
 

	
 
	
5.3
	
No Conflicts13
	
 

	
 
	
5.4
	
No Governmental Authority or Third Party Consents13
	
 

	
 
	
5.5
	
Purchase Entirely for Own Account13
	
 

	
 
	
5.6
	
Disclosure of Information13
	
 

	
 
	
5.7
	
Investment Experience and Accredited Investor Status14
	
 

	
 
	
5.8
	
Acquiring Person14
	
 

	
 
	
5.9
	
Restricted Securities14
	
 

	
 
	
5.10
	
Legends14
	
 

	
 
	
5.11
	
Financial Assurances14
	
 

	
 
	
5.12
	
Brokers14
	
 

	
6.
	
Additional Covenants and Agreements15
	
 

	
 
	
6.1
	
Integration15
	
 

	
 
	
6.2
	
Blue Sky Filings15
	
 

	
 
	
6.3
	
Legend Removal15
	
 

	
 
	
6.4
	
Assistance and Cooperation15
	
 

	
7.
	
Miscellaneous15
	
 

	
 
	
7.1
	
Governing Law; Submission to Jurisdiction15
	
 

	
 
	
7.2
	
Waiver16
	
 

	
 
	
7.3
	
Notices16
	
 

	
 
	
7.4
	
Entire Agreement16
	
 

	
 
	
7.5
	
Amendments16
	
 

	
 
	
7.6
	
Headings; Nouns and Pronouns; Section References16
	
 

	
 
	
7.7
	
Severability17
	
 

	
 
	
7.8
	
Assignment17
	
 

	
 
	
7.9
	
Successors and Assigns17
	
 

			
	
 
	
-ii-
	
 

 
 

Table of Contents

(continued)

Page

	
 
	
7.10
	
Counterparts17
	
 

	
 
	
7.11
	
Third Party Beneficiaries17
	
 

	
 
	
7.12
	
No Strict Construction17
	
 

	
 
	
7.13
	
Survival of Warranties17
	
 

	
 
	
7.14
	
Remedies18
	
 

	
 
	
7.15
	
Expenses18
	
 

 

Exhibit A – Form of Cross Receipt
Exhibit B – Form of Investor Agreement

Exhibit C – Notices 

 

			
	
 
	
-iii-
	
 

 
 

 

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of October 22, 2020 (the “Effective Date”), is entered into by and between Solid Biosciences Inc., a Delaware corporation (the “Company”), and Ultragenyx Pharmaceutical Inc., a Delaware corporation (the “Investor”).  The Investor and the Company are referred to herein collectively as the “Parties”.

WHEREAS, pursuant to the terms and subject to the conditions set forth in this Agreement, the Company desires to issue and sell to the Investor, and the Investor desires to subscribe for and purchase from the Company, certain shares of common stock, par value $0.001 per share, of the Company (“Common Stock”); and

WHEREAS, simultaneously with the execution of this Agreement, the Company and the Investor are entering into the Collaboration and License Agreement (as defined below).

NOW, THEREFORE, in consideration of the following mutual promises and obligations, and for good and valuable consideration, the adequacy and sufficiency of which are hereby acknowledged, the Investor and the Company agree as follows:

Definitions

.

Defined Terms

. When used in this Agreement, the following terms shall have the respective meanings specified therefor below:

“Affiliate” shall mean, with respect to any Person, another Person that controls, is controlled by or is under common control with such Person.  A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. Without limiting the generality of the foregoing, a Person shall be deemed to “control” another Person if any of the following conditions is met: (i) in the case of corporate entities, direct or indirect ownership of more than fifty percent (50%) of the stock or shares having the right to vote for the election of directors; and (ii) in the case of non-corporate entities, direct or indirect ownership of more than fifty percent (50%) of the equity interest with the power to direct the management and policies of such non-corporate entities.  For the purposes of this Agreement, in no event shall the Investor or any of its Affiliates be deemed Affiliates of the Company or any of its Affiliates, nor shall the Company or any of its Affiliates be deemed Affiliates of the Investor or any of its Affiliates.

“Agreement” shall have the meaning set forth in the Preamble, including all Exhibits attached hereto.

“Business Day” shall mean a day on which commercial banking institutions in New York, New York are open for business.

“Collaboration and License Agreement” shall mean the Collaboration and License Agreement between the Company and the Investor, dated as of the Effective Date.

 
 

 

“Cross Receipt” shall mean an executed document signed by each of the Company and the Investor, in substantially the form of Exhibit A attached hereto.

“Effect” shall have the meaning set forth in the definition of “Material Adverse Effect.”

“Governmental Authority” shall mean any court, agency, authority, department, regulatory body or other instrumentality of any government or country or of any national, federal, state, provincial, regional, county, city or other political subdivision of any such government or country or any supranational organization of which any such country is a member.

“Intellectual Property” shall mean trademarks, trade names, trade dress, service marks, copyrights, and similar rights (including registrations and applications to register or renew the registration of any of the foregoing), patents and patent applications, trade secrets, and any other similar intellectual property rights.

“Intellectual Property License” shall mean any license, permit, authorization, approval, contract or consent granted, issued by or with any Person relating to the use of Intellectual Property.

“Investor Agreement” shall mean that certain Investor Agreement between the Investor and the Company, dated as of the Effective Date, in the form of Exhibit B attached hereto.

“Law” or “Laws” shall mean all laws, statutes, rules, regulations, orders, judgments, injunctions and/or ordinances of any Governmental Authority.

“Liens” shall mean all liens, charges, pledges, security interests, encumbrances, rights of first refusal, preemptive rights, restrictions on transfer, claims of Third Parties or other restrictions.

“Material Adverse Effect” shall mean any change, event or occurrence (each, an “Effect”) that, individually or when taken together with all other Effects, has had (i) a material adverse effect on the business, financial condition, assets or results of operations of the Company and its subsidiaries, taken as a whole, or (ii) a material adverse effect on the Company’s ability to perform its obligations, or consummate the Transaction, in accordance with the terms of this Agreement, except in the case of (i) or (ii) to the extent that any such Effect results from or arises out of: (A) changes in conditions in the United States or global economy or capital or financial markets generally, including changes in interest or exchange rates, (B) changes in general legal, regulatory or political conditions or changes in generally accepted accounting principles in the United States or interpretations thereof, (C) changes in general business or economic conditions affecting the Company’s industry, (D) the announcement of the Transaction Agreements, the Collaboration and License Agreement or the Transaction, (E) any change in the trading prices or trading volume of the Common Stock or any failure to meet internal projections or forecasts or published revenue or earnings projections of industry analysts (it being understood that the facts giving rise to or contributing to any such change or failure may be deemed to constitute, or be taken into account when determining whether there has been or will be, a Material Adverse Effect), (F) acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of 

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war, sabotage or terrorism, (G) earthquakes, hurricanes, floods or other natural disasters, (H) pandemics or other health crises, including but not limited to the COVID-19 pandemic, (I) any action taken by the Company with the Investor’s express written consent; (J) any breach by the Investor or any of its Affiliates under the Collaboration and License Agreement; or (K) shareholder litigation arising out of or in connection with the execution, delivery or performance of the Transaction Agreements; provided, that, with respect to clauses (A), (B), (C), (F), (G) and (H) such Effect does not have a materially disproportionate and adverse effect on the Company relative to other companies in the biotechnology or biopharmaceutical industries.

“Organizational Documents” shall mean (i) the Certificate of Incorporation of the Company, dated as of January 25, 2018, as may be amended and/or restated from time to time, and (ii) the By-laws of the Company, dated as of January 25, 2018, as may be amended and/or restated from time to time.

“Per Share Purchase Price” shall mean $5.1113, which is an amount equal to a 33% premium to the volume weighted average price of the Common Stock for the ten (10) trading days prior to the Effective Date, to be calculated and agreed to by each party.

“Person” shall mean any individual, partnership, limited liability company, firm, corporation, trust, unincorporated organization, government or any department or agency thereof or other entity, as well as any syndicate or group that would be deemed to be a Person under Section 13(d)(3) of the Exchange Act.

“Third Party” shall mean any Person (other than a Governmental Authority) other than the Investor, the Company or any Affiliate of the Investor or the Company.

“Transaction” shall mean the issuance and sale of the Shares by the Company, and the purchase of the Shares by the Investor, in accordance with the terms hereof.

“Transaction Agreements” shall mean this Agreement and the Investor Agreement.

Additional Defined Terms

. In addition to the terms defined in Section 1.1, the following terms shall have the respective meanings assigned thereto in the sections indicated below: 

		
	
Defined Term
	
Section

	
Aggregate Purchase Price
	
Section 2

	
Closing
	
Section 3.1

	
Closing Date
	
Section 3.1

	
Common Stock
	
Preamble

	
Company
	
Preamble

	
Company Rights
	
Section 4.14(b)

	
Company SEC Documents
	
Section 4.11(a)

	
Company Studies and Trials
	
Section 4.14(c)

	
Exchange Act
	
Section 4.11(a)

	
Investor
	
Preamble

	
Modified Clause
	
Section 7.7

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Defined Term
	
Section

	
Money Laundering Laws
	
Section 4.26

	
Parties
	
Preamble

	
Permits
	
Section 4.10

	
Proprietary Rights
	
Section 4.14(b)

	
Rule 144
	
Section 5.9

	
SEC
	
Section 4.2(f) 

	
Securities Act
	
Section 4.11(a)

	
Shares
	
Section 2

Purchase and Sale of Common Stock

. Subject to the terms and conditions of this Agreement, at the Closing, the Company shall issue and sell to the Investor, free and clear of all Liens (other than any Liens arising as a result of any action by the Investor), and the Investor shall purchase from the Company, the number of shares of Common Stock equal to the lesser of (a) the quotient of $40,000,000 divided by the Per Share Purchase Price (rounded down to the nearest whole share) and (b) the number of shares of Common Stock that, if issued to the Investor at the Closing, would result in the Investor holding 19.9% of the Company’s outstanding Common Stock (the lesser of (a) and (b), the “Shares”), in exchange for the sum of the product of the number of Shares and the Per Share Purchase Price (the “Aggregate Purchase Price”).

Closing Date; Deliveries

.

Closing Date

. The closing of the purchase and sale of the Shares hereunder (the “Closing”) shall take place remotely via the exchange of documents and signatures on the Effective Date or at such other time, date and place as the Parties mutually agree. The date the Closing occurs is hereinafter referred to as the “Closing Date.”

Deliveries

.

(a)Deliveries by the Company. On the Effective Date, the Company shall deliver to the Investor a counterpart signature page to the Collaboration and License Agreement, duly executed by the Company.  At the Closing, the Company shall instruct its transfer agent to register the Shares in book-entry in the name of the Investor.  The Company shall also deliver to the Investor at the Closing: (i) a duly executed Cross Receipt; (ii) a duly executed Investor Agreement; and (iii) a certificate of the secretary of the Company dated as of the Closing Date certifying (A) that attached thereto are true and complete copies of the Organizational Documents in effect on the Closing Date; (B) that attached thereto is a true and complete copy of all resolutions adopted by the Board of Directors of the Company authorizing the execution, delivery and performance of the Transaction Agreements and the Transaction and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby as of the Closing Date; and (C) as to the incumbency and specimen signature of any officer of the Company executing a Transaction Agreement on behalf of the Company.

(b)Deliveries by the Investor. On the Effective Date, the Investor shall deliver, or cause to be delivered, to the Company a counterpart signature page to the 

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Collaboration and License Agreement, duly executed by the Investor.  At the Closing, the Investor shall deliver, or cause to be delivered, the Aggregate Purchase Price to the Company by wire transfer in immediately available funds to an account designated by the Company.  The Investor shall also deliver, or cause to be delivered, to the Company at the Closing: (i) a duly executed Cross Receipt; (ii) a duly executed Investor Agreement; and (iii) a certificate of the secretary of the Investor dated as of the Closing Date certifying as to the incumbency and specimen signature of any officer executing a Transaction Agreement on behalf of the Investor.

Representations and Warranties of the Company

. The Company hereby represents and warrants the following to the Investor as of the date hereof (except for the representations and warranties that speak as of a specific date, which shall be made as of such date):

Organization, Good Standing and Qualification

.

(a)The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  The Company has all requisite corporate power and corporate authority to own, lease and operate its properties and assets, to carry on its business as now conducted, and as proposed to be conducted as described in the Company SEC Documents, to enter into the Transaction Agreements, to issue and sell the Shares and to carry out the other transactions contemplated by the Transaction Agreements.

(b)The Company is qualified to transact business and is in good standing in each jurisdiction in which the character of the properties owned, leased or operated by the Company or the nature of the business conducted by the Company makes such qualification necessary, except where the failure to be so qualified would not have or be reasonably likely to have a Material Adverse Effect.

Capitalization and Voting Rights

.

(a)The authorized capital of the Company as of the Effective Date consists of: (i) 300,000,000 shares of Common Stock of which, as of October 20, 2020, 46,315,889 shares were issued and outstanding, and (ii) 10,000,000 shares of undesignated preferred stock, par value $0.001 per share, none of which are issued and outstanding as of the date of this Agreement.  All of the issued and outstanding shares of Common Stock (i) have been duly authorized and validly issued, (ii) are fully paid and non-assessable and (iii) were issued in compliance with all applicable federal and state securities Laws.

(b)All of the authorized shares of Common Stock are entitled to one (1) vote per share. 

(c)Except as described or referred to in Section 4.2(a) above, as provided in the Investor Agreement, as set forth in the Company SEC Documents or as disclosed to the Investor on Schedule 4.2(c) hereto, as of the Effective Date, there are not: (i) any outstanding equity securities, options, warrants, rights (including conversion or preemptive rights) or other agreements pursuant to which the Company is or may become obligated to issue, sell or repurchase any shares of its capital stock or any other securities of the Company or (ii) 

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except as set forth in the Investor Agreement, any restrictions on the transfer of capital stock of the Company other than pursuant to state and federal securities Laws.

(d)Except as provided in the Investor Agreement or as set forth in the Company SEC Documents, the Company is not a party to or subject to any agreement or understanding relating to the voting of shares of capital stock of the Company or the giving of written consents by a stockholder or director of the Company.

(e)Except as provided in the Investor Agreement or as set forth in the Company SEC Documents, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company.

(f)The Common Stock is 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 its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Securities and Exchange Commission (the “SEC”) is contemplating terminating such registration.

Subsidiaries

. The Company has disclosed all of its subsidiaries required to be disclosed pursuant to Item 601(b)(21) of Regulation S-K in an exhibit to its Annual Report on Form 10-K. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. 

Authorization

.

(a)All requisite corporate action on the part of the Company and its directors and stockholders required by applicable Law for the authorization, execution and delivery by the Company of the Transaction Agreements and the performance of all obligations of the Company hereunder and thereunder, including the authorization, issuance and delivery of the Shares, has been taken.

(b)Each of the Transaction Agreements have been duly executed and delivered by the Company, and upon the due execution and delivery thereof by the Investor will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms (except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other Laws of general application relating to or affecting enforcement of creditors’ rights and (ii) rules of Law governing specific performance, injunctive relief or other equitable remedies and limitations of public policy).

(c)No stop order or suspension of trading of the Common Stock has been imposed by Nasdaq, the SEC or any other Governmental Authority and remains in effect.

No Defaults

. The Company is not in default under or in violation of (a) its Organizational Documents, (b) any provision of applicable Law or any ruling, writ, injunction, 

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order, Permit, judgment or decree of any Governmental Authority or (c) any agreement, arrangement or instrument, whether written or oral, by which the Company or any of its assets are bound, except, in the case of subsections (b) and (c), as would not have or be reasonably likely to have a Material Adverse Effect.  There exists no condition, event or act which after notice, lapse of time, or both, would constitute a default or violation by the Company under any of the foregoing, except, in the case of subsections (b) and (c), as would not have or be reasonably likely to have a Material Adverse Effect. 

No Conflicts

. The execution, delivery and performance of the Transaction Agreements and compliance with the provisions hereof and thereof by the Company do not and shall not: (a) violate any provision of applicable Law or any ruling, writ, injunction, order, permit, judgment or decree of any Governmental Authority, (b) constitute a breach of, or default under (or an event which, with notice or lapse of time or both, would become a default under) or conflict with, or give rise to any right of termination, cancellation or acceleration of, any agreement, arrangement or instrument, whether written or oral, by which the Company or any of its assets are bound, (c) result in any encumbrance upon any of the Shares, other than restrictions pursuant to the Investor Agreement or securities Laws, or on any of the properties or assets of the Company or any subsidiary or (d) violate or conflict with any of the provisions of the Organizational Documents, except, in the case of subsections (a), (b) and (c), as would not have or be reasonably likely to have a Material Adverse Effect.

No Governmental Authority or Third Party Consents

. No consent, approval, authorization or other order of, or filing with, or notice to, any Governmental Authority or other Third Party is required to be obtained or made by the Company in connection with the authorization, execution and delivery by the Company of any of the Transaction Agreements, or with the authorization, issue and sale by the Company of the Shares, except (a) such filings as may be required to be made with the SEC and with any state blue sky or securities regulatory authority, which filings shall be made in a timely manner in accordance with all applicable Laws and (b) if required, with respect to the Shares, the filing with The Nasdaq Stock Market LLC of, and the absence of unresolved issues with respect to, a Notification Form: Listing of Additional Shares.

Valid Issuance of Shares

. When issued, sold and delivered at the Closing in accordance with the terms hereof for the Aggregate Purchase Price, the Shares shall be duly authorized, validly issued, fully paid and nonassessable, free from any Liens or restrictions on transfer, other than as arising pursuant to the Investor Agreement, as a result of any action by the Investor or under federal or state securities Laws.

Litigation

. Except as set forth in the Company SEC Documents filed prior to the date of this Agreement, there is no action, suit, proceeding or investigation pending (of which the Company has received notice or otherwise has knowledge) or, to the Company’s knowledge, threatened, against the Company or which the Company intends to initiate which has had or is reasonably likely to have a Material Adverse Effect.  None of the Company or any property, right or asset of the Company is a party to, or subject to the provisions of, any order writ, injunction, judgment, award, ruling or decree of, or settlement agreement with, any Governmental Authority which has had or is reasonably likely to have a Material Adverse Effect.

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Licenses and Other Rights; Compliance with Laws

. The Company has all franchises, permits, licenses and other rights and privileges (“Permits”) necessary to permit it to own its properties and to conduct its business as presently conducted and is in compliance thereunder, except where the failure to be in compliance does not and would not have or be reasonably likely to have a Material Adverse Effect.  The Company has not taken any action that would interfere with the Company’s ability to renew all such Permit(s), except where the failure to renew such Permit(s) would not have or be reasonably likely to have a Material Adverse Effect.  The Company is and has been in compliance with all Laws applicable to its business, properties and assets, and to the products and services sold by it, except where the failure to be in compliance does not and would not have or be reasonably likely to have a Material Adverse Effect.

Company SEC Documents; Financial Statements; Nasdaq Stock Market

.

(a)Since January 25, 2018, the Company has timely filed with the SEC all reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated therein), and any amendments to any of the foregoing, in each case required to be filed with the SEC under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (the “Company SEC Documents”).  As of their respective filing dates, each of the Company SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to such Company SEC Documents, and no Company SEC Documents when filed, declared effective or mailed, as applicable, 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.

(b)As of the date of this Agreement, other than as has been disclosed to the Investor, there are no outstanding or unresolved comments in comment letters received from the SEC or its staff. As of the date of this Agreement, none of the Company’s subsidiaries is subject to the reporting requirements of Section 13(a) or 15(d) under the Exchange Act.

(c)The financial statements of the Company included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in its quarterly reports on Form 10-Q for the quarterly periods ended March 31, 2020 and June 30, 2020 comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended.  Except (i) as set forth in the Company SEC Documents or (ii) for liabilities incurred in the ordinary course of business subsequent to the date of the most recent balance sheet contained in the Company SEC Documents, the Company has no liabilities, whether absolute or accrued, contingent or otherwise, other than those that would not, individually or in the aggregate, have or be reasonably likely to have a Material Adverse Effect.

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(d)As of the date of this Agreement, the Common Stock is listed on The Nasdaq Global Select Market, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from The Nasdaq Global Select Market.  As of the date of this Agreement, the Company has not received any notification that, and has no knowledge that, the SEC or The Nasdaq Stock Market LLC is contemplating terminating such listing or registration nor, to the Company’s knowledge, is there any reasonable basis for, the delisting of the Common Stock from Nasdaq.

Absence of Certain Changes

. Except as disclosed in the Company SEC Documents filed prior to the date hereof, since December 31, 2019:

(a)there has not occurred any event that has caused or would reasonably be expected to cause a Material Adverse Effect;

(b)the Company has not (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, or (ii) sold, exchanged or otherwise disposed of any of its material assets or rights; 

(c)the Company has not incurred any material liabilities or obligations (contingent or otherwise) other than such liabilities not required to be reflected in the Company’s financial statements pursuant to United States generally accepted accounting principles or disclosed in the Company SEC Documents or such liabilities and obligations incurred in the ordinary course of business consistent with past practice since the date of the most recent consolidated balance sheet of the Company and its subsidiaries included in the Company SEC Documents publicly available prior to the date hereof;

(d) the Company has not altered in any material respect its method of accounting or the manner in which it keeps its accounting books and records; and

(e)the Company has not admitted in writing its inability to pay its debts generally as they become due, filed or consented to the filing against it of a petition in bankruptcy or a petition to take advantage of any insolvency act, made an assignment for the benefit of creditors, consented to the appointment of a receiver for itself or for the whole or any substantial part of its property, or had a petition in bankruptcy filed against it, been adjudicated a bankrupt, or filed a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other laws of the United States or any other jurisdiction.

Internal Controls; Disclosure Controls and Procedures

.  The Company maintains internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act.  The Company has implemented the “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) required in order for the Principal Executive Officer and Principal Financial Officer of the Company to engage in the review and evaluation process mandated by the Exchange Act, and is in compliance with such disclosure controls and procedures in all material respects.  Each of the Principal Executive Officer and the Principal Financial Officer of the Company (or each former Principal Executive Officer of the Company and each former Principal Financial Officer of the Company, as 

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applicable) has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 with respect to all reports, schedules, forms, statements and other documents required to be filed by the Company with the SEC.  

Intellectual Property

.  

(a)The Intellectual Property that is owned by the Company is owned free from any Liens or restrictions, and all of the Company’s material Intellectual Property Licenses are in full force and effect in accordance with their terms, are free of any Liens or restrictions, and neither the Company nor to the Company’s knowledge any other party thereto, is in material breach of any such material Intellectual Property License, and no event has occurred that with notice or lapse of time or both would constitute such a material breach or default thereunder or would result in the termination thereof or would cause or permit the acceleration or other change of any right or obligation of the loss of any benefit thereunder by the Company, except (i) for such failures to be in full force and effect, such Liens or restrictions, and such material breaches, that would not reasonably be expected to have a Material Adverse Effect, or (ii) as set forth in any such Intellectual Property License.  Except as set forth in the Company SEC Documents, there is no legal claim or demand of any Person pertaining to, or any proceeding which is pending (of which the Company has received notice or otherwise has knowledge) or, to the knowledge of the Company, threatened, (i) challenging the right of the Company in respect of any Company Intellectual Property, or (ii) that claims that any default exists under any Intellectual Property License, except, in the case of (i) and (ii) above, where any such claim, demand or proceeding would not have or reasonably be expected to have a Material Adverse Effect.

(b)Except as set forth in the Company SEC Documents: (i) the Company or one of its subsidiaries owns, free and clear of any Lien, or has a valid license to, or has an enforceable right to use, as it is used or held for use, all U.S. and non-U.S. patents, trade secrets, know-how, trademarks, service marks, copyrights, and other proprietary and intellectual property rights, and all grants and applications with respect to the foregoing (collectively, the “Proprietary Rights”) necessary for the conduct of the Company's business as currently conducted, the absence of which would not have or reasonably be expected to have a Material Adverse Effect (such Proprietary Rights owned by or licensed to the Company collectively, the “Company Rights”); and (ii) the Company and its subsidiaries have taken reasonable measures to protect the Company Rights, consistent with prudent commercial practices in the biotechnology industry, except where failure to take such measures would not have or reasonably be expected to have a Material Adverse Effect.

(c)The studies, tests and preclinical or clinical trials conducted by or on behalf of the Company (the “Company Studies and Trials”) were and, if still pending, are being conducted in all material respects in accordance with experimental protocols, procedures and controls pursuant to, where applicable, accepted professional scientific standards. The descriptions of the results of the Company Studies and Trials contained in the Company SEC Documents are accurate in all material respects.  Except as set forth in the Company SEC Documents, the Company has not received any notices or correspondence from the United States Food and Drug Administration or any Governmental Authority exercising comparable authority requiring the termination, suspension or material modification of any Company Studies and 

10

 
 

 

Trials, except for any such termination, suspension or material modification that has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, to the Company’s knowledge, there are no reasonable grounds for the same.

Tax Returns, Payments and Elections

.  The Company has filed all tax returns and reports as required, and within the time prescribed, by law and has paid or made provision for the payment of all accrued and unpaid taxes to which the Company is subject and which are not currently due and payable, except where any failure would not have a Material Adverse Effect. No U.S. federal, state, local or non-U.S. tax audits or administrative or judicial tax proceedings are pending or being conducted with respect to the Company.  The Company has not received from any U.S. federal state, local or non-U.S. taxing authorities any (i) notice indicating an intent to open and audit or other review, (ii) request for information related to tax matters, or (iii) notice of deficiency or proposed adjustment for any amount of tax proposed, asserted, or assessed by any taxing authority against the Company or any of its subsidiaries.

Offering

. Subject to the accuracy of the Investor’s representations set forth in Sections 5.5, 5.6, 5.7, 5.9 and 5.10, the offer, sale and issuance of the Shares to be issued in conformity with the terms of this Agreement constitute transactions which are exempt from the registration requirements of the Securities Act and from all applicable state registration or qualification requirements.  Neither the Company nor any Person acting on its behalf will take any action that would cause the loss of such exemption.

No Integration

. The Company has not, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which is or will be integrated with the Shares sold pursuant to this Agreement in a manner that would require the registration of the Shares under the Securities Act.

Brokers’ or Finders’ Fees

. No broker, finder, investment banker or other Person is entitled to any brokerage, finder’s or other fee or commission from the Company in connection with the transactions contemplated by the Transaction Agreements.

Not Investment Company

.  The Company is not, and immediately after receipt of the Aggregate Purchase Price will not be, an “investment company” as defined in the Investment Company Act of 1940, as amended.

Insurance

.  The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company is engaged and for an enterprise at a substantially similar stage of lifecycle as the Company, including, but not limited to, directors and officers insurance coverage.  To the Company’s knowledge, it will be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business.

No General Solicitation

.  Neither the Company nor 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.  The Company has not, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the 

11

 
 

 

Securities Act) in a manner or under any circumstances that would require the registration of the Shares under the Securities Act (including, without limitation, by virtue of the integration of the offering of the Shares with any prior offering of Company shares).

Foreign Corrupt Practices

.  Neither the Company nor, to the knowledge of the Company, any agent or other person acting on behalf of the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any Person acting on its behalf of which the Company is aware) which is in violation of Law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable non-U.S. anti-bribery Law.

U.S. Real Property Holding 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.

4.24Title to Assets.  Except as set forth in the Company SEC Documents, the Company has good and marketable title to all real property and personal property owned by the Company that is material to the business of the Company taken as a whole, in each case free and clear of all Liens, except for Liens that do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities held under lease by the Company that are material to the business of the Company are held by the Company under valid, subsisting and enforceable leases with which the Company is in compliance.

4.25Office of Foreign Assets Control.  Neither the Company nor, to the Company’s knowledge, any director, officer, agent, employee or Affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.

4.26Money Laundering.  The operations of the Company are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, and applicable money laundering statutes and applicable rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority (collectively, the “Money Laundering Laws”), and no action, suit or proceeding involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

Representations and Warranties of the Investor

. The Investor hereby represents and warrants to the Company that:

Organization; Good Standing

. The Investor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  The 

12

 
 

 

Investor has all requisite power and authority to enter into the Transaction Agreements, to purchase the Shares and to perform its obligations under and to carry out the other transactions contemplated by the Transaction Agreements.

Authorization

. All requisite action on the part of the Investor and its directors and stockholders required by applicable Law for the authorization, execution and delivery by the Investor of the Transaction Agreements and the performance of all of its obligations thereunder, including the subscription for and purchase of the Shares, has been taken.  Each of the Transaction Agreements have been duly executed and delivered by the Investor and upon the due execution and delivery thereof by the Company, will constitute valid and legally binding obligations of the Investor, enforceable against the Investor in accordance with their respective terms (except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other Laws of general application relating to or affecting enforcement of creditors’ rights and (b) rules of Law governing specific performance, injunctive relief or other equitable remedies and limitations of public policy).

No Conflicts

. The execution, delivery and performance of the Transaction Agreements and compliance with the provisions hereof and thereof by the Investor do not and shall not: (a) violate any provision of applicable Law or any ruling, writ, injunction, order, permit, judgment or decree of any Governmental Authority, (b) constitute a breach of, or default under (or an event which, with notice or lapse of time or both, would become a default under) or conflict with, or give rise to any right of termination, cancellation or acceleration of, any agreement, arrangement or instrument, whether written or oral, by which the Investor or any of its assets, are bound, or (c) violate or conflict with any of the provisions of the Investor’s organizational documents (including any articles or memoranda of organization or association, charter, bylaws or similar documents), except, in the case of subsections (a) or (b), as would not materially impair the ability of the Investor to consummate the Transaction and perform its obligations under the Transaction Agreements.

No Governmental Authority or Third Party Consents

. No consent, approval, authorization or other order of any Governmental Authority or other Third Party is required to be obtained by the Investor in connection with the authorization, execution and delivery of any of the Transaction Agreements or with the subscription for and purchase of the Shares.

Purchase Entirely for Own Account

. The Shares shall be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Investor has no present intention of selling, granting any participation or otherwise distributing the Shares.  The Investor does not have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participation to a Person any of the Shares.

Disclosure of Information

. The Investor has had the opportunity to review the Company SEC Documents and has received or has had full access to all the information from the Company and its management that the Investor considers necessary or appropriate for deciding whether to purchase the Shares hereunder.  The Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the 

13

 
 

 

Company, its financial condition, results of operations and prospects and the terms and conditions of the offering of the Shares sufficient to enable it to evaluate its investment.

Investment Experience and Accredited Investor Status

. The Investor is an “accredited investor” (as defined in Regulation D under the Securities Act).  The Investor has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Shares to be purchased hereunder.

Acquiring Person

. As of the date of this Agreement and immediately prior to the Closing, neither the Investor nor any of its Affiliates beneficially owns, or will beneficially own (as determined pursuant to Rule 13d-3 under the Exchange Act without regard for the number of days in which a Person has the right to acquire such beneficial ownership, and without regard to the Investor’s rights under this Agreement), any securities of the Company, except for securities that may be owned by an employee benefit plan of Investor or any mutual fund or similar investment entity in which Investor and its Affiliates own less than 5% in the aggregate, and over which neither the Investor nor its Affiliates exercise direct management or investment control.

Restricted Securities

. The Investor understands that the Shares, when issued, shall be “restricted securities” under the federal securities Laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such Laws the Shares may be resold without registration under the Securities Act only in certain limited circumstances.  The Investor represents that it is familiar with Rule 144 of the Securities Act, as presently in effect (“Rule 144”).

Legends

. The Investor understands that the Shares, whether certificated or in book entry form, shall be subject to the following legends:  

(a)“These securities have not been registered under the Securities Act of 1933. They may not be sold, offered for sale, pledged or hypothecated in the absence of a registration statement in effect with respect to the securities under the Securities Act or an opinion of counsel (which counsel shall be reasonably satisfactory to Solid Biosciences Inc.) that such registration is not required or unless sold pursuant to Rule 144 of the Securities Act.”

(b)“These securities are subject to transfer restrictions set forth in an Investor Agreement by and between Solid Biosciences Inc. and Ultragenyx Pharmaceutical Inc., a copy of which is on file with the Secretary of Solid Biosciences Inc.”

Financial Assurances

. The Investor has access to cash in an amount sufficient to pay to the Company the Aggregate Purchase Price.

Brokers

. There are no brokers, finders or financial advisory fees or commissions that will be payable by the Investor in respect of the transactions contemplated by this Agreement.

14

 
 

 

Additional Covenants and Agreements

. 

Integration

. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) that would be integrated with the offer or sale of the Shares to be issued to the Investor hereunder for purposes of the rules and regulations of any of the markets or exchanges on which the Common Stock of the Company is listed or quoted for trading on the date in question, including but not limited to the Nasdaq Capital Market, the Nasdaq Global Market, or the Nasdaq Global Select Market. 

Blue Sky Filings

.  The Company 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 Investor at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of the Investor.

Legend Removal

.  After the expiration of the Lock-up Term (as defined in the Investor Agreement), the Company shall (i) cause the legends set forth in Section 5.10(a) and (b) to be removed from the Shares, no later than three (3) Business Days from receipt of a request from the Investor pursuant to this Section 6.3 and receipt from the Investor by the Company and its transfer agent of customary representations and other documentation reasonably requested by the Company and its transfer agent in connection therewith, if (a) the Shares have been or will be resold under an effective registration statement under the Securities Act, (b) the Shares have been or will be transferred in compliance with Rule 144 under the Securities Act, (c) the Shares are eligible for resale pursuant to Rule 144(b)(1)(i) under the Securities Act without the requirement for the Company to be in compliance with the current public information required under Rule 144 under the Securities Act as to such Shares and without volume or manner-of-sale restrictions or (d) the Investor shall have provided the Company with an opinion of counsel, reasonably satisfactory to the Company, stating that such securities may lawfully be transferred without registration under the Securities Act (assuming for this purpose that the Investor is not an affiliate of the Company) and (ii) cause its transfer agent to make a new, unlegended entry for such book entry Shares sold or disposed of without restrictive legends. The Company shall be responsible for the fees of its transfer agent and all Depository Trust Company fees associated with any such issuance. 

6.4Assistance and Cooperation. Following the Closing, each of the Parties agrees to use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other Party in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Transaction.

Miscellaneous

.

Governing Law; Submission to Jurisdiction

. This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware, without regard to the conflict of laws principles thereof that would require the application of the Law of any other jurisdiction.  Any action brought, arising out of, or relating to this Agreement shall be 

15

 
 

 

brought in the Court of Chancery of the State of Delaware.  Each Party hereby irrevocably submits to the exclusive jurisdiction of said Court in respect of any claim relating to the validity, interpretation and enforcement of this Agreement, and hereby waives, and agrees not to assert, as a defense in any action, suit or proceeding in which any such claim is made that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts, or that the venue thereof may not be appropriate or that this agreement may not be enforced in or by such courts.  The Parties hereby consent to and grant the Court of Chancery of the State of Delaware jurisdiction over such Parties and over the subject matter of any such claim.  The Parties hereby consent to and agree that mailing of process or other papers in connection with any such action, suit or proceeding in the manner provided in Section 7.3 or in such other manner as may be permitted by law shall be valid and sufficient thereof.

Waiver

. Waiver by a Party of a breach hereunder by the other Party shall not be construed as a waiver of any subsequent breach of the same or any other provision.  No delay or omission by a Party in exercising or availing itself of any right, power or privilege hereunder shall preclude the later exercise of any such right, power or privilege by such Party.  No waiver shall be effective unless made in writing with specific reference to the relevant provision(s) of this Agreement and signed by a duly authorized representative of the Party granting the waiver.

Notices

. All notices, instructions and other communications hereunder or in connection herewith shall be in writing, shall be sent to the address of the relevant Party set forth on Exhibit C attached hereto and shall be (a) delivered personally, (b) sent by registered or certified mail, return receipt requested, postage prepaid, (c) sent via a reputable nationwide overnight courier service or (d) sent by electronic mail, with a confirmation copy to be sent by registered or certified mail, return receipt requested, postage prepaid.  Any such notice, instruction or communication shall be deemed to have been delivered upon receipt if delivered by hand, three (3) Business Days after it is sent by registered or certified mail, return receipt requested, postage prepaid, one (1) Business Day after it is sent via a reputable nationwide overnight courier service or when transmitted with electronic confirmation of receipt, if transmitted by electronic mail (if such transmission is made during regular business hours of the recipient on a Business Day; or otherwise, on the next Business Day following such transmission).  Either Party may change its address by giving notice to the other Party in the manner provided above.

Entire Agreement

. This Agreement, together with the Investor Agreement and the Collaboration and License Agreement, contain the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements or understandings, whether written or oral, with respect hereto and thereto.

Amendments

. No provision in this Agreement shall be supplemented, deleted or amended except in a writing executed by an authorized representative of each of the Investor and the Company.

Headings; Nouns and Pronouns; Section References

. Headings in this Agreement are for convenience of reference only and shall not be considered in construing this 

16

 
 

 

Agreement.  Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa.  References in this Agreement to a section or subsection shall be deemed to refer to a section or subsection of this Agreement unless otherwise expressly stated.

Severability

. If, under applicable Laws, any provision hereof is invalid or unenforceable, or otherwise directly or indirectly affects the validity of any other material provision(s) of this Agreement in any jurisdiction (“Modified Clause”), then, it is mutually agreed that this Agreement shall endure and that the Modified Clause shall be enforced in such jurisdiction to the maximum extent permitted under applicable Laws in such jurisdiction; provided that the Parties shall consult and use all reasonable efforts to agree upon, and hereby consent to, any valid and enforceable modification of this Agreement as may be necessary to avoid any unjust enrichment of either Party and to match the intent of this Agreement as closely as possible, including the economic benefits and rights contemplated herein.

Assignment

. Except for an assignment by the Investor of this Agreement or any rights hereunder to a subsidiary that is wholly-owned, directly or indirectly, by the Investor (which assignment will not relieve the Investor of any obligations hereunder), neither this Agreement nor any of the rights or obligations hereunder may be assigned by either the Investor or the Company without (a) the prior written consent of the Company in the case of any assignment by the Investor or (b) the prior written consent of the Investor in the case of an assignment by the Company.

Successors and Assigns

. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

Counterparts

. This Agreement may be executed in counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument. Facsimile signatures and signatures transmitted via PDF shall be treated as original signatures.

Third Party Beneficiaries

. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third Party, including any creditor of any Party.  No Third Party shall obtain any right under any provision of this Agreement or shall by reason of any such provision make any claim in respect of any debt, liability or obligation (or otherwise) against any Party.

No Strict Construction

. This Agreement has been prepared jointly and will not be construed against either Party.

Survival of Warranties

. The representations and warranties of the Company and the Investor contained in this Agreement shall survive the Closing, except for the representation and warranty of the Investor in Section 5.11, which shall not survive the Closing.  The Parties hereby acknowledge and agree that the rights of the Parties hereunder are special, unique and of extraordinary character, and that if any Party refuses or otherwise fails to act, or to cause its Affiliates to act, in accordance with the provisions of this Agreement, such refusal or 

17

 
 

 

failure would result in irreparable injury to the Company or the Investor as the case may be, the exact amount of which would be difficult to ascertain or estimate and the remedies at law for which would not be reasonable or adequate compensation.  Accordingly, if any Party refuses or otherwise fails to act, or to cause its Affiliates to act, in accordance with the provisions of this Agreement, then, in addition to any other remedy which may be available to any damaged Party at law or in equity, such damaged Party will be entitled to seek specific performance and injunctive relief, without posting bond or other security, and without the necessity of proving actual or threatened damages, which remedy such damaged Party will be entitled to seek in any court of competent jurisdiction.

Remedies

. The rights, powers and remedies of the Parties under this Agreement are cumulative and not exclusive of any other right, power or remedy which such Parties may have under any other agreement or Law. No single or partial assertion or exercise of any right, power or remedy of a Party hereunder shall preclude any other or further assertion or exercise thereof.

Expenses

. Each Party shall pay its own fees and expenses in connection with the preparation, negotiation, execution and delivery of the Transaction Agreements.

(Signature Page Follows)

 

18

 
 

 

IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of the Effective Date.

SOLID BIOSCIENCES INC.

 

 

	
 
	
By:
	
/s/ Ilan Ganot

	
 
	
Name:
	
Ilan Ganot

	
 
	
Title:
	
Chief Executive Officer

 

 

ULTRAGENYX PHARMACEUTICAL INC.

 

 

	
 
	
By:
	
/s/ Emil Kakkis

	
 
	
Name:
	
Emil Kakkis

	
 
	
Title:
	
Chief Executive Officer

 

Signature Page to Stock Purchase Agreement

 

EXHIBIT A

FORM OF CROSS RECEIPT

CROSS RECEIPT

Solid Biosciences Inc. hereby acknowledges receipt from Ultragenyx Pharmaceutical Inc. on October 22, 2020 of $39,999,996.21, representing the purchase price for 7,825,797 shares of Common Stock, par value $0.001 per share, of Solid Biosciences Inc., pursuant to that certain Stock Purchase Agreement, dated as of October 22, 2020, by and between Solid Biosciences Inc. and Ultragenyx Pharmaceutical Inc. 

 

SOLID BIOSCIENCES INC.

 

 

	
 
	
By:
	

	
 
	
Name:
	

	
 
	
Title:
	

 

 

 

Ultragenyx Pharmaceutical Inc. hereby acknowledges receipt from Solid Biosciences Inc. on October 22, 2020 of 7,825,797 shares of Common Stock, par value $0.001 per share, of Solid Biosciences Inc., delivered pursuant to that certain Stock Purchase Agreement, dated as of October 22, 2020, by and between Solid Biosciences Inc. and Ultragenyx Pharmaceutical Inc.

 

ULTRAGENYX PHARMACEUTICAL INC.

 

 

	
 
	
By:
	

	
 
	
Name:
	
Emil Kakkis

	
 
	
Title:
	
Chief Executive Officer

 

 

 

A-1

 
 

 

EXHIBIT B

FORM OF INVESTOR AGREEMENT

 

 

 

B-1

 

EXHIBIT C

NOTICES

(a)If to the Company:

Solid Biosciences Inc.

141 Portland Street, Fifth Floor

Cambridge, MA 02139

Attention: Lynette Herscha

Email:

 

with a copy to:

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, MA 02109

Attention: Lia Der Marderosian

Email: lia.dermarderosian@wilmerhale.com

 

 (b)If to the Investor:

Ultragenyx Pharmaceutical Inc.

60 Leveroni Court

Novato, CA 94949

Attention: Chief Business Officer; General Counsel

Email:

with a copy to:

Goodwin Procter LLP
100 Northern Avenue
Boston, MA 02210
Attention: Ed Amer
Email: EAmer@goodwinlaw.com

 

 

 

 

C-1sldb-ex103_109.htm

 

Exhibit 10.3

 

 

Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the Company, if publicly disclosed. Double asterisks denote omissions. 

 

 

 

 

 

INVESTOR AGREEMENT

By and Between

SOLID BIOSCIENCES INC.

AND

ULTRAGENYX PHARMACEUTICAL INC.

Dated as of October 22, 2020

 

 

ACTIVE/104419179.14  

 

 

 

TABLE OF CONTENTS

Page

1.Definitions1

2.Registration Rights7

	
 
	
2.1
	
Required Registration7
	
 

	
 
	
2.2
	
Company Registration8
	
 

	
 
	
2.3
	
Underwritten Registration Required; Priority in Underwritten Offering9
	
 

	
 
	
2.4
	
Priority in Required Registration10
	
 

	
 
	
2.5
	
Revocation of Required Registration10
	
 

	
 
	
2.6
	
Effective Required Registrations11
	
 

	
 
	
2.7
	
Continuous Effectiveness of Registration Statement11
	
 

	
 
	
2.8
	
Obligations of the Company12
	
 

	
 
	
2.9
	
Furnish Information15
	
 

	
 
	
2.10
	
Expenses15
	
 

	
 
	
2.11
	
Indemnification15
	
 

	
 
	
2.12
	
SEC Reports17
	
 

	
 
	
2.13
	
Assignment of Registration Rights18
	
 

3.Standstill.18

4.Restrictions on Dispositions19

	
 
	
4.1
	
Lock-Up19
	
 

	
 
	
4.2
	
Certain Tender Offers20
	
 

	
 
	
4.3
	
Sale Limitations.20
	
 

	
 
	
4.4
	
Offering Lock-Up20
	
 

5.Voting Agreement.21

	
 
	
5.1
	
Voting of Securities.21
	
 

	
 
	
5.2
	
Quorum.22
	
 

6.Information Rights.22

	
 
	
6.1
	
Financial Information and Reporting22
	
 

	
 
	
6.2
	
Confidentiality23
	
 

	
 
	
6.3
	
Acknowledgment of Securities Law23
	
 

7.Termination of Certain Rights and Obligations23

	
 
	
7.1
	
Termination of Registration Rights23
	
 

	
 
	
7.2
	
Termination of Standstill Agreement23
	
 

	
 
	
7.3
	
Termination of Restrictions on Dispositions24
	
 

	
 
	
7.4
	
Termination of Voting Agreement Term24
	
 

	
 
	
7.5
	
Termination of Information Rights24
	
 

	
 
	
7.6
	
Effect of Termination24
	
 

8.Miscellaneous24

	
 
	
8.1
	
Governing Law; Submission to Jurisdiction24
	
 

ACTIVE/104419179.14  

 

 

 

	
 
	
8.2
	
Waiver25
	
 

	
 
	
8.3
	
Notices25
	
 

	
 
	
8.4
	
Entire Agreement25
	
 

	
 
	
8.5
	
Amendments25
	
 

	
 
	
8.6
	
Headings; Nouns and Pronouns; Section References25
	
 

	
 
	
8.7
	
Severability26
	
 

	
 
	
8.8
	
Assignment26
	
 

	
 
	
8.9
	
Successors and Assigns26
	
 

	
 
	
8.10
	
Counterparts26
	
 

	
 
	
8.11
	
Third Party Beneficiaries26
	
 

	
 
	
8.12
	
No Strict Construction26
	
 

	
 
	
8.13
	
Remedies26
	
 

	
 
	
8.14
	
Specific Performance26
	
 

	
 
	
8.15
	
No Conflicting Agreements27
	
 

	
 
	
8.16
	
Use of Proceeds.27
	
 

 

Exhibit A – Notices

Exhibit B – Form of Irrevocable Proxy

 

ii

 

 

INVESTOR AGREEMENT

THIS INVESTOR AGREEMENT (this “Agreement”) is made as of October 22, 2020, by and between Solid Biosciences Inc., a Delaware corporation (the “Company”), and Ultragenyx Pharmaceutical Inc., a Delaware corporation (the “Investor”).

WHEREAS, the Stock Purchase Agreement, dated as of the date hereof, by and between the Investor and the Company (the “Purchase Agreement”) provides for the issuance and sale by the Company to the Investor, and the purchase by the Investor, of shares (the “Purchased Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”); and

WHEREAS, as a condition to consummating the transactions contemplated by the Purchase Agreement, the Investor and the Company have agreed upon certain rights and restrictions as set forth herein with respect to the Purchased Shares and other securities of the Company beneficially owned by the Investor and its Affiliates, and it is a condition to the execution of the Purchase Agreement that this Agreement be executed and delivered by the Investor and the Company. 

NOW, THEREFORE, in consideration of the premises and mutual agreements hereinafter set forth, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Definitions

.  As used in this Agreement, the following terms shall have the following meanings: 

(a)“Affiliate” shall mean, with respect to any Person, another Person that controls, is controlled by or is under common control with such Person.  A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. Without limiting the generality of the foregoing, a Person shall be deemed to “control” another Person if any of the following conditions is met: (i) in the case of corporate entities, direct or indirect ownership of more than fifty percent (50%) of the stock or shares having the right to vote for the election of directors; and (ii) in the case of non-corporate entities, direct or indirect ownership of more than fifty percent (50%) of the equity interest with the power to direct the management and policies of such non-corporate entities.  For the purposes of this Agreement, in no event shall the Investor or any of its Affiliates be deemed Affiliates of the Company or any of its Affiliates, nor shall the Company or any of its Affiliates be deemed Affiliates of the Investor or any of its Affiliates.

(b)“Agreement” shall have the meaning set forth in the Preamble to this Agreement, including all Exhibits attached hereto.

(c)“beneficial owner,” “beneficially owns,” “beneficial ownership” and terms of similar import used in this Agreement shall, with respect to a Person, have the 

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meaning set forth in Rule 13d-3 under the Exchange Act (i) assuming the full conversion into, and exercise and exchange for, shares of Common Stock of all Common Stock Equivalents beneficially owned by such Person and (ii) determined without regard for the number of days in which such Person has the right to acquire such beneficial ownership.

(d)“Business Day” shall mean a day on which commercial banking institutions in New York, New York are open for business.

(e)“Change of Control” shall mean, with respect to a Party, (a) a merger or consolidation of such Party with a Third Party that results in the voting securities of such Party outstanding immediately prior thereto, or any securities into which such voting securities have been converted or exchanged, ceasing to represent more than fifty percent (50%) of the combined voting power of the surviving entity or the parent of the surviving entity immediately after such merger or consolidation, (b) a transaction or series of related transactions in which a Third Party, together with its Affiliates, becomes the beneficial owner of more than fifty percent (50%) of the combined voting power of the outstanding securities of such Party, or (c) the sale or other transfer to a Third Party of all or substantially all of such Party’s business to which the subject matter of the Collaboration and License Agreement relates.  

(f)“Closing” shall have the meaning set forth in the Purchase Agreement.

(g)“Collaboration and License Agreement” shall mean the Collaboration and License Agreement between the Company and the Investor, dated as of the date hereof.

(h)“Common Stock” shall have the meaning set forth in the Preamble to this Agreement.

(i)“Common Stock Equivalents” shall mean any options, warrants or other securities or rights convertible into or exercisable or exchangeable for, whether directly or following conversion into or exercise or exchange for other options, warrants or other securities or rights, shares of Common Stock.

(j)“Company” shall have the meaning set forth in the Preamble to this Agreement.

(k)“Competitor” shall mean any biopharmaceutical enterprise significantly involved in developing and commercializing therapies for the treatment of Duchenne muscular dystrophy, or any other Person that directly or indirectly beneficially owns a majority of the voting securities or voting interests in such an enterprise, or any direct or indirect majority-owned subsidiary of such an enterprise or of such a Person.

(l)“Demand Request” shall have the meaning set forth in Section 2.1.  

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(m) “Disposition” or “Dispose of” shall mean any (i) offer, pledge, sale, contract to sell, sale of any option or contract to purchase, purchase of any option or contract to sell, grant of any option, right or warrant for the sale of, or other disposition of or transfer of any shares of Common Stock, or any Common Stock Equivalents, including, without limitation, any “short sale” or similar arrangement, or (ii) swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of shares of Common Stock or Common Stock Equivalents, whether any such swap or transaction is to be settled by delivery of securities, in cash or otherwise.

(n)“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

(o)“Filing Date” shall mean (i) with respect to any Registration Statement to be filed on Form S-1 (or any applicable successor form), ninety (90) days after receipt by the Company of a Demand Request for such Registration Statement and (ii) with respect to any Registration Statement to be filed on Form S-3 (or any applicable successor form), thirty (30) days after receipt by the Company of a Demand Request for such Registration Statement.

(p)“Governmental Authority” shall mean any court, agency, authority, department, regulatory body or other instrumentality of any government or country or of any national, federal, state, provincial, regional, county, city or other political subdivision of any such government or country or any supranational organization of which any such country is a member.

(q)“Group” shall have the meaning set forth in Section 3.1.

(r)“Holders” shall mean (but, in each case, only for so long as such Person remains an Affiliate of the Investor) the Investor and any Permitted Transferee thereof, if any, in accordance with Section 2.13.

(s)“Initiating Holder” shall have the meaning set forth in Section 2.3.

(t)“Interference” shall have the meaning set forth in Section 2.6.

(u)“Investor” shall have the meaning set forth in the Preamble to this Agreement.

(v)“Irrevocable Proxy” shall have the meaning set forth in Section 5.1.

(w) “Law” or “Laws” shall mean all laws, statutes, rules, regulations, orders, judgments, injunctions and/or ordinances of any Governmental Authority.

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(x)“Lock-Up Securities” shall have the meaning set forth in Section 4.1.

(y)“Lock-Up Term” shall mean from and after the Closing until the earlier of (i) 18 months after the date of the Closing and (ii) the termination of the Collaboration and License Agreement (other than pursuant to Section 13.2.1 of the Collaboration and License Agreement).

(z)“Modified Clause” shall have the meaning set forth in Section 8.7.

(aa)“Other Holders” shall mean any Person having rights to participate in a registration of the Company’s securities.

(bb) “Permitted Transferee” shall mean (i) a controlled Affiliate of the Investor or (ii) a controlling Affiliate of the Investor (or any controlled Affiliate of such controlling Affiliate) or the acquiring Person in the case of a Change of Control of the Investor; provided, however, that no such Affiliate shall be deemed a Permitted Transferee for any purpose under this Agreement unless (A) the Permitted Transferee, prior to or simultaneously with such transfer or assignment, shall have agreed in writing to be subject to and bound by all restrictions and obligations set forth in this Agreement, and (B) the Investor shall, prior to such transfer, furnish to the Company written notice of the name and address of such Permitted Transferee, details of its status as a Permitted Transferee and details of the Registrable Securities with respect to which such registration rights are being assigned.

(cc)“Permitted Transferee Irrevocable Proxy” shall have the meaning set forth in Section 5.1.

(dd) “Person” shall mean any individual, limited liability company, partnership, firm, corporation, association, trust, unincorporated organization, government or any department or agency thereof or other entity, as well as any syndicate or group that would be deemed to be a Person under Section 13(d)(3) of the Exchange Act.

(ee)“Prospectus” shall mean the prospectus forming a part of any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all amendments (including post-effective amendments) and including all material incorporated by reference or explicitly deemed to be incorporated by reference in such prospectus.

(ff)“Purchase Agreement” shall have the meaning set forth in the Preamble to this Agreement, and shall include all Exhibits attached thereto.

(gg)“Purchased Shares” shall have the meaning set forth in the Preamble to this Agreement, and shall be adjusted for (i) any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization and (ii) any Common Stock issued as 

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(or issuable upon the exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the Purchased Shares.

(hh)“registers,” “registered,” and “registration” refer to a registration effected by preparing and filing a Registration Statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such Registration Statement or document by the SEC.

(ii)“Registrable Securities” shall mean (i) the Purchased Shares, together with any shares of Common Stock issued in respect thereof as a result of any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization and (ii) any Common Stock issued as (or issuable upon the exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the shares of Common Stock described in clause (i) of this definition, excluding in all cases, however, (A) any Registrable Securities if and after they have been transferred to a Permitted Transferee in a transaction in connection with which registration rights granted hereunder are not assigned or (B) any Registrable Securities sold to or through a broker or dealer or underwriter in a public distribution or a public securities transaction.  

(jj)“Registration Expenses” shall mean all expenses incurred by the Company in connection with any Required Registration pursuant to Section 2.1 or the Company’s compliance with Section 2.8, including, without limitation, all registration and filing fees, fees and expenses of compliance with securities or blue sky Laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of any Registrable Securities), expenses of printing (i) certificates for any Registrable Securities in a form eligible for deposit with the Depository Trust Company or (ii) Prospectuses if the printing of Prospectuses is requested by Holders, messenger and delivery expenses, fees and disbursements of counsel for the Company and its independent certified public accountants (including the expenses of any management review, cold comfort letters or any special audits required by or incident to such performance and compliance), Securities Act liability insurance (if the Company elects to obtain such insurance), the reasonable fees and expenses of any special experts retained by the Company in connection with such registration, fees and expenses of other Persons retained by the Company and the reasonable fees and expenses (such fees and expenses not to exceed $50,000) of one (1) counsel for the Holders of Registrable Securities in each Required Registration, selected by the Holders of a majority of the Registrable Securities to be included in such Required Registration.  In addition, the Company will pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities to be registered on each securities exchange, if any, on which equity securities issued by the Company are then listed or the quotation of such securities on any national securities exchange on which equity securities issued by the Company are then quoted.

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(kk)“Registration Rights Term” shall have the meaning set forth in Section 2.1.

(ll)“Registration Statement” shall mean any registration statement of the Company under the Securities Act that covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the related Prospectus, all amendments and supplements to such registration statement (including post-effective amendments), and all exhibits and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such Registration Statement.

(mm)“Representative” shall mean with, respect to any Person, such Person’s directors, officers, employees, agents, attorneys, accountants, consultants and financial advisors.

(nn)“Required Period” with respect to a Required Registration shall mean the earlier of (i) the date on which all Registrable Securities covered by such Required Registration are sold pursuant thereto and (ii) one hundred twenty (120) days following the first day of effectiveness of the Registration Statement for such Required Registration, in each case subject to extension as set forth herein; provided, however, that in no event will the Required Period expire prior to the expiration of the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 promulgated thereunder.

(oo)“Required Registration” shall have the meaning set forth in Section 2.1.

(pp)“SEC” shall mean the United States Securities and Exchange Commission.

(qq)“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

(rr)“Selling Expenses” shall mean all underwriting discounts and selling commissions applicable to the sale of Registrable Securities pursuant to this Agreement.

(ss)“Shares of Then Outstanding Common Stock” shall mean, at any time, the issued and outstanding shares of Common Stock at such time, as well as all capital stock issued and outstanding at such time as a result of any stock split, stock dividend, or reclassification of Common Stock distributable, on a pro rata basis, to all holders of Common Stock.

(tt)“Standstill Parties” shall have the meaning set forth in Section 3.1.

(uu)“Standstill Term” shall have the meaning set forth in Section 3.1.

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(vv)“Third Party” shall mean any Person other than the Investor, the Company or any of their respective Affiliates.

(ww)“Underwritten Registration” or “Underwritten Offering” shall mean a registration in which Registrable Securities are sold to an underwriter for reoffering to the public.

(xx)“Violation” shall have the meaning set forth in Section 2.11(a).

(yy)“Voting Agreement Term” shall have the meaning set forth in Section 5.1.

Registration Rights

.  Effective as of the Closing:

2.1Required Registration

.  If, at any time after the expiration of the Lock-Up Term but no later than the tenth (10th) anniversary of the date hereof (the “Registration Rights Term”), the Company receives from any Holder or Holders a written request or requests (each, a “Demand Request”) that the Company file a Registration Statement under the Securities Act to effect the registration (a “Required Registration”) of Registrable Securities, the Company shall use all reasonable efforts to file a Registration Statement covering such Holders’ Registrable Securities as soon as practicable (and by the applicable Filing Date) and shall use all reasonable efforts to, as soon as practicable thereafter, effect the registration of the Registrable Securities to permit or facilitate the sale and distribution (including, upon request of such Holder or Holders, in an Underwritten Offering) of all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such Demand Request, subject however, to the conditions and limitations set forth herein; provided, however, that the Company shall not be obligated to effect any registration of Registrable Securities upon receipt of a Demand Request pursuant to this Section 2.1 if:

(i)the Company has already completed two (2) Required Registrations;

(ii)in the event that the market value of the Registrable Securities proposed to be included in the registration, based on the average closing price during the ten (10) consecutive trading days period prior to the making of the Demand Request, is less than the lesser of (x) ten million dollars ($10,000,000) or (y) the total market value of Registrable Securities outstanding; 

(iii)the Company furnishes to the Holders a certificate signed by an authorized officer of the Company stating that (A) within sixty (60) days after receipt of the Demand Request under this Section 2.1, the Company expects to file a registration statement for the public offering of securities for the account of the Company (other than a registration of securities (x) issuable pursuant to an employee stock option, stock purchase or similar plan, (y) issuable pursuant to a merger, exchange offer or a transaction of the type specified in Rule 145(a) under the Securities Act or (z) in which 

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the only securities being registered are securities issuable upon conversion of debt securities which are also being registered), provided, that the Company is actively employing good faith efforts to cause such registration statement to become effective or (B) the Company is engaged in a material transaction or has an undisclosed material corporate development, in either case, which would be required to be disclosed in the Registration Statement, and in the good faith judgment of the Company’s Board of Directors, such disclosure would be materially detrimental to the Company and its stockholders at such time (in which case, the Company shall disclose the matter as promptly as reasonably practicable and thereafter file the Registration Statement, and each Holder agrees not to disclose any information about such material transaction or corporate development to Third Parties until such disclosure has occurred or such information has entered the public domain other than through breach of this provision by such Holder), provided, however, that the Company shall have the right to only defer the filing of the Registration Statement pursuant to this subsection once in any twelve (12) month period and, such deferral may not exceed a period of more than ninety (90) days after receipt of a Demand Request;

(iv)the Company has, within the twelve (12) month period preceding the date of the Demand Request, already effected one (1) Required Registration for any Holder pursuant to this Section 2.1; or

(v)at any time during the period between the Company’s receipt of the Demand Request and the completion of the Required Registration, any Holder is in breach of or has failed to cause its Affiliates to comply with the obligations and restrictions of Section 3 of this Agreement, the Company has provided notice of such breach to a Holder and such breach or failure is ongoing and has not been remedied; it being understood that a one-time, inadvertent and de minimis breach of Section 4 shall not be deemed to be a breach of the obligations and restrictions under Section 4 for purposes of this Section 2.1(v).

2.2Company Registration

.  Effective from the expiration of the Lock-Up Term until the earlier of (a) the tenth (10th) anniversary of the date hereof and (b) the date on which the Holders no longer beneficially own at least one percent (1%) of the Shares of Then Outstanding Common Stock, (provided, however, if the Holders reacquire beneficial ownership representing at least one percent (1%) of the Shares of Then Outstanding Common Stock at any time within ten (10) year period set forth in clause (a) of this Section 2.2, the provisions of this Section 2.2 shall automatically again become applicable to the Holders) the Company shall notify the Holders in writing at least ten (10) days prior to the filing of any Registration Statement including shares of Common Stock by one or more selling stockholders (other than the Holders) (“Registration Notice”) and will afford each Holder an opportunity, subject to the terms and conditions of this Agreement, to include in such Registration Statement the number of Registrable Securities then held by such Holder that such Holder wishes to include in such Registration Statement.  Each Holder desiring to include in any such Registration Statement all or any part of the Registrable Securities held by such Holder shall, within five (5) days after 

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receipt of the Registration Notice, so notify the Company in writing, and in such notification, inform the Company of the number of Registrable Securities such Holder wishes to include in such Registration Statement. If a Holder decides not to include Registrable Securities in any Registration Statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include Registrable Securities in any subsequent Registration Statement or Registration Statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein. Each Holder shall keep confidential and not disclose to any third party (i) its receipt of any Registration Notice and (ii) any information regarding the proposed offering as to which such notice is delivered, except as required by law, regulation or as compelled by subpoena.  If a registration pursuant to this Section 2.2 is an Underwritten Offering, the right of any such Holder to include Registrable Securities in a registration statement pursuant to this Section 2.2 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. The Company and all Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting.  Notwithstanding any other provision of this Section 2, if the managing underwriter for the Underwritten Offering determines in good faith that marketing factors require a limitation of the number of shares of Registrable Securities to be included in such Underwritten Offering and advises the Holders of such determination in writing, then the managing underwriter may exclude shares (including up to 100% of the Registrable Securities) from the registration and the underwriting, with the number of Registrable Securities, if any, included in the registration and the underwriting being allocated to each of the Holders requesting inclusion of their Registrable Securities in such Registration Statement and all other Persons selling shares of Common Stock pursuant to such Registration Statement on a pro rata basis based on the total number of shares of Common Stock then held by each such Holder or other stockholder.  Notwithstanding the foregoing, the Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.

2.3Underwritten Registration Required; Priority in Underwritten Offering

.  The underwriter for any Underwritten Offering requested pursuant to Section 2.1 shall be selected by the Company, subject to approval by a majority in interest of the Holders initiating the Required Registration hereunder (such Holder(s) initiating the registration request, the “Initiating Holders”), which approval shall not be unreasonably withheld, conditioned or delayed.  The right of any Holder to include its Registrable Securities in the Underwritten Offering shall be conditioned upon such Holder’s participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities to the extent provided herein.  All Holders requesting the inclusion of their Registrable Securities in such Underwritten Offering shall (together with the Company as provided in Section 2.8(h)) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such Underwritten Offering.  Notwithstanding any other provision of this Section 2, if the managing underwriter for the Underwritten Offering determines in good faith that marketing factors require a limitation of the number of shares of Registrable Securities to be included in such Underwritten 

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Offering, and advises the Holders of such determination in writing, then the Company shall so advise all Holders which requested inclusion of their Registrable Securities in such Underwritten Offering, and the number of shares of Registrable Securities that may be included in such Underwritten Offering shall be allocated among the Holders in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company owned by each Holder; provided, however, that the number of shares of Registrable Securities to be included in such Underwritten Offering shall not be reduced unless all other securities are first entirely excluded from such Underwritten Offering.  In the event the Company advises the Holders of its intent to decrease the total number of Registrable Securities that may be included by the Holders in such Required Registration such that the number of Registrable Securities included in such Required Registration would be less than seventy-five percent (75%) of all Registrable Securities which the Holders requested be included in such Required Registration, then Holders representing a majority of the Registrable Securities requested to be included in such Required Registration will have the right to withdraw, on behalf of all Holders of all Registrable Securities requested to be so included, such Required Registration, in which case, such Required Registration will not count as a Required Registration for the purposes of Section 2.1(i), and the Company shall bear all Registration Expenses in connection therewith; provided, that, the right to withdraw a registration and have it not count as a Required Registration may only be exercised once by the Holders (taken collectively). 

2.4Priority in Required Registration

.  With respect to any Required Registration of Registrable Securities requested pursuant to Section 2.1, the Company may also (i) propose to sell shares of Common Stock on its own behalf and (ii) provide written notice of such Required Registration to Other Holders and permit all such Other Holders who request to be included in the Required Registration to include any or all Company securities held by such Other Holders in such Required Registration on the same terms and conditions as the Registrable Securities.  Notwithstanding the foregoing, if the managing underwriter or underwriters of the Underwritten Offering to which any Required Registration relates advise the Company in writing and advises the Holders of Registrable Securities of such determination in writing, that, in its good faith determination, the total amount of securities that such Holders, Other Holders, and the Company intend to include in such Required Registration is in an amount in the aggregate which would adversely affect the success of such Underwritten Offering, then such Required Registration shall include (i) first, all Registrable Securities of the Holders allocated, if the amount is less than all the Registrable Securities requested to be sold, pro rata on the basis of the total number of Registrable Securities held by such Holders; and (ii) second, as many other securities proposed to be included in the Required Registration by the Company and any Other Holders, allocated pro rata among the Company and such Other Holders, on the basis of the amount of securities requested to be included therein by the Company and each such Other Holder so that the total amount of securities to be included in such Underwritten Offering is the full amount that, in the written opinion of such managing underwriter, can be sold without materially and adversely affecting the success of such Underwritten Offering.

2.5Revocation of Required Registration

.  With respect to one (1) Required Registration only, the Holders of at least a majority of the Registrable Securities to be included 

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in a Registration Statement with respect to such Required Registration may, at any time prior to the effective date of such Registration Statement, on behalf of all Holders of all Registrable Securities requested to be included therein, revoke the request to have Registrable Securities included therein and revoke the request for such Required Registration by providing a written notice to the Company, in which case such Required Registration that has been revoked will be deemed not to have been effected and will not count as a Required Registration for purposes of Section 2.1(i) if, and only if, the Holders of Registrable Securities which had requested inclusion of Registrable Securities in such Required Registration promptly reimburse the Company for all Registration Expenses incurred by the Company in connection with such Required Registration.  Notwithstanding the foregoing sentence, the parties agree and acknowledge that the Holders of a majority of the Registrable Securities requested to be included in such Required Registration may revoke any Required Registration (without any obligation to reimburse the Company for Registration Expenses incurred in connection therewith) if such revocation is based on (i) a material adverse change in circumstances with respect to the Company and its subsidiaries, taken as a whole, caused by an act or failure to act by the Company or any of its subsidiaries and not known to any Holder at the time the Required Registration was first made or (ii) the Company’s failure to comply in any material respect with its obligations hereunder, and any such revocation based on an event described in (i) or (ii) above shall be exercisable at any time and shall not be counted as the one (1) revocation of a Required Registration permitted by the first sentence of this Section 2.5.

2.6Effective Required Registrations

.  A Required Registration will not be deemed to be effected for purposes of Section 2.1(i) if the Registration Statement for such Required Registration has (a) not been declared effective by the SEC or (b) become effective in accordance with the Securities Act and the rules and regulations thereunder and not been kept effective for the Required Period.  In addition, if after such Registration Statement has been declared or becomes effective, (i) the offering of Registrable Securities pursuant to such Registration Statement is interfered with by any stop order, injunction, or other order or requirement of the SEC or other governmental agency or court such that the continued offer and sale of Registrable Securities being offered pursuant to such Registration Statement would violate applicable Law and such stop order, injunction or other order or requirement of the SEC or other governmental agency or court does not result from any act or omission of any Holder whose Registrable Securities are registered pursuant to such Registration Statement (an “Interference”) and (ii) any such Interference is not cured within ninety (90) days thereof, such Required Registration will be deemed not to have been effected and will not count as a Required Registration.  In the event such Interference occurs and is cured, the Required Period relating to such Registration Statement will be extended by the number of days of such Interference, including the date such Interference is cured.

2.7Continuous Effectiveness of Registration Statement

.  The Company will use all reasonable efforts to cause each Registration Statement filed pursuant to this Section 2 to be declared effective by the SEC or to become effective under the Securities Act as promptly as practicable and to keep each such Registration Statement that has been declared or becomes effective continuously effective for the Required Period.

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2.8Obligations of the Company

.  Whenever required under Section 2.1 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

(a)prepare and file with the SEC a Registration Statement with respect to such Registrable Securities sought to be included therein; provided that at least five (5) Business Days prior to filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Company shall furnish to the Holders of the Registrable Securities covered by such Registration Statement, their counsel and the managing underwriter copies of all such documents proposed to be filed, and any such Holder shall have the opportunity to comment on any information pertaining solely to such Holder and its plan of distribution that is contained therein and the Company shall make the corrections reasonably requested by such Holder or the managing underwriter with respect to such information prior to filing any such Registration Statement or amendment;

(b)prepare and file with the SEC such amendments and post-effective amendments to any Registration Statement and any Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for the Required Period, and cause the Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement for the Required Period; provided that at least five (5) Business Days prior to filing any such amendments and post effective amendments or supplements thereto, the Company shall furnish to the Holders of the Registrable Securities covered by such Registration Statement, their counsel and the managing underwriter copies of all such documents proposed to be filed, and any such Holder or managing underwriter shall have the opportunity to comment on any information pertaining solely to such Holder and its plan of distribution that is contained therein and the Company shall make the corrections reasonably requested by such Holder and the managing underwriter with respect to such information prior to filing any such Registration Statement or amendment;

(c)furnish to the Holders of Registrable Securities covered by such Registration Statement and the managing underwriter such numbers of copies of such Registration Statement, each amendment and supplement thereto, the Prospectus included in such Registration Statement (including each preliminary prospectus or free writing prospectus) in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;

(d)notify the Holders of Registrable Securities covered by such Registration Statement, promptly after the Company shall receive notice thereof, of the time when such Registration Statement becomes or is declared effective or when any amendment or supplement or any Prospectus forming a part of such Registration Statement has been filed;

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(e)notify the Holders of Registrable Securities covered by such Registration Statement promptly of any request by the SEC for the amending or supplementing of such Registration Statement or Prospectus or for additional information and promptly deliver to such Holders copies of any comments received from the SEC;

(f)notify the Holders promptly of any stop order suspending the effectiveness of such Registration Statement or Prospectus or the initiation of any proceedings for that purpose, and use all reasonable efforts to obtain the withdrawal of any such order or the termination of such proceedings;

(g)use all reasonable efforts to register and qualify the Registrable Securities covered by such Registration Statement under such other securities or blue sky Laws of such jurisdictions as shall be reasonably requested by the Holders, use all reasonable efforts to keep each such registration or qualification effective, including through new filings, or amendments or renewals, during the Required Period, and notify the Holders of Registrable Securities covered by such Registration Statement of the receipt of any written notification with respect to any suspension of any such qualification; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, except as may be required by the Securities Act;

(h)in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of the Underwritten Offering pursuant to which such Registrable Securities are being offered;

(i)use all reasonable efforts to obtain: (A) at the time of effectiveness of the Registration Statement covering such Registrable Securities, a “cold comfort letter” from the Company’s independent certified public accountants covering such matters of the type customarily covered by “cold comfort letters” as the underwriters may reasonably request; and (B) at the time of any underwritten sale pursuant to such Registration Statement, a “bring-down comfort letter,” dated as of the date of such sale, from the Company’s independent certified public accountants covering such matters of the type customarily covered by “bring-down comfort letters” as the underwriters may reasonably request;

(j)promptly notify each Holder of Registrable Securities covered by such Registration Statement at any time when a Prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the Prospectus included in such Registration Statement or any offering memorandum or other offering document includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and promptly prepare a supplement or amendment to such Prospectus or file any other required document so that, as thereafter delivered to the 

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purchasers of such Registrable Securities, such Prospectus will not contain an untrue statement of material fact or omit to state any fact necessary to make the statements therein not misleading;

(k)permit any Holder of Registrable Securities covered by such Registration Statement, which Holder in its reasonable judgment could reasonably be deemed to be an underwriter with respect to the Underwritten Offering pursuant to which such Registrable Securities are being offered, or to be a controlling Person of the Company, to reasonably participate in the preparation of such Registration Statement and to require the insertion therein of information to the extent concerning such Holder, furnished to the Company in writing, which in the reasonable judgment of such Holder and its counsel should be included;

(l)in connection with any Underwritten Offering, use all reasonable efforts to obtain an opinion or opinions addressed to the underwriter or underwriters in customary form and scope from counsel for the Company;

(m)upon reasonable notice and during normal business hours, subject to the Company receiving customary confidentiality undertakings or agreements from any Holder of Registrable Securities covered by such Registration Statement or other person obtaining access to Company records, documents, properties or other information pursuant to this subsection (m), make available for inspection by a representative of such Holder and any underwriter participating in any disposition of such Registrable Securities and any attorneys or accountants retained by any such Holder or underwriter, relevant financial and other records, pertinent corporate documents and properties of the Company, and use all reasonable efforts to cause the officers, directors and employees of the Company to supply all information reasonably requested by any such representative, underwriter, attorneys or accountants in connection with the Registration Statement;

(n)with respect to one (1) Required Registration which includes Registrable Securities the market value of which is at least one hundred million dollars ($100,000,000), participate, to the extent requested by the managing underwriter, in efforts extending for no more than three (3) days scheduled by such managing underwriter and reasonably acceptable to the Company’s senior management, to sell the Registrable Securities being offered pursuant to such Required Registration (including participating during such period in customary “roadshow” meetings with prospective investors);

(o)use all reasonable efforts to comply with all applicable rules and regulations of the SEC relating to such registration and make generally available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act, provided that the Company will be deemed to have complied with this Section 2.8(o) with respect to such earning statements if it has satisfied the provisions of Rule 158;

(p)if requested by the managing underwriter or any selling Holder, promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or any selling Holder reasonably requests to be included therein, 

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with respect to the Registrable Securities being sold by such selling Holder, including, without limitation, the purchase price being paid therefor by the underwriters and with respect to any other terms of the Underwritten Offering of Registrable Securities to be sold in such offering, and promptly make all required filings of such prospectus supplement or post-effective amendment;

(q)cause the Registrable Securities covered by such Registration Statement to be listed on each securities exchange, if any, on which equity securities issued by the Company are then listed; and

(r)reasonably cooperate with each selling Holder and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with filings required to be made with the Financial Industry Regulatory Authority, Inc., if any.

2.9Furnish Information

.  It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself and the Registrable Securities held by it as shall be reasonably necessary to effect the registration of such Holder’s Registrable Securities.

2.10Expenses

.  Except as specifically provided herein, all Registration Expenses shall be borne by the Company.  All Selling Expenses incurred in connection with any registration hereunder shall be borne by the Holders of Registrable Securities covered by a Registration Statement, pro rata on the basis of the number of Registrable Securities registered on their behalf in such Registration Statement.

2.11Indemnification

.  In the event any Registrable Securities are included in a Registration Statement under this Agreement:

(a)The Company shall indemnify and hold harmless each Holder including Registrable Securities in any such Registration Statement, any underwriter (as defined in the Securities Act) for such Holder and each Person, if any, who controls such Holder or underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the officers, directors, owners, agents and employees of such controlling Persons, against any and all losses, claims, damages or liabilities (joint or several) to which they may become subject under any securities Laws including, without limitation, the Securities Act, the Exchange Act, or any other statute or common law of the United States or any other country or political subdivision thereof, or otherwise, including the amount paid in settlement of any litigation commenced or threatened (including any amounts paid pursuant to or in settlement of claims made under the indemnification or contribution provisions of any underwriting or similar agreement entered into by such Holder in connection with any offering or sale of securities covered by this Agreement), and shall promptly reimburse them, as and when incurred, for any legal or other expenses incurred by them in connection with investigating any claims and 

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defending any actions, insofar as any such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (each, a “Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in or incorporated by reference into such Registration Statement, including any preliminary prospectus or final prospectus contained therein or any free writing prospectus or any amendments or supplements thereto, or in any offering memorandum or other offering document relating to the offering and sale of such securities, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading or (iii) any violation or alleged violation by the Company (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities Law, or any rule or regulation promulgated under any state securities Law, in each case arising from such Registration Statement; provided, however, the Company shall not be liable in any such case for any such loss, claim, damage, liability or action to the extent that it (A) arises out of or is based upon a Violation which occurs solely in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder; or (B) is caused by such Holder’s disposition of Registrable Securities during any period during which such Holder is obligated to discontinue any disposition of Registrable Securities as a result of any stop order suspending the effectiveness of any registration statement or prospectus with respect to Registrable Securities. The Company shall pay, as incurred, any legal or other expenses reasonably incurred by any Person intended to be indemnified pursuant to this Section 2.11(a), in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 2.11(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.

(b)Each Holder including Registrable Securities in a registration statement shall indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the officers, directors, owners, agents and employees of such controlling Persons, any underwriter, any other Holder selling securities in such registration statement and any controlling Person of any such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing Persons may become subject, under liabilities (or actions in respect thereto) which arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation: (i) arises out of or is based upon a Violation which occurs solely in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder; or (ii) is caused by such Holder’s disposition of Registrable Securities during any period during which such Holder is obligated to discontinue any disposition of Registrable Securities as a result of any stop order suspending the effectiveness of any registration statement or prospectus with respect to Registrable Securities of which such Holder has received written notice.  Each such Holder shall pay, as incurred, any legal or other expenses reasonably incurred by any Person intended to be indemnified pursuant to this Section 2.11(b), in connection with investigating or defending any 

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such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 2.11(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without consent of the Holder, which consent shall not be unreasonably withheld.

(c)Promptly after receipt by an indemnified party under this Section 2.11 of notice of the commencement of any action (including any action by a Governmental Authority), such indemnified party shall, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.11, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain its own counsel, with the reasonable fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.11, but the omission so to deliver written notice to the indemnifying party shall not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.11.

(d)In order to provide for just and equitable contribution to joint liability in any case in which a claim for indemnification is made pursuant to this Section 2.11 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 2.11 provided for indemnification in such case, the Company and each Holder of Registrable Securities shall contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in proportion to the relative fault of the Company, on the one hand, and such Holder, severally, on the other hand; provided, however, that in any such case, no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; provided further, however, that in no event shall any contribution under this Section 2.11(d) on the part of any Holder exceed the net proceeds received by such Holder from the sale of Registrable Securities giving rise to such contribution obligation, except in the case of willful misconduct or fraud by such Holder.

(e)The obligations of the Company and the Holders under this Section 2.11 shall survive the completion of any offering of Registrable Securities in a registration statement under this Agreement and otherwise.

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2.12SEC Reports

.  With a view to making available to the Holders the benefits of Rule 144 under the Securities Act and any other rule or regulation of the SEC that may at any time permit a Holder to sell Registrable Securities of the Company to the public without registration, the Company agrees to at any time that it is a reporting company under Section 13 or 15(d) of the Exchange Act:

(a)make and keep available adequate current public information, as those terms are understood and defined in Rule 144; and

(b)furnish to any Holder, so long as such Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC (exclusive of Rule 144A) which permits the selling of any Registrable Securities without registration.

2.13Assignment of Registration Rights

.  The rights to cause the Company to register any Registrable Securities pursuant to this Agreement may be assigned in whole or in part (but only with all restrictions and obligations set forth in this Agreement) by a Holder to a Permitted Transferee which acquires at least 1,000,000 Registrable Securities (subject to adjustment in the event of any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization) from such Holder; provided, however, (a) such Holder shall, within five (5) days prior to such transfer, furnish to the Company written notice of the name and address of such Permitted Transferee, details of its status as a Permitted Transferee and details of the Registrable Securities with respect to which such registration rights are being assigned, (b) the Permitted Transferee, prior to or simultaneously with such transfer or assignment, shall agree in writing to be subject to and bound by all restrictions and obligations set forth in this Agreement, (c) the Investor shall continue to be bound by all restrictions and obligations set forth in this Agreement and (d) such transfer or assignment shall be effective only if immediately following such transfer or assignment the further disposition of such Registrable Securities by the Permitted Transferee is restricted under the Securities Act and other applicable securities Law.

3.Standstill.

3.1During the period from and after the Closing until 24 months after the date of the Closing (such period, the “Standstill Term”), neither the Investor nor any of its controlled Affiliates, nor any other Affiliates of the Investor acting at the direction of the Investor, nor any Representatives of the Investor acting at its direction (collectively, the “Standstill Parties”) shall (and the Investor shall cause its controlled Affiliates and Representatives not to) in any manner, directly or indirectly, except as expressly approved or invited in advance in writing by the Company: 

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(a)effect or seek, offer or propose (whether publicly or otherwise) to effect, or cause or participate in or in any way advise, assist or knowingly encourage any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, (i) any acquisition of any voting securities (or beneficial ownership thereof) or assets of the Company, or any rights to acquire any such voting securities (including derivate securities representing the right to vote or economic benefit of any such securities) or assets; (ii) any tender or exchange offer, merger or other business combination involving the Company; (iii) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company; or (iv) any “solicitation” of “proxies” (as such terms are used in the proxy rules of the SEC) or consents to vote any voting securities of the Company; 

(b)form, join or in any way participate in a “group” (as defined under the Exchange Act, a “Group”) with respect to any securities of the Company; 

(c)otherwise act, alone or in concert with others, to seek to control or influence the management, Board of Directors or policies of the Company; 

(d)take any action which would reasonably be expected to legally require the Company to make a public announcement regarding any of the types of matters set forth in clause (a) above; or 

(e)enter into any discussions or arrangements with any third party with respect to any of the foregoing.

[**].  

Notwithstanding anything in this Agreement to the contrary, nothing herein shall prevent the Investor from communicating to the Chief Executive Officer of the Company or the Chair of its Board of Directors in a non-public manner at any time a proposal or offer for, or a request for discussions (including further discussions) regarding, any transaction or activity otherwise prohibited under clause (i) or (ii) of Section 3.1(a), provided that such communication would not reasonably be expected to legally require the Company to make any public announcement or disclosure regarding the existence or receipt of such proposal or the terms or conditions thereof.  

Restrictions on Dispositions

.  

4.1Lock-Up

.  During the Lock-Up Term , without the prior approval of the Company, the Investor shall not, and shall cause its Affiliates not to, Dispose of (x) any of the Purchased Shares or any shares of Common Stock beneficially owned by the Investor and its Affiliates as of the date of this Agreement, together with any shares of Common Stock issued in respect thereof as a result of any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization, and (y) any Common Stock issued as (or issuable upon the exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the Purchased Shares or shares of Common Stock described in clause (x) of this sentence (collectively, the “Lock-Up 

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Securities”); provided, however, that the foregoing shall not prohibit the Investor from (A) transferring any of the Lock-Up Securities to a Permitted Transferee in accordance with and subject to the terms of Section 2.13 and (B) Disposing of any of the Lock-Up Securities in order to reduce the beneficial ownership of the Investor and its Affiliates to 19.9% or such lesser percentage, as advised in good faith and in writing by the Investor’s certified public accountants, that would be necessary pursuant to applicable accounting rules and guidelines so as to not require the Investor to include in its financial statements its portion of the Company’s financial results, of the Shares of Then Outstanding Common Stock.

 

4.2Certain Tender Offers

.  Notwithstanding any other provision of this Section 4, this Section 4 shall not prohibit or restrict any Disposition of shares of Common Stock and/or Common Stock Equivalents by the Investor or its Affiliates into (a) a tender offer by a Third Party which is not opposed by the Company’s Board of Directors (but only after the Company’s filing of a Schedule 14D-9, or any amendment thereto, with the SEC disclosing the recommendation of the Company’s Board of Directors with respect to such tender offer) or (b) an issuer tender offer by the Company.

4.3Sale Limitations.  Subject to the restrictions set forth in Section 4.1, the Investor agrees that, except for any transfer of Shares of Then Outstanding Common Stock and/or Common Stock Equivalents by the Investor to a Permitted Transferee or the Company, it shall not, and shall cause its Affiliates not to, Dispose of any Shares of Then Outstanding Common Stock and/or Common Stock Equivalents (for the avoidance of doubt, other than as a result of a Change of Control of the Investor) at any time to any Person that such Investor or Affiliate knows (after a reasonable inquiry in a private placement) is a Competitor.

4.4Offering Lock-Up

.  If the Holders together beneficially own at least five percent (5%) of the Shares of Then Outstanding Common Stock, the Holders shall, if requested by the Company and an underwriter of Common Stock of the Company, agree not to Dispose of any shares of Common Stock and/or Common Stock Equivalents for a specified period of time, such period of time not to exceed ninety (90) days.  Such agreement shall be in writing in a form satisfactory to the Company, the underwriter(s) in such offering and shall contain customary exceptions to the restrictions set forth therein.  The Company may impose stop transfer instructions with respect to the shares of Common Stock and/or Common Stock Equivalents to the extent consistent with any such agreement until the end of the specified period of time.  The foregoing provisions of this Section 4.4 shall apply to the Holders only if the Company’s directors, officers and any holders of an equal or greater number of shares of Common Stock that are party to a collaboration, license or similar agreement with the Company are subject to similar lock-up restrictions.  Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Holders subject to such agreements, based on the number of shares subject to such agreements.

5.Voting Agreement.

5.1Voting of Securities.  From and after the Closing and until the date on 

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which the Investor and any Permitted Transferees together beneficially own less than ten percent (10%) of the Shares of Then Outstanding Common Stock (the “Voting Agreement Term”), the Investor shall, and shall cause any Permitted Transferees to, vote or execute a written consent with respect to the Purchased Shares, in the sole discretion of the Investor, in accordance with the recommendation of the Company’s Board of Directors solely with respect to (i) the election of directors, provided that such directors are unanimously recommended by the Company’s Board of Directors; (ii) the approval of the Company’s auditor; (iii) the approval of, on a non-binding, advisory basis, the compensation of the Company’s named executive officers; and (iv) the approval of an increase to the number of shares reserved for issuance or the issuance of shares under the Company’s equity compensation or share plans for employees, consultants and directors.  In furtherance of this Section 5.1, the Investor hereby irrevocably appoints the Company and any individuals designated by the Company (such designated individuals to be limited to the President and Chief Executive Officer, Chief Financial Officer or Secretary of the Company), and each of them individually, as the attorneys, agents and proxies, with full power of substitution and re-substitution in each of them, for the Investor, and in the name, place and stead of the Investor, to vote (or cause to be voted) in such manner as set forth in this Section 5.1 with respect to the Purchased Shares to which the Investor is or may be entitled to vote at any meeting of the Company held after the date hereof, whether annual or special and whether or not an adjourned meeting (the “Irrevocable Proxy”); provided that, this Irrevocable Proxy shall only be effective and exercisable if, at any annual or special meeting of the stockholders of the Company and at any adjournments or postponements of any such meetings, the Investor (i) fails to appear or otherwise fails to cause its voting securities of the Company to be counted as present for purposes of calculating a quorum, or (ii) fails to vote such voting securities in accordance with this Section 5.1, in each case at least five (5) Business Days prior to the date of such stockholders’ meeting.  This Irrevocable Proxy is coupled with an interest, shall be irrevocable and binding on any successor-in-interest of the Investor and shall not be terminated by operation of law upon the occurrence of any event.  This Irrevocable Proxy shall operate to revoke and render void any prior proxy as to voting securities heretofore granted by the Investor which is inconsistent herewith.  The Irrevocable Proxy shall terminate upon the expiration or termination of the Voting Agreement Term.  The Investor shall cause any Permitted Transferee to promptly execute and deliver to the Company an irrevocable proxy, substantially in the form of Exhibit B attached hereto, and irrevocably appoint the Company and any individuals designated by the Company, and each of them individually, with full power of substitution and resubstitution, as its attorney, agent and proxy to vote (or cause to be voted) such Purchased Shares of the Company as to which such Permitted Transferee is entitled to vote, in such manner as each such attorney, agent and proxy or his substitute shall in its, his or her sole discretion deem appropriate or desirable with respect to the matters set forth in this Section 5.1 (the “Permitted Transferee Irrevocable Proxy”).  The Investor acknowledges, and shall cause any Permitted Transferees to acknowledge, that any such proxy executed and delivered shall be coupled with an interest, shall constitute, among other things, an inducement for the Company to enter into this Agreement, shall be irrevocable and binding on any successor-in-interest of such Permitted Transferee and shall not be terminated by operation of Law upon the occurrence of any event.  Such proxy shall operate to revoke and render void any prior proxy as to any voting securities of the Company heretofore granted by such Permitted Transferee, to the extent it is 

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inconsistent herewith.  The Investor acknowledges and agrees that it shall be a condition to any proposed transfer of voting securities of the Company by the Investor to such Permitted Transferee that such Permitted Transferee execute and deliver to the Company a Permitted Transferee Irrevocable Proxy, and that any purported transfer shall be void and of no force or effect if such Permitted Transferee Irrevocable Proxy is not so executed and delivered at the closing of such transfer.  Such proxy shall terminate upon the earlier of the expiration or termination of the Voting Agreement Term.  The Investor acknowledges and agrees that it shall be a condition to any proposed transfer of voting securities of the Company by the Investor to any Permitted Transferee during the Voting Agreement Term that such Permitted Transferee shall agree in writing to be subject to and bound by all restrictions and obligations set forth in this Section 5.1.

In the event the Company’s stockholders are permitted to act by written consent, the Company and the Investor shall each negotiate in good faith with the other provisions as consistent as possible with the foregoing to govern the voting of the Investor’s and its Permitted Transferees’ Purchased Shares as closely as practicable to the foregoing.

5.2Quorum.  In furtherance of Section 5.1, the Investor shall be, and shall cause each of its Permitted Transferees to be, present in person or represented by proxy at all meetings of stockholders to the extent necessary so that all voting securities of the Company as to which they are entitled to vote shall be counted as present for the purpose of determining the presence of a quorum at such meeting.

6.Information Rights.

6.1Financial Information and Reporting.  At any time when the Investor and its Affiliates beneficially own more than 19.9% (or such lesser percentage, as advised in good faith and in writing by the Investor’s certified public accountants, that would be necessary pursuant to applicable accounting rules and guidelines so as to require the Investor to include in its financial statements its portion of the Company’s financial results) of the Shares of Then Outstanding Common Stock, the Company will provide to the Investor or its designated Affiliate any financial information reasonably requested by the Investor solely so that the Investor can assess whether the Investor needs to account for the investment using the equity method of accounting or otherwise (the “Purpose”), including making its management reasonably available to the Investor for reasonable inquiries regarding its financial statements for the Purpose.  If the Investor or its Affiliate (a) determines in good faith, in accordance with applicable accounting rules and guidance, that such financial information is reasonably likely to be necessary with respect to the financial reporting of the Investor or its Affiliates and (b) provides the Company with written notice to such effect, then beginning as promptly as reasonably practicable but in no event later than the 90th day following such notice, the Company will deliver via overnight delivery and electronic mail to the Investor or its Affiliate such reasonably requested financial information. The Investor and its Affiliates shall not use any financial information received pursuant to this Section 6 for any reason other than the Purpose.

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6.2Confidentiality.  All confidential or proprietary information and data provided by the Company to either the Investor or its Affiliate pursuant to this Section 6 shall be deemed “Confidential Information” under the Collaboration and License Agreement and accordingly shall be subject to the terms and conditions of the Collaboration and License Agreement governing “Confidential Information.” The confidentiality obligations of the Investor and its Affiliates under this Section 6 shall survive any termination or expiration of this Agreement.

6.3Acknowledgment of Securities Law. The Investor is aware of the restrictions imposed by the U.S. securities law 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.

Termination of Certain Rights and Obligations

.  

7.1Termination of Registration Rights

.  Except for Section 2.11, which shall survive until the expiration of any applicable statutes of limitation, Section 2 shall terminate automatically and have no further force or effect upon the earliest to occur of:

(a)the expiration of the Registration Rights Term;

(b)the date on which the Common Stock ceases to be registered pursuant to Section 12 of the Exchange Act; and

(c)a liquidation or dissolution of the Company.

7.2Termination of Standstill Agreement

. Section 3 shall terminate and have no further force or effect, upon the earliest to occur of:

(a)such time that the Company publicly announces that it has entered into with a Third Party a written definitive agreement for the acquisition (by way of merger, tender offer or otherwise), in each case, the consummation of which would result in a Change of Control of the Company;

(b)the expiration of the Standstill Term;

(c)the date on which the Common Stock ceases to be registered pursuant to Section 12 of the Exchange Act; and

(d)a liquidation or dissolution of the Company.

7.3Termination of Restrictions on Dispositions

.  Section 4 shall terminate and have no further force or effect upon the earliest to occur of:

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(a)the consummation of a Change of Control of the Company;

(b)a liquidation or dissolution of the Company; and

(c)the date on which the Common Stock ceases to be registered pursuant to Section 12 of the Exchange Act.

7.4Termination of Voting Agreement Term

.  Section 5 shall terminate and have no further force or effect upon the earliest to occur of:

(a)the consummation of a Change of Control of the Company;

(b)the expiration of the Standstill Term; 

(c)the date on which the Common Stock ceases to be registered pursuant to Section 12 of the Exchange Act; and

(d)a liquidation or dissolution of the Company.

7.5Termination of Information Rights

.  Section 6.1 shall terminate and have no further force or effect upon the earliest to occur of:

(a)the consummation of a Change of Control of the Company; and

(b)a liquidation or dissolution of the Company.

 

7.6Effect of Termination

.  No termination pursuant to any of Sections 7.1, 7.2, 7.3, 7.4 or 7.5 shall relieve any of the parties (or the Permitted Transferee, if any) for liability for breach of or default under any of their respective obligations or restrictions under any terminated provision of this Agreement, which breach or default arose out of events or circumstances occurring or existing prior to the date of such termination.

Miscellaneous

.  

8.1Governing Law; Submission to Jurisdiction

.  This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware, without regard to the conflict of laws principles thereof that would require the application of the Law of any other jurisdiction.  Any action brought, arising out of, or relating to this Agreement shall be brought in the Court of Chancery of the State of Delaware. Each party hereby irrevocably submits to the exclusive jurisdiction of said Court in respect of any claim relating to the validity, interpretation and enforcement of this Agreement, and hereby waives, and agrees not to assert, as a defense in any action, suit or proceeding in which any such claim is made that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts, or that the venue thereof may not be appropriate or that this agreement may not be enforced in or by such courts. The parties hereby consent to and grant the Court of Chancery of 

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the State of Delaware jurisdiction over such parties and over the subject matter of any such claim and agree that mailing of process or other papers in connection with any such action, suit or proceeding in the manner provided in Section 8.3 or in such other manner as may be permitted by law, shall be valid and sufficient thereof.

8.2Waiver

.  Waiver by a party of a breach hereunder by another party shall not be construed as a waiver of any subsequent breach of the same or any other provision.  No delay or omission by a party in exercising or availing itself of any right, power or privilege hereunder shall preclude the later exercise of any such right, power or privilege by such party.  No waiver shall be effective unless made in writing with specific reference to the relevant provision(s) of this Agreement and signed by a duly authorized representative of the party granting the waiver.

8.3Notices

.  All notices, instructions and other communications hereunder or in connection herewith shall be in writing, shall be sent to the address of the relevant party set forth on Exhibit A attached hereto and shall be (a) delivered personally, (b) sent by registered or certified mail, return receipt requested, postage prepaid, (c) sent via a reputable nationwide overnight courier service or (d) sent by electronic mail, with a confirmation copy to be sent by registered or certified mail, return receipt requested, postage prepaid.  Any such notice, instruction or communication shall be deemed to have been delivered upon receipt if delivered by hand, three (3) Business Days after it is sent by registered or certified mail, return receipt requested, postage prepaid, one (1) Business Day after it is sent via a reputable nationwide overnight courier service or when transmitted with electronic confirmation of receipt, if transmitted by electronic mail (if such transmission is made during regular business hours of the recipient on a Business Day; or otherwise, on the next Business Day following such transmission).  Any party may change its address by giving notice to the other parties in the manner provided above.

8.4Entire Agreement

.  This Agreement, the Purchase Agreement and the Collaboration and License Agreement contain the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements or understandings, whether written or oral, with respect hereto and thereto.

8.5Amendments

.  No provision in this Agreement shall be supplemented, deleted or amended except in a writing executed by an authorized representative of each of the parties hereto.

8.6Headings; Nouns and Pronouns; Section References

.  Headings in this Agreement are for convenience of reference only and shall not be considered in construing this Agreement.  Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa.  References in this Agreement to a section or subsection shall be deemed to refer to a section or subsection of this Agreement unless otherwise expressly stated.

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8.7Severability

.  If, under applicable Laws, any provision hereof is invalid or unenforceable, or otherwise directly or indirectly affects the validity of any other material provision(s) of this Agreement in any jurisdiction (“Modified Clause”), then, it is mutually agreed that this Agreement shall endure and that the Modified Clause shall be enforced in such jurisdiction to the maximum extent permitted under applicable Laws in such jurisdiction; provided that the parties shall consult and use all reasonable efforts to agree upon, and hereby consent to, any valid and enforceable modification of this Agreement as may be necessary to avoid any unjust enrichment of either party and to match the intent of this Agreement as closely as possible, including the economic benefits and rights contemplated herein.

8.8Assignment

.  Neither this Agreement nor any rights or duties of a party hereto may be assigned by such party, in whole or in part, without (a) the prior written consent of the Company in the case of any assignment by the Investor, except as provided by Section 2.13 with respect to the Investor’s assignment to a Permitted Transferee; or (b) the prior written consent of the Investor in the case of an assignment by the Company.

8.9Successors and Assigns

.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

8.10Counterparts

.  This Agreement may be executed in counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.

8.11Third Party Beneficiaries

.  None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third Party.  No Third Party shall obtain any right under any provision of this Agreement or shall by reason of any such provision make any claim in respect of any debt, liability or obligation (or otherwise) against any party hereto.

8.12No Strict Construction

.  This Agreement has been prepared jointly and will not be construed against any party.

8.13Remedies

.  The rights, powers and remedies of the parties under this Agreement are cumulative and not exclusive of any other right, power or remedy which such parties may have under any other agreement or Law.  No single or partial assertion or exercise of any right, power or remedy of a party hereunder shall preclude any other or further assertion or exercise thereof.

8.14Specific Performance

.  The Company and the Investor hereby acknowledge and agree that the rights of the parties hereunder are special, unique and of extraordinary character, and that if any party refuses or otherwise fails to act, or to cause its Affiliates to act, in accordance with the provisions of this Agreement, such refusal or failure would result in irreparable injury to the Company or the Investor, as the case may be, the exact amount of which would be difficult to ascertain or estimate and the remedies at law for which would not be reasonable or adequate compensation.  Accordingly, if any party refuses or otherwise fails to act, or to cause its Affiliates to act, in accordance with the provisions of this 

26

 

 

Agreement, then, in addition to any other remedy which may be available to any damaged party at law or in equity, such damaged party will be entitled to seek specific performance and injunctive relief, without posting bond or other security, and without the necessity of proving actual or threatened damages, which remedy such damaged party will be entitled to seek in any court of competent jurisdiction.

8.15No Conflicting Agreements

.  The Investor hereby represents and warrants to the Company that neither it nor any of its Affiliates is, as of the date of this Agreement, a party to, and agrees that neither it nor any of its Affiliates shall, on or after the date of this Agreement, enter into any agreement that conflicts with the rights granted to the Company in this Agreement.  The Company hereby represents and warrants to each Holder that it is not, as of the date of this Agreement, a party to, and agrees that it shall not, on or after the date of this Agreement, enter into, any agreement or approve any amendment to its Organizational Documents (as defined in the Purchase Agreement) with respect to its securities that conflicts with the rights granted to the Holders in this Agreement.  The Company further represents and warrants that the rights granted to the Holders hereunder do not in any way conflict with the rights granted to any other holder of the Company’s securities under any other agreements.

8.16Use of Proceeds. 

The Company shall use the proceeds from the sale of the Purchased Shares primarily for the purpose of funding research, development and related activities, and other working capital purposes.

(Signature Page Follows)

 

27

 

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

SOLID BIOSCIENCES INC.

 

 

	
 
	
By:
	
/s/ Ilan Ganot

	
 
	
Name:
	
Ilan Ganot

	
 
	
Title:
	
Chief Executive Officer

ACTIVE/104419179.14  

 

[Signature Page to Investor Agreement]

 

 

ULTRAGENYX PHARMACEUTICAL INC.

 

 

	
 
	
By:
	
/s/ Emil D. Kakkis

	
 
	
Name:
	
Emil D. Kakkis, M.D. Ph.D.

	
 
	
Title:
	
Chief Executive Officer

 

 

[Signature Page to Investor Agreement]

 

EXHIBIT A

NOTICES

(a)If to the Company:

Solid Biosciences Inc.

141 Portland Street, Fifth Floor

Cambridge, MA 02139

Attention: Lynette Herscha

Email:

 

with a copy to:

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, MA 02109

Attention: Lia Der Marderosian

Email: lia.dermarderosian@wilmerhale.com

 

 (b)If to the Investor:

Ultragenyx Pharmaceutical Inc.

60 Leveroni Court

Novato, CA 94949

Attention: Chief Business Officer; General Counsel

Email:

with a copy to:

Goodwin Procter LLP
100 Northern Avenue
Boston, MA 02210
Attention: Ed Amer
Email: EAmer@goodwinlaw.com

 

 

 

 

EXHIBIT B

FORM OF IRREVOCABLE PROXY

In order to secure the performance of the duties of the undersigned pursuant to Section 5.1 of the Investor Agreement, dated as of as of October 22, 2020 (the “Agreement”), by and between Ultragenyx Pharmaceutical Inc. and Solid Biosciences Inc. (the “Company”), the undersigned hereby irrevocably appoints the Company and any individual designated by the Company, and each of them individually, as the attorneys, agents and proxies, with full power of substitution and resubstitution in each of them, for the undersigned, and in the name, place and stead of the undersigned, to vote (or cause to be voted) in such manner as set forth in Section 5.1 of the Agreement with respect to all Purchased Shares, which the undersigned is or may be entitled to vote at any meeting of the Company held after the date hereof, whether annual or special and whether or not an adjourned meeting.  This proxy is coupled with an interest, shall be irrevocable and binding on any successor-in-interest of the undersigned and shall not be terminated by operation of law upon the occurrence of any event.  This proxy shall operate to revoke and render void any prior proxy as to voting securities heretofore granted by the undersigned which is inconsistent herewith.  Notwithstanding the foregoing, this irrevocable proxy shall be effective if, at any annual or special meeting of the stockholders of the Company (or any consent in lieu thereof) and at any adjournments or postponements of any such meetings, the undersigned (i) fails to appear or otherwise fails to cause its voting securities of the Company to be counted as present for purposes of calculating a quorum, or (ii) fails to vote such voting securities in accordance with Section 5.1 of the Agreement, in each case at least five (5) Business Days prior to the date of such stockholders’ meeting.  This proxy shall terminate upon the earlier of the expiration or termination of the Voting Agreement Term.

 

 

ULTRAGENYX PHARMACEUTICAL INC.

 

 

	
 
	
By:
	

	
 
	
Name:
	

	
 
	
Title:

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