Document:

Exhibit

Exhibit 10.2

Regeneron Pharmaceuticals, Inc.

777 Old Saw Mill River Road
Tarrytown, New York 10591
January 7, 2018
Sanofi
54, rue La Boétie
75008 Paris
France
Attention: Chief Financial Officer
Re:     Limited Waiver and Amendment of Investor Agreement; Amendment of IO LCA and Antibody LCA
Ladies and Gentlemen:
Reference is made to (i) the Amended and Restated Investor Agreement (as may be amended from time to time, the “Investor Agreement”), dated as of January 11, 2014, by and among Sanofi, a company organized under the laws of France (“Sanofi”), sanofi-aventis US LLC, a Delaware limited liability company (“Sanofi US”), Aventisub LLC, a Delaware limited liability company (formerly Aventis Pharmaceuticals Inc., a Delaware corporation) (“Aventis”), sanofi-aventis Amérique du Nord, a société par actions simplifiée (formerly a société en nom collectif) organized under the laws of France (the “Investor” and, together with Sanofi, Sanofi US and Aventis, the “Purchaser Parties”), and Regeneron Pharmaceuticals, Inc., a New York corporation (“Regeneron”); (ii) the Immuno-oncology License and Collaboration Agreement (as may be amended from time to time, the “IO LCA”), dated as of July 1, 2015, by and between Sanofi Biotechnology SAS, a société par actions simplifiée organized under the laws of France (“Sanofi SAS”), and Regeneron; and (iii) the Amended and Restated License and Collaboration Agreement, dated as of November 10, 2009, by and among Sanofi SAS (as successor-in-interest to Aventis), the Investor and Regeneron, as amended (as may be amended from time to time, the “Antibody LCA”). Unless otherwise specified, capitalized terms used but not defined in this letter agreement (this “Letter Agreement”) shall have the respective meanings ascribed to such terms in the Investor Agreement, the IO LCA or the Antibody LCA (as applicable). 
The purpose of this Letter Agreement is to set forth the terms and conditions pursuant to which the Purchaser Parties would be allowed (but not required) to sell shares of common stock of Regeneron, par value $0.001 per share (“Common Stock”), held by one or more of the Purchaser Parties (the “Regeneron Shares”) to satisfy in whole or in part Sanofi SAS’s funding obligations with respect to (i) the REGN2810 Development Costs (as defined below) for the REGN2810 Covered Periods (as defined below) under the IO LCA contingent upon a certain increase in the REGN2810 Budget Amount and (ii) certain Dupilumab/REGN3500 Eligible Investments (as defined below) for the Dupilumab/REGN3500 Eligible Investments Covered Periods (as defined below) under the Antibody LCA. Any such sales would be permitted only up to the REGN2810 Share Sale Cap (as defined below) (in the case of Development Costs incurred with respect to REGN2810) and the Dupilumab/REGN3500 

    

Share Sale Cap (as defined below) (in the case of the Dupilumab/REGN3500 Eligible Investments).  
Pursuant to Sections 9.2 and 9.5 of the Investor Agreement, Section 20.5 of the IO LCA and Section 20.5 of the Antibody LCA, the parties to this Letter Agreement agree as follows:
PART I - REGN2810; Amendment of IO LCA
		
	(1)
	Increase in REGN2810 Budget Amount.  Section 1.138 of the IO LCA is hereby amended and restated in its entirety to read as follows: 

1.138 “REGN2810 Budget Amount” shall mean one billion six hundred forty million dollars ($1,640,000,000), or such other amount as mutually agreed on by the Parties in writing.  

		
	(2)
	Separate Tracking and Invoicing of Development Costs with Respect to REGN2810.  During the REGN2810 Amendment Term (as defined below): 

 
		
	a.
	All of the aggregate Development Costs incurred by or on behalf of the Parties (as defined in the IO LCA) with respect to REGN2810 shall be excluded from the definition of “Development Cost True-Up” for each Quarter commencing on October 1, 2017 and ending on September 30, 2020 (such Quarters, the “REGN2810 Covered Periods”), and shall instead be tracked and invoiced separately for each REGN2810 Covered Period in a dedicated cost true-up utilizing the principles of Part III of Schedule 2 to the IO LCA (each such amount, the “REGN2810 Development Cost True-Up Amount”).  

		
	b.
	For each REGN2810 Covered Period, Regeneron shall invoice Sanofi SAS for the REGN2810 Development Cost True-Up Amount (each such invoice, a “REGN2810 Development Cost Invoice”) separately from other invoices provided to Sanofi SAS pursuant to the IO LCA. Regeneron shall deliver electronically to Sanofi SAS each REGN2810 Development Cost Invoice within 60 days of the end of the applicable Quarter (followed by physical delivery thereof as soon as reasonably practicable), and payment by Sanofi SAS shall be due within 15 days of the electronic delivery thereof.  Notwithstanding the foregoing, the REGN2810 Development Cost Invoice for the Quarter commencing on October 1, 2017 shall not be delivered to Sanofi SAS earlier than February 28, 2018. 

		
	c.
	Sections 9.6, 9.7 and 9.8 of the IO LCA shall otherwise apply mutatis mutandis to the reporting of the Development Costs with respect to REGN2810, the calculation of the REGN2810 Development Cost True-Up Amount and the establishment of the REGN2810 Development Cost Invoice.  

		
	(3)
	REGN2810 Funding Mechanics and Related Provisions.  During the REGN2810 Amendment Term, subject to the other applicable terms and conditions of this Letter Agreement (including, without limitation, the provisions relating to the REGN2810 

Share Sale Cap set forth in Section 10(a) of this Letter Agreement), the parties to this Letter Agreement agree to the following:

		
	a.
	Within three (3) Trading Days (as defined below) after Sanofi SAS’s electronic receipt of the applicable REGN2810 Development Cost Invoice, any of the Purchaser Parties may send a written notice (such notice, a “REGN2810 Sale Notice”) to Regeneron (which shall be done electronically), indicating the dollar amount of such invoice in respect of which such Purchaser Party (on behalf of itself and the other Purchaser Parties) may be willing (but is not obligated) to sell Regeneron Shares either to Regeneron or in the open market (such dollar amount, the “REGN2810 Sale Value” ), which shall not exceed the REGN2810 Development Cost True-Up Amount set forth in such REGN2810 Development Cost Invoice.  Any such REGN2810 Sale Notice shall be deemed to have been received by Regeneron one (1) Trading Day after it is sent by a Purchaser Party.  “Trading Day” means any day on which the NASDAQ (or such other exchange where Regeneron is primarily listed and traded) (the “NASDAQ”) is open for business.

		
	b.
	The “REGN2810 Measurement Price” shall mean the volume-weighted average price of a share of Common Stock on the NASDAQ on the next (1) Trading Day subsequent to Regeneron’s receipt of the REGN2810 Sale Notice, as published by Thomson Reuters.

		
	c.
	If a REGN2810 Sale Notice has been provided to Regeneron in accordance with the terms of this Letter Agreement, on the next Trading Day after the date of the establishment of the REGN2810 Measurement Price (such day, the “REGN2810 Decision Date”), representatives of Regeneron and the Purchaser Parties shall, as soon as reasonably practicable and in any event no later than 4:00 p.m. Eastern Time, discuss the number of Regeneron Shares to be purchased by Regeneron, if any, which shall be no greater than the number equal to the quotient of (x) the REGN2810 Sale Value specified in the REGN2810 Sale Notice for the REGN2810 Development Cost Invoice for that REGN2810 Covered Period and (y) the applicable REGN2810 Measurement Price (such quotient, rounded down to the nearest whole number, the “Full Number of REGN2810 Shares”), and the following provisions shall apply:

		
	i.
	If, on the REGN2810 Decision Date, Regeneron is willing to purchase, and the Purchaser Parties are willing to sell, any of such Regeneron Shares, then the Purchaser Parties shall commit in writing (which may be done electronically) to the sale of such Regeneron Shares (such shares, the “REGN2810 Shares to Be Purchased”) before 5:00 p.m. Eastern Time on the REGN2810 Decision Date.  The purchase of such REGN2810 Shares to Be Purchased shall be settled via a customary method of settlement for such a purchase (based on account information provided by the parties to this Letter Agreement to one another in writing (which may be done electronically)) within three (3) Trading Days after the REGN2810 

Decision Date, with the purchase price to be paid by Regeneron through a credit towards the amount owed by Sanofi SAS under the REGN2810 Development Cost Invoice for that REGN2810 Covered Period based on an amount equal to the product of (x) the number of the REGN2810 Shares to Be Purchased and (y) the applicable REGN2810 Measurement Price. For the avoidance of doubt, Sanofi SAS shall remit to Regeneron by the due date of the applicable REGN2810 Development Cost Invoice an amount in cash equal to the full REGN2810 Development Cost True-Up Amount for such REGN2810 Covered Period less the amount of such credit. The Purchaser Parties will be deemed to have settled the amount corresponding to the purchase price for the REGN2810 Shares to Be Purchased (as determined pursuant to this Letter Agreement) on behalf of Sanofi SAS.

		
	ii.
	If, on the REGN2810 Decision Date, Regeneron is willing to purchase any Regeneron Shares subject to the REGN2810 Sale Notice for a particular REGN2810 Development Cost Invoice, and the Purchaser Parties either (A) decline in writing to sell all such Regeneron Shares to Regeneron or (B) fail to respond to outreach by Regeneron to discuss the purchase of any Regeneron Shares, (x) the Purchaser Parties shall not be permitted to effect sales of any Regeneron Shares in open-market transactions with respect to that REGN2810 Development Cost Invoice and (y) Sanofi SAS shall remit to Regeneron by the due date of the applicable REGN2810 Development Cost Invoice an amount in cash equal to the full REGN2810 Development Cost True-Up Amount for such REGN2810 Covered Period.

		
	iii.
	If, on the REGN2810 Decision Date, Regeneron either (A) declines in writing to purchase the Full Number of REGN2810 Shares for a particular REGN2810 Development Cost Invoice or (B) fails to respond to outreach by the Purchaser Parties to discuss the purchase of any Regeneron Shares, and the Purchaser Parties are willing to sell all such Regeneron Shares to Regeneron, then (x) Sanofi SAS shall remit to Regeneron by the due date of the applicable REGN2810 Development Cost Invoice an amount in cash equal to the full REGN2810 Development Cost True-Up Amount for such REGN2810 Covered Period and (y) the Purchaser Parties may sell in open-market transactions Regeneron Shares in an amount not to exceed the difference between (I) the Full Number of REGN2810 Shares and (II) REGN2810 Shares to Be Purchased (which, in the case of clause (B) of this Section 3(c)(iii), shall be deemed to be zero) (the “Open-Market REGN2810 Shares”), subject to the provisions of Sections 3(e) and 9 of this Letter Agreement.

		
	iv.
	If, on the REGN2810 Decision Date, Regeneron does not attempt to contact any of the Purchaser Parties and none of the Purchaser Parties attempts to contact Regeneron, in each case, prior to 4:00 p.m. Eastern 

Time, then (x) subject to Section 9.15 (Resolution of Payment Disputes) of the IO LCA, Sanofi SAS shall remit to Regeneron by the due date of the applicable REGN2810 Development Cost Invoice an amount in cash equal to the full REGN2810 Development Cost True-Up Amount for such REGN2810 Covered Period and (y) the Purchaser Parties may sell in open-market transactions Open-Market REGN2810 Shares in an amount not to exceed the Full Number of REGN2810 Shares, subject to the provisions of Sections 3(e) and 9 of this Letter Agreement.   

		
	d.
	In the event that, for any REGN2810 Covered Period, the REGN2810 Development Cost True-Up Amount set forth in a given REGN2810 Development Cost Invoice exceeds the product of (x) the REGN2810 Shares to Be Purchased and (y) the REGN2810 Measurement Price (such difference, the “Cash-Settled REGN2810 Development Costs”), and subject to Section 9.15 (Resolution of Payment Disputes) of the IO LCA, Sanofi SAS shall remit to Regeneron by the due date of the applicable REGN2810 Development Cost Invoice an amount in cash equal to the Cash-Settled REGN2810 Development Costs.   For so long as Sanofi SAS is in arrears on any payment of Cash-Settled REGN2810 Development Costs (or is otherwise in arrears on the payment of any REGN2810 Development Cost Invoice), the limited waiver of the Purchaser Parties’ lock-up obligations under Section 5.1 of the Investor Agreement pursuant to Section 10 of this Letter Agreement shall not apply.

		
	e.
	Any sale of the Open-Market REGN2810 Shares for a given REGN2810 Covered Period shall be effected on or before the six (6) month anniversary of the due date of the REGN2810 Development Cost Invoice for that REGN2810 Covered Period (the “REGN2810 Sale Period”); provided that if the Purchaser Parties are restricted by applicable Law from effecting any such open-market transaction for a period of time during the REGN2810 Sale Period (the “REGN2810 Restricted Period”), the REGN2810 Sale Period shall be extended by the length of the applicable REGN2810 Restricted Period, except that in no event shall such extension of any REGN2810 Sale Period exceed two (2) months. 

		
	(4)
	Other Amendments to the IO LCA.

		
	a.
	As a result of the increase in the REGN2810 Budget Amount under this Letter Agreement (from six hundred fifty million dollars ($650,000,000) to one billion six hundred forty million dollars ($1,640,000,000)), each of the REGN2810 Global Development Plan (the “REGN2810 Global Development Plan”) and the REGN2810 Global Development Budget (including an itemization of the costs per year) are revised as set forth in Part A of a separate side letter, dated as of the date hereof, by and among Regeneron, the Investor and Sanofi SAS (the “Side Letter”), and shall be deemed an integral part of the IO LCA.

		
	b.
	Notwithstanding anything to the contrary in Section 5.3(b) of the IO LCA, the REGN2810 Global Development Budget shall be broken down on a yearly basis in accordance with Part A of the Side Letter.  In addition, at least twice each Contract Year during the Term, Regeneron will provide Sanofi SAS with a good-faith forecast of anticipated Development Costs to be incurred for REGN2810 for the remainder of the current Contract Year and the subsequent two (2) Contract Years. 

		
	c.
	Notwithstanding anything to the contrary in Sections 5.3(a) and 5.3(b) of the IO LCA, each of Regeneron and Sanofi SAS agree to discuss any material proposed change(s) to the REGN2810 Global Development Plan or the REGN2810 Global Development Budget prior to the implementation of such changes during meetings between Regeneron’s and Sanofi SAS’s respective IOSC co-chairs and their designated subject matter experts, which meetings are to be held monthly, or at such other times as the Parties agree, and which may be conducted by telephone, video-conference, webcast or in person.  In addition to these monthly meetings, Regeneron may call an ad-hoc meeting of Regeneron’s and Sanofi SAS’s respective IOSC co-chairs and their designated subject matter experts to be held within five (5) Business Days of the date Regeneron provides Sanofi SAS notice if, in Regeneron’s opinion, any material proposed change(s) to the REGN2810 Global Development Plan or the REGN2810 Global Development Budget is urgent and should be commenced prior to the next monthly meeting.  If Sanofi SAS’s IOSC co-chair and designated subject matter experts cannot attend such an ad-hoc meeting within five (5) Business Days, Regeneron may provide a written summary of such proposed change(s) to Sanofi SAS at least seven (7) Business Days prior to the commencement of such activities.   In addition, the following provisions shall apply:

		
	i.
	Such meetings shall provide (x) a forum for reviewing recent clinical data and discussing REGN2810 clinical trial plans, updates on the REGN2810 program progress and regulatory strategy, and (y) the opportunity for Sanofi SAS to provide input and comments on the REGN2810 clinical strategy and study design. 

		
	ii.
	Regeneron shall inform Sanofi SAS in writing of any contemplated material change to the REGN2810 Global Development Plan as soon as possible. In order to enable Sanofi SAS to provide valuable input and comments on any such contemplated material changes, Regeneron shall provide each of the IOSC co-chairs with relevant information and materials at least ten (10) Business Days in advance of the meeting at which such material change shall be discussed.

		
	iii.
	Regeneron shall take into good faith consideration Sanofi SAS’s input and comments expressed during such meetings. In the event that the Parties remain in disagreement concerning the initiation of a pivotal trial (including any Phase III Trial) in a tumor type that has not been studied in a previous clinical trial conducted under the IO LCA, the matter will be referred to the respective Executive Officers to attempt 

a resolution of the differences within five (5) Business Days of such referral.

		
	iv.
	If no agreement can be reached by the Executive Officers within such five (5) Business Day period, Regeneron will retain final decision-making authority with respect to the REGN2810 Global Development Plan; provided, however, that such REGN2810 Global Development Plan shall be at all times consistent with the (x) Collaboration Purpose and (y) the REGN2810 Global Development Budget which shall not exceed the REGN2810 Budget Amount. 

		
	d.
	For the avoidance of doubt, this Section 4 shall survive the Termination Date (as defined below).

PART II - Dupilumab/REGN3500 Eligible Investments;Amendment of Antibody LCA

		
	(5)
	Mutual Understanding. The parties to this Letter Agreement agree that, for the purpose of this Letter Agreement, “Dupilumab/REGN3500 Eligible Investments” shall mean certain proposed activities relating to the Development of dupilumab (an antibody to the interleukin-4 receptor (IL-4R) alpha subunit) (“Dupilumab”) and REGN3500 (an antibody to interleukin-33) (“REGN3500”), each a Licensed Product under the Antibody LCA, and Non-Approval Trials of Dupilumab, which activities, together with associated high level cost estimates for each activity from 2018 to 2023, are listed in Part B of the Side Letter.   The Dupilumab/REGN3500 Eligible Investments are comprised of (i) the Dupilumab LCM studies that are currently defined, as set forth in Part B to the Side Letter (the “Dupilumab Currently Defined Eligible LCM Studies”); (ii) the Dupilumab LCM studies to be further defined, as set forth in Part B to the Side Letter (the “Dupilumab Further Eligible LCM Studies”); and (iii) the REGN3500 studies set forth in Part B to the Side Letter (the “REGN3500 Eligible Studies”).       

		
	(6)
	Separate Tracking of Development Costs with Respect to Dupilumab/REGN3500 Eligible Investments and Costs Relating to Non-Approval Trials of Dupilumab; Quarterly Statement. 

During the Dupilumab/REGN3500 Eligible Investment Amendment Term (as defined below):

		
	a.
	All of the aggregate Development Costs and/or conduct of Non-Approval Trials incurred by or on behalf of the Parties (as defined in the Antibody LCA) with respect to the Dupilumab/REGN3500 Eligible Investments during a Quarter commencing on January 1, 2018 and ending on September 30, 2020 (such Quarters, the “Dupilumab/REGN3500 Eligible Investment Covered Periods”) shall be tracked as set forth in Schedule A hereto; and the aggregate amount thereof borne by Sanofi for each Dupilumab/REGN3500 Eligible Investment Covered Period, as calculated pursuant to the methodology set forth in Schedule A (the “Dupilumab/REGN3500 Eligible Investment Amount”), will be set forth in a separate statement (a “Dupilumab/REGN3500 Eligible Investment Statement”).  

		
	b.
	For each Dupilumab/REGN3500 Eligible Investment Covered Period, Sanofi SAS shall deliver electronically to Regeneron each Dupilumab/REGN3500 Eligible Investment Statement within 65 days of the end of the applicable Quarter (followed by physical delivery thereof as soon as reasonably practicable).  

		
	(7)
	Dupilumab/REGN3500 Eligible Investment Funding Mechanics and Related Provisions.  During the Dupilumab/REGN3500 Eligible Investment Amendment Term, subject to the other applicable terms and conditions of this Letter Agreement (including, without limitation, the provisions relating to the Dupilumab/REGN3500 Eligible Investment Share Sale Cap set forth in Section 10(b) of this Letter Agreement), the parties to this Letter Agreement agree to the following:

		
	a.
	Within three (3) Trading Days after Regeneron’s electronic receipt of the applicable Dupilumab/REGN3500 Eligible Investment Statement, any of the Purchaser Parties may send a written notice (such notice, a “Dupilumab/REGN3500 Eligible Investment Sale Notice”) to Regeneron (which shall be done electronically), indicating the dollar amount of the Dupilumab/REGN3500 Eligible Investment Amount in respect of which such Purchaser Party (on behalf of itself and the other Purchaser Parties) may be willing (but is not obligated) to sell Regeneron Shares either to Regeneron or in the open market (such dollar amount, the “Dupilumab/REGN3500 Eligible Investment Sale Value”), which shall not exceed the Dupilumab/REGN3500 Eligible Investment Amount set forth in such Dupilumab/REGN3500 Eligible Investment Statement.  Any such Dupilumab/REGN3500 Eligible Investment Statement or any such Dupilumab/REGN3500 Eligible Investment Sale Notice shall be deemed to have been received by Regeneron one (1) Trading Day after it is sent by a Purchaser Party.  

		
	b.
	The “Dupilumab/REGN3500 Eligible Investment Measurement Price” shall mean the volume-weighted average price of a share of Common Stock on the NASDAQ on the next (1) Trading Day subsequent to Regeneron’s receipt of the Dupilumab/REGN3500 Eligible Investment Sale Notice, as published by Thomson Reuters.

		
	c.
	If a Dupilumab/REGN3500 Eligible Investment Sale Notice has been provided to Regeneron in accordance with the terms of this Letter Agreement, 

on the next Trading Day after the date of the establishment of the Dupilumab/REGN3500 Eligible Investment Measurement Price (such day, the “Dupilumab/REGN3500 Eligible Investment Decision Date”), representatives of Regeneron and the Purchaser Parties shall, as soon as reasonably practicable and in any event no later than 4:00 p.m. Eastern Time, discuss the number of Regeneron Shares to be purchased by Regeneron, if any, which shall be no greater than the number equal to the quotient of (x) the Dupilumab/REGN3500 Eligible Investment Sale Value specified in the Dupilumab/REGN3500 Eligible Investment Sale Notice for the Dupilumab/REGN3500 Eligible Investment Statement for that Dupilumab/REGN3500 Eligible Investment Covered Period and (y) the applicable Dupilumab/REGN3500 Eligible Investment Measurement Price (such quotient, rounded down to the nearest whole number, the “Full Number of Dupilumab/REGN3500 Eligible Investment Shares”), and the following provisions shall apply:

		
	i.
	If, on the Dupilumab/REGN3500 Eligible Investment Decision Date, Regeneron is willing to purchase, and the Purchaser Parties are willing to sell, any of such Regeneron Shares, then the Purchaser Parties shall commit in writing (which may be done electronically) to the sale of such Regeneron Shares (such shares, the “Dupilumab/REGN3500 Eligible Investment Shares to Be Purchased”) before 5:00 p.m. Eastern Time on the Dupilumab/REGN3500 Eligible Investment Decision Date.  The purchase of such Dupilumab/REGN3500 Eligible Investment Shares to Be Purchased shall be settled via a customary method of settlement for such a purchase (based on account information provided by the parties to this Letter Agreement to one another in writing (which may be done electronically)) within three (3) Trading Days after the Dupilumab/REGN3500 Eligible Investment Decision Date, with the purchase price to be equal to the product of (x) the number of the Dupilumab/REGN3500 Eligible Investment Shares to Be Purchased and (y) the applicable Dupilumab/REGN3500 Eligible Investment Measurement Price and to be paid by Regeneron by wire transfer of immediately available funds.

		
	ii.
	If, on the Dupilumab/REGN3500 Eligible Investment Decision Date, Regeneron is willing to purchase any Regeneron Shares subject to the Dupilumab/REGN3500 Eligible Investment Sale Notice for a particular Dupilumab/REGN3500 Eligible Investment Statement, and the Purchaser Parties either (A) decline in writing to sell all such Regeneron Shares to Regeneron or (B) fail to respond to outreach by Regeneron to discuss the purchase of any Regeneron Shares, the Purchaser Parties shall not be permitted to effect sales of any Regeneron Shares in open-market transactions with respect to that Dupilumab/REGN3500 Eligible Investment Statement.

		
	iii.
	If, on the Dupilumab/REGN3500 Eligible Investment Decision Date, Regeneron either (A) declines in writing to purchase the Full Number 

of Dupilumab/REGN3500 Eligible Investment Shares for a particular Dupilumab/REGN3500 Eligible Investment Statement or (B) fails to respond to outreach by the Purchaser Parties to discuss the purchase of any Regeneron Shares, and the Purchaser Parties are willing to sell all such Regeneron Shares to Regeneron, then the Purchaser Parties may sell in open-market transactions Regeneron Shares in an amount not to exceed the difference between (I) the Full Number of Dupilumab/REGN3500 Eligible Investment Shares and (II) Dupilumab/REGN3500 Eligible Investment Shares to Be Purchased (which, in the case of clause (B) of this Section 6(c)(iii), shall be deemed to be zero) (the “Open-Market Dupilumab/REGN3500 Eligible Investment Shares”), subject to the provisions of Sections 7(d) and 9 of this Letter Agreement.

		
	iv.
	If, on the Dupilumab/REGN3500 Eligible Investment Decision Date, Regeneron does not attempt to contact any of the Purchaser Parties and none of the Purchaser Parties attempts to contact Regeneron, in each case, prior to 4:00 p.m. Eastern Time, then the Purchaser Parties may sell in open-market transactions Open-Market Dupilumab/REGN3500 Eligible Investment Shares in an amount not to exceed the Full Number of Dupilumab/REGN3500 Eligible Investment Shares, subject to the provisions of Sections 7(d) and 9 of this Letter Agreement.   

		
	v.
	For the avoidance of doubt, any purchase of the Dupilumab/REGN3500 Eligible Investment Shares by Regeneron does not impact the amounts owed by the parties to the Antibody LCA to one another, which shall be settled and paid in accordance with the terms of the Antibody LCA.

		
	d.
	Any sale of the Open-Market Dupilumab/REGN3500 Eligible Investment Shares for a given Dupilumab/REGN3500 Eligible Investment Covered Period shall be effected on or before the six (6) month anniversary of the date of the Dupilumab/REGN3500 Eligible Investment Statement for that Dupilumab/REGN3500 Eligible Investment Covered Period (the “Dupilumab/REGN3500 Eligible Investment Sale Period”); provided that if the Purchaser Parties are restricted by applicable Law from effecting any such open-market transaction for a period of time during the Dupilumab/REGN3500 Eligible Investment Sale Period (the “Dupilumab/REGN3500 Eligible Investment Restricted Period”), the Dupilumab/REGN3500 Eligible Investment Sale Period shall be extended by the length of the applicable Dupilumab/REGN3500 Eligible Investment Restricted Period, except that in no event shall such extension of any Dupilumab/REGN3500 Eligible Investment Sale Period exceed two (2) months. 

(8)Other Amendments to the Antibody LCA.

		
	a.
	The parties to this Letter Agreement acknowledge and agree that the JSC has approved a budget for the Development of Dupilumab and REGN3500, as 

well as the Non-Approval Trials of Dupilumab, for 2018 through 2023, in each case pursuant to the Antibody LCA, which budget may be adjusted pursuant to the terms of the Antibody LCA. 

		
	b.
	The parties to this Letter Agreement further agree to allocate the amount set forth in Part B of the Side Letter to the Dupilumab Currently Defined Eligible LCM Studies and to spend such amount on these studies, or such other activities as the parties to the Antibody LCA may mutually agree, prior to the end of 2023.  The design of the clinical studies and other activities that comprise the Dupilumab Currently Defined Eligible LCM Studies will be reviewed, approved and overseen by the JSC pursuant to Article III of the Antibody LCA; provided, however, that notwithstanding anything to the contrary in the Antibody LCA (including Section 3.11 thereof), the parties to this Letter Agreement will spend this amount on the Development of Dupilumab and/or REGN3500 and/or certain activities relating to Non-Approval Trials of Dupilumab.

		
	c.
	The parties to this Letter Agreement acknowledge and agree that the budget for the Dupilumab Further Eligible LCM Studies set forth in Part B of the Side Letter has been agreed upon by the parties to this Letter Agreement.  The design of the clinical studies and other activities that comprise the Dupilumab Further Eligible LCM Studies will be reviewed, approved and overseen by the JSC pursuant to Article III of the Antibody LCA; provided, however, that notwithstanding anything to the contrary in the Antibody LCA (including Section 3.11 thereof), any change to the budget for such activities must be approved by the parties to this Letter Agreement.  

		
	d.
	The parties to this Letter Agreement further agree to allocate the amount set forth in Part B of the Side Letter to the REGN3500 Eligible Studies and to spend such amount on these studies, or such other activities as the parties to the Antibody LCA may mutually agree, prior to the end of 2023.  The design of the clinical studies and other activities that comprise the REGN3500 Eligible Studies will be reviewed, approved and overseen by the JSC pursuant to Article III of the Antibody LCA; provided, however, that notwithstanding anything to the contrary in the Antibody LCA (including Section 3.11 thereof), the parties to this Letter Agreement will spend this amount on the Development of Dupilumab and/or REGN3500 and/or certain activities relating to Non-Approval Trials of Dupilumab.

		
	e.
	For the avoidance of doubt, the parties to this Letter Agreement acknowledge and agree that (i) the Development and Commercialization of Dupilumab and REGN3500 under the Antibody LCA may require studies and activities other than the Dupilumab/REGN3500 Dedicated Investments and expenditures by the parties to the Antibody LCA in addition to the amounts referenced above; (ii) amounts allocated to, and spent on, the Development and Commercialization of Dupilumab and REGN3500 pursuant to this Section 8 are in addition to, and not in lieu of, other amounts the parties to the Antibody LCA may spend on Development and Commercialization activities for Dupilumab and REGN3500 pursuant to the terms of the 

Antibody LCA (including, without limitation, the currently approved budget for the Development of Dupilumab); and (iii) this Section 8 shall survive the Termination Date.  

Open-Market Sale Limitations

		
	(9)
	Open-Market Sale Limitations for Open-Market REGN2810 Shares and Open-Market Dupilumab/REGN3500 Eligible Investment Shares.  Notwithstanding anything in this Letter Agreement to the contrary, the Purchaser Parties shall not be permitted to, and agree not to, sell any Open-Market REGN2810 Shares or any Open-Market Dupilumab/REGN3500 Eligible Investment Shares (i) on any one (1) Trading Day if the aggregate volume of such sales on such Trading Day would exceed ten percent (10%) of the daily average trading volume of Common Stock on the NASDAQ over the 20 Trading Days immediately preceding such Trading Day, as published by Thomson Reuters, and (ii) in any one (1) calendar quarter if the aggregate volume of such sales in such calendar quarter would exceed three hundred thousand (300,000) shares of Common Stock (subject to adjustment to account for any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization by Regeneron).

Limited Waiver and Amendment of Investor Agreement

		
	(10)
	Limited Waiver of Investor Agreement Lock-up.  Regeneron hereby agrees to waive, on the terms and subject to the conditions set forth in this Letter Agreement, the Purchaser Parties’ lock-up obligations under Section 5.1 of the Investor Agreement for the duration of the Amendment Term (as defined below), solely to the extent necessary for the Purchaser Parties to sell Regeneron Shares to offset:

		
	a.
	REGN2810 Development Cost True-Up Amounts, up to an aggregate number of 800,000 Regeneron Shares (subject to adjustment to account for any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization by Regeneron) for all of the REGN2810 Covered Periods (the “REGN2810 Share Sale Cap”, and the Regeneron Shares actually sold in accordance with this Section 10(a), the “REGN2810 Shares”); and

		
	b.
	Dupilumab/REGN3500 Eligible Investment Amounts, up to an aggregate number of 600,000 Regeneron Shares (subject to adjustment to account for any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization by Regeneron) for all of the Dupilumab/REGN3500 Eligible Investment Covered Periods (the “Dupilumab/REGN3500 Eligible Investment Share Sale Cap”, and the Regeneron Shares actually sold in accordance with this Section 10(b), the “Dupilumab/REGN3500 Eligible Investment Shares”),

in each case, all subject to the other applicable terms and conditions of this Letter Agreement (including, without limitation, the restrictions on the timing of such sales set forth in Sections 3(e) and 7(d) of this Letter Agreement).  

		
	(11)
	Limited Waiver of Obligation to Maintain “Highest Percentage Threshold”. Regeneron agrees that the Purchaser Parties will not be required to maintain the Highest Percentage Threshold (as defined in the Investor Agreement immediately prior to the date of this Letter Agreement) from August 26, 2017 until the Termination Date. 

		
	(12)
	Amendment of Definition of “Highest Percentage Threshold”.  Effective as of the Termination Date, the first sentence of Section 1(y) of the Investor Agreement is hereby amended and restated in its entirety to read as follows: 

“Highest Percentage Threshold” shall mean the lower of (i) twenty-five percent (25%) of the Shares of then Outstanding Common Stock and (ii) the higher of (x) the Purchaser Parties’ percentage ownership of Shares of Then Outstanding Common Stock on the Termination Date (as defined in that certain Letter Agreement, dated as of January 7, 2018, by and among the parties hereto and Sanofi Biotechnology SAS), as measured based on (A) the number of outstanding shares of Class A Stock and Common Stock reported on the cover of the Company’s most recent Form 10-Q or Form 10-K, as applicable, filed prior to the Termination Date and (B) the number of shares of Common Stock held by the Purchaser Parties on the Termination Date, and (y) the Purchaser Parties’ highest percentage ownership of Shares of Then Outstanding Common Stock following the Termination Date (measured on a quarterly basis on the fifth (5th) Business Day following the filing of the Company’s most recent Form 10-Q or Form 10-K, as applicable, with the SEC, based on the number of outstanding shares of Class A Stock and Common Stock reported on the cover).”
   
		
	(13)
	Determination of First Cure Period Following Termination Date.  Notwithstanding Section 3.1(f) of the Investor Agreement, the first Cure Period for the Purchaser Parties after the Termination Date shall be until the later of (x) the date determined pursuant to Section 3.1(f) of the Investor Agreement or (y) the day that is eight (8) months after the last sale of Regeneron Shares by the Purchaser Parties during the Amendment Term; for the avoidance of doubt, thereafter, the Cure Period shall be determined pursuant to Section 3.1(f) of the Investor Agreement.

		
	(14)
	Amendment Term.  The duration of the waivers set forth in Sections 10 and 11 of this Letter Agreement shall be limited to the period (the “Amendment Term”) between the date of this Letter Agreement and the date (such date, the “Termination Date”) that is the later of the last day of the REGN2810 Amendment Term and the last day of the Dupilumab/REGN3500 Eligible Investment Amendment Term.

		
	a.
	“REGN2810 Amendment Term” shall mean the period between the date of this Letter Agreement and the date when the earliest of the following shall occur: (i) the aggregate number of REGN2810 Shares sold pursuant to this Letter Agreement (including both REGN2810 Shares to be Purchased and Open-Market REGN2810 Shares) equals the REGN2810 Share Sale Cap; (ii) if a Purchaser Party does not submit a REGN2810 Sale Notice in respect of the invoice for the last REGN2810 Covered Period, the later of (x) the due date of such invoice and (y) the last day of any then-existing REGN2810 Sale Period; (iii) the end of the REGN2810 Sale Period relating to the last 

REGN2810 Covered Period in respect of which a Purchaser Party submits a REGN2810 Sale Notice; and (iv) the effective date of termination of the IO LCA pursuant to its terms (including Section 19.7 of the IO LCA).

		
	b.
	“Dupilumab/REGN3500 Eligible Investment Amendment Term” shall mean the period between the date of this Letter Agreement and the date when the earliest of the following shall occur: (i) the aggregate number of Dupilumab/REGN3500 Eligible Investment Shares sold pursuant to this Letter Agreement (including both Dupilumab/REGN3500 Eligible Investment Shares to be Purchased and Open-Market Dupilumab/REGN3500 Eligible Investment Shares) equals the Dupilumab/REGN3500 Eligible Investment Share Sale Cap; (ii) if a Purchaser Party does not submit a Dupilumab/REGN3500 Eligible Investment Sale Notice in respect of the Dupilumab/REGN3500 Eligible Investment Statement for the last Dupilumab/REGN3500 Eligible Investment Covered Period, the last day of any then-existing Dupilumab/REGN3500 Eligible Investment Sale Period; (iii) the end of the Dupilumab/REGN3500 Eligible Investment Sale Period relating to the last Dupilumab/REGN3500 Eligible Investment Covered Period in respect of which a Purchaser Party submits a Dupilumab/REGN3500 Eligible Investment Sale Notice; and (iv) the effective date of termination of the Antibody LCA pursuant to its terms (including Section 19.7 of the Antibody LCA).

Purchaser Parties’ Representations

		
	(15)
	Purchaser Parties’ Representations. Each of the Purchaser Parties hereby agrees, represents and warrants as follows: 

		
	a.
	Such Purchaser Party has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its sales, if any, of Regeneron Shares and is capable of bearing the economic risks of such sales. 

		
	b.
	Such Purchaser Party has been provided a reasonable opportunity to undertake, and has undertaken, such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed decision with respect to the sales, if any, of the Regeneron Shares. Such Purchaser Party is aware that Regeneron may have material, non-public information that may affect the value of the Regeneron Shares, and hereby acknowledges that neither it nor the other Purchaser Parties are privy to any such information, if there is any such information. 

		
	c.
	Such Purchaser Party is not relying on its own knowledge of any such information or on any of Regeneron’s disclosures or non-disclosures of any such information, if there is any such information. Such Purchaser Party is further not relying on any representations, warranties, information or disclosure by Regeneron not expressly set forth in this Letter Agreement, and hereby waives any and all claims whatsoever against Regeneron arising 

out of the knowledge, disclosure or non-disclosure of any such information, if there is any such information. 

		
	d.
	Such Purchaser Party realizes the effect of this waiver and elects to proceed with the transactions in this Letter Agreement, including any sales by it (whether to Regeneron or in open-market transactions) of any Regeneron Shares, or any purchases by Regeneron of any Regeneron Shares, during the Amendment Term.

Except for Sections 1, 2, 4, 5, 6 and 8 of this Letter Agreement, this Letter Agreement shall be subject to all applicable provisions of Article 9 (Miscellaneous) of the Investor Agreement mutatis mutandis; provided, however, that for purposes of the notices contemplated by Sections 3 and 7 of this Letter Agreement, Section 9.3 (Notices) of the Investor Agreement is hereby amended to provide that notice to a party thereto may be provided by sending an e-mail to each of the addresses set forth beneath such party’s name as set forth in Part C of the Side Letter, and such notice shall be deemed delivered to such party on the date such e-mail is sent (other than a REGN2810 Sale Notice or a Dupilumab/REGN3500 Eligible Investment Sale Notice, each of which shall be deemed to have been received by Regeneron one (1) Trading Day after such e-mail is sent by a Purchaser Party).  In addition, for purposes of the REGN2810 Development Cost Invoices contemplated by Section 2 of this Letter Agreement and the Dupilumab/REGN3500 Eligible Investment Statements contemplated by Section 6 of this Letter Agreement, Sections 20.3 (Notices) of the IO LCA and the Antibody LCA are hereby amended to provide that any REGN2810 Development Cost Invoice or Dupilumab/REGN3500 Eligible Investment Statement, as applicable, may be delivered to Sanofi SAS or Regeneron (as applicable) by e-mail to each of the addresses set forth beneath Sanofi SAS’s name or Regeneron’s name (as applicable) in Part C of the Side Letter (followed by physical delivery thereof as soon as reasonably practicable), and such REGN2810 Development Cost Invoice or Dupilumab/REGN3500 Eligible Investment Development Cost Statement, as applicable, shall be deemed delivered on the date such e-mail is sent. 
This Letter Agreement shall be subject to all applicable provisions of Articles XVI (Confidentiality) of the IO LCA and the Antibody LCA mutatis mutandis.  
Except as expressly set forth herein, no provision of the Investor Agreement, the IO LCA or the Antibody LCA is modified or waived, and the Investor Agreement, the IO LCA and the Antibody LCA shall each continue in full force and effect in accordance with their respective terms. All references in the Investor Agreement to the Investor Agreement shall be deemed to be references to the Investor Agreement after giving effect to this Letter Agreement; all references in the IO LCA to the IO LCA shall be deemed to be references to the IO LCA after giving effect to this Letter Agreement; and all references in the Antibody LCA to the Antibody LCA shall be deemed to be references to the Antibody LCA after giving effect to this Letter Agreement.

Please confirm your agreement with the foregoing by returning a countersigned acknowledgement.
[Signature page follows.]

Sincerely,
REGENERON PHARMACEUTICALS, INC.
By:/s/ Robert E. Landry    
Name:  Robert E. Landry 
Title:  Senior Vice President, Finance and Chief Financial Officer
Acknowledged and Agreed as of the Date Set forth Above:
SANOFI

By:  /s/ Jerome Contamine                                                                               
Name:  Jerome Contamine
Title:  Chief Financial Officer  
SANOFI-AVENTIS US LLC
By:  /s/ Jerome Contamine                                                                               
Name:  Jerome Contamine
Title:  Authorized Signatory  
AVENTISUB LLC
 
By:  /s/ Jerome Contamine                                                                               
Name:  Jerome Contamine
Title:  Authorized Signatory   
 
SANOFI-AVENTIS AMÉRIQUE DU NORD
 
By:  /s/ Jerome Contamine                                                                               
Name:  Jerome Contamine
Title:  Authorized Signatory  
SANOFI BIOTECHNOLOGY SAS
 
By:  /s/ Jerome Contamine                                                                               
Name:  Jerome Contamine
Title:  Authorized Signatory  

[Signature Page to Letter Agreement]

Schedule A

Methodology for Determining Dupilumab/REGN3500 Eligible Investment Amountsmerion_ex101.htm

EXHIBIT 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of April 30, 2018 (the “Effective Date”) by and between Merion, Inc., a Nevada corporation (the “Company”) and YAN ZHU (the “Purchaser”).

 

RECITALS

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an exemption from the registration requirements of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Regulations D and S thereunder, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company, certain securities of the Company as more fully described in this Agreement.

 

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

 

ARTICLE I.

DEFINITIONS

 

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings set forth in this Section 1.1:

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in, and construed, under Rule 405 under the Securities Act.

 

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

 

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

 

“Closing” means the closing of the purchase and sale of the Shares pursuant to Section 2.1.

 

“Closing Date” means the day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchaser’s obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Shares, in each case, have been satisfied or waived.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed. 

 

	 
	Page 1 of 11
	

 
	 

 

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

 

“Exchange Rules” shall mean the listing rules of The OTC Marketplace.

 

“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Per Share Purchase Price” equals $0.9 per share of Common Stock, subject to adjustment for reverse and forward stock splits, stock combinations and other similar transactions of the Common Stock that may occur after the date of this Agreement.

 

“Person” means an individual, corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(c).

 

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

 

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(f).

 

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

 

“Securities Laws” means, collectively, the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”), the Securities Act, the Exchange Act, the Rules and Regulations, the auditing principles, rules, standards and practices applicable to auditors of “issuers” (as defined in Sarbanes-Oxley) promulgated or approved by the Public Company Accounting Oversight Board, the Exchange Rules and applicable state securities laws and regulations. 

 

“Shares” means an aggregate of 5,556 shares of Common Stock to be issued to the Purchaser pursuant to this Agreement (the “Shares”).

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

 

“Subscription Amount” means, an aggregate amount of $5,000.00 to be paid for Shares purchased by the Purchaser in United States dollars and in immediately available funds.

 

“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 

	 
	Page 2 of 11
	

 
	 

 

“Trading Day” means a day on which the principal Trading Market is open for trading.

 

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the OTCQB or the OTC Pink Open Market (or any successors to any of the foregoing).

 

“Transaction Documents” means this Agreement, and any other documents or agreements executed between the Company and the Purchaser in connection with the transactions contemplated hereunder.

 

“Transfer Agent” means Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address of One University Plaza, Suite 505.Hackensack, NJ 07601, and any successor transfer agent of the Company.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1 Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchaser agrees to purchase, up to an aggregate of 5,556 shares. Upon receiving the Purchaser’s Subscription Amount on the Closing Date and the delivery by the Purchaser of the other items set forth in Section 2.2 deliverable at the Closing, the Company shall deliver the Shares to the Purchaser as determined pursuant to Section 2.2(a). 

 

2.2 Deliveries.

 

(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Purchaser each of the following:

 

(i) this Agreement duly executed by the Company;

 

(ii) subject to the last sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver the Shares equal to the Purchaser’s Subscription Amount divided by the Per Share Purchase Price, in the name of the Purchaser.

 

(b) On or prior to the Closing Date, the Purchaser shall deliver or cause to be delivered to the Company, as applicable, the following:

 

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

 

(ii) the Purchaser’s Subscription Amount by wire transfer to the bank account directed by the Company.

 

2.3 Closing Conditions.

 

(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

	 
	Page 3 of 11
	

 
	 

 

(i) the accuracy when made and on the Closing Date of the representations and warranties of the Purchaser contained herein (unless as of a specific date therein in which case they shall be accurate as of such date); 

 

(ii) all obligations, covenants and agreements of the Purchaser required to be performed at or prior to the Closing Date shall have been performed; and

 

(iii) the delivery by the Purchaser of the items set forth in Section 2.2(b) of this Agreement on or prior to the Closing Date.

 

(b) The obligations of the Purchaser hereunder in connection with the Closing are subject to the following conditions being met:

 

(i) the accuracy when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they will be accurate as of such date); 

 

(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed; 

 

(iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement on or prior to the Closing Date; and

 

(iv) there shall have been no material adverse effect with respect to the Company since the date hereof.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of the Company. Except as indicated in the SEC Reports, the Company hereby represents and warrants to the Purchaser as of the date of this Agreement and as of the Closing Date as follows:

 

(a) Organization and Qualification. The Company and each of the Subsidiaries, if any, is an entity duly incorporated or otherwise organized and validly existing under the laws of each jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. 

 

(b) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals (as defined below).

 

	 
	Page 4 of 11
	

 
	 

 

(c) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any governmental authority or any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents or the offer, issue and sale of the Shares, other than: (i) the disclosure filing required for this Agreement, (ii) such filings as are required to be made under applicable state securities laws, and (iii) such consents, waivers and authorizations that shall be obtained prior to the Closing (collectively, the “Required Approvals”).

 

(d) Authorization of the Shares. The Shares to be sold by the Company and their issue and sale are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and free and clear of all Liens imposed by the Company.

 

(e) Capitalization. Except as may be described in the SEC Reports, all of the issued share capital of the Company has been duly and validly authorized and issued, is fully paid and non-assessable. 

 

(f) SEC Reports. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto, documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”). 

 

(g) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. 

 

(h) No Broker. The Company has not employed any broker, finder or agent, nor become obligated in any way to pay any broker’s, finder’s or agent’s or similar fee with respect to the purchase and sale of the Shares.

 

3.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as made of a specific date stated therein, in which case they shall be accurate as of such date):

 

(a) Organization; Authority. The Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by the Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of the Purchaser. Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against it in accordance with its terms.

 

	 
	Page 5 of 11
	

 
	 

 

(b) Understandings or Arrangements. The Purchaser is acquiring the Shares for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of the Shares (this representation and warranty not limiting the Purchaser’s right to sell the Shares in compliance with applicable federal and state securities laws). The Purchaser is acquiring the Shares as principal, not as nominee or agent, and not with a view to or for distributing or reselling the Shares or any part thereof in violation of the Securities Act or any applicable state securities law.

 

(c) Foreign Investors. The Purchaser hereby represents that it has satisfied itself as to the full observance by the Purchaser of the laws of its jurisdiction applicable to the Purchaser in connection with the purchase of the Shares or the execution and delivery by the Purchaser of this Agreement and the Transaction Documents, including (i) the legal requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to the purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the Purchaser’s purchase, holding, redemption, sale, or transfer of the Shares. The Purchaser’s subscription and payment for, and continued beneficial ownership of, the Shares will not violate any securities or other laws of the Purchaser’s jurisdiction applicable to the Purchaser.

 

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

 

(e) Access to Information. The Purchaser acknowledges that it has had the opportunity to review the Transaction Documents and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. 

 

(f) Regulation S. The Purchaser is a non-U.S. person (as such term is defined in Rule 902 of Regulation S under the Securities Act) and is not acquiring the Shares for the account or benefit of a U.S. person. The Purchaser will not, within six (6) months of the date of the transfer of the Shares to the Purchaser, (i) make any offers or sales of the Shares in the United States or to, or for the benefit of, a U.S. person (in each case, as defined in Regulation S) other than in accordance with Regulation S or another exemption from the registration requirements of the Securities Act, or (ii) engage in hedging transactions with regard to the Shares unless in compliance with the Securities Act. Neither the Purchaser nor any of the Purchaser’s Affiliates or any person acting on his/her or their behalf has engaged or will engage in directed selling efforts (within the meaning of Regulation S) with respect to the Shares, and all such persons have complied and will comply with the offering restriction requirements of Regulation S in connection with the offering of the Shares outside of the United States. 

 

	 
	Page 6 of 11
	

 
	 

 

(g) Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Purchaser first discussed the transaction with the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending on the date when this Agreement is publicly disclosed by the Company. The Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

 

(h) Purchaser Status. At the time the Purchaser was offered the Shares, it was, and as of the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act.

 

(i) No Registration. The Purchaser understands that the Shares have not been, and will not be, registered under the Securities Act or applicable securities laws of any state or country and therefore the Shares cannot be sold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and applicable state securities laws or exemptions from such registration requirements are available. The Company shall be under no obligation to register the Shares under the Securities Act and applicable state securities laws, and any such registration shall be in the Company’s sole discretion.

 

(j) No General Solicitation. The Purchaser is not purchasing the Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

(k) Brokers or Finders. The Purchaser has not engaged any brokers, finders or agents, and the Company has not, nor will, incur, directly or indirectly, as a result of any action taken by the Purchaser, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with this Agreement.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1 Reservation of Securities. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents. 

 

4.2 Certain Transactions and Confidentiality. The Purchaser covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending on the date when this Agreement is publicly disclosed by the Company. The Purchaser also covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company, the Purchaser will maintain the confidentiality of the existence and terms of this transaction. 

 

	 
	Page 7 of 11
	

 
	 

 

4.3 Legends. The Shares may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Shares other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of the Purchaser or in connection with a pledge as contemplated in this Section 4.3, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act. The Purchaser agrees to the imprinting, so long as is required by this Section 4.3, of a legend on all of the certificates evidencing the Shares in the following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

ARTICLE V.

MISCELLANEOUS

 

5.1 Termination. This Agreement may be terminated by the Company or the Purchaser by written notice to the other party if the Closing has not been consummated on or before May 31, 2018; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).

 

5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. 

 

5.3 Entire Agreement. The Transaction Documents contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.4 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

 

	 
	Page 8 of 11
	

 
	 

 

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

 

5.6 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

 

5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. No party hereto may assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company and the Purchaser. 

 

5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in this Section 5.8.

 

5.9 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the Clark County, Nevada. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Clark County, Nevada, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. 

 

	 
	Page 9 of 11
	

 
	 

 

5.10 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Shares. The terms of this Article V shall survive any termination of the Agreement pursuant to Section 5.1. 

 

5.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

5.12 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

5.13 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

 

5.14 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement. The English version of this Agreement, regardless of whether a translation in any other language is or will be made, shall be the only authentic version.

 

5.15 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 

 

(Signature Pages Follow)

 

	 
	Page 10 of 11
	

 
	 

 

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

 

 

COMPANY

 

MERION, INC.

 

By: /s/ DING HUA WANG                                                              

 

Name: DING HUA WANG

 

Title: Chief Executive Officer

 

Address for Notice:

9550 Flair Dr, Suite 302

 

El Monte CA 91731

 

Fax: 626-448-2163

 

Email:info@merionus.com

 

 

PURCHASER

 

By: /s/ YAN ZHU                                                                              

 

Name: YAN ZHU

 

Address:

 

Email

 

 

	
Page 11 of 11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00282-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00282-of-00352.parquet"}]]